<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) May 11, 1999
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 0-15538 36-3364279
- --------------------------------------------------------------------------------
(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 34 pages.
The Exhibit Index is located on page 3.
<PAGE>
ITEM 2. DISPOSITION OF ASSETS
- ------- ---------------------
Burlington Associates General Partnership, a joint venture in which First
Capital Income Properties, Ltd. - Series XI (the "Registrant") owns a 70%
preferred interest, sold the real property commonly known as Burlington Office
Center I, II & III (the "Property"), located in Ann Arbor, Michigan to Great
Lakes REIT L.P., a Delaware Limited Partnership.
The closing of this transaction occurred on May 11, 1999. The Property was sold
for $19,650,000 to an unrelated party pursuant to arm's-length negotiations.
Sales Proceeds received by the Registrant approximated $8,125,000, which was net
of estimated closing expenses and repayment of the outstanding mortgage
indebtedness encumbering the Property. For the quarter ending June 30, 1999, the
Registrant will record a net gain for financial reporting purposes of
approximately $5,575,000 from this transaction. On June 7, 1999, the Partnership
will utilize proceeds of $6,798,000 from the sale to repay the junior mortgage
collateralized by Marquette Mall and Office Building. The remainder of the
proceeds will be retained to supplement working capital reserves.
Page 2
<PAGE>
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
- ------- --------------------------------------------
(page 5) Pro Forma Financial Information
Exhibits
2.1 (page 10) Closing statement and supporting statements, dated May
11, 1999, between Seller and Purchaser.
2.2 (page 19) Contract for Purchase of Real Property, executed in
March, 1999, between Burlington Associates General Partnership,
an Illinois joint venture ("Seller") and Great Lakes REIT, L.P.,
a Delaware Limited Partnership ("Purchaser");
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 INCOME PROPERTIES, LTD. - SERIES XI
By: FIRST CAPITAL FINANCIAL CORPORATION
As General Partner
May 20, 1999 By: /s/ NORMAN M. FIELD
- ------------------- ----------------------------------------
(Date) NORMAN M. FIELD
Vice President - Finance and Treasurer
Page 4
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
The accompanying unaudited Pro Forma Balance Sheet has been presented as if the
sale of the Property had occurred on March 31, 1999. The accompanying unaudited
Pro Forma Statement of Income and Expenses for the three months ended March 31,
1999 has been presented as if the sales of the Property and the Marquette land
parcel, as described in the Partnership's Form 10-Q for the quarter ended March
31, 1999, had occurred on December 31, 1998. The accompanying unaudited Pro
Forma Statement of Income and Expenses for the year ended December 31, 1998 has
been presented as if the sale of the Property had occurred on December 31, 1997.
In the opinion of the General Partner, all adjustments necessary to reflect the
financial condition and results of operations of the Partnership exclusive of
the Property 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 transaction actually occurred as of December
31, 1997 and 1998 and March 31, 1999, nor do they purport to represent the
results of operations of the Registrant for future periods.
Page 5
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
PRO FORMA BALANCE SHEET
(Unaudited)
(All dollars rounded to nearest 00s)
ASSETS
<TABLE>
<CAPTION>
Pro Forma
March 31, Pro Forma Balance
1999 Adjustments Sheet
------------ ------------ ------------
<S> <C> <C> <C>
Investment in commercial rental properties:
Land $ 6,019,100 $ (3,000,000) $ 3,019,100
Buildings and improvements 42,819,500 (16,624,900) 26,194,600
------------ ------------ ------------
48,838,600 (19,624,900) 29,213,700
Accumulated depreciation and amortization (17,545,300) 6,060,000 (11,485,300)
------------ ------------ ------------
Total investment properties, net of
accumulated depreciation and amortization 31,293,300 (13,564,900) 17,728,400
Cash and cash equivalents 3,748,400 1,185,900 4,934,300
Investments in debt securities 985,400 985,400
Rents receivable 395,300 (204,300) 191,000
Other assets 197,700 (181,300) 16,400
------------ ------------ ------------
$ 36,620,100 $(12,764,600) $ 23,855,500
============ ============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loans payable $ 25,019,000 $(17,898,000) $ 7,121,000
Front-End Fees Loan payable to Affiliate 8,295,200 8,295,200
Accounts payable and accrued expenses 1,408,200 (161,100) 1,247,100
Due to Affiliates 2,087,400 2,087,400
Security deposits 205,700 (71,800) 133,900
State income taxes payable (193,800) (193,800)
Other liabilities 109,900 109,900
------------ ------------ ------------
37,125,400 (18,324,700) 18,800,700
------------ ------------ ------------
Partners' capital:
General Partner (deficit) (505,300) 973,900 468,600
Limited Partners (57,621 Units issued and
outstanding) 4,586,200 4,586,200
------------ ------------ ------------
(505,300) 5,560,100 5,054,800
------------ ------------ ------------
$ 36,620,100 $(12,764,600) $ 23,855,500
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the
pro forma financial statements
Page 6
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
PRO FORMA STATEMENT OF INCOME AND EXPENSES
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31, 1999
-------------------------------------------
Pro Forma
Statement of Statement of
Income and Pro Forma Income and
Expenses Adjustments Expenses
------------ ----------- ------------
<S> <C> <C> <C>
Income:
Rental $2,181,500 $ (804,700) $1,376,800
Interest 47,300 (300) 47,000
Gain on sale of land parcel 291,800 (291,800) 0
---------- ----------- ----------
2,520,600 (1,096,800) 1,423,800
---------- ----------- ----------
Expenses:
Interest
Affiliates 144,900 144,900
Nonaffiliates 487,000 (334,800) 152,200
Depreciation and amortization 367,800 (162,600) 205,200
Property operating:
Affiliates 37,800 300 38,100
Nonaffiliates 492,300 (116,100) 376,200
Real estate taxes 352,000 (184,500) 167,500
Insurance - Affiliate 30,500 (3,800) 26,700
Repairs and maintenance 298,800 (101,200) 197,600
General and administrative:
Affiliates 6,200 6,200
Nonaffiliates 33,400 33,400
---------- ----------- ----------
2,250,700 (902,700) 1,348,000
---------- ----------- ----------
Net income $ 269,900 $ (194,100) $ 75,800
========== =========== ==========
Net income allocated to General Partner $ 269,900 $ (269,100) $ 800
========== =========== ==========
Net income allocated to Limited Partners $ 0 $ 75,000 $ 75,000
========== =========== ==========
Net income allocated to Limited Partners
per Unit (57,621 Units outstanding) $ 0 $ 1.30 $ 1.30
========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the
pro forma financial statements
Page 7
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
PRO FORMA STATEMENT OF INCOME AND EXPENSES
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
Year Ended December 31, 1998
-------------------------------------------
Pro Forma
Statement of
Statement of Pro Forma Income and
Income and Adjustments Expenses
Expenses (Unaudited) (Unaudited)
------------ ----------- ------------
<S> <C> <C> <C>
Income:
Rental $8,934,600 $(3,075,400) $5,859,200
Interest 199,600 (3,700) 195,900
---------- ----------- ----------
9,134,200 (3,079,100) 6,055,100
---------- ----------- ----------
Expenses:
Interest
Affiliates 640,800 640,800
Nonaffiliates 2,070,700 (1,468,400) 602,300
Depreciation and amortization 1,491,300 (627,200) 864,100
Property operating:
Affiliates 166,600 (21,800) 144,800
Nonaffiliates 1,992,200 (462,500) 1,529,700
Real estate taxes 1,288,000 (448,200) 839,800
Insurance - Affiliates 104,200 (10,700) 93,500
Repairs and maintenance 1,003,500 (388,300) 615,200
General and administrative:
Affiliates 27,800 27,800
Nonaffiliates 135,000 135,000
---------- ----------- ----------
8,920,100 (3,427,100) 5,493,000
---------- ----------- ----------
Net income $ 214,100 $ 348,000 $ 562,100
========== =========== ==========
Net income allocated to General Partner $ 214,100 $ (208,500) $ 5,600
========== =========== ==========
Net income allocated to Limited Partners $ 0 $ 556,500 $ 556,500
========== =========== ==========
Net income allocated to Limited Partners
per Unit (57,621 Units outstanding) $ 0 $ 9.66 $ 9.66
========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the
pro forma financial statements
Page 8
<PAGE>
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES XI
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, rents receivable, other assets,
accounts payable and accrued expenses, security deposits and other
liabilities have been adjusted as of March 31, 1999 to reflect the
sale of the Registrant's interest in the Property.
(b) Cash and cash equivalents has been adjusted to include the
Registrants' portion of the net cash received from the purchaser of
the Property, less amounts utilized to repay the Marquette Mall and
Office junior mortgage ("Marquette Loan").
(c) the mortgage loans payable has been adjusted to reflect the repayment
of the loan encumbering the Property and the Marquette Loan as of
March 31, 1999.
2) For the purpose of the Pro Forma Statement of Income and Expenses for the
three months ended March 31, 1999:
(a) the adjustments reflect the elimination of the Registrant's interest
in the operations of the Property.
(b) the adjustments reflect the elimination of the Registrant's sale of
the Marquette land parcel.
(c) the adjustments reflect the elimination of interest expense on the
Marquette Loan.
3) For the purpose of the Pro Forma Statement of Income and Expenses for the
year ended December 31, 1998:
(a) the adjustments reflect the elimination of the Registrant's interest
in the operations of the Property.
(b) the adjustments reflect the elimination of interest expense on the
Marquette Loan.
Page 9
<PAGE>
- --------------------------------------------------------------------------------
CLOSING STATEMENT INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Property Name: BURLINGTON OFFICE PARK
Seller: BURLINGTON ASSOCIATES GENERAL PARTNERSHIP
an Illinois General Partnership
Purchaser: GREAT LAKES REIT, L.P.
a Delaware limited partnership
Proration Date: 5/10/99
Proration as of: 11:59 PM, MONDAY, MAY 10, 1999
Closing Date: 5/11/99
Closing as of: TUESDAY, MAY 11, 1999
Tax Begin Date: 7/1/98
Tax End Date: 6/30/99
Month Begin Date 5/1/99
Month End Date 5/31/99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CLOSING STATEMENT
BURLINGTON OFFICE PARK
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER: BURLINGTON ASSOCIATES GENERAL PARTNERSHIP
an Illinois General Partnership
PURCHASER: GREAT LAKES REIT, L.P.
a Delaware limited partnership
PRORATION DATE: 11:59 PM, MONDAY, MAY 10, 1999
CLOSING (FUNDING) DATE: TUESDAY, MAY 11, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
CREDIT CREDIT
PURCHASER SELLER
---------------- ----------------
<S> <C> <C>
PURCHASE PRICE 19,650,000.00
EARNEST MONEY (held by LandAmerica) 200,000.00
INTEREST ON EARNEST MONEY POC
PRO-RATE PROPERTY TAXES (FOR MONTH OF CLOSING) 87,373.12
[See Schedule A]
PRO-RATE MAY, 1999 LEASE CHARGES 147,595.96
[See Schedule D]
TENANT PREPAID RENTS 0.00
[See Schedule B]
PRO-RATE SERVICE CONTRACTS 9,827.43
[See Schedule C]
SECURITY DEPOSITS 69,044.57
[See Schedule D]
TI/COMMISSIONS 57,730.00 394.34
[See Schedule E]
BUILDING PLAN COPY REIMBURSEMENT 156.46
HVAC REPLACEMENT CREDIT 15,500.00
---------------- ----------------
SUBTOTALS 474,526.99 19,763,094.88
CASH AMOUNT DUE TO SELLER 19,288,567.89
---------------- ----------------
TOTAL CREDITS 19,763,094.88 19,763,094.88
=============== ===============
</TABLE>
NOTES:
[1] Utility payments shall be directed to the parties for their respective
periods of ownership based upon meter reads ordered on or prior to the
Closing Date.
[2] 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 May 11, 1999, or which relate
to periods after Closing to the extent Seller received a credit from
Purchaser at Closing. Purchaser 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 after May 10, 1999, or
which relate to periods after Closing to the extent Purchaser received a
credit from Seller at Closing.
