2
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Carlyle Income Plus, Ltd.
Commission File No. 000-16975
Form 8-K
Gentlemen:
Transmitted, for the above-captioned registrant, is the
electronically filed executed copy of registrant's current
report on Form 8-K dated November 25, 1997.
Thank you.
Very truly yours,
Carlyle Income Plus, Ltd.
By: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
and Principal Accounting Officer
Enclosures
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 25, 1997
CARLYLE INCOME PLUS, LTD.
-------------------------
Exact name of registrant as specified in its charter)
Illinois 000-16975 36-3439532
----------------- --------------- ----------
(State of Organization) (Commission) (IRS Employer
File Number) Identification
Number)
900 N. Michigan Avenue, Chicago, Illinois 60611
-------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (312)
915-1987.
- ------------------------------------------------------------
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THE LANDINGS SHOPPING CENTER
SARASOTA, FLORIDA
---------------------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December
30, 1997, Carlyle Income Plus, Ltd. (the "Partnership"), an
Illinois limited partnership, through JMB/Landings
Associates ("JMB/Landings"), an Illinois general
partnership, sold the land and related improvements (that it
owned) known as The Landings Shopping Center (the
"Property"), an approximately 209,000 square-foot shopping
center located in Sarasota, Florida. JMB/Landings is a
joint venture between the Partnership and Carlyle Income
Plus, L.P.- II ("CIP-II"). JMB/Landings owned approximately
94,000 square feet of leasable space at the Property. The
remaining space was and remains independently owned and
occupied by three separate store operators. Neither the
purchaser, Inland Real Estate Acquisitions, Inc., an
Illinois corporation, nor its affiliate, InlandSouthern
Acquisitions, Inc., a Delaware corporation, to whom its
interest in the agreement was assigned, is affiliated with
the Partnership or its General Partners and the sale price
was determined by arm's-length negotiations.
On November 25, 1997, JMB/Landings entered into an
agreement to sell the Property for a sale price of
$9,700,000. JMB/Landings received the sale price in cash at
closing, net of estimated selling costs of approximately
$400,000 and operating prorations of approximately $58,000
(subject to reprorations). The Property was approximately
90% occupied at the date of sale. The sale resulted in a
gain of approximately $1,900,000 to JMB/Landings for
financial reporting purposes, primarily as a result of a
value impairment provision of $3,500,000 recorded by
JMB/Landings in 1995. Also, the Property was classified as
held for sale or disposition as of December 31, 1996 and
therefore has not been subject to continued depreciation as
of that date for financial reporting purposes. In addition,
JMB/Landings expects to recognize a loss on sale of
approximately $1,500,000 for Federal income tax reporting
purposes in 1997.
In connection with the sale of this property, as is
customary in such transactions, JMB/Landings agreed to
certain representations and warranties, with a stipulated
survival period which expires in late June, 1998. Although
it is not expected, JMB/Landings may ultimately have some
liability under such representations and warranties which,
in no event, is to exceed $400,000 (of which the
Partnership's share would be $200,000). It is expected that
the Partnership will make its final distributions and wind
up its affairs during 1998 after the expiration of the
survival period for this property and that of a previous
sale (whose survival period expires in mid-September, 1998),
barring unforseen circumstances.
The terms of the JMB/Landings venture agreement provide
generally that all profits and losses and cash flow and
sales proceeds are allocated, or distributable as the case
may be, 50% to the Partnership and 50% to CIP - II.
The Partnership Agreement provides that distributions
of sale proceeds are to be initially allocated 99% to the
Holders of Interests (as defined) and 1% to the General
Partners. However, upon the completion of the liquidation
of the Partnership and final distribution of all Partnership
funds, all previous distributions of sale proceeds to the
General Partners are to be repaid to the Partnership to the
extent that the Holders of Interests have not received sale
proceeds equal to their initial capital investment plus a 6%
return on their investment (as defined). Upon receipt by the
Holders of Interests of such preferred return, further
distributions, if any, of sale proceeds are to be allocated
to the General Partners until the General Partners have
received distributions in an amount equal to 3% of the
aggregate selling prices of all properties sold, with the
remaining balance to be distributed 85% to the Holders of
Interests and 15% to the General Partners; provided,
however, that such 3% and 15% of sale proceeds distributable
to the General Partners are subordinate to the Holders of
Interests' receipt of a 9% return on their investment.
Since the Holders of Interests will not receive an amount
equal to their initial contributed capital from the
aggregate sale proceeds of all of the Partnership's
investment properties, the General Partners will not share
in any distributable proceeds from this or any previous
property sales.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. Not Applicable
(b) Pro Forma Financial Information- Narrative.
The operations of the Property and JMB/Landings were
reflected by the Partnership on the equity basis of
accounting. Accordingly, as a result of the sale of the
Property, beyond the date of sale there will be no further
equity in the operations of the Property and JMB/Landings in
the financial statements of the Partnership, which for the
Partnership's most recent reported fiscal year (the year
ended December 31, 1996) was $153,503. Equity in the
operations of the Property and JMB/Landings was $200,263 for
the nine months ended September 30, 1997. Also, as a result
of the sale of the Property, there are no further
significant assets and liabilities related to the Property
and JMB/Landings, which at September 30, 1997 consisted of
investment in unconsolidated venture of approximately
$4,335,000. The remaining operations of the Partnership will
consist primarily of the Partnership's collection of
interest income on invested sale proceeds and other cash
equivalents, the payment of administrative expenses, cash
distributions to the Partners until the expiration of the
aforementioned representations and warranties in connection
with the sale of the Property (and a previous sale) and the
expected termination of the Partnership in 1998.
(c) Exhibits.
99.1 Real Property Purchase Agreement between
JMB/Landings Associates and Inland Real Estate Acquisitions,
Inc., dated November 25, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
CARLYLE INCOME PLUS, LTD.
By: JMB Realty Corporation
Corporate General partner
By:
__________________________________
GAILEN J. HULL
Gailen J. Hull
Senior Vice President and
Principal Accounting Officer
Date: January 12, 1998
AGREEMENT TO PURCHASE
by and between
JMB/LANDINGS ASSOCIATES ("Seller")
and
INLAND REAL ESTATE ACQUISITIONS, INC. ("Purchaser")
Dated: November 25, 1997
AGREEMENT TO PURCHASE
THIS AGREEMENT is made this 25th of November, 1997, by and
between JMB/Landings Associates, an Illinois general partnership
("Seller") and Inland Real Estate Acquisitions, Inc., an Illinois
corporation ("Purchaser").
RECITALS:
A. Seller is the fee owner of that certain Shopping Center
("Improvements") commonly known as The Landings Shopping Center
located at the northwest corner of Landings Boulevard and U.S. 41
in Sarasota, Florida, and legally described in Exhibit "A"
attached hereto (the "Real Property").
B. Seller desires to sell and Purchaser desires to
purchase, the "Property" (as hereinafter defined) upon and
subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements 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:
ARTICLE I
DEFINITIONS
1.1 Definitions. When used herein, the following terms
shall have the respective meanings set forth opposite each such
term:
Agreement: This Agreement to Purchase including the Exhibits
attached hereto which are by this reference
incorporated herein and made a part hereof.
Closing Date: December 30, 1997.
Closing: The consummation of this Agreement.
Deed: That certain recordable Limited Warranty Deed to
be executed by Seller and delivered by Seller to
Purchaser at the Closing, conveying the Real
Property to Purchaser (or to Purchaser's designee)
subject only to the Permitted Title Exceptions.
