SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 27, 1997
JMB INCOME PROPERTIES, LTD. - XIII
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(Exact name of registrant as specified in its charter)
Illinois 0-19496 36-3426137
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(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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ADAMS/WABASH
CHICAGO, ILLINOIS
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. JMB Income Properties, Ltd. -
XIII, an Illinois limited partnership (the "Partnership"), is a limited
partner in Adams/Wabash Limited Partnership, an Illinois limited partnership
("Adams/Wabash"), whose sole asset was the Adams/Wabash Self Park (the
"Property"), a parking garage and retail space structure containing 670
parking spaces and approximately 28,800 square feet of rentable retail area.
On August 11, 1997, pursuant to an option to buy agreement dated June 27,
1997, Adams/Wabash sold the Property to ECH - Adams/Wabash Parking Garage,
L.L.C., a limited liability company affiliated with Equity Office Properties
Trust, an unaffiliated third party.
The sale price of the land and improvements, determined by arm's length
negotiations, was $25,000,000. Net cash proceeds from the sale, net of
closing costs, are approximately $24,560,000. The retail portion of the
Property was 39% occupied at the date of sale. The Property was classified as
held for sale as of December 31, 1996 and therefore has not been subject to
continued depreciation as of that date for financial reporting purposes.
Adams/Wabash expects to report a gain on sale of approximately $5,500,000 and
$5,200,000 for Federal income tax reporting purposes and financial reporting
purposes in 1997, respectively, substantially all of which will be allocable
to the Partnership under the joint venture agreement. In addition, in
connection with the sale of this property and as is customary in such
transactions, Adams/Wabash agreed to certain representations and warranties,
with a stipulated survival period which expires December 15, 1997. Although
it is not expected, Adams/Wabash may ultimately have some liability under such
representations and warranties.
On October 1, 1990, the Partnership was admitted to Adams/Wabash with a
49.9% ownership interest, which increased to 74.9% effective October 1, 1993
pursuant to the terms of the Adams/Wabash partnership agreement. JMB Realty
Corporation, the managing general partner of Adams/Wabash and the Partnership,
has a .1% interest, with the remaining 25% held by the developers. The
Partnership is entitled to a cumulative annual preferred return, payable from
operating cash flow, of 10% of its capital contributions to Adams/Wabash. Any
distributable cash flow in excess of the Partnership's preferred return will
be distributed in accordance with the ownership interests of Adams/Wabash.
The Adams/Wabash partnership agreement stipulates that sale or financing
proceeds will be distributed such that the Partnership shall first receive any
deficit in its cumulative annual preferred return followed by the return of
the Partnership's original capital investment in Adams/Wabash of $24,996,000.
Since distributable net sale proceeds were below the Partnership's original
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capital investment, and there was a deficit in the Partnership's cumulative
preferred annual return, all distributable sale proceeds were distributed to
the Partnership.
The Partnership Agreement provides that the General Partners shall be
allocated from sale proceeds (net after expenses and retained work capital)
(1) the amount necessary to provide for the amount of cash distributions
accrued to them, but deferred as provided under the Partnership Agreement (2)
up to 2% of the selling price of the property being sold and (3) that the
balance be allocated 85% to the Limited Partners and 15% to the General
Partners. However, the Limited Partners shall be allocated 100% of such net
sale proceeds until the Limited Partners (not including the Special Limited
Partner) (i) have been allocated cumulative cash distributions from the
Partnership's operations which, when combined with sale or refinancing
proceeds previously distributed under this clause (i), equal a 6% annual
return on the Limited Partners' average capital investment (their initial
capital investment as reduced by sale or refinancing proceeds previously
distributed) for each year commencing with the third fiscal quarter of 1987,
(ii) have been allocated cash distributions of sale or refinancing proceeds in
an amount equal to the Limited Partners' aggregate initial capital investment
in the Partnership. Notwithstanding the foregoing, payment of the portion of
the sale and refinancing proceeds allocable to the General Partners pursuant
to the above is deferred until such time as the Limited Partners have received
cash distributions of sale and refinancing proceeds and of the Partnership's
operations, in an amount equal to the Limited Partners' initial capital
investment in the Partnership plus a 9% annual return (on a non-compounded
basis) on the Limited Partners' average capital investment. The Partnership
does not expect that the subordination requirements of the Partnership will be
satisfied over the expected remaining term of the Partnership to permit
payment of these amounts to the General Partners. Accordingly, the General
Partners are waiving their right to receive their allocation of sales proceeds
from this sale. Therefore, no portion of the proceeds of this sale is
distributable to the General Partners.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements - Not Applicable.
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of the Property, beyond the date of sale there
will be no further significant rental and other income, property operating
expenses, depreciation and amortization recorded for the Property in the
consolidated financial statements of the Partnership, which for the
Partnership's most recent fiscal year (the year ended December 31, 1996) was
$3,706,699, $1,387,111, and $571,565, respectively. Rental and other income,
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property operating expenses, and depreciation and amortization recorded for
the Property was $1,923,776, $752,239 and $7,324, respectively, for the six
months ended June 30, 1997. Also, as a result of the sale of the Property,
there are no further assets and liabilities related to the Property, which at
June 30, 1997 consisted of land and building and improvements (net of
accumulated depreciation) of approximately $19,202,535; cash and other current
assets of approximately $907,291; other non-current assets of $196,872;
accrued real estate taxes and other current liabilities of $628,224 and
security deposits of approximately $22,000.
(c) Exhibits.
10.1 Option Agreement To Purchase between Adams/Wabash Limited
Partnership and EOP-Adams/Wabash Parking Garage, L.L.C., a limited liability
company affiliated with Equity Office Properties Trust, dated June 27, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XIII
By: JMB Realty Corporation
Managing General Partner
By: GAILEN J. HULL
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Gailen J. Hull
Senior Vice President
Dated:
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OPTION AGREEMENT
(Adams-Wabash Parking Garage; Chicago, Illinois)
THIS AGREEMENT ("Agreement") is made and entered into as of June 27,
1997 (the "Effective Date") by and among AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO ("Trustee"), not personally but solely as Trustee under
Trust Agreement dated December 12, 1986 and known as Trust No. 100872-03
("Trust") ADAMS/WABASH LIMITED PARTNERSHIP, an Illinois limited partnership
(hereinafter called "Optionor"), and EOP-ADAMS/WABASH PARKING GARAGE, L.L.C.,
a Delaware limited liability company (hereinafter called "Optionee").
R E C I T A L S
A. Trustee is the owner of that certain real property (such real
property, together with all and singular the tenements, hereditaments,
easements, rights-of-way and appurtenances belonging or appertaining thereto,
being herein called the "Land") located at 17 East Adams Street, in the City
of Chicago, County of Cook, State of Illinois, as such real property is more
particularly described in Exhibit "A" attached hereto, and upon which is
located a parking garage (the "Building") sometimes known as "Adams-Wabash
Parking Garage".
B. Optionor is the owner of the beneficial interests in the Trust and
desires to sell, or cause to be sold, and Optionee desires to purchase, the
Land, the Building and the other "Property" (as hereinafter defined), on the
terms and conditions hereinafter documented.
C. Trustee is willing to join in this Agreement solely for the
purpose set forth in Paragraph 1D hereof.
NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, it is hereby agreed as follows:
1. OPTION GRANT, CONSIDERATION AND EXERCISE.
A. GRANT OF OPTION. Trustee and Optionor hereby grant to
Optionee the option (the "Option") to purchase the Land and the Building
together with all right, title and interest of Trustee and Optionor in and to
all other improvements, structures and fixtures located upon the Land, all
right, title and interest of Trustee and Optionor (whether now or hereafter
existing) in and to any land lying in the bed of any street, alley, road or
avenue (whether open, closed or proposed) within, in front of, behind or
otherwise adjoining the Land or any portion of it, and, subject to the terms
of this Agreement, all right, title and interest of Trustee and Optionor
(whether now or hereafter existing) in and to any award made or to be made as
a result or in lieu of condemnation, and in and to any award for damage to the
Property or any part thereof by reason of casualty (all of the foregoing being
included within the term "Land"), and all right, title and interest of Trustee
and Optionor under the "Tenant Leases" and "Parking Agreements" (as
hereinafter defined), all right, title and interest of Optionor under the
"Operating Agreements" (as hereinafter defined), all right, title and interest
of Optionor under that certain Agreement dated April 6, 1883 and recorded as
Document No. 3228599, as amended by that certain Agreement dated May 31, 1902
and recorded as Document No. 3294549, and as further amended by that certain
Agreement dated March 7, 1990 and recorded as Document No. 90292947
(collectively, the "Party Wall Agreement"), all right, title and interest of
Optionor in and to those items of personal property described in Exhibit "B"
attached hereto and made a part hereof, all right, title and interest of
Optionor in and to the name "Adams-Wabash Parking Garage", and, to the extent
assignable, all right, title and interest of Optionor and Trustee, if any, in
and to all leases, contract rights, agreements (other than existing management
agreements with respect to ownership and/or operation of the Property), tenant
lists, advertising
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material and telephone exchange numbers relating solely to the Property
(hereinafter, collectively, the "Property"), all upon the terms, covenants and
conditions hereinafter set forth.
B. OPTION CONSIDERATION.
(1) OPTION FEE. Prior hereto, Optionee has delivered Two
Million and no/100 Dollars ($2,000,000.00) (together with all interest earned
thereon while held by "Escrow Holder" being herein called, the "Option Fee")
to Chicago Title and Trust Company, 171 North Clark Street, Chicago, Illinois
60601, Attention: Rose Watkins (which company, in its capacity as escrow
holder hereunder, is called "Escrow Holder"). At all times in which the
Option Fee is being held by the Escrow Holder, the Escrow Deposit shall be
invested by Escrow Holder in the following investments ("Approved
Investments"): (i) United States Treasury obligations, or (ii) such other
manner as may be reasonably agreed to by Optionor and Optionee. The Option
Fee shall be disposed of by Escrow Holder pursuant to the First Amendment to
Joint Order Escrow Agreement attached hereto as Exhibit "K".
(2) RELEASE OF OPTION FEE. The Option Fee shall be
released and delivered to Optionor as follows:
a. Concurrently herewith - $150,000
b. On July 1, 1997 - $ 50,000
c. On July 15, 1997 - Remaining balance of Escrow
Deposit (i.e., $1,800,000, together with all interest thereon)
Such releases shall be made by delivery of Escrow Holder's check to Optionor
at the address provided in Paragraph 10H below or by wire transfer in
accordance with separate instructions from Optionor. Provided that the
"Closing" (as hereinafter defined) shall occur, the Option Fee shall be
applied against the "Purchase Price" (as hereinafter defined) to reduce the
amount of the "Closing Payment" (as defined below), as provided in Paragraph 2
below.
C. EXERCISE OF OPTION. Optionee hereby irrevocably elects to
exercise the Option and to acquire the Property on the terms, covenants and
conditions hereinafter set forth.
D. JOINDER OF TRUSTEE. Trustee is joining in the execution of
this Agreement solely for the purpose of consenting to the grant of the Option
and, at Optionor's request, agreeing to the execution and delivery of the
"Memorandum of Option", the "Deed" and the other conveyancing documents as
hereinafter provided (and defined).
2. PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Property shall be the sum of Twenty-Five Million and no/100 Dollars
($25,000,000.00). The Purchase Price, as adjusted by the application of the
Option Fee (and, to the extent made by Optionee hereunder, by the "Initial
Extension Fee" and the "Additional Extension Fee", as hereinafter defined),
and by the prorations and credits specified herein, shall be paid in
immediately available federal funds on the "Closing Date", as hereinafter
defined (the amount to be paid under this Paragraph 2 being herein called the
"Closing Payment").
3. TITLE MATTERS.
A. TITLE REPORT. Optionor has delivered to Optionee a copy of
a current title commitment (the "Title Commitment") dated April 20, 1997,
issued under number 7660531, covering the Property from Chicago Title
Insurance Company (which company, in its capacity as title insurer hereunder,
is herein called the "Title Company"), a copy of which is attached hereto as
Exhibit "L". In addition, Optionor has delivered to Optionee that certain
survey of the Property dated May 6, 1997, prepared by National Survey Service,
Inc. ("Survey"). Optionee hereby acknowledges that Optionee has approved the
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exceptions to title shown on the Title Commitment (subject to deletion of
those matters noted therein as to be deleted at Closing) and the matters
disclosed on the Survey. Approval by Optionee of any materially adverse
additional exceptions to title disclosed after the date hereof shall be a
condition precedent to Optionee's obligation to purchase the Property
(Optionee hereby agreeing that, in all events, its approval of such additional
exceptions to title shall not be unreasonably withheld). Unless Optionee
gives written notice that it reasonably disapproves any such additional
materially adverse exceptions to title, stating the exceptions so disapproved,
on or before the date which is 5 days after receipt of written notice thereof,
Optionee shall be deemed to have approved said exceptions (provided, however,
in no event shall the Closing Date be extended more than one time or for more
than 5 days to permit Optionee to review any such additional exceptions). If,
for any reason, on or before the Closing Date, Optionor does not cause any
materially adverse additional exceptions to title which Optionee disapproves
(to the extent Optionee is permitted hereunder to so disapprove) either to be
removed or to obtain a title endorsement (if available) reasonably acceptable
to Optionee insuring over such disapproved exception on or before the Closing
Date (as the same may be extended as aforesaid) at no cost or expense to
Optionee (Optionor having the right but not the obligation to do so, such
right to be exercised, if at all, within 5 days after Optionor's receipt of
written notice of disapproval from Optionee), the obligation of Optionor to
sell, and Optionee to buy, the Property as herein provided shall terminate
(and Optionor and Optionee shall have no further obligations in connection
herewith). Optionee shall have the option to waive the condition precedent
set forth in this Paragraph 3A by written notice to Optionor. In the event of
such waiver, such condition shall be deemed satisfied. Notwithstanding
anything to the contrary contained in this Agreement, Optionor shall (i)
remove any mortgage, deed of trust or other loan documents evidencing
financings obtained by Optionor and (ii) remove (or, at Optionor's cost and
expense, cause the Title Company to endorse over in a manner reasonably
satisfactory to Optionee) any tax or judgment liens against Optionor, and
mechanic's liens for work performed by or on behalf of Optionor, or any other
title exceptions created or acquiesced to by Optionor after the date of the
Title Commitment (collectively, the "Required Title Cure Matters"). In the
event that, not later than the Closing Date (as the same may be extended
pursuant to the terms of this Paragraph 3A), Optionor fails to satisfy its
obligations hereunder with respect to the Required Title Cure Matters,
Optionee shall be entitled to utilize sufficient portions of the Purchase
Price payment as may be necessary to satisfy such obligations.
B. EXCEPTIONS TO TITLE. Optionee shall be obligated to accept
title to the Property, subject to the following exceptions to title:
(1) 1996 final installment of real estate taxes and
assessments not yet delinquent and 1997 real estate taxes and assessments not
yet due and payable;
(2) The printed exceptions which appear in the standard
form owner's policy of title insurance issued by Title Company in the State of
Illinois (other than the five so-called "general exceptions" to title and the
"creditor's rights" exception to title); and
(3) Such exceptions to title as may have been or may
hereafter be approved or deemed approval by Optionee pursuant to the
provisions of Paragraph 3A above.
Conclusive evidence of the availability of such title (and a condition
precedent to Optionee's obligations to close hereunder) shall be the
willingness of Title Company to issue to Optionee on the Closing Date an
owner's title insurance policy in the form attached as Exhibit "L" hereto,
subject to deletion of those matters to be deleted at Closing and to the other
provisions of this Paragraph 3 ("Owner's Policy").
<PAGE>
4. COMPLETED DUE DILIGENCE.
A. PRICE REFLECTIVE OF REVIEWS. Optionee has completed all of
Optionee's due diligence examinations, reviews and inspections of all matters
pertaining to the purchase of the Property, including all leases, service
contracts, survey and title matters and all physical, environmental and
compliance matters and conditions respecting the Property. Optionee
acknowledges that the Purchase Price has been determined to appropriately take
such due diligence matters into account to Optionee's satisfaction.