<TABLE>
<CAPTION>
<S> <C>
APPROVED: SELLER APPROVED: PURCHASER
BURLINGTON ASSOCIATES GENERAL PARTNERSHIP GREAT LAKES REIT, L.P.
an Illinois General Partnership a Delaware limited partnership
By: First Capital Income Properties, Ltd. - Series XI, By: Great Lakes REIT, a Maryland,
a Illinois general partnership, its general partner real estate investment trust, its general partner
By: First Capital Financial Corporation,
a Florida corporation, its general partner By: _______________________________
By: ________________________________
Its: ________________________________
Its: ________________________________
</TABLE>
<PAGE>
WIRING INSTRUCTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WIRE INSTRUCTION FOR SELLER
----------------------------
<S> <C>
AMERICAN NATIONAL BANK, CHICAGO, IL
ABA NO. 71000770
ACCOUNT # 4105478
ACCOUNT NAME: FIRST CAPITAL BURLINGTON ASSOCIATES
PLEASE CONTACT DAN HENNING (312) 906-6488
WIRE INSTRUCTION FOR LENDER
---------------------------
BANK OF AMERICA NT & SA
ABA NO. 121-000-358
ACCOUNT # 15033-00463
ACCOUNT NAME: CLSSS #1503
AMOUNT: $11,021,223.43
REFERENCE: BURLINGTON ASSOC, GJ1116
PLEASE CONTACT AMY JAMES (312) 828-2516
THE FIRST NATIONAL BANK OF CHICAGO
ABA NO. 071-000013
ACCOUNT # 5519624
ACCOUNT NAME: SIDLEY & AUSTIN OPERATING ACCOUNT
AMOUNT: $1,910.38
REFERENCE: 27729-50130
INVOICE # 9913296
WIRE INSTRUCTION FOR BROKER
---------------------------
AMERICAN NATIONAL BANK OF CHICAGO
ABA NO. 071000770
ACCOUNT # 5300031488
ACCOUNT NAME: GRUBB & ELLIS COMPANY
REFERENCE: GRUBB & ELLIS DEPARTMENT #3370
PLEASE CONTACT FRANCINE HOLINOTY (248) 357-6599
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
BURLINGTON OFFICE PARK
SOURCES AND USES STATEMENT
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PURCHASER'S SOURCES AND USES:
BALANCE OF CASH TO BE FUNDED BY PURCHASER 19,288,567.89
ADDITIONAL CASH OUTLAYS BY PURCHASER:
CHICAGO TITLE INSURANCE COMPANY
Zoning 3.1 w/Parking Endorsement (100%) 2,841.38
Survey Endorsement (100%) 6,150.63
Zoning Letter 25.00
Out of Pocket Charges 120.00
Recording Fees (100%) 50.00
Survey (50%) 3,750.00
Closing Fees 375.00
---------------
PURCHASER'S CLOSING COSTS 13,312.01
---------------
TOTAL CASH OUTLAY BY PURCHASER 19,301,879.90
===============
- ---------------------------------------------------------------------------------------------------------------
SELLER'S SOURCES AND USES:
CASH AMOUNT DUE TO SELLER 19,288,567.89
EARNEST MONEY (held by LandAmerica) 200,000.00
---------------
TOTAL SELLER'S SOURCES 19,488,567.89
ITEMS PAYABLE FROM SELLER'S PROCEEDS AT CLOSING:
CHICAGO TITLE INSURANCE COMPANY
Title Insurance Base Premium (100%) 16,760.63
Survey (50%) 3,750.00
County of Washtenaw Trnsfer Taxes 21,615.00
State of Michigan Transfer Taxes 147,375.00
Recording Fees (100%) 50.00
Closing Fees 375.00
---------------
189,925.63
BROKERAGE COMMISSION TO GRUBB & ELLIS 265,275.00
REPAYMENT OF LOAN TO BANK OF AMERICA 11,023,133.81
---------------
TOTAL CASH OUTLAY BY SELLER 11,478,334.44
---------------
BALANCE TO SELLER 8,010,233.45
===============
</TABLE>
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
BURLINGTON OFFICE PARK
PRO-RATE FISCAL YEAR 1998-9 PROPERTY TAXES
PRORATION MADE AS OF: 11:59 PM, MONDAY, MAY 10, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Burlington I
Parcel ID#
----------
12-05-400-019
<S> <C> <C> <C> <C>
1998 Summer Taxes Amount Fiscal Year
School State Education 8,725.82 7/1/98 - 6/30/99 13.97% 1,219.22
School Operating 26,177.45 7/1/98 - 6/30/99 13.97% 3,657.67
School Supplemental - 7/1/98 - 6/30/99 13.97% -
School Debt 4,244.24 7/1/98 - 6/30/99 13.97% 593.03
City of Ann Arbor 44,080.22 7/1/98 - 6/30/99 13.97% 6,159.15
District Library 4,799.20 7/1/98 - 6/30/99 13.97% 670.57
Community College 11,933.72 7/1/98 - 6/30/99 13.97% 1,667.45
Intermediate Schools 9,647.26 7/1/98 - 6/30/99 13.97% 1,347.97
AATA 6,254.96 7/1/98 - 6/30/99 13.97% 873.98
------------
Total 115,862.87
1999 Winter Taxes
School State Education 8,725.82 7/1/98 - 6/30/99 13.97% 1,219.22
School Operational 26,177.45 7/1/98 - 6/30/99 13.97% 3,657.67
School Supplemental - 7/1/98 - 6/30/99 13.97% -
School Debt 4,244.24 7/1/98 - 6/30/99 13.97% 593.03
Washtenaw County 16,180.28 1/1/99 - 12/31/99 64.38% 10,417.44
----------- -----------
Total 55,327.79 $32,076.43
Burlington II
Parcel ID#
----------
12-05-400-022
1998 Summer Taxes Amount Fiscal Year
School State Education 10,297.74 7/1/98 - 6/30/99 13.97% 1,438.86
School Operating 30,893.21 7/1/98 - 6/30/99 13.97% 4,316.59
School Supplemental - 7/1/98 - 6/30/99 13.97% -
School Debt 5,008.82 7/1/98 - 6/30/99 13.97% 699.86
City of Ann Arbor 52,021.06 7/1/98 - 6/30/99 13.97% 7,268.70
District Library 5,663.76 7/1/98 - 6/30/99 13.97% 791.37
Community College 14,083.53 7/1/98 - 6/30/99 13.97% 1,967.84
Intermediate Schools 11,385.18 7/1/98 - 6/30/99 13.97% 1,590.81
AATA 7,381.76 7/1/98 - 6/30/99 13.97% 1,031.42
--------------
Total 136,735.06
1999 Winter Taxes
School State Education 10,297.74 7/1/98 - 6/30/99 13.97% 1,438.86
School Operational 30,893.21 7/1/98 - 6/30/99 13.97% 4,316.59
School Supplemental - 7/1/98 - 6/30/99 13.97% -
School Debt 5,008.82 7/1/98 - 6/30/99 13.97% 699.86
Washtenaw County 19,095.09 1/1/99 - 12/31/99 64.38% 12,294.10
-------------- ------------
Total 65,294.86 $37,854.86
Burlington III
Parcel ID#
----------
12-05-400-036
1998 Summer Taxes Amount Fiscal Year
School State Education 4,744.74 7/1/98 - 6/30/99 13.97% 662.96
School Operating 14,234.22 7/1/98 - 6/30/99 13.97% 1,988.89
School Supplemental - 7/1/98 - 6/30/99 13.97% -
School Debt 2,307.84 7/1/98 - 6/30/99 13.97% 322.47
City of Ann Arbor 23,969.01 7/1/98 - 6/30/99 13.97% 3,349.09
District Library 2,609.61 7/1/98 - 6/30/99 13.97% 364.63
Community College 6,489.06 7/1/98 - 6/30/99 13.97% 906.69
Intermediate Schools 5,245.78 7/1/98 - 6/30/99 13.97% 732.97
AATA 3,401.19 7/1/98 - 6/30/99 13.97% 475.23
------------
Total 63,001.45
1999 Winter Taxes
School State Education 4,744.74 7/1/98 - 6/30/99 13.97% 662.96
School Operational 14,234.22 7/1/98 - 6/30/99 13.97% 1,988.89
School Supplemental - 7/1/98 - 6/30/99 13.97% -
School Debt 2,307.84 7/1/98 - 6/30/99 13.97% 322.47
Washtenaw County 8,798.17 1/1/99 - 12/31/99 64.38% 5,664.58
------------ ----------
Total 30,084.97 $17,441.84
==========
TOTAL CREDIT DUE SELLER $87,373.12
==========
</TABLE>
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
BURLINGTON OFFICE PARK
TENANT PREPAID RENTS
PRORATION MADE AS OF: 11:59 PM, MONDAY, MAY 10, 1999
- -------------------------------------------------------------------------------------------
AMOUNT
SUITE # TENANT NAME PREPAID
---------------------------------------------------------------------------
<S> <C> <C>
Prepaid Rent:
0.00
-----------
CREDIT TO PURCHASER 0.00
==========
</TABLE>
<PAGE>
SCHEDULE C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
BURLINGTON OFFICE PARK
RECURRING PAYABLES PRORATION
PRORATION MADE AS OF: 11:59 PM, MONDAY, MAY 10, 1999
- ------------------------------------------------------------------------------------------------------------------
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
- --------------
B - I
- -----
Bartlett Cleaning Service (5,535.11) 05/01/99 05/31/99 21 (3,749.59)
Answering Service, Inc. (23.91) 05/01/99 05/31/99 21 (16.20)
Millar Elevator (315.00) 05/01/99 05/31/99 21 (213.39)
Tru-Green (82.00) 05/01/99 05/31/99 21 (55.55)
B - II
- ------
Bartlett Cleaning Service (4,892.88) 05/01/99 05/31/99 21 (3,314.53)
Tru-Green (82.00) 05/01/99 05/31/99 21 (55.55)
Millar Elevator (286.00) 05/01/99 05/31/99 21 (193.74)
Answering Service, Inc. (23.91) 05/01/99 05/31/99 21 (16.20)
B - III
- -------
Bartlett Cleaning Service (3,038.71) 05/01/99 05/31/99 21 (2,058.48)
Dover Elevator (161.05) 05/01/99 05/31/99 21 (109.10)
Answering Service, Inc. (11.96) 05/01/99 05/31/99 21 (8.10)
Tru-Green (41.00) 05/01/99 05/31/99 21 (27.77)
Erlich Fire Protection (105.00) 06/01/99 08/31/99 92 (105.00)
CREDIT DUE TO PURCHASER (SELLER) (9,923.20)
-----------
PAYABLE BY PURCHASER
- --------------------
B - I
- -----
A & H Lawn Care 400.00 05/01/99 05/31/99 10 129.03
Eradico Pest Control 27.00 05/01/99 05/31/99 10 8.71
Mr. Uniform 312.25 05/04/99 06/01/99 7 75.37
B - II
- ------
Eradico Pest Control 27.00 05/01/99 05/31/99 10 8.71
B - III
- -------
Eradico Pest Control 22.00 05/01/99 05/31/99 10 7.10
CREDIT DUE TO PURCHASER (SELLER) 228.92
-----------
LICENSES\PERMITS\FEES - (Paid by Seller)
- ------------------------
0.00 01/01/99 12/31/99 130 0.00
CREDIT DUE TO PURCHASER (SELLER) 0.00
-----------
INCOME VENDORS
- --------------
Federal Express 300.00 10/01/98 09/30/99 (142) (116.71)
United Parcel Service 300.00 06/01/98 05/31/99 (20) (16.44)
CREDIT DUE TO PURCHASER (SELLER) (133.15)
-----------
TOTAL CREDIT DUE TO PURCHASER (SELLER) (9,827.43)
===========
</TABLE>
<PAGE>
SCHEDULE D
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
BURLINGTON OFFICE PARK
RENTAL CHARGE, DEPOSIT RECONCILIATION, AND DELINQUENCY SCHEDULE
PRORATION MADE AS OF: 11:59 PM, MONDAY, MAY 10, 1999
- --------------------------------------------------------------------------------------------------------------------------------
MAY MAY MAY
TENANT MONTHLY ESCALATION OTHER TOTAL CHARGES
TENANT DEPOSITS RENT CHARGES INCOME CHARGES PAID
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AMRESCO Commercial Lending Corporation 1,628.00 1,713.33 0.00 0.00 1,713.33 1,713.33
Ann Arbor Associates Inc 2,000.00 2,324.00 0.00 0.00 2,324.00 2,324.00
CCB Financial Strategies 1,365.00 1,365.00 0.00 0.00 1,365.00 -
Dykema Gossett Spencer, Goornow, & Trigg 27,866.67 0.00 605.00 28,471.67 28,470.33
Employment Research Corporation 2,135.00 2,221.77 0.00 0.00 2,221.77 2,221.77
Fame Information Services, Inc. 15,414.00 15,414.00 0.00 0.00 15,414.00 15,414.00
Gerald Alcock Company 1,393.82 1,791.92 0.00 0.00 1,791.92 1,791.92
Global Dynamics, Inc. 2,073.00 2,633.08 0.00 0.00 2,633.08 2,633.08
GMAC Mortgage Corporation of PA 1,774.92 0.00 0.00 1,774.92 1,774.92
Huron Valley Financial, Inc. 2,762.50 2,762.50 0.00 0.00 2,762.50 -
Standard Federal Bank 4,490.43 0.00 0.00 4,490.43 4,490.43
International Business Centers of Michigan, Inc. (1) 17,906.67 18,960.70 0.00 865.33 19,826.03 -
Kaydon Corporation TRIMAS 17,268.36 0.00 0.00 17,268.36 17,268.36
M2 Investment Corporation 630.00 0.00 0.00 630.00 630.00
McDonald & Company Securities, Inc. (2) 7,786.00 0.00 1,250.33 9,036.33 9,036.33
Michael H. Cutler and Associates, P.L.L.C. 1,575.00 1,575.00 0.00 0.00 1,575.00 1,575.00
Micromet Corporation 1,450.83 0.00 0.00 1,450.83 -
Mundus & Mundus, Inc. 2,800.00 6,550.42 0.00 0.00 6,550.42 6,550.42
Network Express, Inc. 31,308.96 0.00 0.00 31,308.96 31,308.96
Partners in Travel 874.00 0.00 0.00 874.00 -
Personal Touch Marketing 3,217.50 3,078.90 0.00 0.00 3,078.90 3,078.90
Personnel Systems 3,175.00 0.00 0.00 3,175.00 3,175.00
Prudential Securities, Inc. 10,147.05 0.00 0.00 10,147.05 10,147.05
Richard L. DeCan 1,309.44 0.00 0.00 1,309.44 1,309.44
Robert J. Stapleton, CPA P.C. 715.00 715.00 0.00 0.00 715.00 715.00
Schmick Law Offices, P.C. 3,352.29 0.00 0.00 3,352.29 3,352.29
Software Plus, Inc. 1,985.00 1,985.00 0.00 0.00 1,985.00 1,985.00
State Farm Mutual Automobile Ins. Co. 3,926.36 0.00 0.00 3,926.36 3,926.36
The Regents of the University of Michigan 29,652.42 0.00 0.00 29,652.42 29,652.31
The Solutions Group Inc. 1,395.00 1,686.00 0.00 0.00 1,686.00 1,686.00
TRIADA, LTD. 3,011.83 8,647.17 0.00 0.00 8,647.17 -
Washtenaw Mortgage Company - Ste. 3A B-I 2,822.42 0.00 35.00 2,857.42 2,857.42
Washtenaw Mortgage Company - Stes. 11-13 B-II 5,167.25 12,268.96 0.00 0.00 12,268.96 12,268.96
Washtenaw Mortgage Company - Ste. 204 - 206 B-II 13,351.30 0.00 0.00 13,351.30 13,351.30
Wilson White Company, Inc. 2,500.00 3,171.88 0.00 0.00 3,171.88 3,171.88
--------------------------------------------------------------------------- ----------
69,044.57 250,051.08 0.00 2,755.66 252,806.74 217,879.76
</TABLE>
<TABLE>
<CAPTION>
MAY
PR'S & PRIOR TOTAL TOTAL
PRORATA BALANCE BALANCE BALANCE SR'S PR'S
TENANT SHARE O/S PRIOR 5/1 FOR 5/1 PMTS SHARE O/S SHARE O/S
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AMRESCO Commercial Lending Corporation 1,160.64 553.37 553.37 - 553.37 -
Ann Arbor Associates Inc 1,574.32 - - - - -
CCB Financial Strategies - 1,807.85 442.85 1,365.00 883.17 924.68
Dykema Gossett Spencer, Goornow, & Trigg 19,286.35 1.34 - 1.34 0.43 0.91
Employment Research Corporation 1,505.07 - - - - -
Fame Information Services, Inc. 10,441.74 13,969.92 13,969.92 - 13,969.92 -
Gerald Alcock Company 1,213.88 - - - - -
Global Dynamics, Inc. 1,783.70 588.71 588.71 - 588.71 -
GMAC Mortgage Corporation of PA 1,202.37 - - - - -
Huron Valley Financial, Inc. - 2,762.50 - 2,762.50 891.13 1,871.37
Standard Federal Bank 3,041.90 - - - - -
International Business Centers of Michigan, Inc. (1) - 56,590.65 36,764.62 19,826.03 43,160.11 13,430.54
Kaydon Corporation TRIMAS 11,697.92 2,356.92 2,356.92 - 2,356.92 -
M2 Investment Corporation 426.77 - - - - -
McDonald & Company Securities, Inc. (2) 6,121.38 2,408.77 2,408.77 - 2,408.77 -
Michael H. Cutler and Associates, P.L.L.C. 1,066.94 - - - - -
Micromet Corporation - 1,450.83 - 1,450.83 468.01 982.82
Mundus & Mundus, Inc. 4,437.38 - - - - -
Network Express, Inc. 21,209.30 - - - - -
Partners in Travel - 2,039.36 1,165.36 874.00 1,447.30 592.06
Personal Touch Marketing 2,085.71 - - - - -
Personnel Systems 2,150.81 - - - - -
Prudential Securities, Inc. 6,873.81 6,095.39 6,095.39 - 6,095.39 -
Richard L. DeCan 887.04 - - - - -
Robert J. Stapleton, CPA P.C. 484.35 - - - - -
Schmick Law Offices, P.C. 2,270.91 2,636.60 2,636.60 - 2,636.60 -
Software Plus, Inc. 1,344.68 - - - - -
State Farm Mutual Automobile Ins. Co. 2,659.79 - - - - -
The Regents of the University of Michigan 20,087.05 0.11 - 0.11 0.04 0.07
The Solutions Group Inc. 1,142.13 - - - - -
TRIADA, LTD. - 9,796.39 1,149.22 8,647.17 3,938.63 5,857.76
Washtenaw Mortgage Company - Ste. 3A B-I 1,935.67 - - - - -
Washtenaw Mortgage Company - Stes. 11-13 B-II 8,311.23 1.24 1.24 - 1.24 -
Washtenaw Mortgage Company - Ste. 204 - 206 B-II 9,044.43 - - - - -
Wilson White Company, Inc. 2,148.69 - - - - -
=================================================================================================================================
147,595.96 103,059.95 68,132.97 34,926.98 79,399.74 23,660.21
</TABLE>
Notes:
(1) See Section 4.3.8.2 of the Real Estate Sale Agreement dated 3/29/99.