Deposit: The sum of $200,000.00 which shall be deposited by
Purchaser with Chicago Title and Trust Company
("Escrowee") within one business day after
Seller's acceptance hereof, at Escrowee's office
in Chicago, Illinois, to be held in an interest
bearing account as earnest money subject to the
terms of this Agreement. All interest earned
thereon shall be included in this definition.
Leases: Those leases for rental of retail space in the
Improvements listed on Exhibit D and those leases
executed hereafter and which are in existence as
of the Closing Date.
Legal All laws, statutes, codes, acts, ordinances,
judgments, decrees,
Requirements: injunctions, rules, regulations, permits,
licenses, authorizations, directions and
requirements of all governments and governmental
authorities having jurisdiction over the Real
Property and the operation of the Improvements
thereon.
Notice to That written notice which may be given by
Purchaser to Seller
Cancel: pursuant to Section 8.1(a).
Permitted Title The Leases, those matters set forth in
Exhibit "B attached hereto,
Exceptions: and any other matters which Purchaser shall
approve in writing or be deemed to have approved
pursuant to the terms of this Agreement.
Personal Those items of personally, which are listed on
Exhibit "C"
Property: attached hereto and which will be conveyed to
Purchaser at Closing by a Bill of Sale (the "Bill
of Sale") containing no warranties, whether
express or implied, except a warranty of title
free of any lien or encumbrance.
Property: The Real Property, Personal Property, Service
Contracts, and the Leases.
Purchase Price: The consideration payable by Purchaser to
Seller for the Property, as provided in Article
III.
Purchaser: Inland Real Estate Acquisitions, Inc.
Rent Roll: The list of Leases in existence as of the date of
said list, which list
is attached hereto as Exhibit D.
Seller: JMB/Landings Associates
Service Those contracts, agreements, and leases of
equipment relating to
Contracts: the servicing, operation, management and
maintenance of the Property which are listed on
Exhibit "E" attached hereto.
Survey: Current as-built survey of the Real Property
prepared by a surveyor licensed by the State of
Florida and certified to Purchaser, Purchaser's
designee, and the Title Insurer, to be prepared in
accordance with minimum standards for an ALTA
survey.
Title
Commitment A commitment for an Owner's Title Insurance Policy
for the Real Property issued by the Title Insurer
in the full amount of the Purchase Price, covering
title to the Real Property, dated on or after the
date hereof, showing Seller as owner of the Real
Property in fee simple, subject only to the
Permitted Title Exceptions and other exceptions
pertaining to liens or encumbrances of a definite
or ascertainable amount (which, in the aggregate
do not exceed the Purchase Price) which may be
removed by the payment of money at Closing and
which Seller shall so remove at Closing. The
Title Commitment will have attached thereto the
following endorsements ("Endorsements"): Extended
Coverage, 3.1 Zoning with Parking Contiguity and
Restrictions.
Title Insurer: Chicago Title Insurance Company.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale. Subject to the conditions and on
the terms contained in this Agreement, Purchaser agrees to
purchase and acquire from Seller, and Seller agrees to sell and
transfer to Purchaser, the Real Property by the Deed, the Leases
and Service Contracts by assignment, and the Personal Property by
the Bill of Sale.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price. The purchase price shall be NINE
MILLION SEVEN HUNDRED THOUSAND AND NO/100 ($9,700,000.00) DOLLARS
payable as hereinafter provided. Purchaser agrees to pay to
Seller, and Seller agrees to accept payment of the Purchase Price
as follows:
(a) The Deposit shall be applied against the Purchase
Price at Closing.
(b) Purchaser shall pay to Seller at Closing the
balance of the Purchase Price, plus or minus adjustments and
prorations as hereinafter provided, by certified, cashier's or
escrowee check or bank wire transfer of collected federal funds,
as Seller requests.
ARTICLE IV
CLOSING MATTERS
4.1 Survey. No later than twenty (20) days following the
date hereof, Seller shall deliver the Survey to Purchaser, at
Seller's sole cost and expense. The Survey shall be dated not
more than thirty (30) days prior to date of delivery, shall show
no encroachments by or from the Real Property onto any adjacent
property and no violation of or encroachments upon any recorded
building lines, restrictions, zoning set-backs, or easements
affecting the Real Property. If the Survey discloses any such
unpermitted encroachment or violation or any exceptions to title
or matters indicating possible rights of third parties other than
the Permitted Title Exceptions and the same are not acceptable to
Purchaser, or if Purchaser desires to have the surveyor's
certification revised in a reasonable manner, then, within five
(5) days from Purchaser's receipt of the Survey, Purchaser must
so notify Seller. If Purchaser fails to so notify Seller within
said five (5) day period, the Survey will be conclusively deemed
to be approved by Purchaser. If, within said five (5) day period
Purchaser notifies Seller that the Survey does not comply with
the terms of this Agreement (which notification must specify in
what respects the Survey does not so comply), Seller shall have
ten (10) days from the date of delivery of Purchaser's notice to
have the Title Insurer issue its endorsements insuring against
damage caused by such encroachments, violations or unpermitted
exceptions and provide evidence thereof to Purchaser, or to have
the surveyor's certification revised, as applicable, and if
Seller fails to do so, and provide evidence thereof to Purchaser,
within said ten (10) day period, Purchaser may elect within ten
(10) days after the expiration of Seller's ten (10) day cure
period, to (i) terminate this Agreement and thereafter there
shall be no further liability of either party hereunder (in which
event the Deposit shall promptly be returned to Purchaser) or
(ii) accept the Real Property subject to such encroachments,
violations and unpermitted exceptions or the unrevised surveyor's
certification, as applicable, without any diminution of the
Purchase Price. Purchaser's failure to make any election within
said ten (10) day period shall be conclusively deemed to mean
that Purchaser has elected the option contained in subsection (i)
of this Section 4.1.
4.2 Title. No later than twenty (20) days following the
date hereof, Seller shall deliver the Title Commitment to
Purchaser, at Seller's sole cost and expense. If the Title
Commitment discloses exceptions to title other than the Permitted
Title Exceptions ("Unpermitted Title Exceptions") and such
Unpermitted Title Exceptions are not acceptable to Purchaser,
then, within five (5) days from Purchaser's receipt of the Title
Commitment, Purchaser must so notify Seller. If Purchaser fails
to so notify Seller within said five (5) day period, the
Unpermitted Title Exceptions will be conclusively deemed to be
approved by Purchaser. If, within said five (5) day period,
Purchaser shall notify Seller that all or certain of the
Unpermitted Title Exceptions are not acceptable to Purchaser
(which notification must specify which Unpermitted Title
Exceptions are so unacceptable), Seller shall have ten (10) days
from the date of Purchaser's notice to have such exceptions
removed from the Title Commitment or cause the Title Insurer to
insure Purchaser against same and provide evidence thereof to
Purchaser, and if Seller fails to have such exceptions removed,
or insured over, Purchaser may elect, within ten (10) days after
the expiration of Seller's ten (10) day cure period to
(i) terminate this Agreement without liability on the part of any
party thereafter (in which event the Deposit shall be promptly
returned to Purchaser), or (ii) accept title subject to such
Unpermitted Title Exceptions without any diminution of the
Purchase Price. Purchaser's failure to make any election within
said ten (10) day period shall be conclusively deemed to mean
that Purchaser has elected the option contained in subsection (i)
of this Section 4.2. On the Closing Date, at the expense of
Seller as set forth in Section 4.3(d) hereof, Seller shall cause
the Title Insurer to issue an owner's title insurance policy or
prepaid commitment therefor pursuant to and in accordance with
the Title Commitment insuring fee simple title to the Real
Property in Purchaser or its designee as of the Closing Date,
subject only to the Permitted Title Exceptions and such other
exceptions as Purchaser may approve. If Seller is unable to
cause the Title Insurer to issue any of the Endorsements and
Purchaser refuses to waive the requirement therefor, then this
Agreement shall become null and void and of no further force or
effect, and the Deposit will be returned to Purchaser.