B. CONDUCT OF REVIEWS. Optionee hereby represents, warrants
and covenants to Optionor that Optionee at all times has conducted its due
diligence reviews, inspections and examinations in a manner so as to not cause
damage, loss, cost or expense to Optionor or the Property and so as to not
unduly interfere with or disturb any tenants or any other person or entity at
the Property, and Optionee will indemnify, defend, and hold Optionor and the
Property harmless from and against any such damage, loss, cost or expense (the
foregoing obligation surviving any termination of this Agreement). Provided
Optionee shall comply with the terms of the "Confidentiality Agreement" (as
defined below). Optionee's indemnification obligation shall not include any
such damage, loss, cost or expense arising out of, relating to or attributable
to information concerning the existing condition of the Property (including
existing defects to the Property) or other matters with respect to the
Property discovered by Optionee as a result of such reviews, inspections or
examinations. Optionee further represents and warrants to Optionor that
Optionee did not, and will not prior to Closing, make any intrusive physical
testing (environmental, structural or otherwise) at the Property (such as soil
borings, water samplings or the like) without Optionor's prior knowledge and
consent (and in all events promptly return the Property to its prior condition
and repair thereafter). If for any reason the transactions hereunder shall
fail to close, Optionee shall promptly deliver (without representation or
warranty) to Optionor true, accurate and complete copies of any written
reports (or last drafts thereof, if final reports were not issued) relating to
the Property prepared for or on behalf of Optionee by any third party (other
than those respecting economic performance or issues of management or those as
to which the consent of such third party is required but whose consent, after
reasonable good efforts by Optionee to obtain the same, is not granted) and
shall, upon written request, destroy or return all documents and other
materials furnished by Optionor hereunder. Optionee shall keep all
information or data received or discovered in connection with any of the
inspections, reviews or examinations strictly confidential in accordance with
that certain confidentiality agreement ("Confidentiality Agreement") dated
February 21, 1997.
5. CLOSING PROCEDURE.
A. CLOSING DATE. The closing ("Closing") of the sale and
purchase herein provided shall be consummated at a closing conference
("Closing Conference"), which shall be held at 10:00 a.m. (Chicago time) on
the Closing Date at Optionor's offices at 900 North Michigan Avenue, Chicago,
Illinois. As used herein, "Closing Date" means July 15, 1997, or such earlier
date as may be agreed upon by Optionee and Optionor; PROVIDED, HOWEVER,
Optionee shall have the right to extend the Closing Date on the following
terms:
(1) INITIAL EXTENSION. Optionee shall have the right to
extend the Closing Date until 10:00 a.m. (Chicago time) August 15, 1997, by
giving written notice thereof to Optionor not later than July 1, 1997 and,
concurrently therewith, delivering to Optionor an extension of $100,000 (the
"Initial Extension Fee") in immediately available federal funds.
(2) ADDITIONAL EXTENSION. If Optionee shall exercise the
initial extension as aforesaid, Optionee shall have the further right to
extend the Closing Date until 10:00 a.m. (Chicago time) September 15, 1997, by
giving written notice thereof to Optionor not later than September 1, 1997
and, concurrently therewith, delivering to Optionor an additional extension
fee of $100,000 (the "Additional Extension Fee") in immediately available
federal funds.
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(3) NON-REFUNDABLE FEES. Except as specifically set forth
in this Agreement, the Initial Extension Fee and the Additional Extension Fee
are non-refundable to Optionee and shall be deemed fully earned by Optionor
solely by reason of Optionor's agreement to extend the Closing Date.
Notwithstanding the foregoing, Optionor agrees that an amount equal to the
Initial Extension Fee and the Additional Extension Fee (to the extent either
of the same have been delivered to Optionor) shall be applied against the
Purchase Price if the closing hereunder shall occur. Optionee hereby
acknowledges that, if any right to extend the Closing Date hereunder is
exercised in accordance herewith, the payment schedule for the Option Fee
under Paragraph 1B(2) hereof shall not be extended or modified (and in all
events the final release of the Option Fee shall occur not later than July 15,
1997).
B. ESCROW. On or before the Closing Date, the parties shall
deliver to Title Company the following: (1) by Trustee, at Optionor's
direction, a duly executed and acknowledged original deed ("Deed") in the form
of Exhibit "D" attached hereto and made a part hereof (together with such
certifications regarding mechanic's liens, non-foreign status certificates,
IRS Form W-9 and the like executed by Trustee and/or Optionor, as applicable,
as Title Company shall reasonably require in order for title to be issued as
required herein, and Optionor shall reasonably approve as hereinafter
contemplated), and (2) by Optionee, the Closing Payment in immediately
available federal funds. Such deliveries shall be made pursuant to escrow
instructions ("Escrow Instructions") to be executed among Optionee, Optionor
and Title Company in form reasonably acceptable to such parties in order to
effectuate the intent hereof. The conditions to the closing of such escrow
shall include the Title Company's receipt of the Deed (and other certificates
as provided for above), the Closing Payment and a notice from each of Optionee
and Optionor confirming that all conditions precedent to the notifying party's
obligation to close the transactions contemplated herein have either been
satisfied or waived and authorizing Title Company to close the transactions as
contemplated herein (each of Optionee and Optionor being obligated to deliver
such authorization notice at the Closing Conference as soon as all such
conditions precedent have been satisfied or waived and it is otherwise
reasonably satisfied that the other party is in a position to deliver the
items to be delivered by such other party under Subparagraph C below).
C. DELIVERY TO PARTIES. Upon the satisfaction of the
conditions set forth in the Escrow Instructions, then (x) Title Company shall
purchase the transfer stamps, affix them to the Deed and record the Deed with
the Cook County Recorder, (y) the Closing Payment shall be delivered by Title
Company to Optionor and (z) at the Closing Conference, the following items
shall be delivered:
(1) OPTIONOR DELIVERIES. Optionor shall deliver, or cause
to be delivered, to Optionee the following:
(a) A duly executed and acknowledged bill of sale,
assignment and assumption agreement ("Assignment and Assumption Agreement") in
the form of Exhibit "E" attached hereto and made a part hereof;
(b) Duly executed and acknowledged certificates
regarding the "non-foreign" status of Optionor;
(c) A copy of the Deed;
(d) A certificate of Optionor (the "Optionor Closing
Certificate") updating the representations and warranties of Optionor
contained herein and noting any changes thereto (such certificate including an
updated "Rent Roll" and "Parking Agreement List", as hereinafter defined);
(e) Evidence reasonably satisfactory to Optionee
respecting the termination of any existing management agreements entered into
by Optionor with respect to the Property;
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(f) Notice letters ("Notice Letters") to tenants,
monthly parkers and vendors under the Operating Agreements notifying such
parties of the consummation of the transactions contemplated herein, in form
reasonably satisfactory to Optionor and Optionee;
(g) The "Closing Statement", as hereinafter defined;
(h) To the extent received by Optionor, originals of
the estoppel certificates contemplated in Paragraph 7D below;
(i) Transfer tax declarations;
(j) To the extent in Optionor's possession,
originals (or certified copies if originals are not available) of all Leases,
Parking Agreement and other Operating Agreements, together with keys tagged
for identification;
(k) Evidence reasonably satisfactory to Optionee and
Title Company respecting the due organization of Optionor and the due
authorization and execution of this Agreement and the documents required to be
delivered hereunder; and
(l) Such additional documents as may be reasonably
required by Optionee and Title Company in order to consummate the transactions
hereunder (provided the same do not materially increase the costs to, or
liability or obligations of, Optionor in a manner not otherwise provided for
herein).