(2) Per section 4.3.8.1 of the Real Estate Sale Agreement dated 3/29/99, tenant
Improvement Loan payments of $1,250.33 are due entirely to Seller
<PAGE>
SCHEDULE E
- --------------------------------------------------------------------------------
BURLINGTON OFFICE PARK
LEASES SIGNED AFTER AUGUST 28, 1998
PRORATION MADE AS OF: 11:59 PM, MONDAY, MAY 10, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Commencement Termination
Tenant Date Date T.I. Due Comm. Due T.I. Paid
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Washtnaw Mortgage - 1,014 sf 1/1/99 12/31/99 $ - $ 253.50 $ -
- -----------------------------------------------------------------------------------------------------
Washtenaw Mortgage - 1,147
sf 3/1/99 2/29/00 $ - $ 286.75 $ -
- -----------------------------------------------------------------------------------------------------
Triada , Inc. $ 57,730.00 $ - $ -
- -----------------------------------------------------------------------------------------------------
Total $ 57,730.00 $ 540.25 $ -
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Seller's Purchaser's Credit
Tenant Comm. Pd. Share Share Purchaser Credit Seller
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Washtnaw Mortgage - 1,014sf $ 253.50 0.00% 64.38% $ - $ 163.21
- -------------------------------------------------------------------------------------------------
Washtenaw Mortgage - 1,147
sf $ 286.75 0.00% 80.60% $ - $ 231.12
- -------------------------------------------------------------------------------------------------
Triada , Inc. $ - 100.00% 0% $ 57,730.00 $ -
- -------------------------------------------------------------------------------------------------
Total $ 540.25 $ 57,730.00 $ 394.34
- -------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REAL ESTATE SALE AGREEMENT
--------------------------
[Burlington Office Park, Ann Arbor, Michigan]
THIS REAL ESTATE SALE AGREEMENT (this "Agreement") is made effective as of
March ___, 1999, by and between Burlington Associates General Partnership, an
Illinois general partnership ("Seller"), and Great Lakes REIT, L.P., a Delaware
limited partnership ("Purchaser"). In consideration of the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:
1. PURCHASE AND SALE OF PROPERTY. 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 a certain parcel of real estate (the
"Real Property") in the City of Ann Arbor, County of Washtenaw, State of
Michigan, which parcel is more particularly described in attached Exhibit A, and
upon which is located three office buildings commonly known as "Burlington
Office Park," together with (a) all buildings, parking areas and improvements
owned by Seller, and any and all of Seller's rights, easements, licenses and
privileges presently thereon or appertaining thereto (the "Improvements"); (b)
Seller's right, title and interest in and to the leases affecting the Property
or any part thereof (the "Leases"); (c) all furniture, furnishings, fixtures,
equipment and other tangible personal property owned by Seller, located on the
Property and used solely in connection therewith (the "Tangible Personal
Property"), a list of which is attached hereto as Exhibit B; (d) all right,
title and interest of Seller under any and all of the maintenance, service and
other like contracts and agreements with respect to the ownership and operation
of the Property (the "Service Contracts"), a list of which is attached hereto as
Exhibit C; and (e) the interest of Seller in all security deposits paid by
tenants under the Leases that are listed on Exhibit O attached hereto and which
are not applied by Seller in accordance Section 4.3.4 below between the date of
this Agreement and Closing (the "Security Deposits"); all to the extent
applicable to the period from and after the Closing (as defined in Section 4
below), except as expressly set forth to the contrary in this Agreement. Items
(a) through (e) above, together with the Real Property, are collectively
referred to in this Agreement as the "Property." However, the term "Property"
expressly excludes all property owned by tenants or other users or occupants of
the Property, all rights with respect to any refund of taxes applicable to any
period prior to the Closing Date (as defined in Section 4 below), and all
computers and computer-related equipment in the management office of the
Property.
2. PURCHASE PRICE. The total consideration to be paid by Purchaser to
Seller for the Property is Nineteen Million Six Hundred Fifty Thousand and
No/100 Dollars ($19,650,000.00) (the "Purchase Price").
2.1 Earnest Money. Prior to the date hereof, and in accordance with
the terms of a Letter of Intent dated February 16, 1999 (the "Letter of
Intent") and a Modification Agreement dated February 16, 1999, Purchaser
has delivered to LandAmerica National Commercial Services ("Escrow Agent")
the sum of Two Hundred Thousand and No/100 Dollars ($200,000.00) (together
with any interest earned thereon and net of investment costs, the "Earnest
Money"). The Earnest Money shall be invested as Seller and Purchaser so
direct. Any and all interest earned on the Earnest Money shall be reported
to Purchaser's federal tax identification number. If the transaction closes
in accordance with the terms of this Agreement, then Escrow Agent shall
deliver the Earnest Money to Seller at Closing as payment toward the
Purchase Price. If the transaction fails to close, then Escrow Agent shall
deliver the Earnest Money to the party entitled to it in accordance with
the terms of this Agreement.
2.2 Cash Balance. At Closing, Purchaser shall pay to Seller the
Purchase Price, less the Earnest Money, plus or minus the prorations
described in this Agreement (such amount, as adjusted, being referred to as
the "Cash Balance"). Purchaser shall pay the Cash Balance by federal funds
wire transferred to an account designated by Seller in writing.
3. EVIDENCE OF TITLE.
-----------------
3.1 Title Commitment. Seller has heretofore caused to be delivered to
Purchaser a commitment for an ALTA Owner's Title Insurance Policy
identified therein as Commitment Number 624531 (the "Title Commitment"), in
the amount of the Purchase Price, issued by Lawyers Title Insurance Company
(the "Title Insurer"), together with copies of all of the underlying
documents referenced in the Title Commitment. At Closing, the Title Insurer
shall deliver to Purchaser a title policy or a "marked-up" title commitment
in the amount of the Purchase Price reflecting the conveyance of the
Property to Purchaser, subject only to those exceptions to title which are
more fully described on attached Exhibit D and exceptions to title which
become Permitted Exceptions pursuant to this Section 3 (collectively, the
"Permitted Exceptions"). The title policy or "marked-up" title commitment
to be delivered at Closing shall have all standard and general printed
exceptions deleted so as to afford full "extended form coverage", subject,
however, to any Permitted Exceptions, and shall further include, to the
extent
1
<PAGE>
available, an ALTA 3.1 zoning endorsement (including coverage as to the
number of legal parking spaces) and a tax parcel endorsement; provided,
however, that Purchaser acknowledges that Purchaser has reviewed that
certain Tax Parcel Reconfiguration Agreement (the "Reconfiguration
Agreement") dated December 16, 1998 and recorded December 30, 1998 in Liber
3837, Page 744, and understands that the "Reconfiguration Date" (as such
term is defined in the Reconfiguration Agreement) will occur subsequent to
the Closing Date and that the "Reconfiguration" (as such term is defined in
the Reconfiguration Agreement) will not be reflected in or insured by such
tax parcel endorsement.
3.2 Survey. Seller has heretofore delivered to Purchaser (i) a survey
of a portion of the Real Property last revised August 27, 1998, prepared by
Midwestern Consulting as Job No. 98039, and (ii) three surveys of portions
of the Real Property, each being last revised March 12, 1990, prepared by
Zeimet Wozniak & Associates Inc. as Job No. 86166, Job No. 83153 and Job
No. 80157-A. Seller shall within fifteen (15) business days after the date
of this Agreement, obtain and cause to be delivered to Purchaser and Title
Insurer a survey of the Real Property (the "Survey") prepared by Midwestern
Consulting, a surveyor duly registered in Michigan, and certified by said
surveyor as having been prepared in accordance with the minimum detail and
classification requirements of the land survey standards of the American
Land Title Association, and specifically incorporating all of the standards
and protocols contemplated by the minimum standard detail requirements and
classifications for ALTA/ACSM land title surveys, as adopted in 1992 by
ALTA/ACSM. The Survey shall be dated as of a date on or after January 1,
1999, and certified to Purchaser, Seller and the Title Insurer. Seller
shall request from the surveyor that the Survey identify, without
limitation, the legal description of the Real Property, the square footage
of the Real Property and Improvements, and the number and location of all
legal parking spaces on the Real Property.
3.3 Review of Title Commitment and Survey. If the Title Commitment or
Survey disclose exceptions to title other than those Permitted Exceptions which
are noted on attached Exhibit D, then Purchaser shall have until 5:00 p.m.
(Chicago, Illinois time) on the tenth (10th) business day after the date of its
receipt of the last of the Title Commitment and Survey within which to notify
Seller of any such exceptions to title to which Purchaser objects. If any
additional exceptions to title arise between the date of the Title Commitment,
the Survey and the Closing, Seller shall notify Purchaser of such exceptions to
the extent Seller becomes aware of such exceptions and Purchaser shall have five
(5) days after its receipt of notice of such exceptions within which to notify
Seller of any such exception to title to which Purchaser objects. Any such
exceptions to title not objected to by Purchaser as aforesaid shall become
Permitted Exceptions. If Purchaser objects to any such exceptions to title,
Seller shall have until Closing (but in any event at least thirty (30) days
after it receives notice of Purchaser's objection(s)) to remove such exceptions
to title, which removal may be accomplished by waiver or endorsement by the
Title Insurer. Seller agrees to use good faith efforts to remove any exceptions
to title to which Purchaser objects which are first disclosed by an update of
the Title Commitment heretofore delivered to Purchaser; provided, however, that
with respect to mortgages, deeds of trust and mechanic's liens, any such
exceptions to title shall be governed by the last sentence of this Section 3.3).
If Seller fails to remove any such exceptions to title as aforesaid, Purchaser
may, as its sole and exclusive remedy, terminate this Agreement and obtain a
return of the Earnest Money. If Purchaser does not elect to terminate this
Agreement, Purchaser shall consummate the Closing and accept title to the
Property subject to all such exceptions to title (in which event, all such
exceptions to title shall be deemed "Permitted Exceptions"). Notwithstanding
anything to the contrary in this Section 3.3, Seller shall be obligated to
remove by waiver or endorsement at Seller's expense (i) any mortgages or deeds
of trust encumbering the Real Property which were granted by Seller, and (ii)
mechanic's liens with respect to work contracted for by Seller or its authorized
agents, provided that Seller has received written notice of such mechanic's
liens prior to Closing and the cost to remove such mechanic's liens as aforesaid
does not exceed Ten Thousand Dollars ($10,000) in the aggregate.
4. CLOSING. 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 (the "Closing") of the transaction contemplated by this Agreement
shall occur at 10:00 a.m. (Chicago, Illinois time) on May 11, 1999 (such day
being sometimes referred to as the "Closing Date"), through escrow at the
Chicago office of the Title Insurer.