Additionally, Seller will have no obligation to obtain any of the
Endorsements if the Title Insurer charges other than standard
rates for the coverage or if the Title Insurer requires security
or an indemnity from Seller in order to issue any of the
Endorsements.
If Purchaser shall make objection to the Survey (as
described in Section 4.1) or the Title Commitment (as described
in this Section 4.2) and the Closing Date was to occur prior to
the time each party was able to exercise its rights under
Section 4.1 or Section 4.2, as applicable, then the Closing Date
will be extended to a date which is three (3) business days
subsequent to the latest date for notice, objection and remedy
permitted by either Section 4.1 or 4.2, as applicable.
4.3 Possession, Prorations and Expenses, and New Leases.
(a) Sole and exclusive possession of the Property,
subject only to the rights of the tenants under the Leases, shall
be delivered to Purchaser on the Closing Date. Any vacant space
will be placed into Rent Ready Condition which is defined to be
that all walls are patched and freshly painted, each space to be
demised has a fully-fixtured and operable bathroom, and all doors
have locks and are operable, the ceiling is completed with
acoustical tile and standard fluorescent lighting and the floor
is in broom-clean condition. Rent Ready Condition shall not
require Seller to remove any interior walls or partitions in any
such vacant space.
(b) If the balance of the Purchase Price is deposited
in immediately available funds with the Title Insurer by 12:00
noon on the Closing Date, as required by Section 4.5(d) hereof,
all prorations will be computed as of the end of the day
immediately prior to the Closing Date ("Proration Date"). If
Purchaser fails to deposit the balance of the Purchase Price by
12:00 noon on the Closing Date, as aforesaid, and if Seller does
not terminate this Contract for such default of Purchaser and the
Closing occurs, the Proration Date shall be concurrent with the
Closing Date and all prorations will be calculated as of the end
of the day on the Closing Date.
(c) Fixed Rent, Percentage Rent and tenant common area
maintenance and other expense contributions to be made by tenants
shall be prorated as follows:
(i) Fixed Rent - prepaid Fixed Rent will be
prorated as of the Proration Date. All other Fixed Rent
which is delinquent on the Proration Date will not be
prorated. All such arrearages of Fixed Rent unpaid on the
Proration Date will remain the sole and exclusive property
of Seller after Closing, provided, however, if, after
Closing, Seller shall receive any such delinquent Fixed
Rent, Seller will remit to Purchaser that portion of such
delinquent Fixed Rent that is attributable to the period
after the Proration Date, if any. Seller shall retain all
right, title, power and authority to enforce payment thereof
after Closing, except that Seller will not have the right to
terminate the Lease of a delinquent tenant after Closing due
to such delinquency. If, after Closing, Purchaser or its
designee shall receive any delinquent Fixed Rents (this
provision shall not relate to percentage rents) Purchaser
may first apply such payments to rent delinquencies which
relate to any period after the Proration Date, and Purchaser
agrees, on its behalf and on behalf of its designee, to
immediately remit the balance to Seller.
(ii) Percentage Rent - Percentage Rent which is
due but unpaid at Closing and accrued Percentage Rent not
yet payable at Closing will not be prorated. If, after
Closing, however, Purchaser receives any payment of
percentage rent which relates in any part to sales made
prior to the Proration Date, Purchaser shall immediately
remit Seller's share thereof to Seller and may not apply any
portion of such percentage rent to any post Proration Date
rent delinquencies whether delinquent Fixed Rent or tenants'
delinquent obligations to pay their prorata share of taxes
or "Expenses" (as hereinafter defined).
(iii) Tenant CAM and Other Expense
Contributions -- For purposes hereof, the term "Expenses"
shall mean all common area maintenance costs and other
operating expenses of the Property, excluding real estate
taxes and other items expressly covered in other provisions
of this Section 4.3. All payments by the tenant to the
landlord under the Leases for Expenses ("Tenant Expense
Contributions") shall be dealt with as follows:
(aa) At Closing there will be no prorations
between Seller and Purchaser for Expenses for calendar
year 1997;
(bb) Seller will be permitted to retain all
payments of Tenant Expense Contributions due under the
Leases for calendar year 1997;
(cc) Seller will pay for all Expenses
incurred during calendar year 1997 whether or not
billed in 1997 or in 1998; and
(dd) Seller will reconcile the calendar year
1997 Tenant Expense Contributions with the tenants
under the Leases subsequent to Closing.
In addition, security deposits, personal property taxes,
general and special real estate and other ad valorem taxes
and assessments and other state or city taxes, fees, charges
and assessments affecting the Property, prepaid expenses,
utility charges and deposits, if any, and all other
customarily proratable items shall be prorated as of the
Proration Date on the basis of the most recent ascertainable
amounts of or other reliable information in respect to each
such item of income and expense and the net credit to
Purchaser or Seller shall be paid in cash or as a credit or
debit against the Purchase Price. All prorations and
reprorations for real estate taxes will be predicated upon
the maximum available discount for early payment. In no
event shall Seller be charged or responsible for any
increase in real estate taxes on the Property resulting from
any improvements made to the Property after the Proration
Date. In the event that any Lease requires the tenant
thereunder to pay any portion of the real estate taxes (upon
presentment of the actual tax bill) the credit in favor of
Purchaser for accrued real estate and other ad valorem taxes
("Purchaser's Tax Credit") will be reduced by an amount
equal to the aggregate of all such tenants' obligations to
pay any portion of Purchaser's Tax Credit under all such
Leases. If any general or special assessment (as contrasted
to ad valorem taxes) is payable in installments, only the
current installment will be prorated and all subsequent
installments will be the obligation of Purchaser. Real
estate taxes will be reprorated (and such reproration will
be a final reproration) within thirty (30) days after
receipt of the tax bill for year of Closing, if not then
available.
Seller, at the time of reproration, will be entitled to a
credit equal to the aggregate of all tenants' obligations to
pay any portion of such reprorated amount of real estate
taxes under the provisions of the Leases.
(d) Seller shall pay all title charges required to
fulfill the obligations under Section 4.2, one-half (1/2) of the
escrow charges, all survey charges, and the cost of the
Documentary Stamps on the Deed. Purchaser shall pay for one-half
(1/2) of the escrow charges, and the charges of the County
Recorder to record the Deed. The parties shall each be solely
responsible for the fees and disbursements of their respective
counsel and other professional advisers.
(e) (i) Seller, until the earlier of the Closing Date
or termination of this Agreement, shall not enter into any
new Leases ("New Leases") without the prior written consent
of the Purchaser, which consent shall not be unreasonably
withheld. Purchaser will not be deemed to have unreasonably
withheld its consent to a proposed New Lease if the terms
thereof do not meet the Criterion for New Leases described
on Exhibit F attached hereto.