(2) OPTIONEE DELIVERIES. Optionee shall deliver to
Optionor the following:
(a) A duly executed and acknowledged Assignment and
Assumption Agreement;
(b) Transfer tax declarations;
(c) The Notice Letters;
(d) A Certificate of Optionee (the "Optionee Closing
Certificate") updating the representations and warranties of Optionee
contained herein;
(e) The Closing Statement;
(f) Evidence reasonably satisfactory to Optionor and
Title Company respecting the due organization of Optionee and the due
authorization and execution of this Agreement and the documents required to be
delivered hereunder; and
(g) Such additional documents as may be reasonably
required by Optionor and Title Company in or to consummate the transactions
hereunder (provided the same do not materially increase the costs to, or
liability or obligations of, Optionee in a manner not otherwise provided for
herein).
D. CLOSING COSTS. Optionor shall pay (i) the title insurance
premium for the Owner's Policy (and any title endorsements required to be
issued in order for Optionor to comply with its obligations to remove or
insure over the Required Title Cure Matters), (ii) the County and State
transfer taxes applicable to the Deed, and (iii) one-half of any escrow
charges. Optionee shall pay (i) the City transfer taxes applicable to the
Deed, (ii) the costs of the Survey, (iii) the costs of any extended title
insurance coverage or title endorsements desired by Optionee (other than
endorsements to be paid for by Optionor pursuant to the preceding sentence),
(iv) all sales and use taxes, if any, payable in connection with the transfers
contemplated in this Agreement, (v) one-half of any escrow charges and (vi)
all fees, costs or expenses incurred by Optionee in connection with Optionee's
<PAGE>
due diligence reviews hereunder. Each of Optionor and Optionee shall pay its
own attorneys' fees and its respective share of prorations as hereinafter
provided. Notwithstanding the foregoing, in the event the sale contemplated
hereby does not close on the Closing Date, then each party shall pay all costs
incurred by it.
E. PRORATIONS.
(1) ITEMS TO BE PRORATED. The following shall be prorated
between Optionor and Optionee as of the Closing Date:
(a) All real estate taxes and assessments on the
Property for 1996 and 1997 on a per diem basis (and otherwise in accordance
with the provisions of this Paragraph E(1)(a)). 1996 taxes and assessments
will be prorated on the basis of the amounts actually billed prior to Closing
and shall be reprorated after the final determination for 1996 taxes is made
in October 1997. The real estate taxes for 1997, payable in 1998, shall be
estimated on the basis of an amount equal to 108% of the actual taxes for
1996. At Closing, the parties will prorate such 1997 taxes on the basis of an
amount equal to 108% of the first installment of 1996 taxes (and will readjust
after the final determination for 1996 taxes is made in October, 1997,
utilizing an amount equal to 108% of the total actual 1996 taxes). Such
proration of taxes for 1997 will be final for all purposes hereunder (and will
not be subject to readjustment by either party when the actual 1997 taxes are
finally determined). If any assessments on the Property are payable in
installments, then the installment for the current period shall be prorated
(with Optionee assuming the obligation to pay any installments due after the
Closing Date).
(b) All parking charges under any Parking
Agreements, all fixed and additional rentals under any leases with respect to
the Property, security deposits and other tenant charges. Optionor shall
deliver or provide a credit in an amount equal to all prepaid rentals or
parking validations for periods after the Closing Date and all refundable
security, parking and key card deposits, and any interest thereon required by
law or by the terms of the applicable lease, (to the extent such deposits are
held by Optionor and are not applied or forfeited prior to the Closing Date in
accordance with the terms of the applicable lease, any such application being
subject to Optionee's reasonable approval) to Optionee on the Closing Date.
Rents or parking agreement income which are delinquent as of the Closing Date
shall not be prorated on the Closing Date. Optionee shall include such
delinquencies in its normal billing through December, 1997 and shall
diligently pursue the collection thereof in good faith after the Closing Date
(but Optionee shall not be required to take any action with respect thereto
except as aforesaid). To the extent Optionee receives rents or parking income
or other amounts on or after the Closing Date, such payments shall be applied
by Optionee towards all rent or parking income or other amounts then owed to
Optionee (i.e., current amounts and any delinquent amounts owed to Optionee)
in connection with the applicable Lease or Parking Agreement for which such
payments are received, and any excess monies received shall be applied toward
the payment of any delinquent rents or parking income or other amounts owed to
Optionor, such amounts being promptly delivered by Optionee to Optionor. If
Optionor shall receive any rents or parking income or other amounts on or
after the Closing Date, the same shall be applied as aforesaid (and Optionor
shall promptly deliver applicable amounts due to Optionee). Optionee may not
waive any delinquent rents or parking income nor modify a Lease or Parking
Agreement so as to reduce or otherwise affect amounts owed thereunder for any
period in which Optionor is entitled to receive a share of charges or amounts
without first obtaining Optionor's written consent (which consent will not be
unreasonably withheld or delayed). Optionor hereby reserves the right to
pursue any remedy against any tenant or monthly parker owing delinquent rents
or parking income and any other amounts to Optionor (it being understood and
agreed that Optionor shall have no right to terminate a lease or cause any
eviction of a tenant thereunder). Optionee shall reasonably cooperate with
Optionor in any collection efforts hereunder (but shall not be required to
litigate or declare a default in any lease). With respect to delinquent rents
and any other amounts or other rights of any kind respecting tenants who are
no longer tenants of the Property as of the Closing Date, Optionor shall
retain all rights relating thereto.
<PAGE>
(c) All operating expenses (including amounts
payable under the Party Wall Agreement); provided, however, in no event shall
any sums under any management agreement in effect prior to Closing be prorated
(Optionee having no obligation with respect thereto).
(2) CALCULATION. The prorations and payments shall be made
on the basis of a written statement prepared and approved by Optionee and
Optionor prior to the Close of Escrow (the "Closing Statement"). Except as
set forth in Paragraph 5E(1)(a), in the event any prorations or apportionments
made under this Subparagraph E shall prove to be incorrect for any reason,
then any party shall be entitled to an adjustment to correct the same provided
written notice of such inaccuracy and request for correction is given not
later than December 15, 1997. Any item which cannot be finally prorated
because of the unavailability of information shall be tentatively prorated on
the basis of the best data then available and reprorated when the information
is available, but not later than December 15, 1997.
(3) BROTHERS COFFEE LITIGATION. The parties acknowledge
that Optionor has commenced litigation against Brothers Coffee Bar, Inc.
("Brothers Coffee"), a copy of the current pleadings to which is attached
hereto as Exhibit "M". Optionee hereby agrees that Optionor shall have the
right to continue to pursue such litigation (and, in connection therewith, to
utilize Wildman, Harrold, Allen & Dixon or, at Optionor's election, such other
attorney(s) as Optionee shall reasonably approve). If at any time such
litigation is settled or is otherwise concluded (by judgment or other final
determination) and sums are payable by Brothers Coffee as a result thereof,
then upon receipt such sums shall be allocated as follows:
(a) First, towards reasonable attorneys fees and
other court costs and expenses paid or incurred in conjunction with such
litigation;
(b) Second, to Optionor any portion of the amounts
awarded which are based on the liquidated damages provisions of the Brothers
Coffee lease with respect to Brothers Coffee's failure to open and/or continue
to operate prior to the Closing Date;
(c) Third, to Optionor an amount equal to Optionor's
lost base rent under the Brothers Coffee lease for periods prior to Closing;
(d) Fourth, to Optionee any portion of the amounts
awarded which are based on liquidated damages provisions of the Brothers
Coffee lease with respect to Brothers Coffee's failure to operate from and
after the Closing Date;
(e) Fifth, to Optionee any portion of such sums
which are awarded based on lost base rents for periods after the Closing; and
(f) Sixth, the balance of any such sums shall be
shared by Optionor and Optionee in the ratio which the amounts paid to
Optionor under clauses (b) and (c) above bears to the amounts paid to Optionee
under clauses (d) and (e) above.
Optionor shall have the right, but not the obligation, to continue to
pursue such litigation after Closing. If Optionor elects not to pursue such
litigation, it shall first notify Optionee thereof in writing and, thereafter,
Optionee shall have the right to pursue such litigation at its sole cost and
expense. If Optionee elects to pursue such litigation, then the allocation of
any payments under clauses (b) and (c), on the one hand, and clauses (d) and
(e) on the other hand shall be reversed, such that Optionee shall be entitled
to receive its share of liquidated damages and lost base rents for periods
after Closing prior to Optionor receiving pre-Closing lost base rents. The
parties agree that any settlement proposed to be made by whichever of Optionor
or Optionee is pursuing the litigation at the applicable time, shall require
the consent of the other party (which consent shall not be unreasonably
withheld). Optionor and Optionee will keep each other reasonably informed as
to the status of such litigation (including giving copies of pleadings) and,
to the extent practicable, shall coordinate the pursuit of such litigation in
good faith.