4.1 Seller's Closing Deliveries. At Closing, Seller shall execute (as
necessary) and deliver to Purchaser (either through escrow or as otherwise
provided below) each of the documents described below, the original of
each, if not attached as an exhibit to this Agreement, in form and
substance reasonably acceptable to Purchaser and Seller: (a) one original
"Special" or "Limited" Warranty Deed, subject to the Permitted Exceptions,
and in form acceptable to the Title Insurer, warranting title to the Real
Property against all persons claiming by, through or under Seller, but not
otherwise; (b) two original counterparts of the Bill of Sale and Assignment
of Leases, Contracts & Intangibles, in the form attached hereto as Exhibit
E; (c) one copy of the fully signed original notice letter to the tenants,
substantially in the form attached hereto as
2
<PAGE>
Exhibit F; (d) one copy of the fully signed original notice letter to each
Service Contract vendor, substantially in the form attached hereto as
Exhibit G; (e) Seller's non-foreign affidavit, in the form attached hereto
as Exhibit H; (f) such disclosures, declarations and reports as required by
applicable state, county or local law in connection with the sale of Real
Property; (g) an update of the Rent Roll (hereinafter defined) in the form
of the rent roll attached hereto as Exhibit O dated no earlier than five
(5) business days prior to the Closing Date, certified by Seller to be, to
the "Actual Knowledge of Seller" (as defined in Section 9.2.2 below), true
and correct, and subject to the qualifications and limitations on the
liability of Seller as provided in Section 9 and Section 10 below); (h)
such other documents and instruments as may reasonably and customarily be
required by Title Insurer; and (i) two original counterparts of the Closing
Statement (as defined in Section 4.3 below). The Closing Statement may be
signed in facsimile counterparts on the Closing Date. Seller shall leave
all of the original Leases and Service Contracts and any plans and
specifications at the Property.
4.2 Purchaser's Closing Deliveries. At Closing Purchaser shall
deliver or cause to be delivered to Seller executed counterparts of those
of the documents listed in Section 4.1 above required to be signed by
Purchaser (except that Purchaser agrees to execute and deliver to Seller at
least five (5) business days prior to the Closing Date, notice letters in
the forms attached hereto as Exhibit F and Exhibit G, and Seller shall send
the fully executed original notices upon Closing), together with the Cash
Balance described in Section 2.2 above, such evidence of Purchaser's power
and authority as Seller may reasonably request.
4.3 Closing Prorations and Adjustments. The provisions of this
Section 4.3 shall survive the Closing. Seller shall prepare a statement of
the prorations and adjustments required by this Agreement to be executed at
Closing by Purchaser and Seller (the "Closing Statement"), and submit it to
Purchaser for approval at least one (1) business day prior to the Closing
Date. For purposes of this Section 4.3, the amount of any expense credited
by one party to the other shall be deemed an expense paid by that party.
The items listed below are to be equitably prorated or adjusted as of the
close of business on the Closing Date, it being understood that for
purposes of prorations and adjustments, Seller shall be deemed the owner of
the Property on the day before the Closing Date and Purchaser shall be
deemed the owner of the Property as of the Closing Date.
4.3.1 Taxes. Real estate and personal property taxes and
assessments shall be prorated on an accrual basis for the applicable
fiscal periods identified in the current bill(s) taking into
consideration the number of days in the current fiscal periods the
Property has been owned by Seller and Purchaser, respectively, without
regard to any local custom. If the current tax bill(s) are not
available at Closing, then the proration shall be made on the basis of
the most recent ascertainable tax bill(s) with the proration for any
time period(s) occurring prior to Closing and subsequent to the fiscal
period(s) identified in such tax bill(s) also being based upon such
bill(s).
4.3.2 Rent. The "minimum" or "base" rent and all Tenant
Reimbursements (hereinafter defined) payable by tenants under the
Leases for the calendar month in which the Closing occurs shall be
prorated on the basis of the number of days of such month the Property
has been owned by Purchaser and Seller, respectively. However, there
shall be no proration of any such rent which is delinquent as of the
Closing Date. Rather, Purchaser shall cause any such delinquent rent
for the period prior to Closing to be remitted to Seller if, as and
when collected, but only if a deficiency in the then current rent for
the applicable tenant is not thereby created. At Closing, Seller shall
deliver to Purchaser a schedule of all such delinquent rent
("Delinquency Schedule"). Purchaser shall include the amount of
delinquent rent in the first bills thereafter submitted to the tenants
in question after the Closing, and shall continue to do so for two (2)
months thereafter. Purchaser shall promptly deliver to Seller a copy
of each such bill submitted to tenants. After such two month period
Seller may pursue remedies directly against delinquent tenants, but
may not sue to evict or otherwise dispossess such tenants.
4.3.3 Costs Relating to New Leases. Any tenant improvement
costs, leasing commissions or other leasing costs payable pursuant to
any New Lease entered into in accordance with Section 9.4.1 below
shall be prorated over the term of such New Lease, with Seller being
responsible for a portion of such costs and commissions based on the
ratio of base rent payments received by Seller through the Closing
Date to the total base rent payable over the term of such New Lease.
Seller and Purchaser agree that (i) Seller shall be responsible for
all tenant improvement costs and/or allowances set forth on Exhibit R
attached hereto and any leasing commissions or other leasing costs
related to the Leases identified on Exhibit R except for those in
connection with any fees or commissions payable upon the expansion,
extension or renewal of any such Lease after the date hereof, (ii) in
the event that any of the amounts described (but not excluded) in the
preceding clause (i) are not due and payable (and have not been paid
by Seller) prior to Closing,
3
<PAGE>
Seller shall credit Purchaser at Closing for any such unpaid amounts,
and (iii) Purchaser shall be responsible for paying all such amounts
for which it receives a credit at Closing up to the amount of the
credit (and by receipt of any such credit shall automatically assume
as of the Closing the Seller's obligations under any contracts for the
completion of improvement work related thereto).
4.3.4 Security Deposits. Purchaser shall receive a credit at
Closing in the amount of any Security Deposits (plus interest if
required under a Lease) not applied by Seller after the date hereof to
monetary amounts due under Leases which expire prior to Closing. Any
other application of any Security Deposits by Seller after the date
hereof shall require the prior consent of Purchaser, which shall not
be unreasonably withheld or delayed.
4.3.5 Utilities. Water, electric, telephone and all other
utility and fuel charges, fuel on hand (at cost plus sales tax), and
any deposits with utility companies shall be prorated. If possible,
utility prorations will be handled by meter readings on the Closing
Date.
4.3.6 Service Contracts. Amounts due and prepayments under the
Service Contracts shall be prorated.
4.3.7 Fees Payable. Assignable license and permit fees, and
similar fees and expenses of operation.
4.3.8 Loans to Tenants. Notwithstanding anything in this
Agreement to the contrary, Purchaser acknowledges that Seller, as
lessor under Leases with International Business Centers of Michigan,
Inc. ("IBCM") and McDonald & Company Securities, Inc. ("M&CS"), has
provided certain financing to such tenants (the financing provided to
IBCM being hereinafter referred to as the "IBCM Financing" and the
financing provided to M&CS being hereinafter referred to as the "M&CS
Financing"). Such financing is described in (i) that certain Second
Amendment to the Lease with IBCM as "Excess Cost Reimbursement", and
(ii) Exhibit D to the Lease with M&CS.
4.3.8.1 M&CS. Seller hereby reserves the right to all
amounts unpaid by M&CS with respect to the M&CS Financing whether
first becoming due and payable prior or subsequent to Closing
(collectively, the "M&CS Unpaid Amounts"). However, there shall
be no proration of any such M&CS Unpaid Amounts which are
delinquent as of the Closing Date. Rather, Purchaser shall cause
any such delinquent M&CS Unpaid Amounts for the period prior to
Closing and all other remaining M&CS Unpaid Amounts, to be
remitted to Seller if, as and when collected, but only if a
deficiency in the then current rent for M&CS is not thereby
created. At Closing, all such delinquent M&CS Unpaid Amounts
shall be included in the Delinquency Schedule. Purchaser shall
include the amount of delinquent M&CS Unpaid Amounts in the first
bills thereafter submitted to M&CS after the Closing, and shall
continue to do so for two (2) months thereafter. Purchaser shall
promptly deliver to Seller a copy of each such bill submitted to
M&CS. After such two month period, Seller may pursue remedies
directly against M&CS, but may not sue to evict or otherwise
dispossess M&CS.
4.3.8.2 IBCM. Notwithstanding anything in Section 4.3.2
to the contrary, for a period of one hundred eighty (180) days
following the Closing Date ("Purchaser Collection Period"),
Purchaser shall have the right to collect, for the benefit of
Seller and Purchaser as further provided below, (i) all amounts
unpaid by IBCM with respect to the IBCM Financing whether first
becoming due and payable prior or subsequent to Closing
(collectively, the "IBCM Unpaid Amounts"), and (ii) any rent,
including Tenant Reimbursements, under the Lease with IBCM which
is delinquent or unpaid as of Closing. There shall be no
proration of any such amounts which are delinquent as of the
Closing Date. Rather, Purchaser and Seller agree to share equally
in, and Purchaser shall promptly cause to be remitted to Seller
one-half (1/2) of, the following amounts if, as and when
collected: (a) any delinquent IBCM Unpaid Amounts for the period
prior to Closing, (b) all other remaining IBCM Unpaid Amounts,
and (c) any delinquent rent, including delinquent Tenant
Reimbursements, for the period prior to Closing; provided,
however, that such amounts shall be so remitted to Seller only if
a deficiency in the then current rent for IBCM is not thereby
created. At Closing, all delinquent IBCM Unpaid Amounts,
delinquent rent, including delinquent Tenant Reimbursements, and
any Checks (hereinafter defined) which have not cleared as of the
Closing Date shall be included in the Delinquency Schedule.
Purchaser shall include the amount of delinquent IBCM Unpaid
Amounts and delinquent rent in the
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first bills thereafter submitted to IBCM after the Closing, and
shall continue to do so during the Purchaser Collection Period.
Purchaser shall promptly deliver to Seller a copy of each such
bill submitted to IBCM. After the Purchaser Collection Period,
Seller and Purchaser agree to cooperate with each other with
respect to collecting any amounts provided for in this Section
4.3.8.2; provided, however, that Seller may pursue remedies
directly against IBCM, but may not sue to evict or otherwise
dispossess IBCM. Notwithstanding anything herein to the contrary,
(1) Purchaser shall have no right to any portion of any sum paid
by IBCM by check delivered to Seller prior to Closing
(collectively, the "Checks") if such check has "cleared" the
balance of the account it was made against by the fifth (5th)
business day following the Closing Date, and (2) after Closing,
either party shall have the right to file claims against IBCM in
the event IBCM becomes insolvent or a party to any voluntary or
involuntary bankruptcy proceedings or similar proceedings. In the
event any Checks clear the balance of the account they were made
against by the fifth (5th) business day following the Closing
Date, then any such amounts shall be deemed not to have been
included in the Delinquency Schedule.
4.4 Tenant Reimbursements. Tenants under the Leases are currently
paying Seller certain amounts (referred to herein as "Tenant
Reimbursements") based on Seller's estimates for real estate taxes and
assessments, common area maintenance, operating expenses and similar
expenses (collectively, "Tenant Reimbursable Expenses").
4.4.1 For the Calendar Year of the Closing. At Closing, Seller
shall be entitled to retain all Tenant Reimbursements so long as they
are not in excess of the Tenant Reimbursable Expenses actually paid by
Seller for the period prior to Closing. After Closing, Purchaser shall
reconcile such Tenant Reimbursements with tenants for the calendar
year in which the Closing occurs. If the amount of Tenant
Reimbursements collected by Seller for such year is less than the
amount of Tenant Reimbursable Expenses paid by Seller for such year
(or less than the amount which Seller is entitled to recover under the
terms of the Leases), then Purchaser shall promptly remit such amounts
to Seller to the extent such amounts have been collected from tenants.
If such amounts have not yet been collected from tenants, Purchaser
shall promptly bill the tenants for such amounts and continue to bill
such tenants for such amounts each month for two (2) months
thereafter, and, promptly upon receipt thereof, pay such amounts to
Seller. On the other hand, if the amount of Tenant Reimbursements
collected by Seller for the calendar year in which the Closing occurs
exceeds the amount of Tenant Reimbursable Expenses paid by Seller for
such year (or the amount which Seller is entitled to recover under the
terms of the Leases), then Seller shall remit such excess amounts to
Purchaser. Upon receipt of such excess amounts, Purchaser shall be
thereafter obligated to promptly remit the applicable portion to the
particular tenants entitled thereto; and Purchaser shall indemnify,
defend and hold Seller, its beneficiaries, their 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, and such indemnity
shall survive the Closing.
4.4.2 For Prior Calendar Years. Prior to Closing, Seller shall
reconcile with tenants the Tenant Reimbursements and Tenant
Reimbursable Expenses for any calendar year prior to that in which the
Closing occurs. If the amount of Tenant Reimbursements collected by
Seller for such prior years is less than the amount of Tenant
Reimbursable Expenses paid by Seller for such period (or less than the
amount which Seller is entitled to recover under the terms of the
Leases), then Seller shall be entitled to bill such tenants and retain
any such amounts received from tenants. If the amount of Tenant
Reimbursements collected by Seller for such prior calendar year
exceeds the amount of Tenant Reimbursable Expenses paid by Seller with
respect to such period (or the amount which Seller is entitled to
recover under the terms of the Leases), then, to the extent required
under the terms of the Leases, Seller shall remit such excess amounts
to the applicable tenants within thirty (30) days of determination;
and Seller shall indemnify, defend and hold Purchaser, 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 Seller's failure to remit any such amounts to tenants
in accordance with the provisions hereof, and such indemnity shall
survive the Closing.
4.5 Reservation of Rights to Contest. Notwithstanding anything to the
contrary contained in this Agreement, Seller reserves the right to meet
with governmental officials and to
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contest any reassessment governing or affecting Seller's obligations under
Section 4.3 above, and the right to contest any assessment of the Property
or any portion thereof and to attempt to obtain a refund for any taxes
previously paid. Seller shall retain all rights with respect to any refund
of taxes applicable to any period prior to the Closing Date.