(ii)In the event Seller enters into a New Lease
after the date of this Agreement, and such New Lease
requires improvements or the payment of brokerage
commissions (collectively the "New Leasing Costs") at the
expense of Seller, as landlord, Purchaser by approving the
execution of the New Lease shall, at Closing, assume the
obligation to pay for all unpaid New Leasing Costs. Any New
Leasing Costs paid by Seller prior to Closing, will be
reimbursed to Seller by Purchaser at Closing.
(iii) Failure of the Purchaser to consent or
express its objections with specificity in writing within
three (3) business days after a written request for such
consent to the execution of a New Lease by Seller, shall be
deemed to constitute consent.
(iv) Purchaser at Closing will indemnify and
forever defend and hold Seller, its partners, agents, and
employees harmless from any loss, liability, suit, action,
judgment or claim as a result of Purchaser's non-payment of
any New Leasing Costs assumed by Purchaser at Closing.
4.4 Escrow. Concurrently herewith, the parties, through
their respective attorneys, shall establish a Strict Joint Order
Escrow in the form customarily used by Escrowee under which the
Deposit will be held. If Purchaser shall not give the Notice to
Cancel, then not later than seven (7) days prior to the Closing
Date, but subject in any event to Section 4.5(g), the Strict
Joint Order Escrow will be terminated, and a new escrow will be
created by the parties through their respective attorneys with
the Escrowee at Escrowee's office in Chicago, Illinois through
which the Deposit will be held and invested and the transaction
shall be Closed. The escrow instructions shall be in the form
customarily used by the Escrowee with such special provisions
added thereto as may be required to conform to the provisions of
this Agreement. Said escrow shall be auxiliary to this Agreement
and this Agreement shall not be merged into nor in any manner
superseded by said escrow.
4.5 Closing.
(a) The Closing of the transaction contemplated hereby
shall commence at 10:00 a.m. (CST) on the Closing Date at the
offices of the Title Insurer in Chicago, Illinois or on such
other date, time and place as the parties may mutually agree.
(b) Not later than the Proration Date, Seller shall
deposit in the escrow the following:
(i) The Deed;
(ii) An assignment of all of Seller's right, title
and interest in and under the Leases and Service Contracts;
(iii) The Bill of Sale;
(iv) Originals of the Leases and Service
Contracts;
(v) Letters to tenants under the Leases advising
that the Property has been sold to Purchaser and directing
payment of rental under the Leases in accordance with the
directions of Purchaser;
(vi) An ALTA statement in form required by the
Title Insurer;
(vii) An executed FIRPTA Affidavit in
customary form;
(viii) Estoppel Certificates in the form
prescribed in the Lease or if no form is prescribed in the
Lease then substantially in the form of Exhibit G-1 attached
hereto from Sally Beauty, Radio Shack, Nextel and Jo-Ann
Fabrics and from such other tenants under the Leases which,
when added to the gross leasable area in the Improvements
occupied by the foregoing four (4) named tenants, aggregate
not less than 80% of the total occupied gross leasable area
in the Improvements ("80% Estoppel Certificate
Requirement"). Notwithstanding the foregoing, in order to
satisfy the 80% Estoppel Certificate requirement, Seller may
execute Landlord's Estoppel Certificates substantially in
the form of Exhibit G-2 attached hereto on behalf of any
tenant other than Jo-Ann Fabrics, if any tenants other than
Jo-Ann refuses or fails to execute required Estoppel
Certificates. If Seller is unable to procure Estoppel
Certificates executed by a sufficient number of tenants in
the Improvements to satisfy the 80% Estoppel Certificate
Requirement and fails to execute a sufficient number of
Landlord's Estoppel Certificates to satisfy the 80% Estoppel
Certificate Requirement by the Proration Date, such failure
shall not constitute a default by Seller hereunder and
Purchaser's sole rights hereunder will be to terminate this
Agreement and obtain a return of the Deposit or to waive
this condition and Close this Agreement without diminution
of the Purchase Price or any liability to Seller.
(ix) Such other documents, instruments,
certifications and confirmations as may be reasonably
required to fully effect and consummate the transaction
contemplated hereby.
(c) Not later than the Proration Date, Purchaser shall
deposit in the escrow the following:
(i) An ALTA statement in form required by the
Title Insurer;
(ii) An assumption of the Leases (including the
obligation to return or apply the tenants' security deposits
under the Leases, but only to the extent that Purchaser has
received a proration credit at Closing from Seller for said
tenant security deposit or unapplied portion thereof) and
Service Contracts; and
(iii) Such other documents, instruments,
certifications and confirmations as may be reasonably
required and to fully effect and consummate the transaction
contemplated hereby.
(d) No later than 12:00 noon (EST) on the Closing
Date, Purchaser shall deposit the balance of the Purchase Price
as provided in Section 3.1(b) with the Title Insurer.
(e) Not later than the Proration Date, Seller and
Purchaser shall jointly deposit in the escrow an agreed proration
statement and certificates complying with the provisions of
state, county and local law applicable to the determination of
the amount of Documentary Stamps on the Deed.
(f) All documents or other deliveries required to be
made by Purchaser or Seller on or prior to the Proration Date and
all deposits and transactions required to be consummated
concurrently with Closing, shall be deemed to have been delivered
and to have been consummated simultaneously with all other
transactions and all other deliveries, and no delivery shall be
deemed to have been made, and no transaction shall be deemed to
have been consummated, until all deliveries required by
Purchaser, or its designee, and Seller shall have been made, and
all concurrent or other transactions shall have been consummated.
(g) At the request of either party, the transaction
shall be closed by means of a so-called "New York Style Closing,
with the concurrent delivery of the documents of title, transfer
of interests, delivery of the title policy described in
Section 4.2 and the payment of the Purchase Price. The Seller
shall provide and pay for any necessary undertaking (the "Gap
Undertaking ) to the Title Insurer and the charges of the Title
Insurer or Escrowee for such New York Style Closing shall be paid
equally by the parties hereto.
(h) In any event, whether the Closing occurs through
escrow or by way of a New York style closing, the parties and
their respective attorneys shall meet with the Escrowee on or
before the Proration Date (as they shall mutually agree) to make
their respective deposits (except for the balance of the Purchase
Price which will be deposited by Purchaser on the Closing Date,
as aforesaid) and approve the proration statement, all as
described in this Section 4.5, to enable the Closing to occur in
a prompt fashion on the Closing Date.
ARTICLE V
BROKERAGE
5.1 Brokerage. Seller hereby represents and warrants to
Purchaser that Seller has not dealt with any broker or finder
with respect to the transaction contemplated hereby except for
Richard Ellis, L.L.C. ("Brokers") whose commission shall be paid
by Seller at Closing; and Seller hereby agrees to indemnify
Purchaser for any claim for brokerage commission or finder's fee
asserted by Brokers or any other person, firm or corporation
claiming to have been engaged by Seller. Purchaser hereby
represents and warrants to Seller that Purchaser has not dealt
with any broker or finder in respect to the transaction
contemplated hereby except for the Brokers and Purchaser hereby
agrees to indemnify Seller for any claim for brokerage commission
or finder's fee asserted by a person, firm or corporation other
than the Brokers claiming to have been engaged by Purchaser.