<PAGE>
6. ADDITIONAL CONDITIONS PRECEDENT.
A. CONDEMNATION OR DESTRUCTION OF PROPERTY. In the event that,
after the date hereof but prior to the Closing Date, either any portion of the
Property is taken pursuant (or becomes subject) to eminent domain proceedings
or any of the improvements on the Property are damaged or destroyed by any
casualty, Optionor shall promptly notify Optionee, and Optionor shall have no
obligation to repair or replace any such damage or destruction. Optionor
shall, upon consummation of the transaction herein provided, pay to Optionee
any applicable "deductible" portion under its casualty insurance coverage,
assign to Optionee all claims of Optionor respecting any condemnation or
casualty insurance coverage, as applicable, and all condemnation proceeds or
proceeds from any such casualty insurance received by Optionor on account of
any condemnation or casualty (the damage from which shall not have been
repaired by Optionor prior to the Closing Date), as applicable; provided,
however, that Optionor shall retain any proceeds received (and the right to
receive any proceeds) of rental income insurance or a temporary taking award
that are attributable to a period prior to the Closing Date. In the event (i)
the condemnation award or the cost of repair of damage to the Property on
account of a casualty, as applicable, shall exceed $1,000,000 or (ii) the
result of any condemnation of the Property would be a permanent materially
adverse loss of access to the Property, Optionee may, at its option, terminate
this Agreement by notice to Optionor, given on or before the Closing Date.
B. PERFORMANCE BY OPTIONOR. The performance and observance, in
all material respects, by Optionor of all covenants and agreements of this
Agreement to be performed or observed by Optionor prior to or on the Closing
Date shall be a condition precedent to Optionee's obligation to purchase the
Property. In addition, in the event that the Optionor Closing Certificate
shall disclose any material adverse changes in the representations and
warranties of Optionor contained in this Agreement which are not otherwise
permitted or contemplated by the terms of this Agreement, then Optionee shall
have the right to terminate this Agreement. Optionee shall have the option to
waive the condition precedent set forth in this Paragraph 6B by written notice
to Optionor. In the event of such waiver, such condition shall be deemed
satisfied.
C. PERFORMANCE BY OPTIONEE. The performance and observance, in
all material respects, by Optionee of all covenants and agreements of this
Agreement to be performed or observed by it prior to or on the Closing Date
shall be a condition precedent to Optionor's obligation to sell the Property.
In addition, in the event that the Optionee Closing Certificate shall disclose
any material adverse changes in the representations and warranties of Optionee
contained in this Agreement which are not permitted or contemplated by the
terms of this Agreement, then Optionor shall have the right to terminate this
Agreement. Optionor shall have the option to waive the condition precedent
set forth in this Paragraph 6C by written notice to Optionee. In the event of
such waiver, such condition shall be deemed satisfied.
D. OPTIONOR'S RIGHT TO CURE. Notwithstanding anything to the
contrary contained herein, prior to any termination under this Agreement by
Optionee based on any claim of default by Optionor or failure of a condition
precedent in favor of Optionee, Optionee shall give Optionor written notice
specifying such claim and Optionor shall thereupon have thirty (30) days
within which to cure such default or satisfy such condition (and, if
necessary, the Closing Date shall be extended to accommodate such cure
period).
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
A. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPTIONOR.
(1) GENERAL DISCLAIMER. Except as specifically set forth
in Paragraph 7A(2) below, or in the documents executed and delivered by
Optionor at Closing (the "Closing Documents") the sale of the Property
hereunder is and will be made on an "as is" basis, without representations and
<PAGE>
warranties of any kind or nature, express, implied or otherwise, including,
but not limited to, any representation or warranty concerning title to the
Property, the physical condition of the Property (including, but not limited
to, the condition of the soil or the Improvements), the environmental
condition of the Property (including, but not limited to, the presence or
absence of hazardous substances on or respecting the Property), the compliance
of the Property with applicable laws and regulations (including, but not
limited to, zoning and building codes or the status of development or use
rights respecting the Property), the financial condition of the Property or
any other representation or warranty respecting any income, expenses, charges,
liens or encumbrances, rights or claims on, affecting or pertaining to the
Property or any part thereof. Optionee acknowledges that Optionee has
examined, reviewed and inspected all matters which in Optionee's judgment bear
upon the Property and its value and suitability for Optionee's purposes. In
addition, Optionee acknowledges that Standard/Wabash Parking Corporation,
Optionor's third party manager for the garage portion of the Property ("Garage
Manager") will either be an investor in Optionee or retained as a manager or
tenant of the garage portion of the Property by Optionee after closing.
Except as to matters specifically set forth in Paragraph 7A(2) below, Optionee
will acquire the Property solely on the basis of its own physical and
financial examinations, reviews and inspections, the knowledge of Garage
Manager as to the garage portion of the Property and the title insurance
protection afforded by the Owner's Policy. Without limitation thereon,
Optionee hereby waives any and all rights of contribution or other rights or
remedies against Optionor under the Comprehensive Environmental Response,
Compensation and Liability Act or any other applicable environmental laws,
rules or regulations.
(2) LIMITED REPRESENTATIONS AND WARRANTIES OF OPTIONOR.
Subject to the provisions of Paragraph 7A(1) above, Optionor hereby represents
and warrants that, except as set forth in Exhibit "F" attached hereto and made
a part hereof, Optionor has no knowledge that any of the following statements
is untrue (and, for this purpose, Optionor's knowledge shall mean only the
present actual knowledge of Andrea Backman, the portfolio manager for JMB
Realty Corporation with respect to the Property, without any duty to
investigate and with any imputed or constructive knowledge being excluded):
(a) RENT ROLL. Attached as Exhibit "G-1" and made a
part hereof is a true, complete and accurate list, as of the date thereof, of
all tenant leases (together with any new leases entered into in accordance
with the terms of this Agreement, the "Tenant Leases") respecting the
Property, together with certain information respecting the same (the "Rent
Roll"), and, except for the matters involved in the Brothers Coffee
litigation, described in this Agreement, Optionor has not received any written
notice of a material default under any of such tenant leases that remains
uncured or any written notice of a bankruptcy of a tenant or any guarantor of
a Tenant Lease.
(b) MONTHLY PARKING AGREEMENTS. Attached as Exhibit
"G-2" and made a part hereof is a true, complete and accurate list, as of May
28, 1997, of all parking agreements respecting the Property, together with
certain information respecting the same (together with any parking agreements
hereinafter entered into, the "Parking Agreements"), and Optionor has not
received any written notice of a material default under any of such monthly
parking agreements that remains uncured.
(c) LITIGATION. There is no pending action,
litigation, condemnation or other proceeding against the Property or against
Optionor with respect to the Property.
(d) COMPLIANCE. Optionor has received no written
notice from any governmental authority having jurisdiction over the Property
to the effect that the Property is not in compliance with applicable laws and
ordinances.
<PAGE>
(e) OPERATING AGREEMENTS. Optionor has not entered
into any service or similar operating agreements or contracts ("Operating
Agreements") or other agreements (other than as set forth in this Agreement)
relating to the Property which will be in force on the Closing Date, except as
described in Exhibit "H" attached hereto, and Optionor has not received any
written notice of any material default thereunder that remains uncured.
(f) PERSONAL PROPERTY. Optionor has not encumbered,
assigned or transferred its interest in the Personal Property.
(g) NO EMPLOYEES OF OPTIONOR. Optionor has no
employees at the Property (any such employees being employed by Optionor's
third party managers of the Property).
(h) NO TAX APPEALS. Optionor has no tax appeals
currently in process with respect to the Property.