4.6 Pending Appeal. Seller is presently appealing the assessed value
of the Real Property and Improvements for real estate tax purposes with
respect to tax year(s) attributable to 1999 and a corresponding reduction
in real estate taxes payable with respect to such tax year(s). Purchaser
and Seller hereby agree that: (1) Seller shall, after Closing, maintain
control of the real estate tax appeal and reduction process with respect to
tax years attributable to 1999 and shall have the right to engage counsel,
consultants, expert witnesses and appraisers as Seller shall reasonably
determine to be necessary to such appeal and Purchaser shall cooperate (and
cause its counsel to cooperate) with Seller with respect to such process;
(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 years, and (3) Seller and Purchaser shall
reprorate real estate and personal property taxes (which were approximated
at Closing pursuant to Section 4.3.1 above based on the most recent
ascertainable tax bills) and the Tenant Reimbursements received from
tenants with respect to such taxes upon issuance of the final real estate
and personal property tax bills for the tax years in which the Closing
occurs (and such reproration shall take into account the reduction in
assessed value described in the first sentence of this Section 4.6). If,
after the reproration described in item (3) of this Section 4.6, 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.
If, after the reproration described in item (3) of this Section 4.6: (y)
the amount credited to Seller by Purchaser at Closing with respect to such
taxes exceeds the amount of the credit that Seller should have received at
Closing had such actual amounts been available at Closing; and/or (z) the
amount of the Tenant Reimbursements with respect to such taxes retained by
Seller at Closing exceed the amount of the Tenant Reimbursements that
Seller should have retained at Closing with respect to such taxes had the
actual amount of such taxes been available at Closing, then: (I) Seller
shall promptly remit the portion of such excess amounts that are
attributable to real estate taxes paid by Purchaser that are not
reimbursable to Purchaser by tenants under the Leases, and (II) if any
portions of such excess amounts are refundable to tenants under any of the
Leases, Seller shall remit such excess amounts to Purchaser and Purchaser
shall be thereafter obligated to promptly remit such portion to the
particular tenants entitled thereto; and Purchaser shall indemnify, defend
and hold Seller, its beneficiaries, their 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, and
such indemnity shall survive the Closing.
4.7 Transaction Costs. Seller shall pay the cost of the base premium
for the owner's policy, any charge for "extended form coverage" and a tax
parcel endorsement as provided in Section 3.1 above, and State of Michigan
and County of Washtenaw transfer taxes. Seller and Purchaser shall share
equally the cost of the Survey and any escrow fees of the Title Company.
Purchaser shall pay for any other closing and other transaction costs
(including, without limitation, any title insurance premiums in excess of
those paid by Seller, such as those for additional endorsements, and any
recording charges except release deeds). Seller and Purchaser shall each be
responsible for the fees of their respective attorneys. This Section 4.7
shall survive any termination of this Agreement.
5. CASUALTY LOSS AND CONDEMNATION. If, prior to Closing, the Real
Property or Improvements, or any part thereof, shall be condemned, or destroyed
or damaged by fire or other casualty, Seller shall promptly so notify Purchaser.
In such event, provided 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
buildings located on the Property is designated to be or is taken or condemned
(a "Material Condemnation"), then either Purchaser or Seller shall have the
option to terminate this Agreement by delivery of written termination notice to
the other within fifteen (15) days after Seller's delivery to Purchaser of
Seller's notice of a Material Condemnation or the occurrence of a Material
Casualty. If (a) the aforementioned casualty is not a Material Casualty, (b) the
aforementioned taking or condemnation is not a Material Condemnation, or (c)
neither Purchaser nor Seller elects 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, subject to the provisions of this Agreement,
without abatement of the Purchase Price (except that Purchaser shall receive a
credit against the Purchase Price in an amount equal to any deductible amount
under Seller's existing casualty insurance payable with respect to the
Property), and Purchaser shall be entitled to receive at Closing the taking,
condemnation or casualty insurance proceeds (or an assignment of the right to
such proceeds) (less any amounts applied against
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costs incurred or income lost by Seller as a result of such occurrence) and
Seller shall, at Closing, execute and deliver to Purchaser all customary proofs
of loss, assignments of claims and other similar items. If either Purchaser or
Seller 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 Escrow Agent, 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 for those which expressly survive termination of this Agreement.
6. BROKERAGE. Seller agrees to pay upon Closing (but not otherwise) a
brokerage commission due to Grubb & Ellis for services rendered in connection
with the sale and purchase of the Property. Seller and Purchaser shall each
indemnify and hold the other harmless from and against any and all claims of all
other brokers and finders 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, attorneys' fees and expenses
incurred by the indemnified party in connection with such claim. This Section 6
shall survive any termination of this Agreement.
7. DEFAULT AND REMEDIES.
7.1 Purchaser's Remedies. Notwithstanding anything to the contrary
contained in this Agreement, if Seller fails to perform in accordance with
the terms of this Agreement, then, as Purchaser's sole and exclusive remedy
hereunder and at Purchaser's option, either (a) 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; provided, however, that in the event of a willful and material
default by Seller, Purchaser shall be entitled to seek Purchaser's actual,
out of pocket damages in an amount not to exceed Twenty Thousand Dollars
($20,000), or (b) upon notice to Seller not more than ten (10) days after
Purchaser becomes aware of which failure, and provided an action is filed
within sixty (60) days thereafter, Purchaser may seek specific performance
of this Agreement, but not damages. Notwithstanding the preceding sentence,
in the event of a willful and material default by Seller under this
Agreement prior to Closing, Purchaser may elect option (a) as provided in
the preceding sentence and in such instance Purchaser shall also be
entitled to reimbursement of the actual out-of-pocket due diligence costs
incurred by Purchaser in connection with this Agreement in an amount not to
exceed $20,000. Purchaser's failure to seek specific performance as
provided in option (b) above shall constitute its election to proceed under
option (a) above.
7.2 Remedies. If Purchaser fails to perform in accordance with the
terms of this Agreement, the Earnest Money shall be retained by Seller as
liquidated and agreed upon damages and as Seller's sole and exclusive
remedy with respect thereto. Notwithstanding anything in this Section 7.2
to the contrary, nothing in this Section 7.2 shall limit Seller's recourse
against Purchaser under any indemnification provisions which expressly
survive termination of 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.
7.3 Post-Closing Remedies. After Closing, Seller and Purchaser shall,
subject to the terms and conditions of this Agreement, 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.
8. CONDITIONS PRECEDENT.
8.1 Review of Property. Subject to the provisions of that certain
Confidentiality Agreement dated October 6, 1998, by and between Grubb &
Ellis, on behalf of Seller, and Purchaser, as modified by that certain
Modification Agreement dated February 16, 1999 (collectively, the
"Confidentiality Agreement") Purchaser acknowledges that it has, prior to
the date of this Agreement, had an opportunity to inspect the Property,
review the Leases, the Service
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Contracts, all "Disclosures" (as hereinafter defined) provided by Seller
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 Section 9 below, 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 11.7 below. Purchaser has obtained
the approval of any necessary investment committee or similar internal
approval for the consummation of the transaction contemplated herein.
Notwithstanding anything to the contrary contained in this Agreement,
Purchaser shall indemnify, defend (with counsel reasonably acceptable to
Seller) and hold Seller and its employees and agents, and each of them,
harmless from and against any and all losses, claims, damages and
liabilities (including, without limitation, attorneys' fees incurred in
connection therewith) arising out of or resulting from Purchaser's exercise
of its rights under this Agreement and the Confidentiality Agreement,
including, without limitation, its right of inspection as was provided for
in the Confidentiality Agreement, and such indemnity shall survive the
Closing and any termination of this Agreement.
8.2 Estoppel Certificates. As a condition to Purchaser's obligation
to close hereunder, Purchaser shall have received estoppel certificates
("Estoppel Certificates"), dated no more than forty-five (45) days prior to
Closing, from tenants occupying not less than eighty percent (80%) of the
rentable space actually leased as of the date of Closing pursuant to valid
and existing Leases, which must include the following three tenants: (a)
The University of Michigan, (b) Dykema Gossett, and (c) Network Express,
Inc.; each in the form and content as set forth herein (the aforesaid
acceptable Estoppel Certificates to be delivered are collectively referred
to as the "Required Estoppel Certificates"). The Estoppel Certificates
shall be in the form of Exhibit J attached hereto (the "Form Tenant
Estoppel Certificate"), unless a different form is indicated in any given
Lease. The Estoppel Certificates executed by tenants shall be in
substantially the form of the Form Tenant Estoppel Certificate, except that
an Estoppel Certificate executed by a tenant shall be deemed an acceptable
Estoppel Certificate for purposes of this Section 8.2 even if: (a) it
contains the information set forth in items 1 through 7 on the Form Tenant
Estoppel Certificate, or such lesser quality or quantity of information as
may be required by the terms of such tenant's Lease; or (b) 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; or (c) such
tenant refuses to certify the same to any lender that Purchaser may have.
If Seller is unable to provide to Purchaser the Required Estoppel
Certificates prior to 3:00 p.m. (Chicago, Illinois time) on the business
day preceding the Closing Date, then Purchaser may elect, by written notice
to Seller given on the Closing Date, either: (i) not to purchase the
Property, in which event the Earnest Money shall be returned to Purchaser,
at which time this Agreement shall terminate and become null and void and
neither party shall have any further rights or obligations under this
Agreement, except for those which expressly survive termination of this
Agreement; (ii) to adjourn the Closing by no more than fourteen (14) days
for the sole purpose of obtaining the Required Estoppel Certificates; or
(iii) to purchase the Property notwithstanding Seller's inability to
provide the Required Estoppel Certificates, in which event Purchaser shall
be deemed to have waived the condition contained in this Section 8.2. If
Purchaser fails to deliver such written notice as described above,
Purchaser shall be deemed to have elected item (ii) above. Notwithstanding
the preceding two sentences, in the event Seller is unable to provide the
Required Estoppel Certificates within the time period initially provided
above in this Section 8.2, then Seller may elect, in its sole and absolute
discretion, by written notice to Purchaser on the day preceding the Closing
Date, to adjourn the Closing Date for one (1) business day in order to
attempt to procure any outstanding Required Estoppel Certificates, and, so
long as Seller provides the Required Estoppel Certificates prior to 3:00
p.m. (Chicago, Illinois time) on the business day preceding the Closing
Date, as so adjourned, then the Closing shall take place on the Closing
Date, as so adjourned.
8.3 Accuracy of Seller's Representations and Warranties. As a
condition to the obligations of Purchaser to close hereunder, each of
Seller's representations and warranties set forth in Section 9 below shall
be true and correct as of the Closing, as modified by any Pre-Closing
Disclosures (as defined in Section 9.2 below). Notwithstanding the
foregoing, if Seller makes any Pre-Closing Disclosure 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 the Closing, or the fifth 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 8.3, then such representations and warranties shall be deemed
modified to conform them to the Pre-Closing Disclosure.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
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9.1 Seller's Representations and Warranties. Subject to Section 9.2,
Section 9.3 and Section 9.5 below, Seller hereby represents and warrants to
Purchaser as to the following matters, as of the date of this Agreement:
9.1.1 Title. Seller holds fee simple title to the Real Property.
9.1.2 Organization & Authority. Seller is duly organized and in
good standing under the laws of the state of its organization. Seller
has the power and authority under its 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.
9.1.3 No Conflict. The execution and delivery of this Agreement,
the consummation of the transactions provided for herein and the
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.
9.1.4 Condemnation. Seller has not received from any
governmental authority any written notice of any condemnation of the
Property or any part thereof.
9.1.5 Litigation. Except as set forth on Exhibit K attached
hereto, Seller has not been served with any material litigation which
is still pending against Seller, and, to the "Actual Knowledge of
Seller" (as hereinafter defined), there is no material litigation
threatened against Seller, with respect to its ownership or operation
of the Property which will affect the Property after Closing.
9.1.6 Service Contracts. To the Actual Knowledge of Seller, the
list attached hereto as Exhibit C is a correct and complete list, in
all material respects, of all of the Service Contracts as of the date
of this Agreement which identifies the service provided and the vendor
under each Service Contract.
9.1.7 Violations of Law. As of the date of this Agreement, to
the Actual Knowledge of Seller, except as set forth on Exhibit M
attached hereto, Seller has received no 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, however, that Seller makes no representation or warranty
with respect to (a) the information or matters disclosed in the items
set forth in Exhibit N attached hereto, and (b) the Property's
compliance with the American with Disabilities Act.
9.1.8 Rent Roll. To the Actual Knowledge of Seller, attached
hereto as Exhibit O is a correct and complete list (the "Rent Roll"),
in all material respects, setting forth the following information as
of the date of this Agreement: (1) the name of each tenant under each
of the Leases as of the date of this Agreement, (2) a description of
the space occupied by each tenant, (3) the monthly Base Rent and
Tenant Reimbursements billed to each tenant with respect to the month
of March, 1999, (4) the approximate square footage demised under the
particular tenant's Lease, (5) the "base year" for payment of real
estate tax pass-throughs, and (6) the amount of all unapplied Security
Deposits held by Seller with respect to the Leases.
9.1.9 Security Deposits. To the Actual Knowledge of Seller, none
of the Security Deposits are held in the form of letters of credit.
9.2 Representations Remade; Knowledge.
9.2.1 Representations Remade. As of Closing, Seller shall be
deemed to remake and restate the representations set forth in Sections
9.1.2 through 9.1.7 and Section 9.1.9, except that the representations
shall be updated by delivering written notice (including, without
limitation, any Estoppel Certificates) to Purchaser in order to
reflect any fact, matter or circumstance of which Seller's Chicago,
Illinois representative, Alissa Helgesen, Vice President -Dispositions
of Equity Office Properties Trust ("EOPT"), becomes aware that would
make any of Seller's representations or warranties contained herein
untrue or incorrect (any such disclosure (including, without
limitation, any Leases or Service Contracts heretofore delivered to or
reviewed by Purchaser) being referred to as a "Pre-Closing
Disclosure"). Notwithstanding the foregoing, the obligation to update
the representations and warranties as provided herein shall not
relieve Seller from liability (if any) under any other provision of
this Agreement.