ARTICLE VI
DESTRUCTION, DAMAGE OR CONDEMNATION
6.1 Destruction or Damage. In the event that prior to the
Closing Date any portion of the Improvements shall be damaged or
destroyed by fire or other casualty, Seller shall immediately
give Purchaser notice of such occurrence. If the amount of
damage caused by such fire or casualty shall exceed $350,000.00
(as determined by an insurance adjuster selected by Seller)
Purchaser may, within fifteen (15) days after receipt of such
notice, elect to (a) terminate this Agreement, in which event the
Deposit shall be returned promptly to Purchaser, all obligations
of the parties hereunder shall cease and this Agreement shall
have no further force and effect, or (b) Close the transaction
contemplated hereby as scheduled (except that if the Closing Date
is less than fifteen (15) days following Purchaser's receipt of
such notice, Closing shall be delayed until after Purchaser makes
such election), and Seller shall assign to Purchaser at Closing
all rights under Seller's insurance policy to collect insurance
proceeds for such destruction or damage and loss of rents, and
Purchaser shall receive a credit against the Purchase Price equal
to equal amount of any deductible under such policy. Failure to
give such notice within such time shall be conclusive evidence
that Purchaser has elected the option contained in subsection (b)
of this Section 6.1.
In the event that the amount of damage caused by such fire
or casualty is less than $350,000.00 (as determined by an
insurance adjuster selected by Seller), Purchaser may not elect
to terminate this Agreement and shall Close the transaction
contemplated hereby as scheduled, and Seller shall assign to
Purchaser at Closing all rights under Seller's insurance policy
to collect insurance proceeds for such destruction or damage and
loss of rents, and Purchaser shall receive a credit against the
Purchase Price equal to the amount of any deductible under such
policy.
6.2 Condemnation. If, subsequent to the date hereof and
prior to the Closing Date, any proceeding, which shall relate to
the proposed taking of any material portion of the Real Property
or Improvements by condemnation or eminent domain or any action
in the nature of eminent domain, is instituted or commenced,
Purchaser shall have the right and option to terminate this
Agreement by giving Seller written notice to such effect within
fifteen (15) days after actual receipt of written notification of
any such occurrence. Failure to give such notice within such
time shall be conclusive evidence that Purchaser has waived the
option to terminate by reason of the occurrence of which it has
received notice. If any such action is instituted or commenced,
and Purchaser elects or is deemed to elect not to terminate this
Agreement, at Closing, Purchaser shall be assigned all Seller's
right to any proceeds therefrom. Seller agrees to furnish
Purchaser written notification with respect to any such
proceedings within forty-eight hours of Seller's receipt of any
such notification or learning of the institution of such
proceedings. Should Purchaser elect to so terminate this
Agreement, the Deposit shall be returned promptly to Purchaser
and thereupon the parties hereto shall be released from any and
all further obligations hereunder. If the Closing Date is less
than fifteen (15) days following the last day on which Purchaser
is entitled to elect to terminate this Agreement, the closing
shall be delayed until after Purchaser makes such election.
The term "material" for purposes of this Section 6.2 shall
mean any taking of any portion of the Improvements or any taking
of more than ten (10%) percent of the land area of the Real
Estate.
6.3 Casualty and Rent Loss Insurance. If, under the terms
of Section 6.1, Seller is obligated at Closing, to assign to
Purchaser all rights under Seller's insurance policy to collect
insurance proceeds for the repair of any pre-Closing destruction
or damage, Seller shall, at Closing, make Purchaser a loss payee
under such insurance policy in order to effectuate such
assignment obligation of Seller and in addition shall make
Purchaser a loss payee for any Loss of Rents insurance coverage
relating to any rental loss arising from said destruction or
damage, but relating solely to the period commencing on the
Proration Date and thereafter while such coverage may be in
effect and the rent is abated under any of the Leases as a result
of such destruction or damage.
In the event Seller is obligated to make Purchaser a loss
payee for any Loss of Rents insurance coverage pursuant to the
preceding paragraph and Seller's insurance to cover such Loss of
Rents for a period of twelve (12) months from the date of any
fire or casualty is not in effect at the time of Closing,
Purchaser, at its election (to be exercised at or prior to
Closing by written notice to Seller) may terminate this
Agreement, obtain a return of its Deposit and thereupon the
parties hereto shall be released from any and all further
obligations hereunder.
ARTICLE VII
COVENANTS, REPRESENTATIONS, WARRANTIES
7.1 Affirmative Covenants of Seller.
(a) Seller, at Seller's sole cost and expense, shall
until the earlier of, the Closing Date or termination of this
Agreement, keep and perform or cause to be performed in all
material respects: (i) all obligations of the lessor under the
Leases, and (ii) all obligations of Seller under the Legal
Requirements if Seller's failure to perform any of such Legal
Requirements would adversely affect Seller's ability to
consummate this Agreement.
(b) From the date of Seller's acceptance hereof to the
earlier of, the Closing Date or termination of this Agreement,
Seller shall not do, suffer or permit or agree to do any of the
following:
(i) Enter into any transaction in respect to or
affecting the Proper out of the ordinary course of
business;
(ii)Except for Seller's execution of New Leases,
as provided in Section 4.3(e), sell, encumber, or grant any
interest in the Property in any form or manner whatsoever,
or otherwise perform or permit any act which will diminish
or otherwise affect Purchaser's interest under this
Agreement or in the Property, or which will prevent Seller's
full performance of its obligations hereunder.
(c) From the date of Seller's acceptance hereof to the
earlier of the Closing Date or termination of this Agreement,
upon reasonable advance notice from Purchaser (which notice shall
be not less than one business day in advance and shall be two (2)
business days in advance if Purchaser desires to inspect any
occupied portions of the Improvements) Seller shall permit
representatives, accountants, agents, employees, lenders,
contractors, appraisers, architects and engineers designated by
Purchaser (collectively "Permittees") access to and entry upon
the Property to examine, inspect, measure and test the Property
and access to the office of Seller to review Seller's books and
records relating to the operation thereof. Seller shall have the
right to require that a representative of Seller may accompany
any or all of the Permittees.
If Purchaser desires to conduct any environmental sampling
or testing at the Property (other than a customary Phase 1
Environmental Report which involves no intrusive testing or
sampling), Purchaser shall first provide Seller with the proposed
study plan therefor ("Plan"). The Plan is subject to the
approval of Seller and no environmental sampling or testing shall
be performed until the Plan therefor has been approved by Seller.
Purchaser agrees that Seller may have a representative present at
any inspection, sampling or testing, including, but not limited
to, an environmental engineer or consultant designated by Seller
(in connection with any environmental sampling or testing
conducted by Purchaser in accordance with this Section 7(c). At
Seller's request, any sampling or testing by Purchaser's
environmental consultant shall be conducted in a manner so as to
provide "split" samples or data to Seller's environmental
consultant.
Purchaser does hereby indemnify and forever defend and hold
Seller, its partners, agents, and employees harmless from any
loss, liability, suit, action judgment, or claim (including,
without limitation, any mechanics' liens which may be filed
against the Property) which any of the indemnified parties may
suffer or sustain as a result of the exercise by Purchaser of its
rights (and that of its Permittees) to enter upon the Property or
the office of Seller pursuant to this Section 7.1(c). Prior to
any such entry, Purchaser (or its Permittees) will deliver to
Seller a certificate of Commercial General Liability insurance
naming Seller and its partners as additional insured thereunder
in coverage amounts of not less than $1,000,000.00 per
occurrence. If the Closing does not occur for any reason,
Purchaser will restore (or cause to be restored), the Property to
its former condition to the extent Purchaser or its Permittees
have altered or damaged the Property in any manner.
(d) Seller shall notify Purchaser promptly if Seller
becomes aware of any transactions or occurrence prior to the
Closing Date which would make any of the representations or
warranties of Seller contained in Section 7.2 hereof not true in
any material respect.