(i) DUE AUTHORITY. This Agreement and all
agreements, instruments and documents herein provided to be executed or to be
caused to be executed by Optionor are and on the Closing Date will be duly
authorized, executed and delivered by and are binding upon Optionor. Optionor
is a limited partnership, duly organized and validly existing under the laws
of the State of Illinois, and is duly authorized and qualified to do all
things required of it under this Agreement. Optionor has the capacity and
authority to enter into this Agreement and consummate the transactions herein
provided.
(j) ENVIRONMENTAL MATTERS. Except as set forth in
the reports described in Exhibit "I" attached hereto and made a part hereof
(the "Environmental Reports"), Optionor has received no written notice of the
existence, deposit, storage, removal, burial or discharge of any "Hazardous
Material" at, upon, under, within or adjacent to the Property, in an amount
which, in Optionor's reasonable judgment, would, as of the date hereof, give
rise to an "Environmental Compliance Cost". The term "Hazardous Material"
shall mean (i) asbestos and any chemicals, flammable substances or explosives,
any radioactive materials (including radon), any hazardous wastes or
substances which have, as of the date hereof, been determined by any
applicable Federal, State or local government law to be hazardous or toxic by
the U.S. Environmental Protection Agency, the U.S. Department of
Transportation, and/or any instrumentality now or hereafter authorized to
regulate materials and substances in the environment which has jurisdiction
over the Property ("Environmental Agency"), and (ii) any oil, petroleum or
petroleum derived substance, any drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude
oil, which materials listed under items (i) and (ii) above cause the Property
(or any part thereof) to be in material violation of any applicable
environmental laws or the regulations of any Environmental Agency; provided,
however, that the term "Hazardous Material" shall not include de minimus
amounts of motor oil and gasoline contained in or discharged from vehicles not
used primarily for the transport of motor oil or gasoline. The term
"Environmental Compliance Cost" means any necessary out-of-pocket cost, fee or
expense incurred directly to satisfy any requirement imposed by an
Environmental Agency to bring the Property into compliance with applicable
Federal, State and local laws and regulations directly relating to the
existence on the Property of any Hazardous Material.
(k) PARTY WALL PAYMENTS. Except for the payments made
in conjunction with the 1990 repairs to the party wall, Optionor has not paid
any fees, costs or expenses under the Party Wall Agreement nor has Optionor
received any written notice demanding payment of any such sums since such 1990
repairs.
B. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby
represents and warrants that this Agreement and all agreements, instruments
and documents herein provided to be executed or to be caused to be executed by
Optionee are and on the Closing Date will be duly authorized, executed and
delivered by and are binding upon Optionee; Optionee is a limited liability
<PAGE>
company, duly organized and validly existing and in good standing under the
laws of the State of Delaware, and is duly authorized and qualified to do all
things required of it under this Agreement; and Optionee has the capacity and
authority to enter into this Agreement and consummate the transactions herein
provided.
C. SURVIVAL. Any cause of action of a party for a breach of
the foregoing representations and warranties shall survive until December 15,
1997, at which time such representations and warranties (and any cause of
action resulting from a breach thereof not then in litigation) shall
terminate. Notwithstanding the foregoing, if any of Blair Ashner, Bob Nelson,
Gary Beller, Frank Frankini or Keith Bawolek, the individuals within
Optionee's organization in charge of Optionee's due diligence reviews and
acquisition determinations, with respect to the Property, or, as to the garage
portion of the Property, the Garage Manager shall have actual knowledge as of
the date hereof, that any of the representations or warranties of Optionor
contained herein are false or inaccurate or that Optionor is in breach or
default of any of its obligations under this Agreement, then Optionee shall
have no right to terminate this Agreement as a result thereof (and Optionor
shall have no liability or obligation respecting such false or inaccurate
representations or warranties or other breach or default). In addition, if
any of Blair Ashner, Bob Nelson, Gary Beller, Frank Frankini or Keith Bawolek,
the individuals within Optionee's organization in charge of Optionee's due
diligence reviews and acquisition determinations, with respect to the
Property, or, as to the garage portion of the Property, the Garage Manager
shall have actual knowledge as of the Closing Date that any of the
representations or warranties of Optionor contained herein are false or
inaccurate or that Optionor is in breach or default of any of its obligations
under this Agreement, and Optionee nonetheless closes the transactions
hereunder and acquires the Property, then Optionor shall have no liability or
obligation respecting such false or inaccurate representations or warranties
or other breach or default (and any cause of action resulting therefrom shall
terminate upon such closing hereunder).
D. INTERIM COVENANTS OF OPTIONOR. Until the Closing Date or
the sooner termination of this Agreement:
(1) Optionor shall use good faith efforts to continue to
maintain the Property in the same manner and condition as prior hereto
pursuant to its normal course of business (such maintenance obligations not
including extraordinary capital expenditures or expenditures not incurred in
such normal course of business), subject to reasonable wear and tear and
further subject to destruction by casualty or other events beyond the control
of Optionor.
(2) Optionor shall not enter into any additional service
contracts or other similar agreements without the prior consent of Optionee,
except those deemed reasonably necessary by Optionor which are cancelable on
30 days' notice and at market rates.
(3) Optionor shall have the right to continue to offer the
Property for lease in the same manner as prior hereto pursuant to its normal
course of business but shall keep Optionee reasonably informed as to the
status of leasing prior to the Closing Date. Optionor shall not enter into
any material new leases or material modifications of existing Tenant Leases or
consent to any assignment or subleases of any Leases thereafter without the
consent of Optionee (which consent will not be unreasonably withheld and shall
be deemed approved if not disapproved in writing within five (5) business days
of request for approval). In no event shall Optionor have any obligation to
enter into any new lease or modify any existing lease unless Optionee shall
agree to pay or reimburse Optionor on the Closing Date for all tenant
improvement costs and leasing commissions incurred by Optionor under or in
connection therewith (Optionee's agreement to pay or reimburse for such
amounts not to be unreasonably withheld).
<PAGE>
(4) Optionor shall use commercially reasonable good faith
efforts to obtain estoppel certificates in form reasonably satisfactory to
Optionee from tenants under the Tenant Leases and, if reasonably requested by
Optionee, from the adjacent property owner under the Party Wall Agreement
(such efforts not including any obligation to institute legal proceedings or
to expend any monies therefor, other than for minor administrative charges).
Optionee agrees that such estoppel certificates are not a condition to the
transactions hereunder (and failure to obtain the same for any reason shall
not give rise to any termination or other rights hereunder or result in any
adjustments to the payments due hereunder).
(5) Optionor shall maintain its current insurance coverage
(or substantially equivalent coverage) through Closing.
(6) Optionor shall use reasonable good faith efforts to
notify Optionee of any breaches or defaults hereunder or other material
adverse changes to the Property of which Optionor has actual knowledge during
the term of this Agreement.
(7) Except to the extent required by law or by existing
agreements respecting the Property or as otherwise provided for herein,
Optionor shall not knowingly create or acquiesce to the creation of any liens,
encumbrances, easements or other matters adversely affecting title to the
Property which will not be removed (or insured over in accordance with the
terms of this Agreement) at Closing.
8. LIMITATION OF REMEDIES AND LIABILITY.
A. If the transactions hereunder shall not be closed by reason
of Optionor's material default or by reason of the failure of a condition
precedent to Optionee's obligations to close hereunder, and Optionee is not in
material default, then the Option Fee shall be returned to Optionee (and, if
such failure to close is as a result of Optionor's material default and not a
failure of a condition, Optionee shall also be entitled to a return of any
Initial Extension Fee or Additional Extension Fee paid by Optionee). In
addition, if the transactions herein provided shall not be closed solely by
reason of Optionor's material default under this Agreement, and Optionee shall
not be in material default and shall be ready, willing and able to close, then
Optionee shall be entitled to specifically enforce this Agreement (but no
other action, for damages or otherwise shall be permitted); provided however:
(i) if Optionor commences suit for specific performance
within thirty (30) days of the Closing Date but is unable to obtain specific
performance because Optionor sold or transferred the Property to a party other
than Optionee on or before the Closing Date (or within 30 days thereafter),
then Optionee shall be entitled to pursue a damage action against Optionor; or
(ii) if the material default by Optionor shall
otherwise be such that specific performance shall not be available so as to
appropriately provide to Optionee the benefits of the bargain under this
Agreement, Optionor shall reimburse Optionee for its actual out-of-pocket
costs and expenses incurred in connection with the transactions hereunder
(such reimbursement obligation not exceeding $100,000 in the aggregate).