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9.2.2 Knowledge. When used in this Agreement or in any
certificate or other document delivered pursuant to this Agreement,
the term "Actual Knowledge of Seller" shall mean and be limited to the
actual (and not imputed, implied or constructive) current knowledge of
Alissa Helgesen, Vice President - Dispositions of EOPT, after Inquiry
(as hereinafter defined). "Inquiry" means that Seller has delivered a
copy of Section 9.1 of this Agreement to Gerry Manwaring, the on-site
property manager, requesting that Ms. Manwaring confirm in writing,
and that she has confirmed in writing, that to her actual (and not
imputed, implied or constructive) current knowledge the
representations and warranties of Section 9.1 that are qualified as to
the Actual Knowledge of Seller are accurate. Any knowledge or notice
given to any of Seller's other agents, servants, representatives or
employees shall not be imputed to Seller. Notwithstanding anything in
this Agreement to the contrary, Alissa Helgesen and Gerry Manwaring
shall not have any personal liability or liability whatsoever with
respect to any matters set forth in this Agreement or any of Seller's
representations and/or warranties herein being or becoming untrue,
inaccurate or incomplete in any respect.
9.3 Survival. The representations and warranties set forth in Section
9.1.1 and Section 9.1.8 shall not survive the Closing. The representations
and warranties set forth in Section 9.1.2 through Section 9.1.7 and Section
9.1.9, subject to modifications thereto as a result of any Pre-Closing
Disclosure, shall survive the Closing, but only for a period of two hundred
seventy (270) days thereafter, and not otherwise.
9.4 Covenants. Seller hereby covenants and agrees with Purchaser as
to the following matters:
9.4.1 New Leases. For purposes of this Agreement, any Lease
entered into after the date of the Letter of Intent, and any
modification, amendment, restatement or renewal of any existing Lease
entered into after the date of the Letter of Intent, shall be referred
to as "New Lease(s)"; provided, however, that certain First Amendment
dated February 25, 1999 with Triada, Ltd. shall not be considered a
"New Lease" for purposes of this Agreement (specifically including,
without limitation, Section 4.3.3 above). Seller shall not enter into
any New Lease without Purchaser's prior written consent, which will
not be unreasonably withheld or delayed. Notwithstanding the preceding
sentence, Purchaser hereby confirms Purchaser's approval of the New
Lease(s) identified on Exhibit S attached hereto. If Purchaser does
not respond in writing to Seller's request for approval or disapproval
of a New Lease within four (4) business days after Purchaser's receipt
of Seller's request, Purchaser shall be conclusively deemed to have
approved of such New Lease.
9.4.2 New Service Contracts. Between the date of the Letter of
Intent and the Closing Date, Seller shall not enter into any new
Service Contracts, or cancel, materially modify or renew any existing
Service Contracts, without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld or delayed, unless
such new Service Contracts are cancelable by Seller upon thirty (30)
days' notice. If Purchaser fails to respond to such a request for
consent within five (5) business days after receipt of the request,
such consent shall be deemed given.
9.4.3 Insurance. Between the date of this Agreement and the
Closing Date, Seller shall maintain the liability and casualty
insurance coverage with respect to the Property in effect as of the
date of this Agreement.
9.4.4 Operations. 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.
9.4.5 Other Agreements. Between the date of this Agreement and
the Closing Date and except as required by law or by any of the
Permitted Exceptions or as otherwise permitted under this Agreement,
Seller shall not become party to agreements granting an easement,
right-of-way of license on, under or about the Property or for the use
of the Property, and Seller shall not become party to any agreements
granting easements, rights-of-way or licenses in favor of the Property
or otherwise encumber, or grant interests in, the Property.
9.4.6 Employees. Employees of Seller at the Property, if any,
shall be terminated or relocated as of the Closing.
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9.5 Service Contracts and Leases. Seller does not represent and
warrant 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 Section 8.2 above.
10. LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
contained herein, if the Closing shall have occurred (and Purchaser shall not
have waived, relinquished or released any applicable rights in further
limitation), the aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties, indemnifications, covenants or
other obligations (whether express or implied) of Seller under this Agreement
(or any document executed or delivered in connection herewith) shall not exceed
five hundred thousand dollars ($500,000). No constituent partner in or agent of
Seller, nor any advisor, trustee, director, officer, employee, beneficiary,
shareholder, participant, representative or agent of any corporation or trust
that is or becomes a constituent partner in Seller (including, but not limited
to, EOP Operating Limited Partnership, Equity Office Properties Trust and Equity
Office Properties Management Corp.) shall have any personal liability, directly
or indirectly, under or in connection with this Agreement or any agreement made
or entered into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times,
heretofore or hereafter, and Purchaser and its successors and assigns and,
without limitation, all other persons and entities, shall look solely to
Seller's assets for the payment of any claim or for any performance, and
Purchaser, on behalf of itself and its successors and assigns, hereby waives any
and all such personal liability. Notwithstanding anything to the contrary
contained in this Agreement, neither the negative capital account of any
constituent partner in Seller (or in any other constituent partner of Seller),
nor any obligation of any constituent partner in Seller (or in any other
constituent partner of Seller) to restore a negative capital account or to
contribute capital to Seller (or to any other constituent partner of Seller),
shall at any time be deemed to be the property or an asset of Seller or any such
other constituent partner (and neither Purchaser nor any of its successors or
assigns shall have any right to collect, enforce or proceed against or with
respect to any such negative capital account of partner's obligations to restore
or contribute). The provisions of this Section 10 shall survive the Closing and
any termination of this Agreement.
11. MISCELLANEOUS.
11.1 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 acknowledges that it has inspected the Property and
that it accepts same in its "as is" condition subject to use, ordinary wear
and tear and natural deterioration. 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.
11.2 Assignment. Except as provided in Section 11.12 below, neither
this Agreement nor any interest hereunder shall be assigned or transferred
by either party. 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.
11.3 Modifications. This Agreement shall not be modified or amended
except in a written document signed by Seller and Purchaser.
11.4 Time of Essence. Time is of the essence of this Agreement. In
the computation of any period of time provided for in this Agreement or by
law, the day of the act or event from which the period of time runs shall
be excluded, and the last day of such period shall be included, unless it
is a Saturday, Sunday, or legal holiday, in which case the period shall be
deemed to run until the end of the next day which is not a Saturday,
Sunday, or legal holiday.
11.5 Governing Law. This Agreement shall be governed and interpreted
in accordance with the laws of the state in which the Property is located.
11.6 Notices. All notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and
delivered personally or by certified mail, return receipt requested,
postage prepaid, by facsimile transmission, or by overnight courier (such
as Federal Express), addressed as follows below. All notices given in
accordance with the terms hereof shall be deemed given and received when
sent or when delivered personally. Either party
11
<PAGE>
hereto may change the address for receiving notices, requests, demands or
other communication by notice sent in accordance with the terms of this
Section 11.6.
If to Seller:
------------
c/o Equity Office Properties Trust
Two North Riverside Plaza, Suite 2200
Chicago, Illinois 60606
Attention: Alissa Helgesen
Telephone: 312/466-3595
Facsimile: 312/559-5051
With a copy to:
--------------
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1600
Chicago, Illinois 60606
Attention: Mark Trager
Telephone: 312/466-3950
Facsimile: 312/454-0335
If to Purchaser:
---------------
Great Lakes REIT
823 Commerce Drive, Suite 300
Oak Brook, Illinois 60523
Attention: Raymond M. Braun
Telephone: 630/368-2909
Facsimile: 630/368-2929
With a copy to:
--------------
Great Lakes REIT
823 Commerce Drive, Suite 300
Oak Brook, Illinois 60523
Attention: Adam E. Berman, Esq.
Telephone: 630/368-2903
Facsimile: 630/368-2929
11.7 "AS IS" SALE. ACKNOWLEDGING THE PRIOR USE OF THE PROPERTY AND
PURCHASER'S OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER AGREES TO TAKE
THE PROPERTY "AS-IS," "WHERE-IS," AND WITH ALL FAULTS AND CONDITIONS
THEREON. ANY INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR RECORDS
(COLLECTIVELY, THE "DISCLOSURES") PROVIDED OR MADE TO PURCHASER OR ITS
CONSTITUENTS BY SELLER, ITS AGENTS, EMPLOYEES, CONTRACTORS OR
REPRESENTATIVES CONCERNING THE CONDITION OF THE PROPERTY, INCLUDING WITHOUT
LIMITATION, THE ITEMS DELIVERED TO PURCHASER SET FORTH ON EXHIBIT N
ATTACHED HERETO, SHALL NOT BE REPRESENTATIONS OR WARRANTIES. 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 SECTION 9 ABOVE, SELLER HAS NOT MADE,
DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY 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 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 DISCLAIMS
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.
12
<PAGE>
PURCHASER, ITS SUCCESSORS AND ASSIGNS, HEREBY WAIVE, RELEASE AND AGREE NOT
TO MAKE ANY CLAIM OR BRING ANY COST RECOVERY ACTION OR CLAIM FOR
CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST SELLER OR ITS AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, OR ASSIGNS
(COLLECTIVELY, "SELLER AND ITS AFFILIATES") BASED ON (A) 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) ANY DISCHARGE, DISPOSAL, RELEASE, OR ESCAPE OF
ANY CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON, AT, TO, OR FROM THE PROPERTY;
OR (C) ANY ENVIRONMENTAL CONDITIONS WHATSOEVER ON, UNDER, OR IN THE
VICINITY OF THE PROPERTY. THE PROVISIONS OF THIS SECTION 11.7 SHALL SURVIVE
THE CLOSING AND ANY TERMINATION OF THIS AGREEMENT.
11.8 Trial by Jury. In any lawsuit or other proceeding initiated by
either party under or with respect to this Agreement, Purchaser and Seller
each waives any right it may have to trial by jury. In addition, Purchaser
waives any right to seek rescission of the transaction provided for in this
Agreement.
11.9 Confidentiality. Except as may be required by law, without the
prior written consent of Seller, and unless the Closing occurs, Purchaser
shall not disclose to any third party the existence of this Agreement or
any term or condition thereof or the results of any inspections or studies
undertaken in connection herewith.
11.10 Reports. If for any reason Purchaser does not consummate the
Closing, then Purchaser shall, upon Seller's request, provide Seller with
copies of 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.
11.11 Reporting Person. Seller and Purchaser hereby designate Escrow
Agent 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 Escrow Agent to execute at Closing, a Designation
Agreement, designating Escrow Agent as the reporting person with respect to
the transaction contemplated by this Agreement.
11.12 Section 1031 Exchange. Either party (the "Requesting Party")
may structure the disposition of the Property as a like-kind exchange under
Internal Revenue Code Section 1031, at the Requesting Party's sole cost and
expense. The other party hereto (the "Non-requesting Party") shall
reasonably cooperate therewith, provided that the Non-requesting Party
shall incur no material costs, expenses or liabilities in connection with
the Requesting Party's exchange. The Requesting Party shall indemnify,
defend and hold the Non-requesting Party harmless therefrom (and such
indemnity shall survive the Closing) and the Non-requesting Party shall not
be required to take title to or contract for purchase of any other
property. The Requesting Party must use a qualified intermediary to
effectuate the exchange, and any assignment of the rights or obligations of
the Requesting Party thereunder shall not relieve, release or absolve the
Requesting Party of its obligations to the Non-requesting Party under this
Agreement.
11.13 Auditor's Letter. Upon reasonable notice to Seller, at
Purchaser's request at any time from and after the date hereof until the
date that is one hundred eighty (180) days after the Closing Date, Seller
shall, at Purchaser's sole cost and expense, provide to Purchaser's
independent auditor, Ernst & Young ("E&Y") reasonable access to the books
and records of the Property, regarding the period for which Purchaser is
required to have audited financial statements prepared with respect to the
Property as may be required by the Securities and Exchange Commission, but
only to the extent that such books, records and related information are in
Seller's possession or control and relate to the period during which Seller
held title to the Property. Further, Seller agrees to provide E&Y a
representation letter regarding the books and records of the Property, in
substantially the form of Exhibit P attached hereto ("Audit Letter"), in
connection with the normal course of auditing the Property in accordance
with generally accepted auditing standards (but shall not thereby be deemed
to have made any representation or warranty to Purchaser or to any other
third party).
[signature page follows]
13
<PAGE>
[signature page to Real Estate Sale Agreement]
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives as of the date first above written.
WITNESSES: SELLER:
BURLINGTON ASSOCIATES GENERAL PARTNERSHIP, an
Illinois general partnership
By: First Capital Income Properties, Ltd. -
Series XI, an Illinois limited partnership,
its general partner
By: First Capital Financial Corporation, a
Florida corporation, its general
partner
By:
- ---------------------------- ------------------------------------
Print Name: Print Name:
----------------- ----------------------------
Title:
---------------------------------
- ----------------------------
Print Name:
-----------------
WITNESSES: PURCHASER:
GREAT LAKES REIT, L.P., a Delaware limited
partnership
By: Great Lakes REIT, a Maryland real estate
investment trust, its general partner
By:
- ---------------------------- ------------------------------------------
Print Name: Print Name:
----------------- -------------------------------
Title:
------------------------------------
- ----------------------------
Print Name:
-----------------
14
<PAGE>
EXHIBITS:
- --------
A Legal Description
B List of Personal Property
C List of Service Contracts
D Permitted Exceptions
E Assignment and Assumption of Leases, Service Contracts and Security
Deposits
F Notice to Tenants
G Notice to Parties to Service Contracts
H Non-Foreign Affidavit
I Intentionally omitted
J Form Estoppel Certificate
K Litigation
L Intentionally omitted
M Violations of Law
N Environmental Reports
O Rent Roll
P Audit Letter
Q Intentionally omitted
R Existing Lease Documents
S Approved New Leases
15
<PAGE>
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
[Burlington Office Park, Ann Arbor, Michigan]
BURLINGTON I:
- ------------
Part of the Southeast 1/4 of Section 5, Town 3 South, Range 6 East, City of Ann
Arbor, Washtenaw County, Michigan, described as: Beginning at a point on the
South line of said Section 5, said point being distant North 87 degrees 25
minutes 50 seconds East 799.56 feet from the South 1/4 corner of said Section 5;
thence North 03 degrees 21 minutes 50 seconds West 616.61 feet; thence North 87
degrees 25 minutes 50 seconds East 579.81 feet; thence South 01 degrees 42
minutes 50 seconds East 616.61 feet to the South line of Section 5; thence along
the South line of Section 5, South 87 degrees 25 minutes 50 seconds West 562.02
feet to the Point of Beginning.