(e) Any vacant rentable space in the Real Property
will be placed into Rent Ready Condition which is defined to be
that all walls are patched and freshly painted, each space to be
demised has a fully-fixtured and operable bathroom, and all doors
have locks and are operable, the ceiling is completed with
acoustical tile and standard fluorescent lighting and the floor
is in broom-clean condition.
(f) Seller agrees to cooperate with Purchaser's
accountants (at no cost or expense to Seller) relative to the
performance by said accountants of an audit of Seller's books and
records relating to the Property. If Purchaser's auditors shall
request Seller to execute a representation letter addressed to
the auditors and Seller and the auditors cannot agree on the
content thereof, Purchaser may terminate this Agreement at any
time prior to the Closing Date by written notice to Seller
whereupon Purchaser shall obtain a return of the Deposit and
Seller shall reimburse Purchaser for the actual costs of
Purchaser's appraisal and environmental study to a maximum amount
of $8,500.00 and this Agreement shall become null and void and of
no further force or effect.
7.2 Representations and Warranties of Seller. To induce
Purchaser to execute, deliver and perform this Agreement, Seller
hereby represents and warrants to Purchaser on and as of the date
hereof and on and as of the Closing Date (except as set forth in
any written communication from Seller to Purchaser given on or
prior to the Closing Date and setting forth any changes in such
representations or warranties) as follows:
(a) Seller owns fee simple title to the Real Property.
(b) Exhibit D hereto attached contains a list of all
Leases presently in existence and lists all modifications or
amendments to the Leases known to Seller. The interest of Seller
in the Leases and Service Agreements is free and clear of all
liens and encumbrances and has not been assigned to any other
person.
(c) Except for Seller and tenants under the Leases, to
Seller's actual knowledge, there are no persons in possession or
occupancy of the Real Property or Improvements or any part
hereof, nor are there any persons who have possessory rights in
respect to the Real Property or Improvements or any part thereof.
Except as may be set forth in the Leases, there are no rights of
first refusal to purchase or options to purchase the Property in
favor of any tenant under the Leases.
(d) Seller has full capacity, right, power and
authority to execute, deliver and perform this Agreement and all
documents to be executed by Seller pursuant hereto, and all
required action and approvals therefor have been duly taken and
obtained. This Agreement and all documents to be executed
pursuant hereto by Seller are, and shall be, binding upon Seller.
(e) To Seller's actual knowledge, there are no causes
of action or other litigation pending in respect to the ownership
of the Property or any part thereof or the ownership, enforcement
or validity of the Leases except matters covered by insurance and
except for any matters listed on Exhibit H hereto attached.
(f) To Seller's actual knowledge, there are no
existing condemnation proceedings of any part of the Real
Property, and Seller has not received written notice from a
condemning authority of its intent to condemn any portion of the
Real Property.
(g) To Seller's actual knowledge, Seller has not
received written notice from any Governmental Authority that: the
Property is in violation of any Legal Requirements which have not
previously been corrected; or, any special assessment lien has
been, or will be, spread of record.
(h) To Seller's actual knowledge, the Financial
Statements provided by Seller to Purchaser are each true,
accurate and complete in all material respects.
For purposes of this Agreement, the expression Seller's
actual knowledge shall mean the actual knowledge of Eric Ulmquist
the property manager of the Property, and Brian Ellison the
portfolio manager (collectively the "Managers") and no knowledge
of any employee, agent, or independent contractor of Seller or
Managers shall be imputed to the Managers, nor shall the Managers
be bound to, or obligated to, make or cause to be made any
independent inquiry or investigation relating to the subject
matter of any representation or warranty made to "Seller's actual
knowledge.
7.3 Representations and Warranties of Purchaser. To induce
Seller to execute, deliver and perform this Agreement, Purchaser
hereby represents and warrants to Seller on and as of the date
hereof and on and as of the Closing Date as follows:
(a) All representations and warranties of Purchaser
appearing in other Sections of this Agreement are true and
correct.
(b) Purchaser has full capacity, right, power and
authority to execute and deliver this Agreement. At Closing,
Purchaser's designee, if any, will have full capacity, right,
power, and authority to perform this Agreement and all documents
to be executed by Purchaser pursuant hereto. This Agreement and
all documents to be executed pursuant hereto by Purchaser are and
shall be binding upon Purchaser in accordance with their
respective terms.
(c) Purchaser certifies and warrants to Seller that
the purchase of the Property by Purchaser or its designee will
not result in a prohibited transaction under Section 406 of the
Employee Retirement Income Security Act of 1974, Section 4975 of
the Internal Revenue Code of 1986, or any similar state law
applicable to governmental plans. Purchaser shall indemnify and
hold Seller harmless from all loss (including reasonable
attorneys' fees and costs) arising out of a breach of the
foregoing certification and warranty. The terms of this
Section 7.3(c) shall survive the Closing.
7.4 Covenants of Purchaser.
(a) Purchaser shall notify Seller promptly if
Purchaser becomes aware of any transactions or occurrence prior
to the Closing Date which would make any of the representations
or warranties of Seller contained in this Agreement untrue in any
material respect.
Purchaser's failure to so notify Seller shall
constitute a waiver by Purchaser of any liability of Seller to
Purchaser or its designee arising from the untruth of any such
representations or warranties of Seller known to Purchaser prior
to Closing, it being agreed by the parties hereto that such
representations and warranties known by Purchaser to be untrue at
or prior to Closing, shall not survive Closing.
(b) Purchaser acknowledges and agrees that the sale of
the Property is made on an "AS IS, WHERE-IS WITH ALL FAULTS"
basis and, except as specifically set forth in Section 7.2,
without representations or warranties of any kind or nature,
express, implied or otherwise, including, but not limited to, any
representation or warranty made by the Brokers or any
representation or warranty concerning zoning, financial,
environmental, or physical condition of the Property, or any
income, expenses, charges, liens, encumbrances, rights, claims on
or affecting or pertaining to the Property. Purchaser
acknowledges that if it elects to purchase the Property, it will
be doing so predicated upon its own independent investigations,
the investigations of its Permittees and the representations and
warranties of the Sellers expressly made herein or in any other
document executed and delivered by Seller to Purchaser at Closing
as described in Section 4.5(b). Purchaser hereby waives any and
all claims which may currently exist or which may arise in the
future, by contract, common law or statute currently in effect,
as amended or subsequently enacted, and which relate to the
Property or environmental conditions on, under, or near the
Property and are not the direct result of a default of this
Agreement by Seller, in which latter event Purchaser's remedies
shall be limited for any such default prior to Closing to the
provisions of Section 8.1(b) and for any default discovered after
Closing to the provisions of Section 10.3.
(c) Purchaser acknowledges and agrees that except as
provided in Section 4.3(d), nothing in this Agreement shall be
deemed to preclude or prohibit Seller from operating, managing,
leasing (including terminating any Lease for breach by the
tenant) and repairing the Property in the same manner as the same
was operated, managed, leased, and repaired prior to execution
hereof. Seller will not voluntarily terminate any of the Leases
prior to their expiration date without Purchaser's written
approval which will not be unreasonably withheld or unduly
delayed.
(d) Purchaser agrees that it will not attempt to
contact any of the tenants of the Property (whether by telephone,
correspondence, or in person) until such time, if ever, as the
Inspection Period shall have expired and Purchaser has not given
Seller a Notice to Cancel. Thereafter, Purchaser may contact any
of the tenants so long as it shall first notify Seller and give
Seller the opportunity to review any written communication with
any of the tenants or to be present at any personal meeting with
the tenants, as applicable.
ARTICLE VIII
DEFAULT, CONDITIONS PRECEDENT AND TERMINATION
8.1 Conditions to Purchaser's Obligations and Default by
Seller.
(a) The obligation of Purchaser to close the
transaction contemplated hereby is, at Purchaser's option,
subject to Purchaser's review and approval of: the Leases,
Service Contracts, the environmental and structural condition of
the Property, the Title Commitment, and such market research,
inspection of the Property, determinations as to the Property's
compliance with the Legal Requirements and review of financial
statements relating to the Property, as Purchaser deems necessary
to make its final determination to acquire the Property.
Purchaser shall have until 5:00 p.m. (CST) December 1, 1997
("Inspection Period") within which to make such reviews (except
for the environmental review as hereinafter referred to) and
approve the same. If, by the conclusion of the Inspection
Period, Purchaser has not given Seller written notice ("Notice to
Cancel") that it intends to cancel this Agreement it will be
conclusively presumed that Purchaser has approved the matters
described in this paragraph 8.1(a) and has determined to acquire
the Property. Purchaser will then have until December 5, 1997
within which to obtain approval by its Board of Directors of the
acquisition of the Property pursuant to the terms hereof. The
Inspection Period will be extended to December 16, 1997 but only
to enable Purchaser to receive and approve (in Purchaser's
reasonable discretion) the results of an Environmental Report
presently being prepared by PSI Environmental Engineers at the
request and expense of Purchaser. If Purchaser shall in its
reasonable discretion fail to approve said Environmental Report
because of environmental problems in, on or under the
Improvements or the Real Property, it must give its Notice To
Cancel for that reason only not later than December 17, 1997 or
this condition will be deemed waived by Purchaser. If on or
before the conclusion of the Inspection Period Purchaser has
given the Notice To Cancel, or if it has not given the Notice to
Cancel but notifies Seller by December 5, 1997 that it did not
obtain Board of Director approval, the Deposit will be paid to
Purchaser and this Agreement will be terminated and become null
and void except for Purchaser's obligations under
paragraph 7.1(c) which will survive such termination.
If Purchaser shall not have given a Notice to Cancel within
the time aforesaid, the Deposit shall be non-refundable except as
set forth in Sections 8. l(b), 6.1 and 6.2.
(b) The obligation of Purchaser to Close the
transaction contemplated hereby is, at Purchaser's option,
further subject to all material representations and warranties of
Seller contained in this Agreement being true and correct in
every material respect at and as of the Closing Date and all
material obligations of Seller to have been performed on or
before the Closing Date having been timely and duly performed.
If the condition precedents to Purchaser's obligation to Close as
described in Sections 4.1, 4.2, and 4.5(b)(viii) have not
occurred on or prior to the times required therein (subject to
Seller's extension rights under Section 4.5(b)(viii)), Purchaser
shall have only the following options to be exercised by written
notice to Seller prior to the Closing Date: (i) to terminate
this Agreement, obtain a return of the Deposit and thereafter
this Agreement shall be null and void, or (ii) to waive such
conditions and Close this Agreement on the Closing Date without
diminution of the Purchase Price. If Seller shall be in default
of its obligation under this Agreement (in contrast to Seller's
inability to perform any of the conditions precedent described
above and elsewhere in this Agreement which shall not constitute
a default), Purchaser shall have only the following options as
its sole and exclusive remedy for said default to be exercised by
written notice to Seller on or prior to Closing Date: (aa) to
terminate this Agreement and obtain a return of the Deposit,
whereupon this Agreement shall become null and void and of no
further force or effect, except that if the default of Seller
shall be of such a nature as to be willful and wanton in conduct,
then Purchaser also shall be entitled to receive from Seller the
sum of $75,000 as and for full, and agreed upon liquidated
damages (the parties hereto hereby acknowledge that the amount of
such damages are otherwise incapable of ascertainment) or (bb) to
obtain a return of the Deposit and seek specific performance of
this Agreement. If Purchaser does not file suit for Specific
Performance within six (6) months of Seller's alleged default, it
will be conclusively presumed that Purchaser has elected the
option set forth in Section 8.1(b)(aa). Purchaser's failure to
give such written notice on or prior to the time described above,
shall be conclusive evidence that all such conditions precedent
to Purchaser's obligations to Close have been satisfied. If this
Agreement is terminated pursuant to this Section 8.1(b), the
Deposit shall promptly be returned to Purchaser, and all other
funds and documents theretofore delivered hereunder or deposited
in escrow by either party shall be promptly returned to such
party. The rights and remedies granted to the Purchaser in this
Section 8.1(b) are the sole rights and remedies available to the
Purchaser in the event of Seller's default of its obligations
under this Agreement and Purchaser hereby waives any other rights
it may have at law (including claims for any tortious conduct it
may allege against Seller) or in equity.
8.2 Conditions to Seller's Obligations and Default by
Purchaser. The obligation of Seller to Close the transaction
contemplated hereby is, at Seller's option, conditioned upon
Purchaser's representations and warranties contained in this
Agreement being true and correct in every material respect at and
as of the Closing Date, and upon fulfillment by Purchaser of all
obligations of Purchaser which were to have been performed on or
before the Closing Date having been timely and duly performed.
If any condition precedent to Closing of Seller as set forth in
this Section 8.2 has not been fulfilled and satisfied on or
before the Closing Date, Seller may, by notice to Purchaser,
elect at any time thereafter to terminate this Agreement, and if
such termination is due to Purchaser's fault, Seller shall be
entitled to retain the Deposit as full and complete liquidated
damages (and not as a penalty or forfeiture) in lieu of any and
all other legal and equitable rights which Seller may have
hereunder, and all other funds and documents theretofore
delivered hereunder or deposited in escrow by either party shall
be promptly returned to such party. Upon such termination and
retention of the Deposit by Seller, except as set forth in the
last sentence of the first grammatical paragraph of Section 10.3
hereof, this Agreement shall become null and void and of no
further force or effect.
ARTICLE IX
NOTICES
9.1 Notices. Any notice, request, demand, instrument or
other document to be given or served hereunder shall be in
writing and shall be delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid, or
by overnight express courier, or by facsimile transmission and
addressed to the parties at their respective addresses set forth
below, and the same shall be effective upon receipt if delivered
personally or two (2) business days after deposit in the mails,
if mailed, or upon receipt if deposited with an overnight express
courier or sent by facsimile transmission. A party may change
its address or facsimile transmission number for receipt of
notices by service of a notice of such change in accordance
herewith.
If to Seller:
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Brian Ellison
Facsimile Number: (312) 915-2310
with copies to:
Richard Ellis, L.L.C.
Attention: Andrea Pierce
Three First National Plaza, Suite 1750
Chicago, Illinois 60602
Facsimile Number: (312) 899-0923
and to:
Robert W. Newman, Esq.
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, Illinois 60606-1229
Facsimile Number: (312) 201-2555
If to Purchaser:
Inland Real Estate Corporation
2901 Butterfield Road
Oak Brook, Illinois 60521
Attention: Robert D. Parks, President
Facsimile Number: (630) 218 4935
with a copy to:
The Inland Group, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60521
Attention: Sam Orticelli, Esq.
Facsimile Number: (630) 218-4900
ARTICLE X
ADDITIONAL COVENANTS
10.1Entire Agreement, Amendments and Waivers. This
Agreement contains the entire agreement and understanding of the
parties with respect to the subject matter hereof, and the same
may not be amended, modified or discharged nor may any of its
terms be waived except by an instrument in writing signed by the
party to be bound thereby.
10.2 Further Assurances. The parties each agree to do,
execute, acknowledge and deliver all such further acts,
instruments and assurances and to take all such further action
before or after the Closing as shall be necessary or desirable to
fully carry out this Agreement and to fully consummate and effect
the transaction contemplated hereby.
10.3Survival and Benefit. Only those agreements,
covenants, indemnifications, and obligations of the parties
hereunder set forth in Sections 4.3(c), 5.1, 7. l(c), 7. l(f),
7.4(b), the representations and warranties and certification of
Seller contained in any Landlord's Estoppel Certificate delivered
to Purchaser at Closing and the representations and warranties of
Purchaser set forth in Section 7.3 shall survive the Closing and
inure to the benefit of and be binding upon the respective
successors and assigns of the parties. The indemnifications set
forth in Sections 5.1 and 7.1(c) shall survive termination of
this Agreement prior to Closing.
Subject to the provisions of the second paragraph of
Section 7.4(a): (i) the representations and warranties of Seller,
as contained in this Agreement shall survive the Closing if the
Purchaser satisfies the requirements hereinafter set forth in
this Section 10.3 and (ii) any liability of Seller to Purchaser
based upon any inaccuracy of Seller's representations and
warranties contained in this Agreement shall expire without
notice from or to any party hereto (including Purchaser's
designee) unless:
(a) Purchaser (or its designee) shall give written
notice to Seller within three (3) months after the Closing Date
that any of such representations and warranties were inaccurate
in any material respect, specifying in detail the nature of any
such inaccuracy and certifying to Seller that Purchaser and its
designee and Permittees were not aware of such inaccuracy at the
time of the Closing; and
(b) Purchaser (or its designee) shall commence legal
proceedings against Seller for damages suffered as a result of
the inaccuracy specified in such notice given to Seller (pursuant
to (a) above) within six (6) months after the Closing Date.
10.4No Third Party Benefits. This Agreement may not be
assigned by Purchaser. Notwithstanding the foregoing, Purchaser
shall be permitted, without Seller's consent, to assign its
rights, privileges, duties and obligations under this Agreement
to an entity which is an affiliate or subsidiary of The Inland
Group, Inc. or Inland Real Estate Corporation. Promptly
following, and as a condition to, any assignment by Purchaser
permitted under this subsection 10.4, Purchaser shall deliver to
Seller an assumption by the assignee of all of Purchaser's duties
and obligations under this Agreement.
Such assignment by Purchaser will not absolve or release
Purchaser from liability under this Agreement whether prior to or
subsequent to Closing. This Agreement is for the sole and
exclusive benefit of the parties hereto and the designee of
Purchaser and no third party is intended to or shall have any
rights hereunder.
10.5No Recording. The Purchaser agrees not to record this
Agreement or any short form, memorandum, or notice thereof in any
public or governmental office.
10.6 Interpretation.
(a) The headings and captions herein are inserted for
convenient reference only and the same shall not limit or
construe the paragraphs or Sections to which they apply or
otherwise affect the interpretation hereof.
(b) The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms shall refer to this Agreement,
and the term "hereafter" shall mean after and the term
"heretofore" shall mean before, the date of this Agreement.
(c) Words of the masculine, feminine or neuter gender
shall mean and include the correlative words of other genders and
words importing the singular number shall mean and include the
plural number and vice versa.
(d) Words importing persons shall include firms,
associations, partnerships (including limited partnerships),
trusts, corporations and other legal entities, including public
bodies, as well as natural persons.
(e) The terms `include," "including" and similar terms
shall be construed as if followed by the phrase "without being
limited to."
(f) Whenever under the terms of this Agreement the
time for performance of a covenant or condition or the last day
to give notice falls upon a Saturday, Sunday or holiday (whether
in the United States or Canada), such time for performance shall
be extended to the next business day. Otherwise all references
herein to "day" shall mean calendar days.
(g) This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
(h) In any action to enforce any of the terms of this
Agreement, the prevailing party shall be entitled to recover its
expenses, including reasonable attorneys fees and costs of
litigation, including those in any appellate proceedings.
(i) Time is of the essence of this Agreement.
(j) This Agreement and any document or instrument
executed pursuant hereto may be executed in any number of
counterparts each of which shall be deemed an original, but all
of which together shall constitute the same instrument.
10.7 Limitation of Liability.
(a) Notwithstanding anything to the contrary contained
herein, if the Closing of the transactions hereunder 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 or related in any manner to the Property
(including, without limitation, liability for a breach of any of
the representations, warranties, indemnifications, covenants or
other obligations, whether express or implied, of Seller under
this Agreement or under any Landlord's Estoppel Certificate or
any other document executed or delivered in connection herewith)
shall not exceed $400,000 including any costs of litigation which
Purchaser or its designee may incur to enforce such liabilities
of Seller.
(b) Provided Seller establishes the reserve account
described in Section 10.7(c) 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, JMB Realty Corporation
and the Managers) 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 or partner's obligation to restore or contribute
same).
(c) Seller agrees that it shall establish a reserve
account of at least $400,000 at the time of Closing hereunder to
cover Seller's liability hereunder as set forth in Section
10.7(a) above, if any. Notwithstanding the limitation of
liability contained in Section 10.7(a) or 10.7(b), if during the
period commencing on the Closing Date and ending three (3) months
after the Closing Date, or six (6) months after the Closing Date
if Purchaser has timely given written notice of a claim against
Seller as provided in Section 10.3(a) (the "Survival Period"),
Seller shall utilize all or any portion of such reserve account
for any purpose other than the payment of claims, expenses,
liabilities or Purchaser's attorneys' fees with respect to a
breach or alleged breach of the representations, warranties,
indemnifications, covenants or other obligations (whether express
or implied) of Seller under this Agreement (or any Landlord
Estoppel Certificate or any other document executed or delivered
in connection therewith) (collectively, the "Specified
Liabilities"), then subject to the terms and conditions of this
Agreement, JMB Realty Corporation, as the general partner of
Seller, shall if the provisions of Sections 10.3(a) and (b) are
complied with by Purchaser during the Survival Period, be liable
for the payment of any Specified Liabilities, provided, however,
the aggregate liabilities of JMB Realty Corporation in connection
therewith shall not exceed $400,000 in the aggregate including
any costs of litigation which Purchaser or its designee may incur
to enforce such post-closing obligations or liabilities of
Seller.
10.8 Effective Date. Wherever herein contained the
expression "date hereof" is used it shall be deemed to mean the
date that Seller has accepted this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed
and delivered by Seller and Purchaser on the respective dates set
forth beneath each of their signatures and is intended to be
effective as of the latest such date.
PURCHASER:
INLAND REAL ESTATE ACQUISITIONS, INC.
By:
Its:
SELLER:
JMB/LANDINGS ASSOCIATES, a general
partnership
By: Carlyle Income Plus, Ltd., a
general partner
By: JMB Realty Corporation, its
general partner
By:
Brian Ellison, Vice President
By: Carlyle Income Plus, L.P.-II, a
general partner
By: JMB Realty Corporation, its
general partner
By:
Brian Ellison, Vice President
Date of Seller's Acceptance:
___________________, 1997.