If the transactions herein provided shall fail to close by reason of
Optionee's default under this Agreement, then the Option Fee (and the Initial
Extension Fee, if made by Optionee) shall be delivered and/or retained by
Optionor as its sole and exclusive remedy hereunder.
B. Notwithstanding anything to the contrary contained herein,
if the closing of the transactions hereunder shall have occurred (and Optionee
shall not have waived, relinquished or released any applicable rights in
further limitation), the aggregate liability of Optionor arising pursuant to
or in connection with the representations, warranties, indemnifications,
covenants or other obligations (whether express or implied) of Optionor under
this Agreement (or any document executed or delivered in connection herewith)
shall not exceed $500,000.
<PAGE>
C. No constituent partner in or agent of Optionor, 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 Optionor (including, but not limited to, JMB
Realty Corporation or any individual named in Paragraph 7A(2) hereof) 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 Optionee and
its successors and assigns and, without limitation, all other persons and
entities, shall look solely to Optionor's assets for the payment of any claim
or for any performance, and Optionee, 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 Optionor (or in any
other constituent partner of Optionor), nor any obligation of any constituent
partner in Optionor (or in any other constituent partner of Optionor) to
restore a negative capital account or to contribute capital to Optionor (or to
any other constituent partner of Optionor), shall at any time be deemed to be
the property or an asset of Optionor or any such other constituent partner
(and neither Optionee nor any of its successors or assigns shall have any
right to collect, enforce or proceed against or with respect to any such
negative capital account of partner's obligation to restore or contribute).
9. MEMORANDUM OF OPTION. Promptly after the full execution and
delivery of this Agreement by Optionee and Optionor and receipt by Escrow
Holder of the Option Fee, and while this Agreement is still in effect, each
party shall deliver to the other party for recordation a duly executed and
acknowledged memorandum of option in the form of Exhibit "J" (the "Memorandum
of Option").
10. MISCELLANEOUS.
A. BROKERS.
(1) Except as provided in Subparagraph (2) below, Optionor
represents and warrants to Optionee, and Optionee represents and warrants to
Optionor, that no broker or finder has been engaged by it, respectively, in
connection with any of the transactions contemplated by this Agreement or to
its knowledge is in any way connected with any of such transactions. In the
event of a claim for broker's or finder's fee or commissions in connection
herewith, then Optionor shall indemnify and defend Optionee from the same if
it shall be based upon any statement or agreement alleged to have been made by
Optionor, and Optionee shall indemnify and defend Optionor from the same if it
shall be based upon any statement or agreement alleged to have been made by
Optionee. The indemnification obligations under this Paragraph 10A(1) shall
survive the closing of the transactions hereunder or the earlier termination
of this Agreement.
(2) Optionor has engaged Richard Ellis, LLC, ("Broker") in
connection with the sale of the Property hereunder pursuant to a separate
agreement (and Optionor shall be responsible for the payment of any fees which
may be due Broker pursuant to such agreement, Optionor hereby certifying to
Optionee that such fees do not exceed 2% of the Purchase Price).
B. BUSINESS DAYS. Whenever action must be taken (including the
giving of notice or the delivery of documents) under this Agreement during a
certain period of time or by a particular date that ends or occurs on a non-
business day, then such period or date shall be extended until the immediately
following business day. As used herein, "BUSINESS DAY" means any day other
than a Saturday, Sunday or federal or Illinois State holiday.
C. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties respecting the matters herein set forth and
supersedes all prior agreements between the parties hereto respecting such
matters. This Agreement may not be modified or amended except by written
agreement signed by both parties.
<PAGE>
D. TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
E. INTERPRETATION. Paragraph headings shall not be used in
construing this Agreement. Each party acknowledges that such party and its
counsel, after negotiation and consultation, have reviewed and revised this
Agreement. As such, the terms of this Agreement shall be fairly construed and
the usual rule of construction, to the effect that any ambiguities herein
should be resolved against the drafting party, shall not be employed in the
interpretation of this Agreement or any amendments, modifications or exhibits
hereto or thereto.
F. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Illinois.
G. SUCCESSORS AND ASSIGNS. Except for a "Permitted Transfer",
Optionee may not assign or transfer its rights or obligations under this
Agreement without the prior written consent of Optionor (in which event such
transferee shall assume in writing all of the transferor's obligations
hereunder, but such transferor shall not be released from its obligations
hereunder with respect to the period prior to such transfer). For purposes of
this Agreement, the term "Permitted Transfer" shall mean the assignment of
Optionee's rights and obligations under this Agreement to any of the
following: (i) an entity directly or indirectly affiliated, controlling,
controlled by or under common control with Optionee; (ii) Equity Office
Properties Trust, a Maryland real estate investment trust; (iii) a partnership
or limited liability company, the general partner or managing member, as
applicable, of which is Equity Office Properties Trust; (iv) a real estate
investment trust which, at the time of such transfer, is affiliated with
Equity Group Investments, Inc. and/or controls Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership IV, an Illinois limited partnership
("ZML IV"), and/or controls the real estate formerly controlled by ZML IV; and
(v) a partnership or limited liability company, the general partner or
managing member, as applicable, of which is a real estate investment trust
which, at the time of such transfer, is a real estate investment trust of the
type described in sub-clause (iv) of this sentence. No consent given by
Optionor to any transfer or assignment of Optionee's rights or obligations
hereunder shall be construed as a consent to any other transfer or assignment
of Optionee's rights or obligations hereunder. No transfer or assignment in
violation of the provisions hereof shall be valid or enforceable. Subject to
the foregoing, this Agreement and the terms and provisions hereof shall inure
to the benefit of and be binding upon the successors and assigns of the
parties.
H. NOTICES. Any notice which a party is required or may desire
to give the other shall be in writing and shall be sent by personal delivery,
by facsimile (followed by mail delivery as hereinafter set forth) or by mail
(either [i] by United States registered or certified mail, return receipt
requested, postage prepaid, or [ii] by Federal Express or similar generally
recognized overnight carrier regularly providing proof of delivery), addressed
as follows (subject to the right of a party to designate a different address
for itself by notice similarly given):
<PAGE>
TO OPTIONEE:
EOP-Adams/Wabash Parking Garage, L.L.C.
c/o Equity Capital Holdings, L.L.C.
Two North Riverside Plaza, Suite 1900
Chicago, Illinois 60606
Attention: Mr. Gary A. Beller
Facsimile: (312) 906-9057
Telephone: (312) 466-3925
WITH COPY TO:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1515
Chicago, Illinois 60606
Attention: Steven Ehrlich, Esq.
Facsimile: (312) 454-0335
Telephone: (312) 466-3456
TO OPTIONOR:
c/o JMB Realty Corporation
900 North Michigan Avenue
12th Floor
Chicago, Illinois 60611
Attention: Ms. Andrea Backman
Facsimile: (312) 915-2502
Telephone: (312) 915-2367
WITH COPY TO:
Pircher, Nichols & Meeks
1999 Avenue of the Stars
Suite 2600
Los Angeles, California 90067
Attention: Real Estate Notices (GML)
Facsimile: (310) 201-8922
Telephone: (310) 201-8900
Any notice so given by mail shall be deemed to have been given as of the date
of delivery (whether accepted or refused) established by U.S. Post Office
return receipt or the overnight carrier's proof of delivery, as the case may
be. Any such notice not so given shall be deemed given upon receipt of the
same by the party to whom the same is to be given.