BURLINGTON II:
- -------------
Part of the Southeast 1/4 of Section 5, Town 3 South, Range 6 East, City of Ann
Arbor, Washtenaw County, Michigan, described as: Beginning at a point, said
point being distant North 87 degrees 25 minutes 50 seconds East 344.48 feet
along the South line of said Section 5 from the South 1/4 corner of said Section
5; thence North 02 degrees 34 minutes 10 seconds West 156.55 feet; thence South
87 degrees 25 minutes 50 seconds West 4.00 feet; thence North 02 degrees 34
minutes 10 seconds West 316.00 feet; thence North 87 degrees 25 minutes 50
seconds East 4.00 feet; thence North 02 degrees 34 minutes 10 seconds West 19.00
feet; thence South 87 degrees 25 minutes 50 seconds West 4.00 feet; thence North
02 degrees 34 minutes 10 seconds West 125.00 feet; thence North 87 degrees 25
minutes 50 seconds East 450.51 feet; thence South 03 degrees 21 minutes 50
seconds East 616.61 feet to the South line of Section 5; thence along said line
South 87 degrees 25 minutes 50 seconds West 455.07 feet to the Point of
Beginning. Excepting therefrom the following described parcel:
PARCEL A: Commencing at the South 1/4 corner of Section 5, Town 3 South, Range 6
East, City of Ann Arbor, Washtenaw County, Michigan; thence North 87 degrees 25
minutes 50 seconds East 344.48 feet along the South line of said Section 5;
thence North 02 degrees 34 minutes 10 seconds West 156.55 feet; thence South 87
degrees 25 minutes 50 seconds West 4.00 feet; thence North 02 degrees 34 minutes
10 seconds West 279.99 feet to the Point of Beginning; thence North 02 degrees
34 minutes 10 seconds West 36.01 feet; thence North 87 degrees 25 minutes 50
seconds East 4.00 feet; thence North 02 degrees 34 minutes 10 seconds West 19.00
feet; thence South 87 degrees 25 minutes 50 seconds West 4.00 feet; thence North
02 degrees 34 minutes 10 seconds West 125.00 feet; thence North 87 degrees 25
minutes 50 seconds East 40.00 feet; thence South 02 degrees 34 minutes 10
seconds East 179.96 feet; thence South 87 degrees 25 minutes 50 seconds West
40.00 feet to the Point of Beginning, being a part of the Southeast 1/4 of said
Section 5.
BURLINGTON III:
- --------------
Part of the Southeast 1/4 of Section 5, Town 3 South, Range 6 East, City of Ann
Arbor, Washtenaw County, Michigan, described as: Beginning at a point, said
point being the South 1/4 corner of said Section 5; thence North 01 degrees 34
minutes 35 seconds West 436.61 feet along the North and South 1/4 line of said
Section 5, also being the centerline of South Main Street; thence North 87
degrees 25 minutes 50 seconds East 332.91 feet; thence South 02 degrees 34
minutes 10 seconds East 279.99 feet; thence North 87 degrees 25 minutes 50
seconds East 4.00 feet; thence South 02 degrees 34 minutes 10 seconds East
156.55 feet to a point on the South line of said Section 5; thence South 87
degrees 25 minutes 50 seconds West along said South line 344.48 feet to the
Point of Beginning;
PARCEL B:
- --------
Commencing at the South 1/4 corner of Section 5, Town 3 South, range 6 East,
City of Ann Arbor, Washtenaw County, Michigan; thence North 87 degrees 25
minutes 50 seconds East 799.54 feet along the South line of said Section 5;
thence North 03 degrees 21 minutes 50 seconds West 616.61 feet to the Point of
Beginning; thence South 87 degrees 25 minutes 50 seconds West 239.45 feet;
thence North 02 degrees 34 minutes 10 seconds West 30.00 feet; thence North 87
degrees 25 minutes 50 seconds East 217.66 feet; thence South 55 degrees 21
minutes 05 seconds East 49.60 feet; thence South 87 degrees 25 minutes 50
seconds West 17.71 feet to the Point of Beginning, being a part of the Southeast
1/4 of said Section 5.
16
<PAGE>
EXHIBIT B
---------
LIST OF PERSONAL PROPERTY
-------------------------
[Burlington Office Park, Ann Arbor, Michigan]
<TABLE>
<CAPTION>
EACH ITEM EACH ITEM
- ---- ---- ---- ----
<S> <C> <C> <C>
3 Toro Snow Blowers 3 8' Step Ladders - Wood
1 Giant Vac Billy goat 2 CO 2 tanks - refillable
1 Ariens ST8 24 Snow Blower 1 Dwyer Magnetic Gauge
1 Toro Push Mower 1 Propane Torch
1 Wood Chipper 1 18' Power Chain Saw
1 Wheel Barrow 1 Dayton Battery Charger
2 Hand Push Cart 1 Porta Ban Saw PortaCable
1 Echo Leaf Blower 1 Fluke OHM Meter
1 Craftsman Gas Hedge Trimmer 1 Dayton 1hp aircompressor
1 Portable Air Tank 1 Tin Snips
1 Hand Pruner 1 Drill Bit Set - 38 pc.
1 Hand Hedge Trimmer 2 Claw hammer
2 Gas Cans - 5 gal. 1 Small Sledge
1 Gas Cans - 2 2/1 gal. 1 Optex Laser Thermometer
1 Sthill Grass Trimmer 1 Cassette Tape Player
4 Misc. Snow Shovels 1 Master Heat Gun
2 Ice Scrapers 1 Pipe Wrenches, 16", 18", 18"
1 15' Fold Down Ladder 1 1/2" Milwaukee Drill
3 Hand Salt Spreader 1 7 1/4" Circular Saw Milwaukee
2 2 gal Hand Sprayer 1 1/2" Drive Socket Set
2 Push Brooms 1 3/8" Drive Socket Set
1 Post Hole Digger 1 3/8" Batt Deill Milwaukee 3 batteries
1 1/2" Heavy duty hammer drill Milwaukee Misc. Screw drivers and wrenches
12 Plastic barricades 12 Orange cones
ATRIUM FURNITURE BOC I & II
2 Chairs, Bench, Drum Table,
2 Chairs, Bench
</TABLE>
17
<PAGE>
EXHIBIT C
---------
LIST OF SERVICE CONTRACTS
-------------------------
[Burlington Office Park, Ann Arbor, Michigan]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
VENDOR NAME TYPE OF SERVICE
- ---------------------------------------------------------------------------------------------------------
<S> <C>
A & H Lawn Care landscaping
- ---------------------------------------------------------------------------------------------------------
Bartlett Cleaning Services, Inc. (BCS) janitorial service
- ---------------------------------------------------------------------------------------------------------
Erlich Protection Systems, Inc. fire alarm system
- ---------------------------------------------------------------------------------------------------------
Millar Elevator Service Company elevator maintenance (for Burlington I and II)
- ---------------------------------------------------------------------------------------------------------
Dover Elevator Company elevator maintenance (for Burlington III)
- ---------------------------------------------------------------------------------------------------------
Robert Morrison Inc. HVAC
- ---------------------------------------------------------------------------------------------------------
Schaefer Technologies, Inc. (verbal agreement) Water Treatment (for Burlington III)
- ---------------------------------------------------------------------------------------------------------
Eradico Pest Control (3 Agreements) Exterminator
- ---------------------------------------------------------------------------------------------------------
TruGreen ChemLawn Plantscaping Plant Maintenance
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
OTHER AGREEMENTS TYPE OF SERVICE
- ---------------------------------------------------------------------------------------------------------
<S> <C>
Airborne Express (verbal agreement) drop box
- ---------------------------------------------------------------------------------------------------------
Federal Express Corporation (3 Agreements) drop box
- ---------------------------------------------------------------------------------------------------------
United Parcel Service drop box
- ---------------------------------------------------------------------------------------------------------
Arbor Mitchell Corp. (verbal agreement) vending machines
- ---------------------------------------------------------------------------------------------------------
Mr. Uniform & MAT Rental Service (verbal agreement) floor mat service
- ---------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
EXHIBIT D
---------
PERMITTED EXCEPTIONS
--------------------
[Burlington Office Park, Ann Arbor, Michigan]
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, and those claiming by, through and
under said tenants.
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. Covenants, conditions, restrictions, and public utility easements of
record.
7. Encroachments, overlaps, boundary line disputes, or other matters which
would be disclosed by an accurate survey or inspection of the Property.
19
<PAGE>
EXHIBIT E
---------
BILL OF SALE AND ASSIGNMENT OF LEASES, CONTRACTS & INTANGIBLES
--------------------------------------------------------------
[Burlington Office Park, Ann Arbor, Michigan]
This instrument is executed and delivered to be effective as of
______________, 1999, by and between Burlington Associates General Partnership,
an Illinois general partnership ("Seller"), having offices at Two North
Riverside Plaza, Chicago, Illinois 60606, and Great Lakes REIT, L.P., a Delaware
limited partnership ("Purchaser"), having offices at 823 Commerce Drive, Suite
300, Oak Brook, Illinois 60523, covering the real property described in Exhibit
A attached hereto, together with the buildings, structures and other
improvements owned by Seller and located on such real property and commonly
known as "Burlington Office Park" (the "Premises").
1. Agreement. "Agreement" shall mean that certain Real Estate Sale
Agreement dated March __, 1999 by and between Seller, as seller, and Purchaser,
as purchaser, [as amended,] concerning the purchase and sale of the Premises.
2. Sale of Personal Property. For good and valuable consideration, Seller
hereby sells, transfers, sets over and conveys to Purchaser the following:
2.1 Tangible Personal Property. All furniture, furnishings, fixtures,
equipment and other tangible personal property owned by Seller, located on the
Premises and used solely in connection therewith (the "Tangible Personal
Property"), a list of which is attached hereto as Exhibit B.
2.2 Property Documentation. All Seller's right, title and interest in
and to any surveys, blue prints, drawings, plans, specifications, appraisals,
bonds, warranties or guaranties, police reports, available tenant lists and
data, correspondence with tenants, vendors, suppliers, utility companies and
other third parties, stationery, brochures, booklets, marketing artwork,
manuals, promotional and advertising materials, keys for the Premises with
identification of the lock to which each such key relates, and such other books,
records and documentation for or with respect to the Premises or any part
thereof, used in connection with the operation of the Premises or any part
thereof, all to the extent located on the Premises (the "Property
Documentation"). Seller hereby certifies to Purchaser that all of the Property
Documentation has been left on site.
3. Assignment of Leases and Service Contracts. For good and valuable
consideration, Seller hereby assigns, transfers, sets over and conveys to
Purchaser (a) all of Seller's right, title and interest in and to the leases
("Leases") and security deposits ("Security Deposits") described in Exhibit C
attached hereto relating to the Premises; and (b) the service contracts
described in Exhibit D attached hereto (the "Service Contracts"). Purchaser
hereby accepts such assignment and hereby assumes and agrees to be bound by and
to perform, as of the date hereof, Seller's obligations, covenants and
agreements under the Leases and Service Contracts, and Purchaser further assumes
all liability of Seller for the proper refund or return of the Security Deposits
if, when, and as required by the terms of the Leases or otherwise by law.
Subject to Section 4.3.3 of the Agreement, Purchaser agrees to pay all brokerage
fees and leasing commissions payable from and after the date hereof in
connection with any of the Leases, including any fees or commissions payable
upon the renewal or extension of any of the Leases.
4. Assignment of Intangibles. For good and valuable consideration, Seller
hereby assigns, transfers, sets over and conveys to Purchaser all of Seller's
right, title and interest, if any and only to the extent transferable, in and to
all approvals, entitlements, the right to use the name "Burlington Office Park,"
all licenses, permits, maps, drawings, warranties, guaranties and other
intangible property, but only to the extent that the same are now used in
connection with the operation, ownership, maintenance, management, or occupancy
of the Premises (and not to any other property owned by Seller or its
affiliates), and only to the extent applicable to the period from and after the
date hereof.
5. Exclusions. Notwithstanding the foregoing, Seller hereby expressly
excludes all property owned by tenants or other users or occupants of the
Premises, all rights with respect to any refund of taxes applicable to any
period prior to the date hereof, and all computers and computer-related
equipment in the management office of the Premises.
6. Warranty. Seller hereby represents and warrants to Purchaser that it
is the owner of the Tangible Personal Property described above, that such
Tangible Personal Property is free and clear of all liens, charges and
encumbrances other than the "Permitted Exceptions" (as such term is defined in
the Agreement), and Seller warrants and defends title to the Tangible Personal
Property unto Purchaser, its successors and assigns, against any person or
entity claiming, or to claim, the same or any part thereof by, through or under
Seller, subject only to the Permitted Exceptions.
7. Successors and Assigns. This instrument is binding upon, and shall
inure to the benefit of Seller and Purchaser and their respective heirs, legal
representatives, successors and assigns.
20
<PAGE>
8. Power and Authority. Each of Purchaser and Seller represents and
warrants to the other that it is fully empowered and authorized to execute and
deliver this instrument, and that the individual signing this instrument on its
behalf represents he or she is fully empowered and authorized to do so.
9. Attorneys' Fees. If either Purchaser or Seller or their respective
successors or assigns file suit to enforce the obligations of the other party
under this instrument, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.
10. Third Parties. Except as set forth in Section 7 of this instrument,
no third party shall have the benefit of any of the provisions of this
instrument, nor is this instrument made with the intent that any person or
entity other than Purchaser or Seller rely hereon.
11. Limited Liability. By accepting this instrument, 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 instrument shall only be
recoverable against Seller as provided in Section 10 of the Agreement.
12. Counterparts. This instrument may be executed in any number of
counterparts, each of which so executed and delivered shall be deemed to be an
original and all of which shall constitute one and the same instrument.
13. Indemnification. Seller shall defend, indemnify and hold harmless
Purchaser from and against any liability, damages, causes of action, expenses,
and reasonable attorneys' fees incurred by Purchaser by reason of the failure of
Seller to fulfill, perform, discharge, and observe its obligations with respect
to the Leases and the Service Contracts arising on or before the Closing Date.
Purchaser shall defend, indemnify and hold harmless Seller from and against any
liability, damages, causes of action, expenses, and reasonable attorneys' fees
incurred by Seller by reason of the failure of Purchaser to fulfill, perform,
discharge, and observe the obligations assumed by it under this instrument with
respect to the Leases and the Service Contracts arising from and after the
Closing Date. The indemnification obligations in this Section 13 shall survive
for a period of two hundred seventy (270) days from the date of this instrument
first written above.
21
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
executed effective as of the date first written above.
WITNESSES: SELLER:
BURLINGTON ASSOCIATES GENERAL PARTNERSHIP, an
Illinois general partnership
By: First Capital Income Properties, Ltd. -
Series XI, an Illinois limited partnership,
its general partner
By: First Capital Financial Corporation, a
Florida corporation, its general
partner
- ---------------------------- By:---------------------------------
Print Name:----------------- Print Name:-------------------------
Title:------------------------------
- ----------------------------
Print Name:-----------------
WITNESSES: PURCHASER
GREAT LAKES REIT, L.P., a Delaware limited
partnership
By: Great Lakes REIT, a Maryland real estate
investment trust, its general partner
- ---------------------------- By:---------------------------------
Print Name:----------------- Print Name:-------------------------
Title:------------------------------
- ----------------------------
Print Name:-----------------
22
<PAGE>
EXHIBIT F
---------
NOTICE TO TENANTS
-----------------
[Burlington Office Park, Ann Arbor, Michigan]
___________, 1999
Re: Sale of Burlington Office Park, Ann Arbor, Michigan (the "Property")
Dear Tenant:
This is to notify you that the Property has been sold to Great Lakes REIT, L.P.,
a Delaware limited partnership ("Purchaser"). In connection with such sale, the
seller of the Property ("Seller") has assigned to the Purchaser its interest as
landlord in your lease in the Property and has transferred your security
deposit, if any, to Purchaser.
All rental and other payments that become due subsequent to the date hereof
should be made payable to Great Lakes REIT, L.P. and should be addressed as
follows:
Great Lakes REIT, L.P.
Dept. 77-6085
Chicago, Illinois 60678-6085
All notices and future correspondence should be addressed to Purchaser as
follows:
Great Lakes REIT, L.P.
823 Commerce Drive
Suite 300
Oak Brook, Illinois 60523
Phone: (630) 368-2900
Fax: (630) 368-2929
Very truly yours,
EQUITY OFFICE PROPERTIES MANAGEMENT CORP., a Delaware
corporation, as agent for the Seller
By:
---------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
GREAT LAKES REIT, L.P., a Delaware limited partnership
By: Great Lakes REIT, a Maryland real estate
investment trust, its general partner
By:
--------------------------------------------
Print Name:
------------------------------------
Title:
-----------------------------------------
23
<PAGE>
EXHIBIT G
---------
NOTICE TO PARTIES TO SERVICE CONTRACTS
--------------------------------------
[Burlington Office Park, Ann Arbor, Michigan]
______________, 1999
Re: Sale of Burlington Office Park, Ann Arbor, Michigan (the "Property")
Dear Service Provider:
This is to notify you that the Property has been sold to Great Lakes REIT, L.P.,
a Delaware limited partnership ("Purchaser"). Purchaser has assumed all of the
obligations of the undersigned under the service contracts as of the date
hereof. All notices to Purchaser should be sent to Purchaser in the manner
provided in the service contract to the following address:
Great Lakes REIT, L.P.
823 Commerce Drive
Suite 300
Oak Brook, Illinois 60523
Phone: (630) 368-2900
Fax: (630) 368-2929
Very truly yours,
EQUITY OFFICE PROPERTIES MANAGEMENT CORP., a Delaware
corporation, as agent for the Seller
By:
--------------------------------------
Print Name:
------------------------------
Title:
-----------------------------------
GREAT LAKES REIT, L.P., a Delaware limited partnership
By: Great Lakes REIT, a Maryland real estate
investment trust, its general partner
By:
------------------------------------------
Print Name:
----------------------------------
Title:
---------------------------------------
24
<PAGE>
EXHIBIT H
---------
CERTIFICATE OF NON-FOREIGN STATUS
---------------------------------
[Burlington Office Park, Ann Arbor, Michigan]
1. The undersigned ("Transferor") hereby certifies the following:
a. That Transferor is not a foreign entity (as said term is defined
in the Internal Revenue Code and Income Tax Regulations) with respect to
the transfer of that certain property known as "Burlington Office Park,"
located in Ann Arbor, Michigan (the "Property") legally described in
Exhibit A attached hereto and made a part hereof.
b. The tax identification number of Transferor is _____________, and
the offices of Transferor are located at Two North Riverside Plaza, Suite
450, Chicago, IL 60606.
2. Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by Transferee and that any false statement contained
herein could be punishable by fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined this
Certification and to the best of my knowledge and belief, it is true, correct
and complete, and I further declare that I have authority to sign this document
on behalf of the Transferor.
Dated the __________________ day of __________________, 1999 in Cook County,
Illinois.
BURLINGTON ASSOCIATES GENERAL PARTNERSHIP,
an Illinois general partnership
By: First Capital Income Properties, Ltd. - Series XI,
an Illinois limited partnership, its general partner
By: First Capital Financial Corporation,
a Florida corporation, its general partner
By:
---------------------------------------------
Print Name:
-------------------------------------
Title:
------------------------------------------
25
<PAGE>
EXHIBIT I
---------
Intentionally omitted
26
<PAGE>
EXHIBIT J
---------
FORM ESTOPPEL CERTIFICATE
-------------------------
[Burlington Office Park, Ann Arbor, Michigan]
Burlington Associates General Partnership
c/o Equity Office Properties Management Corp.
Two North Riverside Plaza, Suite 2200
Chicago, Illinois 60606
Attn: Alissa Helgesen
Great Lakes REIT
823 Commerce Drive, Suite 300
Oak Brook, Illinois 60523
Attn: Raymond M. Braun
Ladies and Gentlemen:
At the request of Burlington Associates General Partnership, an Illinois
general partnership ("Landlord"), made in connection with the proposed sale of
the property commonly known as Burlington Office Park located in Ann Arbor,
Michigan (the "Property") and Landlord's interest in the "Lease" (as hereinafter
defined) to Great Lakes REIT, L.P., a Delaware limited partnership
("Purchaser"), the undersigned hereby certifies to Landlord and Purchaser as
follows:
1. The undersigned is the tenant under a lease with Landlord, dated
__________, 19___, [as amended by _________________, dated __________, 19___
(collectively, the "Lease")][(the "Lease")] for suite(s) _______ on the ________
floor(s) at the Property (the "Premises"). A true, correct and complete copy of
such lease and all amendments thereto is attached hereto as Exhibit A.
2. The Lease sets forth the entire agreement between Landlord and the
undersigned with respect to the Premises, is in full force and effect and has
not been amended, modified or extended except as set forth on Exhibit A.
3. The monthly [base][minimum] rent of $________ due under the Lease has
been paid through _______, 1999 and all additional rent (consisting of
$_________ per month for estimated operating expenses and estimated real estate
taxes) due under the Lease has been paid through ______________, 1999.
4. The Landlord is not in default under the Lease and there is no
existing default on the part of tenant under the Lease.
5. The expiration date (excluding renewals) of the Lease is
____________________, _____.
6. The amount of the security deposit currently held by Landlord under
the Lease is $_______________.
7. There is no prepaid rent, except $ _____________.
8. The undersigned has not assigned any of its interest in the Lease or
subleased all or any portion of the Premises, except as follows:
_____________________________.
9. The undersigned has no defenses, counterclaims, set-offs or
concessions against rent or charges due or to become due under the Lease.
10. The undersigned has unconditionally accepted the Premises and [has
commenced payment of full rent] [or] [is entitled to _____ month's abatement of
base rent, as of the date hereof] under the Lease and is the owner and holder of
the entire tenant's interest in the Lease.
11. [All work required to be performed by Landlord as of the date hereof
with respect to the Lease and in connection with the Premises has been completed
by Landlord to the satisfaction of Tenant except for ______________.] [All
amounts to be paid by Landlord under the Lease with respect to work in the
Premises have been paid by Landlord except for _______________.]
12. The "base year" for operating expense reimbursements and real estate
taxes under the Lease is 19___.
13. The undersigned has no right or option pursuant to the Lease or
otherwise to purchase all or any part of the Premises or the Property.
14. This Tenant Estoppel Certificate (this "Certificate") shall inure to
the benefit of, and may be relied upon by, Landlord, Purchaser and their
successors and assigns.
15. If we are a corporation, the undersigned is a duly appointed officer
of the corporation signing this Certificate and is the incumbent in the office
indicated under this Certificate and is the incumbent in the office indicated
under his or her name. In any event, the undersigned is duly authorized to
execute this Certificate.
Very truly yours,
, Tenant
----------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Date: , 1999
----------------------
27
<PAGE>
EXHIBIT K
---------
LIST OF PENDING LITIGATION
--------------------------
[Burlington Office Park, Ann Arbor, Michigan]
None.
28
<PAGE>
EXHIBIT L
---------
Intentionally omitted
29
<PAGE>
EXHIBIT M
---------
VIOLATIONS OF LAW
-----------------
[Burlington Office Park, Ann Arbor, Michigan]
None.
30
<PAGE>
EXHIBIT N
---------
ENVIRONMENTAL REPORTS
---------------------
[Burlington Office Park, Ann Arbor, Michigan]
1. Letter dated April 20, 1990 from ENSR Consulting and Engineering to Ms.
Carin Wolkenberg.
2. Letter dated August 17, 1988 from ERT to Mr. Scott Whitney.
3. Preliminary Site Assessment and Petroleum Hydrocarbon Investigation at
Burlington I and II Office Park, Ann Arbor, Michigan, prepared for First
Capital Financial Corp. as Document No. 2708-004-200 and dated August,
1988.
31
<PAGE>
EXHIBIT O
---------
RENT ROLL
---------
[Burlington Office Park, Ann Arbor, Michigan]
See attached Rent Roll.
32
<PAGE>
EXHIBIT P
---------
AUDIT LETTER
------------
[Burlington Office Park, Ann Arbor, Michigan]
Ernst & Young L.L.P.
1 North Franklin Street
Suite 2100
Chicago, Illinois 60606
Dear Sirs:
We are writing at your request to confirm our understanding that your audit of
the statement of operating income for the year ended December 31, 1998 was made
for the purpose of expressing an opinion as to whether the statement of
operating income presents fairly, in all material respects, the results of
operations of [Name of Project] ("Project") in conformity with generally
accepted accounting principles. These representations are made exclusively to
Ernst & Young L.L.P. and not to the buyer of the Project or to any other third
party. In connection with your _________________, 199__ audit, we confirm, to
the best of our actual knowledge and belief, with respect to our daily
operations and without independent investigation or inquiry, the following
representations made during your audit:
1. We have made available to you all material financial records and related
data concerning this Project, which are in our possession.
2. We are not aware of any:
a. Material irregularities involving any member of management or employees
that could have a materially adverse effect on the statement of
operating income.
b. Notices of violations of laws or regulations, the effect of which should
be considered for disclosure in the financial statements or as a basis
for recording a loss contingency.
c. Material liabilities, gain or loss contingencies or other transactions
(including oral and written guarantees) that are required to be but have
not been accrued or disclosed.
d. Material events that have occurred subsequent to December 31, 1998 that
would require material adjustment to the statement of operating income.
3. The Company has complied with all material aspects of contractual
agreements relating to the Project (e.g. management contracts) that would
have a material effect on the statement of operating income in the event of
noncompliance.
4. All significant payments to affiliated companies of the undersigned have
been properly recorded or disclosed in the financial statements.
5. There are no material transactions that have not been properly recorded in
the accounting records underlying the statement of operating income.
By:
-----------------------
33
<PAGE>
EXHIBIT Q
---------
Intentionally omitted
34
<PAGE>
EXHIBIT R
---------
EXISTING LEASE DOCUMENTS
------------------------
[Burlington Office Park, Ann Arbor, Michigan]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Tenant Date of Lease or Amendment Tenant Improvement
Allowance
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Kaydon Corporation Lease dated November 18, 1998 $10,654.00 until 3/31/99
- ------------------------------------------------------------------------------------------------
Dykema, Gossett, Spencer, Amendment dated March 1, 1996 to $85,000.00 until 3/31/99
Goodnow & Trigg Lease dated December 12, 1990
- ------------------------------------------------------------------------------------------------
The Regents of the Lease dated May 14, 1998 $153,872.00
University of Michigan
- ------------------------------------------------------------------------------------------------
Prudential Securities Renewal Notice Letter for Lease dated $0.00
Incorporated June 1, 1983
- ------------------------------------------------------------------------------------------------
Triada, Ltd. First Amendment dated February 25, $57,730.00
1999
- ------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
EXHIBIT S
---------
APPROVED NEW LEASES
-------------------
[Burlington Office Park, Ann Arbor, Michigan]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Tenant Date of Lease or Tenant Comm. Due Per Purchaser's Seller's Share
Amendment Improvements Due Invoices Share
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Personal Touch First Amendment $0 $0 $0 $0
Marketing dated February 25,
1999
- -----------------------------------------------------------------------------------------------------------
Total $0 $0 $0 $0
- -----------------------------------------------------------------------------------------------------------
</TABLE>
36