I. LEGAL COSTS. The parties hereto agree that they shall pay
directly any and all legal costs which they have incurred on their own behalf
in the preparation of this Agreement, all deeds and other agreements
pertaining to this transaction and that such legal costs shall not be part of
the closing costs. In addition, and notwithstanding anything to the contrary
contained in this Agreement, if either Optionee or Optionor brings any suit or
other proceeding with respect to the subject matter or the enforcement of this
Agreement, the prevailing party (as determined by the court, agency or other
authority before which such suit or proceeding is commenced), in addition to
such other relief as may be awarded, shall be entitled to recover reasonable
attorneys' fees, expenses and costs of investigation actually incurred. The
foregoing includes, but is not limited to, reasonable attorneys' fees,
reasonable expenses and costs of investigation (including, without limitation,
those incurred in appellate proceedings), costs incurred in establishing the
right to indemnification, or in any action or participation in, or in
connection with, any case or proceeding under Chapter 7, 11 or 13 of the
Bankruptcy Code (11 United States Code Sections 101 ET SEQ.), or any successor
statutes.
J. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same document.
<PAGE>
K. POST-CLOSING COOPERATION. At Optionee's written request,
Optionor will reasonably cooperate to make available Property-specific books
and records in Optionor's possession for years 1995, 1996 and 1997, provided,
however, (i) any costs or expenses in connection therewith will be borne by
Optionee and (ii) in no event shall any obligation of Optionor hereunder
extend beyond December 15, 1997.
L. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer any rights or remedies upon any
person other than the parties hereto and, subject to the restrictions on
assignment herein contained, their respective successors and assigns.
M. TRUSTEE EXCULPATION. This Agreement is executed by AMERICAN
NATIONAL BANK AND TRUST COMPANY OF CHICAGO, as Trustee, solely in the exercise
of the authority conferred upon it as said Trustee, and no personal liability
or responsibility shall be assumed by, nor at any time be asserted or enforced
against it, its agents or employees on account hereof, or on account of any
<PAGE>
promises, covenants, undertakings or agreements herein contained, either
express or implied; all such liability, if any, being expressly waived and
released by every person now or hereafter claiming any right or security
hereunder. It is understood and agreed that AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, individually, or as Trustee, shall have no obligation to
see to the performance or non-performance of any of the covenants or promises
herein contained. It is further understood and agreed that the Trustee is not
entitled to receive any of the rents, issues, or profits of or from said trust
property and this instrument shall not be construed as an admission to the
contrary.
N. ADDITIONAL CONDITIONS PRECEDENT RELATING TO BULK SALE
PROVISIONS. It shall be a condition precedent to Optionee's obligation to
close the purchase and sale of the Property that Optionor provide at Closing:
(1) either (a) a bulk sale stop order (the "Illinois Stop Order") from the
Illinois Department of Revenue (the "Department") under the provisions of the
Illinois Compiled Statutes, Sections 35 ILCS 120/5j and 35 ILCS 5/902
(collectively, the "Illinois Acts"), and, if available, a full release (the
"Illinois Release") of claims from the Department with respect to all debts
owed by Optionor under the Illinois Acts relating to all periods prior to the
Closing Date, or (b) other evidence reasonably satisfactory to Optionee that
Optionor has paid all debts owed by Optionor under the Illinois Acts relating
to all periods prior to the Closing Date (such debts being collectively
referred to herein as "Optionor's Illinois Debts"); and (2) either (a) a bulk
sale stop order (the "City Stop Order") from the appropriate department of the
City of Chicago (the "City") under the provisions of City of Chicago Municipal
Bulk Sales or Transfer Section (3-4-140) (the "City Act"), and, if available,
a full release (the "City Release") of claims of the City with respect to all
debts owed by Optionor under the City relating to all periods prior to the
Closing Date, or (b) other evidence reasonably satisfactory to Optionee that
Optionor has paid all debts owed by Optionor under the City Acts relating to
all periods prior to the Closing Date (such debts being collectively referred
to herein as "Optionor's City Debts"). In the event that either (x) Optionor
fails to provide at Closing either the Illinois Release or evidence reasonably
satisfactory to Optionee that Optionor has paid Optionor's Illinois Debts and
Optionor provides, at Closing, the Illinois Stop Order, or (y) the City
Release or evidence reasonably satisfactory that Optionor has paid Optionor's
City Debts and Optionor provides, at Closing, the City Stop Order, the amount
to be withheld pursuant to the Illinois Stop Order or the City Stop Order, as
applicable, shall be held in escrow by the Title Company until the earlier to
occur of the Title Company's receipt, with respect to money retained by the
Title Company relating to Seller's Illinois Debts, of either the Illinois
Release or Optionee's written confirmation to the Title Company that it has
received evidence reasonably satisfactory to Optionee that Optionor has paid
Seller's Illinois Debts, and with respect to money held by Title Company
relating to Seller's City Debts, of either the City Release or Optionee's
written confirmation to the Title Company that it has received evidence
reasonably satisfactory to Optionee that Optionor has paid Optionor's City
Debts. Notwithstanding the foregoing, if the delivery of either or both of
the Illinois Release or the City Release, as applicable, is subject to a
demand for payment of all or a portion of the amount withheld in escrow by the
Title Company to the Department or City, as applicable, the Title Company
shall be authorized and directed to pay such sums in accordance with such
demand and to pay the balance, if any, to Optionor. In the event that it is
necessary for the Title Company to retain such amounts pursuant to this
Paragraph 10N, then, at Closing, Optionor, Optionee and the Title Company
shall enter into an escrow agreement to implement the provisions of this
Paragraph 10N. Optionee and Optionor shall each reasonably cooperate with
each other in order to obtain the Illinois Stop Order, the Illinois Release,
the City Stop Order and the City Release (including obtaining the foregoing in
the event that the Closing occurred by virtue of Optionor providing evidence
reasonably satisfactory to Optionee of payment of Optionor's Illinois Debts
and Optionor's City Debts, as applicable, as provided above) and in connection
with the any escrow agreement required pursuant hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
OPTIONOR:
ADAMS/WABASH LIMITED PARTNERSHIP,
an Illinois limited partnership
By: JMB INCOME PROPERTIES, LTD.-XIII,
an Illinois limited partnership,
General Partner
By: JMB REALTY CORPORATION,
a Delaware corporation,
General partner
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
[SIGNATURES CONTINUE ON NEXT PAGE]
<PAGE>
OPTIONEE:
EOP - ADAMS/WABASH PARKING GARAGE, L.L.C.,
a Delaware limited liability company
By: EQUITY CAPITAL HOLDINGS L.P.,
a Delaware limited partnership,
its sole member
By: EOP GARAGES, L.L.C.,
a Delaware limited liability company,
its general partner
By: ZELL/MERRILL LYNCH REAL ESTATE
OPPORTUNITY PARTNERS LIMITED
PARTNERSHIP IV,
an Illinois limited partnership,
its sole member
By: ZML PARTNERS LIMITED PARTNERSHIP IV,
an Illinois limited partnership,
its general partner
By: ZM INVESTORS LIMITED
PARTNERSHIP IV,
an Illinois limited partnership,
its general partner
By: ZELL/MERRILL IV, INC.,
an Illinois corporation,
its general partner
By: _____________________________
Name: ___________________________
Title: __________________________
[SIGNATURES CONTINUE ON NEXT PAGE]
<PAGE>
TRUSTEE:
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, not
personally, but solely as Trustee as aforesaid
By: ______________________________________________________
Name: ____________________________________________________
Title: ___________________________________________________
Attest:
_________________________________
Name: ___________________________
Title:___________________________
<PAGE>
EXHIBIT LIST
"A" - Property Description
"B" - Personal Property
"C" - Intentionally Deleted
"D" - Deed
"E" - Bill of Sale, Assignment and Assumption Agreement
"F" - Exceptions to Optionor's Representations
and Warranties
"G-1" - Rent Roll
"G-2" - Monthly Parking Agreements
"H" - Operating Agreements
"I" - Environmental Reports
"J" - Memorandum of Option
"K" - First Amendment to Joint Order Escrow Agreement
"L" - Title Commitment
"M" - Brothers Coffee Complaint
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XIII
By: JMB Realty Corporation
Managing General Partner
By: GAILEN J. HULL
-----------------------------------
Gailen J. Hull
Senior Vice President
Dated:
