<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996 OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to .
---------------- -----------------
Commission File Number 1-13102
FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 36-3935116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 N. WACKER DRIVE, SUITE 150, CHICAGO, ILLINOIS 60606
(Address of principal executive offices) (Zip Code)
(312) 704-9000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK
(Title of class)
NEW YORK STOCK EXCHANGE
(Name of exchange on which registered)
9 1/2% SERIES A CUMULATIVE PREFERRED STOCK
(Title of class)
NEW YORK STOCK EXCHANGE
(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No___.
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $942.9 million based on the closing price on the
New York Stock Exchange for such stock on March 20, 1997.
At March 20, 1997, 30,051,117 shares of the Registrant's Common Stock, $.01 par
value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference to the Registrant's
definitive proxy statement to be filed with respect to the Annual Meeting of
Stockholders to be held on May 14, 1997.
<PAGE> 2
FIRST INDUSTRIAL REALTY TRUST, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I.
Item 1.
Business.................................................................................................. 2
Item 2. The Properties.................................................................................... 6
Item 3. Legal Proceedings................................................................................. 17
Item 4.Submission of Matters to a Vote of Security Holders................................................ 17
PART II.
Item 5.Market for Registrant's Common Equity and Related Stockholder Matters.............................. 18
Item 6.Selected Financial and Operating Data.............................................................. 18
Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations.............. 20
Item 8. Financial Statements and Supplementary Data....................................................... 25
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.............. 25
PART III.
Item 10.Directors and Executive Officers of the Registrant................................................ 26
Item 11.Executive Compensation............................................................................ 26
Item 12.Security Ownership of Certain Beneficial Owners and Management.................................... 26
Item 13.Certain Relationships and Related Transactions.................................................... 26
PART IV.
Item 14.Exhibits, Financial Statements, Financial Statement Schedule and Reports on Form 8-K.............. 26
SIGNATURES................................................................................................ 33
</TABLE>
1
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This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1993, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995, and is including this statement for purposes of complying with these safe
harbor provisions. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies and expectations of the
Company, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," or similar expressions. The
Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors which could have a material
adverse affect on the operations and future prospects of the Company on a
consolidated basis include, but are not limited to, changes in: economic
conditions generally and the real estate market specifically,
legislative/regulatory changes (including changes to laws governing the
taxation of REITs), availability of capital, interest rates, competition,
supply and demand for industrial properties in the Company's current and
proposed market areas and general accounting principles, policies and
guidelines applicable to REITs. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. Further information concerning the Company
and its business, including additional factors that could materially affect the
Company's financial results, is included herein and in the Company's other
filings with the Securities and Exchange Commission.
PART I
ITEM 1. BUSINESS
THE COMPANY
GENERAL
First Industrial Realty Trust, Inc. ("First Industrial" or the "Company")
is a self-administered and fully integrated real estate company which owns,
manages, acquires and develops industrial real estate. The Company completed
its initial public offering in June 1994 (the "Initial Offering"). Upon
consummation of the Initial Offering, the Company owned 226 bulk warehouse and
light industrial properties which contained an aggregate of 17.4 million square
feet of gross leasable area ("GLA"). As of December 31, 1996, the Company's
portfolio consisted of 379 in-service bulk warehouse and light industrial
properties containing approximately 32.7 million square feet of GLA located in
14 states, principally in the midwestern portion of the United States.
The Company's interests in its properties are held through partnerships
controlled by the Company, including First Industrial, L.P. (the "Operating
Partnership"), of which the Company is the sole general partner, as well as,
among others, First Industrial Financing Partnership, L.P. (the "Financing
Partnership"), First Industrial Securities, L.P. (the "Securities
Partnership"), First Industrial Mortgage Partnership, L.P. (the "Mortgage
Partnership"), First Industrial Harrisburg, L.P. (the "Harrisburg
Partnership"), and First Industrial Indianapolis, L.P. (the "Indianapolis
Partnership"), each of which a wholly-owned subsidiary of the Company is the
sole general partner and the Operating Partnership is the sole limited partner.
The Company's initial interest in the Operating Partnership was obtained
in connection with the Initial Offering in exchange for the contribution of
substantially all of the net proceeds thereof. Immediately prior to the
Initial Offering, the Operating Partnership, which had previously been
controlled by members of The Shidler Group, owned 23 properties. In connection
with the Initial Offering, (1) entities affiliated with First Industrial
Chairman of the Board Jay H. Shidler and other members of The Shidler Group
contributed to the Operating Partnership 30 additional properties and the
assets of certain property management operations and received $3.2 million in
cash and ownership of 2,306,399 shares of the Company's common stock and
830,017 limited partnership interests in the Operating Partnership ("Units")
having an aggregate value of $73.7 million (based on the initial public
offering price of $23.50) and the assumption by the Operating Partnership of
$107.4 million of indebtedness owed to affiliates of Jay H. Shidler and other
members of The Shidler Group, (2) businesses of which First Industrial
Executive Officers Michael G. Damone and Anthony Muscatello, and former Senior
2
<PAGE> 4
Regional Director Steven B. Hoyt were principals contributed to the Operating
Partnership 97 properties in the Detroit, central Pennsylvania and
Minneapolis/St. Paul areas, respectively, and certain property management
operations (such businesses, together with The Shidler Group, the "Contributing
Businesses") and received $3.9 million in cash, 475,710 Units having a value of
$11.2 million (based on the initial public offering price of $23.50) and the
assumption of $131.4 million of indebtedness, (3) the Company and the Operating
Partnership contributed a portion of the net proceeds of the Initial Offering
to the Financing Partnership, (4) the Financing Partnership entered into the
1994 Mortgage Loan (as hereinafter defined) and (5) the Operating Partnership
and the Financing Partnership acquired 76 additional properties from
unaffiliated third parties.
First Industrial Realty Trust, Inc. is a Maryland corporation organized on
August 10, 1993, and is a real estate investment trust ("REIT") under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code").
The Company is continuing and expanding the midwestern industrial property
business of The Shidler Group, a national organization with over 20 years
experience in the industrial real estate business. The Company's Chairman of
the Board and senior executive officers have an average of 19 years of business
experience. The Company utilizes an operating approach which combines the
effectiveness of locally based, or decentralized, property management,
acquisition and development functions with the cost efficiencies of centralized
acquisition and development support, capital markets expertise, asset
management and fiscal control systems. At December 31, 1996, the Company had
106 employees.
The Company has grown and will seek to continue to grow through the
acquisition of additional industrial properties and businesses, and through the
development, primarily on a pre-leased basis, of build-to-suit properties.
BUSINESS OBJECTIVES AND GROWTH PLANS
First Industrial's fundamental business objective is to maximize the total
return to its stockholders through increases in per share distributions and
increases in the value of the Company's properties and operations. The
Company's growth plan includes the following elements:
- - Internal Growth. The Company seeks to grow internally by (i) increasing
revenues by renewing or re-leasing spaces subject to expiring leases at
higher rental levels; (ii) increasing occupancy levels at properties where
vacancies exist and maintaining occupancy elsewhere; (iii) controlling and
minimizing operating expenses; and (iv) renovating existing properties.
- - External Growth. The Company seeks to grow externally through (i) the
acquisition of portfolios of industrial properties, industrial property
businesses or individual properties which meet the Company's investment
parameters; (ii) the development of primarily build-to-suit properties;
and (iii) the expansion of its properties.
BUSINESS STRATEGIES
First Industrial utilizes the following seven strategies in connection
with the operation of its business:
- - Organization Strategy. The Company implements its decentralized property
operations strategy through the use of experienced regional management
teams and local property managers. Each operating region is headed by a
senior regional director, who is a senior executive officer of, and has an
equity interest in, the Company. The Company provides acquisition and
financing assistance, property management oversight and financial
reporting functions from its headquarters in Chicago to support its
regional operations. The Company believes the size of its portfolio
enables it to realize operating efficiencies by spreading overhead over
many properties and by negotiating quantity purchasing discounts.
3
<PAGE> 5
- - Market Strategy. The Company invests in markets where it can achieve size
and economies of scale. By focusing on specific markets, properties can
be added without incurring appreciable increases in overhead. Based on
the size of its portfolios in its current markets, which as of December
31, 1996 averaged approximately 2.1 million square feet per market, and
the experience of its senior regional directors, the Company believes that
it has sufficient market presence and resources to compete effectively.
As of December 31, 1996, the Company owned portfolios in the metropolitan
areas of Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Atlanta,
Georgia; Chicago, Illinois; Grand Rapids, Michigan; Indianapolis, Indiana;
Central Pennsylvania; Nashville, Tennessee; St. Louis, Missouri; Columbus,
Ohio; Cincinnati, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; Dayton,
Ohio; and Cleveland, Ohio.
- - Leasing and Marketing Strategy. The Company has an operational management
strategy designed to enhance tenant satisfaction and portfolio
performance. The Company pursues an active leasing strategy, which
includes aggressively marketing available space, renewing existing leases
at higher rents per square foot and seeking leases which provide for the
pass-through of property-related expenses to the tenant. The Company also
has local and national marketing programs which focus on the business and
brokerage communities and national tenants.
- - Acquisition Strategy. The primary focus of First Industrial's acquisition
strategy is to acquire properties in its current markets to capitalize on
local market expertise and maximize operating effectiveness and
efficiencies. As appropriate opportunities arise, the Company will
acquire additional properties in other markets where it can achieve
sufficient size and scale as well as hire top-quality management.
- - Development Strategy. Of the 379 buildings in First Industrial's
portfolio at December 31, 1996, 99 have been developed by its current or
former management. The Company will continue to leverage the development
capabilities of its management, many of whom are leading developers in
their respective markets. In 1996, the Company formed a new subsidiary
("FI Development Services Group, Inc.") to focus on development
activities.
- - Disposition Strategy. The Company continually evaluates local market
conditions and property-related factors and will sell a property when it
believes it is to the Company's advantage to do so.
- - Financing Strategy. The Company believes that the size of its portfolio,
the diversity of its buildings and tenants and the financial strength of
the Company allow it access to the public capital markets which are not
generally available to smaller, less diversified property owners because
of the portfolio size and diversity requirements of those markets.
RECENT DEVELOPMENTS
In 1996, the Company acquired or completed development of 114 properties
for a total estimated investment of approximately $262.0 million. Also, in
1996, the Company improved its capital structure by (1) issuing 5.175 million
shares (inclusive of the underwriters' over-allotment option) of common stock
on February 2, 1996, at a purchase price to the public of $22 per share. The
net proceeds of $106.3 million were used to repay outstanding borrowings
totaling $59.4 million and fund property acquisitions; (2) issuing 5.75 million
shares (inclusive of the underwriters' over-allotment option) of common stock
on October 25, 1996, at a purchase price to the public of $25.50 per share.
The net proceeds of $137.7 million were used to repay outstanding borrowings of
$84.2 million and fund property acquisitions; and (3) terminating its $150
million secured revolving credit facility ("1994 Acquisition Facility") and
entering into a $200 million unsecured revolving credit facility ("1996
Unsecured Acquisition Facility"). The 1996 Unsecured Acquisition Facility
initially bears interest at LIBOR plus 1.10% which is .65 percentage points
less than the interest rate of LIBOR plus 1.75% borne by the 1994 Acquisition
Facility.
4
<PAGE> 6
Subsequent to December 31, 1996, the Company purchased 45 properties
containing an aggregate of 3.9 million square feet of GLA for approximately
$164.3 million, or $42 per square foot. The purchase price consisted of
approximately $110.3 million cash, Operating Partnership units valued at
approximately $49.5 million and assumed debt of approximately $4.5 million.
FUTURE ACQUISITIONS AND DEVELOPMENT
The Company has an active acquisition and development program through
which it is continually engaged in identifying, negotiating and consummating
portfolio and individual industrial property acquisitions and developments. As
a result, the Company is currently engaged in negotiations relating to the
possible acquisitions and developments of a number of properties located in the
Company's current markets and other markets into which the Company may expand.
When evaluating potential acquisitions and development, the Company will
consider such factors as: (i) the geographic area and type of property; (ii)
the location, construction quality, condition and design of the property; (iii)
the potential for capital appreciation of the property; (iv) the ability of the
Company to improve the property's performance through renovation; (v) the terms
of tenant leases, including the potential for rent increases; (vi) the
potential for economic growth and the tax and regulatory environment of the
area in which the property is located; (vii) the potential for expansion of the
physical layout of the property and/or the number of sites; (viii) the
occupancy and demand by tenants for properties of a similar type in the
vicinity; and (ix) competition from existing properties and the potential for
the construction of new properties in the area.
INDUSTRY
Industrial properties are typically used for the design, assembly,
packaging, storage and distribution of goods and/or the provision of services.
As a result, the demand for industrial space in the United States is related to
the level of economic output. Historically, occupancy rates for industrial
property in the United States have been higher than those for other types of
commercial property. The Company believes that the higher occupancy rate in
the industrial property sector is a result of the construction-on-demand nature
of, and the comparatively short development time required for, industrial
property.
Overall, the midwest region (where approximately 74% of the properties
owned at December 31, 1996 and 68% of the properties owned at March 27, 1997
are located) has had the highest average occupancy rate for industrial
properties of the major regions in the United States since 1992, according to
CB Commercial Real Estate Group, Inc.'s industry index, which measures the
supply of available space in large industrial buildings in the major geographic
regions of the United States.
INDUSTRIAL SPACE OCCUPANCY RATES BY REGION
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
REGION 1992 1993 1994 1995 1996
- ------ ---- ---- ---- ---- ----
<C> <C> <C> <C> <C> <C>
Midwest.................................................................... 93.2% 92.8% 93.9% 95.1% 94.3%
East....................................................................... 90.7 91.6 91.7 92.1 91.6
South...................................................................... 90.8 91.4 91.7 90.9 90.5
West....................................................................... 90.7 91.0 92.5 93.0 93.3
United States.............................................................. 91.3 91.7 92.6 93.1 92.7
</TABLE>
- -----------
Source: CB Commercial Real Estate Group, Inc.
5
<PAGE> 7
ITEM 2. THE PROPERTIES
GENERAL
At December 31, 1996, First Industrial owned 379 in-service properties
containing approximately 32.7 million square feet of GLA in 14 states, with a
diverse base of more than 990 tenants engaged in a wide variety of businesses,
including manufacturing, retailing, wholesale trade, distribution and
professional services. The properties are generally located in business parks
which have convenient access to interstate highways and rail and air
transportation. The median age of the properties as of December 31, 1996 was
approximately 11 years.
The Company classifies its properties into two industrial categories:
bulk warehouse and light industrial. The Company's bulk warehouse properties
are generally used for bulk storage of materials and manufactured goods and its
light industrial properties are generally used for the design, assembly,
packaging and distribution of goods and, in some cases, the provision of
services. Each of the properties is wholly owned by the Company. The
following table summarizes certain information as of December 31, 1996 with
respect to the Company's properties. Information in the table excludes
properties under development at December 31, 1996.
PROPERTY SUMMARY
<TABLE>
<CAPTION>
BULK WAREHOUSE LIGHT INDUSTRIAL TOTAL
------------------------ ----------------------- -------------------------------------
GLA AS A %
NUMBER OF NUMBER OF NUMBER OF OCCUPANCY OF TOTAL
METROPOLITAN AREA GLA PROPERTIES GLA PROPERTIES GLA PROPERTIES AT 12/31/96 PORTFOLIO
- ----------------- --- ---------- --- ---------- --- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Minneapolis/St. Paul 1,864,987 16 2,911,474 41 4,776,461 57 97% 15%
Detroit 2,211,563 57 2,485,991 59 4,697,554 116 94% 14%
Atlanta 3,527,237 18 507,731 9 4,034,968 27 94% 12%
Chicago 2,914,002 19 1,071,210 13 3,985,212 32 98% 12%
Grand Rapids 2,769,591 22 40,400 3 2,809,991 25 92% 9%
Indianapolis 1,659,630 6 1,063,780 25 2,723,410 31 98% 8%
Central PA (1) 1,744,699 12 681,008 13 2,425,707 25 99% 7%
Nashville 1,299,040 7 227,267 3 1,526,307 10 100% 5%
St. Louis 873,095 15 385,713 3 1,258,808 18 100% 4%
Columbus 1,110,334 2 56,849 1 1,167,183 3 99% 4%
Cincinnati 951,080 3 111,375 5 1,062,455 8 97% 3%
Des Moines 878,992 5 --- --- 878,992 5 100% 3%
Other (2) 301,355 4 378,603 6 679,958 10 100% 2%
Milwaukee --- --- 306,563 6 306,563 6 100% 1%
Dayton --- --- 264,000 5 264,000 5 98% 1%
Cleveland --- --- 102,500 1 102,500 1 100% 0%
---------- ------ ---------- ---------- ------------- ------- --------- -------
Total or Average 22,105,605 186 10,594,464 193 32,700,069 379 97% 100%
========== ====== ========== ========== ============= ======= ========= =======
</TABLE>
(1) Includes the Harrisburg, Allentown and Reading markets.
(2) Includes Denton, TX; Wichita, KS; West Lebanon, NH; and Abilene, TX.
6
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PROPERTY ACQUISITION ACTIVITY
During 1996, the Company completed 29 separate property acquisition
transactions totaling approximately 10.4 million square feet of GLA at a total
purchase price of approximately $253.0 million, or $24 per square foot. The
112 properties acquired have the following characteristics:
<TABLE>
<CAPTION>
OCCUPANCY AT
METROPOLITAN AREA GLA PROPERTY TYPE 12/31/96 ACQUISITION DATE
- ----------------- ---------- ---------------- ------------- -------------------
<S> <C> <C> <C> <C>
Chicago, IL 364,000 Light Industrial 100% January 11, 1996
Chicago, IL 109,086 Light Industrial 100% February 5, 1996
Atlanta, GA 1,040,000 Bulk Warehouse 100% February 15, 1996
Detroit, MI 386,520 Light Industrial 81% February 29, 1996
Indianapolis, IN,
Cincinnati, OH, Bulk Warehouse/
and Columbus, OH 3,037,382 Light Industrial 98% March 20, 1996
Chicago, IL 151,469 Bulk Warehouse 100% March 22, 1996
Minneapolis, MN 212,293 Light Industrial 100% April 10, 1996
Indianapolis, IN 327,997 Bulk Warehouse 100% June 19, 1996
Milwaukee, WI 78,000 Light Industrial 100% June 25, 1996
Minneapolis, MN 78,029 Light Industrial 77% June 26, 1996
Dayton, OH 180,000 Light Industrial 100% June 28, 1996
Minneapolis, MN 125,950 Bulk Warehouse 97% July 9, 1996
Indianapolis, IN 70,560 Light Industrial 100% July 24, 1996
Detroit, MI 42,300 Light Industrial 100% August 16, 1996
Dayton, OH 84,000 Light Industrial 95% September 12, 1996
Minneapolis, MN 97,770 Light Industrial 95% September 30, 1996
Minneapolis, MN 83,189 Light Industrial 95% September 30, 1996
Columbus, OH 1,110,300 Bulk Warehouse 100% September 30, 1996
Minneapolis, MN 187,777 Light Industrial 100% October 4, 1996
Cleveland, OH 102,500 Light Industrial 100% October 8, 1996
Nashville, TN 538,811 Bulk Warehouse 100% October 28, 1996
Milwaukee, WI 51,960 Light Industrial 100% October 28, 1996
Indianapolis, IN 295,400 Light Industrial 92% October 30, 1996
Detroit, MI 654,095 Bulk Warehouse 96% November 14, 1996
Atlanta, GA 150,536 Light Industrial 100% December 2, 1996
St. Louis, MO 122,813 Light Industrial 100% December 18, 1996
Cincinnati, OH and
Minneapolis, MN 183,614 Light Industrial 93% December 24, 1996
Atlanta, GA 408,819 Bulk Warehouse 100% December 31, 1996
Minneapolis, MN 80,000 Light Industrial 100% December 31, 1996
----------
Total 10,355,170
==========
</TABLE>
PROPERTY DEVELOPMENT ACTIVITY
During 1996, the Company completed two developments totaling approximately
.2 million square feet of GLA at a total cost of approximately $9.0 million, or
$45 per square foot. The developed properties have the following
characteristics:
<TABLE>
<CAPTION>
OCCUPANCY
METROPOLITAN AREA GLA PROPERTY TYPE AT 12/31/96 COMPLETION DATE
- ------------------ --- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Minneapolis, MN 172,800 Bulk Warehouse 100% October 1996
Detroit, MI 27,990 Light Industrial 100% November 1996
Total 200,790
=======
</TABLE>
At December 31, 1996, the Company had seven properties under development,
with an estimated completion GLA of 1.0 million square feet and an estimated
completion cost of approximately $27.4 million.
7
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PROPERTY SALES
During 1996, the Company sold six properties totaling approximately .4
million square feet of GLA. Total sales proceeds approximated $15.0 million.
The sold properties have the following characteristics:
<TABLE>
<CAPTION>
METROPOLITAN AREA GLA PROPERTY TYPE SALE DATE
- ----------------- --- ------------- ---------
<S> <C> <C> <C>
Detroit, Michigan 14,324 Light Industrial April 4, 1996
Huntsville, Alabama(a) 204,189 Bulk Warehouse April 26, 1996
Grand Rapids, Michigan 50,000 Bulk Warehouse May 31, 1996
Atlanta, Georgia 151,575 Bulk Warehouse December 31, 1996
-------
Total 420,088
=======
</TABLE>
(a) comprised of three properties.
PROPERTY ACQUISITIONS SUBSEQUENT TO YEAR END
Subsequent to December 31, 1996, the Company completed three separate
property transactions totaling approximately 3.9 million square feet of GLA
for approximately $164.3 million, or $42 per square foot, with the following
characteristics:
<TABLE>
<CAPTION>
OCCUPANCY AT
METROPOLITAN AREA GLA PROPERTY TYPE ACQUISITION DATE ACQUISITION DATE
- ----------------- --------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Indianapolis, IN 482,400 Bulk Warehouse 71% January 9, 1997
Long Island, NY and Bulk Warehouse/
Northern NJ 2,733,414 Light Industrial 97% January 31, 1997
Dayton, OH 58,746 Light Industrial 100% February 20, 1997
York, PA 312,500 Bulk Warehouse 100% March 17, 1997
Taylor, MI 179,700 Bulk Warehouse 98% March 21, 1997
Mechanicsburg, PA 162,500 Light Industrial 0%(a) March 24, 1997
---------
Total 3,929,260
=========
</TABLE>
(a) As of March 27, 1997, there is currently an executed lease for the entire
162,500 square feet of GLA. The tenant is expected to occupy the property
within 60 days of the acquisition date.
8
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DETAIL PROPERTY LISTING
The following table lists all of the Company's properties as of December
31, 1996, by geographic market area.
PROPERTY LISTING
<TABLE>
<CAPTION>
BUILDING ADDRESS LOCATION YEAR BUILT/ BUILDING LAND AREA OCCUPANCY
(CITY/STATE) ENCUMBRANCES RENOVATED TYPE (ACRES) GLA AT 12/31/96
- ---------------------- ------------ ------------- --------- ---------------- ---------------- ------- -----------
ATLANTA
- -------
<S> <C> <C> <C> <C> <C>
4250 River Green Parkway Duluth, GA (b) 1988 Light Industrial 2.14 28,942 100%
3400 Corporate Parkway Duluth, GA (b) 1987 Light Industrial 3.73 59,959 86%
3450 Corporate Parkway Duluth, GA (b) 1988 Light Industrial 2.38 37,346 67%
3500 Corporate Parkway Duluth, GA (b) 1991 Light Industrial 2.80 44,242 100%
3425 Corporate Parkway Duluth, GA (b) 1990 Light Industrial 3.49 42,978 77%
1650 GA Highway 155 McDonough, GA (a) 1991 Bulk Warehouse 12.80 228,400 100%
415 Industrial Park Road Cartersville, GA (a) 1986 Bulk Warehouse 9.27 119,657 100%
434 Industrial Park Road Cartersville, GA (a) 1988 Bulk Warehouse 8.07 57,493 100%
435 Industrial Park Road Cartersville, GA (a) 1986 Bulk Warehouse 8.03 71,000 100%
14101 Industrial Park Blvd. N.E. Covington, GA (a) 1984 Bulk Warehouse 9.25 67,500 100%
801-804 Blacklawn Road Conyers, GA (a) 1982 Bulk Warehouse 6.67 111,090 100%
1665 Dogwood Drive Conyers, GA (a) 1973 Bulk Warehouse 9.46 198,000 100%
1715 Dogwood Drive Conyers, GA (a) 1973 Bulk Warehouse 4.61 100,000 100%
11235 Harland Drive Covington, GA (a) 1988 Bulk Warehouse 5.39 32,361 100%
700 Westlake Parkway Atlanta, GA 1990 Light Industrial 3.50 56,400 100%
800 Westlake Parkway Atlanta, GA 1991 Bulk Warehouse 7.40 132,400 78%
4050 Southmeadow Parkway Atlanta, GA 1991 Light Industrial 6.60 87,328 100%
4051 Southmeadow Parkway Atlanta, GA 1989 Bulk Warehouse 11.20 171,671 12%
4071 Southmeadow Parkway Atlanta, GA 1991 Bulk Warehouse 17.80 209,918 100%
4081 Southmeadow Parkway Atlanta, GA 1989 Bulk Warehouse 12.83 254,172 100%
1875 Rockdale Industrial Blv Conyers, GA 1966 Bulk Warehouse 5.70 121,600 100%
1605 Indian Brook Way Norcross, GA 1995 Bulk Warehouse 12.85 202,880 100%
3312 N. Berkeley Lake Road Duluth, GA 1969 Bulk Warehouse 52.11 1,040,276 100%
3495 Bankhead Highway (f) Atlanta, GA 1986 Bulk Warehouse 20.50 408,819 100%
5570 Tulane Drive (f) Atlanta, GA 1996 Light Industrial 8.06 150,536 91%
--------- ----------
SUBTOTAL OR AVERAGE 4,034,968 94%
--------- ----------
<CAPTION>
CENTRAL PENNSYLVANIA
- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1214-B Freedom Road Cranberry Twnp, PA (a) 1982 Bulk Warehouse 5.99 32,779 100%
401 Russell Drive Middletown, PA (a) 1990 Bulk Warehouse 5.20 52,800 100%
2700 Commerce Drive Middletown, PA (a) 1990 Bulk Warehouse 3.60 32,000 100%
2701 Commerce Drive Middletown, PA (a) 1989 Light Industrial 6.40 48,000 100%
2780 Commerce Drive Middletown, PA (a) 1989 Light Industrial 2.00 21,600 100%
5035 Ritter Road Mechanicsburg, PA (a) 1988 Light Industrial 5.50 55,950 97%
5070 Ritter Road Mechanicsburg, PA (a) 1989 Light Industrial 5.20 60,000 93%
6340 Flank Drive Harrisburg, PA (a) 1988 Light Industrial 6.70 68,200 80%
6345 Flank Drive Harrisburg, PA (a) 1989 Light Industrial 7.00 69,443 100%
6360 Flank Drive Harrisburg, PA (a) 1988 Light Industrial 5.30 46,500 90%
6380 Flank Drive Harrisburg, PA (a) 1991 Light Industrial 3.70 32,000 94%
6400 Flank Drive Harrisburg, PA (a) 1992 Light Industrial 5.30 52,790 100%
6405 Flank Drive Harrisburg, PA (a) 1991 Light Industrial 6.00 32,000 100%
100 Schantz Spring Road Allentown, PA (a) 1993 Bulk Warehouse 12.37 100,000 100%
794 Roble Road Allentown, PA (a) 1984 Light Industrial 16.68 101,750 100%
7355 Williams Avenue Allentown, PA (a) 1989 Light Industrial 3.94 43,425 100%
2600 Beltline Avenue Reading, PA (a) 1985 Bulk Warehouse 5.89 69,190 100%
7125 Grayson Road Swatara, PA (a) 1991 Bulk Warehouse 17.17 300,000 100%
7253 Grayson Road Swatara, PA (a) 1990 Bulk Warehouse 12.42 196,000 96%
5 Keystone Drive Lebanon, PA 1995 Bulk Warehouse 14.00 88,400 100%
5020 Louise Drive Mechanicsburg, PA 1995 Light Industrial 5.06 49,350 100%
7195 Grayson Swatara, PA 1994 Bulk Warehouse 6.02 100,000 100%
400 First Street Middletown, PA (e) 1963-65/96 Bulk Warehouse 23.37 167,500 100%
401 First Street Middletown, PA (e) 1963-65/96 Bulk Warehouse 68.39 490,140 100%
500 Industrial Lane Middletown, PA (e) 1963-65/96 Bulk Warehouse 16.17 115,890 100%
--------- ----------
SUBTOTAL OR AVERAGE 2,425,707 99%
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
Location Year Built/ Building Land Area Occupancy
Building Address (City/State) Encumbrances Renovated Type (Acres) GLA at 12/31/96
- ------------------------------ -------------- -------------- ---------- ----------- ---------- ------ -------------
Chicago
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1330 West 43rd Street Chicago, IL (a) 1977 Bulk Warehouse 4.25 109,735 100%
2300 Hammond Drive Schaumburg, IL (a) 1970 Bulk Warehouse 4.13 77,000 100%
6500 North Lincoln Avenue Lincolnwood, IL (a) 1965/88 Light Industrial 2.52 63,050 100%
3600 West Pratt Avenue Lincolnwood, IL (a) 1953/88 Bulk Warehouse 6.35 205,481 100%
917 North Shore Drive Lake Bluff, IL (a) 1974 Bulk Warehouse 4.27 84,575 100%
6750 South Sayre Avenue Bedford Park, IL (a) 1975 Bulk Warehouse 2.51 63,383 41%
7200 S. Leamington Bedford Park, IL 1950 Bulk Warehouse 12.24 310,752 100%
585 Slawin Court Mount Prospect, IL (a) 1992 Light Industrial 3.71 38,150 100%
2300 Windsor Court Addison, IL (a) 1986 Bulk Warehouse 6.80 105,100 100%
3505 Thayer Court Aurora, IL (a) 1989 Bulk Warehouse 4.60 64,220 100%
3600 Thayer Court Aurora, IL (a) 1989 Light Industrial 6.80 67,058 100%
736-776 Industrial Drive Elmhurst, IL (a) 1975 Bulk Warehouse 3.79 80,520 93%
5310-5352 East Avenue Countryside, IL (a) 1975 Bulk Warehouse 4.77 88,042 96%
12330-12358 South Latrobe Alsip, IL (a) 1975 Bulk Warehouse 3.71 85,390 100%
305-311 Era Drive Northbrook, IL 1978 Light Industrial 1.82 27,549 68%
700-714 Landwehr Road Northbrook, IL 1978 Light Industrial 1.99 41,835 100%
720-730 Landwehr Road Northbrook, IL (b) 1978 Light Industrial 4.29 66,912 100%
3170-3190 MacArthur Boulevard Northbrook, IL (b) 1978 Light Industrial 2.14 41,820 58%
4330 South Racine Avenue Chicago, IL 1978 Bulk Warehouse 5.57 168,000 100%
13040 S. Crawford Ave. Alsip, IL 1976 Bulk Warehouse 15.12 400,076 100%
20W201 101st Street Lemont, IL (b) 1988 Light Industrial 8.72 160,200 100%
12241 Melrose Street Franklin Park, IL 1969 Bulk Warehouse 2.47 77,031 100%
280-296 Palatine Road Wheeling, IL (b) 1978 Bulk Warehouse 4.67 90,250 100%
3150-3160 MacArthur Boulevard Northbrook, IL 1978 Light Industrial 2.14 41,820 100%
2101-2125 Gardner Road Broadview, IL 1950/69 Bulk Warehouse 9.98 323,425 93%
365 North Avenue Carol Stream, IL 1969 Bulk Warehouse 28.65 225,000 100%
2942 MacArthur Boulevard Northbrook, IL 1979 Light Industrial 3.12 49,730 100%
12301-12325 S. Laramie Avenue Alsip, IL 1975 Bulk Warehouse 8.83 204,586 100%
6300 W. Howard Street Niles, IL 1956/64 Light Industrial 19.50 364,000 100%
301 Hintz Wheeling, IL 1960 Light Industrial 2.51 43,636 100%
301 Alice Wheeling, IL 1965 Light Industrial 2.88 65,450 100%
410 W. 169th Street South Holland, IL 1974 Bulk Warehouse 6.40 151,436 100%
--------- -----
SUBTOTAL OR AVERAGE 3,985,212 98%
--------- -----
<CAPTION>
CINCINNATI
- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
9900-9970 Princeton-Glendale Rd. Cincinnati, OH (c) 1970 Bulk Warehouse 10.64 185,580 97%
2940 Highland Avenue Cincinnati, OH (c) 1969/74 Bulk Warehouse 17.08 500,500 100%
4700-4750 Creek Road Cincinnati, OH (c) 1960 Bulk Warehouse 15.32 265,000 96%
4860 Duff Drive Cincinnati, OH 1979 Light Industrial 1.02 15,986 87%
4866 Duff Drive Cincinnati, OH 1979 Light Industrial 1.02 16,000 100%
4884 Duff Drive Cincinnati, OH 1979 Light Industrial 1.59 25,000 90%
4890 Duff Drive Cincinnati, OH 1979 Light Industrial 1.59 25,018 80%
963609643 Interocean Drive Cincinnati, OH 1983 Light Industrial 4.13 29,371 86%
--------- -----
SUBTOTAL OR AVERAGE 1,062,455 97%
--------- -----
<CAPTION>
CLEVELAND
- ---------
<S> <C> <C> <C> <C> <C> <C>
6675 Parkland Boulevard Cleveland, OH 1991 Light Industrial 10.41 102,500 100%
--------- -----
SUBTOTAL OR AVERAGE 102,500 100%
--------- -----
<CAPTION>
COLUMBUS
- --------
<S> <C> <C> <C> <C> <C> <C>
6911 Americana Parkway Columbus, OH 1980 Light Industrial 4.05 56,849 71%
3800 Lockbourne Industrial Pkwy Columbus, OH 1986 Bulk Warehouse 43.61 705,600 100%
3800 Groveport Road Columbus, OH 1986 Bulk Warehouse 22.31 404,734 100%
--------- -----
SUBTOTAL OR AVERAGE 1,167,183 99%
--------- -----
<CAPTION>
DAYTON
- ------
<S> <C> <C> <C> <C> <C> <C>
6094-6104 Executive Boulevard Dayton, OH 1975 Light Industrial 3.33 43,200 100%
6202-6220 Executive Boulevard Dayton, OH 1976 Light Industrial 3.79 64,000 100%
6268-6294 Executive Boulevard Dayton, OH 1989 Light Industrial 4.03 60,800 100%
5749-5753 Executive Boulevard Dayton, OH 1975 Light Industrial 1.15 12,000 100%
6230-6266 Executive Boulevard Dayton, OH 1979 Light Industrial 5.30 84,000 95%
--------- -----
SUBTOTAL OR AVERAGE 264,000 98%
--------- -----
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
LAND OCCUPANCY
LOCATION YEAR BUILT/ BUILDING AREA AT
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES RENOVATED TYPE (ACRES) GLA 12/31/96
- -------------------- -------------------- ------------ ----------- --------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
DES MOINES
- ----------
1550 East Washington Avenue Des Moines, IA (a) 1987 Bulk Warehouse 13.25 192,466 100%
1600 East Washington Avenue Des Moines, IA (a) 1987 Bulk Warehouse 6.78 81,886 100%
4121 McDonald Avenue Des Moines, IA (a) 1977 Bulk Warehouse 11.02 177,431 100%
4141 McDonald Avenue Des Moines, IA (a) 1976 Bulk Warehouse 11.03 263,196 100%
4161 McDonald Avenue Des Moines, IA (a) 1979 Bulk Warehouse 11.02 164,033 100%
878,992 100%
SUBTOTAL OR AVERAGE ------- ----
DETROIT
- -------
2654 Elliott Troy, MI (b) 1986 Light Industrial 0.75 9,700 100%
1731 Thorncroft Troy, MI (b) 1969 Light Industrial 2.26 38,000 100%
1653 E. Maple Troy, MI (b) 1990 Light Industrial 1.38 23,392 100%
47461 Clipper Plymouth, MI (b) 1992 Light Industrial 1.10 11,600 100%
47522 Galleon Plymouth, MI (b) 1990 Light Industrial 0.90 13,507 100%
4150 Varsity Drive Ann Arbor, MI (b) 1986 Light Industrial 4.32 26,400 100%
1330 Crooks Road Clawson, MI (b) 1960 Light Industrial 5.55 42,360 100%
12000 Merriman Road Livonia, MI (a) 1975 Bulk Warehouse 9.28 179,720 36%
238 Executive Drive Troy, MI (a) 1973 Bulk Warehouse 1.32 13,740 100%
256 Executive Drive Troy, MI (a) 1974 Bulk Warehouse 1.12 11,273 100%
301 Executive Drive Troy, MI (a) 1974 Bulk Warehouse 1.27 20,411 100%
449 Executive Drive Troy, MI (a) 1975 Bulk Warehouse 2.12 33,001 100%
501 Executive Drive Troy, MI (a) 1984 Light Industrial 1.57 18,061 100%
645 Executive Drive Troy, MI (a) 1972 Light Industrial 2.27 32,470 100%
451 Robbins Drive Troy, MI (a) 1975 Bulk Warehouse 1.88 28,401 100%
700 Stephenson Highway Troy, MI (a) 1978 Light Industrial 3.13 29,344 100%
800 Stephenson Highway Troy, MI (a) 1979 Light Industrial 4.39 48,200 100%
1150 Stephenson Highway Troy, MI (a) 1982 Light Industrial 1.70 18,107 100%
1200 Stephenson Highway Troy, MI (a) 1980 Light Industrial 2.65 25,025 100%
1035 Crooks Road Troy, MI (a) 1980 Light Industrial 1.74 23,320 100%
1095 Crooks Road Troy, MI (a) 1986 Light Industrial 2.83 35,042 100%
1151 Crooks Road Troy, MI (a) 1985 Light Industrial 5.93 54,675 0%
1416 Meijer Drive Troy, MI (a) 1980 Light Industrial 1.20 17,944 100%
1624 Meijer Drive Troy, MI (a) 1984 Light Industrial 3.42 44,040 100%
1972 Meijer Drive Troy, MI (a) 1985 Light Industrial 2.36 37,075 100%
2112 Meijer Drive Troy, MI (a) 1980 Bulk Warehouse 4.12 34,558 100%
1621 Northwood Drive Troy, MI (a) 1977 Bulk Warehouse 1.54 24,900 100%
1707 Northwood Drive Troy, MI (a) 1983 Light Industrial 1.69 28,750 100%
1749 Northwood Drive Troy, MI (a) 1977 Bulk Warehouse 1.69 26,125 100%
1788 Northwood Drive Troy, MI (a) 1977 Light Industrial 1.55 12,480 100%
1821 Northwood Drive Troy, MI (a) 1977 Light Industrial 2.07 35,050 100%
1826 Northwood Drive Troy, MI (a) 1977 Light Industrial 1.22 12,480 100%
1864 Northwood Drive Troy, MI (a) 1977 Light Industrial 1.55 12,480 100%
1902 Northwood Drive Troy, MI (a) 1977 Light Industrial 3.65 62,925 100%
1921 Northwood Drive Troy, MI (a) 1977 Bulk Warehouse 2.33 42,000 100%
2230 Elliott Avenue Troy, MI (a) 1974 Bulk Warehouse 0.90 12,612 100%
2237 Elliott Avenue Troy, MI (a) 1974 Light Industrial 0.96 12,612 100%
2277 Elliott Avenue Troy, MI (a) 1975 Light Industrial 0.96 12,612 100%
2291 Elliott Avenue Troy, MI (a) 1974 Bulk Warehouse 1.06 12,200 100%
2451 Elliott Avenue Troy, MI (a) 1974 Bulk Warehouse 1.68 24,331 100%
2730 Research Drive Rochester Hills, MI (a) 1988 Bulk Warehouse 3.52 57,850 100%
2791 Research Drive Rochester Hills, MI (a) 1991 Light Industrial 4.48 64,199 100%
2871 Research Drive Rochester Hills, MI (a) 1991 Bulk Warehouse 3.55 49,543 100%
2911 Research Drive Rochester Hills, MI (a) 1992 Bulk Warehouse 5.72 80,078 100%
3011 Research Drive Rochester Hills, MI (a) 1988 Light Industrial 2.55 32,637 100%
2870 Technology Drive Rochester Hills, MI (a) 1988 Bulk Warehouse 2.41 24,445 100%
2890 Technology Drive Rochester Hills, MI (a) 1991 Bulk Warehouse 1.76 24,410 100%
2900 Technology Drive Rochester Hills, MI (a) 1992 Light Industrial 2.15 31,047 100%
2920 Technology Drive Rochester Hills, MI (a) 1992 Bulk Warehouse 1.48 19,011 100%
2930 Technology Drive Rochester Hills, MI (a) 1991 Bulk Warehouse 1.41 17,994 100%
2950 Technology Drive Rochester Hills, MI (a) 1991 Light Industrial 1.48 19,996 100%
2960 Technology Drive Rochester Hills, MI (a) 1992 Bulk Warehouse 3.83 41,565 100%
23014 Commerce Drive Farmington Hills, MI (a) 1983 Light Industrial 0.65 7,200 100%
23028 Commerce Drive Farmington Hills, MI (a) 1983 Bulk Warehouse 1.26 20,265 100%
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
LAND OCCUPANCY
LOCATION YEAR BUILT/ BUILDING AREA AT
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES RENOVATED TYPE (ACRES) GLA 12/31/96
- -------------------- -------------------- ------------ ----------- --------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
23035 Commerce Drive Farmington Hills, MI (a) 1983 Light Industrial 1.23 15,200 100%
23042 Commerce Drive Farmington Hills, MI (a) 1983 Light Industrial 0.75 8,790 0%
23065 Commerce Drive Farmington Hills, MI (a) 1983 Light Industrial 0.91 12,705 100%
23070 Commerce Drive Farmington Hills, MI (a) 1983 Light Industrial 1.43 16,765 100%
23079 Commerce Drive Farmington Hills, MI (a) 1983 Light Industrial 0.85 10,830 100%
23093 Commerce Drive Farmington Hills, MI (a) 1983 Bulk Warehouse 3.87 49,040 100%
23135 Commerce Drive Farmington Hills, MI (a) 1986 Light Industrial 2.02 23,969 100%
23149 Commerce Drive Farmington Hills, MI (a) 1985 Bulk Warehouse 6.32 47,700 100%
23163 Commerce Drive Farmington Hills, MI (a) 1986 Bulk Warehouse 1.51 19,020 100%
23164 Commerce Drive Farmington Hills, MI (a) 1986 Bulk Warehouse 1.47 17,584 100%
23177 Commerce Drive Farmington Hills, MI (a) 1986 Bulk Warehouse 2.29 32,127 100%
23192 Commerce Drive Farmington Hills, MI (a) 1986 Light Industrial 0.69 7,306 100%
23206 Commerce Drive Farmington Hills, MI (a) 1985 Light Industrial 1.30 19,822 100%
23290 Commerce Drive Farmington Hills, MI (a) 1980 Bulk Warehouse 2.56 42,930 100%
23370 Commerce Drive Farmington Hills, MI (a) 1980 Light Industrial 0.67 8,741 100%
24492 Indoplex Circle Farmington Hills, MI (a) 1976 Bulk Warehouse 1.63 24,000 100%
24528 Indoplex Circle Farmington Hills, MI (a) 1976 Bulk Warehouse 2.26 34,650 100%
31800 Plymouth Road - Bldg 1 Livonia, MI (a) 1968/89 Light Industrial 42.71 697,865 94%
31800 Plymouth Road - Bldg 2 Livonia, MI (a) 1968/89 Bulk Warehouse 11.81 184,614 100%
31800 Plymouth Road - Bldg 3 Livonia, MI (a) 1968/89 Bulk Warehouse 6.13 96,575 98%
31800 Plymouth Road - Bldg 6 Livonia, MI (a) 1968/89 Bulk Warehouse 9.06 183,959 100%
31800 Plymouth Road - Bldg 7 Livonia, MI (a) 1968/89 Bulk Warehouse 1.64 26,836 100%
21477 Bridge Street Southfield, MI 1986 Light Industrial 3.10 41,500 100%
2965 Technology Drive Rochester Hills, MI 1995 Light Industrial 4.92 66,395 100%
1451 Lincoln Avenue Madison Heights, MI 1967 Light Industrial 3.92 75,000 100%
4400 Purks Drive Auburn Hills, MI 1987 Light Industrial 13.04 87,100 100%
4177A Varsity Drive Ann Arbor, MI 1993 Light Industrial 2.48 11,050 100%
6515 Cobb Drive Sterling Heights, MI 1984 Light Industrial 2.91 47,597 100%
32450 N. Avis Drive Madison Heights, MI 1974 Light Industrial 3.23 55,820 100%
32200 N. Avis Drive Madison Heights, MI 1973 Light Industrial 6.15 88,700 100%
32440-32442 Industrial Drive Madison Heights, MI 1979 Light Industrial 1.41 19,200 63%
32450 Industrial Drive Madison Heights, MI 1979 Light Industrial 0.76 10,350 0%
11813 Hubbard Livonia, MI 1979 Light Industrial 1.95 33,300 100%
11844 Hubbard Livonia, MI 1979 Light Industrial 2.16 38,500 0%
11866 Hubbard Livonia, MI 1979 Light Industrial 2.32 41,380 100%
12050-12300 Hubbard (f) Livonia, MI 1981 Light Industrial 6.10 85,086 83%
12707 Eckles Road Plymouth Township, MI 1990 Light Industrial 2.62 42,300 100%
9300-9328 Harrison Road Romulus, MI 1978 Bulk Warehouse 2.53 29,280 100%
9330-9458 Harrison Road Romulus, MI 1978 Bulk Warehouse 2.53 29,280 100%
28420-28448 Highland Road Romulus, MI 1979 Bulk Warehouse 2.53 29,280 100%
28450-28478 Highland Road Romulus, MI 1979 Bulk Warehouse 2.53 29,280 100%
28421-28449 Highland Road Romulus, MI 1980 Bulk Warehouse 2.53 29,280 100%
28451-28479 Highland Road Romulus, MI 1980 Bulk Warehouse 2.53 29,280 100%
28825-28909 Highland Road Romulus, MI 1981 Bulk Warehouse 2.53 29,280 100%
28933-29017 Highland Road Romulus, MI 1982 Bulk Warehouse 2.53 29,280 100%
28824-28908 Highland Road Romulus, MI 1982 Bulk Warehouse 2.53 29,280 100%
28932-29016 Highland Road Romulus, MI 1982 Bulk Warehouse 2.53 29,280 100%
9710-9734 Harrison Road Romulus, MI 1987 Bulk Warehouse 2.22 25,620 0%
9740-9772 Harrison Road Romulus, MI 1987 Bulk Warehouse 2.53 29,280 100%
9840-9868 Harrison Road Romulus, MI 1987 Bulk Warehouse 2.53 29,280 100%
9800-9824 Harrison Road Romulus, MI 1987 Bulk Warehouse 2.22 25,620 100%
29265-29285 Airport Drive Romulus, MI 1983 Bulk Warehouse 2.05 23,707 100%
29185-29225 Airport Drive Romulus, MI 1983 Bulk Warehouse 3.17 36,658 100%
29149-29165 Airport Drive Romulus, MI 1984 Bulk Warehouse 2.89 33,440 100%
29101-29115 Airport Drive Romulus, MI 1985 Bulk Warehouse 2.53 29,280 100%
29031-29045 Airport Drive Romulus, MI 1985 Bulk Warehouse 2.53 29,280 100%
29050-29062 Airport Drive Romulus, MI 1986 Bulk Warehouse 2.22 25,620 100%
29120-29134 Airport Drive Romulus, MI 1986 Bulk Warehouse 2.53 29,280 100%
29200-29214 Airport Drive Romulus, MI 1985 Bulk Warehouse 2.53 29,280 100%
9301-9339 Middlebelt Road Romulus, MI 1983 Bulk Warehouse 1.29 14,950 100%
46750 Port Street Plymouth, MI 1995 Light Industrial 3.23 27,990 100%
--------- -----
SUBTOTAL OR AVERAGE 4,697,554 94%
--------- -----
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
LAND OCCUPANCY
LOCATION YEAR BUILT/ BUILDING AREA AT
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES RENOVATED TYPE (ACRES) GLA 12/31/96
- -------------------- -------------------- ------------ ----------- --------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
GRAND RAPIDS
- ------------
3232 Kraft Avenue Grand Rapids, MI (b) 1988 Bulk Warehouse 13.15 216,000 88%
8181 Logistics Drive Grand Rapids, MI (b) 1990 Bulk Warehouse 10.00 222,000 100%
5062 Kendrick Court SE Grand Rapids, MI (b) 1987 Bulk Warehouse 2.06 31,750 100%
2 84th Street SW Grand Rapids, MI (a) 1986 Bulk Warehouse 3.01 30,000 100%
100 84th Street SW Grand Rapids, MI (a) 1979 Bulk Warehouse 4.20 81,000 100%
150 84th Street SW Grand Rapids, MI (a) 1977 Light Industrial 1.95 16,000 100%
511 76th Street SW Grand Rapids, MI (a) 1986 Bulk Warehouse 14.44 202,500 95%
553 76th Street SW Grand Rapids, MI (a) 1985 Light Industrial 1.16 10,000 64%
555 76th Street SW Grand Rapids, MI (a) 1987 Bulk Warehouse 12.50 200,000 75%
2925 Remico Avenue SW Grand Rapids, MI (a) 1988 Bulk Warehouse 3.40 66,505 100%
2935 Walkent Court NW Grand Rapids, MI (a) 1991 Bulk Warehouse 6.13 64,961 0%
3300 Kraft Avenue SE Grand Rapids, MI (a) 1987 Bulk Warehouse 11.57 200,000 100%
3366 Kraft Avenue SE Grand Rapids, MI (a) 1987 Bulk Warehouse 12.35 200,000 97%
4939 Starr Avenue Grand Rapids, MI (a) 1985 Bulk Warehouse 3.87 30,000 100%
5001 Kendrick Court SE Grand Rapids, MI (a) 1983 Bulk Warehouse 4.00 61,500 51%
5050 Kendrick Court SE Grand Rapids, MI (a) 1988 Bulk Warehouse 26.94 413,500 100%
5015 52nd Street SE Grand Rapids, MI (a) 1987 Bulk Warehouse 4.11 61,250 100%
5025 28th Street Grand Rapids, MI (a) 1967 Light Industrial 3.97 14,400 100%
5079 33rd Street SE Grand Rapids, MI (a) 1990 Bulk Warehouse 6.74 109,875 100%
5333 33rd Street SE Grand Rapids, MI (a) 1991 Bulk Warehouse 8.09 101,250 100%
5130 Patterson Avenue SE Grand Rapids, MI (a) 1987 Bulk Warehouse 6.57 30,000 100%
425 Gordon Industrial Court Grand Rapids, MI 1990 Bulk Warehouse 8.77 156,875 100%
2851 Prairie Street Grand Rapids, MI 1989 Bulk Warehouse 5.45 117,251 100%
2945 Walkent Court Grand Rapids, MI 1993 Bulk Warehouse 4.45 93,374 100%
537 76th Street Grand Rapids, MI 1987 Bulk Warehouse 5.26 80,000 50%
--------- ----
SUBTOTAL OR AVERAGE 2,809,991 92%
--------- ----
INDIANAPOLIS
- ------------
2900 N. Shadeland Avenue Indianapolis, IN (c) 1957/1992 Bulk Warehouse 60.00 976,273 98%
1445 Brookville Way Indianapolis, IN (c) 1989 Light Industrial 8.79 115,200 96%
1440 Brookville Way Indianapolis, IN (c) 1990 Bulk Warehouse 9.64 166,400 100%
1240 Brookville Way Indianapolis, IN (c) 1990 Bulk Warehouse 3.50 63,000 60%
1220 Brookville Way Indianapolis, IN (c) 1990 Light Industrial 2.10 10,000 100%
1345 Brookville Way Indianapolis, IN (d) 1992 Light Industrial 5.50 132,000 98%
1350 Brookville Way Indianapolis, IN (c) 1994 Bulk Warehouse 2.87 38,460 100%
1315 Sadlier Circle E. Drive Indianapolis, IN (d) 1970/1992 Light Industrial 1.33 14,000 100%
1341 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 2.03 32,400 100%
1322-1438 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 3.79 36,000 97%
1327-1441 Salider Dircle E. Drive Indianapolis, IN (d) 1992 Light Industrial 5.50 54,000 100%
1304 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 2.42 17,600 100%
1402 Sadlier Circle E. Drive Indianapolis, IN (d) 1970/1992 Light Industrial 4.13 40,800 100%
1504 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 4.14 54,000 100%
1311 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 1.78 13,200 100%
1365 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 2.16 30,000 100%
1352-1354 Sadlier Circle E. Drive Indianapolis, IN (d) 1970/1992 Light Industrial 3.50 44,000 100%
1338 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 1.20 20,000 100%
1327 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 1.20 12,800 100%
1428 Sadlier Circle E. Drive Indianapolis, IN (d) 1971/1992 Light Industrial 2.49 5,000 100%
1230 Brookville Way Indianapolis, IN (c) 1995 Light Industrial 1.96 15,000 100%
6951 E. 30th Street Indianapolis, IN 1995 Light Industrial 3.81 44,000 100%
6701 E. 30th Street Indianapolis, IN 1992 Light Industrial 3.00 7,820 100%
6737 E. 30th Street Indianapolis, IN 1995 Bulk Warehouse 11.01 87,500 100%
6555 E. 30th Street Indianapolis, IN 1969/1981 Bulk Warehouse 37.00 327,997 100%
2432-2436 Shadeland Indianapolis, IN 1968 Light Industrial 4.57 70,560 100%
8402-8440 E. 33rd Street Indianapolis, IN 1977 Light Industrial 4.70 55,200 97%
8520-8630 E. 33rd Street Indianapolis, IN 1976 Light Industrial 5.30 81,000 100%
8710-8768 E. 33rd Street Indianapolis, IN 1979 Light Industrial 4.70 43,200 100%
3316-3346 N. Pagosa Court Indianapolis, IN 1977 Light Industrial 5.10 81,000 100%
3331 Raton Court Indianapolis, IN 1979 Light Industrial 2.80 35,000 100%
--------- -----
SUBTOTAL OR AVERAGE 2,723,410 98%
--------- -----
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
LAND OCCUPANCY
LOCATION YEAR BUILT/ BUILDING AREA AT
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES RENOVATED TYPE (ACRES) GLA 12/31/96
- -------------------- -------------------- ------------ ----------- --------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
MILWAUKEE
- ---------
N25 W23050 Paul Road Pewaukee, WI (a) 1989 Light Industrial 4.50 37,765 100%
N25 W23255 Paul Road Pewaukee, WI (a) 1987 Light Industrial 4.80 55,940 100%
N27 W23293 Roundy Drive Pewaukee, WI (a) 1989 Light Industrial 3.64 39,468 100%
6523 N. Sidney Place Glendale, WI 1978 Light Industrial 4.00 43,440 100%
8800 W. Bradley Milwaukee, WI 1982 Light Industrial 8.00 78,000 100%
1435 North 113th Street Wauwatosa, WI 1993 Light Industrial 4.69 51,950 100%
------- ----
SUBTOTAL OR AVERAGE 306,563 100%
------- ----
MINNEAPOLIS/ST. PAUL
- --------------------
2700 Freeway Boulevard Brooklyn Center, MN (b) 1981 Light Industrial 7.76 78,741 85%
6503-6545 Cecilia Circle Bloomington, MN (a) 1980 Light Industrial 9.65 74,118 81%
6403-6437 Cecilia Drive Bloomington, MN (a) 1980 Light Industrial 9.65 87,322 100%
1275 Corporate Center Drive Eagan, MN (a) 1990 Bulk Warehouse 1.50 19,675 100%
1279 Corporate Center Drive Eagan, MN (a) 1990 Bulk Warehouse 1.50 19,792 100%
2815 Eagandale Boulevard Eagan, MN (a) 1990 Bulk Warehouse 2.20 29,106 100%
6201 West 111th Street Bloomington, MN (a) 1987 Bulk Warehouse 37.00 424,866 100%
6925-6943 Washington Avenue Edina, MN (a) 1972 Light Industrial 2.75 37,169 94%
6955-6973 Washington Avenue Edina, MN (a) 1972 Light Industrial 2.25 31,189 92%
7251-7267 Washington Avenue Edina, MN (a) 1972 Light Industrial 1.82 26,250 100%
7301-7325 Washington Avenue Edina, MN (a) 1972 Light Industrial 1.92 27,287 100%
7101 Winnetka Avenue North Brooklyn Park, MN (a) 1990 Light Industrial 14.18 252,978 100%
7600 Golden Triangle Drive Eden Prairie, MN (a) 1989 Light Industrial 6.79 73,855 88%
7830-7848 12th Avenue South Bloomington, MN (a) 1978 Light Industrial 8.11 82,837 100%
7850-7890 12th Avenue South Bloomington, MN (a) 1978 Light Industrial 8.11 67,271 100%
7900 Main Street Northeast Fridley, MN (a) 1973 Bulk Warehouse 6.09 97,020 100%
7901 Beech Street Northeast Fridley, MN (a) 1975 Bulk Warehouse 6.07 97,020 100%
9901 West 74th Street Eden Prairie, MN (a) 1983/88 Bulk Warehouse 8.86 150,000 100%
10120 W. 76th Street Eden Prairie, MN 1987 Light Industrial 4.52 57,798 85%
7615 Golden Triangle Eden Prairie, MN 1987 Light Industrial 4.61 52,820 92%
10175-10205 Crosstown Circle Eden Prairie, MN (a) 1980 Light Industrial 2.30 30,219 95%
11201 Hampshire Avenue South Bloomington, MN (a) 1986 Light Industrial 5.90 60,480 100%
12270-12274 Nicollet Avenue Burnsville, MN (a) 1989/90 Light Industrial 1.80 17,116 100%
12250-12268 Nicollet Avenue Burnsville, MN (a) 1989/90 Light Industrial 4.30 42,465 91%
12220-12230 Nicollet Avenue Burnsville, MN (a) 1989/90 Light Industrial 2.40 23,607 78%
305 2nd Street Northwest Minneapolis, MN (a) 1991 Light Industrial 5.43 62,293 99%
953 Westgate Drive Minneapolis, MN (a) 1991 Light Industrial 3.17 51,906 100%
980 Lone Oak Road Minneapolis, MN (a) 1992 Light Industrial 11.40 154,950 100%
990 Lone Oak Road Minneapolis, MN (a) 1989 Light Industrial 11.41 153,607 79%
1030 Lone Oak Road Minneapolis, MN (a) 1988 Bulk Warehouse 6.30 83,076 100%
1060 Lone Oak Road Minneapolis, MN (a) 1988 Light Industrial 6.50 82,728 100%
5400 Nathan Lane Minneapolis, MN (a) 1990 Light Industrial 5.70 72,089 100%
6464 Sycamore Court Minneapolis, MN (a) 1990 Light Industrial 6.40 79,702 80%
6701 Parkway Circle Brooklyn Center, MN 1987 Light Industrial 4.44 75,000 100%
6601 Shingle Creek Parkway Brooklyn Center, MN 1985 Light Industrial 4.59 68,899 99%
7625 Golden Triangle Eden Prairie, MN 1987 Light Industrial 4.61 73,125 100%
2605 Fernbrook Lane North Plymouth, MN 1987 Light Industrial 6.37 80,769 90%
12155 Nicollet Avenue Burnsville, MN 1995 Bulk Warehouse 5.80 48,000 100%
6655 Wedgewood Road Maple Grove, MN 1989 Light Industrial 17.88 131,288 100%
900 Apollo Road Eagan, MN 1970 Bulk Warehouse 39.00 312,265 100%
7316 Aspen Lane North Brooklyn Park, MN 1978 Bulk Warehouse 6.63 97,640 100%
6707 Shingle Creek Parkway Brooklyn Center, MN 1986 Light Industrial 4.22 75,939 100%
73rd Avenue North Brooklyn Park, MN 1995 Light Industrial 4.46 59,782 100%
1905 W. Country Road C Roseville, MN 1993 Light Industrial 4.60 47,735 100%
2730 Arthur Street Roseville, MN 1995 Light Industrial 6.06 74,337 100%
10205 51st Avenue North Plymouth, MN 1990 Light Industrial 2.00 30,476 100%
4100 Peavey Road Chaska, MN 1988 Light Industrial 8.27 78,029 77%
11300 Hampshire Avenue South Bloomington, MN 1983 Bulk Warehouse 9.94 129,950 97%
375 Rivertown Drive Woodbury, MN 1996 Bulk Warehouse 11.33 172,800 100%
5205 Highway 169 Plymouth, MN 1960 Light Industrial 7.92 97,770 95%
6451-6595 Citywest Parkway Eden Prairie, MN 1984 Light Industrial 6.98 83,189 95%
7100-7198 Shady Oak Road (g) Eden Prairie, MN 1982 Bulk Warehouse 14.44 187,777 100%
</TABLE>
14
<PAGE> 16
<TABLE>
<CAPTION>
LAND OCCUPANCY
LOCATION YEAR BUILT/ BUILDING AREA AT
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES RENOVATED TYPE (ACRES) GLA 12/31/96
- -------------------- -------------------- ------------ ----------- --------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
7550-7588 Washington Square Eden Prairie, MN 1975 Light Industrial 29,739 100%
7500-7546 Washington Square Eden Prairie, MN 1975 Light Industrial 44,600 100%
5240-5300 Valley Industrial Blvd Eden Prairie, MN 1973 Light Industrial 80,000 100%
---------- ----
SUBTOTAL OR AVERAGE 4,776,461 97%
---------- ----
NASHVILLE
- ---------
1621 Heil Quaker Boulevard Nashville, TN (b) 1975 Bulk Warehouse 11.29 160,661 100%
220 Great Circle Drive Nashville, TN (a) 1979 Light Industrial 5.32 76,169 95%
230 Great Circle Drive Nashville, TN (a) 1981 Light Industrial 4.69 71,673 100%
240 Great Circle Drive Nashville, TN (a) 1982 Light Industrial 5.06 79,425 95%
417 Harding Industrial Drive Nashville, TN (a) 1972 Bulk Warehouse 13.70 207,440 100%
501 Harding Industrial Drive Nashville, TN (a) 1975 Bulk Warehouse 8.81 202,128 100%
521 Harding Industrial Drive Nashville, TN (a) 1977 Bulk Warehouse 7.73 190,000 100%
3099 Barry Drive Portland, TN 1995 Bulk Warehouse 6.20 109,058 100%
3150 Barry Drive Portland, TN 1993 Bulk Warehouse 26.32 268,253 100%
5599 Highway 31 West Portland, TN 1995 Bulk Warehouse 20.00 161,500 100%
---------- ----
SUBTOTAL OR AVERAGE 1,526,307 100%
---------- ----
ST. LOUIS
- ---------
8921-8957 Frost Avenue Hazelwood, MO (b) 1971 Bulk Warehouse 2.00 100,000 100%
9043-9083 Frost Avenue Hazelwood, MO (b) 1970 Bulk Warehouse 2.69 145,000 100%
2121 Chapin Industrial Drive Vinita Park, MO (a) 1969/87 Light Industrial 23.40 280,905 100%
1200 Andes Boulevard Creve Couer, MO (a) 1967 Bulk Warehouse 2.77 66,600 100%
1248 Andes Boulevard Creve Couer, MO (a) 1967 Light Industrial 3.15 60,708 100%
1208-1226 Ambassador Blvd. Creve Couer, MO (a) 1966 Bulk Warehouse 2.11 49,600 100%
1250 Ambassador Boulevard Creve Couer, MO (a) 1967 Bulk Warehouse 1.52 31,500 100%
1503-1525 Fairview Industrial Overland, MO (a) 1967 Bulk Warehouse 2.18 46,431 100%
2441-2445 Northline Industrial Maryland Heights, MO (a) 1967 Bulk Warehouse 2.02 42,090 100%
2462-2470 Schuetz Road Maryland Heights, MO (a) 1965 Bulk Warehouse 2.28 43,868 100%
10431-10449 Midwest Industrial Overland, MO (a) 1967 Bulk Warehouse 2.40 55,125 99%
10751 Midwest Industrial Blvd. St. Louis, MO (a) 1965 Light Industrial 1.70 44,100 100%
11632-11644 Fairgrove Industrial Maryland Heights, MO (a) 1967 Bulk Warehouse 1.52 31,484 100%
11652-11666 Fairgrove Industrial Maryland Heights, MO (a) 1966 Bulk Warehouse 1.92 31,484 100%
11674-11688 Fairgrove Industrial Maryland Heights, MO (a) 1967 Bulk Warehouse 1.53 31,500 100%
2337 Centerline Drive Maryland Heights, MO 1967 Bulk Warehouse 3.46 75,600 100%
6951 N. Hanley (f) Hazelwood, MO 1965 Bulk Warehouse 9.50 122,813 100%
---------- ----
SUBTOTAL OR AVERAGE 1,258,808 100%
---------- ----
OTHER
- -----
2800 Airport Road (h) Denton, TX (a) 1965 Light Industrial 29.99 222,403 100%
3501 Maple Street Abilene, TX (a) 1980 Bulk Warehouse 34.42 123,700 100%
4200 West Harry Street (g) Wichita, KS (a) 1968 Bulk Warehouse 21.45 177,655 100%
Industrial Park No. 2 West Lebanon, NH (a) 1968 Light Industrial 10.27 156,200 100%
---------- ----
SUBTOTAL OR AVERAGE 679,958 100%
---------- ----
TOTAL 32,700,069 97%
========== ====
</TABLE>
(a) These properties collateralize the 1994 Mortgage Loan (hereinafter defined).
(b) These properties collateralize the 1995 Mortgage Loan (hereinafter defined).
(c) These properties collateralize the CIGNA Loan (hereinafter defined).
(d) These properties collateralize the Assumed Loans (hereinafter defined).
(e) These properties collateralize the Harrisburg Mortgage Loan (hereinafter
defined).
(f) Comprised of two properties.
(g) Comprised of three properties.
(h) Comprised of five properties.
15
<PAGE> 17
TENANT AND LEASE INFORMATION
The Company has a diverse base of more than 990 tenants engaged in a wide
variety of businesses including manufacturing, retailing, wholesale trade,
distribution and professional services. Most leases have an initial term of
between three and five years and provide for periodic rental increases that are
either fixed or based on changes in the Consumer Price Index. Industrial
tenants typically have net or semi-net leases and pay as additional rent their
percentage of the property's operating costs, including the costs of common
area maintenance, property taxes and insurance. As of December 31, 1996,
approximately 97% of the GLA of the properties was leased, and no single tenant
or group of related tenants accounted for more than 2.1% of the Company's rent
revenues, nor did any single tenant or group of related tenants occupy more
than 2.4%, of the Company's total GLA as of December 31, 1996.
The following table shows scheduled lease expirations for all leases for
the Company's properties as of December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF ANNUAL BASE RENT PERCENTAGE OF TOTAL
YEAR OF LEASES GLA GLA UNDER EXPIRING ANNUAL BASE RENT
EXPIRATION (1) EXPIRING EXPIRING (2) EXPIRING LEASES EXPIRING
- ------------------- ------------ ------------ ------------- ---------------- -----------------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
1997 274 5,526,896 17.5% $ 20,868 17.0%
1998 253 5,903,934 18.7 23,866 19.4
1999 221 5,395,706 17.1 21,295 17.3
2000 136 4,492,598 14.2 18,453 15.0
2001 108 4,438,680 14.1 15,959 13.0
2002 28 1,021,689 3.3 4,575 3.8
2003 25 1,456,219 4.6 5,678 4.6
2004 10 1,081,594 3.4 3,185 2.6
2005 10 769,068 2.4 3,216 2.6
Thereafter 19 1,492,901 4.7 5,791 4.7
Total 1,084 31,579,285 100.0% $ 122,886 100.0%
====== ========== ======= ============ ===========
</TABLE>
- --------------------
(1) Lease expirations as of December 31, 1996, assuming tenants do not
exercise existing renewal, termination, or
purchase options.
(2) Does not include existing vacancies of 1,120,784 aggregate square feet.
MORTGAGE LOANS
Contemporaneously with the consummation of the Initial Offering, the
Financing Partnership borrowed $300 million under a mortgage loan (the "1994
Mortgage Loan") from an institutional lender. The 1994 Mortgage Loan matures
June 30, 1999 unless extended by the Financing Partnership, subject to certain
conditions, for an additional two year period, thereby maturing on June 30,
2001. The 1994 Mortgage Loan provides for interest only payments which have
been effectively fixed at a rate of 6.97% through June 30, 2001 by certain
interest rate protection agreements. The 1994 Mortgage Loan is collateralized
by first mortgage liens on 195 properties owned by the Financing Partnership.
The 1994 Mortgage Loan may not be prepaid prior to January 1, 1998. Subsequent
to December 31, 1997, the 1994 Mortgage Loan may be prepaid in whole or in
part, with a 2% premium in 1998 and thereafter without premium.
On December 29, 1995, the Mortgage Partnership borrowed $40.2 million
under a mortgage loan (the "1995 Mortgage Loan") from an institutional lender.
In the first quarter of 1996, the Company made a one-time paydown of $.2
million on the 1995 Mortgage Loan decreasing the outstanding balance to $40
million. The 1995 Mortgage Loan matures on January 11, 2026. The 1995 Mortgage
Loan provides for interest at a fixed interest rate of 7.22% per annum through
January 11, 2003, and provides for interest only payments through January 11,
1998, with monthly principal and interest payments required subsequently based
on a 28-year amortization schedule. After January 11, 2003, the interest rate
adjusts based on a predetermined formula based on the applicable Treasury rate.
The 1995 Mortgage Loan is collateralized by first mortgage liens on 23
properties owned by the Mortgage Partnership. The 1995 Mortgage Loan may be
prepaid only after December 31, 1997, in whole or in part and in exchange for a
yield maintenance premium.
16
<PAGE> 18
On December 14, 1995, the Company, through the Harrisburg Partnership,
entered into an approximately $6.6 million mortgage loan (the "Harrisburg
Mortgage Loan") collateralized by three properties in Harrisburg, Pennsylvania.
This loan bears interest at a rate of LIBOR plus 1.5% or the prime rate plus
2.25%, at the Company's option, provides for monthly principal and interest
payments commencing after May 31, 1996, based on a 26.5-year amortization
schedule, and matures on December 15, 2000. The Harrisburg Mortgage Loan may
be repaid only after December 15, 1997 in exchange for a prepayment premium.
On March 20, 1996, the Company, through the Operating Partnership and the
Indianapolis Partnership, entered into an approximately $36.7 million mortgage
loan (the "CIGNA Loan") that is collateralized by seven properties in
Indianapolis, Indiana and three properties in Cincinnati, Ohio. The CIGNA Loan
bears interest at a fixed interest rate of 7.5% and provides for monthly
principal and interest payments based on a 25-year amortization schedule. The
CIGNA Loan will mature on April 1, 2003. The CIGNA Loan may be prepaid only
after April 30, 1999 in exchange for the greater of a 1% premium or a yield
maintenance premium.
On March 20, 1996, the Company, through the Operating Partnership, assumed
an approximately $6.4 million mortgage loan and an approximately $3.0 million
mortgage loan (together, the "Assumed Loans") that are collateralized by 13
properties in Indianapolis, Indiana and one property in Indianapolis, Indiana,
respectively. The Assumed Loans bear interest at a fixed rate of 9.25% and
provide for monthly principal and interest payments based on a 16.75-year
amortization schedule. The Assumed Loans will mature on January 1, 2013. The
Assumed Loans may be prepaid only after December 22, 1999 in exchange for the
greater of a 1% premium or a yield maintenance premium.
PROPERTY MANAGEMENT
At December 31, 1996, Company employees managed 358 of the Company's 379
properties. Twenty-one properties were managed at the local level by parties
other than the Company, with oversight by the Company's Senior Regional
Directors. In each of these cases, the Company retains control over all
leasing, capital investment decisions, rent collection, accounting and most
operational decisions, allowing its local third-party managers limited
operational authority.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in several legal proceedings arising in the
ordinary course of business. All such proceedings, taken together, are not
expected to have a material impact on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
17
<PAGE> 19
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The following table sets forth for the periods indicated the high and low
closing prices per share and distributions paid per share for the Company's
common stock which trades on the New York Stock Exchange under the trading
symbol FR.
<TABLE>
<CAPTION>
DISTRIBUTION
QUARTER ENDED HIGH LOW DECLARED
------------- ---- --- -------------------
<C> <C> <C> <C>
December 31, 1996 $30 7/8 $24 7/8 $.5050
September 30, 1996 26 22 1/2 .4875
June 30, 1996 24 5/8 21 3/4 .4875
March 31, 1996 25 21 3/8 .4875
December 31, 1995 22 1/2 19 3/8 .4875
September 30, 1995 20 1/2 19 1/2 .4725
June 30, 1995 20 1/2 17 3/8 .4725
March 31, 1995 19 5/8 17 3/4 .4725
</TABLE>
The Company had 308 common stockholders of record as of March 20, 1997.
The Company has determined that, for federal income tax purposes,
approximately 65.97% of the total $1.9675 in distributions per share paid with
respect to 1996 represents ordinary dividend income to its stockholders, while
the remaining 34.03% represents a return of capital. In order to maintain its
status as a REIT, the Company is required to meet certain tests, including
distributing at least 95% of its REIT taxable income, or approximately $1.39
per share for 1996.
ITEM 6. SELECTED FINANCIAL AND OPERATING DATA
The following sets forth selected financial and operating data for the
Company on a pro forma and historical consolidated basis and the Contributing
Businesses on a historical combined basis. The following data should be read
in conjunction with the financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Form 10-K. The pro forma statement of operations
for the year ended December 31, 1994 includes the historical results of the
Company's operations from July 1, 1994 to December 31, 1994, and for the period
of January 1, 1994 to June 30, 1994 and were prepared as if the Initial
Offering and the related transactions had occurred on January 1, 1994. The
historical statements of operations for the years ended December 31, 1996 and
1995, and the six months ended December 31, 1994 include the results of
operations of the Company as derived from the Company's audited financial
statements. The historical balance sheet data and other data as of December
31, 1996, 1995 and 1994, and June 30, 1994 (unaudited) include the balances of
the Company. The historical balance sheet data as of December 31, 1993 and
1992, and the six months ended June 30, 1994 and the combined statements of
operations for the years ended December 31, 1993 and 1992, have been derived
from the historical financial statements of the Contributing Businesses. In the
opinion of management, financial data as of and for the periods ended June 30,
1994, December 31, 1993 and 1992 include all adjustments necessary to present
fairly the information set forth therein.
18
<PAGE> 20
<TABLE>
<CAPTION>
THE COMPANY CONTRIBUTING BUSINESSES
----------------------------------------------- ------------------------------------
HISTORICAL
HISTORICAL ------------------------------------
HISTORICAL HISTORICAL PRO FORMA SIX SIX YEAR ENDED
YEAR YEAR YEAR MONTHS MONTHS DECEMBER 31,
ENDED ENDED ENDED ENDED ENDED -----------------------
12/31/96 12/31/95 12/31/94 12/31/94 6/30/94 1993 1992
----------- ---------- ---------- ---------- ---------- ---------- -----------
(IN THOUSANDS, EXCEPT PER SHARE, RATIO AND PROPERTY DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Total Revenues.......................... $ 140,055 $ 106,486 $ 87,923 $ 46,570 $ 22,816 $ 33,237 $ 31,145
Property Expenses....................... 39,224 28,302 22,714 11,853 6,036 8,832 7,308
General & Administrative Expense........ 4,018 3,135 2,310 1,097 795 1,416 1,699
Interest Expense........................ 28,954 28,591 19,528 10,588 11,773 18,187 18,350
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Cost ................ 3,286 4,438 6,113 2,904 858 997 1,644
Depreciation and Other Amortization 28,049 22,264 19,189 9,802 4,744 7,105 6,328
Loss from Disposition of Interest
Rate Protection Agreement (a)........... --- 6,410 --- --- --- --- ---
Management and Construction
Income (Loss), Net...................... --- --- --- --- (81) (99) 136
Gain on Sales of Properties............. 4,344 --- --- --- --- --- ---
Minority Interest....................... 2,931 997 1,405 778 --- --- ---
----------- ---------- ---------- ---------- ---------- ---------- -----------
Income (Loss) Before
Extraordinary Items..................... 37,937 12,349 16,664 9,548 (1,471) (3,399) (4,048)
Extraordinary Gain (Loss) (b)........... (2,273) --- --- --- (1,449) --- 2,340
----------- ---------- ---------- ---------- ---------- ---------- -----------
Net Income (Loss)....................... $35,664 $ 12,349 $ 16,664 $ 9,548 $ (2,920) $ (3,399) $ (1,708)
=========== ========== ===========
Preferred Stock Dividends............... (3,919) (468) --- ---
----------- ---------- ---------- ----------
Net Income Available to Common
Stockholders............................ $ 31,745 $ 11,881 $ 16,664 $ 9,548
=========== ========== ========== ==========
Net Income Available to Common
Stockholders Per Share.................. $ 1.28 $ .63 $ .92 $ .51
=========== ========== ========== ==========
Net Income Available to Common
Stockholders Before
Extraordinary Loss Per Share............ $ 1.37 $ .63 $ .92 $ .51
=========== ========== ========== ==========
Distributions Per Share................. $ 1.9675 $ 1.905 $ .945
=========== ========== ==========
Weighted Average Number of
Common Shares Outstanding............... 24,756 18,889 18,182 18,881
=========== ========== ========== ==========
BALANCE SHEET DATA (END OF PERIOD):
Real Estate, Before Accumulated
Depreciation............................ $ 1,050,779 $ 757,516 $ 669,608 $ 597,504 $ 209,177 $ 192,053
Real Estate, After Accumulated
Depreciation............................ 959,322 688,767 620,294 556,902 171,162 160,735
Total Assets............................ 1,022,600 753,904 691,081 616,767 189,789 175,693
Mortgage Loans, Acquisition
Facilities Payable, Construction
Loans and Promissory Notes
Payable................................. 406,401 399,958 348,700 305,000 179,568 168,659
Mortgage Loans (affiliated)............. --- --- --- --- 7,624 7,951
Total Liabilities....................... 447,178 426,972 374,849 323,703 227,553 208,569
Stockholders' Equity/ (Net Deficit)..... 532,561 306,023 292,420 269,326 (37,764) (32,876)
OTHER DATA:
Cash Flows From Operating Activities.... $ 62,621 $ 38,541 $ 18,033 $ 5,026 $ 8,700 $ 1,877
Cash Flows From Investing Activities.... (240,571) (84,159) (73,840) (374,757) (17,124) (2,317)
Cash Flows From Financing
Activities.............................. 176,677 45,420 57,475 374,152 9,093 1,250
Funds From Operations ("FFO") (c)....... 60,546 41,428 20,128 3,273 3,706 2,280
Ratio of Earnings to Fixed
Charges and Preferred Stock
Dividends (d)........................... 1.88x 1.56x 1.76x --- (e) --- (e) --- (e)
Total Properties (f).................... 379 271 246 226 124 118
Total GLA in sq.ft (f).................. 32,700,069 22,562,755 19,169,321 17,393,813 6,376,349 5,883,730
Occupancy % (f)......................... 97% 97% 97% 97% 94% 92%
==================================================================================================================================
</TABLE>
19
<PAGE> 21
(a) One-time loss from disposition of Interest Rate Protection Agreement.
(b) Upon consummation of the Initial Offering in June 1994, certain
Contributing Businesses' loans were repaid and the related unamortized
deferred financing fees totaling $1,449 were written off. In 1996, the
Company terminated certain revolving credit facilities and construction
loans before their contractual maturity date. The resulting write-off of
unamortized deferred financing costs and prepayment fee incurred to retire
the above mentioned credit facilities and loans was $2,273.
(c) Management considers funds from operations to be one financial measure of
the operating performance of an equity REIT that provides a relevant basis
for comparison among REITs and it is presented to assist investors in
analyzing the performance of the Company. In accordance with the National
Association of Real Estate Investment Trusts' definition of funds from
operations, the Company calculates funds from operations to be equal
to net income, excluding gains (or losses) from debt restructuring and
sales of property, plus depreciation and amortization, excluding
amortization of deferred financing costs and interest rate protection
agreements, and after adjustments for unconsolidated partnerships and
joint ventures. Funds from operations does not represent cash generated
from operating activities in accordance with generally accepted accounting
principles and is not necessarily indicative of cash available to fund
cash needs, including the payment of dividends and distributions. Funds
from operations should not be considered as a substitute for net income as
a measure of results of operations or for cash flow from operating
activities calculated in accordance with generally accepted accounting
principles as a measure of liquidity. Funds from operations as
calculated by the Company may not be comparable to similarly titled but
differently calculated measures of other REITs. The following is a
reconciliation of net income to funds from operations:
<TABLE>
<CAPTION>
The Company Contributing Businesses
--------------------------------- ---------------------------------
Six Months Six Months
Year Ended Year Ended Ended Ended Year Ended Year Ended
12/31/96 12/31/95 12/31/94 6/30/94 12/31/93 12/31/92
---------- ---------- ---------- ---------- ---------- ----------
<C> <C> <C> <C> <C> <C> <C>
Net Income (Loss) Available to
Common Stockholders............. $31,745 $11,881 $ 9,548 $(2,920) $(3,399) $(1,708)
Adjustments:
Depreciation and Other
Amortization.................... 27,941 22,140 9,802 4,744 7,105 6,328
Disposition of Interest Rate
Protection Agreement............ --- 6,410 --- --- --- ---
Gain on Sales of Properties..... (4,344) --- --- --- --- ---
Extraordinary Items............. 2,273 --- --- 1,449 --- (2,340)
Minority Interest............... 2,931 997 778 --- --- ---
------- ------- ------- -------- ------- -------
Funds From Operations........... $60,546 $41,428 $20,128 $ 3,273 $ 3,706 $ 2,280
======= ======= ======= ======== ======= =======
</TABLE>
(d) For purposes of computing the ratios of earnings to fixed charges and
preferred stock dividends, earnings have been calculated by adding fixed
charges (excluding capitalized interest) to income (loss) before
disposition of interest rate protection agreement, gain on sales of
properties, minority interest and extraordinary items. Fixed charges
consist of interest costs, whether expensed or capitalized, and
amortization of interest rate protection agreement(s) and deferred
financing costs.
(e) Earnings were inadequate to cover fixed charges by approximately $1.4
million, $3.4 million and $4.3 million for the six months ended June 30,
1994 and the years ended December 31, 1993 and 1992, respectively, which
periods were prior to the Company's initial public offering.
(f) As of end of period and excludes properties under development.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with "Selected
Financial and Operating Data" and the historical Consolidated and Combined
Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.
RESULTS OF OPERATIONS
COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995
At December 31, 1996, the Company owned 379 in-service properties
containing approximately 32.7 million square feet of GLA, compared to 271
in-service properties with approximately 22.6 million square feet of GLA at
December 31, 1995. During 1996, the Company acquired 112 properties containing
approximately 10.4 million square feet of GLA, completed development of two
properties totaling .2 million square feet of GLA and sold six properties
totaling .4 million square feet of GLA.
20
<PAGE> 22
Revenues increased in 1996 over 1995 by $33.6 million or 31.5% due
primarily to the properties acquired after December 31, 1994. Revenues from
properties owned prior to January 1, 1995 increased in 1996 over 1995 by $3.2
million or 3.3% due primarily to increased rental rates upon renewal or
replacement of tenant leases and additional amounts charged to tenants for
additional property expenses incurred in 1996.
Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased in 1996 over 1995 by $10.9 million or 38.6% due primarily to
properties acquired after December 31, 1994. For properties owned prior to
January 1, 1995, property expenses increased in 1996 over 1995 by $1.2 million
or 4.8% due to additional snow removal expenses incurred in the Minneapolis and
Harrisburg metropolitan areas, additional repair and maintenance expenses
incurred in the Chicago metropolitan area and increased real estate taxes in
the majority of the Company's geographical markets.
General and administrative expense increased in 1996 over 1995 by $.9
million due primarily to the additional expenses associated with managing the
Company's growing operations (including additional professional fees relating
to additional properties owned and personnel to manage and expand the Company's
business).
Interest expense increased from $28.6 million in 1995 to $29.0 million in
1996. The average outstanding debt balance was approximately $18.6 million
higher in 1996 due to an increase in acquisition activity during the year;
however, the resulting impact on interest expense was partially offset by lower
interest rates in 1996 on the 1994 Acquisition Facility.
Depreciation and amortization increased in 1996 over 1995 by $5.8 million
due primarily to the additional depreciation and amortization related to the
properties acquired after December 31, 1994.
The $6.4 million loss from disposition of interest rate protection
agreement in 1995 resulted from the replacement of the Company's interest rate
protection agreement entered into in connection with the 1994 Mortgage Loan
with new interest rate protection agreements. Approximately $6.3 million of
the loss is a non-cash loss, representing the difference between the
unamortized cost of the replaced interest rate protection agreement and the
cost of the new interest rate agreements.
The $4.3 million gain on sales of properties in 1996 resulted from the
sale of three properties located in Huntsville, Alabama, one property located
in Detroit, Michigan, one property located in Grand Rapids, Michigan and one
property located in Atlanta, Georgia. Gross proceeds for these property sales
totaled approximately $15.0 million.
The $2.3 million extraordinary loss in 1996 represents the write-off of
unamortized deferred financing costs and a prepayment fee for loans that were
paid off in full and retired in 1996.
COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994
The results of operations for the year ended December 31, 1994 include the
operations of the Contributing Businesses from January 1, 1994 through June 30,
1994 and the operations of the Company from July 1, 1994 through December 31,
1994.
At December 31, 1995, the Company owned 271 in-service properties
containing approximately 22.6 million square feet of GLA, compared to 246
in-service properties with approximately 19.2 million square feet of GLA at
December 31, 1994. Acquisitions of 20 properties containing approximately 2.8
million square feet of GLA were made between December 31, 1994 and December 31,
1995. Also during 1995, the Company completed development of five properties
and expansions of three properties already owned by the Company totaling
approximately .6 million square feet of GLA.
21
<PAGE> 23
Revenues increased in 1995 over 1994 by $37.1 million or 53.5% due
primarily to the properties acquired after December 31, 1993. Revenues from
properties owned prior to January 1, 1994 increased in 1995 over 1994 by $1.2
million or 3.2% due primarily to increased rental rates upon renewal or
replacement of tenant leases and an increase in occupancy of certain properties
located in the Detroit metropolitan area.
Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased in 1995 over 1994 by $10.4 million or 58.2% due primarily to
properties acquired after December 31, 1993. For properties owned prior to
January 1, 1994, property expenses increased in 1995 over 1994 by $.2 million
or 1.6% due to general increases in operating expenses, partially offset by a
decrease of real estate taxes for certain properties located in the Detroit
metropolitan area.
General and administrative expense increased in 1995 over 1994 by $1.2
million due primarily to the additional expenses associated with being a public
company (including directors' fees, director and officer liability insurance,
additional professional fees relating to additional properties and personnel to
manage and expand the Company's business).
Interest expense increased from $22.4 million in 1994 to $28.6 million in
1995. The increase reflects higher average debt levels in 1995 related to
acquisition and development activity during the year, and higher average
interest rates in 1995.
Depreciation and amortization increased in 1995 over 1994 by $7.7 million
due primarily to the additional depreciation and amortization related to the
properties acquired after December 31, 1993.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company's unrestricted cash and cash
equivalents totaled $7.7 million and restricted cash totaled $11.8 million.
Restricted cash includes $9.4 million of reserves required to be set aside for
payments of tenant improvements, capital expenditures, interest, real estate
taxes, insurance and potential environmental costs. The portion of the cash
reserves relating to payments for potential environmental costs was established
at the closing of the 1994 Mortgage Loan. Such amounts are distributed to the
Company as expenditures are made and are not required to be replenished. The
portion of cash reserves relating to payments for tenant improvements and
capital expenditures was established at the closings of the 1994 Mortgage Loan
and 1995 Mortgage Loan and such amounts are distributed to the Company as
expenditures are made and are required to be replenished on a monthly basis.
The portion of the cash reserves relating to payments for interest, real estate
taxes and insurance for the 1994 Mortgage Loan and 1995 Mortgage Loan is
established monthly, distributed to the Company as such expenditures are made
and is replenished to a level adequate to make the next periodic payment of
such expenditures. Of the $11.8 million reserve referred to above, $.5 million
relates to potential environmental costs, which was an amount negotiated with
the lender under the 1994 Mortgage Loan. In each of 1996 and 1995, the Company
incurred environmental costs of $.1 million. The Company estimates 1997 costs
of approximately $.4 million. The Company estimates that the aggregate cost
which may need to be expended in 1997 and beyond with regard to currently
identified environmental issues will not exceed approximately $1.2 million, a
substantial amount of which will be the primary responsibility of the tenant,
the seller to the Company or another responsible party. This estimate was
determined by a third party evaluation.
Net cash provided by operating activities was $62.6 million for the year
ended December 31, 1996 compared to $38.5 million for the year ended December
31, 1995 and $23.1 million for the year ended December 31, 1994. The increases
are primarily due to increased net operating income as discussed in the
"Results of Operations" above.
Net cash used in investing activities was $240.6 million for the year
ended December 31, 1996 compared to $84.2 million and $448.6 million for the
years ended December 31, 1995 and December 31, 1994, respectively. The majority
of the cash used in investing activities was for acquisition of new properties.
22
<PAGE> 24
Net cash provided by financing activities for the year ended December 31,
1996 increased to $176.7 million from $45.4 million for the year ended December
31, 1995, reflecting the issuance of 10.9 million shares of common stock offset
in part by increased distributions to the common stockholders and Unit holders,
dividends to the preferred stockholders and a net pay down on the 1994
Acquisition Facility. Net cash provided by financing activities for the year
ended December 31, 1995 was $45.4 million, compared to $431.6 million for the
year ended December 31, 1994, reflecting primarily debt and equity transactions
relating to the Company's Initial Offering in June 1994 and an increase in
indebtedness due to the properties acquired subsequent to the Initial Offering.
Funds from operations increased by $19.1 million or 46.1% in 1996 compared
to 1995 and increased by $18.0 million or 77.0% in 1995 compared to 1994 as a
result of the factors discussed in the analysis of operating results above.
Management considers funds from operations to be one financial measure of the
operating performance of an equity REIT that provides a relevant basis for
comparison among REITs and it is presented to assist investors in analyzing the
performance of the Company. In accordance with the National Association of
Real Estate Investment Trusts' definition of funds from operations, the Company
calculates funds from operations to be equal to net income, excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization, excluding amortization of deferred financing costs and interest
rate protection agreements, and after adjustments for unconsolidated
partnerships and joint ventures. Funds from operations does not represent cash
generated from operating activities in accordance with generally accepted
accounting principles and is not necessarily indicative of cash available to
fund cash needs, including the payment of dividends and distributions. Funds
from operations should not be considered as a substitute for net income as a
measure of results of operations or for cash flow from operating activities
calculated in accordance with generally accepted accounting principles as a
measure of liquidity. Funds from operations as calculated by the Company may
not be comparable to similarly titled but differently calculated measures of
other REITs.
The ratio of earnings to fixed charges and preferred stock dividends was
1.88 for the year ended Dcember 31, 1996 compared to 1.56 for the year ended
December 31, 1995 and 1.34 for the year ended December 31, 1994. The increases
are primarily due to increased net operating income as discussed in the
"Results of Operations" above.
In 1996, the Company acquired 112 industrial properties comprising
approximately 10.4 million square feet of GLA for a total purchase price of
approximately $253 million, completed the development of two build-to suit
properties comprising approximately .2 million square feet of GLA at a cost of
approximately $9.0 million and sold properties comprising approximately .4
million square feet of GLA for $15 million. The acquisitions and developments
were financed in part by proceeds from the February 1996 Equity Offering and
the October 1996 Equity Offering (as such terms are hereinafter defined),
borrowings under the Company's acquisition facilities and by new mortgage debt.
The Company has committed to the construction of two light industrial and
five bulk warehouse properties totaling approximately 1.0 million square feet.
The estimated total construction costs are approximately $27.4 million. These
developments are expected to be funded with cash flow from operations as well as
borrowings under the 1996 Unsecured Acquisition Facility.
In 1996, the Company and Operating Partnership paid a quarterly
distribution of $.4875 per share/Unit related to each of the first, second and
third quarters. In addition, the Company and Operating Partnership paid a
fourth quarter 1996 distribution of $.505 per share/Unit on January 20, 1997.
The total distributions paid to the Company's stockholders and the Operating
Partnership's limited partners related to 1996 totaled $54.3 million.
In 1996, the Company paid a quarterly preferred dividend of $.59375 per
share to its preferred stockholders related to each of the first, second, third
and fourth quarters. The total preferred dividends paid to the Company's
preferred stockholders related to 1996 totaled $3.9 million.
23
<PAGE> 25
On February 2, 1996, the Company completed an offering of 5.175 million
shares (inclusive of the underwriters' over-allotment option) of common stock
at a purchase price of $22 per share (the "February 1996 Equity Offering").
The net proceeds of $106.3 million were used to repay outstanding borrowings
totaling $59.4 million and fund acquisitions closed subsequently in the first
quarter of 1996.
On October 25, 1996, the Company completed an offering of 5.75 million
shares (inclusive of the underwriters' over-allotment option) of common stock
at a purchase price of $25.50 per share (the "October 1996 Equity Offering").
The net proceeds of $137.7 million were used to repay outstanding borrowings
totaling $84.2 million and to fund acquisitions closed in the fourth quarter of
1996.
On July 1, 1995, the Company effectively fixed the interest rate on its
$300 million 1994 Mortgage Loan at 6.97% for a term of six years beginning July
1, 1995 and ending June 30, 2001. The Company accomplished this by entering
into interest rate protection agreements for a notional value of $300 million.
The interest rate protection agreements require the Company to pay monthly to
the counterparty a fixed interest rate which effectively fixes the interest
rate on the 1994 Mortgage Loan at 6.97%. The Company will continue to use
interest rate protection agreements to hedge interest rate risk where
appropriate.
On March 20, 1996, the Company, through the Operating Partnership and the
Indianapolis Partnership, entered into the $36.7 million CIGNA Loan that is
collateralized by seven properties in Indianapolis, Indiana and three
properties in Cincinnati, Ohio. The CIGNA Loan bears interest at a fixed
interest rate of 7.5% and provides for monthly principal and interest payments
based on a 25-year amortization schedule. The CIGNA Loan will mature on April
1, 2003. The CIGNA Loan may be prepaid only after April 30, 1999, in exchange
for the greater of a 1% premium or a yield maintenance premium.
On March 20, 1996, the Company, through the Operating Partnership, assumed
an approximately $6.4 million mortgage loan and an approximately $3.0 million
mortgage loan (together, the "Assumed Loans") that are collateralized by 13
properties in Indianapolis, Indiana and one property in Indianapolis, Indiana,
respectively. The Assumed Loans bear interest at a fixed rate of 9.25% and
provide for monthly principal and interest payments based on a 16.75-year
amortization schedule. The Assumed Loans will mature on January 1, 2013. The
Assumed Loans may be prepaid only after December 22, 1999, in exchange for the
greater of a 1% premium or a yield maintenance premium.
In 1997, the Company obtained investment grade ratings on its senior
unsecured debt and its preferred stock from Moody's Investors Service, Standard
& Poor's, Duff & Phelps Credit Rating Co. and Fitch Investors Service, Inc.
In December 1996, the Company terminated its $150 million 1994 Acquisition
Facility and entered into a $200 million 1996 Unsecured Acquisition Facility.
Borrowings under the 1996 Unsecured Acquisition Facility will be used to
finance the acquisitions and development of additional properties and for other
corporate purposes, including to obtain working capital. It is the Company's
intent to, from time to time, replace borrowings under the 1996 Unsecured
Acquisition Facility with long term sources of capital as the Company deems
appropriate.
The Company has considered its short-term (one year or less) liquidity
needs and the adequacy of its estimated cash flow from operations and other
expected liquidity sources to meet these needs. The Company believes that its
principal short-term liquidity needs are to fund normal recurring expenses,
debt service requirements and the minimum distribution required to maintain the
Company's REIT qualification under the Internal Revenue Code. The Company
anticipates that these needs will be met with cash flows provided by operating
activities.
24
<PAGE> 26
The Company expects to meet long-term (greater than one year) liquidity
requirements such as property acquisitions, scheduled debt maturities, major
renovations, expansions and other non-recurring capital improvements through
long-term unsecured indebtedness and the issuance of additional equity
securities. The Company may finance the acquisition or development of
additional properties through borrowings under the 1996 Unsecured Acquisition
Facility. At December 31, 1996, borrowings under the 1996 Unsecured
Acquisition Facility bore interest at a weighted average interest rate of
8.25%. The borrowings under the 1996 Unsecured Acquisition Facility were
converted to an interest rate of 6.6% on January 7, 1997. As of March 20,
1997, the Company had $68.1 million available in additional borrowings under
the 1996 Unsecured Acquisition Facility. While the Company may sell properties
if property or market conditions make it desirable, the Company does not expect
to sell assets in the foreseeable future to satisfy its liquidity requirements.
OTHER
In February of 1997, the Financial Accounting Standards Board issued
Statement of Financial Standards No. 128 (FAS 128), "Earnings per Share,
"effective for financial statements issued after December 15, 1997. The
Company intends to adopt FAS 128 in fiscal year 1997. The Company has not
determined the financial impact of FAS 128.
INFLATION
For the last several years, inflation has not had a significant impact on
the Company because of the relatively low inflation rates in the Company's
markets of operation. Most of the Company's leases require the tenants to pay
their share of operating expenses, including common area maintenance, real
estate taxes and insurance, thereby reducing the Company's exposure to
increases in costs and operating expenses resulting from inflation. In
addition, many of the outstanding leases expire within five years which may
enable the Company to replace existing leases with new leases at higher base
rentals if rents of existing leases are below the then-existing market rate.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedule on page
F-1 of this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
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<PAGE> 27
PART III
ITEM 10, 11, 12, 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT,
EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 10, Item 11, Item 12 and Item 13 will
be contained in a definitive proxy statement which the Registrant
anticipates will be filed no later than April 30, 1997, and thus are
incorporated herein by reference in accordance with General Instruction
G(3) to Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND
REPORTS ON FORM 8-K
(A) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND EXHIBITS
(1 & 2) See Index to Financial Statements and Financial Statement
Schedule on page F-1 of this Form 10-K
(3) Exhibits:
Exhibit
No. Description
------- -----------
3.1 Amended and Restated Articles of
Incorporation of the Company (incorporated by reference to
Exhibit 3.1 of the Form 10-Q of the Company for the fiscal
quarter ended June 30, 1996, File No. 1-13102)
3.2 Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-3, File No. 333-03999)
3.3 Articles of Amendment to the Company's
Articles of Incorporation dated June 20, 1994 (incorporated
by reference to Exhibit 3.2 of the Form 10-Q of the Company
for the fiscal quarter ended June 30, 1996, File No.
1-13102)
3.4 Articles Supplementary relating to the
Company's 9 1/2% Series A Cumulative Preferred Stock, $.01
par value (incorporated by reference to Exhibit 3.4 of the
Form 10-Q of the Company for the fiscal quarter ended June
30, 1996, File No. 1-13102)
3.5 Articles of Amendment to the Company's
Articles of Incorporation dated May 31, 1996 (incorporated
by reference to Exhibit 3.3 of the Form 10-Q of the Company
for the fiscal quarter ended June 30, 1996, File No.
1-13102)
4.1 Form of Amended and Restated Articles of
Incorporation of First Industrial Securities Corporation
(incorporated by reference to Exhibit 4.5 of the Company's
Registration Statement on Form S-3, File No. 33-97014)
4.2 Form of Articles Supplementary of First
Industrial Securities Corporation (incorporated by reference
to Exhibit 4.6 of the Company's Registration Statement on
Form S-3, File No. 33-97014)
4.3 Loan Agreement by and between Nomura Asset
Capital Corporation and First Industrial Financing
Partnership, L.P. (incorporated by reference to Exhibit 4.1
of the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, File No. 1-13102)
4.4 Amendment to Loan Agreement by and between
Nomura Asset Capital Corporation and First Industrial
Financing Partnership, L.P. (incorporated by reference to
Exhibit 4.2 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 1-13102)
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<PAGE> 28
Exhibit
No. Description
------- -----------
4.5 Second Amended and Restated Revolving Credit Agreement (the
"Credit Agreement"), dated as of May 12, 1995, by and among
First Industrial, L.P., First Industrial Pennsylvania, L.P.,
First Industrial Realty Trust, Inc., the First National Bank
of Chicago and the other financial institutions party
thereto (incorporated by reference as the sole exhibit to
the Company's quarterly report on Form 10-Q for the period
ended June 30, 1995, File No. 1-13102)
4.6 First Amendment to the Credit Agreement (incorporated by
reference to Exhibit 10.1 of the Company's Registration
Statement on Form S-3, File No. 33-80829)
4.7 Second Amendment to the Credit Agreement (incorporated by
reference to Exhibit 10.2 of the Company's Registration
Statement on Form S-3, File No. 33-80829)
4.8 Third Amendment to the Credit Agreement (incorporated by
reference to Exhibit 10.3 of the Company's Registration
Statement on Form S-3, File No. 33-80829)
4.9* Unsecured Revolving Credit Agreement (the "Unsecured
Revolving Credit Agreement"), dated as of December 16,
1996, by and among First Industrial, L.P., First Industrial
Realty Trust, Inc., the First National Bank of Chicago NBD
and Union Bank of Switzerland, New York Branch
4.10* First Amendment to Unsecured Revolving Credit Agreement
4.11 Form of Guarantee and Payment Agreement between First
Industrial Securities, L.P. and First Industrial Securities
Corporation for the benefit of American National Bank and
Trust Company of Chicago (incorporated by reference to
Exhibit 4.8 of the Company's Registration Statement on Form
S-3, File No. 33-97014)
4.12 Form of Agency and Advance Agreement among First Industrial
Realty Trust, Inc., First Industrial Securities, L.P. and
American National Bank and Trust Company of Chicago
(incorporated by reference to Exhbit 4.9 of the Company's
Registration Statement on Form S-3, File No. 33-97014)
4.13 Form of Guarantee Agency Agreement among First Industrial
Realty Trust, Inc., First Industrial Securities, L.P. and
American National Bank and Trust Company of Chicago
(incorporated by reference to Exhibit 4.10 of the Company's
Registration Statement on Form S-3, File No. 33-97014)
4.14 Form of Limited Partnership Agreement of First Industrial
Securities, L.P. (incorporated by reference to Exhibit 4.3
of the Company's Registration Statement on Form S-3, File
No. 33-97014)
10.1 Second Amended and Restated Limited Partnership Agreement of
First Industrial, L.P. (incorporated by reference to Exhibit
10.1 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, File No. 1-13102)
10.2 Contribution Agreement dated April 16, 1994, by and between
Metro Chicago Investment Company and Realty Trust Funding
Corporation (incorporated by reference to Exhibit 10.2 to
the Company's Registration Statement on Form S-11, File No.
33-77804)
10.3 Amendment to Exhibit 10.2 (incorporated by reference to
Exhibit 10.3 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 1-13102)
10.4 Contribution Agreement dated April 16, 1994, by and between
National Warehouse Investment Company and Realty Trust
Funding Corporation (incorporated by reference to Exhibit
10.3 to the Company's Registration Statement on Form S-11,
File No. 33-77804)
27
<PAGE> 29
Exhibit
No. Description
------- -----------
10.5 Amendment to Exhibit 10.4 (incorporated by reference to
Exhibit 10.5 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 1-13102)
10.6 Contribution Agreement dated April 16, 1994, by and between
Chicago Suburban Investment Company and Realty Trust Funding
Corporation (incorporated by reference to Exhibit 10.4 to
the Company's Registration Statement on Form S-11, File No.
33-77804)
10.7 Amendment to Exhibit 10.6 (incorporated by reference to
Exhibit 10.7 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 1-13102)
10.8 Contribution Agreement dated April 16, 1994, by and between
Great Circle Investments Limited Partnership and Realty
Trust Funding Corporation (incorporated by reference to
Exhibit 10.5 to the Company's Registration Statement on Form
S-11, File No. 33-77804)
10.9 Amendment to Exhibit 10.8 (incorporated by reference to
Exhibit 10.9 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1994, File No. 1-13102)
10.10 Contribution Agreement dated April 16, 1994, by and between
Mid-County Trade Center Investment Company and Realty Trust
Funding Corporation (incorporated by reference to Exhibit
10.6 to the Company's Registration Statement on Form S-11,
File No. 33-77804)
10.11 Amendment to Exhibit 10.10 (incorporated by reference to
Exhibit 10.11 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, File No. 1-13102)
10.12 Contribution Agreement dated April 16, 1994, by and between
Multi-City Investment Company and Realty Trust Funding
Corporation (incorporated by reference to Exhibit 10.7 to
the Company's Registration Statement on Form S-11, File No.
33-77804)
10.13 Amendment to Exhibit 10.12 (incorporated by reference to
Exhibit 10.13 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, File No. 1-13102)
10.14 Contribution Agreement dated April 16, 1994, by and among
Tomasz/Shidler Investment Corporation,
Brennan/Tomasz/Shidler Investment Corporation and ProVest,
L.P. (incorporated by reference to Exhibit 10.8 to the
Company's Registration Statement on Form S-11, File No.
33-77804)
10.15 Contribution Agreement dated April 16, 1994, by and between
Lambert/Shidler Investment Corporation and ProVest, L.P.
(incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement on Form S-11, File No. 33-77804)
10.16 Non-Competition Agreement between Jay H. Shidler and First
Industrial Realty Trust, Inc. (incorporated by reference to
Exhibit 10.16 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, File No. 1-13102)
10.17 Form of Non-Competition Agreement between each of Michael T.
Tomasz, Paul T. Lambert, Michael J. Havala, Michael W.
Brennan, Michael G. Damone, Duane H. Lund, and Johannson L.
Yap and First Industrial Realty Trust, Inc. (incorporated by
reference to Exhibit 10.14 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.18 Non-Competition Agreement between Steven B. Hoyt and First
Industrial Realty Trust, Inc. (incorporated by reference to
Exhibit 10.15 to the Company's Registration Statement on
Form S-11, File No. 33-77804)
28
<PAGE> 30
Exhibit
No. Description
------- -----------
10.19 Agreement for the Purchase and Sale of Partnership Interests
and Corporate Shares dated July 16, 1993, by and between
various Sellers specified therein and Hamlin/Shidler
Investment Corporation (incorporated by reference to Exhibit
10.16 to the Company's Registration Statement on Form S-11,
File No. 33-77804)
10.20 First Amendment to Agreement for the Purchase and Sale of
Partnership Interests and Corporate Shares dated November 9,
1993, by and between various Sellers specified therein and
Hamlin/Shidler Investment Corporation (incorporated by
reference to Exhibit 10.17 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.21 Agreement for the Sale of Partnership Interests dated
November 10, 1993, between Anthony Muscatello and
Hamlin/Shidler Investment Corporation (incorporated by
reference to Exhibit 10.18 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.22 Agreement dated November 10, 1993, by and between Anthony
Muscatello and Hamlin/Shidler Investment Corporation, Jay H.
Shidler and Clay W. Hamlin, III (incorporated by reference
to Exhibit 10.19 to the Company's Registration Statement on
Form S-11, File No. 33-77804)
10.23 Restructure Agreement dated March 30, 1994, between Anthony
Muscatello and Hamlin/Shidler Investment Corporation
(incorporated by reference to Exhibit 10.20 to the Company's
Registration Statement on Form S-11, File No. 33-77804)
10.24 Agreement of Purchase and Sale dated March 31, 1994, by and
between Steven B. Hoyt and ProVest L.P. (incorporated by
reference to Exhibit 10.21 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.25 Agreement of Purchase and Sale dated March 31, 1994, by and
between Steven B. Hoyt and ProVest L.P. (incorporated by
reference to Exhibit 10.22 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.26 Agreement of Purchase and Sale dated March 31, 1994, by and
between Steven B. Hoyt and ProVest L.P. (incorporated by
reference to Exhibit 10.23 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.27 Asset Purchase Agreement dated as of March 31, 1994, by and
between ProVest, L.P. and Hoyt Properties Inc. (incorporated
by reference to Exhibit 10.24 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.28 Share Contribution Agreement dated March 17, 1994, among
Brennan/Tomasz/Shidler Capital Corporation, Michael G.
Damone and Daniel R. Andrew (incorporated by reference to
Exhibit 10.25 to the Company's Registration Statement on
Form S-11, File No. 33-77804)
10.29 Acquisition Agreement dated March 29, 1994, by and among
Kenmore Properties Joint Venture, C/O Investment Associates,
Westwood Properties and Brennan/Tomasz/Shidler Capital
Corporation (incorporated by reference to Exhibit 10.26 to
the Company's Registration Statement on Form S-11, File No.
33-77804)
10.30 Acquisition Agreement dated March 29, 1994, by and among C/O
Investment Associates and Brennan/Tomasz/Shidler Capital
Corporation (incorporated by reference to Exhibit 10.27 to
the Company's Registration Statement on Form S-11, File No.
33-77804)
10.31 Acquisition Agreement dated March 29, 1994, by and among
Rochester Hills Executive Park, New England Mutual Life
Insurance Company, RHEP Limited Partnership and
Brennan/Tomasz/Shidler Capital Corporation (incorporated by
reference to Exhibit 10.28 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
29
<PAGE> 31
Exhibit No. Description
10.32 Acquisition Agreement dated March 29, 1994, by
and among Newbury 1972, New England Mutual Life Insurance
Company, Glenhurst Properties and Brennan/Tomasz/Shidler
Capital Corporation (incorporated by reference to Exhibit
10.29 to the Company's Registration Statement on Form S-11,
File No. 33-77804)
10.33 Acquisition Agreement dated March 29, 1994, by
and among Boylston Properties Joint Venture, C/O Investment
Associates, Maple Properties and Brennan/Tomasz/Shidler
Capital Corporation (incorporated by reference to Exhibit
10.30 to the Company's Registration Statement on Form S-11,
File No. 33-77804)
10.34 Acquisition Agreement dated March 29, 1994, by
and among Concord Properties Joint Venture, C/O Investment
Associates, Fairway Development Company and
Brennan/Tomasz/Shidler Capital Corporation (incorporated by
reference to Exhibit 10.31 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.35 Acquisition Agreement dated March 29, 1994, by
and among Newbury Properties Joint Venture, C/O Investment
Associates, Glenhurst Properties and Brennan/Tomasz/Shidler
Capital Corporation (incorporated by reference to Exhibit
10.32 to the Company's Registration Statement on Form S-11,
File No. 33-77804)
10.36 Acquisition Agreement dated March 29, 1994, by
and among Boylston 501 Joint Venture, New England Mutual Life
Insurance Company, Maple Properties and
Brennan/Tomasz/Shidler Capital Corporation (incorporated by
reference to Exhibit 10.33 to the Company's Registration
Statement on Form S-11, File No. 33-77804)
10.37 + 1994 Stock Incentive Plan (incorporated by
reference to Exhibit 10.37 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, File No.
1-13102)
10.38 Amendment to Exhibit A of Exhibit 10.22
(incorporated by reference to Exhibit 10.43 to the Company's
Registration Statement on Form S-11, File No. 33-77804)
10.39 Reimbursement Agreement by and among First
Industrial Realty Trust, Inc., First Industrial, L.P. and Jay
H. Shidler (incorporated by reference to Exhibit 10.39 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994, File No. 1-13102)
10.40 Letter of Resignation from Paul T. Lambert to
First Industrial, dated January 10, 1996 (incorporated by
reference to Exhibit 10.40 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, File No.
1-13102)
10.41 + Employee Stock Option Agreement Amendment for Paul T.
Lambert, dated December 31, 1995 (incorporated by reference
to Exhibit 10.41 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, File No. 1-13102)
10.42 + Separation Agreement dated January 10, 1996 between First
Industrial and Paul T. Lambert (incorporated by reference to
Exhibit 10.42 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995, File No. 1-13102)
10.43 Noncompetition Agreement between First
Industrial and Paul T. Lambert, dated January 1, 1996
(incorporated by reference to Exhibit 10.43 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1995, File No. 1-13102)
10.44 Interest Rate Protection Agreement
(incorporated by reference to Exhibit 10.40 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1994, File No. 1-13102)
30
<PAGE> 32
Exhibit No. Description
10.45 Interest Rate Protection Termination Agreement
between First Industrial Financing Partnership, L.P. and UBS
Securities (Swaps) Inc. (incorporated by reference to Exhibit
10.45 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, File No. 1-13102)
10.46 Interest Rate Protection Agreement between
First Industrial Financing Partnership, L.P. and UBS
Securities (Swaps) Inc. (incorporated by reference to Exhibit
10.46 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1995, File No. 1-13102)
10.47 Interest Rate Swap Agreement between First
Industrial, L.P. and UBS Securities (Swaps) Inc.
(incorporated by reference to Exhibit 10.47 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1995, File No. 1-13102)
10.48 First Amendment to Second Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.,
dated November 17, 1995 (incorporated by referenced to
Exhibit 10.1 of the Form 10-Q of the Company for the fiscal
quarter ended June 30, 1996, File No. 1-13102)
10.49 Second Amendment to Second Amended and
Restated Limited Partnership Agreement of First Industrial,
L.P., dated March 20, 1996 (incorporated by referenced to
Exhibit 10.2 of the Form 10-Q of the Company for the fiscal
quarter ended June 30, 1996, File No. 1-13102)
10.50 Third Amendment to Second Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.,
dated June 28, 1996 (incorporated by referenced to Exhibit
10.3 of the Form 10-Q of the Company for the fiscal quarter
ended June 30, 1996, File No. 1-13102)
10.51 Fourth Amendment to Second Amended and
Restated Limited Partnership Agreement of First Industrial,
L.P., dated September 13, 1996 (incorporated by referenced to
Exhibit 10.1 of the Form 10-Q of the Company for the fiscal
quarter ended September 30, 1996, File No. 1-13102)
10.52 Fifth Amendment to Second Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.,
dated September 30, 1996 (incorporated by referenced to
Exhibit 10.2 of the Form 10-Q of the Company for the fiscal
quarter ended September 30, 1996, File No. 1-13102)
10.53 * Sixth Amendment to Second Amended and Restated Limited
Partnership Agreement of First Industrial, L.P., dated
November 14, 1996
10.54 * Seventh Amendment to Second Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.,
dated January 31, 1997
10.55 * Eighth Amendment to Second Amended and Restated Limited
Partnership Agreement of First Industrial, L.P., dated March
17, 1997
10.56 First Industrial Realty Trust, Inc. Deferred
Income Plan (incorporated by reference to Exhibit 10 of the
Form 10-Q of the Company for the fiscal quarter ended March
31, 1996, File No. 1-13102)
10.57 Contribution Agreement dated March 19, 1996
among FR Acquisitions, Inc. and the parties listed on the
signature pages thereto (incorporated by reference to Exhibit
10.1 of the Form 8-K of the Company dated April 3, 1996, File
No. 1-13102)
10.58 * Contribution Agreement dated January 31, 1997 among FR
Acquisitions, Inc. and the parties listed on the signature
pages thereto
10.59 * + Employment Agreement dated December 4, 1996 between the
Company and Michael T. Tomasz
10.60 * + Employment Agreement dated February 1, 1997 between the
Company and Michael W. Brennan
10.61 * + Employment Agreement dated January 31, 1997 between the
Company and Jan Burman
31
<PAGE> 33
Exhibit No. Description
- ----------- -----------
10.62 * + 1997 Stock Incentive Plan
21.1 * Subsidiaries of the Registrant
23 * Consent of Coopers & Lybrand L.L.P.
27 * Financial Data Schedule
* Filed herewith.
+ Indicates a compensatory plan or arrangement contemplated by Item 14
[a (3)] of Form 10-K.
(b) REPORTS ON FORM 8-K
Report on Form 8-K dated October 24, 1996, filing as an exhibit thereto, a
definitive underwriting agreement relating to the Company's public offering of
common stock.
The Company has prepared supplemental financial and operating information
which is available without charge upon request to the Company. Please direct
requests as follows:
First Industrial Realty Trust, Inc.
150 N. Wacker, Suite 150
Chicago, IL 60606
Attention: Investor Relations
32
<PAGE> 34
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.
FIRST INDUSTRIAL REALTY TRUST, INC.
Date: March 27, 1997 By: /s/ Michael T. Tomasz Michael T. Tomasz
---------------------------------------
President, Chief Executive Officer and
Director
(Principal Executive Officer)
Date: March 27, 1997 By: /s/ Michael J. Havala .
----------------------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Jay H. Shidler Chairman of the Board of Directors March 27, 1997
----------------------
Jay H. Shidler
/s/ Michael T. Tomasz President, Chief Executive Officer March 27, 1997
---------------------- and Director
Michael T. Tomasz
/s/ Michael W. Brennan Chief Operating Officer and Director March 27, 1997
----------------------
Michael W. Brennan
/s/ Michael G. Damone Senior Regional Director and Director March 27, 1997
----------------------
Michael G. Damone
/s/ John L. Lesher Director March 27, 1997
----------------------
John L. Lesher
/s/ Kevin W. Lynch Director March 27, 1997
----------------------
Kevin W. Lynch
/s/ John E. Rau Director March 27, 1997
----------------------
John E. Rau
/s/ Robert J. Slater Director March 27, 1997
----------------------
Robert J. Slater
/s/ J. Steven Wilson Director March 27, 1997
----------------------
J. Steven Wilson
33
<PAGE> 35
EXHIBIT INDEX
Exhibit
No. Description
------- ------------
4.9 Unsecured Revolving Credit Agreement (the "Unsecured Revolving
Credit Agreement"), dated as of December 16, 1996, by and among
First Industrial, L.P., First Industrial Realty Trust, Inc., the
First National Bank of Chicago NBD and Union Bank of Switzerland,
New York Branch
4.10 First Amendment to Unsecured Revolving Credit Agreement
10.53 Sixth Amendment to Second Amended and Restated Limited
Partnership Agreement of First Industrial, L.P., dated November 14,
1996
10.54 Seventh Amendment to Second Amended and Restated Limited
Partnership Agreement of First Industrial, L.P., dated January 31,
1997
10.55 Eighth Amendment to Second Amended and Restated Limited
Partnership Agreement of First Industrial, L.P., dated March 17,
1997
10.58 Contribution Agreement dated January 31, 1997 among FR
Acquisitions, Inc. and the parties listed on the signature pages
thereto
10.59 Employment Agreement dated December 4, 1996 between the Company
and Michael T. Tomasz
10.60 Employment Agreement dated February 1, 1997 between the Company
and Michael W. Brennan
10.61 Employment Agreement dated January 31, 1997 between the Company
and Jan Burman
10.62 1997 Stock Incentive Plan
21.1 Subsidiaries of the Registrant
23 Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule
34
<PAGE> 36
FIRST INDUSTRIAL REALTY TRUST, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
PAGE
FINANCIAL STATEMENTS
Report of Independent
Accountants............................................... F-2
Consolidated Balance Sheets of First Industrial Realty
Trust, Inc. (the "Company") as of December 31, 1996 and
1995...................................................... F-3
Consolidated Statements of Operations of the Company for
the Years Ended December 31, 1996 and 1995 and for the
Period July 1, 1994 to December 31, 1994, and Combined
Statement of Operations for the Contributing Businesses
for the Period January 1, 1994 to June 30,
1994...................................................... F-4
Consolidated Statements of Changes in Stockholders'
Equity of the Company for the Years Ended December 31,
1996 and 1995 and for the Period July 1, 1994 to December
31, 1994 and Combined Statement of Changes in Net Deficit
of the Contributing Businesses for the Period January 1,
1994 to June 30, 1994..................................... F-5
Consolidated Statements of Cash Flows of the Company for
the Years Ended December 31, 1996 and 1995 and for the
Period July 1, 1994 to December 31, 1994 and Combined
Statement of Cash Flows of the Contributing Businesses
for the Period January 1, 1994 to June 30,
1994...................................................... F-6
Notes to Consolidated and Combined Financial Statements... F-7
FINANCIAL STATEMENT SCHEDULE
Schedule III: Real Estate and Accumulated Depreciation... S-1
F-1
<PAGE> 37
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
First Industrial Realty Trust, Inc.
We have audited the consolidated financial statements and the financial
statement schedule of First Industrial Realty Trust, Inc. (the "Company") and
the combined financial statements of the Contributing Businesses as listed on
page F-1 of this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of First
Industrial Realty Trust, Inc. as of December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1996 and 1995 and for the period July 1, 1994 through
December 31, 1994 and of the Contributing Businesses for the period January 1,
1994 through June 30, 1994, in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
February 12, 1997
F-2
<PAGE> 38
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
December 31, December 31,
1996 1995
------------ --------------
<C> <C> <C>
ASSETS
Assets:
Investment in Real Estate:
Land................................................................ $ 153,390 $109,227
Buildings and Improvements.......................................... 880,924 645,872
Furniture, Fixtures and Equipment................................... 1,662 2,024
Construction in Progress............................................ 14,803 393
Less: Accumulated Depreciation...................................... (91,457) (68,749)
---------- -----------
Net Investment in Real Estate................................... 959,322 688,767
Cash and Cash Equivalents........................................... 7,646 8,919
Restricted Cash..................................................... 11,837 11,732
Tenant Accounts Receivable, Net..................................... 4,667 2,561
Deferred Rent Receivable............................................ 8,290 7,676
Interest Rate Protection Agreements, Net............................ 8,376 8,529
Deferred Financing Costs, Net....................................... 7,442 9,422
Prepaid Expenses and Other Assets, Net.............................. 15,020 16,298
---------- -----------
Total Assets.................................................... $1,022,600 $753,904
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage Loans Payable.............................................. $ 392,082 $346,850
Construction Loans Payable.......................................... --- 4,873
Acquisition Facilities Payable...................................... 4,400 48,235
Promissory Notes Payable............................................ 9,919 ---
Accounts Payable and Accrued Expenses............................... 18,374 12,468
Rents Received in Advance and Security Deposits..................... 6,122 4,124
Dividends/Distributions Payable..................................... 16,281 10,422
---------- -----------
Total Liabilities............................................. 447,178 426,972
---------- -----------
Minority Interest..................................................... 42,861 20,909
Commitments and Contingencies......................................... --- ---
Stockholders' Equity:
Preferred Stock ($.01 par value, 10,000,000 shares authorized,
1,650,000 shares issued and outstanding).......................... 17 17
Common Stock ($.01 par value, 100,000,000 shares authorized,
29,939,417 and 18,950,216 shares issued and outstanding at
December 31, 1996 and 1995, respectively)......................... 299 190
Additional Paid-in-Capital.......................................... 584,009 338,907
Distributions in Excess of Accumulated Earnings..................... (51,764) (33,091)
---------- -----------
Total Stockholders' Equity.................................... 532,561 306,023
---------- -----------
Total Liabilities and Stockholders' Equity.................... $1,022,600 $ 753,904
========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 39
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
The Company
------------------------------------------------------------
Year Ended Year Ended Six Months Ended
December 31, December 31, December 31,
1996 1995 1994
--------------- ---------------- -------------------
<S> <C> <C> <C>
Revenues:
Rental Income....................................................... $ 109,113 $ 83,522 $ 36,883
Tenant Recoveries and Other Income.................................. 30,942 22,964 9,687
--------- -------- --------
Total Revenues...................................................... 140,055 106,486 46,570
--------- -------- --------
Expenses:
Real Estate Taxes................................................... 23,371 16,998 7,409
Repairs and Maintenance............................................. 5,408 3,872 1,582
Property Management................................................. 5,067 3,539 1,357
Utilities........................................................... 3,582 2,060 822
Insurance........................................................... 877 903 385
Other............................................................... 919 930 298
General and Administrative.......................................... 4,018 3,135 1,097
Interest Expense.................................................... 28,954 28,591 10,588
Interest Expense (affiliated)....................................... --- --- ---
Amortization of Interest Rate Protection Agreements
and Deferred Financing Costs...... ................................. 3,286 4,438 2,904
Depreciation and Other Amortization................................. 28,049 22,264 9,802
Disposition of Interest Rate Protection Agreement................... --- 6,410 ---
--------- -------- --------
Total Expenses...................................................... 103,531 93,140 36,244
--------- -------- --------
Income (Loss) Before Gain on Sales of Properties,
Management and Construction (Loss),
Minority Interest and Extraordinary Item............................ 36,524 13,346 10,326
Gain on Sales of Properties......................................... 4,344 --- ---
--------- --- ---
Income (Loss) Before Management and Construction
(Loss), Minority Interest and Extraordinary Item.................... 40,868 13,346 10,326
Management and Construction (Loss) ................................. --- ---
Income Allocated to Minority Interest............................... (2,931) (997) (778)
--------- -------- --------
Income (Loss) Before Extraordinary Item............................. 37,937 12,349 9,548
Extraordinary (Loss)................................................ (2,273) --- ---
--------- --- ---
Net Income (Loss)................................................... 35,664 12,349 9,548
Preferred Stock Dividends........................................... (3,919) (468) ---
--------- -------- --------
Net Income Available to Common Stockholders......................... $ 31,745 $ 11,881 $ 9,548
========= ======== ========
Net Income Available to Common Stockholders
Before Extraordinary Loss Per Weighted Average
Common Share Outstanding (24,755,953, 18,889,013
and 18,881,399 in 1996, 1995 and 1994, respectively).. $ 1.37 $ 0.63 $ 0.51
Extraordinary Loss Per Weighted Average Common
Share Outstanding (24,755,953, 18,889,013 and
18,881,399 in 1996, 1995 and 1994, respectively).................... $ (0.09) $ --- $ ---
Net Income Available to Common Stockholders Per
Weighted Average Common Share Outstanding
(24,755,953, 18,889,013 and 18,881,399 in 1996, 1995 and 1994,
respectively)....................................................... $ 1.28 $ 0.63 $ 0.51
<CAPTION>
Contributing
Businesses
---------------------
Six Months
Ended
June 30, 1994
---------------------
<S> <C>
Revenues:
Rental Income....................................................... $ 18,041
Tenant Recoveries and Other Income.................................. 4,775
---------
Total Revenues...................................................... 22,816
--------
Expenses:
Real Estate Taxes................................................... 3,273
Repairs and Maintenance............................................. 1,225
Property Management................................................. 677
Utilities........................................................... 570
Insurance........................................................... 184
Other............................................................... 107
General and Administrative.......................................... 795
Interest Expense.................................................... 9,868
Interest Expense (affiliated)....................................... 1,905
Amortization of Interest Rate Protection Agreements
and Deferred Financing Costs...... ................................. 858
Depreciation and Other Amortization................................. 4,744
Disposition of Interest Rate Protection Agreement................... ---
---------
Total Expenses...................................................... 24,206
----------
Income (Loss) Before Gain on Sales of Properties,
Management and Construction (Loss),
Minority Interest and Extraordinary Item............................ (1,390)
Gain on Sales of Properties......................................... ---
---
Income (Loss) Before Management and Construction
(Loss), Minority Interest and Extraordinary Item.................... (1,390)
Management and Construction (Loss) ................................. (81)
Income Allocated to Minority Interest............................... ---
---------
Income (Loss) Before Extraordinary Item............................. (1,471)
Extraordinary (Loss)................................................ (1,449)
---------
Net Income (Loss)................................................... $ (2,920)
==========
</TABLE>
<PAGE> 40
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY AND NET DEFICIT
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Contributing
Businesses The Company
----------- ----------------------------------------------------------------
Preferred Common Add'l Paid Retained Dist In Excess
Total Net Deficit Stock Stock In Capital Earnings Accum Earning
-------- ----------- --------- ------ ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993............ $(37,548) $(37,764) $ 0 $ 43 $ 173 $ 0 $ 0
Issuance of Common Stock............... 2 -- -- -- 2 -- --
Common Stock Required................... (102) -- -- (20) (82) -- --
Contributions........................... 18,796 18,796 -- -- -- -- --
Distributions........................... (29,011) (29,011) -- -- -- -- --
Net Loss............................... (2,920) (2,920) -- -- -- -- --
Acquisition and Contribution of
Contributing Businesses' Interests.... (2,970) 50,899 -- -- (53,869) -- --
Net Proceeds from Issuance of Stock..... 324,805 -- -- 152 324,653 -- --
-------- -------- --- ---- -------- -------- --------
Balance at June 30, 1994................ 271,052 0 0 175 270,877 0 0
Net Proceeds from Issuance of
Common Stock.......................... 30,412 -- -- 14 30,398 -- --
Distributions ($.945 per Share/Unit)... (19,296) -- -- -- -- (10,326) (8,970)
Net Income Before Minority Interest.... 10,326 -- -- -- -- 10,326 --
Minority Interest...................... (74) -- -- -- (74) -- --
-------- -------- --- ---- -------- -------- --------
Balance at December 31, 1994............ 292,420 0 0 189 301,201 0 (8,970)
Net Proceeds from Issuance of
Preferred Stock....................... 36,719 -- 17 -- 36,702 -- --
Preferred Stock Dividends
($.2837 per Share).................... (468) -- -- -- -- (468) --
Distributions ($1.905 per Share/Unit).. (38,898) -- -- -- -- (12,878) (26,020)
Net Income Before Minority Interest.... 13,346 -- -- -- -- 13,346 --
Minority Interest:
Allocation of Income.................. (997) -- -- -- -- -- (997)
Distributions ($1.905 per Unit)....... 2,896 -- -- -- -- -- 2,896
Conversion of Units to Common Stock... 1,005 -- -- 1 1,004 -- --
-------- -------- --- ---- -------- -------- --------
Balance at December 31, 1995............ 306,023 0 17 190 338,907 0 (33,091)
Net Proceeds from Issuance of
Common Stock.......................... 244,040 -- -- 109 243,931 -- --
Preferred Stock Dividends
($2.375 per Share).................... (3,919) -- -- -- -- (3,919) --
Distributions
($1.9675 per Share/Unit).............. (54,318) -- -- -- -- (34,676) (19,642)
Exercise of Stock Options.............. 228 -- -- -- 228 -- --
Net Income Before Minority Interest.... 38,595 -- -- -- -- 38,595 --
Minority Interest:
Allocation of Income.................. (2,931) -- -- -- -- -- (2,931)
Distributions ($1.9675 per Unit)...... 3,900 -- -- -- -- -- 3,900
Conversion of Units to Common Stock... 943 -- -- -- 943 -- --
-------- -------- --- ---- -------- -------- --------
Balance at December 31, 1996............ $532,561 $ 0 $17 $299 $584,009 $ 0 $(51,764)
======== ======== === ==== ======== ======== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 41
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
The Company
and
Contributing
The Company Businesses
------------------------------------------- -------------
Six Months
Year Ended Year Ended Ended Six Months
December 31, December 31, December 31, Ended
1996 1995 1994 June 30, 1994
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) ...................... $ 35,664 $ 12,349 $ 9,548 $ (2,920)
Income Allocated to Minority Interest... 2,931 997 778 --
--------- -------- -------- ---------
Income (Loss) Before Minority Interest.. 38,595 13,346 10,326 (2,920)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Depreciation ........................... 24,542 19,440 8,713 4,661
Amortization of Interest Rate
Protection Agreement and Deferred
Financing Costs....................... 3,286 4,438 2,904 858
Other Amortization...................... 3,507 2,824 1,089 83
Provision for Bad Debts................. 100 352 148 --
Gain on Sales of Properties............. (4,344) -- -- --
Extraordinary Items..................... 2,273 -- -- 1,449
Loss from Disposition of Interest Rate
Protection Agreement ................. -- 6,410 -- --
(Increase) in Accounts Receivable and
Other Assets ......................... (4,448) (5,207) (6,436) (4,544)
(Increase) in Deferred Rent Receivable.. (1,189) (1,584) (1,122) (92)
Increase in Accounts Payable, Accrued
Expenses, Rents Received in Advance
and Security Deposits................. 2,085 953 7,987 7,807
Increase in Organization Costs.......... (68) (153) (1,610) (1,466)
(Increase) in Restricted Cash........... (1,718) (2,278) (3,966) (810)
--------- -------- -------- ---------
Net Cash Provided by Operating
Activities............................ 62,621 38,541 18,033 5,026
--------- -------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of and Additions to Investment
in Real Estate ....................... (257,156) (87,908) (72,913) (367,257)
Proceeds from Sale of Investment in
Real Estate .......................... 14,972 -- -- ---
(Increase) Decrease in Restricted Cash.. 1,613 3,749 (927) (7,500)
--------- -------- -------- ---------
Net Cash Used in Investing Activities... (240,571) (84,159) (73,840) (374,757)
--------- -------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Sale of Common Stock...... 260,703 -- 32,900 356,612
Common Stock Underwriting Discounts/
Offering Costs ........................ (15,190) -- (7,296) (27,065)
Issuance of Common Stock................. -- -- -- 2
Redemption of Common Stock............... -- -- -- (102)
Proceeds from Sale of Preferred Stock.... -- 41,250 -- --
Preferred Stock Underwriting Discounts/
Offering Costs ........................ (408) (4,123) -- --
Contributions............................ -- -- -- 18,796
Distributions............................ (47,991) (38,592) (9,648) (29,011)
Preferred Stock Dividends................ (4,387) -- -- --
Proceeds from Mortgage Loans Payable..... 36,750 52,850 -- 381,743
Repayments on Mortgage Loans Payable..... (935) (6,000) -- (268,935)
Proceeds from Acquisition Facilities
Payable ............................... 103,523 83,943 48,700 5,000
Repayments on Acquisition Facilities
Payable ............................... (147,357) (84,408) (5,000) --
Proceeds from Construction Loans
Payable ............................... -- 4,873 -- --
Repayment of Construction Loans Payable.. (4,873) -- -- --
Repayment of Notes Payable............... -- -- -- (34,553)
Cost of Debt Issuance and Interest Rate
Protection Agreement .................. (2,799) (4,373) (2,181) (28,335)
Prepayment Fee........................... (359) -- -- --
--------- -------- ------- --------
Net Cash Provided by Financing
Activities ............................ 176,677 45,420 57,475 374,152
--------- -------- ------- --------
Net Increase (Decrease) in Cash and Cash
Equivalents ........................... (1,273) (198) 1,668 4,421
Cash and Cash Equivalents, Beginning of
Period ................................ 8,919 9,117 7,449 3,028
--------- -------- ------- --------
Cash and Cash Equivalents, End of
Period ................................ $ 7,646 $ 8,919 $ 9,117 $ 7,449
======== ======== ======= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 42
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
1. ORGANIZATION AND FORMATION OF COMPANY
First Industrial Realty Trust, Inc. (the "Company") was organized in the
state of Maryland on August 10, 1993. The Company is a real estate investment
trust ("REIT") as defined in the Internal Revenue Code. The Company is
continuing and expanding the Midwestern industrial property business of The
Shidler Group and the properties and businesses contributed by three other
contributing businesses (the "Contributing Businesses"). The Company's
operations are conducted primarily through First Industrial, L.P. (the
"Operating Partnership") of which the Company is the sole general partner. As
of December 31, 1996, the Company owned 379 in-service properties located in 14
states, containing an aggregate of approximately 32.7 million square feet
(unaudited) of gross leasable area. Of the 379 properties owned by the
Company, 195 are held by First Industrial Financing Partnership, L.P. (the
"Financing Partnership"), 141 are held by the Operating Partnership or the
Operating Partnership's Pennsylvania subsidiaries, 19 are held by First
Industrial Securities, L.P. (the "Securities Partnership"), 23 are held by
First Industrial Mortgage Partnership, L.P. (the "Mortgage Partnership") and 1
is held by First Industrial Indianapolis, L.P. (the "Indianapolis
Partnership").
On June 30, 1994, the Company completed its initial public offering of
15,175,000 shares of $.01 par value common stock (the "Initial Offering") and,
in July 1994, issued an additional 1,400,000 shares pursuant to an
over-allotment option. The price per share in the Initial Offering and the
over-allotment option was $23.50, resulting in gross offering proceeds of
approximately $389,512. Net of underwriters' discount and total offering
expenses, the Company received approximately $355,217 in proceeds from the
Initial Offering and the over-allotment option. On June 30, 1994, the Company
(through the Financing Partnership) borrowed $300,000 (the "1994 Mortgage
Loan") from an institutional lender. The net proceeds from the Initial
Offering and the 1994 Mortgage Loan were used primarily to acquire properties,
repay indebtedness and pay certain fees and expenses. The Company began
operations on July 1, 1994.
2. BASIS OF PRESENTATION
First Industrial Realty Trust, Inc. is the sole general partner of the
Operating Partnership, with an approximate 92.4% ownership interest at December
31, 1996. First Industrial Realty Trust, Inc. is the sole stockholder of First
Industrial Finance Corporation, First Industrial Securities Corporation, First
Industrial Mortgage Corporation and First Industrial Indianapolis Corporation,
which are the sole general partners of the Financing Partnership, the
Securities Partnership, the Mortgage Partnership and the Indianapolis
Partnership, respectively. The Operating Partnership is the sole limited
partner of the Financing Partnership, the Securities Partnership, the Mortgage
Partnership and the Indianapolis Partnership. The consolidated financial
statements of the Company at December 31, 1996 and 1995 and for the years ended
December 31, 1996 and 1995 and the six months ended December 31, 1994 include
the accounts and operations of the Company and its subsidiaries. All
significant intercompany transactions have been eliminated in consolidation.
The Statement of Operations, Statement of Changes in Stockholders' Equity
and Net Deficit and Statement of Cash Flows for the six months ended June 30,
1994 reflect the operations, equity and deficit, and cash flows of the
properties and business contributed by The Shidler Group and the properties and
businesses contributed by three other contributing businesses (the "Other
Contributing Businesses" and, together with the foregoing entities, the
"Contributing Businesses") at or prior to the consummation of the Initial
Offering.
F-7
<PAGE> 43
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
Purchase accounting has been applied when ownership interests in
properties were acquired for cash. The historical cost basis of properties has
been carried over when the Contributing Businesses' (defined below) ownership
interests were exchanged for Operating Partnership units and purchase
accounting has been used for all other properties that were acquired for
Operating Partnership units.
Minority interest in the Company at December 31, 1996 represents the
approximately 7.6% aggregate partnership interest in the Operating Partnership
held by the limited partners thereof.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In order to conform with generally accepted accounting principles,
management, in preparation of the Company's financial statements, is required
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as of
December 31, 1996 and 1995, and the reported amounts of revenues and expenses
for the years ended December 31, 1996 and 1995 and the six months ended
December 31, 1994 and June 30, 1994. Actual results could differ from those
estimates.
Revenue Recognition:
Rental income is recognized on a straight-line method under which
contractual rent increases are recognized evenly over the lease term. Tenant
recovery income includes payments from tenants for taxes, insurance and other
property operating expenses and is recognized as revenues in the same period
the related expenses are incurred by the Company.
The Company provides an allowance for doubtful accounts against the
portion of tenant accounts receivable which is estimated to be uncollectible.
Accounts receivable in the consolidated balance sheets are shown net of an
allowance for doubtful accounts of $600 and $500 as of December 31, 1996 and
December 31, 1995, respectively.
Investment in Real Estate and Depreciation:
Effective January 1, 1995, the Company adopted Financial Accounting
Standards Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." Real estate assets are
carried at the lower of depreciated cost or fair value as determined by the
Company. The Company reviews its properties on a quarterly basis for
impairment and provides a provision if impairments are determined. First, to
determine if impairment may exist, the Company reviews its properties and
identifies those which have had either an event of change or event of
circumstances warranting further assessment of recoverability. Then, the
Company estimates the fair value of those properties on an individual basis by
capitalizing the expected net operating income and discounting the expected
cash flows of the properties. Such amounts are then compared to the property's
depreciated cost to determine whether an impairment exists.
F-8
<PAGE> 44
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
Interest expense, real estate taxes and other directly related expenses
incurred during construction periods are capitalized and depreciated commencing
with the date placed in service, on the same basis as the related assets.
Depreciation expense is computed using the straight-line method based on the
following useful lives:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings and Improvements............... 31.5 to 40
Land Improvements........................ 15
Furniture, Fixtures and Equipment........ 5 to 10
</TABLE>
Construction expenditures for tenant improvements and leasing commissions
are capitalized and amortized over the terms of each specific lease.
Maintenance and repairs are charged to expense when incurred. Expenditures for
improvements are capitalized.
When assets are sold or retired, their costs and related accumulated
depreciation are removed from the accounts with the resulting gains or losses
reflected in net income or loss.
Cash and Cash Equivalents:
Cash and Cash Equivalents include all cash and liquid investments with an
initial maturity of three months or less. The carrying amount approximates
fair value due to the short maturity of these investments.
Income Taxes:
Prior to the consummation of the Initial Offering, the Contributing
Businesses' operations were conducted through a number of partnerships. In
accordance with partnership taxation, each of the partners are responsible for
reporting their shares of taxable income or loss. Accordingly, no provision
has been made in the accompanying combined financial statements for federal,
state or local income taxes for periods prior to the consummation of the
Initial Offering.
The Company has elected to be taxed as a REIT under Sections 856 through
860 of the Internal Revenue Code of 1986, as amended (the "Code"). As a
result, the Company generally is not subject to federal income taxation at the
corporate level to the extent it distributes annually at least 95% of its REIT
taxable income, as defined in the Code, to its stockholders and satisfies
certain other requirements. Accordingly, no provision has been made for
federal income taxes in the accompanying consolidated financial statements.
The Company and certain of its subsidiaries are subject to certain state
and local income, excise and franchise taxes. The provision for such state and
local taxes has been reflected in general and administrative expense in the
consolidated statement of operations and has not been separately stated due to
its insignificance.
For federal income tax purposes, the cash distributions paid to
stockholders may be characterized as ordinary income, return of capital
(generally non-taxable) or capital gains. Distributions paid for the year
ended December 31, 1996 totaling $50.4 million are characterized 65.97% ($1.30
per share) as ordinary income and 34.03% ($.67 per share) as return of capital.
Distributions paid for the year ended December 31, 1995 totaling $36.0 million
are characterized 40.17% ($.765 per share) as ordinary income and 59.83%
($1.140 per share) as return of capital. Distributions paid for the six months
ended December 31, 1994 totaling $17.8 million are characterized 60.03% ($.567
per share) as ordinary income and 39.97% ($.378 per share) as return of
capital.
F-9
<PAGE> 45
FIRST INDUSTRIAL REALTY TRUST,INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
Fair Value of Financial Instruments:
The Company's financial instruments include short-term investments, tenant
accounts receivable, accounts payable, other accrued expenses, mortgage loans
payable, acquisition facilities payable and promissory notes payable. The fair
values of these financial instruments were not materially different from their
carrying or contract values. The Company's financial instruments also include
interest rate protection agreements (see Note 4).
Derivative Financial Instruments:
The Company's interest rate protection agreements (the "Agreements")
are used to hedge the interest rate on the Company's $300 million mortgage
loan. As such, receipts or payments resulting from the Agreements are
recognized as adjustments to interest expense. The credit risks associated
with the Agreements are controlled through the evaluation and monitoring of
the creditworthiness of the counterparty. In the event that the counterparty
fails to meet the terms of the Agreements, the Company's exposure is limited to
the current value of the interest rate differential, not the notional amount,
and the Company's carrying value of the Agreements on the balance sheet. The
Agreements have been executed with a creditworthy financial institution. As
such, the Company considers the risk of nonperformance to be remote. In the
event that the Company terminates the Agreements, the Company would recognize
a gain (loss) from the disposition of Agreements equal to the amount of cash
received or paid at termination less the carrying value of the Agreements on
the Company's balance sheet.
Deferred Financing Costs:
Deferred financing costs include fees and costs incurred to obtain
long-term financing. These fees and costs are being amortized over the terms of
the respective loans. Accumulated amortization of deferred financing costs was
$4,549 and $3,593 at December 31, 1996 and 1995, respectively. Unamortized
deferred financing fees are written-off when debt is retired before the
maturity date (see Note 11).
Earnings Per Common Share:
Net income per share amounts are based on the weighted average of common
and common stock equivalent (stock options) shares outstanding.
In February of 1997, the Financial Accounting Standards Board issued
Statement of Financial Standards No. 128 (FAS 128), "Earnings per Share,
"effective for financial statements issued after December 15, 1997. The
Company intends to adopt FAS 128 in fiscal year 1997. The Company has not
determined the financial impact of FAS 128.
F-10
<PAGE> 46
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
4. MORTGAGE LOANS, ACQUISITION FACILITIES, CONSTRUCTION LOANS AND PROMISSORY
NOTES PAYABLE
Mortgage Loans:
Concurrent with the Initial Offering, the Company (through the Financing
Partnership) borrowed $300,000 under a mortgage loan (the "1994 Mortgage
Loan"). The 1994 Mortgage Loan is cross-collateralized by, among other things,
first mortgage liens on the 195 properties owned by the Financing Partnership.
The 1994 Mortgage Loan will mature on June 30, 1999, unless extended by the
Company, subject to certain conditions, for an additional two-year period,
thereby maturing on June 30, 2001. The Operating Partnership has guaranteed
certain obligations of the Financing Partnership under the 1994 Mortgage Loan.
The 1994 Mortgage Loan provides for interest only payments which have been
effectively fixed at a rate of 6.97% through June 30, 2001 by certain interest
rate protection agreements. Interest payable related to the 1994 Mortgage Loan
was $1,750 and $1,905 at December 31, 1996 and 1995, respectively. Payments to
(from) the Company under the interest rate protection agreements during 1996,
1995 and 1994 totaled $(309), $584 and $51, respectively, which have been
included as a component of interest expense.
In conjunction with obtaining the 1994 Mortgage Loan, the Company
purchased an interest rate protection agreement which effectively limited the
interest rate during the initial five-year term of the 1994 Mortgage Loan to
7.2% per annum. Prior to the subsequent replacement of this interest rate
protection agreement, its cost of $18,450 had been capitalized and was being
amortized over the five-year term of the agreement.
Effective July 1, 1995, the Company replaced such interest rate protection
agreement with new interest rate protection agreements and entered into
interest rate swap agreements with a notional value of $300 million, which
together effectively fix the annual interest rate on the 1994 Mortgage Loan at
6.97% for six years through June 30, 2001. As a result of the replacement of
the interest rate protection agreement, the Company incurred a one-time loss of
$6.4 million, of which $6.3 million represents the difference between the
unamortized cost of the replaced interest rate protection agreement and the
cost of the new agreements. In the event that the Company does not exercise
the two-year option to extend the 1994 Mortgage Loan, the risk associated with
the interest rate protection agreements is that the Company would be obligated
to perform its obligations under the terms or would either pay or receive cash
to terminate the agreement. In either event, the impact of such transaction
would be reflected in the Company's financial statements. The costs of the new
interest rate protection agreements have been capitalized and are being
amortized over the respective terms of the agreements. Under the terms of the
new interest rate protection agreements, certain collateral may be required to
be set aside for amounts that could become due under the agreements. At
December 31, 1996 and 1995, cash collateral of $0 and $2,557, respectively, was
included in restricted cash. Accumulated amortization on the interest rate
protection agreements was $223 and $60 as of December 31, 1996 and 1995,
respectively.
At December 31, 1996, the fair market value of the interest rate
protection agreements was approximately $8.0 million, which was less than the
$8.4 million net book value by approximately $.4 million. The fair market
value of the interest rate protection agreements was $10.9 million (unaudited)
on March 13, 1997, which exceeded the $8.4 million net book value on December
31, 1996 by approximately $2.5 million (unaudited). The fair market value was
determined by a third party evaluation and is based on estimated discounted
future cash flows.
F-11
<PAGE> 47
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
Under the terms of the 1994 Mortgage Loan, certain cash reserves are
required to be and have been set aside for payment of tenant improvements,
capital expenditures, interest, real estate taxes, insurance and potential
environmental costs. The amount of cash reserves for payment of potential
environmental costs was determined by the lender and was established at the
closing of the 1994 Mortgage Loan. The amounts included in the cash reserves
relating to payments of tenant improvements, capital expenditures, interest,
real estate taxes and insurance were determined by the lender and approximate
the next periodic payment of such items. At December 31, 1996 and 1995, these
reserves totaled $10,223 and $8,552, respectively, and are included in
Restricted Cash. Such cash reserves were invested in a money market fund at
December 31, 1996. The maturity of these investments is one day;accordingly,
cost approximates fair market value.
On December 29, 1995, the Mortgage Partnership borrowed $40,200 under a
mortgage loan (the "1995 Mortgage Loan"). In the first quarter of 1996, the
Company made a one time paydown of $200 on the 1995 Mortgage Loan decreasing
the outstanding balance to $40,000. The 1995 Mortgage Loan matures on January
11, 2026 and provides for interest only payments through January 11, 1998,
after which monthly principal and interest payments are required based on a
28-year amortization schedule. The interest rate under the 1995 Mortgage Loan
is fixed at 7.22% per annum through January 11, 2003. After January 11, 2003,
the interest rate adjusts through a predetermined formula based on the
applicable Treasury rate. Interest payable related to the 1995 Mortgage Loan
was $168 and $24 at December 31, 1996 and 1995, respectively. The 1995
Mortgage Loan is collateralized by 23 properties held by the Mortgage
Partnership.
Under the terms of the 1995 Mortgage Loan, certain cash reserves are
required to be and have been set aside for payments of security deposits,
capital expenditures, interest, real estate taxes and insurance. The amount of
cash reserves segregated for security deposits is adjusted as tenants turn
over. The amounts included in the cash reserves relating to payments of capital
expenditures, interest, real estate taxes and insurance were determined by the
lender and approximate the next periodic payment of such items. At December
31, 1996 and 1995, these reserves totaled $1,614 and $388, respectively, and
are included in Restricted Cash. Such cash reserves were invested in a money
market fund at December 31, 1996. The maturity of these investments is one
day;accordingly, cost approximates fair market value.
On December 14, 1995, the Company, through First Industrial Harrisburg,
L.P., entered into a $6,650 mortgage loan (the "Harrisburg Mortgage Loan") that
is collateralized by three properties in Harrisburg, Pennsylvania. The
Harrisburg Mortgage Loan bears interest at a rate based on LIBOR plus 1.5% or
prime plus 2.25%, at the Company's option, and provides for interest only
payments through May 31, 1996, with monthly principal and interest payments
required subsequently based on a 26.5-year amortization schedule. At December
31, 1996, the interest rate was 6.875%. The Harrisburg Mortgage Loan will
mature on December 15, 2000. The outstanding mortgage loan balance at December
31, 1996 and 1995 was approximately $6,504 and $6,650, respectively. Interest
payable related to the Harrisburg Mortgage Loan was $39 and $0 at December 31,
1996 and 1995, respectively.
On March 20, 1996, the Company, through the Operating Partnership, and the
Indianapolis Partnership, entered into a $36,750 mortgage loan (the "CIGNA
Loan") that is collateralized by seven properties in Indianapolis, Indiana and
three properties in Cincinnati, Ohio. The CIGNA Loan bears interest at a fixed
interest rate of 7.5% and provides for monthly principal and interest payments
based on a 25-year amortization schedule. The CIGNA Loan will mature on April
1, 2003. The outstanding mortgage loan balance at December 31, 1996 was
approximately $36,363. Interest payable related to the CIGNA Loan was $0 at
December 31, 1996.
F-12
<PAGE> 48
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
On March 20, 1996, the Company, through the Operating Partnership assumed
a $6,424 mortgage loan and a $2,993 mortgage loan (together, the "Assumed
Loans") that are collateralized by 13 properties in Indianapolis, Indiana and
one property in Indianapolis, Indiana, respectively. The Assumed Loans bear
interest at a fixed rate of 9.25% and provide for monthly principal and
interest payments based on a 16.75-year amortization schedule. The Assumed
Loans will mature on January 1, 2013. At December 31, 1996, the outstanding
mortgage loan balances under the $6,424 mortgage loan and $2,993 mortgage loan
were approximately $6,286 and $2,929, respectively. Interest payable related to
the Assumed Loans was $0 at December 31, 1996.
Acquisition Facilities:
In connection with the Initial Offering, the Operating Partnership entered
into a three-year, $100,000 collateralized revolving credit facility (the "1994
Acquisition Facility"). During the quarter ended June 30, 1995, the capacity
of the 1994 Acquisition Facility was increased to $150,000. The Operating
Partnership could borrow under the facility to finance the acquisition of
additional properties and for other corporate purposes, including to obtain
additional working capital. The Company had guaranteed repayment of the 1994
Acquisition Facility. Borrowings under the 1994 Acquisition Facility bore
interest at a floating rate equal to LIBOR plus 2.0% or a "Corporate Base Rate"
plus .5%, at the Company's election. Effective July 12, 1996, the lenders
reduced the interest rate to LIBOR plus 1.75%. Under the 1994 Acquisition
Facility, LIBOR contracts were entered into by the Company as draws were made.
Interest payable related to the 1994 Acquisition Facility was $488 at December
31, 1995. In December 1996, the Operating Partnership terminated the 1994
Acquisition Facility (see Note 11) and entered into a $200 million unsecured
revolving credit facility (the "1996 Unsecured Acquisition Facility") which
initially bears interest at LIBOR plus 1.10% or a "Corporate Base Rate" plus
.5% and provides for interest only payments until the maturity date. At
December 31, 1996, borrowings under the 1996 Acquisition Facility bore interest
at a weighted average interest rate of 8.25%. The borrowings under the 1996
Unsecured Acquisition Facility were converted to an interest rate of 6.6% on
January 7, 1997. The Operating Partnership may borrow under the facility to
finance the acquisition of additional properties and for other corporate
purposes, including to obtain additional working capital. The 1996 Unsecured
Acquisition Facility matures in April 2000. Borrowings under the 1996
Unsecured Acquisition Facility at December 31, 1996 were $4,400. Interest
payable related to the 1996 Unsecured Acquisition Facility was $3 at December
31, 1996. The 1996 Unsecured Acquisition Facility contains certain financial
covenants relating to debt service coverage, market value net worth, dividend
payout ratio and total funded indebtedness.
In December 1995, the Operating Partnership entered into a $24,219
collateralized revolving credit facility (the "1995 Acquisition Facility"). The
1995 Acquisition Facility was paid off in full and retired in February 1996
with a portion of the proceeds of the February 1996 Equity Offering. The 1995
Acquisition Facility was collateralized by six properties held by the Operating
Partnership and bore interest at a floating rate of LIBOR plus 2.45%. As of
December 31, 1995, borrowings under the 1995 Acquisition Facility were $11,294
and bore interest at a rate of 8.3%. Interest payable related to the 1995
Acquisition Facility was $27 at December 31, 1995. The Operating Partnership
terminated the 1995 Acquisition Facility in February 1996 (See Note 11).
In May 1996, the Operating Partnership entered into a $10,000
collateralized revolving credit facility (the "1996 Credit Line"). The 1996
Credit Line was collateralized by three properties held by the Operating
Partnership. The Company had guaranteed repayment of the 1996 Credit Line.
Borrowings under the 1996 Credit Line bore interest at a floating rate from
LIBOR plus 2.45% to LIBOR plus 2.75%, depending on the term of the interest
rate option. The 1996 Credit Line would have matured on December 14, 1998.
The Operating Partnership terminated the 1996 Credit Line in November 1996 (See
Note 11).
F-13
<PAGE> 49
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
In September 1996, the Operating Partnership entered into a $40,000
revolving credit facility ("1996 Acquisition Facility"). The Operating
Partnership could have borrowed under the facility to finance the acquisition
of additional properties and for other corporate purposes, including to obtain
additional working capital. The Company had guaranteed the repayment of the
1996 Acquisition Facility. The 1996 Acquisition Facility would have matured on
March 31, 1997. Borrowings under the 1996 Acquisition Facility bore interest
at a floating rate equal to LIBOR plus 2.0% or a "Corporate Base Rate" plus
.5%, at the Company's election. The Operating Partnership terminated the 1996
Acquisition Facility in November 1996 (See Note 11).
Construction Loans:
In 1995, the Operating Partnership entered into two construction loans
(together the "Construction Loans") with commercial banks providing total
funding commitments of $5,860. Both construction loans were paid off in full
and retired in February 1996 with a portion of the proceeds of the February
1996 Equity Offering (See Note 11). At December 31, 1995, the Operating
Partnership had borrowed $4,873 under such construction loans which were
collateralized by two properties held by the Operating Partnership. Such
borrowings bore interest at LIBOR plus 2.0% and provided for interest only
payments.
Promissory Notes Payable:
On September 30, 1996, the Company, through the Operating Partnership,
entered into a $6,489 promissory note and a $3,430 promissory note
(collectively referred to as "Promissory Notes") as partial consideration for
the purchase of two properties in Columbus, Ohio. The $6,489 promissory note
was collateralized by a letter of credit pledged by the Company in the amount
of $2,715. The $3,430 promissory note was collateralized by a letter of credit
pledged by the Company in the amount of $967. Both promissory notes bore
interest at 8% and matured on January 6, 1997, at which time they were repaid
and the letters of credit were released. Interest payable related to both
promissory notes was $68 at December 31, 1996.
The following is a schedule of maturities of the mortgage loans,
acquisition facilities, and promissory notes for the next five years ending
December 31, and thereafter:
<TABLE>
<CAPTION>
Amount
------
<C> <C>
1997 $ 10,914
1998 1,563
1999 301,710
2000 11,728
2001 1,683
Thereafter 78,803
--------
Total $406,401
========
</TABLE>
The 1994 Mortgage Loan matures in 1999 but may be extended at the
Company's option, subject to certain conditions, for an additional two years,
thereby maturing on June 30, 2001.
F-14
<PAGE> 50
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
5. STOCKHOLDERS' EQUITY
Common Stock:
On February 2, 1996, the Company issued 5,175,000 shares of $.01 par value
common stock (the "February 1996 Equity Offering") inclusive of the
underwriters' over-allotment option. The price per share in the February 1996
Equity Offering was $22, resulting in gross offering proceeds of $113,850. Net
of underwriters' discount and total offering expenses, the Company received
approximately $106,343. The net proceeds from the February 1996 Equity
Offering were used to pay down the 1994 Acquisition Facility, the 1995
Acquisition Facility and the Construction Loans and fund properties
subsequently acquired.
On October 25, 1996, the Company issued 5,750,000 shares of $.01 par value
common stock (the "October 1996 Equity Offering") inclusive of the
underwriters' over-allotment option. The price per share in the October 1996
Equity Offering was $25.50, resulting in gross offering proceeds of $146,625.
Net of underwriters' discount and total offering expenses, the Company received
approximately $137,697. The net proceeds from the October 1996 Equity Offering
were used to pay down the 1994 Acquisition Facility and the 1996 Acquisition
Facility and fund properties subsequently acquired.
Preferred Stock:
In 1995, the Company issued 1.65 million shares of 9.5% Series A
Cumulative Preferred Stock (the "Series A Preferred Stock") at a purchase price
of $25 per share, and used the $41,250 of gross proceeds to pay down debt
outstanding under the 1994 Acquisition Facility. Dividends on the Series A
Preferred Stock are cumulative from the date of initial issuance and are
payable quarterly. The payment of dividends and amounts upon liquidation,
dissolution or winding-up ranks senior to the payments on the Company's common
stock. The Series A Preferred Stock is not redeemable prior to November 17,
2000. On or after November 17, 2000, the Series A Preferred Stock is
redeemable for cash at the option of the Company, in whole or in part, at
$25.00 per share, or $41,250 in the aggregate, plus dividends accrued and
unpaid to the redemption date. The Series A Preferred Stock has no stated
maturity and is not convertible into any other securities of the Company.
The payment of dividends on, and payments on liquidation or redemption of,
the Series A Preferred Stock are guaranteed by the Securities Partnership (the
"Guarantor") pursuant to a Guarantee and Payment Agreement (the "Guarantee
Agreement"). The Series A Preferred Stock is the only class of securities of
the Company which has the benefit of such guarantee. To the extent the Company
fails to make any payment of dividend or pay any portion of the liquidation
preference on or the redemption price of any shares of Series A Preferred
Stock, the Guarantor will be obligated to pay an amount to each holder of
Series A Preferred Stock equal to any such shortfall.
6. SALES OF REAL ESTATE
In 1996, the Operating Partnership sold a property located in suburban
Detroit, Michigan, three properties located in Huntsville, Alabama, one
property located in Grand Rapids, Michigan, and one property located in
Atlanta, Georgia. Gross proceeds from these sales were approximately $15.0
million. The gain on sales was approximately $4.3 million.
F-15
<PAGE> 51
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
7. RELATED PARTY TRANSACTIONS
The Company leases office space in Chicago, Illinois from an affiliate of
The Shidler Group at an aggregate annual cost of approximately $131.
On December 5, 1994, the Company purchased for approximately $.9 million,
five acres of land from a partnership in which an officer and director of the
Company owns approximately a 2.5% general partner interest.
The Company often obtains title insurance coverage for its properties
from an entity which an Independent Director of the Company became the
President, Chief Executive Officer and a Director in 1996.
8. EMPLOYEE BENEFIT PLANS
The Company maintains a Stock Incentive Plan which is administered by the
Compensation Committee of the Board of Directors. Only officers and other key
employees of the Company and its affiliates generally are eligible to
participate in the Stock Incentive Plan. However, independent Directors of the
Company receive automatic annual grants of options to purchase 7,500 shares at
a per share exercise price equal to the fair market value of a share on the
date of grant.
The Stock Incentive Plan authorizes (i) the grant of stock options that
qualify as incentive stock options under Section 422 of the Code, (ii) the
grant of stock options that do not so qualify, (iii) restricted stock awards,
(iv) performance share awards and (v) dividend equivalent rights. The exercise
price of stock options will be determined by the Compensation Committee, but
may not be less than 100% of the fair market value of the shares on the date of
grant. Special provisions apply to awards granted under the Stock Incentive
Plan in the event of a change in control in the Company. The Company has
reserved 1,200,000 shares for issuance under the Stock Incentive Plan. Options
covering 90,500 shares are available for future grants. The outstanding stock
options generally vest over one to two year periods and have lives of ten
years. Stock option transactions are summarized as follows:
<TABLE>
<CAPTION>
WEIGHTED EXERCISE
AVERAGE OPTION PRICE
SHARES PRICE PER SHARE PER SHARE
-------------------- --------------- ---------
<C> <C> <C> <C>
Granted at Initial Offering 637,500 $23.50 $23.50
----------
Outstanding at December 31, 1994 637,500 $23.50 $23.50
Granted 274,500 $19.98 $18.25-$20.25
Expired or Terminated (54,000) $23.50 $23.50
----------
Outstanding at December 31, 1995 858,000 $22.37 $18.25-$23.50
Granted 263,500 $22.94 $22.75-$25.63
Exercised (16,000) $23.03 $22.75-$23.50
Expired or Terminated (12,000) $23.50 $23.50
----------
Outstanding at December 31, 1996 1,093,500 $22.49 $18.25-$25.63
==========
</TABLE>
F-16
<PAGE> 52
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
The following table summarizes information currently outstanding and
exercisable options:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------------------------- -------------------------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
RANGE OF EXERCISE PRICE OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE EXERCISABLE EXERCISE PRICE
- ----------------------- ------------------ -------------------- -------------------- ------------------ ----------------
<C> <C> <C> <C> <C> <C>
$18.25-$25.63 1,093,500 8.22 $22.49 830,000 $22.35
</TABLE>
The Company applies Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," in accounting for its Stock
Incentive Plan. Accordingly, no compensation expense has been recognized in
the consolidated statements of operations. Had compensation cost for the
Company's Stock Incentive Plan been determined based upon the fair value at the
grant date for awards under the Stock Incentive Plan consistent with the
methodology prescribed under Statement of Financial Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," net income and earnings per share
would have been the pro forma amounts indicated in the table below (in
millions, except per share amounts):
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
--------------------
1996 1995
--------- ---------
<C> <C> <C>
Net Income Available to Common Stockholders - as reported...................... 31,745 11,881
Net Income Available to Common Stockholders - pro forma........................ 31,239 11,881
Net Income Available to Common Stockholders per Share
- - as reported.................................................................. 1.28 0.63
Net Income Available to Common Stockholders per Share
- - pro forma.................................................................... 1.26 0.63
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions:
Expected dividend yield........................................................ 7.16% 7.16%
Expected stock price volatility................................................ 18.12% 18.12%
Risk-free interest rate........................................................ 6.81% 6.05%
Expected life of options....................................................... 7.37 5.51
</TABLE>
The weighted average fair value of options granted during 1996 and 1995 is
$2.43 and $1.84 per option, respectively.
F-17
<PAGE> 53
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
In September 1994, the Board of Directors approved and the Company adopted
a 401(k)/Profit Sharing Plan. Under the Company's 401(k)/Profit Sharing Plan,
all eligible employees may participate by making voluntary contributions. The
Company may make, but is not required to make, matching contributions. For the
years ended December 31, 1996 and 1995, the Company did not make any matching
contributions. In March 1996, the Board of Directors approved and the Company
adopted a Deferred Income Plan (the "Plan"). Under the Plan, 138,500 unit
awards were granted, providing the recipients with deferred income benefits
which vest in three equal annual installments. The expense related to these
deferred income benefits is included in general and administrative expenses in
the consolidated statements of operations. In the first quarter of 1997,
approximately $141 was paid to the recipients under the Plan.
9. FUTURE RENTAL REVENUES
The Company's properties are leased to tenants under net and semi-net
operating leases. Minimum lease payments receivable, excluding tenant
reimbursements of expenses, under noncancelable operating leases in effect as
of December 31, 1996 are approximately as follows:
<TABLE>
<C> <C>
1997 $ 116,502
1998 98,892
1999 78,776
2000 56,853
2001 37,913
Thereafter 97,931
----------
Total $ 486,867
==========
</TABLE>
F-18
<PAGE> 54
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
10. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
Supplemental disclosure of cash flow information:
<TABLE>
<CAPTION>
The Company
and
Contributing
The Company Businesses
---------------------------------------------- ------------
Six Months Six Months
Year Ended Year Ended Ended Ended
December 31, December 31, December 31, June 30,
1996 1995 1994 1994
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Interest paid, net of
capitalized interest............... $ 29,309 $ 28,248 $ 8,598 $ 13,697
======== ======== ======= ========
Interest capitalized................. $ 501 $ 324 $ 50 $ --
======== ======== ======= ========
Supplemental schedule of noncash investing and financing activities:
Distribution payable on
common stock/units................. $ 16,281 $ 9,954 $ 9,648 $ --
======== ======== ======= ========
Dividend payable on
preferred stock.................... $ -- $ 468 $ -- $ --
======== ======== ======= ========
Exchange of units for common shares:
Minority interest.................. $ (943) $ (1,005) $ -- $ --
Common stock....................... -- 1 -- --
Additional paid in capital......... 943 1,004 -- --
-------- -------- ------- -------
$ -- $ -- $ -- $ --
======== ======== ======= ========
Sale of interest rate
protection agreement............... $ -- $(12,852) $ -- $ --
Purchase of interest rate
protection and swap
agreements......................... -- 12,852 -- --
-------- -------- ------- -------
$ -- $ -- $ -- $ --
======== ======== ======= ========
In conjunction with the property acquisitions, the following assets and liabilities were assumed:
Purchase of real estate.............. $252,991 $ 63,855 $66,230 $372,642
Mortgage loans....................... (9,417) -- -- --
Promissory notes..................... (9,919) -- -- --
Operating partnership units.......... (23,863) -- -- --
Accounts receivable.................. -- 153 80 2,453
Accounts payable and
accrued expenses................... (2,626) (1,115) (991) (4,642)
Acquisitions of interests in
properties......................... -- -- -- 4,281)
-------- -------- ------- -------
Acquisition of real estate........... $207,166 $ 62,893 $65,319 $366,172
======== ======== ======= ========
</TABLE>
11. EXTRAORDINARY ITEMS
Upon consummation of the Initial Offering, certain Contributing
Businesses' loans were paid off and the related unamortized deferred financing
fees totaling $1,449 were written off. The write-off is shown as an
extraordinary loss in the combined statement of operations of the Contributing
Businesses for the six months ended June 30, 1994.
F-19
<PAGE> 55
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
In 1996, the Company terminated the 1994 Acquisition Facility, the 1995
Acquisition Facility, the 1996 Acquisition Facility, the Construction Loans and
the 1996 Credit Line before their contractual maturity date. The resulting
write-off of $2,273 comprised of unamortized deferred financing costs and
prepayment fee incurred to retire the above mentioned loans and is shown as an
extraordinary loss in the consolidated statement of operations for the year
ended December 31, 1996.
12. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Company is involved in legal actions
arising from the ownership of its properties. In management's opinion, the
liabilities, if any, that may ultimately result from such legal actions are not
expected to have a materially adverse effect on the consolidated financial
position, operations or liquidity of the Company.
Twenty-five properties have leases granting the tenants options to
purchase the property. Such options are exercisable at various times and at
appraised fair market value or at a fixed purchase price generally in excess of
the Company's purchase price. The Company has no notice of any exercise of any
tenant purchase option.
The Company has committed to the construction of two light industrial and
five bulk warehouse properties totaling approximately 1.0 million square feet
(unaudited). The estimated total construction costs are approximately $27.4
million (unaudited). The Company is not acting as the general contractor for
these construction projects.
13. SUBSEQUENT EVENTS (UNAUDITED)
On January 9, 1997, the Company purchased a .5 million square foot bulk
warehouse located in Indianapolis, Indiana for approximately $7.1 million.
On January 31, 1997, the Company purchased 10 bulk warehouses and 29 light
industrial properties located in Long Island, New York and northern New Jersey
totaling 2.7 million square feet for approximately $138.8 million.
On February 20, 1997, the Company purchased a 58,746 square foot light
industrial property in Dayton, Ohio. The purchase price for the property was
approximately $1.5 million.
On March 4, 1997, the Company declared a dividend of $.505 per share on
its common stock payable on April 21, 1997 to common shareholders of record on
March 31, 1997. It also declared a dividend of $.59375 per share on its Series
A Preferred Shares payable on March 31, 1997 to shareholders of record on March
14, 1997.
On March 17, 1997, the Company purchased a 312,500 square foot bulk
warehouse in York, Pennsylvania for approximately $8.4 million.
On March 21, 1997, the Company purchased a 179,400 square foot bulk
warehouse in Taylor, Michigan for approximately $5.1 million.
F-20
<PAGE> 56
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
On March 24, 1997, the Company purchased a 162,500 square foot light
industrial warehouse in Mechanicsburg, Pennsylvania. The purchase price for
the property was approximately $3.4 million.
14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues $30,645 $34,779 $36,175 $38,456
Income Before Gain on Sales of Properties, Minority
Interest and Extraordinary Item........................... 6,986 8,558 9,419 11,561
Gain on Sales of Properties............................... --- 4,320 --- 24
Income Before Minority Interest and Extraordinary Item. 6,986 12,878 9,419 11,585
Minority Interest......................................... (404) (1,001) (759) (767)
Income Before Extraordinary Item.......................... 6,582 11,877 8,660 10,818
Extraordinary Item........................................ (821) --- --- (1,452)
Net Income................................................ 5,761 11,877 8,660 9,366
Preferred Stock Dividends................................. (980) (980) (980) (979)
---------------- --------------- ---------------- ----------------
Net Income Available to Common Stockholders............... $ 4,781 $10,897 $ 7,680 $ 8,387
================ =============== ================ ================
Earnings Per Share:
Net Income Available to Common Stockholders Before
Extraordinary Item per Weighted Average Common
Shares Outstanding.................................... $ 0.25 $ 0.45 $ 0.32 $ 0.35
================ =============== ================ ================
Net Income Available to Common Stockholders per
Weighted Average Common Share Outstanding............. $ 0.21 $ 0.45 $ 0.32 $ 0.30
================ =============== ================ ================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
---------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues.................................................. $25,347 $26,126 $27,063 $27,950
Income Before Minority Interest........................... 4,517 4,353 (1,000) 5,476
Minority Interest......................................... (340) (328) 75 (404)
Net Income................................................ 4,177 4,025 (925) 5,072
Preferred Stock Dividends................................. --- --- --- (468)
---------------- --------------- ---------------- ----------------
Net Income Available to Common Stockholders............... $ 4,177 $ 4,025 $ (925) $ 4,604
================ =============== ================ ================
Earnings Per Share:
Net Income Available to Common Stockholders
per Weighted Average Common
Share Outstanding..................................... $ 0.22 $ 0.21 $ (0.05) $ 0.24
================ =============== ================ ================
</TABLE>
F-21
<PAGE> 57
FIRST INDUSTRIAL REALTY TRUST, INC.
AND CONTRIBUTING BUSINESSES
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
15. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following Pro Forma Condensed Statements of Operations for the
years ended December 31, 1996 and 1995 are presented as if the acquisition of
112 properties between January 1, 1995 and December 31, 1996 and the February
1996 Equity Offering and the October 1996 Equity Offering had occurred at
January 1, 1995, and therefore include pro forma information. The pro forma
information is based upon historical information and does not purport to present
what actual results would have been had such transactions, in fact, occurred at
January 1, 1995, or to project results for any future period.
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
--------------------------------------------------
December 31, 1996 December 31, 1995
------------------------ ------------------------
<S> <C> <C>
Total Revenues...................................... $155,364 $141,660
Property Expenses................................... (43,398) (39,214)
General and Administrative Expense.................. (4,018) (3,135)
Interest Expense.................................... (29,521) (32,092)
Depreciation and Amortization....................... (33,598) (32,064)
Disposition of Interest Rate Protection Agreement... --- (6,410)
--------- ---------
Income Before Gain on Sales of Properties,
Minority Interest and Extraordinary Loss........... 44,829 28,745
Gain on Sales of Properties......................... 4,344 ---
--------- ----------
Income Before Minority Interest and
Extraordinary Loss................................. 49,173 28,745
Income Allocated to Minority Interest............... (3,611) (2,280)
--------- ----------
Income Before Extraordinary Loss.................... 45,562 26,465
Extraordinary Loss.................................. (2,273) ---
--------- ----------
Net Income.......................................... 43,289 26,465
Preferred Stock Dividends........................... (3,919) (468)
--------- ----------
Net Income Available to Common Stockholders......... $ 39,370 $ 25,997
========= ==========
Net Income Available to Common Stockholders
Per Weighted Average Common Share Outstanding....... $ 1.32 $ 0.87
========= ==========
</TABLE>
F-22
<PAGE> 58
FIRST INDUSTRIAL REALTY TRUST, INC.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION
As Of December 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Costs
Capitalized
Initial Cost Subsequent to
Location (i) ---------------------- Acquisition
Building Address (City/State) Encumbra Land Buildings or Completion Land
- ---------------- ----------- -------- ---- --------- ------------- ----
<S> <C> <C> <C> <C> <C> <C>
ATLANTA
4250 River Green Parkway Duluth, GA (b) 264 1,522 $ 21 $ 264
3400 Corporate Parkway Duluth, GA (b) 281 1,621 99 281
3450 Corporate Parkway Duluth, GA (b) 506 2,904 18 506
3500 Corporate Parkway Duluth, GA (b) 260 1,500 16 260
3425 Corporate Parkway Duluth, GA (b) 385 2,212 21 385
1650 GA Highway 155 Atlanta, GA (a) 788 4,544 12 788
415 Industrial Park Road Atlanta, GA (a) 544 3,140 51 544
434 Industrial Park Road Atlanta, GA (a) 234 1,365 2 234
435 Industrial Park Road Atlanta, GA (a) 281 1,638 9 281
14101 Industrial Park Bou Atlanta, GA (a) 285 1,658 10 285
801-804 Blacklawn Road Atlanta, GA (a) 361 2,095 163 361
1665 Dogwood Drive Atlanta, GA (a) 635 3,662 11 635
1715 Dogwood Drive Atlanta, GA (a) 288 1,675 93 288
11235 Harland Drive Atlanta, GA (a) 125 739 12 125
700 Westlake Parkway Atlanta, GA 213 1,551 509 223
800 Westlake Parkway Atlanta, GA 450 2,645 350 479
900 Westlake Parkway Atlanta, GA 266 0 1 267
4050 Southmeadow Parkway Atlanta, GA 401 2,813 157 425
4051 Southmeadow Parkway Atlanta, GA 697 3,486 686 726
4071 Southmeadow Parkway Atlanta, GA 750 4,460 714 828
4081 Southmeadow Parkway Atlanta, GA 1,012 5,450 611 1,157
1875 Rockdale Industrial Atlanta, GA 386 2,264 30 386
1605 Indian Brook Way Gwinnett, GA 1,008 3,800 1,180 1,012
3312 N. Berkeley Lake Roa Duluth, GA 2,937 16,644 777 3,045
5015 Oakbrook Parkway Atlanta, GA 1,183 0 3,271 1,247
5570 Tulane Drive (f) Atlanta, GA 527 2,984 129 546
3495 Bankhead Highway (f) Atlanta, GA 983 5,568 148 1,003
755 Selig Drive Atlanta, GA 143 808 88 155
Central Pennsylvania
1214-a Freedom Road Cranberry Township, P (a) 31 994 702 205
401 Russell Drive Middletown, PA (a) 262 857 1,496 287
2700 Commerce Drive Harrisburg, PA (a) 196 997 671 206
2701 Commerce Drive Harrisburg, PA (a) 141 859 1,171 164
2780 Commerce Drive Harrisburg, PA (a) 113 743 1,033 209
5035 Ritter Road Harrisburg, PA (a) 360 1,442 2,400 442
5070 Ritter Road Harrisburg, PA (a) 395 2,322 1,874 506
6340 Flank Drive Harrisburg, PA (a) 361 2,363 2,350 563
6345 Flank Drive Harrisburg, PA (a) 293 2,297 2,740 587
6360 Flank Drive Harrisburg, PA (a) 218 2,286 838 359
6380 Flank Drive Harrisburg, PA (a) 109 1,317 756 234
6400 Flank Drive Harrisburg, PA (a) 153 1,312 1,256 281
6405 Flank Drive Harrisburg, PA (a) 221 1,462 1,159 313
100 Schantz Spring Road Allentown, PA (a) 532 3,144 47 533
794 Roble Road Allentown, PA (a) 915 5,391 39 915
7355 Williams Avenue Allentown, PA (a) 291 1,725 203 291
2600 Beltline Avenue Reading, PA (a) 341 2,038 207 356
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
--------------------------- Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ----------- ---- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
Atlanta
4250 River Green Parkway 1,543 87 1988 (k)
3400 Corporate Parkway 1,720 2,001 106 1987 (k)
3450 Corporate Parkway 2,922 3,428 165 1988 (k)
3500 Corporate Parkway 1,516 1,776 86 1991 (k)
3425 Corporate Parkway 2,233 2,618 128 1990 (k)
1650 GA Highway 155 4,556 5,344 286 1991 (k)
415 Industrial Park Road 3,191 3,735 199 1986 (k)
434 Industrial Park Road 1,367 1,601 86 1988 (k)
435 Industrial Park Road 1,647 1,928 106 1986 (k)
14101 Industrial Park Bou 1,668 1,953 107 1984 (k)
801-804 Blacklawn Road 2,258 2,619 168 1982 (k)
1665 Dogwood Drive 3,673 4,308 232 1973 (k)
1715 Dogwood Drive 1,768 2,056 138 1973 (k)
11235 Harland Drive 751 87 47 1988 (k)
700 Westlake Parkway 2,050 2,273 165 1990 (k)
800 Westlake Parkway 2,966 3,445 204 1991 (k)
900 Westlake Parkway 0 26 0 (k)
4050 Southmeadow Parkway 2,946 3,371 203 1991 (k)
4051 Southmeadow Parkway 4,143 4,869 295 1989 (k)
4071 Southmeadow Parkway 5,096 5,924 351 1991 (k)
4081 Southmeadow Parkway 5,916 7,073 394 1989 (k)
1875 Rockdale Industrial 2,294 2,680 142 1966 (k)
1605 Indian Brook Way 4,976 5,988 138 1995 (k)
3312 N. Berkeley Lake Road 17,313 20,358 395 1969 (k)
5015 Oakbrook Parkway 3,207 4,454 0 (m)
5570 Tulane Drive (f) 3,094 3,640 6 1996 (k)
3495 Bankhead Highway (f) 5,696 6,699 12 1986 (k)
755 Selig Drive 884 1,039 2 (m)
Central Pennsylvania
1214-a Freedom Road 1,522 401 1982 (k)
401 Russell Drive 2,328 2,615 526 1990 (k)
2700 Commerce Drive 1,658 1,864 309 1990 (k)
2701 Commerce Drive 2,007 2,171 283 1989 (k)
2780 Commerce Drive 1,680 1,889 314 1989 (k)
5035 Ritter Road 3,760 4,202 738 1988 (k)
5070 Ritter Road 4,085 4,591 768 1989 (k)
6340 Flank Drive 4,511 5,074 859 1988 (k)
6345 Flank Drive 4,743 5,330 893 1989 (k)
6360 Flank Drive 2,983 3,342 568 1988 (k)
6380 Flank Drive 1,948 2,182 351 1991 (k)
6400 Flank Drive 2,440 2,721 422 1992 (k)
6405 Flank Drive 2,529 2,842 456 1991 (k)
100 Schantz Spring Road 3,190 3,723 197 1993 (k)
794 Roble Road 5,430 6,345 338 1984 (k)
7355 Williams Avenue 1,928 2,219 160 1989 (k)
2600 Beltline Avenue 2,230 2,586 279 1985 (k)
</TABLE>
S-1
<PAGE> 59
<TABLE>
<CAPTION>
Costs
Capitalized
Initial Cost Subsequent to
Location (i) ---------------------- Acquisition
Building Address (City/State) Encumbra Land Buildings or Completion Land
- ---------------- ----------- -------- ---- --------- ------------- ----
<S> <C> <C> <C> <C> <C> <C>
7125 Grayson Road Harrisburg, PA (a) $ 1,514 $ 8,779 $ 6 $ 1,514
7253 Grayson Road Harrisburg, PA (a) 894 5,168 11 894
5 Keystone Drive Lebanon, PA 678 0 4,715 683
5020 Louise Drive Mechanicsaurg, PA 707 0 2,773 716
7195 Grayson Harrisburg, PA 478 2,771 73 479
400 First Street Middletown, PA (e) 280 1,839 576 192
401 First Street Middletown, PA (e) 819 5,381 1,665 563
500 Industrial Lane Middletown, PA (e) 194 1,272 263 133
600 Hunter Lane Middletown, PA 191 0 3,689 191
300 Hunter Lane Middletown, PA 216 0 4,553 216
Chicago
720-730 Landwehr Road Northbrook, IL (b) 521 2,985 9 521
3170-3190 MacArthur Boule Northbrook, IL (b) 370 2,126 166 370
20W201 101st Street Lemont, IL (b) 967 5,554 414 968
280-296 Palatine Road Wheeling, IL (b) 305 1,735 139 310
1330 West 43rd Street Chicago, IL (a) 369 1,464 278 375
2300 Hammond Drive Schaumburg, IL (a) 442 1,241 572 444
6500 North Lincoln Avenue Lincolnwood, IL (a) 613 1,336 786 615
3600 West Pratt Avenue Lincolnwood, IL (a) 1,050 5,767 447 1,050
917 North Shore Drive Lake Bluff, IL (a) 556 3,212 48 556
6750 South Sayre Avenue Bedford Park, IL (a) 224 1,309 13 224
585 Slawin Court Mount Prospect, IL (a) 611 3,505 1 611
2300 Windsor Court Addison, IL (a) 688 3,943 178 688
3505 Thayer Court Aurora, IL (a) 430 2,472 16 430
3600 Thayer Court Aurora, IL (a) 636 3,645 35 636
736-776 Industrial Drive Elmhurst, IL (a) 349 1,994 195 349
5310-5352 East Avenue Countryside, IL (a) 382 2,036 451 382
12330-12358 South Latrobe Alsip, IL (a) 381 2,067 71 381
305-311 Era Drive Northbrook, IL 200 1,154 133 205
700-714 Landwehr Road Northbrook, IL 357 2,052 101 357
4330 South Racine Avenue Chicago, IL 448 1,893 239 468
13040 S. Crawford Ave. Alsip, IL 1,073 6,193 24 1,073
12241 Melrose Street Franklin Park, IL 332 1,931 1,066 469
3150-3160 MacArthur Boule Northbrook, IL 439 2,518 103 439
2101-2125 Gardner Road Broadview, IL 1,177 6,818 103 1,228
365 North Avenue Carol Stream, IL 1,208 6,961 81 1,208
2942 MacArthur Boulevard Northbrook, IL 315 1,803 15 315
7200 S Leamington Bedford Park, IL 798 4,595 159 818
12301-12325 S Laramie Ave Alsip, IL 650 3,692 424 659
6300 W Howard Street Niles, IL 743 4,208 343 782
301 Hintz Wheeling, IL 160 905 71 167
301 Alice Wheeling, IL 218 1,236 58 225
410 W 169th Street South Holland, IL 462 2,618 124 476
Cincinnati
9900-9970 Princeton Cincinnati, OH (c) 545 3,088 616 566
2940 Highland Avenue Cincinnati, OH (c) 1,717 9,730 415 1,770
4700-4750 Creek Road Cincinnati, OH (c) 1,080 6,118 267 1,109
4860 Duff Drive Cincinnati, OH 67 378 8 68
4866 Duff Drive Cincinnati, OH 67 379 7 68
4884 Duff Drive Cincinnati, OH 104 591 13 106
4890 Duff Drive Cincinnati, OH 104 592 12 106
9636-9643 Interocean Driv Cincinnati, OH 123 695 14 125
Vacantland Cincinnati, OH 426 0 31 436
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
--------------------------- Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ----------- ---- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
7125 Grayson Road 8,785 10,299 594 1991 (k)
7253 Grayson Road 5,179 6,073 350 1990 (k)
5 Keystone Drive 4,710 5,393 173 1995 (k)
5020 Louise Drive 2,764 3,480 173 1995 (k)
7195 Grayson 2,843 3,322 147 1994 (k)
400 First Street 2,503 2,695 78 1963-1965 (k)
401 First Street 7,302 7,865 222 1963-1965 (k)
500 Industrial Lane 1,596 1,729 48 1963-1965 (k)
600 Hunter Lane 3,689 3,880 0 (m)
300 Hunter Lane 4,553 4,769 0 (m)
Chicago
720-730 Landwehr Road 2,994 187 1978 (k)
3170-3190 MacArthur Boule 2,292 2,662 138 1978 (k)
20W201 101st Street 5,967 6,935 394 1988 (k)
280-296 Palatine Road 1,869 2,179 85 1978 (k)
1330 West 43rd Street 1,736 2,111 994 1977 (k)
2300 Hammond Drive 1,811 2,255 931 1970 (k)
6500 North Lincoln Avenue 2,120 2,735 980 1965/88 (k)
3600 West Pratt Avenue 6,214 7,264 383 1953/88 (k)
917 North Shore Drive 3,260 3,816 212 1974 (k)
6750 South Sayre Avenue 1,322 1,546 82 1975 (k)
585 Slawin Court 3,506 4,117 219 1992 (k)
2300 Windsor Court 4,121 4,809 291 1986 (k)
3505 Thayer Court 2,488 2,918 155 1989 (k)
3600 Thayer Court 3,680 4,316 232 1989 (k)
736-776 Industrial Drive 2,189 2,538 156 1975 (k)
5310-5352 East Avenue 2,487 2,869 150 1975 (k)
12330-12358 South Latrobe 2,138 2,519 137 1975 (k)
305-311 Era Drive 1,282 1,487 83 1978 (k)
700-714 Landwehr Road 2,153 2,510 139 1978 (k)
4330 South Racine Avenue 2,112 2,580 1,135 1978 (k)
13040 S. Crawford Ave. 6,217 7,290 362 1976 (k)
12241 Melrose Street 2,860 3,329 175 1969 (k)
3150-3160 MacArthur Boule 2,621 3,060 159 1978 (k)
2101-2125 Gardner Road 6,870 8,098 399 1950/69 (k)
365 North Avenue 7,042 8,250 395 1969 (k)
2942 MacArthur Boulevard 1,818 2,133 113 1979 (k)
7200 S Leamington 4,734 5,552 128 1950 (k)
12301-12325 S Laramie Ave 4,107 4,766 105 1975 (k)
6300 W Howard Street 4,512 5,294 110 1956/1964 (k)
301 Hintz 969 1,136 24 1960 (k)
301 Alice 1,287 1,512 32 1965 (k)
410 W 169th Street 2,728 3,204 56 1974 (k)
Cincinnati
9900-9970 Princeton 3,683 4,249 70 1970 (k)
2940 Highland Avenue 10,092 11,862 209 1969/1974 (k)
4700-4750 Creek Road 6,356 7,465 132 1960 (k)
4860 Duff Drive 385 45 1 1979 (k)
4866 Duff Drive 385 45 1 1979 (k)
4884 Duff Drive 602 70 1 1979 (k)
4890 Duff Drive 602 70 1 1979 (k)
9636-9643 Interocean Drive 707 83 1 1983 (k)
Vacantland 21 45 0 (m) (e)
</TABLE>
S-2
<PAGE> 60
<TABLE>
<CAPTION>
Costs
(i) Capitalized
Initial Cost Subsequent to
Location (i) --------------------- Acquisition
Building Address (City/State) Encumbrances Land Buildings or Completion
- ---------------- ------------ ------------ ---- --------- -------------
<S> <C> <C> <C> <C> <C>
Cleveland
6675 Parkland Blvd Cleveland, OH $ 548 $ 3,103 $ 154
Columbus
6911 Americana Parkway Columbus, OH 314 1,777 74
3800 Lockbourne Industria Columbus, OH 1,133 6,421 165
3800 Groveport Road Columbus, OH 2,145 12,154 173
Dayton
6094-6104 Executive Blvd Dayton, OH 181 1,025 66
6202-6220 Executive Blvd Dayton, OH 268 1,521 86
6268-6294 Executive Blvd Dayton, OH 255 1,444 85
5749-5753 Executive Blvd Dayton, OH 50 282 37
6230-6266 Executive Blvd Dayton, OH 271 1,534 72
Des Moines
1500 East Washington Aven Des Moines, IA (a) 610 4,251 695
1600 East Washington Aven Des Moines, IA (a) 209 1,557 161
4121 McDonald Avenue Des Moines, IA (a) 390 2,931 303
4141 McDonald Avenue Des Moines, IA (a) 706 5,518 606
4161 McDonald Avenue Des Moines, IA (a) 389 3,046 624
Detroit
2654 Elliott Troy, MI (b) 57 334 4
1731 Thorncroft Troy, MI (b) 331 1,904 20
1653 E. Maple Troy, MI (b) 192 1,104 15
47461 Clipper Plymouth, MI (b) 122 723 79
47522 Galleon Plymouth, MI (b) 85 496 9
4150 Varsity Drive Ann Arbor, MI (b) 168 969 8
1330 Crooks Road Clawson, MI (b) 234 1,348 12
12000 Merriman Road Livonia, MI (a) 453 3,651 1,019
238 Executive Drive Troy, MI (a) 52 173 422
256 Executive Drive Troy, MI (a) 44 146 359
301 Executive Drive Troy, MI (a) 71 293 487
449 Executive Drive Troy, MI (a) 125 425 829
501 Executive Drive Troy, MI (a) 71 236 520
645 Executive Drive Troy, MI (a) 184 940 358
451 Robbins Drive Troy, MI (a) 96 448 885
700 Stephenson Highway Troy, MI (a) 250 854 1,361
800 Stephenson Highway Troy, MI (a) 558 2,341 1,249
1150 Stephenson Highway Troy, MI (a) 178 966 201
1200 Stephenson Highway Troy, MI (a) 246 1,115 443
1035 Crooks Road Troy, MI (a) 114 414 458
1095 Crooks Road Troy, MI (a) 331 1,017 947
1151 Crooks Road Troy, MI (a) 764 4,115 807
1416 Meijer Drive Troy, MI (a) 94 394 343
1624 Meijer Drive Troy, MI (a) 236 1,406 800
1972 Meijer Drive Troy, MI (a) 315 1,301 726
2112 Meijer Drive Troy, MI (a) 141 714 608
1621 Northwood Drive Troy, MI (a) 85 351 1,041
1707 Northwood Drive Troy, MI (a) 95 262 1,156
1749 Northwood Drive Troy, MI (a) 107 477 454
1788 Northwood Drive Troy, MI (a) 50 196 461
1821 Northwood Drive Troy, MI (a) 132 523 745
1826 Northwood Drive Troy, MI (a) 55 208 395
1864 Northwood Drive Troy, MI (a) 57 190 441
1902 Northwood Drive Troy, MI (a) 234 807 2,163
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
------------------------------------ Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Land Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ---- ------------ ----- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Cleveland
6675 Parkland Blvd $ 569 3,236 20 1991 (k)
Columbus
6911 Americana Parkway 321 1,844 38 1980 (k)
3800 Lockbourne Industria 1,153 6,566 7,719 54 1986 (k)
3800 Groveport Road 2,163 12,309 14,472 102 1986 (k)
Dayton
6094-6104 Executive Blvd 186 1,086 16 1975 (k)
6202-6220 Executive Blvd 275 1,600 1,875 23 1976 (k)
6268-6294 Executive Blvd 261 1,523 1,784 22 1989 (k)
5749-5753 Executive Blvd 53 316 36 4 1975 (k)
6230-6266 Executive Blvd 279 1,598 1,877 13 1979 (k)
Des Moines
1500 East Washington Aven 623 4,933 371 1987 (k)
1600 East Washington Aven 221 1,706 1,927 117 1987 (k)
4121 McDonald Avenue 416 3,208 3,624 221 1977 (k)
4141 McDonald Avenue 787 6,043 6,830 417 1976 (k)
4161 McDonald Avenue 467 3,592 4,059 248 1979 (k)
Detroit
2654 Elliott 57 338 20 1986 (k)
1731 Thorncroft 331 1,924 2,255 112 1969 (k)
1653 E. Maple 192 1,119 1,311 65 1990 (k)
47461 Clipper 122 802 92 69 1992 (k)
47522 Galleon 85 505 59 29 1990 (k)
4150 Varsity Drive 168 977 1,145 57 1986 (k)
1330 Crooks Road 234 1,360 1,594 79 1960 (k)
12000 Merriman Road 440 4,683 5,123 1,834 1975 (k)
238 Executive Drive 100 547 64 191 1973 (k)
256 Executive Drive 85 464 54 156 1974 (k)
301 Executive Drive 133 718 85 250 1974 (k)
449 Executive Drive 218 1,161 1,379 398 1975 (k)
501 Executive Drive 129 698 82 195 1984 (k)
645 Executive Drive 234 1,248 1,482 472 1972 (k)
451 Robbins Drive 192 1,237 1,429 356 1975 (k)
700 Stephenson Highway 386 2,079 2,465 666 1978 (k)
800 Stephenson Highway 654 3,494 4,148 1,114 1979 (k)
1150 Stephenson Highway 200 1,145 1,345 336 1982 (k)
1200 Stephenson Highway 284 1,520 1,804 467 1980 (k)
1035 Crooks Road 143 843 98 249 1980 (k)
1095 Crooks Road 360 1,935 2,295 572 1986 (k)
1151 Crooks Road 896 4,790 5,686 1,427 1985 (k)
1416 Meijer Drive 121 710 83 210 1980 (k)
1624 Meijer Drive 373 2,069 2,442 621 1984 (k)
1972 Meijer Drive 372 1,970 2,342 574 1985 (k)
2112 Meijer Drive 229 1,234 1,463 404 1980 (k)
1621 Northwood Drive 215 1,262 1,477 408 1977 (k)
1707 Northwood Drive 239 1,274 1,513 386 1983 (k)
1749 Northwood Drive 164 874 1,038 296 1977 (k)
1788 Northwood Drive 103 604 70 193 1977 (k)
1821 Northwood Drive 220 1,180 1,400 401 1977 (k)
1826 Northwood Drive 103 555 65 183 1977 (k)
1864 Northwood Drive 107 581 68 192 1977 (k)
1902 Northwood Drive 511 2,693 3,204 940 1977 (k)
</TABLE>
S-3
<PAGE> 61
<TABLE>
<CAPTION>
Costs
Capitalized
Initial Cost Subsequent to
Location (i) ---------------------- Acquisition
Building Address (City/State) Encumbra Land Buildings or Completion Land
- ---------------- ----------- -------- ---- --------- ------------- ----
<S> <C> <C> <C> <C> <C> <C>
1921 Northwood Drive Troy, MI (a) 135 589 $ 1,164 $ 291
2230 Elliott Avenue Troy, MI (a) 46 174 400 95
2237 Elliott Avenue Troy, MI (a) 48 159 408 90
2277 Elliott Avenue Troy, MI (a) 48 188 434 104
2291 Elliott Avenue Troy, MI (a) 52 209 324 86
2451 Elliott Avenue Troy, MI (a) 78 319 670 164
2730 Research Drive Rochester Hills, MI (a) 915 4,215 545 903
2791 Research Drive Rochester Hills, MI (a) 557 2,731 290 560
2871 Research Drive Rochester Hills, MI (a) 324 1,487 264 326
2911 Research Drive Rochester Hills, MI (a) 505 2,136 376 505
3011 Research Drive Rochester Hills, MI (a) 457 2,104 321 457
2870 Technology Drive Rochester Hills, MI (a) 275 1,262 231 279
2890 Technology Drive Rochester Hills, MI (a) 199 902 206 206
2900 Technology Drive Rochester Hills, MI (a) 214 977 491 219
2920 Technology Drive Rochester Hills, MI (a) 149 671 155 153
2930 Technology Drive Rochester Hills, MI (a) 131 594 382 138
2950 Technology Drive Rochester Hills, MI (a) 178 819 178 185
2960 Technology Drive Rochester Hills, MI (a) 281 1,277 231 283
23014 Commerce Drive Farmington Hills, MI (a) 39 203 124 56
23028 Commerce Drive Farmington Hills, MI (a) 98 507 207 125
23035 Commerce Drive Farmington Hills, MI (a) 71 355 172 93
23042 Commerce Drive Farmintgon Hills, MI (a) 67 277 304 89
23065 Commerce Drive Farmington Hills, MI (a) 71 408 119 93
23070 Commerce Drive Farmington Hills, MI (a) 112 442 618 125
23079 Commerce Drive Farmington Hills, MI (a) 68 301 163 79
23093 Commerce Drive Farmington Hills, MI (a) 211 1,024 626 295
23135 Commerce Drive Farmington Hills, MI (a) 146 701 226 158
23149 Commerce Drive Farmington Hills, MI (a) 266 1,005 457 274
23163 Commerce Drive Farmington Hills, MI (a) 111 513 238 138
23164 Commerce Drive Farmington Hills, MI (a) 100 405 207 110
23177 Commerce Drive Farmington Hills, MI (a) 175 1,007 511 254
23192 Commerce Drive Farmington Hills, MI (a) 41 205 134 58
23206 Commerce Drive Farmington Hills, MI (a) 125 531 221 137
23290 Commerce Drive Farmington Hills, MI (a) 124 707 531 210
23370 Commerce Drive Farmington Hills, MI (a) 59 233 138 66
24492 Indoplex Circle Farmington Hills, MI (a) 67 370 724 175
24528 Indoplex Circle Farmington Hills, MI (a) 91 536 1,069 263
31800 Plymouth Road - Bui Livonia, MI (a) 3,415 19,481 364 3,417
31800 Plymouth Road - Bui Livonia, MI (a) 671 3,860 54 674
31800 Plymouth Road - Bui Livonia, MI (a) 322 1,869 131 324
31800 Plymouth Road - Bui Livonia, MI (a) 557 3,207 916 560
31800 Plymouth Road - Bui Livonia, MI (a) 139 832 7 141
21477 Bridge Street Southfield, MI 244 1,386 214 253
2965 Technology Drive Rochester Hills, MI 964 2,277 115 964
1451 Lincoln Avenue Madison, MI 299 1,703 187 305
4400 Purks Drive Auburn Hills, MI 602 3,410 112 612
4177A Varsity Drive Ann Arbor, MI 90 536 59 90
6515 Cobb Drive Sterling Heights, MI 305 1,753 29 305
46750 Port Street Plymouth, MI 360 33 1,072 361
32450 N Avis Drive Madison Heights, MI 281 1,590 50 286
32200 N Avis Drive Madison Heights, MI 408 2,311 39 411
32440-32442 Industrial Dr Madison Heights, MI 120 679 81 123
32450 Industrial Drive Madison Heights, MI 65 369 18 66
11813 Hubbard Livonia, MI 177 1,001 34 180
11844 Hubbard Livonia, MI 189 1,069 61 191
11866 Hubbard Livonia, MI 189 1,073 24 191
12050-12300 Hubbard (f) Livonia, MI 425 2,410 42 428
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
--------------------------- Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ----------- ---- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
1921 Northwood Drive 1,597 1,888 559 1977 (k)
2230 Elliott Avenue 525 62 188 1974 (k)
2237 Elliott Avenue 525 61 167 1974 (k)
2277 Elliott Avenue 566 67 186 1975 (k)
2291 Elliott Avenue 499 58 172 1974 (k)
2451 Elliott Avenue 903 1,067 306 1974 (k)
2730 Research Drive 4,772 5,675 1,387 1988 (k)
2791 Research Drive 3,018 3,578 838 1991 (k)
2871 Research Drive 1,749 2,075 484 1991 (k)
2911 Research Drive 2,512 3,017 732 1992 (k)
3011 Research Drive 2,425 2,882 701 1988 (k)
2870 Technology Drive 1,489 1,768 425 1988 (k)
2890 Technology Drive 1,101 1,307 301 1991 (k)
2900 Technology Drive 1,463 1,682 392 1992 (k)
2920 Technology Drive 822 97 219 1992 (k)
2930 Technology Drive 969 1,107 231 1991 (k)
2950 Technology Drive 990 1,175 269 1991 (k)
2960 Technology Drive 1,506 1,789 414 1992 (k)
23014 Commerce Drive 310 36 83 1983 (k)
23028 Commerce Drive 687 81 206 1983 (k)
23035 Commerce Drive 505 59 144 1983 (k)
23042 Commerce Drive 559 64 148 1983 (k)
23065 Commerce Drive 505 59 144 1983 (k)
23070 Commerce Drive 1,047 1,172 242 1983 (k)
23079 Commerce Drive 453 53 131 1983 (k)
23093 Commerce Drive 1,566 1,861 478 1983 (k)
23135 Commerce Drive 915 1,073 255 1986 (k)
23149 Commerce Drive 1,454 1,728 430 1985 (k)
23163 Commerce Drive 724 86 204 1986 (k)
23164 Commerce Drive 602 71 167 1986 (k)
23177 Commerce Drive 1,439 1,693 435 1986 (k)
23192 Commerce Drive 322 38 83 1986 (k)
23206 Commerce Drive 740 87 212 1985 (k)
23290 Commerce Drive 1,152 1,362 388 1980 (k)
23370 Commerce Drive 364 43 106 1980 (k)
24492 Indoplex Circle 986 1,161 330 1976 (k)
24528 Indoplex Circle 1,433 1,696 501 1976 (k)
31800 Plymouth Road - Bui 19,843 23,260 1,381 1968/89 (k)
31800 Plymouth Road - Bui 3,911 4,585 267 1968/89 (k)
31800 Plymouth Road - Bui 1,998 2,322 137 1968/89 (k)
31800 Plymouth Road - Bui 4,120 4,680 253 1968/89 (k)
31800 Plymouth Road - Bui 837 97 56 1968/89 (k)
21477 Bridge Street 1,591 1,844 66 1986 (k)
2965 Technology Drive 2,392 3,356 112 1995 (k)
1451 Lincoln Avenue 1,884 2,189 79 1967 (k)
4400 Purks Drive 3,512 4,124 138 1987 (k)
4177A Varsity Drive 595 68 59 1993 (k)
6515 Cobb Drive 1,782 2,087 103 1984 (k)
46750 Port Street 1,104 1,465 1 1996 (k)
32450 N Avis Drive 1,635 1,921 37 1974 (k)
32200 N Avis Drive 2,347 2,758 53 1973 (k)
32440-32442 Industrial Dr 757 88 19 1979 (k)
32450 Industrial Drive 386 45 9 1979 (k)
11813 Hubbard 1,032 1,212 23 1979 (k)
11844 Hubbard 1,128 1,319 25 1979 (k)
11866 Hubbard 1,095 1,286 25 1979 (k)
12050-12300 Hubbard (f) 2,449 2,877 56 1981 (k)
</TABLE>
S-4
<PAGE> 62
<TABLE>
<CAPTION>
Costs
Capitalized
Initial Cost Subsequent to
Location (i) ----------------- Acquisition
Building Address (City/State) Encumbra Land Buildings or Completion Land
- -------------- ----------- -------- ---- --------- ------------- ----
<S> <C> <C> <C> <C> <C> <C>
12707 Eckles Road Plymouth Township, MI 255 1,445 $ 106 $ 267
9300-9328 Harrison Rd Romulus, MI 147 834 50 154
9330-9358 Harrison Rd Romulus, MI 81 456 29 84
28420-28448 Highland Rd Romulus, MI 143 809 48 149
28450-28478 Highland Rd Romulus, MI 81 461 28 85
28421-28449 Highland Rd Romulus, MI 109 617 37 114
28451-28479 Highland Rd Romulus, MI 107 608 36 112
28825-28909 Highland Rd Romulus, MI 70 395 24 73
28933-29017 Highland Rd Romulus, MI 112 634 38 117
28824-28908 Highland Rd Romulus, MI 134 760 43 140
28932-29016 Highland Rd Romulus, MI 123 694 40 128
9710-9734 Harrison Rd Romulus, MI 125 706 41 130
9740-9772 Harrison Rd Romulus, MI 132 749 43 138
9840-9868 Harrison Rd Romulus, MI 144 815 46 150
9800-9824 Harrison Rd Romulus, MI 117 664 40 123
29265-29285 Airport Dr Romulus, MI 140 794 46 147
29185-29225 Airport Dr Romulus, MI 140 792 46 146
29149-29165 Airport Dr Romulus, MI 216 1,225 70 226
29101-29115 Airport Dr Romulus, MI 130 738 43 136
29031-29045 Airport Dr Romulus, MI 124 704 41 130
29050-29062 Airport Dr Romulus, MI 127 718 42 133
29120-29134 Airport Dr Romulus, MI 161 912 52 168
29200-29214 Airport Dr Romulus, MI 170 963 55 178
9301-9339 Middlebelt Rd Romulus, MI 124 703 41 130
38200 Plymouth Livonia, MI 2,700 0 2,617 2,753
GRAND RAPIDS
3232 Kraft Avenue Grand Rapids, MI (b) 810 4,792 1,036 874
8181 Logistics Drive Grand Rapids, MI (b) 803 5,263 591 864
5062 Kendrick Court SE Grand Rapids, MI (b) 142 815 13 142
2 84th Street SW Grand Rapids, MI (a) 117 685 284 117
100 84th Street SW Grand Rapids, MI (a) 255 1,477 86 255
150 84th Street SW Grand Rapids, MI (a) 47 286 27 47
511 76th Street SW Grand Rapids, MI (a) 758 4,355 21 758
553 76th Street SW Grand Rapids, MI (a) 32 191 12 32
555 76th Street SW Grand Rapids, MI (a) 776 4,458 32 776
2925 Remico Avenue SW Grand Rapids, MI (a) 281 1,617 7 281
2935 Walkent Court NW Grand Rapids, MI (a) 285 1,663 7 285
3300 Kraft Avenue SE Grand Rapids, MI (a) 838 4,810 123 638
3366 Kraft Avenue SE Grand Rapids, MI (a) 833 4,780 34 833
4939 Starr Avenue Grand Rapids, MI (a) 117 681 27 117
5001 Kendrick Court SE Grand Rapids, MI (a) 210 1,221 28 210
5050 Kendrick Court SE Grand Rapids, MI (a) 1,721 11,433 4,568 1,721
5015 52nd Street SE Grand Rapids, MI (a) 234 1,321 34 234
5025 28th Street Grand Rapids, MI (a) 77 488 17 77
5079 33rd Street SE Grand Rapids, MI (a) 525 3,018 4 525
5333 33rd Street SE Grand Rapids, MI (a) 480 2,761 47 480
5130 Patterson Avenue SE Grand Rapids, MI (a) 137 793 12 137
425 Gordon Industrial Cou Grand Rapids, MI 611 3,747 692 644
2851 Prairie Street Grand Rapids, MI 377 2,778 231 445
2945 Walkent Court Grand Rapids, MI 310 2,074 294 352
537 76th Street Grand Rapids, MI 255 1,456 113 258
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
--------------------------- Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ----------- ----- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
12707 Eckles Road $1,539 1,806 $ 16 1990 (k)
9300-9328 Harrison Rd 877 1,031 4 1978 (k)
9330-9358 Harrison Rd 482 56 2 1978 (k)
28420-28448 Highland Rd 851 1,000 4 1979 (k)
28450-28478 Highland Rd 485 57 2 1979 (k)
28421-28449 Highland Rd 649 76 3 1980 (k)
28451-28479 Highland Rd 639 75 3 1980 (k)
28825-28909 Highland Rd 416 48 2 1981 (k)
28933-29017 Highland Rd 667 78 3 1982 (k)
28824-28908 Highland Rd 797 93 3 1982 (k)
28932-29016 Highland Rd 729 85 3 1982 (k)
9710-9734 Harrison Rd 742 87 3 1987 (k)
9740-9772 Harrison Rd 786 92 3 1987 (k)
9840-9868 Harrison Rd 855 1,005 4 1987 (k)
9800-9824 Harrison Rd 698 82 3 1987 (k)
29265-29285 Airport Dr 833 98 3 1983 (k)
29185-29225 Airport Dr 832 97 3 1983 (k)
29149-29165 Airport Dr 1,285 1,511 5 1984 (k)
29101-29115 Airport Dr 775 91 3 1985 (k)
29031-29045 Airport Dr 739 86 3 1985 (k)
29050-29062 Airport Dr 754 88 3 1986 (k)
29120-29134 Airport Dr 957 1,125 4 1986 (k)
29200-29214 Airport Dr 1,010 1,188 4 1985 (k)
9301-9339 Middlebelt Rd 738 86 3 1983 (k)
38200 Plymouth 2,564 5,317 0 (m)
GRAND RAPIDS
3232 Kraft Avenue 5,764 6,638 398 1988 (k)
8181 Logistics Drive 5,793 6,657 407 1990 (k)
5062 Kendrick Court SE 828 97 55 1987 (k)
2 84th Street SW 969 1,086 62 1986 (k)
100 84th Street SW 1,563 1,818 99 1979 (k)
150 84th Street SW 313 36 23 1977 (k)
511 76th Street SW 4,376 5,134 277 1986 (k)
553 76th Street SW 203 23 13 1985 (k)
555 76th Street SW 4,490 5,266 292 1987 (k)
2925 Remico Avenue SW 1,624 1,905 101 1988 (k)
2935 Walkent Court NW 1,670 1,955 104 1991 (k)
3300 Kraft Avenue SE 4,933 5,771 346 1987 (k)
3366 Kraft Avenue SE 4,814 5,647 308 1987 (k)
4939 Starr Avenue 708 82 49 1985 (k)
5001 Kendrick Court SE 1,249 1,459 80 1983 (k)
5050 Kendrick Court SE 16,001 17,722 911 1988 (k)
5015 52nd Street SE 1,355 1,589 84 1987 (k)
5025 28th Street 505 58 53 1967 (k)
5079 33rd Street SE 3,022 3,547 189 1990 (k)
5333 33rd Street SE 2,808 3,288 203 1991 (k)
5130 Patterson Avenue SE 805 94 52 1987 (k)
425 Gordon Industrial Cou 4,406 5,050 293 1990 (k)
2851 Prairie Street 2,941 3,386 203 1989 (k)
2945 Walkent Court 2,326 2,678 161 1993 (k)
537 76th Street 1,566 1,824 68 1987 (k)
</TABLE>
S-5
<PAGE> 63
<TABLE>
Caption>
Cost
(j) Capitalized
Initial Cost Subsequent to
Location (i) ----------------------- Acquisitions
Building/Address (City/State) Emcumbrances Land Buildings or Completion
- ---------------- -------------- ------------ ------ ---------- -------------
<S> <C> <C> <C> <C> <C>
Indianapolis
2900 N Shadeland Avenue Indianpolis, IN (c) 2,394 13,565 $ 1,264
1445 Brookville Way Indianpolis, IN (c) 459 2,603 242
1440 Brookville Way Indianpolis, IN (c) 665 3,770 219
1240 Brookville Way Indianpolis, IN (c) 247 1,402 128
1220 Brookville Way Indianpolis, IN (c) 223 40 30
1345 Brookville Way Indianpolis, IN (d) 586 3,321 239
1350 Brookville Way Indianpolis, IN (c) 205 1,161 77
1315 Sadlier Circle E Dr Indianpolis, IN (d) 57 322 39
1341 Sadlier Circle E Dr Indianpolis, IN (d) 131 743 50
1322-1438 Sadlier Circle Indianpolis, IN (d) 145 822 75
1327-1441 Sadlier Circle Indianpolis, IN (d) 218 1,234 88
1304 Sadlier Circle E Dr Indianpolis, IN (d) 71 405 46
1402 Sadlier Circle E Dr Indianpolis, IN (d) 165 934 66
1504 Sadlier Circle E Dr Indianpolis, IN (d) 219 1,238 70
1311 Sadlier Circle E Dr Indianpolis, IN (d) 54 304 60
1365 Sadlier Circle E Dr Indianpolis, IN (d) 121 688 49
1352-1354 Sadlier Circle Indianpolis, IN (d) 178 1,008 90
1338 Sadlier Circle E Dr Indianpolis, IN (d) 81 460 48
1327 Sadlier Circle E Dr Indianpolis, IN (d) 52 295 31
1428 Sadlier Circle E Dr Indianpolis, IN (d) 21 117 23
1230 Brookville Way Indianpolis, IN (c) 103 586 40
6951 E 30th St Indianpolis, IN 256 1,449 91
6701 E 30th St Indianpolis, IN 78 443 40
6737 E 30th St Indianpolis, IN 385 2,181 122
6555 E 30th St Indianpolis, IN 840 4,760 129
2432-2436 Shadeland Indianpolis, IN 212 1,199 167
8402-8440 E 33rd St Indianpolis, IN 222 1,260 35
8520-8630 E 33rd St Indianpolis, IN 326 1,848 50
8710-8768 E 33rd St Indianpolis, IN 175 993 30
3316-3346 N. Pagosa Court Indianpolis, IN 325 1,842 50
3331 Raton Court Indianpolis, IN 138 802 22
Vacant Land Indianpolis, IN 60 0 131
Milwaukee
N25 W23050 Paul Road Pewaukee, WI (a) 474 2,723 12
N25 W23255 Paul Road Waukesha County, WI (a) 571 3,270 1
N27 W23293 Roundy Drive Waukesha County, WI (a) 412 2,837 1
6523 N. Sydney Place Milwaukee, WI 172 976 140
8800 W Bradley Milwaukee, WI 375 2,125 130
1435 North 113th St Wauwatosa, WI 300 1,699 79
Minneapolis
2700 Freeway Boulevard Brooklyn Center, MN (b) 392 2,318 397
6403-6545 Cecilia Circle Brooklyn Center, MN (b) 723 2,683 765
1275 Corporate Center Dri Eagan, MN (a) 80 357 38
1279 Corporate Center Dri Eagan, MN (a) 105 357 86
2815 Eagandale Boulevard Eagan, MN (a) 80 357 95
6201 West 111th Street Bloomington, MN (a) 1,358 8,622 3,732
6925-6943 Washington Aven Edina, MN (a) 117 504 534
6955-6973 Washington Aven Edina, MN (a) 117 486 382
7251-7279 Washington Aven Edina, MN (a) 129 382 406
7301-7329 Washington Aven Edina, MN (a) 174 391 466
7101 Winnetka Avenue Nort Brooklyn Park, MN (a) 2,195 6,084 2,135
7600 Golden Triangle Driv Eden Prairie, MN (a) 566 1,394 1,170
7830-7890 12th Avenue Sou Eden Prairie, MN (a) 723 2,588 321
7900 Main Street Northeas Fridley, MN (a) 480 1,604 278
<CAPTION>
Gross Annual Carried
At Close of Period 12/31/96
--------------------------- Accumulated
Location Buildings and Depreciation Year Built/ Depreciable
Building/Address (City/State) Land Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ------------ ---- ------------- ----- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Indianapolis
2900 N Shadeland Avenue Indianpolis, IN 2,493 14,730 17,223 309 1957/1992 (k)
1445 Brookville Way Indianpolis, IN 475 2,829 3,304 61 1989 (k)
1440 Brookville Way Indianpolis, IN 684 3,970 4,654 81 1990 (k)
1240 Brookville Way Indianpolis, IN 258 1,519 1,777 32 1990 (k)
1220 Brookville Way Indianpolis, IN 226 67 29 1 1990 (k)
1345 Brookville Way Indianpolis, IN 601 3,545 4,146 74 1992 (k)
1350 Brookville Way Indianpolis, IN 211 1,232 1,443 25 1994 (k)
1315 Sadlier Circle E Dr Indianpolis, IN 61 357 41 7 1970/1992 (k)
1341 Sadlier Circle E Dr Indianpolis, IN 136 788 92 16 1971/1992 (k)
1322-1438 Sadlier Circle Indianpolis, IN 152 890 1,042 18 1971/1992 (k)
1327-1441 Sadlier Circle Indianpolis, IN 225 1,315 1,540 28 1992 (k)
1304 Sadlier Circle E Dr Indianpolis, IN 75 447 52 9 1971/1992 (k)
1402 Sadlier Circle E Dr Indianpolis, IN 170 995 1,165 20 1970/1992 (k)
1504 Sadlier Circle E Dr Indianpolis, IN 225 1,302 1,527 27 1971/1992 (k)
1311 Sadlier Circle E Dr Indianpolis, IN 57 361 41 8 1971/1992 (k)
1365 Sadlier Circle E Dr Indianpolis, IN 126 732 85 15 1971/1992 (k)
1352-1354 Sadlier Circle Indianpolis, IN 188 1,088 1,276 22 1970/1992 (k)
1338 Sadlier Circle E Dr Indianpolis, IN 85 504 58 10 1971/1992 (k)
1327 Sadlier Circle E Dr Indianpolis, IN 56 322 37 7 1971/1992 (k)
1428 Sadlier Circle E Dr Indianpolis, IN 23 138 16 3 1971/1992 (k)
1230 Brookville Way Indianpolis, IN 109 620 72 13 1995 (k)
6951 E 30th St Indianpolis, IN 265 1,531 1,796 32 1995 (k)
6701 E 30th St Indianpolis, IN 82 479 56 10 1992 (k)
6737 E 30th St Indianpolis, IN 398 2,290 2,688 47 1995 (k)
6555 E 30th St Indianpolis, IN 855 4,874 5,729 71 1969/1981 (k)
2432-2436 Shadeland Indianpolis, IN 229 1,349 1,578 16 1968 (k)
8402-8440 E 33rd St Indianpolis, IN 227 1,290 1,517 8 1977 (k)
8520-8630 E 33rd St Indianpolis, IN 333 1,891 2,224 12 1976 (k)
8710-8768 E 33rd St Indianpolis, IN 184 1,014 1,198 7 1979 (k)
3316-3346 N. Pagosa Court Indianpolis, IN 332 1,885 2,217 12 1977 (k)
3331 Raton Court Indianpolis, IN 141 821 96 5 1979 (k)
Vacant Land Indianpolis, IN 62 129 19 0 (m)
Milwaukee
N25 W23050 Paul Road Pewaukee, WI 474 2,735 171 1989 (k)
N25 W23255 Paul Road Waukesha County, WI 571 3,271 3,842 204 1987 (k)
N27 W23293 Roundy Drive Waukesha County, WI 412 2,838 3,250 176 1989 (k)
6523 N. Sydney Place Milwaukee, WI 176 1,112 1,288 29 1978 (k)
8800 W Bradley Milwaukee, WI 388 2,242 2,630 32 1982 (k)
1435 North 113th St Wauwatosa, WI 309 1,769 2,078 11 1993 (k)
Minneapolis
2700 Freeway Boulevard Brooklyn Center, MN 415 2,692 213 1981 (k)
6403-6545 Cecilia Circle Brooklyn Center, MN 781 3,390 4,171 1,198 1980 (k)
1275 Corporate Center Dri Eagan, MN 93 382 47 117 1990 (k)
1279 Corporate Center Dri Eagan, MN 109 439 54 138 1990 (k)
2815 Eagandale Boulevard Eagan, MN 97 435 53 126 1990 (k)
6201 West 111th Street Bloomington, MN 1,499 12,213 13,712 1,306 1987 (k)
6925-6943 Washington Aven Edina, MN 237 918 1,155 419 1972 (k)
6955-6973 Washington Aven Edina, MN 191 794 98 358 1972 (k)
7251-7279 Washington Aven Edina, MN 182 735 91 336 1972 (k)
7301-7329 Washington Aven Edina, MN 193 838 1,031 374 1972 (k)
7101 Winnetka Avenue Nort Brooklyn Park, MN 2,228 8,186 10,414 2,875 1990 (k)
7600 Golden Triangle Driv Eden Prairie, MN 615 2,515 3,130 845 1989 (k)
7830-7890 12th Avenue Sou Eden Prairie, MN 739 2,893 3,632 1,158 1978 (k)
7900 Main Street Northeas Fridley, MN 497 1,865 2,362 841 1973 (k)
</TABLE>
S-6
<PAGE> 64
<TABLE>
<CAPTION>
Costs
Capitalized
Initial Cost Subsequent to
Location (i) ----------------------- Acquisition
Building Address (City/State) Encumbra Land Buildings or Completion
- ---------------- ----------- -------- ---- --------- -------------
<S> <C> <C> <C> <C> <C>
7901 Beech Street Northeast Fridley, MN (a) $ 405 $1,554 $ $ 275
9901 West 74th Street Eden Prairie, MN (a) 621 3,289 1,957
10175-10205 Crosstown Circle Eden Prairie, MN (a) 132 686 51
11201 Hampshire Avenue South Bloomington, MN (a) 495 1,035 848
12220-12274 Nicollet Avenue(g) Burnsville, MN (a) 555 2,249 219
305 2nd Street Northwest Minneapolis, MN (a) 460 2,744 41
953 Westgate Drive Minneapolis, MN (a) 193 1,178 0
980 Lone Oak Road Minneapolis, MN (a) 683 4,103 46
990 Lone Oak Road Minneapolis, MN (a) 883 5,575 50
1030 Lone Oak Road Minneapolis, MN (a) 456 2,703 44
1060 Lone Oak Road Minneapolis, MN (a) 624 3,700 135
5400 Nathan Lane Minneapolis, MN (a) 749 4,461 25
6464 Sycamore Court Minneapolis, MN (a) 457 2,730 0
6701 Parkway Circle Brooklyn Center, MN 350 2,131 343
6601 Shingle Creek Parkway Brooklyn Center, MN 411 2,813 484
10120 W 76th Street Eden Prairie, MN 315 1,804 85
7615 Golden Triangle Eden Prairie, MN 268 1,532 255
7625 Golden Triangle Eden Prairie, MN 415 2,375 133
2605 Fernbrook Lane North Plymouth, MN 443 2,533 263
12155 Nicollet Ave. Burnsville, MN 286 0 1,673
6655 Wedgewood Road Maple Grove, MN 1,775 8,410 79
900 Apollo Road Eagan, MN 1,029 5,855 194
7316 Aspen Lane North Brooklyn, MN 368 2,156 145
6707 Shingle Creek Parkway Brooklyn Center, MN 376 2,101 360
73rd Avenue North Brooklyn Park, MN 504 2,856 73
1905 W Country Road C Roseville, MN 402 2,278 64
2730 Arthur Street Roseville, MN 824 4,671 76
10205 51st Avenue North Plymouth, MN 180 1,020 68
4100 Peavey Road Chaska, MN 399 2,261 124
11300 Hamshire Ave South Bloomington, MN 527 2,985 125
375 Rivertown Drive Woodbury, MN 1,083 6,135 266
5205 Highway 169 Plymouth, MN 446 2,525 331
6451-6595 Citywest Parkway Eden Prairie, MN 525 2,975 110
7100-7198 Shady Oak Rd (g) Eden Prairie, MN 1,118 6,333 146
7500-7546 Washington Square Eden Prairie, MN 229 1,300 28
7550-7588 Washington Square Eden Prairie, MN 153 867 19
5240-5300 Valley Industrial Blvd S Eden Prairie, MN 362 2,049 73
Nashville
- ---------
1621 Heil Quaker Boulevard Nashville, TN (b) 413 2,348 166
220-240 Great Circle Drive Nashville, TN (a) 978 6,350 1,599
417 Harding Industrial Drive Nashville, TN (a) 1,006 6,586 880
501-521 Harding Industrial Drive(f) Nashville, TN (a) 645 3,382 1,092
3099 Barry Drive Portland, TN 418 2,368 49
3150 Barry Drive Portland, TN 941 5,333 326
5599 Highway 31 West Portland, TN 564 3,196 62
St. Louis
- ---------
8921-8957 Frost Avenue Hazelwood, MO (b) 431 2,479 10
9043-9083 Frost Avenue Hazelwood, MO (b) 319 1,838 27
2121 Chapin Industrial Drive Vinita Park, MO (a) 606 4,384 1,372
1200 Andes Boulevard St. Louis, MO (a) 246 1,412 82
1248 Andes Boulevard St. Louis, MO (a) 194 1,120 50
1208-1226 Ambassador Boulevard St. Louis, MO (a) 235 1,351 1
1250 Ambassador Boulevard St. Louis, MO (a) 119 694 2
1503-1525 Fairview Industrial St. Louis, MO (a) 112 658 29
</TABLE>
<TABLE>
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
----------------------------------- Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Land Improvements Total 12/31/96 Renovated Live (Years)
- ---------------- ---- ------------ ----- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
7901 Beech Street Northeast $ 428 $1,806 $2,234 $ 684 1975 (k)
9901 West 74th Street 639 5,228 5,867 659 1983/88 (k)
10175-10205 Crosstown Circle 174 695 869 251 1980 (k)
11201 Hampshire Avenue South 501 1,877 2,378 672 1986 (k)
12220-12274 Nicollet Avenue(g) 605 2,418 3,023 803 1989/90 (k)
305 2nd Street Northwest 460 2,785 3,245 185 1991 (k)
953 Westgate Drive 193 1,178 1,371 75 1991 (k)
980 Lone Oak Road 683 4,103 4,832 290 1992 (k)
990 Lone Oak Road 883 5,575 6,508 504 1989 (k)
1030 Lone Oak Road 456 2,703 3,203 185 1988 (k)
1060 Lone Oak Road 624 3,835 4,459 274 1988 (k)
5400 Nathan Lane 749 4,486 5,235 285 1990 (k)
6464 Sycamore Court 457 2,730 3,187 171 1990 (k)
6701 Parkway Circle 377 2,447 2,824 178 1987 (k)
6601 Shingle Creek Parkway 502 3,206 3,708 243 1985 (k)
10120 W 76th Street 315 1,804 2,204 87 1987 (k)
7615 Golden Triangle 268 1,787 2,055 123 1987 (k)
7625 Golden Triangle 415 2,508 2,923 150 1987 (k)
2605 Fernbrook Lane North 445 2,794 3,239 168 1987 (k)
12155 Nicollet Ave. 287 1,672 1,959 48 1995 (k)
6655 Wedgewood Road 1,778 8,486 10,264 493 1989 (k)
900 Apollo Road 1,030 6,048 7,078 276 1970 (k)
7316 Aspen Lane North 377 2,292 2,669 100 1978 (k)
6707 Shingle Creek Parkway 379 2,458 2,837 200 1986 (k)
73rd Avenue North 512 2,921 3,433 54 1995 (k)
1905 W Country Road C 409 2,335 2,744 44 1993 (k)
2730 Arthur Street 832 4,739 5,571 89 1995 (k)
10205 51st Avenue North 187 1,081 1,268 20 1990 (k)
4100 Peavey Road 415 2,369 2,784 34 1988 (k)
11300 Hamshire Ave South 541 3,096 3,637 38 1983 (k)
375 Rivertown Drive 1,119 6,365 7,484 53 1996 (k)
5205 Highway 169 473 2,829 3,302 26 1960 (k)
6451-6595 Citywest Parkway 538 3,072 3,610 25 1984 (k)
7100-7198 Shady Oak Rd (g) 1,135 6,462 7,597 40 1982 (k)
7500-7546 Washington Square 233 1,324 1,557 3 1975 (k)
7550-7588 Washington Square 156 883 1,039 2 1973 (k)
5240-5300 Valley Industrial Blvd S 370 2,114 2,484 4 1975 (k)
Nashville
- ---------
1621 Heil Quaker Boulevard 429 2,498 2,927 116 1975 (k)
220-240 Great Circle Drive(g) 978 7,949 8,927 3,356 1979/1982 (k)
417 Harding Industrial Drive 1,116 7,356 8,472 630 1972 (k)
501-521 Harding Industrial Drive(f) 699 4,420 5,119 302 1975 (k)
3099 Barry Drive 424 2,411 2,835 15 1995 (k)
3150 Barry Drive 987 5,613 6,600 35 1993 (k)
5599 Highway 31 West 571 3,251 3,822 20 1995 (k)
St. Louis
- ---------
8921-8957 Frost Avenue 431 2,489 2,920 155 1971 (k)
9043-9083 Frost Avenue 319 1,865 2,184 116 1970 (k)
2121 Chapin Industrial Drive 614 5,748 6,362 2,854 1969/87 (k)
1200 Andes Boulevard 319 1,421 1,740 88 1967 (k)
1248 Andes Boulevard 194 1,170 1,364 82 1967 (k)
1208-1226 Ambassador Boulevard 235 1,352 1,587 84 1966 (k)
1250 Ambassador Boulevard 119 696 815 43 1967 (k)
1503-1525 Fairview Industrial 112 687 799 49 1967 (k)
</TABLE>
S-7
<PAGE> 65
<TABLE>
<CAPTION>
Costs
Capitalized
Initial Cost Subsequent to
Location (i) ---------------------- Acquisition
Building Address (City/State) Encumbra Land Buildings or Completion Land
- ---------------- ----------- -------- ---- --------- ------------- ----
<S> <C> <C> <C> <C> <C> <C>
2441-2445 Northline Indus St. Louis, MO (a) $ 72 $ 478 $ 2 $ 72
2462-2470 Schuetz Road St. Louis, MO (a) 174 1,004 0 174
10431-10449 Midwest Indus St. Louis, MO (a) 237 1,360 166 237
10751 Midwest Industrial St. Louis, MO (a) 193 1,119 12 193
11632-11644 Fairgrove Ind St. Louis, MO (a) 109 637 17 109
11652-11666 Fairgrove Ind St. Louis, MO (a) 103 599 89 103
11674-11688 Fairgrove Ind St. Louis, MO (a) 118 689 27 118
2337 Centerline Drive St. Louis, MO (d) 239 1,370 110 239
6951 N Hanley (f) Hazelwood, MO 405 2,295 93 417
Other
2800 Airport Road (h) Denton, TX (a) 369 1,935 1,773 490
3501 Maple Street Aailene, TX (a) 67 1,057 1,048 260
4200 West Harry Street (g Wichita, KS (a) 193 2,224 1,967 528
Industrial Park No. 2 West Lebanon, NH (a) 723 5,208 491 776
------ ----- ----- -------- -----
$396,482 $144,683 $763,000 $143,096 $153,390
<CAPTION>
Gross Amount Carried
At Close of Period 12/31/96
--------------------------- Accumulated
Building and Depreciation Year Built/ Depreciable
Building Address Improvements Total 12/31/96 Renovated Lives (Years)
- ---------------- ----------- ---- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
2441-2445 Northline Indus 480 55 61 1967 (k)
2462-2470 Schuetz Road 1,004 1,178 63 1965 (k)
10431-10449 Midwest Indus 1,526 1,763 94 1967 (k)
10751 Midwest Industrial 1,131 1,324 71 1965 (k)
11632-11644 Fairgrove Ind 654 76 44 1967 (k)
11652-11666 Fairgrove Ind 688 79 56 1966 (k)
11674-11688 Fairgrove Ind 716 83 50 1967 (k)
2337 Centerline Drive 1,480 1,719 88 1967 (k)
6951 N Hanley (f) 2,376 2,793 5 1965 (k)
Other
2800 Airport Road (h) 3,587 4,077 955 1965 (k)
3501 Maple Street 1,912 2,172 507 1980 (k)
4200 West Harry Street (g 3,856 4,384 1,028 1968 (k)
Industrial Park No. 2 5,646 6,422 1,504 1968 (k)
-------- ---------- -------
$897,389 $1,050,779 $91,457
</TABLE>
NOTES:
(a) Collateralizes the 1994 Mortgage Loans Payable.
(b) Collateralizes the 1995 Mortgage Loans Payable.
(c) Collateralizes the CIGNA Loan.
(d) Collateralizes the Aegon Loan.
(e) Collateralizes the Harrisburg Mortgage Loan.
(f) Comprised of 2 properties.
(g) Comprised of 3 properties.
(h) Comprised of 5 properties.
(i) See description of encumbrances in Note 4 to Notes to Consolidated and
Combined Financial statements.
(j) Initial cost for each respective property is total acquisition costs
associated with its purchase.
(k) Depreciation is computed based upon the following estimated lives:
Buildings, Improvements 31.5 to 40 years
Tenant Improvements, Leasehold Improvements Life of lease
Furniture, Fixtures and equipment 5 to 10 years
(l) At December 31, 1995, the aggregate cost of land and buildings and
equipment for federal income tax purpose was approximately $ 1,020
million.
(m) These properties represent developments that haven't been placed in
service.
S-8
<PAGE> 66
FIRST INDUSTRIAL REALTY TRUST, INC.
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
The changes in total real estate assets for the three years ended
December 31, 1996 are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---------- -------- --------
<S> <C> <C> <C>
Balance, Beginning of Year.....................$ 757,516 $669,608 $209,177
Transfer of Assets
Between Contributing Businesses.............. --- --- 4,893
Acquisition, Construction Costs
and Improvements............................. 305,153 87,908 455,538
Disposition of Assets.......................... (11,890) --- ---
---------- -------- --------
Balance, End of Year...........................$1,050,779 $757,516 $669,608
========== ======== ========
The changes in accumulated depreciation for the three years ended
December 31, 1996 are as follows:
1996 1995 1994
---------- -------- --------
<S> <C> <C> <C>
Balance, Beginning of Year.....................$ 68,749 $ 49,314 $ 38,015
Transfer of Assets
Between Contributing Businesses.............. --- --- (2,075)
Depreciation for Year.......................... 24,542 19,435 13,374
Disposition of Assets.......................... (1,834) --- ---
---------- ------- --------
Balance, End of Year...........................$ 91,457 $ 68,749 $ 49,314
=========== ======== ========
</TABLE>
S-9
<PAGE> 1
EXHIBIT 4.9
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 16, 1996
AMONG
FIRST INDUSTRIAL, L.P., AS BORROWER
FIRST INDUSTRIAL REALTY TRUST, INC., AS GENERAL PARTNER
AND
THE FIRST NATIONAL BANK OF CHICAGO
AND
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
AS LENDERS
AND
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
AS DOCUMENTATION AGENT
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Financial Standards . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II THE FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1 The Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Principal Payments and Extension Option . . . . . . . . . . . . . . . 19
2.3 Requests for Advances; Responsibility for Advances . . . . . . . . . 20
2.4 Evidence of Credit Extensions . . . . . . . . . . . . . . . . . . . . 20
2.5 Ratable and Non-Pro Rata Loans . . . . . . . . . . . . . . . . . . . 20
2.6 Applicable Margins . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.8 Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9 Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . . 23
2.10 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.11 Selection of Rate Options and LIBOR Interest Periods . . . . . . . . 23
2.12 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.13 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.14 Lending Installations . . . . . . . . . . . . . . . . . . . . . . . . 26
2.15 Non-Receipt of Funds by Administrative Agent . . . . . . . . . . . . 27
2.16 Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.17 Competitive Bid Loans. . . . . . . . . . . . . . . . . . . . . . . . 28
2.18 Voluntary Reduction of Aggregate Commitment Amount . . . . . . . . . 32
2.19 Application of Moneys Received . . . . . . . . . . . . . . . . . . . 32
ARTICLE III THE LETTER OF CREDIT SUBFACILITY . . . . . . . . . . . . . . . . . . . . 33
3.1 Obligation to Issue. . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2 Types and Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.3 Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.4 Procedure for Issuance of Facility Letters of Credit . . . . . . . . 35
3.5 Reimbursement Obligations; Duties of Issuing Bank . . . . . . . . . . 36
3.6 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.7 Payment of Reimbursement Obligations . . . . . . . . . . . . . . . . 38
3.8 Compensation for Facility Letters of Credit . . . . . . . . . . . . . 39
3.9 Letter of Credit Collateral Account . . . . . . . . . . . . . . . . . 39
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S><C> <C>
ARTICLE IV CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . . 40
4.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.2 Changes in Capital Adequacy Regulations . . . . . . . . . . . . . . 41
4.3 Availability of LIBOR Advances . . . . . . . . . . . . . . . . . . 41
4.4 Funding Indemnification . . . . . . . . . . . . . . . . . . . . . . 42
4.5 Lender Statements; Survival of Indemnity . . . . . . . . . . . . . 42
ARTICLE V CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.1 Conditions Precedent to Closing . . . . . . . . . . . . . . . . . . 42
5.2 Conditions Precedent to Subsequent Advances . . . . . . . . . . . . 45
ARTICLE VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 46
6.1 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.2 Corporate/Partnership Powers . . . . . . . . . . . . . . . . . . . 46
6.3 Power of Officers . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.4 Government and Other Approvals . . . . . . . . . . . . . . . . . . 46
6.5 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.6 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 47
6.7 Enforceability of Agreement . . . . . . . . . . . . . . . . . . . . 47
6.8 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.10 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.11 Investment Company Act of 1940 . . . . . . . . . . . . . . . . . . 48
6.12 Public Utility Holding Company Act . . . . . . . . . . . . . . . . 48
6.13 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.14 No Material Adverse Financial Change . . . . . . . . . . . . . . . 48
6.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . 48
6.16 Factual Information . . . . . . . . . . . . . . . . . . . . . . . . 49
6.17 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.18 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.19 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 49
6.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.21 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.22 No Violation of Usury Laws . . . . . . . . . . . . . . . . . . . . 51
6.23 Not a Foreign Person . . . . . . . . . . . . . . . . . . . . . . . 51
6.24 No Trade Name . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
-ii-
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S><C> <C>
6.25 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.26 Unencumbered Assets . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VII ADDITIONAL REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 53
7.1 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.2 Corporate Powers . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.3 Power of Officers . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.4 Government and Other Approvals . . . . . . . . . . . . . . . . . . 54
7.5 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 54
7.6 Enforceability of Agreement . . . . . . . . . . . . . . . . . . . . 54
7.7 Liens; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.9 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.10 Investment Company Act of 1940 . . . . . . . . . . . . . . . . . . 55
7.11 Public Utility Holding Company Act . . . . . . . . . . . . . . . . 55
7.12 No Material Adverse Financial Change . . . . . . . . . . . . . . . 55
7.13 Financial Information . . . . . . . . . . . . . . . . . . . . . . . 55
7.14 Factual Information . . . . . . . . . . . . . . . . . . . . . . . . 55
7.15 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.17 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.18 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.19 Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VIII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 56
8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2 Financial Statements, Reports, Etc. . . . . . . . . . . . . . . . . 57
8.3 Existence and Conduct of Operations . . . . . . . . . . . . . . . . 60
8.4 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . 60
8.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.6 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . 61
8.7 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 61
8.8 Adequate Books . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.10 Maintenance of Status . . . . . . . . . . . . . . . . . . . . . . . 61
8.11 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.12 Pre-Acquisition Environmental Investigations. . . . . . . . . . . . 61
</TABLE>
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ARTICLE IX NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.1 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.2 Change of Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . 62
9.3 Change of Borrower Ownership or Financing Partnership Ownership . . . . . . . 62
9.4 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.5 Transfers of Unencumbered Assets. . . . . . . . . . . . . . . . . . . . . . . 62
9.6 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.7 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.8 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.9 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.10 Indebtedness and Cash Flow Covenants . . . . . . . . . . . . . . . . . . . . 64
9.11 Mergers and Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.12 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.13 Maximum Revenue from Single Tenant . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE X DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.1 Nonpayment of Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.3 Nonpayment of Interest and Other Obligations . . . . . . . . . . . . . . . . 66
10.4 Cross Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.5 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.6 Representation or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.7 Covenants, Agreements and Other Conditions . . . . . . . . . . . . . . . . . 66
10.8 No Longer General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.9 Material Adverse Financial Change . . . . . . . . . . . . . . . . . . . . . . 67
10.10 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.11 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.13 REMIC Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.14 Failure to Satisfy Judgments . . . . . . . . . . . . . . . . . . . . . . . . 68
10.15 Environmental Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE XI ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . . . . . . . . . . 69
11.1 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.2 Preservation of Rights; Amendments . . . . . . . . . . . . . . . . . . . . . 69
</TABLE>
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ARTICLE XII THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . 70
12.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.4 No Responsibility for Loans, Recitals, etc . . . . . . . . . . . . 70
12.5 Action on Instructions of Lenders . . . . . . . . . . . . . . . . . 70
12.6 Employment of Administrative Agents and Counsel . . . . . . . . . . 71
12.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . 71
12.8 Administrative Agent's Reimbursement and Indemnification . . . . . 71
12.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . 71
12.10 Commitment as a Lender . . . . . . . . . . . . . . . . . . . . . . 71
12.11 Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . 72
12.12 Successor Administrative Agent . . . . . . . . . . . . . . . . . . 72
12.13 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 73
12.14 Requests for Approval . . . . . . . . . . . . . . . . . . . . . . . 73
12.15 Copies of Documents . . . . . . . . . . . . . . . . . . . . . . . . 73
12.16 Defaulting Lenders . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . . . . 74
13.1 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 74
13.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . 74
13.2.1 Permitted Participants; Effect . . . . . . . . . . . . . . 74
13.2.2 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . 75
13.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
13.3.1 Permitted Assignments . . . . . . . . . . . . . . . . . . . 75
13.3.2 Effect; Effective Date of Assignment . . . . . . . . . . . 76
13.4 Dissemination of Information . . . . . . . . . . . . . . . . . . . 76
13.5 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE XIV GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.1 Survival of Representations . . . . . . . . . . . . . . . . . . . . 77
14.2 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . 77
14.3 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.5 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . 77
14.6 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . 77
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14.7 Severability of Provisions . . . . . . . . . . . . . . . . . . . . 78
14.8 Nonliability of the Lenders . . . . . . . . . . . . . . . . . . . . 78
14.9 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.10 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . 78
14.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 79
14.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 79
14.13 Entire Agreement; Modification of Agreement . . . . . . . . . . . . 79
14.14 Dealings with the Borrower . . . . . . . . . . . . . . . . . . . . 80
14.15 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
14.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XV NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
15.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
15.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . 82
</TABLE>
EXHIBITS
A - Percentages
B-1 - Form of Note
B-2 - Form of Competitive Bid Note
C-1 - Form of Competitive Bid Quote Request
C-2 - Invitation for Competitive Bid Quotes
C-3 - Competitive Bid Quote
D - Form of Guaranty
E - Opinion of Borrower's Counsel
F - Opinion of General Partner's Counsel
G - Wiring Instructions
H - Form of Compliance Certificate
I - Scope of Work for Environmental Investigations
J - Form of Assignment Agreement
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(CONTINUED)
PAGE
SCHEDULES
6.9 Litigation (Borrower)
6.19 Environmental Compliance
6.24 Trade Names
6.25 Subsidiaries (Borrower)
6.26 Unencumbered Assets
7.8 Litigation (General Partner)
7.18 Subsidiaries (General Partner)
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<PAGE> 9
UNSECURED REVOLVING CREDIT AGREEMENT
THIS UNSECURED REVOLVING CREDIT AGREEMENT is entered into as of
December 16, 1996, by and among the following:
FIRST INDUSTRIAL, L.P., a Delaware limited partnership having its
principal place of business at 150 North Wacker Drive, Suite 150, Chicago,
Illinois 60606 ("Borrower"), the sole general partner of which is First
Industrial Realty Trust, Inc., a Maryland corporation;
FIRST INDUSTRIAL REALTY TRUST, INC., a Maryland corporation that is
qualified as a real estate investment trust whose principal place of business
is 150 North Wacker Drive, Suite 150, Chicago, Illinois 60606 ("General
Partner");
THE FIRST NATIONAL BANK OF CHICAGO ("First Chicago"), a national
bank organized under the laws of the United States of America having an office
at One First National Plaza, Chicago, Illinois 60670;
UNION BANK OF SWITZERLAND, NEW YORK BRANCH ("UBS"), the New York
Branch of a Swiss banking corporation, having an office at 299 Park Avenue, New
York, New York 10171;
UBS, as Documentation Agent ("Documentation Agent");
First Chicago, as Administrative Agent ("Administrative Agent") for
the Lenders (as defined below).
RECITALS
A. Borrower is primarily engaged in the business of acquiring,
developing, owning and operating bulk warehouse and light industrial
properties.
B. The Borrower has requested that the Lenders make loans available
to the Borrower in the maximum aggregate principal amount of $200,000,000
outstanding from time to time pursuant to the terms of this Agreement (the
"Facility"), and that the Administrative Agent act as administrative agent for
the Lenders and that the Documentation Agent act as documentation agent for the
Lenders. The Administrative Agent, the Documentation Agent and the Lenders
have agreed to do so.
C. General Partner is fully liable for the obligations of Borrower
hereunder by virtue of its status as the sole general partner of Borrower.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
<PAGE> 10
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions. As used in this Agreement, the following
terms have the meanings set forth below:
"Absolute Interest Period" means, with respect to a Competitive Bid
Loan made at an Absolute Rate, a period of up to 180 days as requested by
Borrower in a Competitive Bid Quote Request and confirmed by a Lender in a
Competitive Bid Quote but in no event extending beyond the Maturity Date. If
an Absolute Interest Period would end on a day which is not a Business Day,
such Absolute Interest Period shall end on the next succeeding Business Day.
"Absolute Rate" means a fixed rate of interest (rounded to the
nearest 1/100 of 1%) for an Absolute Interest Period with respect to a
Competitive Bid Loan offered by a Lender and accepted by the Borrower at such
rate under Section 2.17.
"Adjusted Corporate Base Rate" means a floating interest rate equal
to the Corporate Base Rate plus CBR Applicable Margin changing when and as the
Corporate Base Rate and CBR Applicable Margin changes.
"Adjusted Corporate Base Rate Advance" means an Advance that bears
interest at the Adjusted Corporate Base Rate.
"Adjusted EBITDA" means the sum of EBITDA and reported corporate
overhead for Borrower and its Subsidiaries; provided that "Adjusted EBITDA"
shall not include overhead related to specific properties.
"Adjusted LIBOR Rate" means, with respect to a LIBOR Advance for
the relevant LIBOR Interest Period, the sum of (i) the quotient of (a) the Base
LIBOR Rate applicable to such LIBOR Interest Period, divided by (b) one minus
the Reserve Requirement (expressed as a decimal) applicable to such LIBOR
Interest Period, plus, in the case of ratable LIBOR Advances, the LIBOR
Applicable Margin in effect from time to time during such LIBOR Interest
Period, or in the case of LIBOR Advances made as Competitive Bid Loans, the
Competitive LIBOR Margin established in the Competitive Bid Quote applicable to
such Competitive Bid Loan.
"Administrative Agent" means First Chicago, acting as agent for the
Lenders in connection with the transactions contemplated by this Agreement, and
its successors in such capacity.
<PAGE> 11
"Advance" means a Loan to the Borrower hereunder by one or more of
the Lenders pursuant to Section 2.1(a) hereof (including Swingline Loans and
Competitive Bid Loans), including the initial Advance and all subsequent
Advances, whether such Advances are from time to time, Adjusted Corporate Base
Rate Advances, LIBOR Advances, Swingline Loans or Competitive Bid Loans.
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with any other Person.
A Person shall be deemed to control another Person if the controlling Person
owns ten percent (10%) or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, as of any date, the sum of all of the
Lenders' then-current Commitments, which initially shall be $200,000,000,
subject to Borrower's right to reduce the Aggregate Commitment pursuant to
Section 2.18 and which shall otherwise only be increased with the consent of
all Lenders.
"Agreement" means this Unsecured Revolving Credit Agreement and all
amendments, modifications and supplements hereto.
"Agreement Execution Date" shall mean December 16, 1996, the date
on which all of the parties hereto have executed this Agreement.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances (including all Swingline Loans and Competitive Bid Loans),
and the then Facility Letter of Credit Obligations.
"Applicable Margin" means the applicable margins set forth in the
table in Section 2.6 used in calculating the interest rate applicable to the
various types of Advances, which shall vary from time to time in accordance
with the long term, senior unsecured debt ratings of Borrower and General
Partner in the manner set forth in Section 2.6.
"Arranger" means First Chicago Capital Markets, Inc. and UBS,
collectively.
"Base LIBOR Rate" means, with respect to a LIBOR Advance for the
relevant LIBOR Interest Period, the rate determined by the Administrative Agent
to be the rate at which deposits in immediately available funds in Dollars are
offered by the Administrative Agent to first-class banks in the London
interbank eurodollar market at approximately 11:00 a.m. London time two
Business Days prior to the first day of such LIBOR Interest Period, in the
approximate amount of the relevant LIBOR Advance and having a maturity
approximately equal to such LIBOR Interest Period.
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<PAGE> 12
"Borrower" means First Industrial, L.P., along with its permitted
successors and assigns.
"Borrowing Date" means a Business Day on which an Advance is made
to the Borrower.
"Borrowing Notice" is defined in Section 2.11(a) hereof.
"Business Day" means a day, other than a Saturday, Sunday or
holiday, on which banks are open for business in Chicago, Illinois and, where
such term is used in reference to the selection or determination of the
Adjusted LIBOR Rate, in London, England.
"Capital Stock" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person which is not a
corporation and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents" shall mean (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by Standard and Poor's Corporation or P-1 or better by Moody's
Investors Service, Inc., or (iii) certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000.
"CBR Applicable Margin" means, as of any date with respect to any
Adjusted Corporate Base Rate Advance, the Applicable Margin in effect for such
Adjusted Corporate Base Rate Advance as determined in accordance with Section
2.6 hereof.
"Code" means the Internal Revenue Code of 1986 as amended from time
to time, or any replacement or successor statute, and the regulations
promulgated thereunder from time to time.
"Collateral Letter of Credit" means any irrevocable unconditional
Letter of Credit issued in the name of the Administrative Agent for the benefit
of the Lenders in form and substance satisfactory to the Administrative Agent
and drawn on a bank having a rating of at least AA by S&P and otherwise
satisfactory to the Administrative Agent.
"Commitment" means the obligation of each Lender, subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties herein, to make Advances not exceeding in the aggregate the
amount set forth opposite its signature below, or the amount stated in any
subsequent amendment hereto.
"Competitive Bid Borrowing Notice" is defined in Section 2.17(f).
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<PAGE> 13
"Competitive Bid Lender" means a Lender which has a Competitive Bid
Loan outstanding.
"Competitive Bid Loan" is a Loan made pursuant to Section 2.17
hereof.
"Competitive Bid Note" means the promissory note payable to the
order of each Lender in the form attached hereto as Exhibit B-2 to be used to
evidence any Competitive Bid Loans which such Lender elects to make
(collectively, the "Competitive Bid Notes").
"Competitive Bid Quote" means a response submitted by a Lender to
the Administrative Agent with respect to a Competitive Bid Quote Request in the
form attached as Exhibit C-3.
"Competitive Bid Quote Request" means a written request from
Borrower to Administrative Agent in the form attached as Exhibit C-1.
"Competitive LIBOR Margin" means, with respect to any Competitive
Bid Loan for a LIBOR Interest Period, the percentage established in the
applicable Competitive Bid Quote which is to be used to determine the interest
rate applicable to such Competitive Bid Loan.
"Consolidated Operating Partnership" means the Borrower, the
General Partner and any other subsidiary partnerships or entities of either of
them which are required under GAAP to be consolidated with the Borrower and the
General Partner for financial reporting purposes.
"Consolidated Secured Debt" means as of any date of determination,
the sum of (a) the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries outstanding at such date which is secured by a
Lien on any asset or Capital Stock of Borrower or any Subsidiary, including
without limitation loans secured by mortgages, stock, or partnership interests,
but excluding Defeased REMIC Debt, and (b) the amount by which the aggregate
principal amount of all Indebtedness of the Subsidiaries outstanding at such
date exceeds $5,000,000, without duplication of any Indebtedness included under
clause (a).
"Consolidated Senior Unsecured Debt" means as of any date of
determination, the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries outstanding at such date other than (a)
Indebtedness which is contractually subordinated to the Indebtedness of the
Borrower and its Subsidiaries under the Loan Documents on terms acceptable to
the Administrative Agent and (b) that portion of Consolidated Secured Debt
described in clause (a) of that definition.
"Consolidated Total Indebtedness" means as of any date of
determination, all Indebtedness of the Borrower and its Subsidiaries
outstanding at such date, determined on a consolidated basis in accordance with
GAAP, after eliminating intercompany items; provided that for purposes of
defining "Consolidated Total Indebtedness" the term "Indebtedness" shall
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<PAGE> 14
not include the short term debt (e.g. accounts payable, short term expenses) of
Borrower or General Partner or Defeased REMIC Debt.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with all or any of the entities in the
Consolidated Operating Partnership, are treated as a single employer under
Sections 414(b) or 414(c) of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as such corporate base rate changes.
"Debt Service" means for any period, (a) Interest Expense for such
period plus (b) the aggregate amount of regularly scheduled principal payments
of Indebtedness (excluding optional prepayments and balloon principal payments
due on maturity in respect of any Indebtedness) required to be made during such
period by the Borrower, or any of its consolidated Subsidiaries plus (c) a
percentage of all such regularly scheduled principal payments required to be
made during such period by any Investment Affiliate on Indebtedness (excluding
optional prepayments and balloon principal payments due on maturity in respect
of any Indebtedness) taken into account in calculating Interest Expense, equal
to the greater of (x) the percentage of the principal amount of such
Indebtedness for which the Borrower or any consolidated Subsidiary is liable
and (y) the percentage ownership interest in such Investment Affiliate held by
the Borrower and any consolidated Subsidiaries, in the aggregate, without
duplication plus (d) Senior Preferred Stock Expense for such period.
"Default" means an event which, with notice or lapse of time or
both, would become an Event of Default.
"Default Rate" means with respect to any Advance, a rate equal to
the interest rate applicable to such Advance plus three percent (3%) per annum.
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Agreement within the time period specified
for performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.
"Defeased REMIC Debt" means the REMIC Loan, if Borrower elects to
fully defease the REMIC Loan and obtain the release of the Projects presently
securing the REMIC Loan by delivering substitute collateral in the form of
obligations supported by the credit of the United States government in such
amounts as are required and permitted under the terms of the REMIC Loan.
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<PAGE> 15
"Dollars" and "$" mean United States Dollars.
"Duff & Phelps" means Duff & Phelps Credit Rating Company.
"EBITDA" means income before extraordinary items and after
adjustment for any gains or losses from sales of assets (reduced to eliminate
any income from Investment Affiliates and any income from the assets used for
Defeased REMIC Debt), as reported by the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP, plus Interest Expense,
depreciation, amortization and income tax (if any) expense plus a percentage of
such income (adjusted as described above) of any Investment Affiliate equal to
the allocable economic interest in such Investment Affiliate held by the
Borrower and any Subsidiaries, in the aggregate (provided that no item of
income or expense shall be included more than once in such calculation even if
it falls within more than one of the foregoing categories).
"Effective Date" means each Borrowing Date and, if no Borrowing
Date has occurred in the preceding calendar month, the first Business Day of
each calendar month.
"Environmental Laws" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority having jurisdiction over
the Borrower, its Subsidiaries or Investment Affiliates, or their respective
assets, and regulating or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect, in each case to the extent the foregoing are applicable
to the operations of the Borrower, any Investment Affiliate, or any Subsidiary
or any of their respective assets or Properties.
"Equity Value" is defined in Section 10.10 hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and regulations promulgated thereunder from time to time.
"Event of Default" means any event set forth in Article X hereof.
"Extension Notice" is defined in Section 2.2 hereof.
"Facility" means the unsecured revolving credit facility described
in Section 2.1.
"Facility Fee" and "Facility Fee Rate" are defined in Section
2.8(b).
"Facility Letter of Credit" means a Financial Letter of Credit or
Performance Letter of Credit issued hereunder.
"Facility Letter of Credit Fee" is defined in Section 3.8.
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<PAGE> 16
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10 a.m.
(Chicago time) on such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FIMC" means First Industrial Mortgage Corporation, a Delaware
corporation, and the sole general partner of the Mortgage Partnership. FIMC is
a wholly-owned subsidiary of the General Partner.
"Financial Letter of Credit" means any standby Letter of Credit
which represents an irrevocable obligation to the beneficiary on the part of
the Issuing Bank (i) to repay money borrowed by or advanced to or for the
account of the account party or (ii) to make any payment on account of any
indebtedness undertaken by the account party, in the event the account party
fails to fulfill its obligation to the beneficiary.
"Financing Partnership" means First Industrial Financing
Partnership, L.P., a Delaware limited partnership. Borrower and General
Partner, either directly or indirectly, collectively own 100% of the
partnership interests of the Financing Partnership.
"First Chicago" means The First National Bank of Chicago.
"FISC" means First Industrial Securities Corporation, a Delaware
corporation, and the sole general partner of the Guaranteeing Partnership.
FISC is a wholly-owned subsidiary of the General Partner.
"Fitch" means Fitch Investors Service, L.P.
"Funded Percentage" means, with respect to any Lender at any time,
a percentage equal to a fraction the numerator of which is the amount of the
Aggregate Commitment actually disbursed and outstanding to Borrower by such
Lender at such time, and the denominator of which is the total amount of the
Aggregate Commitment disbursed and outstanding to Borrower by all of the
Lenders at such time.
"Funding Lender" is defined in Section 2.3.
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"Funds From Operations" shall mean GAAP net income of the
Consolidated Operating Partnership, as adjusted by (i) excluding gains and
losses from property sales, debt restructurings and property write-downs and
adjusted for the non-cash effect of straight-lining of rents, (ii)
straight-lining various ordinary operating expenses which are payable less
frequently than monthly (e.g., real estate taxes) and (iii) adding back
depreciation, amortization and all non-cash items. Annualized Funds From
Operations for any Person will be calculated by annualizing actual Funds From
Operations for the most recently ended fiscal quarter. In calculating Funds
From Operations, no deduction shall be made from net income for closing costs
and other one-time charges associated with the formation and capitalization of
such Person.
"GAAP" means generally accepted accounting principles in the United
States of America consistent with those utilized in preparing the audited
financial statements of the Borrower required hereunder.
"General Partner" means First Industrial Realty Trust, Inc., a
Maryland corporation that is listed on the New York Stock Exchange and is
qualified as a real estate investment trust. General Partner is the sole
general partner of Borrower.
"Gross Revenues" means total revenues, calculated in accordance
with GAAP.
"Guarantee Obligation" means as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of the guaranteeing
person (or any other Person [including, without limitation, any bank under any
letter of credit] if the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation in favor of such other Person)
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the maximum stated amount of the primary
obligation relating to such Guarantee Obligation (or, if less, the maximum
stated liability set forth in the instrument embodying such Guarantee
Obligation), provided, that in the absence of any such stated amount or stated
liability, the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum
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reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guaranteeing Partnership" means First Industrial Securities L.P.,
a Delaware limited partnership. FISC is the sole general partner of the
Guaranteeing Partnership and Borrower is the sole limited partner.
"Guaranty" means the Guaranty executed by the General Partner in
the form attached hereto as Exhibit D.
"Implied Capitalization Value" means for any Person for any
quarter, the sum of (i) the quotient of (x) the Adjusted EBITDA for such Person
during such quarter (which Adjusted EBITDA shall be annualized as described in
the definition of "Funds From Operations", but shall exclude any Adjusted
EBITDA attributable to Preleased Assets Under Development), and (y) the then
most recent "Average Residual Cap Rate for National Industrial Markets", as
published in the Korpacz Real Estate Investor Survey, plus (ii) an amount equal
to fifty percent (50%) of the value of all Preleased Assets Under Development,
provided that in no event shall the aggregate amount added to Implied
Capitalization Value pursuant to this clause (ii) exceed $50,000,000. For
purposes of computing the Implied Capitalization Value, (A) Adjusted EBITDA may
be increased from quarter to quarter by the amount of net cash flow from new
leases of space at the Properties approved by Administrative Agent (where such
net cash flow has not then been included in EBITDA) which have a minimum term
of one year and (B) Properties which either (i) were acquired during the
quarter and/or (ii) were previously assets under development under GAAP but
which have been completed during the quarter and have at least some tenants in
possession of the respective leased spaces and conducting business operations
therein each will be included in the calculation of Implied Capitalization
Value using Pro Forma EBITDA for the quarter, so long as a "new
acquisition/opening summary" form is submitted to, and approved by,
Administrative Agent for each new acquisition or newly-opened Property during
such quarter. In no event shall the "Average Residual Cap Rate for Industrial
Markets" used to calculate the Implied Capitalization Value be less than 9% or
greater than 9.5%.
"Indebtedness" of any Person at any date means without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade liabilities and other accounts payable, and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness
for the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all obligations
of such Person under financing leases and capital leases, (e) all obligations
of such Person in respect of acceptances issued or created for the account of
such Person, (f) all Guarantee Obligations of such Person (excluding in any
calculation of consolidated indebtedness of the Borrower, Guarantee Obligations
of the Borrower in respect of primary obligations of any Subsidiary), (g) all
reimbursement obligations of such Person for letters of credit and other
contingent
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<PAGE> 19
liabilities, (h) all liabilities secured by any Lien (other than Liens for
taxes not yet due and payable) on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof,
(i) any repurchase obligation or liability of such Person or any of its
Subsidiaries with respect to accounts or notes receivable sold by such Person
or any of its Subsidiaries, (j) Senior Preferred Stock, and (k) such Person's
pro rata share of debt in Investment Affiliates and any loans where such Person
is liable as a general partner. The liquidation preference of the Senior
Preferred Stock will be considered as Indebtedness and Consolidated Total
Indebtedness, provided, however, that the obligations of the General Partner
created by the issuance of Senior Preferred Stock and the obligations of the
Guaranteeing Partnership created by the execution and delivery of the PS
Guaranty shall be deemed to constitute a single, combined liability on a
consolidated basis.
"Insolvency" means insolvency as defined in the United States
Bankruptcy Code, as amended. "Insolvent" when used with respect to a Person,
shall refer to a Person who satisfies the definition of Insolvency.
"Interest Expense" means all interest expense of the Borrower and
its Subsidiaries determined in accordance with GAAP plus (i) capitalized
interest not covered by an interest reserve from a loan facility, plus (ii) the
allocable portion (based on liability) of any accrued or paid interest incurred
on any obligation for which the Borrower or any Subsidiary is wholly or
partially liable under repayment, interest carry, or performance guarantees, or
other relevant liabilities, plus (iii) the allocable percentage of any accrued
or paid interest incurred on any Indebtedness of any Investment Affiliate,
whether recourse or non-recourse, equal to the applicable economic interest in
such Investment Affiliate held by the Borrower and any Subsidiaries, in the
aggregate, provided that no expense shall be included more than once in such
calculation even if it falls within more than one of the foregoing categories;
provided, however, that "Interest Expense" shall not include (i) those costs
and fees which have been capitalized and are payable by Borrower and/or the
Financing Partnership by reason of the purchase of a $300,000,000 interest rate
cap/swap from Union Bank of Switzerland in connection with the REMIC Loan or
(ii) dividends paid on Senior Preferred Stock or payments made pursuant to the
PS Guaranty or (iii) interest on the REMIC Loan after it becomes Defeased REMIC
Debt.
"Interest Period" means either an Absolute Interest Period or a
LIBOR Interest Period.
"Investment Affiliate" means any Person in which the Borrower,
directly or indirectly, has an ownership interest, whose financial results are
not consolidated under GAAP with the financial results of the Borrower on the
consolidated financial statements of the Borrower.
"Invitation for Competitive Bid Quotes" means a written notice to
the Lenders from the Administrative Agent with respect to a Competitive Bid
Quote Request in the form attached as Exhibit C-2 hereto.
"Issuance Date" is defined in Section 3.4(a)(3).
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"Issuance Notice" is defined in Section 3.4(c).
"Issuing Bank" means, with respect to each Facility Letter of
Credit, the Lender which issues such Facility Letter of Credit. First Chicago
shall be the sole Issuing Bank.
"Lenders" means, collectively, First Chicago, UBS and the other
Persons executing this Agreement in such capacity, or any Person which
subsequently executes and delivers any amendment hereto in such capacity and
each of their respective permitted successors and assigns. Where reference is
made to "the Lenders" in any Loan Document it shall be read to mean "all of the
Lenders".
"Lending Installation" means any U.S. office of any Lender
authorized to make loans similar to the Advances described herein.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
"Letter of Credit Request" is defined in Section 3.4(a).
"LIBOR Advance" means an Advance that bears interest at the
Adjusted LIBOR Rate, whether a ratable Advance based on the LIBOR Applicable
Margin or a Competitive Bid Loan based on a Competitive LIBOR Margin.
"LIBOR Applicable Margin" means, as of any date with respect to any
LIBOR Advance, the Applicable Margin in effect for such LIBOR Advance as
determined in accordance with Section 2.6 hereof.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a
period of one, two, three or six months (to the extent that periods in excess
of three months are generally available from the Lenders), as selected in
advance by the Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof, any filing
or agreement to file a financing statement as debtor under the Uniform
Commercial Code on any property leased to any Person under a lease which is not
in the nature of a conditional sale or title retention agreement, or any
subordination agreement in favor of another Person).
"Loan" means, with respect to a Lender, such Lender's portion of
any Advance.
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<PAGE> 21
"Loan Documents" means this Agreement, the Notes, the Guaranty and
any and all other agreements or instruments required and/or provided to Lenders
hereunder or thereunder, as any of the foregoing may be amended from time to
time.
"Majority Lenders" means Lenders in the aggregate having in excess
of 50% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding in excess of 50% of the aggregate
unpaid principal amount of the outstanding Advances.
"Margin Stock" has the meaning ascribed to it in Regulation U of
the Board of Governors of the Federal Reserve System.
"Market Value Net Worth" means at any time, Implied Capitalization
Value at such time minus the Indebtedness of Borrower and its Subsidiaries at
such time.
"Material Adverse Effect" means, with respect to any matter, that
such matter in the Supermajority Lenders' good faith judgment may (x)
materially and adversely affect the business, properties, condition or results
of operations of the Consolidated Operating Partnership taken as a whole, or
(y) constitute a non-frivolous challenge to the validity or enforceability of
any material provision of any Loan Document against any obligor party thereto.
"Material Adverse Financial Change" shall be deemed to have
occurred if the Supermajority Lenders, in their good faith judgment, determine
that a material adverse financial change has occurred which could prevent
timely repayment of any Advance hereunder or materially impair Borrower's
ability to perform its obligations under any of the Loan Documents.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products
or any hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Law, including, without limitation,
asbestos, radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means April 30, 2000, subject to extension pursuant
to the terms and conditions of Section 2.2 hereof or such earlier date on which
the principal balance of the Facility and all other sums due in connection with
the Facility shall be due as a result of the acceleration of the Facility.
"Monetary Default" means any Default involving Borrower's failure
to pay any of the Obligations when due.
"Moody's" means Moody's Investors Service, Inc. and its successors.
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<PAGE> 22
"Mortgage Partnership" means First Industrial Mortgage L.P., a
Delaware limited partnership. FIMC is the sole general partner of the Mortgage
Partnership and Borrower is the sole limited partner.
"Note" means the promissory note payable to the order of each
Lender in the amount of such Lender's maximum Commitment in the form attached
hereto as Exhibit B-1 (collectively, the "Notes").
"Obligations" means the Advances, the Facility Letter of Credit
Obligations and all accrued and unpaid fees and all other obligations of
Borrower to the Administrative Agent or any or all of the Lenders arising under
this Agreement or any of the other Loan Documents.
"Payment Date" means the last Business Day of each calendar
quarter.
"Partial Advance" is defined in Section 2.3 hereof.
"Participants" is defined in Section 13.2.1 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Lender, the applicable
percentage of the then-current Aggregate Commitment represented by such
Lender's then-current Commitment.
"Performance Letter of Credit" means any standby Letter of Credit
which represents an irrevocable obligation to the beneficiary on the part of
the Issuing Bank to make payment on account of any default by the account party
in the performance of a nonfinancial or commercial obligation.
"Permitted Liens" are defined in Section 9.6 hereof.
"Person" means an individual, a corporation, a limited or general
partnership, an association, a joint venture or any other entity or
organization, including a governmental or political subdivision or an agent or
instrumentality thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA, whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.
"Preleased Assets Under Development" means as of any date of
determination, any Project which (i) is under construction and then treated as
an asset under development under GAAP, and (ii) has, as of such date, at least
fifty percent (50%) of its projected total rentable area leased at market rates
to third party tenants similar to those at Borrower's other properties, both
such land and improvements under construction to be valued for purposes of
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<PAGE> 23
this Agreement at then-current book value, as determined in accordance with
GAAP; provided, however, in no event shall Preleased Assets Under Development
include any Project for more than 270 days from the date such Project is
initially so designated under GAAP.
"Project" means any real estate asset owned by the Borrower or any
wholly-owned Subsidiary and operated as a bulk warehouse or light industrial
property.
"Property" means each parcel of real property owned or operated by
the Borrower, any Subsidiary or Investment Affiliate.
"Property Operating Income" means, with respect to any Property,
for any period, earnings from rental operations (computed in accordance with
GAAP but without deduction for reserves) attributable to such Property plus
depreciation, amortization and interest expense with respect to such Property
for such period, and, if such period is less than a year, adjusted by straight
lining various ordinary operating expenses which are payable less frequently
than once during every such period (e.g. real estate taxes and insurance). At
the request of either Borrower or the Administrative Agent, the earnings from
rental operations reported for the immediately preceding fiscal quarter shall
be adjusted to include pro forma earnings (as substantiated to the satisfaction
of the Administrative Agent) for an entire quarter for any Property acquired or
placed in service during the then-current fiscal quarter and to exclude
earnings with respect to such immediately preceding fiscal quarter from any
Property not owned as of the date of determination.
"PS Guaranty" means the existing guaranty of Senior Preferred Stock
by the Guaranteeing Partnership.
"Purchasers" is defined in Section 13.3.1 hereof.
"Qualified Officer" means, with respect to any entity, the chief
financial officer, chief accounting officer or controller of such entity if it
is a corporation or of such entity's general partner if it is a partnership.
"Rate Option" means the Adjusted Corporate Base Rate, the Adjusted
LIBOR Rate or the Absolute Rate (only as applicable to Competitive Bid Loans).
The Rate Option in effect on any date shall always be the Adjusted Corporate
Base Rate unless the Borrower has properly selected the Adjusted LIBOR Rate
pursuant to Section 2.11 hereof or a Competitive Bid Loan pursuant to Section
2.17 hereof.
"Rating Pricing Period" means any period during the term of the
Facility during which the Borrower's or General Partner's long-term, senior
unsecured debt has been rated by at least two of S&P, Moody's, Fitch and Duff &
Phelps and the lower of the highest two ratings (at least one of which is from
S&P or Moody's) is at least BBB- (S&P) or Baa3 (Moody's) or an equivalent
rating from Fitch or Duff & Phelps.
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"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to reserve requirements applicable to member banks of the Federal Reserve
System.
"Reimbursement Obligations" means at any time, the aggregate of the
Obligations of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all unreimbursed payments or disbursements
made by the Lenders, the Issuing Bank and the Administrative Agent under or in
respect of the Facility Letters of Credit.
"REMIC Loan" means the $300,000,000 mortgage loan made by Nomura
Asset Capital Corporation ("REMIC Lender") to Financing Partnership pursuant to
the terms of a Loan Agreement dated as of June 30, 1994 ("REMIC Loan
Agreement").
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waivers in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Reserve Requirement" means, with respect to a LIBOR Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Second REMIC Loan" means the up to $42,600,000 mortgage loan made
by REMIC Lender to Mortgage Partnership pursuant to the terms of a Loan
Agreement dated as of December 29, 1995 (the "Second REMIC Loan Agreement") of
which only $40,200,000 was actually funded.
"Senior Preferred Stock" means the stated value of any preferred
stock issued by the General Partner which is not typical preferred stock but
instead is both (i) redeemable by the holders thereof on any fixed date or upon
the occurrence of any event and (ii) as to payment of dividends or amounts on
liquidation, either guaranteed by any direct or indirect Subsidiary of the
General Partner or secured by any property of the General Partner or any direct
or indirect Subsidiary of the General Partner.
"Senior Preferred Stock Expense" means for any period for any
Person, the aggregate dividend payments due to the holders of Senior Preferred
Stock of such Person, whether payable in cash or in kind, and whether or not
actually paid during such period.
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"Supermajority Lenders" means, as of any date, those Lenders
holding, in the aggregate, more than two-thirds (2/3) of the then-current
Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders holding, in the aggregate, more than two-thirds (2/3) of the aggregate
unpaid principal amount of the outstanding Advances.
"Subsidiary" means as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person, and provided such corporation,
partnership or other entity is consolidated with such Person for financial
reporting purposes under GAAP.
"Swingline Advances" means, as of any date, collectively, all
Swingline Loans then outstanding under this Facility.
"Swingline Commitment" means the obligation of the Swingline Lender
to make Swingline Loans not exceeding $15,000,000.
"Swingline Lender" shall mean First Chicago, in its capacity as a
Lender.
"Swingline Loan" means a Loan made by the Swingline Lender under
the special availability provisions described in Sections 2.16 hereof.
"Total Liabilities" means all Indebtedness plus all other GAAP
liabilities of the Borrower and its Subsidiaries.
"Transferee" is defined in Section 13.4 hereof.
"Unencumbered Asset" means any Project which, as of any date of
determination, (a) is not subject to any Liens other than Permitted Liens and
Liens in favor of the Lenders securing this Facility, (b) is not subject to any
agreement (including any agreement governing Indebtedness incurred in order to
finance or refinance the acquisition of such asset) which prohibits or limits
the ability of the Borrower, or its Subsidiaries, as the case may be, to
create, incur, assume or suffer to exist any Lien upon any assets or Capital
Stock of the Borrower or any of its Subsidiaries, (c) is not subject to any
agreement (including any agreement governing Indebtedness incurred in order to
finance or refinance the acquisition of such asset) which entitles any Person
to the benefit of any Lien (but excluding Liens in favor of Lenders securing
this Facility and other Permitted Liens) on any assets or Capital Stock of the
Borrower or any of its Subsidiaries or would entitle any Person to the benefit
of any Lien (but excluding liens in favor of Lenders securing this Facility and
other Permitted Liens) on such assets or Capital Stock upon the occurrence of
any contingency (including, without limitation, pursuant to an "equal and
ratable" clause), (d) is not the subject of any material
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architectural/engineering issue, as evidenced by a certification of Borrower,
and (e) is materially compliant with the representations and warranties in
Article VI below. Notwithstanding the foregoing, if any Project is a
"Superfund" site under federal law or a site identified in writing by the
jurisdiction in which such Project is located as having significant
environmental contamination under applicable state law, Borrower shall so
advise the Lenders in writing and the Majority Lenders shall have the right to
request from Borrower a current detailed environmental assessment (or one which
is not more than two years old for Unencumbered Assets owned as of the
Agreement Execution Date), and, if applicable, a written estimate of any
remediation costs from a recognized environmental contractor and to exclude any
such Project from Unencumbered Assets at their election. No Project of a
Subsidiary shall be deemed to be unencumbered unless both such Project and all
Capital Stock of such Subsidiary is unencumbered and neither such Subsidiary
nor any other intervening Subsidiary between the Borrower and such Subsidiary
has any Indebtedness for borrowed money (other than Indebtedness due to the
Borrower). The Borrower and General Partner acknowledge that Projects owned by
the Guaranteeing Partnership will not constitute Unencumbered Assets until the
PS Guaranty is released. For purposes of determining Unencumbered Assets, the
mortgages on those Projects securing Borrower's existing facility with First
Chicago as agent will be deemed released upon the termination of such existing
facility and First Chicago's receipt of full repayment thereunder.
"Value of Unencumbered Assets" means, as of any date, the amount
determined by dividing the Property Operating Income for a calculation period
which shall be either the immediately preceding full fiscal quarter or, if so
requested by Borrower or the Administrative Agent, the then-current partial
fiscal quarter from each Project which is an Unencumbered Asset as of such date
(as such Property Operating Income is annualized) by the then-current "Average
Residual Cap Rate for National Industrial Markets" described in the definition
of Implied Capitalization Value (including the cap and floor on such rate
described therein). If a Project has been acquired during such a calculation
period then Borrower shall be entitled to include pro forma Property Operating
Income from such property for the entire calculation period in the foregoing
calculation, except for purposes of the financial covenant contained in Section
9.10(d). If a Project is no longer owned as of the date of calculation, then
no value shall be included based on capitalizing Property Operating Income from
such Project, except for purposes of such financial covenant contained in
Section 9.10(d).
The foregoing definitions shall be equally applicable to both the
singular and the plural forms of the defined terms.
1.2 Financial Standards. All financial computations
required of a Person under this Agreement shall be made, and all financial
information required under this Agreement shall be prepared, in accordance with
GAAP, except that if any Person's financial statements are not audited, such
Person's financial statements shall be prepared in accordance with the same
sound accounting principles utilized in connection with the financial
information submitted
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to Lenders with respect to the Borrower or the General Partner or the
Properties in connection with this Agreement and shall be certified by an
authorized representative of such Person.
ARTICLE II
THE FACILITY
2.1 The Facility.
(a) Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Borrower and General
Partner contained herein, Lenders agree to make Advances through the
Administrative Agent to Borrower from time to time prior to the Maturity Date,
provided that the making of any such Advance will not cause the then Allocated
Facility Amount to exceed the then- current Aggregate Commitment. The Advances
may be ratable Adjusted Corporate Base Rate Advances, ratable LIBOR Advances,
non-pro rata Swingline Loans or non-pro rata Competitive Bid Loans. Except as
provided in Sections 2.16, 2.17 and 12.16 hereof, each Lender shall fund its
Percentage of each such Advance and no Lender will be required to fund any
amounts which when aggregated with such Lender's Percentage of (i) all other
Advances (other than Competitive Bid Loans) then outstanding, (ii) all
Swingline Advances and (iii) all Facility Letter of Credit Obligations would
exceed such Lender's then-current Commitment. This facility ("Facility") is a
revolving credit facility and, subject to the provisions of this Agreement,
Borrower may request Advances hereunder, repay such Advances and reborrow
Advances at any time prior to the Maturity Date.
(b) The Facility created by this Agreement, and that
Commitment of each Lender to lend hereunder, shall terminate on the Maturity
Date, unless sooner terminated in accordance with the terms of this Agreement.
(c) In no event shall the Aggregate Commitment exceed Two
Hundred Million Dollars ($200,000,000).
2.2 Principal Payments and Extension Option. Any
outstanding Advances (other than Competitive Bid Loans) and all other unpaid
Obligations shall be paid in full by the Borrower on the Maturity Date. Each
Competitive Bid Loan shall be paid in full on the last day of the applicable
Interest Period as described in Section 2.17 below. The Maturity Date can be
extended for extension periods of one year each upon notice to the
Administrative Agent not later than April 30, 1998 with respect to the first
such extension of the Maturity Date and not later than each April 30 thereafter
for each subsequent extension of the Maturity Date (each an "Extension
Notice"), if (i) no Default has occurred and is continuing at the time of such
notice and at the time of the then applicable Maturity Date, (ii) all of the
Lenders agree to such extension, (iii) all prior extensions have been elected
by the Borrower and accepted by the Lenders, and (iv) the Borrower pays an
extension fee to the
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Administrative Agent for the account of each Lender equal to a pro rata amount
of the upfront fee paid to such Lender (expressed as a percentage of such
Lender's initial Commitment applied to the then-current Commitment of such
Lender). The Administrative Agent shall, at the Borrower's request, confirm
the amount of the upfront fee paid to each Lender with respect to its initial
Commitment. If the Borrower gives an Extension Notice to the Administrative
Agent, the Administrative Agent shall notify the Lenders within 10 days of
receipt of such request. The Lenders shall have 30 days after receipt of an
Extension Notice to notify Administrative Agent as to whether they accept or
reject such extension request and Administrative Agent shall notify Borrower
and the Lenders promptly thereafter of the acceptance or rejection of the
Lenders of Borrower's request to extend the Maturity Date. If the foregoing
conditions are satisfied other than the condition requiring the consent of all
Lenders, then Borrower shall have the right to replace any Lender that does not
agree to the extension provided that Borrower notifies such Lender that it has
elected to replace such Lender and notifies such Lender and the Administrative
Agent of the identity of the proposed replacement Lender no later than the date
six (6) months after the date of the applicable Extension Notice. The Lender
being replaced shall assign its Percentage of the Aggregate Commitment and its
rights and obligations under this Facility to the replacement Lender in
accordance with the requirements of Section 13.3 hereof and the replacement
Lender shall assume such Percentage of the Aggregate Commitment and the related
obligations under this Facility prior to the Maturity Date to be extended, all
pursuant to an assignment and assumption agreement substantially in the form of
Exhibit J hereto. The purchase by the replacement Lender shall be at par (plus
all accrued and unpaid interest and any other sums owed to such Lender being
replaced hereunder) which shall be paid to the Lender being replaced upon the
execution and delivery of the assignment.
2.3 Requests for Advances; Responsibility for Advances.
Ratable Advances shall be made available to Borrower by Administrative Agent in
accordance with Section 2.1(a) and Section 2.11(a) hereof. The obligation of
each Lender to fund its Percentage of each ratable Advance shall be several and
not joint.
2.4 Evidence of Credit Extensions. The Advances of each
Lender outstanding at any time (other than Competitive Bid Loans) shall be
evidenced by the Notes. Each Note executed by the Borrower shall be in a
maximum principal amount equal to each Lender's Percentage of the current
Aggregate Commitment of $200,000,000. Each Lender shall record Advances and
principal payments thereof on the schedule attached to its Note or, at its
option, in its records, and each Lender's record thereof shall be conclusive
absent Borrower furnishing to such Lender conclusive and irrefutable evidence
of an error made by such Lender with respect to that Lender's records.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under the Notes to pay the amount actually
owed by Borrower to Lenders.
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<PAGE> 29
2.5 Ratable and Non-Pro Rata Loans. Each Advance hereunder
shall consist of Loans made from the several Lenders ratably in proportion to
their Percentages, except for Swingline Loans which shall be made by the
Swingline Lender in accordance with Section 2.16 and Competitive Bid Loans
which may be made on a non-pro rata basis by one or more of the Lenders in
accordance with Section 2.17. The ratable Advances may be Adjusted Corporate
Base Rate Advances, LIBOR Advances or a combination thereof, selected by the
Borrower in accordance with Sections 2.10 and 2.11.
2.6 Applicable Margins. The CBR Applicable Margin and the
LIBOR Applicable Margin to be used in calculating the interest rate applicable
to different types of Advances shall vary from time to time in accordance with
the ratings for Borrower's or General Partner's long-term, senior unsecured
debt as follows:
No Rating Pricing Period in Effect:
<TABLE>
<CAPTION>
Consolidated Total Indebtedness as a Percentage LIBOR CBR
of Implied Capitalization Value Applicable Margin Applicable Margin
<S> <C> <C>
less than 25% 0.95%* 0
25% or over, but less than 30% 1.10%* 0.125%
30% or over, but less than 40% 1.10%** 0.25%
40% or over, but not more than 50% 1.35%* 0.375%
</TABLE>
* These levels of LIBOR Applicable Margin shall be increased by 0.10%
on the earlier of (i) a date six (6) months after the Agreement
Execution Date if the Rating Pricing Period has not commenced by
such date or (ii) any date on which Borrower or General Partner has
received ratings from both S&P and Moody's lower than BBB-/Baa3 or
has been refused a rating by both S&P and Moody's or has other
reason to know that the Rating Pricing Period will not commence
within such six (6) month period.
** This level of LIBOR Applicable Margin shall be increased by 0.20%
on the earlier of (i) a date six (6) months after the Agreement
Execution Date if the Rating Pricing Period has not commenced by
such date or (ii) any date on which Borrower or General Partner has
received ratings from both S&P and Moody's lower than BBB-/Baa3 or
has been refused a rating by both S&P and Moody's or has other
reason to know that the Rating Pricing Period will not commence
within such six (6) month period.
Rating Pricing Period in Effect:
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<PAGE> 30
<TABLE>
<CAPTION>
LIBOR CBR
Rating Level of Lower of Two Applicable Margin Applicable Margin
Highest Ratings*** Facility Fee
<S> <C> <C> <C>
A-/A3 0.80% 0 0.15%
BBB+/Baa1 0.90% 0 0.20%
BBB/Baa2 1.00% 0 0.225%
BBB-/Baa3 1.10% 0.10% 0.25%
</TABLE>
*** Rating levels established by reference to S&P and Moody's ratings,
respectively. At least one of S&P or Moody's ratings must always
be included in the two ratings used.
Subject to the clauses shown as * and **, the Applicable Margins
when no Rating Pricing Period is in effect will change only quarterly and upon
delivery of a compliance certificate in the form of Exhibit H attached hereto,
when the Borrower's Implied Capitalization Value is determined. When a Rating
Pricing Period is in effect, all Applicable Margins and the Facility Fee shall
change as and when the applicable rating level changes. In the event an agency
issues different ratings for the Borrower and the General Partner, then the
higher rating for the two entities shall be deemed to be the rating from such
agency.
2.7 Commitment Fee. During those portions of the Facility
term which are not Rating Pricing Periods, the Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (the
"Commitment Fee") from the Agreement Execution Date to and including the
Maturity Date, calculated at the rate of 0.20% per annum on the daily
unborrowed portion of such Lender's Commitment (which is equal to the
difference between (a) such Lender's Commitment on such day and (b) the then
outstanding Loans owed to such Lender plus the Lender's Percentage of any
outstanding and undrawn Facility Letters of Credit) payable quarterly in
arrears on the last day of each calendar quarter hereafter beginning December
31, 1996 and on the Maturity Date; provided, however, that the Commitment Fee
shall be calculated at the reduced rate of 0.125% per annum on the daily
unborrowed portion of such Lender's Commitment for any day on which the
principal balance of all outstanding and unpaid Loans under the Facility
(including Swingline Loans and Competitive Bid Loans) plus all outstanding and
undrawn Facility Letters of Credit is greater than 50% of the Aggregate
Commitment. Amounts outstanding under the Swingline Loans shall be considered
part of the available unborrowed portion of the Facility for purposes of
computing the Commitment Fee. Notwithstanding the foregoing, all accrued
Commitment Fees shall be payable on the effective date of any termination of
the obligations of the Lenders to make Loans hereunder.
2.8 Other Fees.
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<PAGE> 31
(a) The Borrower shall pay the fee due to the
Administrative Agent in connection with Competitive Bid Loans as described in
Section 2.17. The Borrower agrees to pay all other fees payable to the
Administrative Agent and the Arranger pursuant to the Borrower's prior letter
agreements with them.
(b) For each day during a Rating Pricing Period the
Borrower shall pay a fee ("Facility Fee") to the Administrative Agent for the
account of the Lenders equal to the applicable Facility Fee Rate in effect for
such day, as shown in Section 2.6 hereof, times the then Aggregate Commitment,
to be shared among the Lenders based on their respective Percentages. The
Facility Fee shall be paid quarterly in arrears.
2.9 Minimum Amount of Each Advance. Each LIBOR Advance
shall be in the minimum amount of $2,000,000 (and in multiples of $100,000 if
in excess thereof), and each Adjusted Corporate Base Rate Advance shall be in
the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), provided, however, that any Adjusted Corporate Base Rate Advance may
be in the amount of the unused Aggregate Commitment.
2.10 Interest.
(a) The outstanding principal balance under the Notes shall
bear interest from time to time at a rate per annum equal to:
(i) the Adjusted Corporate Base Rate; or
(ii) at the election of Borrower with respect to all
or portions of the Obligations, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest accrued on each Advance shall
be payable in arrears on (i) the first day of each calendar month, commencing
with the first such date to occur after the date hereof, (ii) with respect to
LIBOR Advances, the last day of the applicable LIBOR Interest Period, and (iii)
the Maturity Date. Interest shall not be payable for the day of any payment on
the amount paid if payment is received by Administrative Agent prior to noon
(Chicago time). If any payment of principal or interest under the Notes shall
become due on a day that is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a payment of principal,
such extension of time shall be included in computing interest due in
connection with such payment; provided that for purposes of Section 10.1
hereof, any payments of principal described in this sentence shall be
considered to be "due" on such next succeeding Business Day.
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<PAGE> 32
2.11 Selection of Rate Options and LIBOR Interest Periods.
(a) Borrower, from time to time, may select the Rate Option
and, in the case of each LIBOR Advance, the commencement date (which shall be a
Business Day) and the length of the LIBOR Interest Period applicable to each
LIBOR Advance. Borrower shall give Administrative Agent irrevocable notice (a
"Borrowing Notice" not later than 11:00 a.m. (Chicago time) (i) at least one
Business Day prior to an Adjusted Corporate Base Rate Advance, (ii) at least
three (3) Business Days prior to a ratable LIBOR Advance, and (iii) not later
than 11:00 a.m. (Chicago time) on the Borrowing Date for each Swingline Loan,
specifying:
(i) the Borrowing Date, which shall be a Business
Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR
Interest Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice
the compliance certificate required in Section 5.2 and otherwise comply with
the conditions set forth in Section 5.2 for Advances. Administrative Agent
shall provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate on the same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. The Lenders shall not be obligated to
match fund their LIBOR Advances. Administrative Agent will promptly make the
funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable
after receipt of a Borrowing Notice, determine the Adjusted LIBOR Rate
applicable to the requested ratable LIBOR Advance and inform Borrower and
Lenders of the same. Each determination of the Adjusted LIBOR Rate by
Administrative Agent shall be conclusive and binding upon Borrower in the
absence of manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than
on the last day of the LIBOR Interest Period applicable thereto, Borrower shall
be responsible to pay all amounts due to Lenders as required by Section 4.4
hereof.
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<PAGE> 33
(d) As of the end of each LIBOR Interest Period selected
for a ratable LIBOR Advance, the interest rate on the LIBOR Advance will become
the Adjusted Corporate Base Rate, unless Borrower has once again selected a
LIBOR Interest Period in accordance with the timing and procedures set forth in
Section 2.11(g).
(e) The right of Borrower to select the Adjusted LIBOR
Rate for an Advance pursuant to this Agreement is subject to the availability
to Lenders of a similar option. If Administrative Agent determines that (i)
deposits of Dollars in an amount approximately equal to the LIBOR Advance for
which the Borrower wishes to select the Adjusted LIBOR Rate are not generally
available at such time in the London interbank eurodollar market, or (ii) the
rate at which the deposits described in subsection (i) herein are being offered
will not adequately and fairly reflect the costs to Lenders of maintaining an
Adjusted LIBOR Rate on an Advance or of funding the same in such market for
such LIBOR Interest Period, or (iii) reasonable means do not exist for
determining an Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be in
excess of the maximum interest rate which Borrower may by law pay, then in any
of such events, Administrative Agent shall so notify Borrower and Lenders and
such Advance shall bear interest at the Adjusted Corporate Base Rate.
(f) In no event may Borrower elect a LIBOR Interest
Period which would extend beyond the Maturity Date. Unless Lenders agree
thereto, in no event may Borrower have more than ten (10) different LIBOR
Interest Periods for LIBOR Advances outstanding at any one time.
(g) Conversion and Continuation.
(i) Borrower may elect from time to time, subject
to the other provisions of this Section 2.11, to convert all
or any part of a ratable Advance into any other type of
Advance; provided that any conversion of a ratable LIBOR
Advance shall be made on, and only on, the last day of the
LIBOR Interest Period applicable thereto.
(ii) Adjusted Corporate Base Rate Advances shall
continue as Adjusted Corporate Rate Advances unless and until
such Adjusted Corporate Base Rate Advances are converted into
ratable LIBOR Advances pursuant to a Conversion/Continuation
Notice from Borrower in accordance with Section 2.11(g)(iv).
Ratable LIBOR Advances shall continue until the end of the
then applicable LIBOR Interest Period therefor, at which time
each such Advance shall be automatically converted into an
Adjusted Corporate Base Rate Advance unless the Borrower shall
have given the Administrative Agent a Conversion/Continuation
Notice in accordance with Section 2.11(g)(iv) requesting that,
at the end of such LIBOR Interest Period, such Advance either
continue as an Advance of such type for the same or another
LIBOR Interest Period.
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<PAGE> 34
(iii) Notwithstanding anything to the contrary
contained in Sections 2.11(g)(i) or (g)(ii), no Advance may be
converted into a LIBOR Advance or continued as a LIBOR Advance
(except with the consent of the Majority Lenders) when any
Monetary Default or Event of Default has occurred and is
continuing.
(iv) The Borrower shall give the Administrative
Agent irrevocable notice (a "Conversion/Continuation Notice")
of each conversion of an Advance or continuation of a LIBOR
Advance not later than 11:00 a.m. (Chicago time) on the
Business Day immediately preceding the date of the requested
conversion, in the case of a conversion into an Adjusted
Corporate Base Rate Advance, or 11:00 a.m. (Chicago time) at
least three (3) Business Days prior to the date of the
requested conversion or continuation, in the case of a
conversion into or continuation of a ratable LIBOR Advance,
specifying: (1) the requested date (which shall be a Business
Day) of such conversion or continuation; (2) the amount and
type of the Advance to be converted or continued; and (3) the
amounts and type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a ratable LIBOR Advance, the duration
of the LIBOR Interest Period applicable thereto.
2.12 Method of Payment. All payments of the Obligations hereunder
shall be made, without set-off, deduction, or counterclaim, in immediately
available funds to Administrative Agent at Administrative Agent's address
specified herein, or at any other Lending Installation of Administrative Agent
specified in writing by Administrative Agent to Borrower, by noon (local time)
on the date when due and shall be applied ratably by Administrative Agent among
Lenders. Each payment delivered to Administrative Agent for the account of any
Lender shall be delivered promptly by Administrative Agent to such Lender in
the same type of funds that Administrative Agent received at its address
specified herein or at any Lending Installation specified in a notice received
by Administrative Agent from such Lender. Administrative Agent is hereby
authorized to charge the account of Borrower maintained with First Chicago for
each payment of principal, interest and fees as it becomes due hereunder.
2.13 Default. Notwithstanding the foregoing, during the
continuance of a Monetary Default or an Event of Default, Borrower shall not
have the right to request a LIBOR Advance, request a Competitive Bid Loan,
select a new LIBOR Interest Period for an existing ratable LIBOR Advance or
convert any Adjusted Corporate Base Rate Advance to a ratable LIBOR Advance.
During the continuance of a Monetary Default or an Event of Default, at the
election of the Majority Lenders, by notice to Borrower, outstanding Advances
shall bear interest at the applicable Default Rates until such Monetary Default
or Event of Default ceases to exist or the Obligations are paid in full.
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<PAGE> 35
2.14 Lending Installations. Each Lender may book its Advances at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and Borrower, designate a Lending
Installation through which Advances will be made by it and for whose account
payments are to be made.
2.15 Non-Receipt of Funds by Administrative Agent. Unless Borrower or a
Lender, as the case may be, notifies Administrative Agent prior to the date on
which it is scheduled to make payment to Administrative Agent of (i) in the case
of a Lender, an Advance, or (ii) in the case of Borrower, a payment of
principal, interest or fees to the Administrative Agent for the account of the
Lenders, that it does not intend to make such payment, Administrative Agent may
assume that such payment has been made. Administrative Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or Borrower, as the
case may be, has not in fact made such payment to Administrative Agent, the
recipient of such payment shall, on demand by Administrative Agent, repay to
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by Administrative Agent until the date Administrative Agent
recovers such amount at a rate per annum equal to (i) in the case of payment by
a Lender, the Federal Funds Effective Rate (as determined by Administrative
Agent) for such day or (ii) in the case of payment by Borrower, the interest
rate applicable to the relevant Advance.
2.16 Swingline Loans. In addition to the other options available
to Borrower hereunder, up to $15,000,000 of the Swingline Commitment, shall be
available for Swingline Loans subject to the following terms and conditions.
Swingline Loans shall be made available for same day borrowings provided that
notice is given in accordance with Section 2.11 hereof. All Swingline Loans
shall bear interest at the Adjusted Corporate Base Rate and shall be deemed to
be Adjusted Corporate Base Rate Advances. In no event shall the Swingline
Lender be required to fund a Swingline Loan if it would increase the total
aggregate outstanding Loans by Swingline Lender hereunder plus its Percentage
of Facility Letter of Credit Obligations to an amount in excess of its
Commitment. Upon request of the Swingline Lender made to all the Lenders, each
Lender irrevocably agrees to purchase its Percentage of any Swingline Loan made
by the Swingline Lender regardless of whether the conditions for disbursement
are satisfied at the time of such purchase, including the existence of an Event
of Default hereunder provided no Lender shall be required to have total
outstanding Loans (other than Competitive Bid Loans) plus its Percentage of
Facility Letters of Credit to be in an amount greater than its Commitment.
Such purchase shall take place on the date of the request by Swingline Lender
so long as such request is made by noon (Chicago time), otherwise on the
Business Day following such request. All requests for purchase shall be in
writing. From and after the date it is so purchased, each such Swingline Loan
shall, to the extent purchased, (i) be treated as a Loan made by the purchasing
Lenders
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<PAGE> 36
and not by the selling Lender for all purposes under this Agreement and the
payment of the purchase price by a Lender shall be deemed to be the making of a
Loan by such Lender and shall constitute outstanding principal under such
Lender's Note, and (ii) shall no longer be considered a Swingline Loan except
that all interest accruing on or attributable to such Swingline Loan for the
period prior to the date of such purchase shall be paid when due by the
Borrower to the Administrative Agent for the benefit of the Swingline Lender
and all such amounts accruing on or attributable to such Loans for the period
from and after the date of such purchase shall be paid when due by the Borrower
to the Administrative Agent for the benefit of the purchasing Lenders. If
prior to purchasing its Percentage of a Swingline Loan one of the events
described in Section 10.10 shall have occurred and such event prevents the
consummation of the purchase contemplated by preceding provisions, each Lender
will purchase an undivided participating interest in the outstanding Swingline
Loan in an amount equal to its Percentage of such Swingline Loan. From and
after the date of each Lender's purchase of its participating interest in a
Swingline Loan, if the Swingline Lender receives any payment on account
thereof, the Swingline Lender will distribute to such Lender its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded); provided, however, that in
the event that such payment was received by the Swingline Lender and is
required to be returned to the Borrower, each Lender will return to the
Swingline Lender any portion thereof previously distributed by the Swingline
Lender to it. If any Lender fails to so purchase its Percentage of any
Swingline Loan, such Lender shall be deemed to be a Defaulting Lender
hereunder. No Swingline Loan shall be outstanding for more than five (5) days
at a time and Swingline Loans shall not be outstanding for more than a total of
ten (10) days during any month.
2.17 Competitive Bid Loans.
(a) Competitive Bid Option. In addition to ratable
Advances pursuant to Section 2.5, but subject to the terms and conditions of
this Agreement (including, without limitation the limitation set forth in
Section 2.1(a) as to the maximum Allocated Facility Amount), the Borrower may,
as set forth in this Section 2.17, but only during a Rating Pricing Period,
request the Lenders, prior to the Maturity Date, to make offers to make
Competitive Bid Loans to the Borrower. Each Lender may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section
2.17. Competitive Bid Loans shall be evidenced by the Competitive Bid Notes.
(b) Competitive Bid Quote Request. When the Borrower
wishes to request offers to make Competitive Bid Loans under this Section 2.17,
it shall transmit to the Administrative Agent by telecopy a Competitive Bid
Quote Request substantially in the form of Exhibit C-1 hereto so as to be
received no later than (i) 10:00 a.m. (Chicago time) at least five Business
Days prior to the Borrowing Date proposed therein, in the case of a request for
a Competitive LIBOR Margin or (ii) 9:00 a.m. (Chicago time) at least one
Business Day
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<PAGE> 37
prior to the Borrowing Date proposed therein, in the case of a request for an
Absolute Rate specifying:
(i) the proposed Borrowing Date for the
proposed Competitive Bid Loan,
(ii) the requested aggregate principal
amount of such Competitive Bid Loan,
(iii) whether the Competitive Bid Quotes
requested are to set forth a Competitive LIBOR Margin or an
Absolute Rate, or both, and
(iv) the LIBOR Interest Period, if a
Competitive LIBOR Margin is requested, or the Absolute
Interest Period, if an Absolute Rate is requested.
The Borrower may request offers to make Competitive Bid Loans for more than one
(but not more than five) Interest Period in a single Competitive Bid Quote
Request. No Competitive Bid Quote Request shall be given within five Business
Days (or such other number of days as the Borrower and the Administrative Agent
may agree) of any other Competitive Bid Quote Request. A Competitive Bid Quote
Request that does not conform substantially to the form of Exhibit C-1 hereto
shall be rejected, and the Administrative Agent shall promptly notify the
Borrower of such rejection by telecopy.
(c) Invitation for Competitive Bid Quotes. Promptly and
in any event before the close of business on the same Business Day of receipt
of a Competitive Bid Quote Request that is not rejected pursuant to Section
2.17(b), the Administrative Agent shall send to each of the Lenders by telecopy
an Invitation for Competitive Bid Quotes substantially in the form of Exhibit
C-2 hereto, which shall constitute an invitation by the Borrower to each Lender
to submit Competitive Bid Quotes offering to make the Competitive Bid Loans to
which such Competitive Bid Quote Request relates in accordance with this
Section 2.17.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Lender may, in its sole
discretion, submit a Competitive Bid Quote containing an offer
or offers to make Competitive Bid Loans in response to any
Invitation for Competitive Bid Quotes. Each Competitive Bid
Quote must comply with the requirements of this Section
2.17(d) and must be submitted to the Administrative Agent by
telex or telecopy at its offices not later than (a) 2:00 p.m.
(Chicago time) at least four Business Days prior to the
proposed Borrowing Date, in the case of a request for a
Competitive LIBOR Margin or (b) 9:00 a.m. (Chicago time) on
the proposed Borrowing Date, in the case of a request for an
Absolute Rate (or, in either case upon reasonable prior notice
to the Lenders, such other time and
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<PAGE> 38
rate as the Borrower and the Administrative Agent may agree);
provided that Competitive Bid Quotes submitted by First
Chicago may only be submitted if the Administrative Agent or
First Chicago notifies the Borrower of the terms of the Offer
or Offers contained therein no later than 30 minutes prior to
the latest time at which the relevant Competitive Bid Quotes
must be submitted by the other Lenders. Subject to the
Borrower's compliance with all other conditions to
disbursement herein, any Competitive Bid Quote so made shall
be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the
Borrower.
(ii) Each Competitive Bid Quote shall be
in substantially the form of Exhibit C-3 hereto and shall in
any case specify:
(a) the proposed Borrowing Date,
which shall be the same as that set forth in the
applicable Invitation for Competitive Bid Quotes,
(b) the principal amount of the
Competitive Bid Loan for which each such offer is
being made, which principal amount (1) may be greater
than, less than or equal to the Commitment of the
quoting Lender, (2) must be at least $10,000,000 and
an integral multiple of $1,000,000, and (3) may not
exceed the principal amount of Competitive Bid Loans
for which offers are requested,
(c) as applicable, the Competitive
LIBOR Margin and Absolute Rate offered for each such
Competitive Bid Loan,
(d) the minimum amount, if any, of
the Competitive Bid Loan which may be accepted by the
Borrower, and
(e) the identity of the quoting
Lender.
(iii) The Administrative Agent shall
reject any Competitive Bid Quote that:
(a) is not substantially in the
form of Exhibit C-3 hereto or does not specify all of
the information required by Section 2.17(d)(ii),
(b) contains qualifying,
conditional or similar language, other than any such
language contained in Exhibit C-3 hereto,
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<PAGE> 39
(c) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Competitive Bid Quotes, or
(d) arrives after the time set
forth in Section 2.17(d)(i).
If any Competitive Bid Quote shall be rejected pursuant to
this Section 2.17(d)(iii), then the Administrative Agent shall
notify the relevant Lender of such rejection as soon as
practical.
(e) Notice to Borrower. The Administrative Agent shall
promptly notify the Borrower of the terms (i) of any Competitive Bid Quote
submitted by a Lender that is in accordance with Section 2.17(d) and (ii) of
any Competitive Bid Quote that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote submitted by such Lender with respect to
the same Competitive Bid Quote Request. Any such subsequent Competitive Bid
Quote shall be disregarded by the Administrative Agent unless such subsequent
Competitive Bid Quote specifically states that it is submitted solely to
correct a manifest error in such former Competitive Bid Quote. The
Administrative Agent's notice to the Borrower shall specify the aggregate
principal amount of Competitive Bid Loans for which offers have been received
for each Interest Period specified in the related Competitive Bid Quote Request
and the respective principal amounts and Competitive LIBOR Margins or Absolute
Rate, as the case may be, so offered.
(f) Acceptance and Notice by Borrower. Not later than
(i) 6:00 p.m. (Chicago time) at least four Business Days prior to the proposed
Borrowing Date in the case of a request for a Competitive LIBOR Margin or (ii)
10:00 a.m. (Chicago time) on the proposed Borrowing Date, in the case of a
request for an Absolute Rate (or, in either case upon reasonable prior notice
to the Lenders, such other time and date as the Borrower and the Administrative
Agent may agree), the Borrower shall notify the Administrative Agent of its
acceptance or rejection of the offers so notified to it pursuant to Section
2.17(e); provided, however, that the failure by the Borrower to give such
notice to the Administrative Agent shall be deemed to be a rejection of all
such offers. In the case of acceptance, such notice (a "Competitive Bid
Borrowing Notice") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any
Competitive Bid Quote in whole or in part (subject to the terms of Section
2.17(d)(iii)); provided that:
(i) the aggregate principal amount of
all Competitive Bid Loans to be disbursed on a given Borrowing
Date may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request,
(ii) acceptance of offers may only be
made on the basis of ascending Competitive LIBOR Margins or
Absolute Rates, as the case may be, and
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(iii) the Borrower may not accept any
offer that is described in Section 2.17(d)(iii) or that
otherwise fails to comply with the requirements of this
Agreement.
(g) Allocation by Administrative Agent. If offers are
made by two or more Lenders with the same Competitive LIBOR Margins or Absolute
Rates, as the case may be, for a greater aggregate principal amount than the
amount in respect of which offers are accepted for the related Interest Period,
the principal amount of Competitive Bid Loans in respect of which such offers
are accepted shall be allocated by the Administrative Agent among such Lenders
as nearly as possible (in such multiples, not greater than $1,000,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amount of such offers provided, however, that no Lender shall be
allocated any Competitive Bid Loan which is less than the minimum amount which
such Lender has indicated that it is willing to accept. Allocations by the
Administrative Agent of the amounts of Competitive Bid Loans shall be
conclusive in the absence of manifest error. The Administrative Agent shall
promptly, but in any event on the same Business Day, notify each Lender of its
receipt of a Competitive Bid Borrowing Notice and the principal amounts of the
Competitive Bid Loans allocated to each participating Lender.
(h) Administration Fee. The Borrower hereby agrees to
pay to the Administrative Agent an administration fee of $2,500 per each
Competitive Bid Quote Request transmitted by the Borrower to the Administrative
Agent pursuant to Section 2.17(b). Such administration fee shall be payable
monthly in arrears on the first Business Day of each month and on the Maturity
Date (or such earlier date on which the Aggregate Commitment shall terminate or
be cancelled) for any period then ending for which such fee, if any, shall not
have been theretofore paid.
(i) Other Terms. Any Competitive Bid Loan shall not
reduce the Commitment of the Lender making such Competitive Bid Loan, and each
such Lender shall continue to be obligated to fund its full percentage of all
pro rata Advances under the Facility. In no event can the aggregate amount of
all Competitive Bid Loans at any time exceed fifty percent (50%) of the then
Aggregate Commitment. Competitive Bid Loans may not be continued and, if not
repaid at the end of the Interest Period applicable thereto, shall (subject to
the conditions set forth in this Agreement) be replaced by new Competitive Bid
Loans made in accordance with this Section 2.17 or by ratable Advances in
accordance with Section 2.11.
2.18 Voluntary Reduction of Aggregate Commitment Amount. Upon at
least five (5) days prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall have
the right, without premium or penalty, to terminate the Aggregate Commitment in
whole or in part provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, and (b) any such partial termination shall be in the minimum
aggregate amount of Five Million Dollars (U.S. $5,000,000.00) or any integral
multiple of Five
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Million Dollars (U.S. $5,000,000.00) in excess thereof. Any partial
termination of the Aggregate Commitment shall be applied pro rata to each
Lender's Commitment.
2.19 Application of Moneys Received. All moneys collected or
received by the Administrative Agent on account of the Facility directly or
indirectly, shall be applied in the following order of priority:
(i) to the payment of all reasonable
costs incurred in the collection of such moneys of which the
Administrative Agent shall have given notice to the Borrower;
(ii) to the reimbursement of any yield
protection due to any of the Lenders in accordance with
Section 4.1;
(iii) to the payment of any fee due
pursuant to Section 3.8(b) in connection with the issuance of
a Facility Letter of Credit to the Issuing Bank, to the
payment of the Commitment Fee, Facility Fee and Facility
Letter of Credit Fee to the Lenders, if then due, and to the
payment of all fees to the Administrative Agent;
(iv) to payment of the full amount of
interest and principal on the Swingline Loans;
(v) first to interest until paid in full
and then to principal for all Lenders (other than Defaulting
Lenders) (i) as allocated by the Borrower (unless an Event of
Default exists) between Competitive Bid Loans and ratable
Advances (the amount allocated to ratable Advances to be
distributed in accordance with the Percentages of the Lenders)
or (ii) if an Event of Default exists, in accordance with the
respective Funded Percentages of the Lenders;
(vi) any other sums due to the
Administrative Agent or any Lender under any of the Loan
Documents; and
(vii) to the payment of any sums due to
each Defaulting Lender as their respective Percentages appear
(provided that Administrative Agent shall have the right to
set-off against such sums any amounts due from such Defaulting
Lender).
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ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
3.1 Obligation to Issue. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Borrower and the General Partner herein set forth, the Issuing Bank hereby
agrees to issue for the account of Borrower, one or more Facility Letters of
Credit in accordance with this Article III, from time to time during the period
commencing on the Agreement Execution Date and ending on a date one Business
Day prior to the Maturity Date. The Issuing Bank has, as of the Agreement
Execution Date, issued three letters of credit under the Borrower's prior
credit agreement with First Chicago as agent in the face amounts of
$979,688.00, $2,732,943.18 and $973,492.93, which letters of credit shall be
deemed Facility Letters of Credit hereunder.
3.2 Types and Amounts. The Issuing Bank shall not have any
obligation to:
(i) issue any Facility Letter of Credit
if the aggregate maximum amount then available for drawing
under Letters of Credit issued by such Issuing Bank, after
giving effect to the Facility Letter of Credit requested
hereunder, shall exceed any limit imposed by law or regulation
upon such Issuing Bank;
(ii) issue any Facility Letter of Credit
if, after giving effect thereto, either (1) the then
applicable Allocated Facility Amount would exceed the then
current Aggregate Commitment, or (2) the Facility Letter of
Credit Obligations would exceed $30,000,000;
(iii) issue any Facility Letter of Credit
having an expiration date, or containing automatic extension
provision to extend such date, to a date which is after the
Business Day immediately preceding the Maturity Date; or
(iv) issue any Facility Letter of Credit
having an expiration date, or containing automatic extension
provisions to extend such date, to a date which is more than
twelve (12) months after the date of its issuance.
3.3 Conditions. In addition to being subject to the satisfaction
of the conditions contained in Article V hereof, the obligation of the Issuing
Bank to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank
at such times and in such manner as the Issuing Bank may reasonably
prescribe such documents and materials as may be reasonably required
pursuant to the terms of the proposed Facility Letter of Credit (it
being understood that if any inconsistency exists between such
documents and the Loan Documents, the terms of the Loan Documents
shall control)
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and the proposed Facility Letter of Credit shall be reasonably
satisfactory to the Issuing Bank as to form and content;
(ii) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or governmental authority shall
purport by its terms to enjoin or restrain the Issuing Bank from
issuing the requested Facility Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over the Issuing Bank shall prohibit or
request that the Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of the requested Facility Letter or
Credit in particular; and
(iii) there shall not exist any Default or Event of Default.
3.4 Procedure for Issuance of Facility Letters of Credit.
(a) Borrower shall give the Issuing Bank and the
Administrative Agent at least two (2) Business Days' prior written notice of
any requested issuance of a Facility Letter of Credit under this Agreement (a
"Letter of Credit Request"), a copy of which shall be sent immediately to all
Lenders (except that, in lieu of such written notice, the Borrower may give the
Issuing Bank and the Administrative Agent telephonic notice of such request if
confirmed in writing by delivery to the Issuing Bank and the Administrative
Agent (i) immediately (A) of a telecopy of the written notice required
hereunder which has been signed by an authorized officer, or (B) of a telex
containing all information required to be contained in such written notice and
(ii) promptly (but in no event later than the requested date of issuance) of
the written notice required hereunder containing the original signature of an
authorized officer); such notice shall be irrevocable and shall specify:
(1) whether the requested Facility Letter of Credit is, in
Borrower's belief, a Financial Letter of Credit or a
Performance Letter of Credit;
(2) the stated amount of the Facility Letter of Credit requested
(which stated amount shall not be less than $50,000);
(3) the effective date (which day shall be a Business Day) of
issuance of such requested Facility Letter of Credit (the
"Issuance Date");
(4) the date on which such requested Facility Letter of Credit is
to expire;
(5) the purpose for which such Facility Letter of Credit is to be
issued;
(6) the Person for whose benefit the requested Facility Letter of
Credit is to be issued; and
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(7) any special language required to be included in the Facility
Letter of Credit.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section 3.4(a).
(b) Subject to the terms and conditions of this Article
III and provided that the applicable conditions set forth in Article V hereof
have been satisfied, the Issuing Bank shall, on the Issuance Date, issue a
Facility Letter of Credit on behalf of the Borrower in accordance with the
Letter of Credit Request and the Issuing Bank's usual and customary business
practices unless the Issuing Bank has actually received (i) written notice from
the Borrower specifically revoking the Letter of Credit Request with respect to
such Facility Letter of Credit, (ii) written notice from a Lender, which
complies with the provisions of Section 3.6(a), or (iii) written or telephonic
notice from the Administrative Agent stating that the issuance of such Facility
Letter of Credit would violate Section 3.2.
(c) The Issuing Bank shall give the Administrative Agent
(who shall promptly notify Lenders) and the Borrower written or telex notice,
or telephonic notice confirmed promptly thereafter in writing, of the issuance
of a Facility Letter of Credit (the "Issuance Notice"), which shall indicate
the Issuing Bank's reasonable determination as to whether such Facility Letter
of Credit is a Financial Letter of Credit or a Performance Letter of Credit,
which determination shall be conclusive absent manifest error.
(d) The Issuing Bank shall not extend or amend any
Facility Letter of Credit unless the requirements of this Section 3.4 are met
as though a new Facility Letter of Credit was being requested and issued.
3.5 Reimbursement Obligations; Duties of Issuing Bank.
(a) The Issuing Bank shall promptly notify the Borrower
and the Administrative Agent (who shall promptly notify Lenders) of any draw
under a Facility Letter of Credit. Any such draw shall constitute an Advance
of the Facility in the amount of the Reimbursement Obligation with respect to
such Facility Letter of Credit and shall bear interest from the date of the
relevant drawing(s) under the pertinent Facility Letter of Credit at a rate
selected by Borrower in accordance with Section 2.11 hereof; provided that if a
Monetary Default or an Event of Default exists at the time of any such
drawing(s), then the Borrower shall reimburse the Issuing Bank for drawings
under a Facility Letter of Credit issued by the Issuing Bank no later than the
next succeeding Business Day after the payment by the Issuing Bank and until
repaid such Reimbursement Obligation shall bear interest at the Default Rate.
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(b) Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Facility Letter of Credit, if
taken or omitted in the absence of willful misconduct or gross negligence,
shall not put the Issuing Bank under any resulting liability to any Lender or,
provided that such Issuing Bank has complied with the procedures specified in
Section 3.4 and such Lender has not given a notice contemplated by Section
3.6(a) that continues in full force and effect, relieve that Lender of its
obligations hereunder to the Issuing Bank. In determining whether to pay under
any Facility Letter of Credit, the Issuing Bank shall have no obligation
relative to the Lenders other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered in
compliance, and that they appear to comply on their face, with the requirements
of such Letter of Credit.
3.6 Participation.
(a) Immediately upon issuance by the Issuing Bank of any
Facility Letter of Credit in accordance with the procedures set forth in
Section 3.4, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuing Bank, without recourse,
representation or warranty, an undivided interest and participation equal to
such Lender's Percentage in such Facility Letter of Credit (including, without
limitation, all obligations of the Borrower with respect thereto) and all
related rights hereunder and under the Guaranty and other Loan Documents;
provided that a Letter of Credit issued by the Issuing Bank shall not be deemed
to be a Facility Letter of Credit for purposes of this Section 3.6 if the
Issuing Bank shall have received written notice from any Lender on or before
the Business Day prior to the date of its issuance of such Letter of Credit
that one or more of the conditions contained in Section 5.2 is not then
satisfied, and in the event the Issuing Bank receives such a notice it shall
have no further obligation to issue any Facility Letter of Credit until such
notice is withdrawn by that Lender or the Issuing Bank receives a notice from
the Administrative Agent that such condition has been effectively waived in
accordance with the provisions of this Agreement. Each Lender's obligation to
make further Loans to Borrower (other than any payments such Lender is required
to make under subparagraph (b) below) or to purchase an interest from the
Issuing Bank in any subsequent letters of credit issued by the Issuing Bank on
behalf of Borrower shall be reduced by such Lender's Percentage of the undrawn
portion of each Facility Letter of Credit outstanding.
(b) In the event that the Issuing Bank makes any payment
under any Facility Letter of Credit and the Borrower shall not have repaid such
amount to the Issuing Bank pursuant to Section 3.7 hereof, the Issuing Bank
shall promptly notify the Administrative Agent, which shall promptly notify
each Lender of such failure, and each Lender shall promptly and unconditionally
pay to the Administrative Agent for the account of the Issuing Bank the amount
of such Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank.
Lender's payments of its Percentage of such Reimbursement Obligation as
aforesaid shall be deemed to be a Loan by such Lender and shall constitute
outstanding principal under
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such Lender's Note. The failure of any Lender to make available to the
Administrative Agent for the account of the Issuing Bank its Percentage of the
unreimbursed amount of any such payment shall not relieve any other Lender of
its obligation hereunder to make available to the Administrative Agent for the
account of such Issuing Bank its Percentage of the unreimbursed amount of any
payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to the
Administrative Agent its Percentage of the unreimbursed amount of any payment
on the date such payment is to be made. Any Lender which fails to make any
payment required pursuant to this Section 3.6(b) shall be deemed to be a
Defaulting Lender hereunder.
(c) Whenever the Issuing Bank receives a payment on
account of a Reimbursement Obligation, including any interest thereon, the
Issuing Bank shall promptly pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender which has funded its
participating interest therein, in immediately available funds, an amount equal
to such Lender's Percentage thereof.
(d) Upon the request of the Administrative Agent or any
Lender, the Issuing Bank shall furnish to such Administrative Agent or Lender
copies of any Facility Letter of Credit to which the Issuing Bank is party and
such other documentation as may reasonably be requested by the Administrative
Agent or Lender.
(e) The obligations of a Lender to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to a
Facility Letter of Credit shall be absolute, unconditional and irrevocable, not
subject to any counterclaim, set-off, qualification or exception whatsoever
other than a failure of any such Issuing Bank to comply with the terms of this
Agreement relating to the issuance of such Facility Letter of Credit, and such
payments shall be made in accordance with the terms and conditions of this
Agreement under all circumstances.
3.7 Payment of Reimbursement Obligations.
(a) The Borrower agrees to pay to the Administrative
Agent for the account of the Issuing Bank the amount of all Advances for
Reimbursement Obligations, interest and other amounts payable to the Issuing
Bank under or in connection with any Facility Letter of Credit when due,
irrespective of any claim, set-off, defense or other right which the Borrower
may have at any time against any Issuing Bank or any other Person, under all
circumstances, including without limitation any of the following circumstances:
(i) any lack of validity or
enforceability of this Agreement or any of the other Loan
Documents;
(ii) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time
against a beneficiary named in a Facility Letter of Credit or
any transferee of any Facility Letter of Credit (or
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any Person for whom any such transferee may be acting), the
Administrative Agent, the Issuing Bank, any Lender, or any
other Person, whether in connection with this Agreement, any
Facility Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transactions between the Borrower and the beneficiary named in
any Facility Letter of Credit);
(iii) any draft, certificate or any other
document presented under the Facility Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any
respect of any statement therein being untrue or inaccurate in
any respect;
(iv) the surrender or impairment of any
security for the performance or observance of any of the terms
of any of the Loan Documents; or
(v) the occurrence of any Default or
Event of Default.
(b) In the event any payment by the Borrower received by
the Issuing Bank or the Administrative Agent with respect to a Facility Letter
of Credit and distributed by the Administrative Agent to the Lenders on account
of their participations is thereafter set aside, avoided or recovered from the
Administrative Agent or Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which
received such distribution shall, upon demand by the Administrative Agent,
contribute such Lender's Percentage of the amount set aside, avoided or
recovered together with interest at the rate required to be paid by the Issuing
Bank or the Administrative Agent upon the amount required to be repaid by the
Issuing Bank or the Administrative Agent.
3.8 Compensation for Facility Letters of Credit.
(a) The Borrower shall pay to the Administrative Agent,
for the ratable account of the Lenders, based upon the Lenders' respective
Percentages, a per annum fee (the "Facility Letter of Credit Fee") with respect
to each Facility Letter of Credit that is equal to (i) the LIBOR Applicable
Margin in effect from time to time in the case of Financial Letters of Credit,
and (ii) the LIBOR Applicable Margin from time to time minus 0.25% in the case
of Performance Letters of Credit. The Facility Letter of Credit Fee relating
to any Facility Letter of Credit shall be due and payable in arrears in equal
installments on the first Business Day of each month following the issuance of
any Facility Letter of Credit and, to the extent any such fees are then due and
unpaid, on the Maturity Date. The Administrative Agent shall promptly remit
such Facility Letter of Credit Fees, when paid, to the other Lenders in
accordance with their Percentages thereof. The Borrower shall not have any
liability to any Lender for the failure of the Administrative Agent to promptly
deliver funds to any such Lender and shall be deemed to have made all such
payments on the date the
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respective payment is made by the Borrower to the Administrative Agent,
provided such payment is received by the time specified in Section 2.12 hereof.
(b) The Issuing Bank also shall have the right to receive
solely for its own account an issuance fee of 0.15% of the face amount of each
Facility Letter of Credit, payable by the Borrower on the Issuance Date for
each such Facility Letter of Credit. The Issuing Bank shall also be entitled
to receive its reasonable out-of-pocket costs and the Issuing Bank's standard
charges of issuing, amending and servicing Facility Letters of Credit and
processing draws thereunder.
3.9 Letter of Credit Collateral Account. The Borrower hereby
agrees that it will, until the Maturity Date, maintain a special collateral
account (the "Letter of Credit Collateral Account") at the Administrative
Agent's office at the address specified pursuant to Article XV, in the name of
the Borrower but under the sole dominion and control of the Administrative
Agent, for the benefit of the Lenders, and in which the Borrower shall have no
interest other than as set forth in Section 11.1. In addition to the
foregoing, the Borrower hereby grants to the Administrative Agent, for the
benefit of the Lenders, a security interest in and to the Letter of Credit
Collateral Account and any funds that may hereafter be on deposit in such
account, including income earned thereon. The Lenders acknowledge and agree
that the Borrower has no obligation to fund the Letter of Credit Collateral
Account unless and until so required under Section 11.1 hereof.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If the adoption of or change in any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any
applicable Lending Installation to any tax, duty, charge or
withholding on or from payments due from Borrower (excluding
federal and state taxation of the overall net income of any
Lender or applicable Lending Installation), or changes the
basis of such taxation of payments to any Lender in respect of
its Advances, its interest in the Facility Letters of Credit
or other amounts due it hereunder, or
(ii) imposes or increases or deems
applicable any reserve, assessment, insurance charge, special
deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender
or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest
rate applicable to LIBOR Advances), or
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(iii) imposes any other condition, and the
result is to increase the cost of any Lender or any applicable
Lending Installation of making, funding or maintaining loans
or reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with loans, or
requires any Lender or any applicable Lending Installation to
make any payment calculated by reference to the amount of
loans held, Letters of Credit issued or participated in or
interest received by it, by an amount deemed material by such
Lender,
then, within fifteen (15) days of demand by such Lender, Borrower shall pay
such Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making, funding
and maintaining its Advances and its Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporate entity
controlling such Lender is increased as a result of a Change (as defined
below), then, within fifteen (15) days of demand by such Lender, Borrower shall
pay such Lender the amount necessary to compensate for any shortfall in the
rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Advances, its interest in the
Facility Letters of Credit, or its obligation to make Advances hereunder or
participate in or issue Facility Letters of Credit hereunder (after taking into
account such Lender's policies as to capital adequacy). "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital Guidelines
(as defined below) or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards", including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
Without in any way affecting the Borrower's obligation to pay compensation
actually claimed by a Lender under this Section 4.2, the Borrower shall have
the right to replace any Lender which has demanded such compensation provided
that Borrower notifies such Lender that it has elected to replace such Lender
and notifies such Lender and the Administrative Agent of the identity of the
proposed replacement Lender not more than six (6) months after the date of such
Lender's most recent demand for compensation under this Section 4.2. The
Lender being replaced shall assign its Percentage of the Aggregate Commitment
and its rights and obligations under this Facility to the replacement Lender in
accordance with the requirements of Section 13.3 hereof and the
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replacement Lender shall assume such Percentage of the Aggregate Commitment and
the related obligations under this Facility prior to the Maturity Date to be
extended, all pursuant to an assignment agreement substantially in the form of
Exhibit J hereto. The purchase by the replacement Lender shall be at par (plus
all accrued and unpaid interest and any other sums owed to such Lender being
replaced hereunder) which shall be paid to the Lender being replaced upon the
execution and delivery of the assignment.
4.3 Availability of LIBOR Advances. If any Lender determines that
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by
written notice to Borrower the availability of LIBOR Advances and require any
LIBOR Advances to be repaid; or if the Required Lenders determine that (i)
deposits of a type or maturity appropriate to match fund LIBOR Advances are not
available, the Administrative Agent shall suspend by written notice to Borrower
the availability of LIBOR Advances with respect to any LIBOR Advances made
after the date of any such determination, or (ii) an interest rate applicable
to a LIBOR Advance does not accurately reflect the cost of making a LIBOR
Advance, and, if for any reason whatsoever the provisions of Section 4.1 are
inapplicable, the Administrative Agent shall suspend by written notice to
Borrower the availability of LIBOR Advances with respect to any LIBOR Advances
made after the date of any such determination.
4.4 Funding Indemnification. If any payment of a ratable LIBOR
Advance or a Competitive Bid Loan occurs on a date which is not the last day of
the applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a ratable LIBOR Advance or a Competitive Bid Loan is not made on
the date specified by Borrower for any reason other than default by one or more
of the Lenders, Borrower will indemnify each Lender for any loss or cost
incurred by such Lender resulting therefrom, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
the ratable LIBOR Advance or Competitive Bid Loan, as the case may be.
4.5 Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Advances to reduce any liability of
Borrower to such Lender under Sections 4.1 and 4.2 or to avoid the
unavailability of a LIBOR Advance, so long as such designation is not
disadvantageous to such Lender. Each Lender shall deliver a written statement
of such Lender as to the amount due, if any, under Sections 4.1, 4.2 or 4.4
hereof. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a LIBOR
Advance shall be calculated as though each Lender funded its LIBOR Advance
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Adjusted LIBOR Rate applicable
to such Advance, whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the written statement shall be payable
on demand after receipt by
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Borrower of the written statement. The obligations of Borrower under Sections
4.1, 4.2 and 4.4 hereof shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions Precedent to Closing. The Lenders shall not be
required to make the initial Advance hereunder, nor shall the Issuing Bank be
required to issue the initial Facility Letter of Credit hereunder, unless (i)
the Borrower shall have paid all fees then due and payable to the Lenders, the
Documentation Agent, the Arrangers and the Administrative Agent hereunder, (ii)
all of the conditions set forth in Section 5.2 are satisfied, and (iii) the
Borrower shall have furnished to the Administrative Agent, in form and
substance satisfactory to the Lenders and their counsel and with sufficient
copies for the Lenders, the following:
(a) Certificates of Limited Partnership/Incorporation. A
copy of the Certificate of Limited Partnership for the Borrower and a copy of
the articles of incorporation of General Partner, each certified by the
appropriate Secretary of State or equivalent state official.
(b) Agreements of Limited Partnership/Bylaws. A copy of
the Agreement of Limited Partnership for the Borrower and a copy of the bylaws
of the General Partner, including all amendments thereto, each certified by the
Secretary or an Assistant Secretary of the General Partner as being in full
force and effect on the Agreement Execution Date.
(c) Good Standing Certificates. A certified copy of a
certificate from the Secretary of State or equivalent state official of the
states where the Borrower and General Partner are organized, dated as of the
most recent practicable date, showing the good standing or partnership
qualification (if issued) of (i) Borrower, and (ii) General Partner.
(d) Foreign Qualification Certificates. A certified copy
of a certificate from the Secretary of State or equivalent state official of
the state where the Borrower and General Partner maintain their principal place
of business, dated as of the most recent practicable date, showing the
qualification to transact business in such state as a foreign limited
partnership or foreign corporation, as the case may be, for (i) Borrower, and
(ii) General Partner.
(e) Resolutions. A copy of a resolution or resolutions
and adopted by the Board of Directors of the General Partner, certified by the
Secretary or an Assistant Secretary of the General Partner as being in full
force and effect on the Agreement Execution Date, authorizing the Advances
provided for herein and the execution, delivery and
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performance of the Loan Documents by the General Partner to be executed and
delivered by it hereunder on behalf of itself and Borrower.
(f) Incumbency Certificate. A certificate, signed by the
Secretary or an Assistant Secretary of the General Partner and dated the
Agreement Execution Date, as to the incumbency, and containing the specimen
signature or signatures, of the Persons authorized to execute and deliver the
Loan Documents to be executed and delivered by it and Borrower hereunder.
(g) Loan Documents. Originals of the Loan Documents (in
such quantities as the Lenders may reasonably request), duly executed by
authorized officers of the appropriate entity.
(h) Opinion of Borrower's Counsel. A written opinion,
dated the Agreement Execution Date, from outside counsel for the Borrower which
counsel is reasonably satisfactory to Administrative Agent, substantially in
the form attached hereto as Exhibit E.
(i) Opinion of General Partner's Counsel. A written
opinion, dated the Agreement Execution Date, from outside counsel for the
General Partner which counsel is reasonably satisfactory to Administrative
Agent, substantially in the form attached hereto as Exhibit F.
(j) Insurance. Original or certified copies of insurance
policies or binders therefor, with accompanying receipts showing current
payment of all premiums, evidencing that Borrower carries insurance on the
Unencumbered Assets which satisfies the Administrative Agent's insurance
requirements, including, without limitation:
(i) Property and casualty insurance (including
coverage for flood and other water damage for any Unencumbered
Assets located within a 100-year flood plain) in the amount of
the replacement cost of the improvements at the Unencumbered
Assets;
(ii) Loss of rental income insurance in the amount
not less than one year's Gross Revenues from the Unencumbered
Assets; and
(iii) Comprehensive general liability insurance in
the amount of $1,000,000 per occurrence.
All insurance must be carried by companies with a Best
Insurance Reports (1992) Policyholder's and Financial Size Rating of "A-VII" or
better.
(k) [Intentionally Omitted]
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(l) Financial and Related Information. The following
information:
(i) A certificate, signed by an officer
of the Borrower, stating that on the Agreement Execution Date
no Default or Event of Default has occurred and is continuing
and that all representations and warranties of the Borrower
contained herein are true and correct as of the Agreement
Execution Date as and to the extent set forth herein;
(ii) The most recent financial statements
of the Borrower and General Partner and a certificate from a
Qualified Officer of the Borrower that no change in the
Borrower's financial condition that would have a Material
Adverse Effect has occurred since September 30, 1996;
(iii) Evidence of sufficient Unencumbered
Assets (which evidence may include pay-off letters (together
with evidence of payment or a direction of Borrower to use a
portion of the proceeds of the Advances to repay such
Indebtedness), mortgage releases and/or title policies) to
assist the Administrative Agent in determining the Borrower's
compliance with the covenants set forth in Article IX herein;
(iv) Written money transfer instructions,
in substantially the form of Exhibit G hereto, addressed to
the Administrative Agent and signed by a Qualified Officer,
together with such other related money transfer authorizations
as the Administrative Agent may have reasonably requested; and
(v) Operating statements for the
Unencumbered Assets and other evidence of income and expenses
to assist the Administrative Agent in determining Borrower's
compliance with the covenants set forth in Article VIII
herein.
(m) Other Evidence as any Lender May Require. Such other
evidence as any Lender may reasonably request to establish the consummation of
the transactions contemplated hereby, the taking of all necessary actions in
any proceedings in connection herewith and compliance with the conditions set
forth in this Agreement.
When all such conditions have been fulfilled (or, in the Lenders' sole
discretion, waived by Lenders), the Lenders shall confirm in writing to
Borrower that the initial Advance is then available to Borrower hereunder.
5.2 Conditions Precedent to Subsequent Advances. Advances after
the initial Advance shall be made from time to time as requested by Borrower,
and the obligation of each Lender to make any Advance (including Swingline
Loans) is subject to the following terms and conditions:
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(a) prior to each such Advance no Default or Event of
Default shall have occurred and be continuing under this Agreement or any of
the Loan Documents and, if required by Administrative Agent, Borrower shall
deliver a certificate of Borrower to such effect; and
(b) The representations and warranties contained in
Article VI and VII are true and correct as of such borrowing date, Issuance
Date, or date of conversion and/or continuation as and to the extent set forth
therein, except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or warranty
shall be true and correct on and as of such earlier date.
Subject to the last grammatical paragraphs of Article VI and VII hereof,
each Borrowing Notice, Letter of Credit Request, and Conversion/Continuation
Notice shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 5.2(a) and (b) have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants that:
6.1 Existence. Borrower is a limited partnership duly organized
and existing under the laws of the State of Delaware, with its principal place
of business in the State of Illinois, and is duly qualified as a foreign
limited partnership, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which
it owns Properties and, except where the failure to be so qualified or to
obtain such authority would not have a Material Adverse Effect, in each other
jurisdiction in which its business is conducted. Each of its Subsidiaries is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite authority to conduct its
business in each jurisdiction in which it owns Property, and except where the
failure to be so qualified or to obtain such authority would not have a
Material Adverse Effect, in each other jurisdiction in which it conducts
business.
6.2 Corporate/Partnership Powers. The execution, delivery and
performance of the Loan Documents required to be delivered by Borrower
hereunder are within the partnership authority of such entity and the corporate
powers of the general partners of such entity, have been duly authorized by all
requisite action, and are not in conflict with the terms of any organizational
instruments of such entity, or any instrument or agreement to which Borrower or
General Partner is a party or by which Borrower, General Partner or any of
their respective assets may be bound or affected.
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6.3 Power of Officers. The officers of the general partner of
Borrower executing the Loan Documents required to be delivered by such entities
hereunder have been duly elected or appointed and were fully authorized to
execute the same at the time each such agreement, certificate or instrument was
executed.
6.4 Government and Other Approvals. No approval, consent,
exemption or other action by, or notice to or filing with, any governmental
authority is necessary in connection with the execution, delivery or
performance of the Loan Documents required hereunder.
6.5 Solvency.
(i) Immediately after the Agreement
Execution Date and immediately following the making of each
Loan and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of
the Borrower and its Subsidiaries on a consolidated basis, at
a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and its
Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Properties of the Borrower and its
Subsidiaries on a consolidated basis will be greater than the
amount that will be required to pay the probable liability of
the Borrower and its Subsidiaries on a consolidated basis on
their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute
and matured; (c) the Borrower and its Subsidiaries on a
consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the
Borrower and its Subsidiaries on a consolidated basis will not
have unreasonably small capital with which to conduct the
businesses in which they are engaged as such businesses are
now conducted and are proposed to be conducted after the date
hereof.
(ii) Borrower does not intend to, or to
permit any of its Subsidiaries to incur debts beyond its
ability to pay such debts as they mature, taking into account
the timing of and amounts of cash to be received by it or any
such Subsidiary and the timing of the amounts of cash to be
payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
6.6 Compliance With Laws. There is no judgment, decree or order
or any law, rule or regulation of any court or governmental authority binding
on Borrower or any of its Subsidiaries which would be contravened by the
execution, delivery or performance of the Loan Documents required hereunder.
6.7 Enforceability of Agreement. This Agreement is the legal,
valid and binding agreement of the Borrower, and the Notes when executed and
delivered will be the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in
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accordance with their respective terms, and the Loan Documents required
hereunder, when executed and delivered, will be similarly legal, valid, binding
and enforceable except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the rights of creditors generally.
6.8 Title to Property. To the best of Borrower's knowledge after
due inquiry, Borrower or its Subsidiaries has good and marketable title to the
Properties and assets reflected in the financial statements as owned by it or
any such Subsidiary free and clear of Liens except for the Permitted Liens.
The execution, delivery or performance of the Loan Documents required to be
delivered by the Borrower hereunder will not result in the creation of any Lien
on the Properties. No consent to the transactions contemplated hereunder is
required from any ground lessor or mortgagee or beneficiary under a deed of
trust or any other party except as has been delivered to the Lenders.
6.9 Litigation. There are no suits, arbitrations, claims,
disputes or other proceedings (including, without limitation, any civil,
criminal, administrative or environmental proceedings), pending or, to the best
of Borrower's knowledge, threatened against or affecting the Borrower or any of
the Properties, the adverse determination of which individually or in the
aggregate would have a Material Adverse Effect on the Borrower and/or any of
the Properties and/or would cause a Material Adverse Financial Change of
Borrower or materially impair the Borrower's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder, except as
disclosed on Schedule 6.9 hereto, or otherwise disclosed to Lenders in
accordance with the terms hereof.
6.10 Events of Default. No Default or Event of Default has
occurred and is continuing or would result from the incurring of obligations by
the Borrower under any of the Loan Documents or any other document to which
Borrower is a party.
6.11 Investment Company Act of 1940. Borrower is not and will by
such acts as may be necessary continue not to be, an investment company within
the meaning of the Investment Company Act of 1940.
6.12 Public Utility Holding Company Act. The Borrower is not a
"holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," within the definitions of the Public Utility Holding Company Act of
1935, as amended.
6.13 Regulation U. The proceeds of the Advances will not be used,
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
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6.14 No Material Adverse Financial Change. To the best knowledge
of Borrower, there has been no Material Adverse Financial Change in the
condition of Borrower since the date of the financial and/or operating
statements most recently submitted to the Lenders.
6.15 Financial Information. All financial statements furnished to
the Lenders by or at the direction of the Borrower and all other financial
information and data furnished by the Borrower to the Lenders are complete and
correct in all material respects as of the date thereof, and such financial
statements have been prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of the Borrower as
of such date. The Borrower has no contingent obligations, liabilities for
taxes or other outstanding financial obligations which are material in the
aggregate, except as disclosed in such statements, information and data.
6.16 Factual Information. All factual information heretofore or
contemporaneously furnished by or on behalf of the Borrower to the Lenders for
purposes of or in connection with this Agreement and the other Loan Documents
and the transactions contemplated therein is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to the Lenders
will be, true and accurate (taken as a whole) in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken
as a whole) not misleading at such time.
6.17 ERISA. (i) Borrower is not an entity deemed to hold "plan
assets" within the meaning of ERISA or any regulations promulgated thereunder
of an employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan within the meaning of Section 4975 of
the Code, and (ii) the execution of this Agreement and the transactions
contemplated hereunder do not give rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
6.18 Taxes. All required tax returns have been filed by Borrower
with the appropriate authorities except to the extent that extensions of time
to file have been requested, granted and have not expired or except to the
extent such taxes are being contested in good faith and for which adequate
reserves, in accordance with GAAP, are being maintained.
6.19 Environmental Matters. Except as disclosed in Schedule 6.19,
each of the following representations and warranties is true and correct except
to the extent that the facts and circumstances giving rise to any such failure
to be so true and correct, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect:
(i) To the knowledge of the Borrower,
the Properties of Borrower, its Subsidiaries, and Investment
Affiliates do not contain any Materials of Environmental
Concern in amounts or concentrations which
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constitute a violation of, or could reasonably give rise to
liability under, Environmental Laws.
(ii) Borrower has not received any
written notice alleging that any or all of the Properties of
Borrower and its Subsidiaries and Investment Affiliates and
all operations at the Properties are not in compliance with
all applicable Environmental Laws. Further, Borrower has not
received any written notice alleging the existence of any
contamination at or under such Properties in amounts or
concentrations which constitute a violation of any
Environmental Law, or any violation of any Environmental Law
with respect to such Properties for which Borrower, its
Subsidiaries or Investment Affiliates is or could be liable.
(iii) Neither Borrower nor any of its
Subsidiaries or Investment Affiliates has received any written
notice of non-compliance, liability or potential liability
regarding Environmental Laws with regard to any of the
Properties, nor does it have knowledge that any such notice
will be received or is being threatened.
(iv) To the knowledge of Borrower during
the ownership of the Properties by any or all of Borrower, its
Subsidiaries and Investment Affiliates, Materials of
Environmental Concern have not been transported or disposed of
from the Properties of Borrower and its Subsidiaries and
Investment Affiliates in violation of, or in a manner or to a
location which could reasonably give rise to liability of
Borrower, any Subsidiary, or any Investment Affiliate under,
Environmental Laws, nor during the ownership of the Properties
by any or all of Borrower, its Subsidiaries and Investment
Affiliates have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any
of such Properties in violation of, or in a manner that could
give rise to liability of Borrower, any Subsidiary or any
Investment Affiliate under, any applicable Environmental Laws.
(v) No judicial proceedings or
governmental or administrative action is pending, or, to the
knowledge of Borrower, threatened, under any Environmental Law
to which Borrower, any of its Subsidiaries, or any Investment
Affiliate, is named as a party with respect to the Properties
of such entity, nor are there any consent decrees or other
decrees, consent orders, administrative order or other orders,
or other administrative or judicial requirements outstanding
under any Environmental Law with respect to such Properties
for which Borrower, its Subsidiaries, or any Investment
Affiliate is or could be liable.
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(vi) To the knowledge of Borrower during
the ownership of the Properties by any or all of Borrower, its
Subsidiaries and Investment Affiliates, there has been no
release or threat of release of Materials of Environmental
Concern at or from the Properties of Borrower and its
Subsidiaries and Investment Affiliates, or arising from or
related to the operations of such entity in connection with
the Properties in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
6.20 Insurance. Borrower has obtained the insurance which Borrower
is required to furnish to Lenders under Section 5.1(j) hereof.
6.21 No Brokers. Borrower has dealt with no brokers in connection
with this Facility, and no brokerage fees or commissions are payable by or to
any Person in connection with this Agreement or the Advances. Lenders shall
not be responsible for the payment of any fees or commissions to any broker and
Borrower shall indemnify, defend and hold Lenders harmless from and against any
claims, liabilities, obligations, damages, costs and expenses (including
reasonable attorneys' fees and disbursements) made against or incurred by
Lenders as a result of claims made or actions instituted by any broker or
Person claiming by, through or under Borrower in connection with the Facility.
6.22 No Violation of Usury Laws. No aspect of any of the
transactions contemplated herein violate or will violate any usury laws or laws
regarding the validity of agreements to pay interest in effect on the date
hereof.
6.23 Not a Foreign Person. Borrower is not a "foreign person"
within the meaning of Section 1445 or 7701 of the Internal Revenue Code.
6.24 No Trade Name. Except for the name "First Industrial," and
except as otherwise set forth on Schedule 6.24 attached hereto, Borrower does
not use any trade name and has not and does not do business under any name
other than their actual names set forth herein. The principal place of
business of Borrower is as stated in the recitals hereto.
6.25 Subsidiaries. Schedule 6.25 hereto contains an accurate list
of all of the presently existing Subsidiaries of Borrower, setting forth their
respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
6.26 Unencumbered Assets. Schedule 6.26 hereto contains a complete
and accurate description of Unencumbered Assets as of the Agreement Execution
Date and as supplemented from time to time including the entity that owns each
Unencumbered Asset. With respect to each Project identified from time to time
as an Unencumbered Asset,
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Borrower hereby represents and warrants as follows except to the extent
disclosed in writing to the Lenders and approved by the Majority Lenders (which
approval shall not be unreasonably withheld):
(a) No portion of any improvement on the Unencumbered
Asset is located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located within
any such area, Borrower has obtained and will maintain the insurance prescribed
in Section 5.1(j) hereof.
(b) To the Borrower's knowledge, the Unencumbered Asset
and the present use and occupancy thereof are in material compliance with all
applicable zoning ordinances (without reliance upon adjoining or other
properties), building codes, land use and Environmental Laws, and other similar
laws ("Applicable Laws").
(c) The Unencumbered Asset is served by all utilities
required for the current or contemplated use thereof. All utility service is
provided by public utilities and the Unencumbered Asset has accepted or is
equipped to accept such utility service.
(d) All public roads and streets necessary for service of
and access to the Unencumbered Asset for the current or contemplated use
thereof have been completed, are serviceable and all-weather and are physically
and legally open for use by the public.
(e) The Unencumbered Asset is served by public water and
sewer systems or, if the Unencumbered Asset is not serviced by a public water
and sewer system, such alternate systems are adequate and meet, in all material
respects, all requirements and regulations of, and otherwise complies in all
material respects with, all Applicable Laws with respect to such alternate
systems.
(f) Borrower is not aware of any latent or patent
structural or other significant deficiency of the Unencumbered Asset. The
Unencumbered Asset is free of damage and waste that would materially and
adversely affect the value of the Unencumbered Asset, is in good repair and
there is no deferred maintenance other than ordinary wear and tear. The
Unencumbered Asset is free from damage caused by fire or other casualty. There
is no pending or, to the actual knowledge of Borrower threatened condemnation
proceedings affecting the Unencumbered Asset, or any material part thereof.
(g) To Borrower's knowledge, all liquid and solid waste
disposal, septic and sewer systems located on the Unencumbered Asset are in a
good and safe condition and repair and to Borrower's knowledge, in material
compliance with all Applicable Laws with respect to such systems.
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(h) All improvements on the Unencumbered Asset lie within
the boundaries and building restrictions of the legal description of record of
the Unencumbered Asset, no such improvements encroach upon easements
benefitting the Unencumbered Asset other than encroachments that do not
materially adversely affect the use or occupancy of the Unencumbered Asset and
no improvements on adjoining properties encroach upon the Unencumbered Asset or
easements benefitting the Unencumbered Asset other than encroachments that do
not materially adversely affect the use or occupancy of the Unencumbered Asset.
All amenities, access routes or other items that materially benefit the
Unencumbered Asset are under direct control of Borrower, constitute permanent
easements that benefit all or part of the Unencumbered Asset or are public
property, and the Unencumbered Asset, by virtue of such easements or otherwise,
is contiguous to a physically open, dedicated all weather public street, and
has the necessary permits for ingress and egress.
(i) There are no delinquent taxes, ground rents, water
charges, sewer rents, assessments, insurance premiums, leasehold payments, or
other outstanding charges affecting the Unencumbered Asset except to the extent
such items are being contested in good faith and as to which adequate reserves
have been provided.
A breach of any of the representations and warranties contained in this Section
6.26 with respect to a Project shall disqualify such Project from being an
Unencumbered Asset for so long as such breach continues (unless otherwise
approved by the Majority Lenders) but shall not constitute a Default (unless
the elimination of such Property as an Unencumbered Asset results in a Default
under one of the other provisions of this Agreement).
Borrower agrees that all of its representations and warranties set
forth in Article VI of this Agreement and elsewhere in this Agreement are true
on the Agreement Execution Date, and will be true on each Effective Date in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Majority Lenders), and will be true in all
material respects (except with respect to matters which have been disclosed in
writing to and approved by the Majority Lenders) upon each request for
disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
ARTICLE VII
ADDITIONAL REPRESENTATIONS AND WARRANTIES
The General Partner hereby represents and warrants that:
7.1 Existence. The General Partner is a corporation duly
organized and existing under the laws of the State of Maryland, with its
principal place of business in the State of
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Illinois, is duly qualified as a foreign corporation and properly licensed (if
required) and in good standing in each jurisdiction where the failure to
qualify or be licensed (if required) would constitute a Material Adverse
Financial Change with respect to the General Partner or have a Material Adverse
Effect on the business or properties of the General Partner.
7.2 Corporate Powers. The execution, delivery and performance of
the Loan Documents required to be delivered by the General Partner hereunder
are within the corporate powers of the General Partner, have been duly
authorized by all requisite corporate action, and are not in conflict with the
terms of any organizational instruments of the General Partner, or any
instrument or agreement to which the General Partner is a party or by which
General Partner or any of its assets is bound or affected.
7.3 Power of Officers. The officers of the General Partner
executing the Loan Documents required to be delivered by the General Partner
hereunder have been duly elected or appointed and were fully authorized to
execute the same at the time each such agreement, certificate or instrument was
executed.
7.4 Government and Other Approvals. No approval, consent,
exemption or other action by, or notice to or filing with, any governmental
authority is necessary in connection with the execution, delivery or
performance of the Loan Documents required hereunder.
7.5 Compliance With Laws. There is no judgment, decree or order
or any law, rule or regulation of any court or governmental authority binding
on the General Partner which would be contravened by the execution, delivery or
performance of the Loan Documents required hereunder.
7.6 Enforceability of Agreement. This Agreement is the legal,
valid and binding agreement of the General Partner, as the general partner of
Borrower, enforceable against the General Partner in accordance with its
respective terms, and the Loan Documents required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the rights of
creditors generally.
7.7 Liens; Consents. The execution, delivery or performance of
the Loan Documents required to be delivered by the General Partner hereunder
will not result in the creation of any Lien on the Properties other than in
favor of the Lenders. No consent to the transactions hereunder is required
from any ground lessor or mortgagee or beneficiary under a deed of trust or any
other party except as has been delivered to the Lenders.
7.8 Litigation. There are no suits, arbitrations, claims,
disputes or other proceedings (including, without limitation, any civil,
criminal, administrative or environmental proceedings), pending or, to the best
of General Partner's knowledge, threatened against or affecting the General
Partner or any of the Properties, the adverse
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determination of which individually or in the aggregate would have a Material
Adverse Effect on the General Partner and/or any of the Collateral and/or would
cause a Material Adverse Financial Change with respect to the General Partner
or materially impair the General Partner's ability to perform its obligations
hereunder or under any instrument or agreement required hereunder, except as
disclosed on Schedule 7.8 hereto, or otherwise disclosed to Lenders in
accordance with the terms hereof.
7.9 Events of Default. No Default or Event of Default has
occurred and is continuing or would result from the incurring of obligations by
the General Partner under any of the Loan Documents or any other document to
which General Partner is a party.
7.10 Investment Company Act of 1940. The General Partner is not,
and will by such acts as may be necessary continue not to be, an investment
company within the meaning of the Investment Company Act of 1940.
7.11 Public Utility Holding Company Act. The General Partner is
not a "holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," within the definitions of the Public Utility Holding Company Act of
1935, as amended.
7.12 No Material Adverse Financial Change. There has been no
Material Adverse Financial Change in the condition of the General Partner since
the last date on which the financial and/or operating statements were submitted
to the Lenders.
7.13 Financial Information. All financial statements furnished to
the Lenders by or on behalf of the General Partner and all other financial
information and data furnished by or on behalf of the General Partner to the
Lenders are complete and correct in all material respects as of the date
thereof, and such financial statements have been prepared in accordance with
GAAP and fairly present the consolidated financial condition and results of
operations of the General Partner as of such date. The General Partner has no
contingent obligations, liabilities for taxes or other outstanding financial
obligations which are material in the aggregate, except as disclosed in such
statements, information and data.
7.14 Factual Information. All factual information heretofore or
contemporaneously furnished by or on behalf of the General Partner to the
Lenders for purposes of or in connection with this Agreement and the other Loan
Documents and the transactions contemplated therein is, and all other such
factual information hereafter furnished by or on behalf of the General Partner
to the Lenders will be, true and accurate in all material respects (taken as a
whole) on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time.
7.15 ERISA. (i) General Partner is not an entity deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee
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benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any plan within the meaning of Section 4975 of the Code, and (ii)
the execution of this Agreement and the transactions contemplated hereunder do
not give rise to a prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code.
7.16 Taxes. All required tax returns have been filed by the
General Partner with the appropriate authorities except to the extent that
extensions of time to file have been requested, granted and have not expired or
except to the extent such taxes are being contested in good faith and for which
adequate reserves, in accordance with GAAP, are being maintained.
7.17 No Brokers. General Partner has dealt with no brokers in
connection with this Facility, and no brokerage fees or commissions are payable
by or to any Person in connection with this Agreement or the Advances. Lender
shall not be responsible for the payment of any fees or commissions to any
broker and General Partner shall indemnify, defend and hold Lender harmless
from and against any claims, liabilities, obligations, damages, costs and
expenses (including reasonable attorneys' fees and disbursements) made against
or incurred by Lender as a result of claims made or actions instituted by any
broker or Person claiming by, through or under the General Partner in
connection with the Facility.
7.18 Subsidiaries. Schedule 7.18 hereto contains an accurate list
of all of the presently existing Subsidiaries of General Partner, setting forth
their respective jurisdictions of formation, the percentage of their respective
Capital Stock owned by it or its Subsidiaries and the Properties owned by them.
All of the issued and outstanding shares of Capital Stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
7.19 Status. General Partner is a corporation listed and in good
standing on the New York Stock Exchange ("NYSE").
General Partner agrees that all of its representations and warranties
set forth in Article VII of this Agreement and elsewhere in this Agreement are
true on the Agreement Execution Date, and will be true on each Effective Date
in all material respects (except with respect to matters which have been
disclosed in writing to and approved by the Majority Lenders), and will be true
in all material respects (except with respect to matters which have been
disclosed in writing to and approved by the Majority Lenders) upon each request
for disbursement of an Advance. Each request for disbursement hereunder shall
constitute a reaffirmation of such representations and warranties as deemed
modified in accordance with the disclosures made and approved, as aforesaid, as
of the date of such request and disbursement.
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ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower (and the General Partner, if expressly included in
Sections contained in this Article) covenant and agree that so long as the
Commitment of any Lender shall remain available and until the full and final
payment of all Obligations incurred under the Loan Documents they will:
8.1 Notices. Promptly give written notice to Administrative Agent
(who will promptly send such notice to Lenders) of:
(a) all litigation or arbitration proceedings affecting
the Borrower, the General Partner or any Subsidiary where the amount claimed is
$5,000,000 or more;
(b) any Default or Event of Default, specifying the
nature and the period of existence thereof and what action has been taken or
been proposed to be taken with respect thereto;
(c) all claims filed against any property owned by the
Borrower or the General Partner which, if adversely determined, could have a
Material Adverse Effect on the ability of the Borrower or the General Partner
to meet any of their obligations under the Loan Documents;
(d) the occurrence of any other event which might have a
Material Adverse Effect or cause a Material Adverse Financial Change on or with
respect to the Borrower or the General Partner;
(e) any Reportable Event or any "prohibited transaction"
(as such term is defined in Section 4975 of the Code) in connection with any
Plan or any trust created thereunder, which may, singly or in the aggregate
materially impair the ability of the Borrower or the General Partner to repay
any of its obligations under the Loan Documents, describing the nature of each
such event and the action, if any, the Borrower or the General Partner, as the
case may be, proposes to take with respect thereto;
(f) any notice from any federal, state, local or foreign
authority regarding any Hazardous Material, asbestos, or other environmental
condition, proceeding, order, claim or violation affecting any of the
Properties.
8.2 Financial Statements, Reports, Etc. The Borrower will
maintain, for itself and each Subsidiary, a system of accounting established
and administered in accordance with GAAP, and furnish to the Lenders:
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(i) as soon as available, but in any
event not later than 45 days after the close of each fiscal
quarter, for the Borrower an unaudited consolidated balance
sheet as of the close of each such period and the related
unaudited consolidated statements of income and retained
earnings and of cash flows of the Borrower and its
Subsidiaries for such period and the portion of the fiscal
year through the end of such period, setting forth in each
case in comparative form the figures for the previous year,
all certified by the Borrower's chief financial officer or
chief accounting officer;
(ii) As soon as available, but in any
event not later than 45 days after the close of each fiscal
quarter, for the Borrower and its Subsidiaries, related
reports in form and substance satisfactory to the Lenders, all
certified by Borrower's chief financial officer or chief
accounting officer, including a statement of Funds From
Operations, a description of Unencumbered Assets, a listing of
capital expenditures (in the level of detail as currently
disclosed in Borrower's "Supplemental Information"), a report
listing and describing all newly acquired Properties,
including their cash flow, cost and secured or unsecured
Indebtedness assumed in connection with such acquisition, if
any, summary Property information for all Properties,
including, without limitation, their Property Operating
Income, occupancy rates, square footage, property type and
date acquired or built, and such other information as may be
requested to evaluate the quarterly compliance certificate
delivered as provided below;
(iii) As soon as publicly available but in
no event later than the date such reports are to be filed with
the Securities Exchange Commission, copies of all Form 10Ks,
10Qs, 8Ks, and any other annual, quarterly, monthly or other
reports, copies of all registration statements and any other
public information which the Borrower or any of its
Subsidiaries files with the Securities Exchange Commission and
to the extent any of such reports contains information
required under the other subsections of this Section 8.2, the
information need not be furnished separately under the other
subsections;
(iv) As soon as available, but in any
event not later than 90 days after the close of each fiscal
year of the Borrower and its Subsidiaries, reports in form and
substance satisfactory to the Lenders, certified by the
Borrower's chief financial officer or chief accounting officer
containing Property Operating Income for each individual
Property included as Unencumbered Assets;
(v) Not later than forty-five (45) days
after the end of each of the first three fiscal quarters, and
not later than ninety (90) days after the end of the fiscal
year, a compliance certificate in substantially the form of
Exhibit H hereto signed by the Borrower's chief financial
officer or chief
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accounting officer confirming that Borrower is in compliance
with all of the covenants of the Loan Documents, showing the
calculations and computations necessary to determine
compliance with the financial covenants contained in this
Agreement (including such schedules and backup information as
may be necessary to demonstrate such compliance) and stating
that to such officer's best knowledge, there is no other
Default or Event of Default exists, or if any Default or Event
of Default exists, stating the nature and status thereof;
(vi) (a) As soon as possible and in any
event within 10 Business Days after the Borrower knows that
any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of Borrower,
describing said Reportable Event and within 20 days after such
Reportable Event, a statement signed by such chief financial
officer describing the action which Borrower proposes to take
with respect thereto; and (b) within 10 Business Days of
receipt, any notice from the Internal Revenue Service, PBGC or
Department of Labor with respect to a Plan regarding any
excise tax, proposed termination of a Plan, prohibited
transaction or fiduciary violation under ERISA or the Code
which could result in any liability to Borrower or any member
of the Controlled Group in excess of $100,000; and (c) within
10 Business Days of filing, any Form 5500 filed by Borrower
with respect to a Plan, or any member of the Controlled Group
which includes a qualified accountant's opinion.
(vii) As soon as possible and in any event
within 30 days after receipt by the Borrower, a copy of (a)
any notice or claim to the effect that the Borrower or any of
its Subsidiaries is or may be liable to any Person as a result
of the release by such entity, or any of its Subsidiaries, or
any other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health
orsafety law or regulation by the Borrower or any of its
Subsidiaries or Investment Affiliates, which, in either case,
could be reasonably likely to have a Material Adverse Effect;
(viii) Promptly upon the furnishing thereof
to the shareholders of the Borrower, copies of all financial
statements, reports and proxy statements so furnished;
(ix) Promptly upon the distribution
thereof to the press or the public, copies of all press
releases;
(x) As soon as possible, and in any
event within 10 days after the Borrower knows of any fire or
other casualty or any pending or threatened condemnation or
eminent domain proceeding with respect to all or any material
portion of any Unencumbered Asset, a statement signed by the
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Chief Financial Officer of Borrower, describing such fire,
casualty or condemnation and the action Borrower intends to
take with respect thereto; and
(xi) Such other information (including,
without limitation, non-financial information) as the
Administrative Agent or any Lender may from time to time
reasonably request.
8.3 Existence and Conduct of Operations. Except as permitted
herein, maintain and preserve its existence and all rights, privileges and
franchises now enjoyed and necessary for the operation of its business,
including remaining in good standing in each jurisdiction in which business is
currently operated. The Borrower and the General Partner shall carry on and
conduct their respective businesses in substantially the same manner and in
substantially the same fields of enterprise as presently conducted. The
Borrower will do, and will cause each of its Subsidiaries to do, all things
necessary to remain duly incorporated and/or duly qualified, validly existing
and in good standing as a real estate investment trust, corporation, general
partnership, limited liability company or limited partnership, as the case may
be, in its jurisdiction of incorporation/formation. The Borrower will maintain
all requisite authority to conduct its business in each jurisdiction in which
the Properties are located and, except where the failure to be so qualified
would not have a Material Adverse Effect, in each jurisdiction required to
carry on and conduct its businesses in substantially the same manner as it is
presently conducted, and, specifically, neither the Borrower nor its
Subsidiaries will undertake any business other than the acquisition,
development, ownership, management, operation and leasing of
warehouse/industrial properties and ancillary businesses specifically related
thereto, except that the Borrower and its Subsidiaries and Investment
Affiliates may invest in other assets subject to the certain limitations
contained herein with respect to the following specified categories of assets:
(i) unimproved land; (ii) other property holdings (excluding cash, Cash
Equivalents, non-industrial Properties and Indebtedness of any Subsidiary to
the Borrower); (iii) stock holdings other than in Subsidiaries; (iv) mortgages;
and (v) joint ventures and partnerships. The total investment in any one of
categories (i), (ii), (iii), (iv) or (v) shall not exceed 10% of Implied
Capitalization Value and the total investment in all the foregoing investment
categories in the aggregate shall be less than or equal to twenty percent (20%)
of Market Value Net Worth. In addition to the foregoing restrictions,
investments in unimproved land which is not adjacent to existing improvements
and not under active planning for near term development as evidenced to the
reasonable satisfaction of Administrative Agent shall not exceed in the
aggregate 5% of Implied Capitalization Value, and no single industrial property
shall exceed 5% of Implied Capitalization Value. For the purposes of this
Section 8.3, all investments shall be valued in accordance with GAAP.
8.4 Maintenance of Properties. Maintain, preserve, protect and
keep the Properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements, normal wear and tear
excepted.
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8.5 Insurance. Provide a certificate of insurance from all
insurance carriers who maintain policies with respect to the Properties within
thirty (30) days after the end of each fiscal year, evidencing that the
insurance required to be furnished to Lenders pursuant to Section 5.1(j) hereof
is in full force and effect. Borrower shall timely pay, or cause to be paid,
all premiums on all insurance policies required under this Agreement from time
to time. Borrower shall promptly notify its insurance carrier or agent
therefor (with a copy of such notification being provided simultaneously to
Administrative Agent) if there is any occurrence which, under the terms of any
insurance policy then in effect with respect to the Properties, requires such
notification.
8.6 Payment of Obligations. Pay all taxes, assessments,
governmental charges and other obligations when due, except such as may be
contested in good faith or as to which a bona fide dispute may exist, and for
which adequate reserves have been provided in accordance with sound accounting
principles used by Borrower on the date hereof.
8.7 Compliance with Laws. Comply in all material respects with
all applicable laws, rules, regulations, orders and directions of any
governmental authority having jurisdiction over Borrower, General Partner, or
any of their respective businesses.
8.8 Adequate Books. Maintain adequate books, accounts and records
in order to provide financial statements in accordance with GAAP and, if
requested by any Lender, permit employees or representatives of such Lender at
any reasonable time and upon reasonable notice to inspect and audit the
properties of Borrower and of the Consolidated Operating Partnership, and to
examine or audit the inventory, books, accounts and records of each of them and
make copies and memoranda thereof.
8.9 ERISA. Comply in all material respects with all requirements
of ERISA applicable to it with respect to each Plan.
8.10 Maintenance of Status. General Partner shall at all times (i)
remain as a corporation listed and in good standing on the New York Stock
Exchange (NYSE), and (ii) take all steps maintain General Partner's status as a
real estate investment trust in compliance with all applicable provisions of the
Code (unless otherwise consented to by the Supermajority Lenders).
8.11 Use of Proceeds. Use the proceeds of the Facility for the
general business purposes of the Borrower, including without limitation working
capital needs, closing costs, and interim funding for property acquisitions and
construction of new industrial properties, and/or payment of other debts and
obligations of Borrower.
8.12 Pre-Acquisition Environmental Investigations. Cause to be
prepared prior to the acquisition of each project that it intends to acquire an
environmental report pursuant to a standard scope of work attached as Exhibit I
hereto and made a part hereof.
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8.13 Distributions. Provided there is no Monetary Default then
existing and provided there is not an Event of Default relating to a breach of
the financial covenants contained in Section 9.10 below, the Borrower may make
distributions to its partners provided that the aggregate amount of
distributions in any period of four consecutive fiscal quarters is not in
excess of 95% of its Funds From Operations for such period. Notwithstanding
the foregoing, unless at the time of distribution there is a Monetary Default,
the Borrower shall be permitted at all times to distribute whatever amount is
necessary to maintain the General Partner's tax status as a real estate
investment trust.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment
shall remain available and until full and final payment of all obligations
incurred under the Loan Documents, without the prior written consent of the
Majority Lenders (or the Administrative Agent or a greater Percentage of the
Lenders, if so expressly provided), it will not, and the General Partner will
not and, in the case of Sections 9.5 and 9.11, Borrower's Subsidiaries will
not:
9.1 Change in Business. Engage in any business activities or
operations other than (i) the ownership and operation of the Properties, or
(ii) other business functions and transactions related to the financing,
ownership, acquisition, development and/or management of bulk warehouse and
light industrial properties, or without obtaining the prior written consent of
the Supermajority Lenders materially change the nature of the use of the
Properties.
9.2 Change of Ownership of Properties. Change the ownership and
management of the Properties, except that any Affiliate of Borrower or the
General Partner shall be permitted to manage any of the Properties.
9.3 Change of Borrower Ownership or Financing Partnership
Ownership. Allow (i) the General Partner to own less than fifty-one percent
(51%) of the partnership interests in Borrower or 100% of the stock in FIMC and
in FISC, (ii) the Borrower to be controlled by a Person other than the General
Partner, (iii) any pledge of, other encumbrance on, or conversion to limited
partnership interests of, any of the general partnership interests in the
Borrower, or (iv) any pledge, hypothecation, encumbrance, transfer or other
change in the ownership or the partnership interests in the Financing
Partnership or Mortgage Partnership (except for the pledge of such partnership
interests to the REMIC Lender).
9.4 Use of Proceeds. Apply or permit to be applied any proceeds
of any Advance directly or indirectly, to the funding of any purchase of, or
offer for, any share of capital stock of any publicly held corporation unless
the board of directors of such corporation has
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consented to such offer prior to any public announcements relating thereto and
the Lenders have consented to such use of the proceeds of the Facility.
9.5 Transfers of Unencumbered Assets. Transfer or otherwise
dispose of (other than the creation or incurrence of Liens permitted under
Section 9.6) an Unencumbered Asset without the prior written consent of the
Majority Lenders if the Value of such Unencumbered Asset, together with the
Value of any other Unencumbered Assets which have been transferred or disposed
of during the same period, exceeds the following maximum amounts:
(i) for the period from the Agreement
Execution Date through the earlier of (A) the date that the
REMIC Loan becomes Defeased REMIC Debt and (B) a date six (6)
months after the Agreement Execution Date, a maximum of
$90,000,000; and
(ii) for a period beginning at the end of
the period described in clause (i) and ending on the last day
of the fourth full fiscal quarter of the Borrower thereafter
and for subsequent periods ending on the last day of each such
fiscal quarter thereafter and consisting of the immediately
preceding four (4) full fiscal quarters, a maximum of twenty
percent (20%) of the sum of the Value of Unencumbered Assets
at the beginning of such period plus the increase therein as a
result of all Projects added to Unencumbered Assets during
such period.
9.6 Liens. Create, incur, or suffer to exist (or permit any of
its Subsidiaries to create, incur, or suffer to exist) any Lien in, of or on
the Property of the Borrower or any of their Subsidiaries except:
(i) Liens for taxes, assessments or
governmental charges or levies on their Property if the same
shall not at the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves shall
have been set aside on their books;
(ii) Liens which arise by operation of
law, such as carriers', warehousemen's, landlords',
materialmen and mechanics' liens and other similar liens
arising in the ordinary course of business which secure
payment of obligations not more than 30 days past due or which
are being contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set aside on
its books;
(iii) Liens arising out of pledges or
deposits under worker's compensation laws, unemployment
insurance, old age pensions, or other social security or
retirement benefits, or similar legislation;
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(iv) Utility easements, building
restrictions, zoning restrictions, easements and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries;
(v) Liens of any Subsidiary in favor of
the Borrower; and
(vi) Liens arising in connection with any
Indebtedness permitted hereunder to the extent such Liens will
not result in a violation of any of the provisions of this
Agreement.
Liens permitted pursuant to this Section 9.6 shall be deemed to be "Permitted
Liens".
9.7 Regulation U. Use any of the proceeds of the Advances to
purchase or carry any Margin Stock.
9.8 [Intentionally Omitted]
9.9 [Intentionally Omitted]
9.10 Indebtedness and Cash Flow Covenants. Permit or suffer:
(a) as of November 30, 1996 or the last day of any fiscal
quarter ending thereafter, the ratio of EBITDA to the sum of (1) Interest
Expense plus (2) Senior Preferred Stock Expense for such fiscal quarter to be
less than 2.0 to 1.0, based on annualizing the results of such fiscal quarter;
(b) as of any day, Consolidated Total Indebtedness to
exceed 50% of Implied Capitalization Value;
(c) as of any day, the ratio of Value of Unencumbered
Assets to outstanding Consolidated Senior Unsecured Debt to be less than either
(i) 1.65 to 1.0 for any fiscal quarter not ending during a Rating Pricing
Period or (ii) 1.5 to 1.0 for any fiscal quarter ending during a Rating Pricing
Period;
(d) as of November 30, 1996 or the last day of any fiscal
quarter ending thereafter, the ratio obtained by dividing (a) Property
Operating Income from Unencumbered Assets qualifying for inclusion in the
calculation of Value of Unencumbered Assets for such quarter by (b) Debt
Service on all Consolidated Senior Unsecured Debt for such quarter to be less
than 1.75 to 1;
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(e) as of any day, the sum of (1) Consolidated Secured
Debt plus (2) Senior Preferred Stock to exceed 45% of Implied Capitalization
Value of Borrower and its Subsidiaries. Senior Preferred Stock will be dropped
from this ratio when the PS Guaranty is eliminated, as evidenced by the
Administrative Agent's receipt of satisfactory evidence thereof;
(f) as of November 30, 1996 or the last day of any fiscal
quarter ending thereafter, Market Value Net Worth of the Borrower to be less
than the sum of (i) $450,000,000 plus (ii) seventy-five percent (75%) of the
aggregate proceeds received (net of customary related fees and expenses) in
connection with any equity offering (including any issuance of shares in the
General Partner or units in the Borrower) after the Agreement Execution Date.
To the extent Borrower has Defeased REMIC Debt, both the underlying debt and
interest payable thereon and the financial assets used to defease such debt and
interest earned thereon shall be excluded from calculations of the foregoing
financial covenants.
9.11 Mergers and Dispositions. Enter into any merger,
consolidation, reorganization or liquidation or transfer or otherwise dispose
of all or a substantial portion of its properties, except for: such
transactions that occur between wholly-owned Subsidiaries; transactions where
Borrower is the surviving entity and there is no change in business conducted
or loss of an investment grade credit rating, and no Default or Event of
Default under the Loan Documents results from such transaction; or as otherwise
approved in advance by the Lenders. Borrower will notify the Administrative
Agent (who will promptly notify Lenders) of any acquisitions, dispositions,
mergers or asset purchases involving assets valued in excess of 5% of
Borrower's then-current Market Value Net Worth and certify compliance with
covenants after giving effect to such proposed acquisition, disposition,
merger, or asset purchase regardless of whether any consent is required.
9.12 Negative Pledge. Borrower agrees that throughout the term of
this Facility, no "negative pledge" on any Project then included in
Unencumbered Assets restricting Borrower's right to sell or encumber such
Project shall be given to any other lender or creditor or, if such a "negative
pledge" is given, the Project affected shall be immediately excluded from
Unencumbered Assets.
9.13 Maximum Revenue from Single Tenant. Permit the rent revenue
(exclusive of tenant reimbursements) received from a single tenant during any
quarter (as annualized), to exceed 7.5% of the Consolidated Operating
Partnership's total rent revenue (as annualized) as of the last day of such
quarter, except where Borrower's noncompliance arises from a merger of tenants
or other causes outside of Borrower's control.
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ARTICLE X
DEFAULTS
The occurrence of any one or more of the following events shall
constitute an Event of Default:
10.1 Nonpayment of Principal. The Borrower fails to pay any
principal portion of the Obligations when due, whether on the Maturity Date or
otherwise.
10.2 Certain Covenants. The Borrower, General Partner and/or
Consolidated Operating Partnership, as the case may be, is not in compliance
with any one or more of Sections 8.10, 8.13, 9.3, 9.4, 9.5, 9.6, 9.10, 9.11,
9.12 or 9.13 hereof.
10.3 Nonpayment of Interest and Other Obligations. The Borrower
fails to pay any interest or other portion of the Obligations, other than
payments of principal, and such failure continues for a period of five (5) days
after the date such payment is due.
10.4 Cross Default. Any monetary default occurs (after giving
effect to any applicable cure period) under any other Indebtedness (which
includes liability under Guaranties) of Borrower or the General Partner, singly
or in the aggregate, in excess of Seven Million Five Hundred Thousand Dollars
($7,500,000), other than (i) Indebtedness arising from the purchase of personal
property or the provision of services, the amount of which is being contested
by Borrower or (ii) Indebtedness (other than the REMIC Loan which is the
subject of Section 10.13 below) which is "non-recourse", i.e., which is not
recoverable by the creditor thereof from the general assets of the Borrower,
the General Partner or any of their Affiliates, but is limited to the proceeds
of certain real estate, improvements and related personal property.
10.5 Loan Documents. Any Loan Document is not in full force and
effect or a default has occurred and is continuing thereunder after giving
effect to any cure or grace period in any such document.
10.6 Representation or Warranty. At any time or times hereafter
any representation or warranty set forth in Articles VI or VII of this
Agreement or in any other Loan Document or in any statement, report or
certificate now or hereafter made by the Borrower or the General Partner to the
Lenders or the Administrative Agent is not true and correct in any material
respect.
10.7 Covenants, Agreements and Other Conditions. The Borrower or
the General Partner fails to perform or observe any of the other covenants,
agreements and conditions contained in Articles VIII and IX (except for
Sections 8.10, 8.13, 9.3, 9.4, 9.5, 9.6, 9.10, 9.11, 9.12 or 9.13 hereof) and
elsewhere in this Agreement or any of the other Loan Documents in accordance
with the terms hereof or thereof, not specifically referred to
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herein, and such Default continues unremedied for a period of thirty (30) days
after written notice from Administrative Agent, provided, however, that if such
Default is susceptible of cure but cannot by the use of reasonable efforts be
cured within such thirty (30) day period, such Default shall not constitute an
Event of Default under this Section 10.7 so long as (i) the Borrower or the
General Partner, as the case may be, has commenced a cure within such
thirty-day period and (ii) thereafter, Borrower or General Partner, as the case
may be, is proceeding to cure such default continuously and diligently and in a
manner reasonably satisfactory to Lenders and (iii) such default is cured not
later than sixty (60) days after the expiration of such thirty (30) day period.
10.8 No Longer General Partner. The General Partner shall no
longer be the sole general partner of Borrower.
10.9 Material Adverse Financial Change. The Borrower or General
Partner has suffered a Material Adverse Financial Change or is Insolvent.
10.10 Bankruptcy.
(a) The General Partner, the Borrower or any Subsidiary
having more than $10,000,000 of Equity Value (as defined below) shall (i) have
an order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any substantial portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it as a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 10.10(a), (vi)
fail to contest in good faith any appointment or proceeding described in
Section 10.10(b) or (vii) not pay, or admit in writing its inability to pay,
its debts generally as they become due. As used herein, the term "Equity
Value" of a Subsidiary shall mean (1) Property Operating Income of such
Subsidiary's Properties owned as of the Agreement Execution Date capitalized at
a 10.5% rate, plus (2) the purchase price of any of such Subsidiary's
Properties acquired after the Agreement Execution Date less (3) any
Indebtedness of such Subsidiary;
(b) A receiver, trustee, examiner, liquidator or similar
official shall be appointed for the General Partner, Borrower or any Subsidiary
having more than $10,000,000 of Equity Value or any substantial portion of any
of their Properties, or a proceeding described in Section 10.10(a)(iv) shall be
instituted against the General Partner, the Borrower or any such Subsidiary and
such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of sixty (60) consecutive days.
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10.11 Legal Proceedings. Borrower or General Partner is enjoined,
restrained or in any way prevented by any court order or judgment or if a
notice of lien, levy, or assessment is filed of record with respect to all or
any part of the Properties by any governmental department, office or agency,
which could materially adversely affect the performance of the obligations of
such parties hereunder or under the Loan Documents, as the case may be, or if
any proceeding is filed or commenced seeking to enjoin, restrain or in any way
prevent the foregoing parties from conducting all or a substantial part of
their respective business affairs and failure to vacate, stay, dismiss, set
aside or remedy the same within ninety (90) days after the occurrence thereof.
10.12 ERISA. Borrower or General Partner is deemed to hold "plan
assets" within the meaning of ERISA or any regulations promulgated thereunder
of an employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan (within the meaning of Section 4975 of
the Code).
10.13 REMIC Loan. Any "Event of Default" (as such term is defined
in the REMIC Loan Agreement) that occurs under the REMIC Loan Agreement with
respect to the REMIC Loan.
10.14 Failure to Satisfy Judgments. The General Partner, the
Borrower or any of its Subsidiaries shall fail within sixty (60) days to pay,
bond or otherwise discharge any judgments or orders for the payment of money in
an amount which, when added to all other judgments or orders outstanding
against the General Partner, the Borrower or any Subsidiary would exceed
$10,000,000 in the aggregate, which have not been stayed on appeal or otherwise
appropriately contested in good faith, unless the liability is insured against
and the insurer has not challenged coverage of such liability.
10.15 Environmental Remediation. Failure to remediate within the
time period required by law or governmental order, (or within a reasonable time
in light of the nature of the problem if no specific time period is so
established), environmental problems in violation of applicable law related to
Properties of Borrower and/or its Subsidiaries where the estimated cost of
remediation is in the aggregate in excess of $20,000,000, in each case after
all administrative hearings and appeals have been concluded.
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ARTICLE XI
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
11.1 Acceleration.
If any Event of Default described in Section 10.10 hereof
occurs, the obligation of the Lenders to make Advances and of the Issuing Bank
to issue Facility Letters of Credit hereunder shall automatically terminate and
the Obligations shall immediately become due and payable. If any other Event
of Default described in Article X hereof occurs, such obligation to make
Advances and to issue Facility Letters of Credit shall be terminated and at the
election of the Majority Lenders, the Obligations may be declared to be due and
payable.
In addition to the foregoing, following the occurrence of an
Event of Default and so long as any Facility Letter of Credit has not been
fully drawn and has not been cancelled or expired by its terms, upon demand by
the Majority Lenders the Borrower shall deposit in the Letter of Credit
Collateral Account cash in an amount equal to the aggregate undrawn face amount
of all outstanding Facility Letters of Credit and all fees and other amounts
due or which may become due with respect thereto. The Borrower shall have no
control over funds in the Letter of Credit Collateral Account, which funds
shall be invested by the Administrative Agent from time to time in its
discretion in certificates of deposit of First Chicago having a maturity not
exceeding thirty (30) days. Such funds shall be promptly applied by the
Administrative Agent to reimburse the Issuing Bank for drafts drawn from time
to time under the Facility Letters of Credit. Such funds, if any, remaining in
the Letter of Credit Collateral Account following the payment of all
Obligations in full shall, unless the Administrative Agent is otherwise
directed by a court of competent jurisdiction, be promptly paid over to the
Borrower.
11.2 Preservation of Rights; Amendments. No delay or omission of
the Lenders in exercising any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence therein,
and the making of an Advance notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Advance
shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall
be valid unless in writing signed by the Administrative Agent and the number of
Lenders required hereunder and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Lenders until
the Obligations have been paid in full.
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ARTICLE XII
THE ADMINISTRATIVE AGENT
12.1 Appointment. First Chicago is hereby appointed Administrative
Agent hereunder and under each other Loan Document, and each of the Lenders
authorizes the Administrative Agent to act as the agent of such Lender. The
Administrative Agent agrees to act as such upon the express conditions
contained in this Article XII. The Administrative Agent shall not have a
fiduciary relationship in respect of any Lender by reason of this Agreement,
except to the extent the Administrative Agent acts as an agent with respect to
the receipt or payment of funds hereunder.
12.2 Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
12.3 General Immunity. Neither the Administrative Agent (in its
capacity as Administrative Agent) nor any of its directors, officers, agents or
employees shall be liable to the Borrower, the Lenders or any Lender for any
action taken or omitted to be taken by it or them hereunder or under any other
Loan Document or in connection herewith or therewith, except for its or their
own gross negligence or willful misconduct.
12.4 No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent (in its capacity as Administrative Agent) nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of
any condition specified in Article V, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith.
12.5 Action on Instructions of Lenders. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Majority Lenders, Supermajority Lenders or all
Lenders, as the case may be, and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders and on
all holders of Notes. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the
Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
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12.6 Employment of Administrative Agents and Counsel. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Lenders, except as to
money or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
12.7 Reliance on Documents; Counsel. The Administrative Agent
shall be entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of outside counsel
selected by the Administrative Agent.
12.8 Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
accordance with their respective Percentages (i) for any amounts not reimbursed
by the Borrower for which the Administrative Agent is entitled to reimbursement
by the Borrower under the Loan Documents, (ii) for any other reasonable
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents, if not paid by Borrower, and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent (in
its capacity as Administrative Agent and not as a Lender) in any way relating
to or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the
Administrative Agent.
12.9 Rights as a Lender. With respect to the Commitment, Advances
made by it and the Note issued to it, the Administrative Agent shall have the
same rights and powers hereunder and under any other Loan Document as any
Lender and may exercise the same as though it were not the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent, in its individual capacity, may accept deposits from,
lend money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person.
12.10 Commitment as a Lender. First Chicago and UBS each agrees to
maintain at all times a Commitment of at least 10% of the Aggregate Commitment
so long as First
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Chicago remains as Administrative Agent; provided, that the foregoing
agreement of First Chicago and UBS shall not apply at any time following a
Monetary Default or Event of Default (irrespective of whether such Monetary
Default or Event of Default subsequently is waived).
12.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
12.12 Successor Administrative Agent. Each Lender agrees that First
Chicago shall serve as Administrative Agent at all times during the term of
this Facility, except that First Chicago may resign as Administrative Agent in
the event (x) First Chicago and Borrower shall mutually agree in writing or (y)
an Event of Default shall occur under the Loan Documents (irrespective of
whether such Event of Default subsequently is waived), or (z) First Chicago
shall determine, in its sole reasonable discretion, that because of its other
banking relationships with Borrower and/or Borrower's Affiliates at the time of
such decision First Chicago's resignation as Administrative Agent would be
necessary in order to avoid creating an appearance of impropriety on the part
of First Chicago. First Chicago (or any successor Administrative Agent) may be
removed as Administrative Agent by written notice received by Administrative
Agent from all of the other Lenders (i) at any time with cause (i.e., a breach
by First Chicago (or any successor Administrative Agent) of its duties as
Administrative Agent hereunder), or (ii) without cause if First Chicago (or any
successor Administrative Agent) assigns a portion of First Chicago's (or such
successor Administrative Agent's) then applicable Commitment in an amount such
that following such assignment First Chicago's (or such successor Administrative
Agent's) then remaining Commitment is less than the then applicable Commitment
of any other Lender hereunder. Upon any such resignation or removal, UBS shall
be the successor Administrative Agent (unless objected to by the Majority
Lenders) or, if UBS declines or is so objected to, the Majority Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty days after the retiring Administrative Agent's giving
notice of resignation, then the retiring Administrative Agent may appoint, on
behalf of the Borrower and the Lenders, a successor Administrative Agent. Such
successor Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent (including the right to
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receive any fees for performing such duties which accrue thereafter), and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article XII shall continue in effect for its benefit and that
of the other Lenders in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent hereunder and under the other
Loan Documents.
12.13 Notice of Defaults. If a Lender becomes aware of a Default or
Event of Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Event of Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
12.14 Requests for Approval. If the Administrative Agent requests
in writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove definitively in writing to the Administrative
Agent within ten Business Days (or sooner if such notice specifies a shorter
period, but in no event less than five Business Days for responses based on
Administrative Agent's good faith determination that circumstances exist
warranting its request for an earlier response) after such written request from
the Administrative Agent. If the Lender does not so respond, that Lender shall
be deemed to have approved the request. Upon request, the Administrative Agent
shall notify the Lenders which Lenders, if any, failed to respond to a request
for approval.
12.15 Copies of Documents. Administrative Agent shall promptly
deliver to each of the Lenders copies of all notices of default and other
formal notices sent or received and according to Section 15.1 of this
Agreement. Administrative Agent shall deliver to Lenders within 15 Business
Days following receipt, copies of all financial statements, certificates and
notices received regarding the General Partner's ratings except to the extent
such items are required to be furnished directly to the Lenders by Borrower
hereunder. Within fifteen Business Days after a request by a Lender to the
Administrative Agent for other documents furnished to the Administrative Agent
by the Borrower, the Administrative Agent shall provide copies of such documents
to such Lender except where this Agreement obligates Administrative Agent to
provide copies in a shorter period of time.
12.16 Defaulting Lenders. At such time as a Lender becomes a
Defaulting Lender, such Defaulting Lender's right to vote on matters which are
subject to the consent or approval of the Majority or Supermajority Lenders,
such Defaulting Lender or all Lenders shall be immediately suspended until such
time as the Lender is no longer a Defaulting Lender. If a Defaulting Lender
has failed to fund its Percentage of any Advance and until such time as such
Defaulting Lender subsequently funds its Percentage of such Advance, all
Obligations owing to such Defaulting Lender hereunder shall be subordinated in
right of payment, as provided in the following sentence, to the prior payment
in full of all principal of, interest on and fees relating to the Loans funded
by the other Lenders in connection with any such Advance in which the
Defaulting Lender has not funded its Percentage (such
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principal, interest and fees being referred to as "Senior Loans" for the
purposes of this section). All amounts paid by the Borrower and otherwise due to
be applied to the Obligations owing to such Defaulting Lender pursuant to the
terms hereof shall be distributed by the Administrative Agent to the other
Lenders in accordance with their respective Percentages (recalculated for the
purposes hereof to exclude the Defaulting Lender) until all Senior Loans
have been paid in full. At that point, the "Defaulting Lender" shall no longer
be deemed a Defaulting Lender. After the Senior Loans have been paid in full
equitable adjustments will be made in connection with future payments by the
Borrower to the extent a portion of the Senior Loans had been repaid with
amounts that otherwise would have been distributed to a Defaulting Lender but
for the operation of this Section 12.16. This provision governs only the
relationship among the Administrative Agent, each Defaulting Lender and the
other Lenders; nothing hereunder shall limit the obligation of the Borrower to
repay all Loans in accordance with the terms of this Agreement. The provisions
of this Section 12.16 shall apply and be effective regardless of whether a
Default occurs and is continuing, and notwithstanding (i) any other provision of
this Agreement to the contrary, (ii) any instruction of the Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters as provided above.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns.
The terms and provisions of the Loan Documents shall be
binding upon and inure to the benefit of Borrower and the Lenders and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights or obligations under the Loan Documents without the
consent of all the Lenders and any assignment by any Lender must be made in
compliance with Section 13.3. The Administrative Agent may treat the payee of
any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 13.3 in the case of an assignment thereof or, in
the case of any other transfer, a written notice of the transfer is filed with
the Administrative Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
13.2 Participations.
13.2.1 Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other entities ("
Participants") participating interests in any Advance
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owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under
the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of
any such Note for all purposes under the Loan Documents, all amounts
payable by Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and Borrower and the
Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
13.2.2 Voting Rights. Each Lender shall retain the sole
right to vote its Percentage of the Aggregate Commitment, without the
consent of any Participant, for the approval or disapproval of any
amendment, modification or waiver of any provision of the Loan
Documents, provided that such Lender may grant such Participant the
right to approve any amendment, modification or waiver which forgives
principal, interest or fees or reduces the interest rate or fees
payable hereunder, postpones any date fixed for any
regularly-scheduled payment of principal of or interest on the
Obligations, releases Collateral beyond any releases expressly
provided for herein or extends the Maturity Date.
13.3 Assignments.
13.3.1 Permitted Assignments. Subject to the provisions of
Section 12.10 above with respect to First Chicago and UBS, any Lender
may, with the prior written consent of Administrative Agent (plus,
during the initial syndication, UBS) and Borrower (which consents
shall not be unreasonably withheld or delayed), in accordance with
applicable law, at any time assign to one or more banks or other
entities (collectively, "Purchasers") all or any part of its
rights and obligations under the Loan Documents, except that no
consent of Borrower shall be required if an Event of Default has
occurred and is continuing and that no consent of Administrative
Agent, UBS or Borrower shall ever be required for (i) any assignment
to a Person directly or indirectly controlling, controlled by or under
direct or indirect common control with the assigning Lender or (ii)
the pledge or assignment by a Lender of such Lender's Note and other
rights under the Loan Documents to any Federal Reserve Bank in
accordance with applicable law. Such assignments and assumptions
shall be substantially in the form of Exhibit J hereto. The Borrower
shall execute any and all documents which are customarily required by
such Lender (including, without limitation, a replacement
promissory note or notes in the forms provided hereunder) in
connection with any such assignment, but Borrower shall not be
obligated to pay any fees and expenses incurred by any Lender in
connection with any assignment pursuant to this Section. Any Lender
selling all or any part of its rights and obligation hereunder in a
transaction requiring the consent of the Administrative
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Agent shall pay to the Administrative Agent a fee of $3,500.00
per assignee to reimburse Administrative Agent for its involvement in
such assignment.
13.3.2 Effect; Effective Date of Assignment. Upon delivery
to the Administrative Agent of a notice of assignment executed by the
assigning Lender and the Purchaser, such assignment shall become
effective on the effective date specified in such notice of
assignment. The notice of assignment shall contain a representation
by the Purchaser to the effect that none of the consideration used to
make the purchase of the Commitment and the Loan under the applicable
assignment agreement are "plan assets" as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and no further consent or
action by Borrower, the Lenders or the Administrative Agent shall be
required to release the transferor Lender with respect to the
percentage of the Commitment and Advances assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to
this Section 13.3.2, the transferor Lender, the Administrative Agent
and Borrower shall make appropriate arrangements so that replacement
Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each
case in principal amounts reflecting their respective Commitments, as
adjusted pursuant to such assignment.
13.4 Dissemination of Information. Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower and General Partner. Each
Transferee shall agree in writing to keep confidential any such information
which is not publicly available.
13.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with all applicable provisions of the Code with respect to
withholding and other tax matters.
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ARTICLE XIV
GENERAL PROVISIONS
14.1 Survival of Representations. All representations and
warranties contained in this Agreement shall survive delivery of the Notes and
the making of the Advances herein contemplated.
14.2 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
14.3 Taxes. Any recording and other taxes (excluding franchise,
income or similar taxes) or other similar assessments or charges payable or
ruled payable by any governmental authority incurred in connection with the
consummation of the transactions contemplated by this Agreement shall be paid
by the Borrower, together with interest and penalties, if any.
14.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
14.5 No Third Party Beneficiaries. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
14.6 Expenses; Indemnification. Subject to the provisions of this
Agreement, Borrower will pay (a) all out-of-pocket costs and expenses incurred
by the Administrative Agent and the Arrangers (including the reasonable fees,
out-of-pocket expenses and other reasonable expenses of counsel, which counsel
may be employees of Administrative Agent) in connection with the preparation,
execution and delivery of this Agreement, the Notes, the Loan Documents and any
other agreements or documents referred to herein or therein and any amendments
thereto, (b) all out-of-pocket costs and expenses incurred by the Administrative
Agent and the Lenders (including the reasonable fees, out-of-pocket expenses
and other reasonable expenses of counsel to the Administrative Agent and the
Lenders, which counsel may be employees of Administrative Agent or the Lenders)
in connection with the enforcement and protection of the rights of the Lenders
under this Agreement, the Notes, the Loan Documents or any other agreement or
document referred to herein or therein, and (c) all reasonable and customary
costs and expenses of periodic audits by the Administrative Agent's personnel of
the Borrower's books and records provided that prior to an Event of Default,
Borrower shall be required to pay for only one such audit during any year. The
Borrower further agrees to indemnify the Lenders, their directors, officers and
employees against all losses, claims, damages, penalties, judgments, liabilities
and reasonable expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Lenders is a party
thereto) which any of them may pay or incur arising out of or
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relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Advance hereunder, except that the
foregoing indemnity shall not apply to a Lender to the extent that any losses,
claims, etc. are the result of such Lender's gross negligence or wilful
misconduct. The obligations of the Borrower under this Section shall survive
the termination of this Agreement.
14.7 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
14.8 Nonliability of the Lenders. The relationship between the
Borrower and the Lenders shall be solely that of borrower and lender. The
Lenders shall not have any fiduciary responsibilities to the Borrower. The
Lenders undertake no responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
14.9 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
14.10 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE LENDERS OR ANY AFFILIATE OF THE LENDERS
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
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14.11 Waiver of Jury Trial. THE BORROWER, THE GENERAL PARTNER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
14.12 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents. Any assignee or transferee of the Notes agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of the Notes, shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such Notes or of any note or notes issued in exchange therefor.
14.13 Entire Agreement; Modification of Agreement. The Loan
Documents embody the entire agreement among the Borrower, General Partner,
Administrative Agent, and Lenders and supersede all prior conversations,
agreements, understandings, commitments and term sheets among any or all of
such parties with respect to the subject matter hereof. Any provisions of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower, and Administrative Agent if the
rights or duties of Administrative Agent are affected thereby, and
(a) each of the Lenders if such amendment or waiver
(i) reduces or forgives any payment of
principal or interest on the Obligations or any fees payable
by Borrower to such Lender hereunder; or
(ii) postpones the date fixed for any
payment of principal of or interest on the Obligations or any
fees payable by Borrower to such Lender hereunder; or
(iii) changes the amount of such Lender's
Commitment (other than pursuant to an assignment permitted
under Section 13.3) or the unpaid principal amount of such
Lender's Note; or
(iv) extends the Maturity Date; or
(v) releases or limits the liability of
the General Partner under the Loan Documents; or
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(vi) changes the definition of Majority
Lenders or Supermajority Lenders or modifies any requirement
for consent by each of the Lenders; or
(vii) modifies or waives any covenant
contained in Sections 8.13, 9.3, 9.5, 9.6, 9.10 or 9.12 hereof;
or
(b) the Majority Lenders, to the extent expressly provided
for herein; or
(c) the Supermajority Lenders, to the extent expressly
provided for herein and in the case of all other waivers or amendments if no
percentage of Lenders is specified herein.
14.14 Dealings with the Borrower. The Lenders and their affiliates
may accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with the Borrower or the General Partner or
any of their Affiliates regardless of the capacity of the Lenders hereunder.
14.15 Set-Off.
(a) If an Event of Default shall have occurred, each
Lender shall have the right, at any time and from time to time without notice
to the Borrower, any such notice being hereby expressly waived, to set-off and
to appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due
hereunder and all other obligations and liabilities of the Borrower under this
Agreement, irrespective of whether or not such Lender shall have made any
demand hereunder and whether or not said obligations and liabilities shall have
matured.
(b) Each Lender agrees that if it shall, by exercising
any right of set-off or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal, interest or fees due with
respect to any Note held by it which is greater than the proportion received by
any other Lender in respect of the aggregate amount of principal, interest or
fees due with respect to any Note held by such other Lender, the Lender
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Lenders and such other
adjustments shall be made as may be required so that all such payments of
principal, interest or Fees with respect to the Notes held by the Lenders shall
be shared by the Lenders pro rata according to their respective Commitments.
14.16 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement
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shall be effective when it has been executed by the Borrower and each of the
Lenders shown on the signature pages hereof.
ARTICLE XV
NOTICES
15.1 Giving Notice. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below or at such other address as may be designated by
such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of telexes). Notice may be given
as follows:
To the Borrower:
First Industrial, L.P.
c/o First Industrial Realty Trust, Inc.
150 North Wacker Drive
Suite 150
Chicago, Illinois 60606
Attention: Mr. Scott Musil
Telecopy: (312) 704-6606
To General Partner:
First Industrial Realty Trust, Inc.
150 North Wacker Drive
Suite 150
Chicago, Illinois 60606
Attention: Mr. Michael Havala
Telecopy: (312) 704-6606
Each of the above with a copy to:
Barack Ferrazzano Kirschbaum & Perlman
333 W. Wacker Drive
Suite 2700
Chicago, Illinois 60606
Attention: Howard A. Nagelberg, Esq.
Telecopy: (312) 984-3150
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To each Lender:
As shown below the Lenders' signatures.
To the Administrative Agent:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telecopy: (312) 732-1117
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
To the Documentation Agent:
Union Bank of Switzerland,
New York Branch
299 Park Avenue
New York, New York 10171-0026
Attention: Kenneth A. McIntyre, Jr.
Telecopy: (212) 821-3969
15.2 Change of Address. Each party may change the address for
service of notice upon it by a notice in writing to the other parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
BORROWER: FIRST INDUSTRIAL, L.P.
By: FIRST INDUSTRIAL REALTY
TRUST, INC., its General Partner
By: Gary H. Heigl
------------------------------------
Title: Senior V.P.
---------------------------------
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GENERAL PARTNER: FIRST INDUSTRIAL REALTY TRUST, INC.
By: Gary H. Heigl
------------------------------------
Title: Senior V.P.
---------------------------------
LENDERS: THE FIRST NATIONAL BANK OF CHICAGO
By: [SIG]
------------------------------------
Title: Vice President
---------------------------------
Commitment: $100,000,000 Percentage
of Aggregate Commitment: 50%
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telephone: 312/732-2107
Telecopy: 312/732-1117
UNION BANK OF SWITZERLAND, NEW YORK BRANCH
By: [SIG]
------------------------------------
Title: Assistant Vice President
---------------------------------
By: [SIG]
------------------------------------
Title: Vice President
---------------------------------
Commitment: $100,000,000 Percentage
of Aggregate Commitment: 50%
Address for Notices:
299 Park Avenue
New York, New York 10071
Attention: Joseph Mitaretondo
-----------------------------
Telephone: 821-6589
-----------------------------
Telecopy: 821-4138
------------------------------
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ADMINISTRATIVE AGENT: THE FIRST NATIONAL BANK OF CHICAGO
By: [SIG]
------------------------------------
Title: Vice President
---------------------------------
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Division
Telephone: 312/732-2107
Telecopy: 312/732-1117
DOCUMENTATION AGENT: UNION BANK OF SWITZERLAND, NEW YORK
BRANCH
By: [SIG]
------------------------------------
Title: Assistant Vice President
---------------------------------
By: [SIG]
------------------------------------
Title: Vice President
---------------------------------
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EXHIBIT A
PERCENTAGES
First Chicago -- 50%
UBS -- 50%
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EXHIBIT B-1
FORM OF NOTE
$_______________________ _______________, 1996
On or before the Maturity Date, as defined in that certain Unsecured
Revolving Credit Agreement dated as of December __, 1996 (the "Agreement")
between FIRST INDUSTRIAL, L.P., a Delaware limited partnership ("Borrower"),
First Industrial Realty Trust, Inc., a Maryland corporation, Union Bank of
Switzerland, New York Branch, individually and as Documentation Agent, The
First National Bank of Chicago, a national bank organized under the laws of the
United States of America, individually and as Administrative Agent for the
Lenders (as such terms are defined in the Agreement), and the other Lenders
listed on the signature pages of the Agreement, Borrower promises to pay to the
order of _________________________ (the "Lender"), or its successors and
assigns, the principal sum of _________________________ AND NO/100 DOLLARS
($_________________________) or the aggregate unpaid principal amount of all
Loans (other than Competitive Bid Loans) made by the Lender to the Borrower
pursuant to Section 2.1 of the Agreement, in immediately available funds at the
office of the Administrative Agent in Chicago, Illinois, together with interest
on the unpaid principal amount hereof at the rates and on the dates set forth
in the Agreement. The Borrower shall pay this Promissory Note ("Note") in full
on or before the Maturity Date in accordance with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
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<PAGE> 95
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.,
its general partner
By:_____________________________________
Its:_________________________________
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<PAGE> 96
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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<PAGE> 97
EXHIBIT B-2
FORM OF COMPETITIVE BID NOTE
_______________, 1996
On or before the last day of each "Interest Period" applicable to a
"Competitive Bid Loan", as defined in that certain Unsecured Revolving Credit
Agreement dated as of December __, 1996 (the "Agreement") between FIRST
INDUSTRIAL, L.P., a Delaware limited partnership ("Borrower"), First Industrial
Realty Trust, Inc., a Maryland corporation, Union Bank of Switzerland, New York
Branch, The First National Bank of Chicago, a national bank organized under the
laws of the United States of America, individually and as Administrative Agent
for the Lenders (as such terms are defined in the Agreement), Borrower promises
to pay to the order of _________________________ (the "Lender"), or its
successors and assigns, the unpaid principal amount of such Competitive Bid
Loan made by the Lender to the Borrower pursuant to Section 2.17 of the
Agreement, in immediately available funds at the office of the Administrative
Agent in Chicago, Illinois, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay any remaining unpaid principal amount of such Competitive
Bid Loans under this Competitive Bid Note ("Note") in full on or before the
Maturity Date in accordance with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date, amount and due date of each Competitive Bid Loan and the date and
amount of each principal payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly
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<PAGE> 98
provided for in the Agreement), and any and all lack of diligence or delays in
collection or enforcement of this Note, and expressly agree that this Note, or
any payment hereunder, may be extended from time to time, and expressly
consent to the release of any party liable for the obligation secured by this
Note, the release of any of the security of this Note, the acceptance of any
other security therefor, or any other indulgence or forbearance whatsoever, all
without notice to any party and without affecting the liability of the Borrower
and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.,
its general partner
By:________________________________
Its:_______________________________
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<PAGE> 99
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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EXHIBIT C-1
FORM OF COMPETITIVE BID QUOTE REQUEST
(Section 2.17(b))
To: The First National Bank of Chicago,
as administrative agent (the "Agent")
From: First Industrial, L.P. (the "Borrower")
Re: Unsecured Revolving Credit Agreement dated as of December _____,
1996 among the Borrower, First Industrial Realty Trust, Inc.,
the lenders from time to time party thereto, Union Bank of
Switzerland and The First National Bank of Chicago, as Agent for
such lenders (as amended, supplemented or otherwise modified
from time to time through the date hereof, the "Agreement")
1. Capitalized terms used herein have the meanings assigned to them
in the Agreement.
2. We hereby give notice pursuant to Section 2.17(b) of the
Agreement that we request Competitive Bid Quotes for the following proposed
Competitive Bid Loan(s):
Borrowing Date: _______________, 19___
Principal Amount(1) Interest Period(2)
3. Such Competitive Bid Quotes should offer [a Competitive LIBOR
Margin] [an Absolute Rate].
__________________________________
(1) Amount must be at least $10,000,000 and an integral multiple of
$1,000,000.
(2) One, two, three or six months (Competitive LIBOR Margin) or up to 180
days (Absolute Rate), subject to the provisions of the definitions of LIBOR
Interest Period and Absolute Interest Period.
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4. Upon acceptance by the undersigned of any or all of the
Competitive Bid Loans offered by Lenders in response to this request, the
undersigned shall be deemed to affirm as of the Borrowing Date thereof the
representations and warranties made in Article VI of the Agreement.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.,
its general partner
By:_____________________________________
Its:_________________________________
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EXHIBIT C-2
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.17(c))
To: Each of the Lenders party to
the Agreement referred to below
From: Invitation for Competitive Bid Quotes to
First Industrial, L.P. (the "Borrower")
Pursuant to Section 2.17(c) of the Unsecured Revolving Credit Agreement
dated as of December _____, 1996 among the Borrower, First Industrial Realty
Trust, Inc., the lenders from time to time party thereto, Union Bank of
Switzerland and The First National Bank of Chicago, as Administrative Agent for
such lenders (as amended, supplemented or otherwise modified from time to time
through the date hereof, the "Agreement"), we are pleased on behalf of the
Borrower to invite you to submit Competitive Bid Quotes to the Borrower for the
following proposed Competitive Bid Loan(s):
Borrowing Date: _______________, 19___
Principal Amount Interest Period
Such Competitive Bid Quotes should offer [a Competitive LIBOR Margin]
[an Absolute Rate]. Your Competitive Bid Quote must comply with Section
2.17(d) of the Agreement and the foregoing. Capitalized terms used herein have
the meanings assigned to them in the Agreement.
Please respond to this invitation by no later than 9:00 a.m. (Chicago
time) on _______________, 19___.
THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent
By:_____________________________________
Its:_________________________________
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EXHIBIT C-3
COMPETITIVE BID QUOTE
(Section 2.17(d))
_______________, 19___
To: The First National Bank of Chicago,
as Administrative Agent
Re: Competitive Bid Quote to First Industrial, L.P.
(the "Borrower")
In response to your invitation on behalf of the Borrower dated
_______________, 19___, we hereby make the following Competitive Bid Quote
pursuant to Section 2.17(d) of the Agreement hereinafter referred to and on the
following terms:
1. Quoting Lender:_________________________________________________________
2. Person to contact at Quoting Lender:____________________________________
3. Borrowing Date:_______________________________________________________(1)
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
__________________________________
(1) As specified in the related Invitation For Competitive Bid Quotes.
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[Competitive
Principal Interest LIBOR [Absolute Minimum
Amount(2) Period(3) Margin(4)] Rate(5)] Amount(6)
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Unsecured
Revolving Credit Agreement dated as of December _____, 1996, among the
Borrower, First Industrial Realty Trust, Inc., the lenders from time to time
party thereto, Union Bank of Switzerland and The First National Bank of
Chicago, as Administrative Agent for such lenders (as amended, supplemented or
otherwise modified from time to time through the date hereof, the "Agreement"),
irrevocably obligates us to make the Competitive Bid Loan(s) for which any
offer(s) are accepted, in whole or in part. Capitalized terms used herein and
not otherwise defined herein shall have their meanings as defined in the
Agreement.
Very truly yours,
[NAME OF LENDER]
By:_____________________________________
Title:__________________________________
_____________________
2 Principal amount bid for each Interest Period may not exceed the
principal amount requested. Buds must be made for at least $10,000,000 and
integral multiples of $1,000,000.
3 One, two, three or six months or up to 180 days, as specified in the
related Invitation For Competitive Bid Quotes.
4 Competitive LIBOR Margin for the applicable LIBOR Interest Period.
Specify percentage (rounded to the nearest 1/100 of 1%) and specify whether
"PLUS" or "MINUS".
5 Specify rate of interest per annum (rounded to the nearest 1/100 of 1%).
6 Specify minimum amount, if any, which the Borrower may accept (see
Section 2.17(d)(ii)(d)).
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<PAGE> 105
EXHIBIT D
FORM OF GUARANTY
This Guaranty made as of December __, 1996, by First Industrial Realty
Trust, Inc., a Maryland corporation ("Guarantor"), to and for the benefit of
Union Bank of Switzerland, New York Branch, The First National Bank of Chicago,
a national banking association, individually ("First Chicago"), and as
administrative agent for itself and the lenders listed on the signature pages
of the Revolving Credit Agreement (as defined below) and their respective
successors and assigns (collectively, "Lender").
RECITALS
A. First Industrial, L.P., a Delaware limited partnership
("Borrower"), and Guarantor have requested that Lender make an unsecured
revolving credit facility available to Borrower in the aggregate principal
amount of up to $200,000,000 ("Facility").
B. Lender has agreed to make available the Facility to Borrower
pursuant to the terms and conditions set forth in an Unsecured Revolving Credit
Agreement bearing even date herewith between Borrower, the Lenders and
Guarantor ("Revolving Credit Agreement"). All capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to such terms in the
Revolving Credit Agreement.
C. Borrower has executed and delivered to Lender one or more
Promissory Notes each of even date in the aggregate principal amount of
$200,000,000 as evidence of its indebtedness to Lender with respect to the
Facility (the promissory notes described above, together with any amendments or
allonges thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Revolving Credit Agreement, are
collectively referred to herein as the "Note"). Borrower has also executed and
delivered to each Lender a note ("Competitive Loan Note") which evidences any
Competitive Bid Loans which may be made by such Lender under the Revolving
Credit Agreement.
D. Guarantor is the sole general partner of Borrower and,
therefore, Guarantor will derive financial benefit from the Facility evidenced
by the Note, Revolving Credit Agreement and the other Loan Documents. The
execution and delivery of this Guaranty by Guarantor is a condition precedent to
the performance by Lender of its obligations under the Revolving Credit
Agreement.
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AGREEMENTS
NOW, THEREFORE, Guarantor, in consideration of the matters described in
the foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agrees as
follows:
1. Guarantor absolutely, unconditionally, and irrevocably
guarantees to Lender:
(a) the full and prompt payment of the principal of and
interest on the Note and/or any Competitive Bid Loan Note when due,
whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, and the prompt payment of all sums which may now be or
may hereafter become due and owing under the Note, any Competitive Bid
Loan Note, the Revolving Credit Agreement, and the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter
defined in Paragraph 7 hereof); and
(c) the full, complete, and punctual observance,
performance, and satisfaction of all of the obligations, duties,
covenants, and agreements of Borrower under the Revolving Credit
Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to herein as the
"Facility Indebtedness." All obligations described in subparagraph (c) of this
Paragraph 1 are referred to herein as the "Obligations."
2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, as aforesaid, in
each case beyond the expiration of any applicable grace period, Guarantor
agrees, on demand by Lender or the holder of the Note, to pay all the Facility
Indebtedness and to perform all the Obligations as are or then or thereafter
become due and owing or are to be performed under the terms of the Note, any
Competitive Bid Loan Note, the Revolving Credit Agreement and the other Loan
Documents, and to pay any reasonable expenses incurred by Lender in protecting,
preserving, or defending its interest in the Property or in connection with the
Facility or under any of the Loan Documents, including, without limitation, all
reasonable attorneys' fees and costs. Lender shall have the right, at its
option, either before, during or after pursuing any other right or remedy
against Borrower or Guarantor, to perform any and all of the Obligations by
or through any agent, contractor or subcontractor, or any of their agents, of
its selection, all as Lender in its sole discretion deems proper, and Guarantor
shall indemnify and hold Lender free and harmless from and against any and all
loss, damage, cost, expense, injury, or liability Lender may suffer or incur in
connection with the exercise of its rights under this Guaranty or the
performance of the Obligations, except to the extent the same arises as a result
of the gross negligence or wilful misconduct of Lender.
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All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Lender, and the choice
by Lender of one such alternative over another shall not be subject to question
or challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off, or failure to mitigate damages in any action,
proceeding, or counteraction by Lender to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Lender from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily be
and should properly be a matter of business judgment, which the passage of time
and events may or may not prove to have been the best choice to maximize
recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the
intention of the parties that such choice by Lender be given conclusive effect
regardless of such subsequent developments.
3. Guarantor does hereby waive (i) notice of acceptance of this
Guaranty by Lender and any and all notices and demands of every kind which may
be required to be given by any statute, rule or law, (ii) any defense, right of
set-off or other claim which Guarantor may have against the Borrower or which
Guarantor or Borrower may have against Lender or the holder of the Note or the
holder of any Competitive Bid Loan Note (other than defenses relating to
payment of the Facility Indebtedness or the correctness of any allegation by
Lender that Borrower was in default in the performance of the Obligations),
(iii) presentment for payment, demand for payment (other than as provided for in
Paragraph 2 above), notice of nonpayment (other than as provided for in
Paragraph 2 above) or dishonor, protest and notice of protest, diligence in
collection and any and all formalities which otherwise might be legally required
to charge Guarantor with liability, (iv) any failure by Lender to inform
Guarantor of any facts Lender may now or hereafter know about Borrower, the
Facility, or the transactions contemplated by the Revolving Credit Agreement, it
being understood and agreed that Lender has no duty so to inform and that the
Guarantor is fully responsible for being and remaining informed by the Borrower
of all circumstances bearing on the existence or creation, or the risk of
nonpayment of the Facility Indebtedness or the risk of nonperformance of the
Obligations, and (v) any and all right to cause a marshalling of assets of the
Borrower or any other action by any court or governmental body with respect
thereto, or to cause Lender to proceed against any other security given to
Lender in connection with the Facility Indebtedness or the Obligations. Credit
may be granted or continued from time to time by Lender to Borrower without
notice to or authorization from Guarantor, regardless of the financial or other
condition of the Borrower at the time of any such grant or continuation.
Lender shall have no obligation to disclose or discuss with Guarantor its
assessment of the financial condition of Borrower. Guarantor acknowledges that
no representations of any kind whatsoever have been made by Lender to
Guarantor. No modification or waiver of any of the provisions of this Guaranty
shall be binding upon Lender except as expressly set forth in a writing duly
signed and delivered on behalf of Lender. Guarantor further agrees that any
exculpatory language contained in the Revolving Credit Agreement, the Note and
any Competitive Bid Loan Note shall in no event
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apply to this Guaranty, and will not prevent Lender from proceeding against
Guarantor to enforce this Guaranty.
4. Guarantor further agrees that Guarantor's liability as guarantor
shall in nowise be impaired by any renewals or extensions which may be made
from time to time, with or without the knowledge or consent of Guarantor of the
time for payment of interest or principal under the Note or any Competitive Bid
Loan Note or by any forbearance or delay in collecting interest or principal
under the Note or any Competitive Bid Loan Note, or by any waiver by Lender
under the Revolving Credit Agreement or any other Loan Documents, or by
Lender's failure or election not to pursue any other remedies it may have
against Borrower, or by any change or modification in the Note, Revolving Credit
Agreement, any Competitive Bid Loan Note or any other Loan Documents, or by the
acceptance by Lender of any additional security or any increase, substitution or
change therein, or by the release by Lender of any security or any withdrawal
thereof or decrease therein, or by the application of payments received from any
source to the payment of any obligation other than the Facility Indebtedness,
even though Lender might lawfully have elected to apply such payments to any
part or all of the Facility Indebtedness, it being the intent hereof that
Guarantor shall remain liable as principal for payment of the Facility
Indebtedness and performance of the Obligations until all indebtedness has been
paid in full and the other terms, covenants and conditions of the Revolving
Credit Agreement and other Loan Documents and this Guaranty have been
performed, notwithstanding any act or thing which might otherwise operate as a
legal or equitable discharge of a surety. Guarantor further understands and
agrees that Lender may at any time enter into agreements with Borrower to amend
and modify the Note, Revolving Credit Agreement, any Competitive Bid Loan Note
or other Loan Documents, or any thereof, and may waive or release any provision
or provisions of the Note, the Revolving Credit Agreement, any Competitive Bid
Loan Note and other Loan Documents or any thereof, and, with reference to such
instruments, may make and enter into any such agreement or agreements as Lender
and Borrower may deem proper and desirable, without in any manner impairing this
Guaranty or any of Lender's rights hereunder or any of the Guarantor's
obligations hereunder.
5. This is an absolute, unconditional, complete, present and
continuing guaranty of payment and performance and not of collection.
Guarantor agrees that this Guaranty may be enforced by Lender without the
necessity at any time of resorting to or exhausting any other security or
collateral given in connection herewith or with the Note, any Competitive Bid
Loan Note, the Revolving Credit Agreement, or any of the other Loan Documents,
or resorting to any other guaranties, and Guarantor hereby waives the right to
require Lender to join Borrower in any action brought hereunder or to commence
any action against or obtain any judgment against Borrower or to pursue any
other remedy or enforce any other right. Guarantor further agrees that nothing
contained herein or otherwise shall prevent Lender from pursuing concurrently
or successively all rights and remedies available to it at law and/or in equity
or under the Note, Revolving Credit Agreement, any Competitive Bid Loan Note or
any other Loan Documents, and the exercise of any of its rights or the
completion of any of its remedies shall not constitute a discharge of any of
Guarantor's obligations
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hereunder, it being the purpose and intent of the Guarantor that the obligations
of such Guarantor hereunder shall be primary, absolute, independent and
unconditional under any and all circumstances whatsoever. Neither Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of
Borrower under the Note, Revolving Credit Agreement, any Competitive Bid Loan
Note or other Loan Documents or by reason of Borrower's bankruptcy or by reason
of any creditor or bankruptcy proceeding instituted by or against Borrower.
This Guaranty shall continue to be effective and be deemed to have continued in
existence or be reinstated (as the case may be) if at any time payment of all or
any part of any sum payable pursuant to the Note, Revolving Credit Agreement,
any Competitive Bid Loan Note or any other Loan Document is rescinded or
otherwise required to be returned by the payee upon the insolvency, bankruptcy,
or reorganization of the payor, all as though such payment to Lender had not
been made, regardless of whether Lender contested the order requiring the return
of such payment. The obligations of Guarantor pursuant to the preceding
sentence shall survive any termination, cancellation, or release of this
Guaranty.
6. This Guaranty shall be assignable by Lender to any assignee of
all or a portion of Lender's rights under the Loan Documents.
7. If: (i) this Guaranty, the Note, any Competitive Bid Loan Note,
or any other Loan Document is placed in the hands of an attorney for collection
or is collected through any legal proceeding; (ii) an attorney is retained to
represent Lender in any bankruptcy, reorganization, receivership, or other
proceedings affecting creditors' rights and involving a claim under this
Guaranty, the Note, any Competitive Bid Loan Note, the Revolving Credit
Agreement, or any Loan Document; (iii) an attorney is retained to provide
advice or other representation with respect to the Loan Documents in connection
with an enforcement action or potential enforcement action; or (iv) an attorney
is retained to represent Lender in any other legal proceedings whatsoever in
connection with this Guaranty, the Note, any Competitive Bid Loan Note, the
Revolving Credit Agreement, any of the Loan Documents, or any property subject
thereto (other than any action or proceeding brought by any Lender or
participant against the Administrative Agent (as defined in the Revolving
Credit Agreement) alleging a breach by the Administrative Agent of its duties
under the Loan Documents), then Guarantor shall pay to Lender upon demand all
reasonable attorney's fees, costs and expenses, including, without limitation,
court costs, filing fees, recording costs, expenses of foreclosure, title
insurance premiums, survey costs, minutes of foreclosure, and all other costs
and expenses incurred in connection therewith (all of which are referred to
herein as "Enforcement Costs"), in addition to all other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty
comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare
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such portion, provision or provisions of this Guaranty to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and
enforceable, that the remainder of this Guaranty shall be construed as if such
illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained therein, and that the rights, obligations and
interest of Lender or the holder of the Note or any Competitive Bid Loan Note
under the remainder of this Guaranty shall continue in full force and effect.
9. Any indebtedness of Borrower to Guarantor now or hereafter
existing is hereby subordinated to the Facility Indebtedness. Guarantor agrees
that until the entire Facility Indebtedness has been paid in full, (i)
Guarantor will not seek, accept, or retain for Guarantor's own account, any
payment from Borrower on account of such subordinated debt, and (ii) any such
payments to Guarantor on account of such subordinated debt shall be collected
and received by Guarantor in trust for Lender and shall be paid over to Lender
on account of the Facility Indebtedness without impairing or releasing the
obligations of Guarantor hereunder.
10. Guarantor waives and releases any claim (within the meaning of
11 U.S.C. Section 101) which Guarantor may have against Borrower arising from
a payment made by Guarantor under this Guaranty and agrees not to assert or
take advantage of any subrogation rights of Guarantor or Lender or any right of
Guarantor or Lender to proceed against (i) Borrower for reimbursement, or (ii)
any other guarantor or any collateral security or guaranty or right of offset
held by Lender for the payment of the Facility Indebtedness and performance of
the Obligations, nor shall Guarantor seek or be entitled to seek any
contribution or reimbursement from Borrower or any other guarantor in respect of
payments made by Guarantor hereunder. It is expressly understood that the
waivers and agreements of Guarantor set forth above constitute additional and
cumulative benefits given to Lender for its security and as an inducement for
its extension of credit to Borrower. Nothing contained in this Paragraph 10 is
intended to prohibit Guarantor from making all distributions to its constituent
shareholders which are required by law from time to time in order for Guarantor
to maintain its status as a real estate investment trust in compliance with all
applicable provisions of the Code (as defined in the Revolving Credit
Agreement).
11. Any amounts received by Lender from any source on account of any
indebtedness may be applied by Lender toward the payment of such indebtedness,
and in such order of application, as Lender may from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the
State of Illinois for the enforcement of this Guaranty and waives any and all
personal rights to object to such jurisdiction for the purposes of litigation
to enforce this Guaranty. Guarantor hereby consents to the jurisdiction of
either the Circuit Court of Cook County, Illinois, or the United States
District Court for the Northern District of Illinois, in any action, suit, or
proceeding which Lender may at any time wish to file in connection with this
Guaranty or any related
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matter. Guarantor hereby agrees that an action, suit, or proceeding to enforce
this Guaranty may be brought in any state or federal court in the State of
Illinois and hereby waives any objection which Guarantor may have to the laying
of the venue of any such action, suit, or proceeding in any such court;
provided, however, that the provisions of this Paragraph shall not be deemed to
preclude Lender from filing any such action, suit, or proceeding in any other
appropriate forum.
13. All notices and other communications provided to any party
hereto under this Agreement or any other Loan Document shall be in writing or
by telex or by facsimile and addressed or delivered to such party at its
address set forth below or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes). Notice may be given as follows:
To the Guarantor:
First Industrial Realty Trust, Inc.
150 N. Wacker Drive
Chicago, Illinois 60611
Attention: Mr. Michael Havala
Telecopy: (312) 704-6606
With a copy to:
Barack Ferrazzano Kirschbaum & Perlman
333 W. Wacker Drive, Suite 2700
Chicago, Illinois 60606
Attention: Howard A. Nagelberg, Esq.
Telecopy: 312-984-3150
To the Lender:
c/o The First National Bank of Chicago, as agent
One First National Plaza
Chicago, Illinois 60670
Attention: Real Estate Finance Department
Telecopy: (312) 732-1117
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<PAGE> 112
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
Telecopy: (312) 876-7934
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a
place for the service of notice.
14. This Guaranty shall be binding upon the heirs, executors, legal
and personal representatives, successors and assigns of Guarantor and shall
inure to the benefit of Lender's successors and assigns.
15. This Guaranty shall be construed and enforced under the internal
laws of the State of Illinois.
16. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING
THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS
GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State
of Illinois as of the date first written above.
FIRST INDUSTRIAL REALTY TRUST, INC., a
Maryland corporation
By:____________________________________
Its_________________________________
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STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
I, the undersigned, a Notary Public, in and for said County, in the
State aforesaid, DO HEREBY CERTIFY, that _____________________, _____
___________ of First Industrial Realty Trust, Inc., personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and acknowledged that he signed and
delivered the said instrument as his own free and voluntary act and as the free
and voluntary act of said corporation, for the uses and purposes therein set
forth.
GIVEN under my hand and Notarial Seal, this _____ day of December, 1996.
______________________________________
Notary Public
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<PAGE> 114
EXHIBIT E
OPINION OF BORROWER'S COUNSEL
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<PAGE> 115
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
333 WEST WACKER DRIVE, SUITE 2700
CHICAGO, ILLINOIS 60606
TELEPHONE: (312) 984-3100
FAX: (312) 984-3150
December 16, 1996
The First National Bank of Chicago, Union Bank of Switzerland
One First National Plaza New York Branch
Chicago, Illinois 60670 299 Park Avenue
New York, New York 10071
Re: $200,000,000 Unsecured Revolving Credit Agreement
Ladies and Gentlemen:
We have acted as special counsel to First Industrial, L.P., a Delaware
limited partnership ("FILP"; also referred to as "Borrower"), and First
Industrial Realty Trust, Inc., a Maryland corporation and the general partner
of FILP ("General Partner"), in connection with that certain Unsecured
Revolving Credit Agreement dated as of December 16, 1996 (the "Credit
Agreement") among Borrower, General Partner, The First National Bank of Chicago
("First Chicago"), Union Bank of Switzerland, New York Branch, a New York
Branch of a Swiss banking corporation ("UBS"), and certain other co-lenders to
be added at a subsequent date (any such added co-lenders are collectively
referred to herein as the "Co-Lenders"). For purposes of this opinion, First
Chicago, in its individual capacity and as administrative agent for UBS, the
Co-Lenders and itself; UBS, in its individual capacity and as documentation
agent for First Chicago, the Co-Lenders and itself; and the Co-Lenders are
referred to collectively in this legal opinion as "Lender." The Credit
Agreement provides for a $200,000,000 unsecured revolving credit facility (the
"Facility") in accordance with the terms and provisions of the Credit
Agreement. The Facility is administered by First Chicago, in its individual
capacity, and as administrative agent for UBS, the Co-Lenders, and itself. All
initial capitalized terms used, but not defined, in this legal opinion shall
have the meanings respectively ascribed to those terms in the Credit Agreement.
In connection with the Facility, we have examined executed copies of each
of the following documents, all of which are dated as of December 16, 1996,
except as otherwise indicated below:
(i) The Credit Agreement executed by Borrower, General Partner and
Lender;
<PAGE> 116
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
The First National Bank of Chicago
December 16, 1996
Page 2
(ii) Promissory Note in the principal amount of $100,000,000.00
executed by Borrower in favor of First Chicago (the "First Chicago
Promissory Note");
(iii) Promissory Note in the principal amount of $100,000,000.00
executed by Borrower in favor of UBS (the "UBS Promissory Note");
(iv) Guaranty executed by General Partner in favor of First Chicago
and UBS (the "Guaranty");
(v) Competitive Bid Promissory Note, executed by Borrower in favor
of First Chicago (the "First Chicago Competitive Bid Note"); and
(vi) Competitive Bid Promissory Note, executed by Borrower in favor
of UBS (the "UBS Competitive Bid Note").
The Credit Agreement, the First Chicago Promissory Note, the UBS Promissory
Note, the Guaranty, the First Chicago Competitive Bid Note and the UBS
Competitive Bid Note are hereinafter collectively referred to as the "Loan
Documents."
We have made such examination of the laws of the State of Illinois (the
"State") as we have deemed relevant for the purpose of expressing the opinions
set forth in this opinion letter. We are not licensed in any jurisdiction
other than the State, and our opinion is, therefore, limited to the laws of the
State and federal law. We have not made a review of the laws of any other
jurisdiction, and we express no opinions concerning such laws or whether such
laws may apply.
In rendering our opinions, we have made the following assumptions which we
have not been requested to confirm, nor have we confirmed:
A. First Chicago is a national banking association validly formed and
chartered, and in good standing, under the laws of the United States of America
and such state laws as are applicable in the jurisdiction in which First
Chicago has been formed and/or chartered.
B. UBS is a New York Branch of a Swiss banking corporation validly formed
and chartered, and in good standing, under the laws of Switzerland and the
United States, and any other laws applicable in the jurisdiction in which UBS
has been formed and/or chartered.
C. All of the Credit Agreement, the First Chicago Promissory Note, the
Guaranty and the First Chicago Competitive Bid Note have been duly authorized
by all requisite action of First Chicago and the Credit Agreement constitutes a
legal, valid and binding obligation of First Chicago.
<PAGE> 117
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
The First National Bank of Chicago
December 16, 1996
Page 3
D. All of the Credit Agreement, the UBS Promissory Note, the Guaranty and
the UBS Competitive Bid Note have been duly authorized by all requisite action
of UBS, and the Credit Agreement constitutes a legal, valid and binding
obligation of UBS.
E. The Loan Documents will be enforced in circumstances and in a manner
that are commercially reasonable.
F. If either or both of First Chicago and UBS is subject to any statute,
rule or regulation or any impediment that requires it to obtain the consent of,
or to make any declaration or filing with, any governmental authority in
connection with the transactions contemplated by the Loan Documents, all such
consents, declarations and filings have been obtained and made.
G. The performance by First Chicago and UBS of their respective
obligations under the Loan Documents does not and will not contravene or
conflict with any law, rule or regulation of, any jurisdiction, or any
agreement, judgment, order or decree of any court or regulatory body applicable
to the parties or by which either or both of First Chicago and UBS may be
bound.
H. To the extent the Loan Documents, or any one of them, purport to be
governed by the laws of a jurisdiction other than the State, the applicable
Loan Documents are or would be valid and enforceable under the laws of that
jurisdiction.
In our examination of the Loan Documents, we have assumed the genuineness
of all signatures (with the exception of the signatures of individuals
executing documents on behalf of FILP and General Partner); the authenticity of
all documents submitted to us as originals; the conformance to original
documents of all documents submitted to us as conformed or photostatic copies;
the authenticity of the originals of such latter documents; and the correctness
of all statements of fact and the truth of all representations and warranties
contained therein.
Based upon the foregoing, but subject to the assumptions, qualifications
and limitations set forth herein, we are of the opinion that the Loan Documents
have been properly authorized, executed and delivered by, or on behalf of, FILP
and General Partner, as the case may be, and constitute the legal, valid and
binding obligations of FILP and General Partner, as applicable, and such
documents are enforceable against FILP and General Partner, as applicable, in
accordance with their respective terms. Based solely on those materials that
we have received from the offices of the Secretaries of State of Delaware and
Maryland, respectively, which materials are described on Exhibit "A" attached
to this opinion, we are also of the opinion that (1) FILP is duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and (2) General Partner is duly organized, validly existing and in good
standing under the laws of the State of Maryland.
<PAGE> 118
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
The First National Bank of Chicago
December 16, 1996
Page 4
Our opinions are qualified as follows:
A. Whenever we indicate that our opinion with respect to the existence or
absence of facts is based on our knowledge, our opinion is based solely on (i)
the current actual knowledge of (1) the attorneys currently with the firm who
have represented Borrower and General Partner in connection with the
transactions contemplated by the Loan Documents and (2) any other attorneys
presently in our firm whom we have determined are likely, in the course of
representing any of Borrower and General Partner, to have actual knowledge of
the matters covered by this opinion, and (ii) the representations and
warranties of Borrower and General Partner contained in the Loan Documents.
While we have made no independent investigation as to such factual matters, we
do not know of any facts that lead us to believe such factual matters are
untrue or inaccurate.
B. Our opinion is subject to the following:
(i) The Lender's ability to enforce any of the Loan Documents may
be limited by applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or transfer, equitable
subordination and other similar laws and doctrines now or hereafter in
effect relating to or affecting creditors' rights generally;
(ii) Enforcement of the Lender's rights and remedies may be limited
by general principles of equity, regardless of whether such enforcement
is sought or considered in a proceeding in equity or at law, and in this
regard we have assumed that the Lender will exercise its rights and
remedies under the Loan Documents in good faith and in circumstances and
a manner that are commercially reasonable and in accordance with Illinois
statutes and laws;
(iii) Certain provisions of the Loan Documents may be rendered
unenforceable or limited by applicable laws and judicial decisions, but
such laws and judicial decisions do not render the Loan Documents invalid
as a whole, and, subject to qualifications and limitations elsewhere set
forth herein, legally adequate remedies exist in the Loan Documents or
pursuant to applicable law for the realization of the principal benefits
and security intended to be provided by the Loan Documents;
(iv) We express no opinion on provisions in any Loan Documents that
purport to (x) waive the statute of limitations or the manner of service
of process; (y) appoint Lender or its agents or employees as
attorney-in-fact; or (z) waive the requirements of good faith, notice and
commercial reasonableness contained in the Uniform Commercial Code as
enacted in any state, which requirements cannot be waived
<PAGE> 119
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
The First National Bank of Chicago
December 16, 1996
Page 5
by consent. We further advise that the award of the amount of attorneys'
fees is subject to the discretion of the court before which any
proceeding involving the Loan Documents may be brought;
(v) The provisions of any documents, agreements or instrument that
(x) may require indemnification or contribution for liabilities under the
provisions of any federal or state securities laws or with respect to the
neglect or wrongful conduct of the indemnified party or its
representatives or agents; (y) purport to confer, waive or consent to the
jurisdiction of any court; or (z) waive any right granted by common or
statutory law, may be unenforceable as against public policy;
(vi) Any provisions of the Loan Documents granting so-called "self
help" or extra-judicial remedies may not be enforceable;
(vii) Requirements in the Loan Documents specifying that the
provisions thereof may be waived only in writing may not be valid,
binding or enforceable to the extent that an oral agreement or implied
agreement by trade practice or course of conduct has been created to
modify any provision of such document, or to the extent that the conduct
of the parties is deemed to effectuate a modification in the absence of
an agreement, written or otherwise;
C. Our opinion is limited to the laws of the United States (except as set
forth below) and the laws and statutes of the State and political subdivisions
thereof in effect on the date hereof, as they presently apply. We shall have
no continuing obligations to inform you of changes in law or fact subsequent to
the date hereof, or of facts about which we become aware after the date hereof.
D. We express no opinion as to the enforceability of any of the following
provisions contained in the Loan Documents:
(i) Provisions for late charges or default rates of interest, or
for additional interest or payments due only upon default. Such
provisions may, based on facts and circumstances, create or constitute
unenforceable penalties under general principles of contract law.
Furthermore, provisions of the Loan Documents providing that unpaid
interest shall be added to principal and thereafter itself bear interest,
so as to result in the so-called payment of "interest on interest", may
not be enforceable;
<PAGE> 120
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
The First National Bank of Chicago
December 16, 1996
Page 6
(ii) Any direct restraints on alienation of real property contained
in Loan Documents, to the extent sought to be enforced as covenants
(though a violation of any such covenant would constitute an Event of
Default under Loan Documents and would entitle Lender to its remedies on
default other than injunctive relief);
(iii) Cumulative remedies, the exercise of which would have the
effect of compensating Lender in excess of its actual loss;
(iv) Provisions that require the payment of prepayment penalty,
charge or fee upon an acceleration of the Loan balance by Lender after a
default; and
(v) Grants of powers of attorney or other ex parte rights or
remedies to Lender contained in the Loan Documents.
E. We have not reviewed and do not opine as to: (i) ERISA laws, rules and
regulations; or (ii) Federal or state taxation, banking, securities or "blue
sky" laws, rules or regulations.
This opinion is limited to the matters set forth herein. No opinion may
be inferred or implied beyond the matters expressly contained herein. Without
limitation of the foregoing, no opinion is hereby rendered on any document or
instrument in connection with the Facility that was executed or delivered prior
to the transactions evidenced by the Credit Agreement, whether or not the terms
and provisions thereof are reaffirmed by, or incorporated in, the Loan
Documents.
<PAGE> 121
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
The First National Bank of Chicago
December 16, 1996
Page 7
This opinion is rendered solely for the benefit of First Chicago, UBS and
any Co-Lenders who become Lenders or participants pursuant to the terms of the
Credit Agreement. This opinion should not, however, be disclosed, disseminated
or quoted (in whole or in part), except to regulatory agencies, auditors, and
potential participants in the Facility, and no other person or entity shall be
entitled to rely on any matter set forth herein, without the express written
consent of the undersigned.
BARACK, FERRAZZANO, KIRSCHBAUM
& PERLMAN
By:__________________________________
A Partner
<PAGE> 122
EXHIBIT A
1. Certificate of Good Standing of First Industrial, L.P. ("FILP"), dated
December 6, 1996, certified and issued by the Secretary of State of the
State of Delaware.
2. Certificate of Limited Partnership of PROVEST, L.P. ("PROVEST"), dated
November 23, 1993, together with the Certificate of Amendment of Limited
Partnership of PROVEST, dated May 4, 1994, changing its name to FILP, and
the Certificate of Amendment of Limited Partnership of FILP, dated June
30, 1994, all certified and issued on December 9, 1996 by the Secretary of
State of the State of Delaware.
3. Certificate of Good Standing of First Industrial Realty Trust, Inc.
("General Partner"), dated December 9, 1996, certified and issued by the
Department of Assessments and Taxation of the State of Maryland.
4. Certified copy of the Articles of Incorporation for PROVEST INDUSTRIAL
REALTY TRUST, INC. ("PIRT"), dated August 10, 1993, together with the
certified copy of the Articles of Amendment of PIRT, dated April 18, 1994,
changing its name to General Partner, the certified copy of the Articles
of Amendment and Restatement of General Partner, dated June 13, 1994, the
certified copy of the Articles of Amendment of General Partner, dated June
21, 1994, the certified copy of the Articles Supplementary of General
Partner, dated November 14, 1995, and the certified copy of the Articles
of Amendment of General Partner, dated June 6, 1996, all certified and
issued on December 9, 1996 by the Department of Assessments and Taxation
of the State of Maryland.
<PAGE> 123
EXHIBIT F
OPINION OF GENERAL PARTNER'S COUNSEL
Included in Exhibit E
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<PAGE> 124
EXHIBIT G
WIRING INSTRUCTIONS
To: The First National Bank of Chicago,
as Administrative Agent (the "Agent")
under the Credit Agreement Described Below
Re: Unsecured Revolving Credit Agreement, dated as of December
_____, 1996 (as amended, modified, renewed or extended from time
to time, the "Agreement"), among First Industrial, L.P. (the
"Borrower"), First Industrial Realty Trust, Inc. ("General
Partner"), The First National Bank of Chicago, individually and
as Administrative Agent, Union Bank of Switzerland, individually
and as Documentation Agent, and the Lenders named therein.
Terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower
in accordance with Section 15.1 of the Agreement or based on any telephonic
notice made in accordance with the Agreement.
Facility Identification Number(s)______________________________________________
Customer/Account Name__________________________________________________________
Transfer Funds To______________________________________________________________
______________________________________________
______________________________________________
For Account No.________________________________________________________________
Reference/Attention To_________________________________________________________
Authorized Officer (Customer Representative) Date _________________________
_________________________________ ______________________________
(Please Print) Signature
Bank Officer Name Date _________________________
_________________________________ ______________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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<PAGE> 125
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
To: The Administrative Agent and the Lenders
who are parties to the Agreement described below
This Compliance Certificate is furnished pursuant to that certain
Unsecured Revolving Credit Agreement, dated as of December _____, 1996 (as
amended, modified, renewed or extended from time to time, the "Agreement")
among First Industrial, L.P. (the "Borrower"), First Industrial Realty Trust,
Inc. (the "General Partner"), The First National Bank of Chicago, individually
and as Administrative Agent, Union Bank of Switzerland, individually and as
Documentation Agent, and the Lenders named therein. Unless otherwise defined
herein, capitalized terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [Chief Financial Officer] [Chief
Accounting Officer] [Controller] of the [Borrower] [General Partner].
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the General Partner, the Borrower and their
respective Subsidiaries and Investment Affiliates during the accounting period
covered by the financial statements attached (or most recently delivered to the
Administrative Agent if none are attached).
3. The examinations described in paragraph 2 did not disclose, and
I have no knowledge of, the existence of any condition or event which
constitutes a Material Adverse Financial Change, Event of Default or Default
during or at the end of the accounting period covered by the attached financial
statements or as of the date of this Compliance Certificate, except as set
forth below.
4. Schedule I (if attached) attached hereto sets forth financial
data and computations and other information evidencing the General Partner's
and the Borrower's compliance with certain covenants of the Agreement, all of
which data, computations and information (or if no Schedule I is attached, the
data, computations and information contained in the most recent Schedule I
attached to a prior Compliance Certificate) are true, complete and correct in
all material respects.
5. The financial statements and reports referred to in Section
8.2(i), 8.2(ii), 8.2(iv), or 8.2(viii), as the case may be, of the Agreement
which are delivered concurrently with the delivery of this Compliance
Certificate, if any, fairly present in all material respects the consolidated
financial condition and operations of the General Partner, the Borrower and
their respective Subsidiaries at such date and the consolidated results of
their operations for the period then-ended, in accordance with GAAP applied
consistently throughout such period and with prior periods and correctly state
the amounts of Consolidated Total Indebtedness, Consolidated Secured Debt,
Consolidated Senior Unsecured Debt and the Values of all Unencumbered Assets as
determined pursuant to the Agreement.
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<PAGE> 126
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
The foregoing certifications, together with the computations and
information set forth in Schedule I hereto and the financial statements
delivered with this Compliance Certificate in support hereof, are made and
delivered this _____ day of _______________, 19___.
FIRST INDUSTRIAL, L.P.
By: FIRST INDUSTRIAL REALTY TRUST, INC.,
General Partner
By:________________________________
Print Name:________________________
Title:_____________________________
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SCHEDULE I
CALCULATION OF COVENANTS
[QUARTER]
1. Permitted Investments (Section 8.3)
<TABLE>
<CAPTION>
Maximum Percent
Percent of Percent of
Implied Implied
Investment Capitalization Capitalization
Category (i.e. Book Value) Value Value
-------- ---------- ----- -----
<S> <C> <C> <C> <C>
(a) unimproved land 10%
(b) other property holdings 10%
(excluding cash, Cash
Equivalents, non-industrial
Properties and Indebtedness
of any Subsidiary or to the
Borrower)
(c) stock holdings other than in 10%
Subsidiaries
(d) mortgages 10%
(e) joint ventures and 10%
partnerships
(f) total investments in 20% of Market
(a)-(e) Value Net Worth
(g) investments in unimproved 5%
land not adjacent to existing
improvements and not under
active planning for near term
development as a percentage
of Implied Capitalization
Value
(h) Identify any single industrial property in excess of 5% of Implied Capitalization Value (If none,
insert "none"):___________________________________________________________________________________
</TABLE>
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<PAGE> 128
<TABLE>
<S> <C>
2. Dividends (Section 8.13)
(a) Amount paid during most recent quarter __________________
(b) Amount paid during preceding three quarters __________________
(c) Funds From Operation during such four quarter period
(i) GAAP net income for such period __________________
(ii) adjustments to GAAP net income per definition
of Funds From Operation (See Schedule) __________________
(iii) Funds From Operation __________________
TOTAL DIVIDEND PAY OUT RATIO [(A) PLUS (B), DIVIDED BY (C)(III)] __________________
Must be less than or equal to: 95%
3. EBITDA To Interest Expense and Senior Preferred Stock Expense (Section 9.10(a))
(a) EBITDA for the quarter most recently ended
(i) Borrower and its Subsidiaries __________________
(ii) less extraordinary items and gain or loss on sales __________________
(iii) less GAAP income from Investment Affiliate __________________
(iv) Allocable EBITDA of Investment Affiliates __________________
(See Schedule)
(v) EBITDA [(I) MINUS (II) MINUS (III) PLUS (IV)] __________________
(b) Interest Expense for the quarter most recently ended __________________
(i) GAAP interest expense (Borrower and Subsidiaries) __________________
(ii) Capitalized interest not covered by interest reserve __________________
(iii) Interest on Guaranteed Obligations __________________
(iv) Allocable Interest (Investment Affiliates) __________________
(v) Interest Expense [SUM OF (I)-(IV)] __________________
(c) Senior Preferred Stock Expense for the quarter most recently ended __________________
</TABLE>
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<PAGE> 129
<TABLE>
<S> <C>
RATIO
[(a)(v) DIVIDED BY THE SUM OF (b)(v) AND (c)]: __________________
Must be greater than or equal to: 2.0
__________________
4. Consolidated Total Indebtedness Ratio (Section 9.10(b))
(a) Consolidated Total Indebtedness (See Schedule) __________________
(b) Implied Capitalization Value __________________
(i) Adjusted EBITDA for the quarter most recently ended __________________
(ii) less Adjusted EBITDA from Preleased Assets Under
Development and from Projects acquired or completed
during quarter __________________
(iii) plus full quarter pro forma adjustment for Projects
acquired or completed during quarter __________________
(iv) annualized (x4) __________________
(v) most recent Korpacz Cap Rate (not less than 9% or
more than 9.5%) _____%
(vi) (item (iv) divided by item (v)) __________________
(vii) GAAP value of Preleased Assets Under Development __________________
(viii) GAAP value of those over 270 days in category __________________
(ix) 50% of item (vii) less item (viii) __________________
(x) sum of (vi) and (ix) is "Implied Capitalization Value" __________________
CONSOLIDATED TOTAL INDEBTEDNESS RATIO
[(a) DIVIDED BY (b) EXPRESSED AS A PERCENTAGE]: __________________
Must be less than or equal to: 50%
5. Value of Unencumbered Assets Ratio (Section 9.10(c))
(a) Value of Unencumbered Assets
(i) Property Operating Income attributable to
</TABLE>
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<PAGE> 130
<TABLE>
<S> <C>
Unencumbered Assets owned by Borrower and
wholly-owned Subsidiaries as of end of quarter as
appropriately annualized (including pro forma Property
Operating Income for entire quarter for Unencumbered
Assets acquired during the quarter) (attach schedule
noting Property Operating Income for each
Unencumbered Asset as appropriately annualized) __________________
(ii) most recent Korpacz Cap Rate (not less than 9% or
more than 9.5%) _____%
(iii) item (i) divided by item (ii) is "Value of
Unencumbered Assets" __________________
(b) Consolidated Senior Unsecured Debt (provide schedule of
such Debt) __________________
VALUE OF UNENCUMBERED ASSETS RATIO [(a) DIVIDED BY (b)]:
Must be greater than or equal to: 1.65 (or 1.50 if
quarter ended
during a Rating
Pricing Period)
6. Property Operating Income Ratio (Section 9.10(d))
(a) Property Operating Income from all Unencumbered Assets
owned for any part of the preceding quarter __________________
(b) Debt Service on Consolidated Senior Unsecured Debt for the
preceding quarter __________________
(i) Interest Expense (Borrower and Subsidiaries only) __________________
(ii) Regular principal payments (Borrower and Subsidiaries) __________________
[(iii) Senior Preferred Stock Expense]
[only included after release of PS Guaranty] __________________
(iv) Debt Service [SUM OF (I), (II) AND (III)] __________________
PROPERTY OPERATING INCOME RATIO [(a) DIVIDED BY (b)] __________________
must be greater than or equal to: 1.75
7. Consolidated Secured Debt and Senior Preferred Stock to Implied
</TABLE>
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<PAGE> 131
<TABLE>
<S> <C>
Capitalization Value (Section 9.10(e))
(a) Consolidated Secured Debt
(i) secured Indebtedness of Borrower and Subsidiaries __________________
(ii) unsecured Indebtedness of Subsidiaries in excess of
$5,000,000 __________________
(iii) Consolidated Secured Debt [SUM OF (i) PLUS (ii)] __________________
(b) Senior Preferred Stock __________________
(c) Implied Capitalization Value [LINE (x) IN ITEM 4(b) ABOVE] __________________
(d) (a) plus (b) divided by (c) __________________
Must be less than or equal to: 45%
8. Minimum Market Value Net Worth (Section 9.10(f))
(a) Market Value Net Worth
(i) Implied Capitalization Value
[LINE (X) IN ITEM 4(B) ABOVE] __________________
(ii) Indebtedness of Borrower and Subsidiaries __________________
(iii) Market Value Net Worth [(I) MINUS (II)] __________________
(b) $450,000,000
(c) product of .75 and net proceeds of stock and unit offerings
since December 5, 1996 __________________
(d) sum of (b) plus (c) __________________
(a)(iii) must be greater than or equal to (d)
9. Maximum Revenue From a Single Tenant (Section 9.13)
(a) 7.5% of Consolidated Operating Partnership's total rent
revenue as of last day of quarter, annualized __________________
(b) Identify any tenant for which rent revenue
</TABLE>
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<PAGE> 132
<TABLE>
<S> <C>
(exclusive of tenant reimbursements) as
annualized exceeds amount shown in (a) __________________
10. Transfers of Unencumbered Assets (Section 9.5)
(a) Aggregate Value of all Unencumbered Assets transferred
during measuring period __________________
(b) $90,000,000 for initial measuring period (ends May _____,
1997 at latest) __________________
(c) Aggregate Value of Unencumbered Assets at start of current
measuring period (trailing 4 quarters) __________________
(d) Aggregate Value of Unencumbered Assets added during current
measuring period __________________
(e) 20% of sum of (c) and (d) __________________
Item (a) must be less than or equal to Item (b) or Item (e), as applicable
NOTE: To the extent of any inconsistency between the form of this
Compliance Certificate and the terms of the Agreement, the
terms of the Agreement shall prevail.
</TABLE>
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<PAGE> 133
EXHIBIT I
SCOPE OF WORK FOR ENVIRONMENTAL INVESTIGATIONS
[Schedule Omitted]
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<PAGE> 134
EXHIBIT J
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
__________________________ (the "Assignor") and __________________ (the
"Assignee") is dated as of _________________, 19__. The parties hereto agree
as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Unsecured
Revolving Credit Agreement (which, as it may be amended, modified, renewed or
extended from time to time is herein called the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under the
Credit Agreement such that after giving effect to such assignment the Assignee
shall have purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the later of the date specified in Item 5 of
Schedule 1 or two (2) Business Days (or such shorter period agreed to by the
Administrative Agent) after a Notice of Assignment substantially in the form of
Exhibit "I" attached hereto has been delivered to the Agent. In no event will
the Effective Date occur if the payments required to be made by the Assignee to
the Assignor on the Effective Date under Sections 4 and 5 hereof are not made
on the proposed Effective Date, unless otherwise agreed to in writing by
Assignor and Assignee. The Assignor will notify the Assignee of the proposed
Effective Date no later than the Business Day prior to the proposed Effective
Date. As of the Effective Date, (i) the Assignee shall have the rights and
obligations of a Lender under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from the Administrative Agent all
payments of principal, interest and fees with respect to the interest assigned
hereby. The Assignee shall advance funds directly to the Administrative Agent
with respect to all Loans and reimbursement payments made on or after the
Effective Date with respect to the interest assigned hereby. [In consideration
for the sale and assignment of Loans hereunder, (i) the Assignee shall pay the
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<PAGE> 135
Assignor, on the Effective Date, an amount equal to the principal amount of the
portion of all Adjusted Corporate Base Rate Loans assigned to the Assignee
hereunder and (ii) with respect to each ratable LIBOR Advance and Competitive
Bid Loan made by the Assignor and assigned to the Assignee hereunder which is
outstanding on the Effective Date, (a) on the last day of the Interest Period
therefor or (b) on such earlier date agreed to by the Assignor and the Assignee
or (c) on the date on which any such Loan either becomes due (by acceleration
or otherwise) or is prepaid (the date as described in the foregoing clauses
(a), (b) or (c) being hereinafter referred to as the "Fixed Due Date"), the
Assignee shall pay the Assignor an amount equal to the principal amount of the
portion of such Loan assigned to the Assignee which is outstanding on the Fixed
Due Date. If the Assignor and the Assignee agree that the applicable Fixed Due
Date for such Loan shall be the Effective Date, they shall agree, solely for
purposes of dividing interest paid by the Borrower on such Loan, to an
alternate interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the related
Interest Period (the "Agreed Interest Rate") and any interest received by the
Assignee in excess of the Agreed Interest Rate, with respect to such Loan for
such period, shall be remitted to the Assignor. In the event a prepayment of
any Loan which is existing on the Effective Date and assigned by the Assignor
to the Assignee hereunder occurs after the Effective Date but before the
applicable Fixed Due Date, the Assignee shall remit to the Assignor any excess
of the funding indemnification amount paid by the Borrower under Section 4.4 of
the Credit Agreement an account of such prepayment with respect to the portion
of such Loan assigned to the Assignee hereunder over the amount which would
have been paid if such prepayment amount were calculated based on the Agreed
Interest Rate and only covered the portion of the Interest Period after the
Effective Date. The Assignee will promptly remit to the Assignor (i) the
portion of any principal payments assigned hereunder and received from the
Administrative Agent with respect to any such Loan prior to its Fixed Due Date
and (ii) any amounts of interest on Loans and fees received from the
Administrative Agent which relate to the portion of the Loans assigned to the
Assignee hereunder for periods prior to the Effective Date, in the case of
ratable Adjusted Corporate Base Rate Loans or Fees, or the Fixed Due Date, in
the case of LIBOR Loans and Competitive Bid Loans, and not previously paid by
the Assignee to the Assignor.]* In the event that either party hereto receives
any payment to which the other party hereto is entitled under this Assignment
Agreement, then the party receiving such amount shall promptly remit it to the
other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest or Commitment Fees or
Facility Fees is made under the Credit Agreement with respect to the amounts
assigned to the Assignee hereunder (other than a payment of interest or
Commitment Fees or Facility Fees attributable to the period prior to the
Effective Date or, in the case of LIBOR Loans and Competitive Bid Loans, the
Payment Date, which the Assignee is obligated to deliver to the Assignor
pursuant to Section 4 hereof). The amount of such fee shall be the difference
between (i) the interest or fee, as applicable, paid with respect to the
amounts assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was
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<PAGE> 136
calculated at the rate of ___% rather than the actual percentage used to
calculate the interest rate paid by the Borrower or if the Commitment Fee or
Facility Fee was calculated at the rate of ___% rather than the actual
percentage used to calculate the Commitment Fee or Facility Fee paid by the
Borrower, as applicable. In addition, the Assignee agrees to pay ___% of the
fee required to be paid to the Agent in connection with this Assignment
Agreement. [THIS SENTENCE CAN BE REVISED APPROPRIATELY BASED ON HOW THE FEE IS
BEING PAID.]
*EACH ASSIGNOR MAY INSERT ITS STANDARD PROVISIONS IN LIEU OF THE PAYMENT TERMS
INCLUDED IN SECTIONS 4 AND 5 OF THIS EXHIBIT.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of
the terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, its Subsidiaries or Investment
Affiliates, (vi) the validity, enforceability, perfection, priority, condition,
value or sufficiency of any collateral securing or purporting to secure the
Loans or (vii) any mistake, error of judgment, or action taken or omitted to be
taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that
it has received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the financial statements requested by the Assignee and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Administrative
Agent, the Documentation Agent, the Assignor or any other Lender and based on
such documents and information at it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, (iii) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and
notice instructions
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<PAGE> 137
are as set forth in the attachment to Schedule 1, (vi) confirms that none of
the funds, monies, assets or other consideration being used to make the
purchase and assumption hereunder are "plan assets" as defined under ERISA and
that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, [AND (VII) ATTACHES THE FORMS PRESCRIBED BY
THE INTERNAL REVENUE SERVICE OF THE UNITED STATES CERTIFYING THAT THE ASSIGNEE
IS ENTITLED TO RECEIVE PAYMENTS UNDER THE LOAN DOCUMENTS WITHOUT DEDUCTION OR
WITHHOLDING OF ANY UNITED STATES FEDERAL INCOME TAXES].**
**TO BE INSERTED IF THE ASSIGNEE IS NOT INCORPORATED UNDER THE LAWS OF THE
UNITED STATES, OR A STATE THEREOF.
8. INDEMNITY. The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to Section 13.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any entity or
person, provided that (i) any such subsequent assignment does not violate any
of the terms and conditions of the Loan Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent required under
the terms of the Loan Documents has been obtained and (ii) unless the prior
written consent of the Assignor is obtained, the Assignee is not thereby
released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under Sections 4, 5
and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between
the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by
the internal law, and not the law of conflicts, of the State of Illinois.
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13. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By: ___________________________
Title:_________________________
_________________________
_________________________
[NAME OF ASSIGNEE]
By: ___________________________
Title:_________________________
_________________________
_________________________
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<PAGE> 139
SCHEDULE 1 TO
ASSIGNMENT AGREEMENT
<TABLE>
<S> <C>
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: , 19
------------- --
3. Amounts (As of Date of Item 2 above):
a. Aggregate Commitment
(Loans)* under
Credit Agreement $
----------------
b. Assignee's Percentage
of the Aggregate Commitment
purchased under this
Assignment Agreement** %
-----------------
4. Amount of Assignee's Commitment (Loan Amount)*
Purchased under this Assignment Agreement: $
------------------
5. Amount of Assignor's Commitment (Loan Amount)
After Purchase under this Assignment Agreement
-----------------
6. Proposed Effective Date:
-----------------
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------------------------- -------------------------------------------
Title: Title:
----------------------------------- ----------------------------------------
</TABLE>
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
** Percentage taken to 10 decimal places
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<PAGE> 140
ATTACHMENT TO SCHEDULE 1 TO
ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address and account information for the Assignor and the Assignee
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<PAGE> 141
EXHIBIT "I" TO
ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
____________________, 19__
To: [NAME OF ADMINISTRATIVE AGENT]
__________________________________________
__________________________________________
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Unsecured Revolving Credit Agreement (the
"Credit Agreement") described in Item 1 of Schedule 1 attached hereto
("Schedule 1"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to the Administrative Agent pursuant to Section 13.3.1 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, 19__ (the "Assignment"), pursuant to
which, among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor the percentage interest specified in Item 3 of
Schedule 1 of all outstandings, rights and obligations under the Credit
Agreement. From and after such purchase, the Assignee's Commitment shall be
the amount specified in Item 4 of Schedule 1 and the Assignor's Commitment
shall be the amount specified in Item 5 of Schedule 1. The Effective Date of
the Assignment shall be the later of the date specified in Item 5 of Schedule 1
or two (2) Business Days (or such shorter period as agreed to by the
Administrative Agent) after this Notice of Assignment and any fee required by
Section 13.3.1 of the Credit Agreement have been delivered to the
Administrative Agent, provided that the Effective Date shall not occur if any
condition precedent agreed to by the Assignor and the Assignee or set forth in
Section 13 of the Credit Agreement has not been satisfied.
4. The Assignor and the Assignee hereby give to the Administrative
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the
-125-
<PAGE> 142
Administrative Agent before the date specified in Item 6 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Administrative Agent to
determine the Effective Date pursuant to Section 3 hereof if it occurs
thereafter. The Assignor shall notify the Administrative Agent if the
Assignment Agreement does not become effective on any proposed Effective Date
as a result of the failure to satisfy the conditions precedent agreed to by the
Assignor and the Assignee. At the request of the Administrative Agent, the
Assignor will give the Administrative Agent written confirmation of the
satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Administrative
Agent on or before the Effective Date the processing fee of $3,500 required by
Section 13.3.1 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and
the Assignee request and direct that the Administrative Agent prepare and cause
the Borrower to execute and deliver new Notes or, as appropriate, replacements
notes, to the Assignor and the Assignee. The Assignor and, if applicable, the
Assignee each agree to deliver to the Administrative Agent the original Note
received by it from the Borrower upon its receipt of a new Note in the
appropriate amount.
7. The Assignee advises the Administrative Agent that notice and
payment instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the
funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not be
"plan assets" under ERISA.
9. The Assignee authorizes the Administrative Agent to act as its
agent under the Loan Documents in accordance with the terms thereof. The
Assignee acknowledges that the Administrative Agent has no duty to supply
information with respect to the Borrower or the Loan Documents to the Assignee
until the Assignee becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By:_____________________________ By:_____________________________
Title:__________________________ Title:__________________________
-126-
<PAGE> 143
ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By:______________________________________
Title:___________________________________
[ATTACH PHOTOCOPY OF SCHEDULE 1 TO ASSIGNMENT]
-127-
<PAGE> 144
SCHEDULE 6.9
LITIGATION (BORROWER)
None
-128-
<PAGE> 145
SCHEDULE 6.19
ENVIRONMENTAL COMPLIANCE
-129-
<PAGE> 146
SCHEDULE 6.19
Environmental Reports and Agreements
<TABLE>
<CAPTION>
PROP_NUM REPORT TYPE DATE ISSUED/COMPLETED BY
<S> <C> <C> <C>
6300 W. HOWARD ST., NILES, IL
992 Preliminary Remediation Action Plan Addition 6/16/96 Groundwater Technology
992 Phase I Environmental Site Assessment Report 11/29/95 Groundwater Technology
992 Phase I Environmental Site Assessment Report 8/15/95 Groundwater Technology
992 Preliminary Risk-Based Cleanup Objectives 8/15/95 Groundwater Technology
992 Letter re. Pullman Property 8/9/95 Groundwater Technology
992 Additional Investigation Report 6/16/95 Groundwater Technology
992 Phase II Subsurface Investigation Report 4/22/95 Groundwater Technology
992 Preliminary Remediation Plan 4/22/95 Groundwater Technology
CAPITOL BUSINESS CENTER (FKA FRUEHAUF),
MIDDLETOWN, PA
962 Letter re: Effective Date of Covenant Not to Sue 9/14/95 United States Environmental
Protection Agency
962 Letter re: Buyer-Seller Consent Order and Agreement 9/12/95 Commonwealth of Pennsylvania/Department
of Environmental Resource
962 Agreement and Covenant Not to Sue 9/7/95 United States Environmental
Protection Agency
962 Letter re. Notice of Waste Treatment 9/6/95 Groundwater Technology
962 Environmental Report/Supplemental Groundwater
Sampling Result 7/1/95 Groundwater Technology
962 Consent Order and Agreement 6/26/95 Pennsylvania Department of
Environmental Resources
962 Additional Investigation Report/Addendum 1/13/95 Groundwater Technology
962 Phase I Environmental Site Assessment Report 12/14/94 Groundwater Technology
963 Letter re: Effective Date of Covenant Not to Sue 9/14/95 United States Environmental
Protection Agency
963 Letter re: Buyer-Seller Consent Order and Agreement 9/12/95 Commonwealth of Pennsylvania/Department
of Environmental Resource
963 Agreement and Covenant Not to Sue 9/7/95 United States Environmental
Protection Agency
963 Letter re. Notice of Waste Treatment 9/6/95 Groundwater Technology
963 Environmental Report/Supplemental Groundwater
Sampling Result 7/1/95 Groundwater Technology
963 Consent Order and Agreement 6/26/95 Pennsylvania Department of
Environmental Resources
963 Additional Investigation Report/Addendum 1/13/95 Groundwater Technology
963 Phase I Environmental Site Assessment Report 12/14/94 Groundwater Technology
964 Letter re: Effective Date of Covenant Not to Sue 9/14/95 United States Environmental
Protection Agency
964 Letter re: Buyer-Seller Consent Order and Agreement 9/12/95 Commonwealth of Pennsylvania/Department
of Environmental Resource
964 Agreement and Covenant Not to Sue 9/7/95 United States Environmental
Protection Agency
964 Letter re. Notice of Waste Treatment 9/6/95 Groundwater Technology
964 Environmental Report/Supplemental Groundwater
Sampling Result 7/1/95 Groundwater Technology
964 Consent Order and Agreement 6/26/95 Pennsylvania Department of
Environmental Resources
964 Additional Investigation Report/Addendum 1/13/95 Groundwater Technology
964 Phase I Environmental Site Assessment Report 12/14/94 Groundwater Technology
2900 N. SHADELAND, INDIANAPOLIS, IN
332 Industrial Discharge Permit: Modification to FIIP
as permitee 6/11/96 City of Indianapolis -
Dept. of Public Works
332 Phase II Subsurface Investigation Report 2/21/96 Groundwater Technology
332 Addendum to Phase I Environmental Assessment:
Chain of Title 2/5/96 GTI
332 Phase I Environmental Site Assessment Report 1/31/96 Groundwater Technology
332 Asbestos Survey 1/1/96 Smith Environmental Technologies
Corporation
332 Voluntary Remediation Agreement 10/4/95 Indiana Department of Environmental
Management
</TABLE>
<PAGE> 147
SCHEDULE 6.24
TRADE NAMES
First Industrial (Michigan), Limited Partnership
First Industrial (Minnesota), Limited Partnership
First Industrial (Tennessee), Limited Partnership
First Industrial Realty, Inc.
First Industrial Development Services
First Industrial (Alabama), Limited Partnership
First Industrial, Limited Partnership
First Industrial Realty, Inc.
First Industrial Financing Partnership (Alabama), Limited Partnership
First Industrial Financing Partnership, Limited Partnership
First Industrial Financing Partnership (Minnesota), Limited Partnership
First Industrial Financial Partnership (Wisconsin), Limited Partnership
First Industrial MP, L.P. dba First Industrial Mortgage Partnership, L.P.
-130-
<PAGE> 148
SCHEDULE 6.25
SUBSIDIARIES (BORROWER)
First Industrial Financing Partnership, L.P., a Delaware limited partnership*
First Industrial Pennsylvania, L.P., a Delaware limited partnership*
First Industrial Harrisburg, L.P., a Delaware limited partnership*
First Industrial Securities, L.P., a Delaware limited partnership*
First Industrial Mortgage Partnership, L.P., a Delaware limited partnership*
First Industrial Indianapolis, L.P., a Delaware limited partnership*
First Industrial Development Services Group, L.P., a Delaware limited
partnership*
First Industrial Enterprises of Michigan, Inc., a Michigan corporation ("FIEM")
[formerly Damone/Andrew Enterprises, Inc., a Michigan corporation]
(100% of non-voting stock; 8% of voting stock)
First Industrial (Atlanta) Management Corporation, a Maryland corporation
(100% owned by FTP)
NOTE: 1. FIEM owns 100% of capital stock of First Industrial
Group of Michigan, Inc., a Michigan corporation, which,
in turn, owns 100% of capital stock of the following
Michigan corporations:
First Industrial of Michigan, Inc.
First Industrial Associates of Michigan, Inc.
First Industrial Construction Company of Michigan, Inc.
2. FTP owns 100% of capital stock of First Industrial
(Atlanta) Management Corporation, a Maryland
corporation
3. For property ownership information, see Exhibit 1 to
this Schedule 6.25.
* Borrower owns 99% limited partnership interest in this entity.
-131-
<PAGE> 149
SCHDULE 6.26
UNENCUMBERED ASSETS
[Schedule Omitted]
-132-
<PAGE> 150
SCHEDULE 7.8
LITIGATION (GENERAL PARTNER)
None
-133-
<PAGE> 151
SCHEDULE 7.18
SUBSIDIARIES (GENERAL PARTNER)
1. FI Development Services Corporation, a Maryland corporation
2. First Industrial Finance Corporation, a Maryland corporation
3. First Industrial Management Corporation, a Maryland corporation
4. FR Acquisitions, Inc., a Maryland corporation
5. First Industrial Pennsylvania Corporation, a Maryland corporation
6. First Industrial Harrisburg Corporation, a Maryland corporation
7. First Industrial Securities Corporation, a Maryland corporation
8. First Industrial Mortgage Corporation, a Maryland corporation
9. First Industrial Indianapolis Corporation, a Maryland corporation
NOTE:
1. Each of these entities is 100% wholly owned by the General Partner.
2. None of these entities owns any properties.
-134-
<PAGE> 1
EXHIBIT 4.10
FIRST AMENDMENT TO
UNSECURED REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO UNSECURED REVOLVING CREDIT AGREEMENT (the
"Amendment") is made as of the 3rd day of March, 1997, by and among FIRST
INDUSTRIAL, L.P., a Delaware limited partnership ("Borrower"), FIRST INDUSTRIAL
REALTY TRUST, INC., a Maryland corporation ("General Partner"), THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association ("First Chicago"), in
First Chicago's capacity as Administrative Agent and Lender under the Credit
Agreement described below, UNION BANK OF SWITZERLAND, NEW YORK BRANCH, the New
York branch of a Swiss banking corporation ("UBS"), in UBS' capacity as
Documentation Agent and Lender under such Credit Agreement (First Chicago and
UBS in their capacities as Lenders being referred to as the "Original Lenders")
and the additional banks identified on the signature pages of this Amendment
(the "New Lenders").
RECITALS
A. Borrower, General Partner and the Original Lenders entered
into a certain Unsecured Revolving Credit Agreement dated as of December 16,
1996 (the "Credit Agreement"). All capitalized terms used in this Agreement
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Credit Agreement.
B. Pursuant to the terms of the Credit Agreement, the Original
Lenders agreed to provide Borrower with a revolving credit facility in an
aggregate principal amount of up to $200,000,000. The parties hereto desire to
amend the Credit Agreement in order to, among other things, (i) admit each of
the New Lenders as a "Lender" under the Credit Agreement without increasing the
Aggregate Commitment; (ii) adjust the respective Percentages of the Lenders;
and (iii) make certain other modifications to the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. The foregoing Recitals to this Amendment hereby are
incorporated into and made a part of this Amendment.
2. From and after the "Effective Date", as defined below, each of
the Original Lenders and each New Lender shall be considered a "Lender" under
the Credit Agreement and the Loan Documents. Borrower, General Partner and the
Original Lenders hereby consent to the addition of each of the New Lenders as a
Lender. From and after the Effective Date, each New Lender's Commitment and
Percentage shall be as shown below such New Lender's signature block on this
Amendment. The adjusted Commitments and
<PAGE> 2
Percentages for the Original Lenders are also shown on the signature pages to
this Amendment.
3. The "Effective Date" shall be the date on which all of the
following conditions shall have been fulfilled (or waived by the Original
Lenders and New Lenders):
(i) no Default or Event of Default then exists;
(ii) Borrower shall have executed and delivered to
the Administrative Agent for delivery to each New Lender two Notes,
one in the form attached hereto as Exhibit B-3 in the amount of such
New Lender's Commitment (each a "Primary Note") and one in the form
attached hereto as Exhibit B-5 with respect to Competitive Bid Loans;
(iii) Borrower shall have executed and delivered to
the Administrative Agent for delivery to the Original Lenders two
amended and restated Notes, one in the form attached hereto as Exhibit
B-4 in the adjusted amount of such Original Lender's Commitment (each
a "Primary Note") and one in the form attached hereto as Exhibit B-6
with respect to Competitive Bid Loans;
(iv) the only Advances outstanding on the
Effective Date shall be Adjusted Corporate Base Rate Advances;
(v) Borrower shall have executed and delivered,
or caused to be executed and delivered, to the Administrative Agent
(and, upon receipt from Borrower, the Administrative Agent shall
deliver to the other Lenders) (A) a certificate dated as of the
Effective Date signed by Borrower and General Partner (i) confirming
that no Default or Event of Default exists under the Loan Documents;
and (ii) representing and warranting that the Loan Documents are then
in full force and effect and that, to the best of their knowledge,
Borrower and General Partner then have no defenses or offsets to, or
claims or counterclaims relating to, their obligations under the Loan
Documents, and (B) an opinion of counsel regarding the due
authorization and enforceability of this Agreement, together with
supporting resolutions and other evidence, all satisfactory to the
Administrative Agent; and
(vi) the Original Lenders shall have paid in equal
shares to each of the New Lenders the agreed upon upfront fee payable
to each such New Lender.
If the Effective Date has not occurred by March 31, 1997, either Borrower or
any New Lender may, by written notice to all other parties hereto, elect to
terminate this Amendment which thereupon shall have no further force or effect
and the Credit Agreement shall continue as if this Amendment had not been
executed.
-2-
<PAGE> 3
4. Each New Lender, on the Effective Date, agrees to purchase
from each of the Original Lenders, in equal shares, and each of the Original
Lenders hereby agree to sell to each New Lender, in equal shares, without
recourse, a portion of the Obligations equal to such New Lender's Percentage of
the then outstanding principal balance of each Adjusted Corporate Base Rate
Advance then outstanding and held by the Original Lenders. Such purchases by
each New Lender shall not change the aggregate principal amount of all Advances
outstanding on the Effective Date. Each such purchase shall be effected by
wire transfer of immediately available funds in the appropriate amounts to the
Administrative Agent for remittance to each of the Original Lenders on the
Effective Date. Borrower irrevocably and unconditionally agrees that from and
after the Effective Date the portion of Obligations so funded by each of the
New Lenders shall be evidenced by and shall be deemed to be an Advance by such
New Lender under such New Lender's Primary Note as of the date of such purchase
and shall be treated as such for purposes of calculating interest and fees
accruing from and after the date of such purchase under the Credit Agreement
(as amended by this Amendment). All interest and fees accruing on such portion
of the Obligations prior to the date of such purchase shall be paid when due to
the Administrative Agent for remittance to the Original Lenders, as described
in the Credit Agreement.
5. Section 1.1 of the Credit Agreement is hereby amended by
deleting the defined terms "Funding Lender" and "Partial Advance."
6. Section 2.2 of the Credit Agreement is hereby amended by
deleting the fourth sentence thereof and by deleting clause (iv) of the third
sentence thereof and replacing it with the following:
"(iv) the Borrower pays an extension fee to the Administrative
Agent equal to 0.063% of the then-current Aggregate
Commitment, to be distributed to the Lenders in accordance
with their respective Percentages."
Section 2.2 of the Credit Agreement is hereby further amended by adding the
words "by each such Lender" after the words "after receipt" in the sixth
sentence thereof.
7. Subsection 2.19(iii) of the Credit Agreement is hereby amended
by deleting such subsection in its entirety and replacing it with the
following:
"(iii) first to the payment of any fee due
pursuant to Section 3.8(b) in connection with the issuance of
a Facility Letter of Credit to the Issuing Bank until such fee
is paid in full, then next to the payment of the Commitment
Fee, Facility Fee and Facility Letter of Credit Fee to the
Lenders, if then due, in that order on a pro rata basis in
accordance with the respective amounts of such fees due to the
Lenders and then finally to the payment of all fees then due
to the Administrative Agent;"
-3-
<PAGE> 4
8. Section 4.3 of the Credit Agreement is hereby amended by
deleting the word "Required" in the fifth line thereof and replacing it with
the word "Majority".
9. Section 5.2 of the Credit Agreement is hereby amended by
adding the words "and the obligation of the Issuing Bank to issue a Facility
Letter of Credit," after the words "(including Swingline Loans)" in the third
line thereof.
10. Section 8.2(iii) of the Credit Agreement is hereby amended by
inserting the words "the General Partner," in the fifth line thereof before the
words "the Borrower".
11. Section 9.2 of the Credit Agreement is hereby amended by (i)
replacing the word "Ownership" in the title thereof with the word "Management"
and (ii) deleting the words "ownership and" in the first line thereof.
12. Section 11.1 is hereby amended by adding the following phrase
at the end of the next to last sentence thereof: "and to pay any fees or other
amounts due with respect thereto."
13. Section 12.3 is hereby amended by adding the following
sentence at the end thereof: "Subject to the express terms hereof, the
Administrative Agent will, unless otherwise instructed as described in Section
12.5, endeavor to administer the Facility in substantially the same manner as
it administers similar credit facilities held for its own account."
14. Except as specifically modified hereby, the Credit Agreement
is and remains unmodified and in full force and effect and is hereby ratified
and confirmed. All references in the Loan Documents to the "Agreement" or the
"Revolving Credit Agreement" henceforth shall be deemed to refer to the Credit
Agreement as amended by this Amendment. The General Partner, in its capacity
as Guarantor under the Guaranty, hereby consents to this Amendment and
specifically acknowledges and agrees that its obligations under the Guaranty
continue in full force and effect with respect to all of the "Facility
Indebtedness" and all "Obligations" (as defined in the Guaranty) which are now
or hereafter due to the Lenders or the Administrative Agent under the Credit
Agreement as amended by this Amendment.
15. This Amendment may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Amendment by signing any such counterpart.
This Amendment shall be construed in accordance with the internal laws (and not
the law of conflicts) of the State of Illinois, but giving effect to federal
laws applicable to national banks. This Amendment shall be effective when it
has been executed by Borrower, General Partner, the Documentation Agent, the
Administrative Agent, the Original Lenders and all New Lenders and each party
has notified the Administrative Agent by telecopy or telephone that it has
taken such action.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the Borrower, General Partner, the Original
Lenders, the New Lenders, the Documentation Agent and the Administrative Agent
have executed this Amendment as of the date first above written.
FIRST INDUSTRIAL, L.P., a Delaware
limited partnership
By: First Industrial Realty Trust,
Inc., a Maryland corporation
By:_____________________________________
Title:__________________________________
FIRST INDUSTRIAL REALTY TRUST, INC., as
Guarantor and as General Partner
By:_____________________________________
Title:__________________________________
THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent
By:_____________________________________
Title:__________________________________
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH, as Documentation Agent
By:_____________________________________
Title:__________________________________
-5-
<PAGE> 6
THE FIRST NATIONAL BANK OF
CHICAGO, as Original Lender
By:_____________________________________
Title:__________________________________
Commitment: $25,000,000
Percentage: 12.5%
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH, as Original Lender
By:_____________________________________
Title:__________________________________
Commitment: $25,000,000
Percentage: 12.5%
BANK OF MONTREAL, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $20,000,000
Percentage: 10%
COMERICA BANK, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $20,000,000
Percentage: 10%
-6-
<PAGE> 7
FIRST BANK NATIONAL ASSOCIATION,
as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $20,000,000
Percentage: 10%
AMSOUTH BANK OF ALABAMA, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $15,000,000
Percentage: 7.5%
BHF-BANK AKTIENGESELLSCHAFT, as New
Lender
By:_____________________________________
Title:__________________________________
And By:_________________________________
Title:__________________________________
Commitment: $15,000,000
Percentage: 7.5%
-7-
<PAGE> 8
COMMERZBANK AKTIENGESELLSCHAFT, CHICAGO
BRANCH, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $15,000,000
Percentage: 7.5%
LASALLE NATIONAL BANK, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $15,000,000
Percentage: 7.5%
THE NORTHERN TRUST COMPANY, as New
Lender
By:_____________________________________
Title:__________________________________
Commitment: $15,000,000
Percentage: 7.5%
SIGNET BANK, as New Lender
By:_____________________________________
Title:__________________________________
Commitment: $15,000,000
Percentage: 7.5%
-8-
<PAGE> 9
EXHIBIT B-3
FORM OF NOTE
$_________________________ March 3, 1997
On or before the Maturity Date, as defined in that certain Unsecured
Revolving Credit Agreement dated as of December 16, 1996 as amended by a First
Amendment thereto dated as of March 3, 1997 (as heretofore and hereafter
amended, the "Agreement") between FIRST INDUSTRIAL, L.P., a Delaware limited
partnership ("Borrower"), First Industrial Realty Trust, Inc., a Maryland
corporation, Union Bank of Switzerland, New York Branch, individually and as
Documentation Agent, The First National Bank of Chicago, a national bank
organized under the laws of the United States of America, individually and as
Administrative Agent for the Lenders (as such terms are defined in the
Agreement), and the other Lenders listed on the signature pages of the
Agreement, Borrower promises to pay to the order of _________________________
(the "Lender"), or its successors and assigns, the principal sum of
_________________________ AND NO/100 DOLLARS ($_________________________) or
the aggregate unpaid principal amount of all Loans (other than Competitive Bid
Loans) made by the Lender to the Borrower pursuant to Section 2.1 of the
Agreement, in immediately available funds at the office of the Administrative
Agent in Chicago, Illinois, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay this Promissory Note ("Note") in full on or before the
Maturity Date in accordance with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
-9-
<PAGE> 10
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of
the State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust,Inc.,
its general partner
By:_____________________________________
Its:____________________________________
-10-
<PAGE> 11
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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-11-
<PAGE> 12
EXHIBIT B-4
FORM OF AMENDED AND RESTATED NOTE
$_______________________ March 3, 1997
On or before the Maturity Date, as defined in that certain Unsecured
Revolving Credit Agreement dated as of December 16, 1996 as amended by a First
Amendment thereto dated as of March 3, 1997 (as heretofore and hereafter
amended, the "Agreement") between FIRST INDUSTRIAL, L.P., a Delaware limited
partnership ("Borrower"), First Industrial Realty Trust, Inc., a Maryland
corporation, Union Bank of Switzerland, New York Branch, individually and as
Documentation Agent, The First National Bank of Chicago, a national bank
organized under the laws of the United States of America, individually and as
Administrative Agent for the Lenders (as such terms are defined in the
Agreement), and the other Lenders listed on the signature pages of the
Agreement, Borrower promises to pay to the order of _________________________
(the "Lender"), or its successors and assigns, the principal sum of
_________________________ AND NO/100 DOLLARS ($_________________________) or
the aggregate unpaid principal amount of all Loans (other than Competitive Bid
Loans) made by the Lender to the Borrower pursuant to Section 2.1 of the
Agreement, in immediately available funds at the office of the Administrative
Agent in Chicago, Illinois, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay this Promissory Note ("Note") in full on or before the
Maturity Date in accordance with the terms of the Agreement.
This Amended and Restated Note amends and restates in its entirety that
certain Note dated December 16, 1996 in the amount of $100,000,000 made by
Borrower in favor of Lender.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Advance and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such
-12-
<PAGE> 13
documents, Lender shall be entitled to receive reasonable attorneys fees and
expenses incurred by Lender in exercising such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.,
its general partner
By:_____________________________________
Its:____________________________________
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<PAGE> 14
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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<PAGE> 15
EXHIBIT B-5
FORM OF COMPETITIVE BID NOTE
March 3, 1997
On or before the last day of each "Interest Period" applicable to a
"Competitive Bid Loan", as defined in that certain Unsecured Revolving Credit
Agreement dated as of December 16, 1996 as amended by a First Amendment thereto
dated as of March 3, 1997 (as heretofore and hereafter amended, the
"Agreement") between FIRST INDUSTRIAL, L.P., a Delaware limited partnership
("Borrower"), First Industrial Realty Trust, Inc., a Maryland corporation,
Union Bank of Switzerland, New York Branch, The First National Bank of Chicago,
a national bank organized under the laws of the United States of America,
individually and as Administrative Agent for the Lenders (as such terms are
defined in the Agreement), Borrower promises to pay to the order of
_________________________ (the "Lender"), or its successors and assigns, the
unpaid principal amount of such Competitive Bid Loan made by the Lender to the
Borrower pursuant to Section 2.17 of the Agreement, in immediately available
funds at the office of the Administrative Agent in Chicago, Illinois, together
with interest on the unpaid principal amount hereof at the rates and on the
dates set forth in the Agreement. The Borrower shall pay any remaining unpaid
principal amount of such Competitive Bid Loans under this Competitive Bid Note
("Note") in full on or before the Maturity Date in accordance with the terms of
the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date, amount and due date of each Competitive Bid Loan and the date and
amount of each principal payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly
-15-
<PAGE> 16
provided for in the Agreement), and any and all lack of diligence or delays in
collection or enforcement of this Note, and expressly agree that this Note, or
any payment hereunder, may be extended from time to time, and expressly consent
to the release of any party liable for the obligation secured by this Note, the
release of any of the security of this Note, the acceptance of any other
security therefor, or any other indulgence or forbearance whatsoever, all
without notice to any party and without affecting the liability of the Borrower
and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.,
its general partner
By:_____________________________________
Its:____________________________________
-16-
<PAGE> 17
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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<PAGE> 18
EXHIBIT B-6
FORM OF AMENDED AND RESTATED COMPETITIVE BID NOTE
March 3, 1997
On or before the last day of each "Interest Period" applicable to a
"Competitive Bid Loan", as defined in that certain Unsecured Revolving Credit
Agreement dated as of December 16, 1996 as amended by a First Amendment thereto
dated as of March 3, 1997 (as heretofore and hereafter amended, the
"Agreement") between FIRST INDUSTRIAL, L.P., a Delaware limited partnership
("Borrower"), First Industrial Realty Trust, Inc., a Maryland corporation,
Union Bank of Switzerland, New York Branch, The First National Bank of Chicago,
a national bank organized under the laws of the United States of America,
individually and as Administrative Agent for the Lenders (as such terms are
defined in the Agreement), Borrower promises to pay to the order of
_________________________ (the "Lender"), or its successors and assigns, the
unpaid principal amount of such Competitive Bid Loan made by the Lender to the
Borrower pursuant to Section 2.17 of the Agreement, in immediately available
funds at the office of the Administrative Agent in Chicago, Illinois, together
with interest on the unpaid principal amount hereof at the rates and on the
dates set forth in the Agreement. The Borrower shall pay any remaining unpaid
principal amount of such Competitive Bid Loans under this Competitive Bid Note
("Note") in full on or before the Maturity Date in accordance with the terms of
the Agreement.
This Amended and Restated Competitive Bid Note amends and restates in
its entirety that certain Competitive Bid Note dated December 16, 1996 made by
Borrower in favor of Lender.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date, amount and due date of each Competitive Bid Loan and the date and
amount of each principal payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Event of Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such
-18-
<PAGE> 19
documents, Lender shall be entitled to receive reasonable attorneys fees and
expenses incurred by Lender in exercising such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
FIRST INDUSTRIAL, L.P.
By: First Industrial Realty Trust, Inc.,
its general partner
By:_____________________________________
Its:____________________________________
-19-
<PAGE> 20
PAYMENTS OF PRINCIPAL
Unpaid
Principal Notation
Date Balance Made by
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<PAGE> 1
EXHIBIT 10.53
SIXTH AMENDMENT TO
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
FIRST INDUSTRIAL, L.P.
The undersigned, being the sole general partner of First Industrial, L.P.
(the "Partnership"), a limited partnership formed under the Delaware Revised
Uniform Limited Partnership Act and pursuant to the terms of that certain
Second Amended and Restated Limited Partnership Agreement dated June 30, 1994
(as amended by amendments thereto dated November 17, 1995, March 20, 1996, June
28, 1996, September 13, 1996 and September 30, 1996, the "Partnership
Agreement"), does hereby amend the Partnership Agreement as follows:
Capitalized terms used but not defined in this Sixth Amendment shall have
the same meanings that are ascribed to them in the Partnership Agreement.
1. Additional Limited Partners. The Persons identified on Schedule 1
hereto are hereby admitted to the Partnership as Additional Limited Partners
owning the number of Units and having made the Capital Contributions set forth
on such Schedule 1. Such persons hereby adopt the Partnership Agreement. The
General Partner hereby consents to the assignment of all Units of the
Additional Limited Partners identified as transferors on Schedule 2 hereto to
their equity owners identified as transferees and in the amounts set forth on
such Schedule 2, and to the admission to the Partnership as Substituted Limited
Partners of such transferees, and such transferees are hereby admitted to the
Partnership as Substituted Limited Partners.
2. Schedule of Partners. Exhibit 1B to the Partnership Agreement is
hereby deleted in its entirety and replaced by Exhibit 1B hereto which
identifies the Partners following consummation of the transactions referred to
in Section 1 hereof.
3. Ratification. Except as expressly modified by this Sixth Amendment,
all of the provisions of the Partnership Agreement are affirmed and ratified
and remain in full force and effect.
Dated: November 14, 1996
FIRST INDUSTRIAL REALTY TRUST, INC.,
as sole General Partner of the
Partnership
By: /s/ Michael W. Brennan
---------------------------------
Name: Michael W. Brennan
--------------------------
Title: COO
--------------------------
<PAGE> 2
EXHIBIT 1B
SCHEDULE OF PARTNERS
GENERAL PARTNER NUMBER OF UNITS
- --------------- ---------------
First Industrial Realty Trust, Inc. 29,887,881
LIMITED PARTNERS
Daniel R. Andrew, TR of the Daniel R.
Andrew Trust UA Dec 29 92 137,489
Robert W. Bennett 36,476
BK Columbus Venture 24,789
John E. de B Blockey, TR of the John E.
De B Blockey Trust 8,187
Michael W. Brennan 7,587
Henry D. Bullock & Terri D. Bullock &
Shawn Stevenson TR of the Bullock Childrens
Education Trust UA Dec 20 94
FBO Benjamin Dure Bullock 770
Henry D. Bullock & Terri D. Bullock &
Shawn Stevenson TR of the Bullock Childrens
Education Trust UA Dec 20 94
FBO Christine Laurel Bullock 770
Edward Burger 9,261
Henry D. Bullock & Terri D. Bullock TR
of the Henry D. & Terri D. Bullock
Trust UA Aug 28 92 12,611
Michael G Damone, TR of the Michael G.
Damone Trust UA Nov 4 69 144,296
Robert L. Denton 6,286
-1 -
<PAGE> 3
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Henry E. Dietz Trust UA Jan 16 81 36,476
W. Allen Doane TR of the W. Allen
Doane Trust UA May 31, 91 4,416
Timothy Donohue 2,000
Farlow Road Associates Limited Partnership 2,751
Thelma C. Gretzinger Trust 450
Clay Hamlin & Lynn Hamlin JT TEN WROS 15,159
Highland Associates Limited Partnership 69,039
Robert W. Holman Jr. 150,134
Steven B. Hoyt 250,000
Frederick K. Ito 3,880
Michael W. Jenkins 8,831
Peter Kepic 9,261
Paul T. Lambert 39,737
Lambert Investment Corporation 13,606
LGR Investment Fund Ltd 22,556
Duane Lund 13,617
Eileen Millar 2,880
Linda Miller 2,000
Peter Murphy 56,184
Anthony Muscatello 81,654
North Star Associates Limited Partnership 19,333
-2-
<PAGE> 4
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Arden O'Connor 63,845
Peter O'Connor 118,281
Shidler Equities LP 254,541
Eduardo Paneque 2,000
Partridge Road Associates Limited Partnership 2,751
James C. Reynolds 38,697
Shadeland Associates Limited Partnership 42,976
Shadeland Corporation 4,442
Jay H. Shidler 65,118
Jay H. Shidler & Wallette A. Shidler
TEN ENT 1,223
Michael B. Slade 2,829
Kevin Smith 13,571
Robert Stein 56,778
S. Larry Stein 56,778
Jonathan Stott 182,126
Michael T. Tomasz 23,868
Mark S. Whiting 25,206
Holman/Shidler Investment Corporation 22,079
Joseph Dresner 149,531
The Milton Dresner Revocable Trust
dated October 22, 1976 149,531
-3-
<PAGE> 5
The Jack Friedman Revocable Living Trust
dated March 23, 1978 26,005
-4-
<PAGE> 6
SCHEDULE 1
<TABLE>
<CAPTION>
Additional
Limited Partners Number of Units Capital Contribution
- --------------------- --------------------------- ----------------------------
<S> <C> <C>
HIGHLAND INDUSTRIAL
DEVELOPMENT COMPANY 325,067 $8,464,782.80
</TABLE>
-5-
<PAGE> 7
SCHEDULE 2
<TABLE>
<CAPTION>
Transferor Transferee Number of Units
- ---------- ---------- ---------------
<S> <C> <C>
HIGHLAND INDUSTRIAL
DEVELOPMENT COMPANY JOSEPH DRESNER 149,531
HIGHLAND INDUSTRIAL THE MILTON DRESNER REVOCABLE
DEVELOPMENT COMPANY TRUST DATED OCTOBER 22, 1976 149,531
THE JACK FRIEDMAN REVOCABLE
HIGHLAND INDUSTRIAL LIVING TRUST DATED
DEVELOPMENT COMPANY MARCH 23, 1978 26,005
</TABLE>
<PAGE> 1
EXHIBIT 10.54
SEVENTH AMENDMENT TO
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
FIRST INDUSTRIAL, L.P.
The undersigned, being the sole general partner of First Industrial, L.P.
(the "Partnership"), a limited partnership formed under the Delaware Revised
Uniform Limited Partnership Act and pursuant to the terms of that certain
Second Amended and Restated Limited Partnership Agreement dated June 30, 1994
(as amended by amendments thereto dated November 17, 1995, March 20, 1996, June
28, 1996, September 13, 1996, September 30, 1996 and November 14, 1996, the
"Partnership Agreement"), does hereby amend the Partnership Agreement as
follows:
Capitalized terms used but not defined in this Seventh Amendment shall
have the same meanings that are ascribed to them in the Partnership Agreement.
1. Amendment of Partnership Agreement. The Partnership Agreement is
hereby amended, effective immediately prior to the admissions referred to in
Section 2 below, as follows:
(a) A new Exhibit 1C and a new Exhibit 1D, in the respective forms
of Exhibit 1C and Exhibit 1D attached hereto, are hereby added to the
Partnership Agreement.
(b) Section 1.1 is amended by adding each of the following
definitions in the appropriate alphabetic location:
AGGREGATE PROTECTED AMOUNT: With respect to the Contributor
Partners, as a group, the aggregate balances of the Protected
Amounts, if any, of the Contributor Partners, as determined on the
date in question.
CONTRIBUTOR PARTNER(S): That or those Limited Partner(s)
listed as Contributor Partner(s) on Exhibit 1D attached hereto and
made a part hereof, as such Exhibit may be amended from time to
time by the General Partner, whether by express amendment to this
Partnership Agreement or by execution of a written instrument by
and between any additional Contributor Partner(s) being affected
thereby and the General Partner, acting on behalf of the
Partnership and without the prior consent of the Limited Partners
(whether or not Contributor Partners other than the Contributor
Partner(s) being affected thereby). For purposes hereof, any
successor, assignee, or transferee of the Interest of a Contributor
Partner (other than the Partnership in connection with a redemption
pursuant to Article IX hereof) shall be considered a Contributor
Partner for purposes hereof.
<PAGE> 2
LB CLOSING DATE: January 31, 1997.
LB PARTNERS: The persons identified on Exhibit 1C hereto,
following their admission to the Partnership as Additional Limited
Partners.
LB UNITS: The Partnership Units issued to the LB Partners in
connection with the acquisition by the Partnership of certain
properties on the LB Closing Date.
PROTECTED AMOUNT: With respect to any Contributor Partner, the
amount set forth opposite the name of such Contributor Partner on
Exhibit 1D attached hereto and made a part hereof, as such Exhibit
may be modified from time to time by an amendment to the
Partnership Agreement or by execution of a written instrument by
and between the Contributor Partner being affected thereby and the
General Partner, acting on behalf of the Partnership and without
the prior written consent of the Limited Partners (whether or not
Contributor Partners other than the Contributor Partner being
affected thereby).
RECOURSE LIABILITIES: The amount of liabilities owed by the
Partnership (other than nonrecourse liabilities and liabilities to
which Partner Nonrecourse Deductions are attributable in accordance
with Treasury Regulations Section 1.704-2(i)) owed by the
Partnership."
THRESHOLD PERCENTAGE: A percentage equal to 85% on the LB
Closing Date and thereafter adjusted upwards (but not downwards)
immediately prior to each solicitation of any vote of, or the
seeking of any consent, approval or waiver from, the Limited
Partners generally, to the sum of (i) 85% and (ii) the number of
percentage points equal to the positive difference, if any, between
(a) the aggregate Percentage Interest represented by the LB Units
immediately following the LB Closing Date and (b) the aggregate
Percentage Interest represented by the LP Units immediately prior
to any such solicitation. For example, if on the LB Closing Date
the LB Units represent a 10% aggregate Percentage Interest, and if
immediately prior to a solicitation the Threshold Percentage is 85%
and the aggregate Percentage Interest represented by the LB Units
is 8%, the Threshold Percentage would be increased to 87% (85% =
(10% - 8%)).
VOTING TERMINATION DATE: The first date after the LB Closing
Date on which either (i) the General Partner holds 90% or more of
all Partnership Units or ii) the aggregate number of Partnership
Units held by the General Partner and the LB Partners is less than
the product of the Threshold Percentage and the total number of
Partnership Units then outstanding.
<PAGE> 3
(c) Section 5.2(A) of the Partnership Agreement is hereby amended to
read as follows:
"(A) PROFITS. After giving effect to the special
allocations, if any, provided in Section 5.2(C) and (D),
Profits in each Fiscal Year shall be allocated in the
following order:
(1) First to the General Partner until the cumulative
Profits allocated to the General Partner under this Section
5.2(A)(1) equal the cumulative Losses allocated to such
Partner under Section 5.2(B)(5);
(2) Second, to each Partner in proportion to the
cumulative Losses allocated to such Partner under Section
5.2(B)(4), until the cumulative Losses allocated to such
Partner under this Section 5.2(A)(2) equal the cumulative
Losses allocated to such partner under Section 5.2(B)(4);
(3) Third, to the General Partner in proportion to the
cumulative Losses allocated to the General Partner under
this Section 5.2(A)(3) equal the cumulative Losses allocated
to such Partner under Section 5.2(B)(3);
(4) Fourth, to each Partner in proportion to the
cumulative Losses allocated to such Partner under Section
5.2(B)(2), until the cumulative Profits allocated to such
Partner under this Section 5.2(A)(4) equal the cumulative
Losses allocated to such Partner under Section 5.2(B)(2);
(5) Fifth, to each Partner in proportion to the
cumulative Losses allocated to such Partner under Section
5.2(B)(1), until the cumulative Profits allocated to such
Partner under this Section 5.2(A)(5) equal the cumulative
Losses allocated to such partner under Section 5.2(B)(1);
and
(6) then, the balance, if any, to the Partners in
proportion to their respective Partnership Interests."
(d) Section 5.2(B) of the Partnership Agreement is hereby amended to
read as follows:
"(B) LOSSES. After giving effect to the special
allocations, if any, provided in Section 5.2(C) and (D),
Losses in each Fiscal Year shall be allocated in the
following order of priority:
<PAGE> 4
(a) First, to the Partners, in proportion to their
respective Partnership Interests, but not in excess of the
positive Capital Account balance of any Partner prior to the
allocation provided for in this Section 5.2(B)(1);
(b) Second, to the Partners with positive Capital
Account balances prior to the allocation provided for in
this Section 5.2(B)(2), in proportion to the amount of such
balances;
(c) Third, to the General Partner in an amount equal to
the excess of (i) the amount of Recourse Liabilities over
(ii) the Aggregate Protected Amount;
(d) Fourth, to and among the Contributor Partners, in
accordance with their respective Protected Amounts, until
such time as the Contributor Partners have been allocated an
aggregate amount of Loss pursuant to this Section 5.2(B)(4)
equal to the Aggregate Protected Amount; and
(e) Thereafter, to the General Partner;
provided, however, (i) that, from and following the first
date upon which a Contributor Partner is no longer a
Partner of the Partnership, the provisions of this Section
5.2(B) shall be null, void and without further force and
effect with respect to such Contributor Partner; (ii) that,
this Section 5.2(B) shall control, notwithstanding any
reallocation or adjustment of taxable income, loss or other
items by the Internal Revenue Service or any other taxing
authority; provided, however, that neither the Partnership
nor the General Partner (nor any of their respective
affiliates) is required to indemnify any Contributor Partner
(or its affiliates) for the loss of any tax benefit
resulting from any reallocation or adjustment of taxable
income, loss or other items by the Internal Revenue Service
or other taxing authority; and (iii) that, during such
period as there are Contributor Partners in the Partnership,
the provisions of Section 5.2(B)(4) shall not be amended in
a manner which adversely affects the Contributor Partners
(without the consent of each Contributor Partner."
(d) Section 10.3(A) of the Partnership Agreement is hereby amended to
delete the sentence beginning "If any Partner has a deficit balance . . .
." and substitute the following language therefor:
<PAGE> 5
"If any Contributor Partner has a deficit balance in its
Capital Account (after giving effect to all contributions
(without regard to this Section 10.3(A)), distributions and
allocations), each such Contributor Partner shall contribute
to the capital of the Partnership an amount equal to its
respective deficit balance, such obligation to be satisfied
within ninety (90) days following the liquidation and
dissolution of the Partnership in accordance with the
provisions of this Article X hereof. Conversely, if any
Partner other than a Contributor Partner has a deficit
balance in its Capital Account (after giving effect to all
contributions (without regard to this Section 10.3(A)),
distributions and allocations), such Partner shall have no
obligation to make any contribution to the capital of the
Partnership. Any deficit restoration obligation pursuant to
the provisions hereof shall be for the benefit of creditors
of the Partnership or any other Person to whom any debts,
liabilities, or obligations are owed by (or who otherwise
has any claim against) the Partnership or the general
partner, in its capacity as General Partner of the
Partnership."
(e) A new Section 11.3 is hereby added to the Partnership Agreement
to read as follows:
"SECTION 11.3 VOTING OF LB UNITS. On any matter on
which the Limited Partners shall be entitled to vote,
consent or grant an approval or waiver, following the
admissions of the LB Partners to the Partnership as
Additional Limited Partners and through the Voting
Termination Date, each holder of the LB Units shall be
deemed (i) in connection with any matter submitted to a
vote, to have cast all votes attributable to such holder's
LB Units in the same manner as the votes attributable to the
Units held by the General Partner are cast on such matter,
and (ii) in connection with any consent, approval or waiver,
to have taken the same action as the General Partner shall
have taken with respect to its Units in connection
therewith. If the General Partner shall not have the right
to vote, consent or grant an approval or waiver on a matter,
each holder of LB Units shall vote or act as directed by the
General Partner."
(f) A new Section 12.3(D) is hereby added to the Partnership
Agreement to read as follows:
"(D) Each LB Partner hereby irrevocably appoints and
empowers the General Partner and the Liquidator, in the event of
a liquidation, and each of their authorized officers and
attorneys-in-fact with full power of substitution, as the true
and lawful agent and attorney-in-fact of such LB Partner with
full power and
<PAGE> 6
authority in the name, place and stead of such LB Partner to take
such actions (including waivers under the Partnership Agreement) or
refrain from taking such action as the General Partner reasonably
believes are necessary or desirable to achieve the purposes of
Section 11.3 of the Partnership Agreement."
2. Additional Limited Partners. The Persons identified on Schedule 1
hereto are hereby admitted to the Partnership as Additional Limited Partners
owning the number of Units and having made the Capital Contributions set forth
on such Schedule 1. Such persons hereby adopt the Partnership Agreement. The
General Partner hereby consents to the assignment of all Units of the
Additional Limited Partners identified as transferors on Schedule 2 hereto to
their equity owners identified as transferees and in the amounts set forth on
such Schedule 2, and to the admission to the Partnership as Substituted Limited
Partners of such transferees, and such transferees are hereby admitted to the
Partnership as Substituted Limited Partners.
3. Schedule of Partners. Exhibit 1B to the Partnership Agreement is
hereby deleted in its entirety and replaced by Exhibit 1B hereto, which
identifies the Partners following consummation of the transactions referred to
in Section 2 hereof.
4. Ratification. Except as expressly modified by this Seventh Amendment,
all of the provisions of the Partnership Agreement are affirmed and ratified
and remain in full force and effect.
Dated: January 31, 1997
FIRST INDUSTRIAL REALTY TRUST, INC., as
sole General Partner of the Partnership
By: /s/ Michael T. Tomasz
---------------------------------------
Name: Michael T. Tomasz
Title: Chief Executive Officer and
President
<PAGE> 7
EXHIBIT 1B
SCHEDULE OF PARTNERS
GENERAL PARTNER NUMBER OF UNITS
- --------------- ---------------
First Industrial Realty Trust, Inc. 30,043,617
LIMITED PARTNERS
Daniel R. Andrew, TR of the Daniel R.
Andrew Trust UA Dec 29 92 137,489
BK Columbus Venture 24,789
John E. de B Blockey, TR of the John E.
De B Blockey Trust 8,187
Michael W. Brennan 7,587
Henry D. Bullock & Terri D. Bullock &
Shawn Stevenson TR of the Bullock Childrens
Education Trust UA Dec 20 94
FBO Benjamin Dure Bullock 770
<PAGE> 8
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Henry D. Bullock & Terri D. Bullock &
Shawn Stevenson TR of the Bullock Childrens
Education Trust UA Dec 20 94
FBO Christine Laurel Bullock 770
Edward Burger 9,261
Henry D. Bullock & Terri D. Bullock TR
of the Henry D. & Terri D. Bullock
Trust UA Aug 28 92 12,551
Michael G Damone, TR of the Michael G.
Damone Trust UA Nov 4 69 144,296
Robert L. Denton 6,286
Henry E. Dietz Trust UA Jan 16 81 36,476
W. Allen Doane TR of the W. Allen
Doane Trust UA May 31, 91 4,416
Timothy Donohue 2,000
Farlow Road Associates Limited Partnership 2,751
Thelma C. Gretzinger Trust 450
Clay Hamlin & Lynn Hamlin JT TEN WROS 15,159
<PAGE> 9
LIMITED PARTNERS NUMBER OF UNITS
- ----------------- ---------------
Highland Associates Limited Partnership 69,039
Robert W. Holman Jr. 150,134
Steven B. Hoyt 250,000
Frederick K. Ito 3,880
Michael W. Jenkins 3,831
Peter Kepic 9,261
Paul T. Lambert 39,737
Lambert Investment Corporation 13,606
LGR Investment Fund Ltd 22,556
Duane Lund 13,617
Eileen Millar 2,880
Linda Miller 2,000
Peter Murphy 56,184
<PAGE> 10
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Anthony Muscatello 81,654
North Star Associates Limited Partnership 19,333
Arden O'Connor 63,845
Peter O'Connor 66,181
Shidler Equities LP 254,541
Eduardo Paneque 2,000
Partridge Road Associates Limited Partnership 2,751
James C. Reynolds 38,697
Shadeland Associates Limited Partnership 42,976
Shadeland Corporation 4,442
Jay H. Shidler 65,118
Jay H. Shidler & Wallette A. Shidler
TEN ENT 1,223
<PAGE> 11
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Michael B. Slade 2,829
Kevin Smith 13,571
Robert Stein 56,778
S. Larry Stein 56,778
Jonathan Stott 130,026
Michael T. Tomasz 23,868
Mark S. Whiting 25,206
Holman/Shidler Investment Corporation 22,079
Joseph Dresner 149,531
The Milton Dresner Revocable Trust
dated October 22, 1976 149,531
The Jack Friedman Revocable Living Trust
dated March 23, 1978 26,005
Jernie Holdings Corp. 180,499
<PAGE> 12
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Fourbur Family Co., L.P. 50,478
Fourbur Co., L.L.C. 27,987
Jerome Lazarus 18,653
Constance Lazarus 417,961
Susan Burman 523,155
Judith Draizin 331,742
Jan Burman 18,653
Danielle Draizin 6,538
Heather Draizin 6,538
Jason Draizin 13,078
<PAGE> 13
EXHIBIT 1C
LB PARTNERS
Jernie Holdings Corp., a New York corporation
Fourbur Family Co., L.P., a New York limited partnership
Fourbur Co., L.L.C., a New York limited liability company
Jerome Lazarus
Constance Lazarus
Susan Burman
Judith Draizin
Jan Burman
Judith Draizin as custodian
under the NYUGMA until
the age of 21 for Danielle Draizin
Judith Draizin as custodian
under the NYUGMA until
the age of 21 for Heather Draizin
Judith Draizin as custodian
under the NYUGMA until
the age of 21 for Jason Draizin
<PAGE> 14
EXHIBIT 1D
<TABLE>
<CAPTION>
ADDITIONAL
LIMITED PARTNERS TRANSFEREE
PROTECTED PARTNER PROTECTED
ADDITIONAL LIMITED PARTNERS AMOUNT TRANSFEREE PARTNER AMOUNT
--------------------------- ---------------- ------------------ -----------------
<S> <C> <C> <C>
1 Lazarus Burman Associates 100,000 Jerome Lazarus 100,000
Jan Burman 0
2 Jan Burman Management Company 200,000 Jerome Lazarus 100,000
Jan Burman 100,000
3 Jerry Lazarus Management Co. 2,500,000 Jerome Lazarus 1,260,394
Jan Burman 1,239,606
4 Connie Lazarus Management Company 600,000 Jerome Lazarus 305,792
Jan Burman 294,208
5 Red Ground Co. 4,000,000 Jerome Lazarus 2,307,610
Jan Burman 1,692,390
6 Surrey Company 6,700,000 Jerome Lazarus 3,350,000
Jan Burman 3,350,000
7 Jernie Investors Co. 900,000 Constance Lazarus 720,000
Susan Burman 180,000
Judith Draizin 0
Jernie Holdings Corp. 0
8 109 Industrial Co., LLC 4,300,000 Jerome Lazarus 4,228,630
Jan Burman 71,370
9 LB Management Co. 5,600,000 Jerome Lazarus 5,507,053
Jan Burman 92,947
10 JD-U Co. 1,200,000 Judith Draizin 1,200,000
11 Laz-Bur Co. 900,000 Constance Lazarus 449,990
Susan Burman 450,010
---------- ----------
Total 27,000,000 27,000,000
========== ==========
</TABLE>
<PAGE> 15
EXHIBIT 1D
<TABLE>
<CAPTION>
TOTAL BY TRANSFEREE PARTNER PROTECTED AMOUNT
--------------------------- ----------------
<S> <C>
1 Jan Burman (6,300,000)
2 Jerome Lazarus (17,000,000)
3 Constance Lazarus (3,600,000)
4 Jernie Holdings Corp. (100,000)
-----------
Total (27,000,000)
===========
</TABLE>
<PAGE> 16
SCHEDULE 1
<TABLE>
<CAPTION>
ADDITIONAL
LIMITED PARTNERS NUMBER OF UNITS CAPITAL CONTRIBUTION
---------------- --------------- --------------------
<S> <C> <C>
Lazarus Burman Associates
Jan Burman Management Co.
Jerry Lazarus Management Co.
Connie Lazarus Management Co.
Red Ground Co.
Surrey Co.
Jernie Investors Co.
109 Industrial Co., LLC
L.B. Management Co.
Judith Draizin
Susan Burman
Laz-Bur Co.
SJB Realty Co.
C 4-6-7 Co.
C 3-5 Co.
290 Industrial Co., LLC
185 Price Parkway, LLC
116 Lehigh Industrial Co. 1,595,282 $47,858,460
========= ===========
</TABLE>
<PAGE> 17
SCHEDULE 2
<TABLE>
<CAPTION>
TRANSFEROR+ TRANSFEREE NUMBER OF UNITS CAPITAL ACCOUNT
- ---------- ---------- --------------- ---------------
<S> <C> <C> <C>
Jerome Lazarus 18,653 $ 559,590
Jan Burman 18,653 559,590
Constance Lazarus 417,961 12,538,830
Susan Burman 523,155 15,694,650
Judith Draizin 331,742 9,952,260
Jernie Holdings Corp. 180,499 4,414,970
Fourbur Co., LLC 27,987 839,610
Jason Draizin* 13,078 392,340
Heather Draizin* 6,538 196,140
Danielle Draizin* 6,538 196,140
Fourbur Family Co., LLC 50,478 1,514,340
--------- -----------
1,595,282 $47,858,460
========= ===========
</TABLE>
- - With respect to each transferee, one or more of the Additional Limited
Partners reflected on Schedule 1.
* Under the New York Uniform Gift to Minors Act until the age of 21, Judith
Draizin as custodian.
<PAGE> 1
EXHIBIT 10.55
EIGHTH AMENDMENT TO
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
FIRST INDUSTRIAL, L.P.
The undersigned, being the sole general partner of First Industrial, L.P.
(the "Partnership"), a limited partnership formed under the Delaware Revised
Uniform Limited Partnership Act and pursuant to the terms of that certain
Second Amended and Restated Limited Partnership Agreement dated June 30, 1994
(as amended by amendments thereto dated November 17, 1995, March 20, 1996, June
28, 1996, September 13, 1996, September 30, 1996, November 14, 1996 and January
31, 1997, the "Partnership Agreement"), does hereby amend the Partnership
Agreement as follows:
Capitalized terms used but not defined in this Eighth Amendment shall have
the same meanings that are ascribed to them in the Partnership Agreement.
1. Additional Limited Partners. The Persons identified on Schedule 1
hereto are hereby admitted to the Partnership as Additional Limited Partners
owning the number of Units and having made the Capital Contributions set forth
on such Schedule 1. Such persons hereby adopt the Partnership Agreement. The
General Partner hereby consents to the assignment of all Units of the
Additional Limited Partners identified as transferors on Schedule 2 hereto to
their equity owners identified as transferees and in the amounts set forth on
such Schedule 2, and to the admission to the Partnership as Substituted Limited
Partners of such transferees, and such transferees are hereby admitted to the
Partnership as Substituted Limited Partners.
2. Schedule of Partners. Exhibit 1B to the Partnership Agreement is
hereby deleted in its entirety and replaced by Exhibit 1B hereto which
identifies the Partners following consummation of the transactions referred to
in Section 1 hereof.
3. Ratification. Except as expressly modified by this Eighth Amendment,
all of the provisions of the Partnership Agreement are affirmed and ratified
and remain in full force and effect.
Dated: March 17, 1997
FIRST INDUSTRIAL REALTY TRUST, INC.,
as sole General Partner of the Partnership
By: /s/ Michael J. Havala
---------------------------------
By: Michael J. Havala
Its: Chief Financial Officer
<PAGE> 2
EXHIBIT 1B
SCHEDULE OF PARTNERS
GENERAL PARTNER NUMBER OF UNITS
- --------------- ---------------
First Industrial Realty Trust, Inc. 30,043,617
LIMITED PARTNERS
- ----------------
Daniel R. Andrew, TR of the Daniel R.
Andrew Trust UA Dec 29 92 137,489
BK Columbus Venture 24,789
John E. de B Blockey, TR of the John E.
De B Blockey Trust 8,187
Michael W. Brennan 7,587
Henry D. Bullock & Terri D. Bullock &
Shawn Stevenson TR of the Bullock Childrens
Education Trust UA Dec 20 94
FBO Benjamin Dure Bullock 770
Henry D. Bullock & Terri D. Bullock &
Shawn Stevenson TR of the Bullock Childrens
Education Trust UA Dec 20 94
FBO Christine Laurel Bullock 770
Edward Burger 9,261
<PAGE> 3
LIMITED PARTNERS NUMBER OF UNITS
- -------------------------------------- ---------------
Henry D. Bullock & Terri D. Bullock TR
of the Henry D. & Terri D. Bullock
Trust UA Aug 28 92 12,551
Michael G Damone, TR of the Michael G.
Damone Trust UA Nov 4 69 144,296
Robert L. Denton 6,286
Henry E. Dietz Trust UA Jan 16 81 36,476
W. Allen Doane TR of the W. Allen
Doane Trust UA May 31, 91 4,416
Timothy Donohue 2,000
Farlow Road Associates Limited Partnership 2,751
Thelma C. Gretzinger Trust 450
Clay Hamlin & Lynn Hamlin JT TEN WROS 15,159
Highland Associates Limited Partnership 69,039
Robert W. Holman Jr. 150,134
Steven B. Hoyt 250,000
<PAGE> 4
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Frederick K. Ito 3,880
Michael W. Jenkins 3,831
Peter Kepic 9,261
Paul T. Lambert 39,737
Lambert Investment Corporation 13,606
LGR Investment Fund Ltd 22,556
Duane Lund 13,617
Eileen Millar 2,880
Linda Miller 2,000
Peter Murphy 56,184
Anthony Muscatello 81,654
North Star Associates Limited Partnership 19,333
Arden O'Connor 63,845
<PAGE> 5
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Peter O'Connor 66,181
Shidler Equities LP 254,541
Eduardo Paneque 2,000
Partridge Road Associates Limited Partnership 2,751
James C. Reynolds 38,697
Shadeland Associates Limited Partnership 42,976
Shadeland Corporation 4,442
Jay H. Shidler 65,118
Jay H. Shidler & Wallette A. Shidler
TEN ENT 1,223
Michael B. Slade 2,829
Kevin Smith 13,571
Robert Stein 56,778
S. Larry Stein 56,778
<PAGE> 6
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Jonathan Stott 130,026
Michael T. Tomasz 23,868
Mark S. Whiting 25,206
Holman/Shidler Investment Corporation 22,079
Joseph Dresner 149,531
The Milton Dresner Revocable Trust
dated October 22, 1976 149,531
The Jack Friedman Revocable Living Trust
dated March 23, 1978 26,005
Jernie Holdings Corp. 180,499
Fourbur Family Co., L.P. 50,478
Fourbur Co., L.L.C. 27,987
Jerome Lazarus 18,653
Constance Lazarus 417,961
Susan Burman 523,155
<PAGE> 7
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Judith Draizin 331,742
Jan Burman 18,653
Danielle Draizin 6,538
Heather Draizin 6,538
Jason Draizin 13,078
Charles T. Andrews 754
Perry C. Caplan 1,388
Charles S. Cook and
Shelby H. Cook, tenants in the entirety 634
George L. Cramer, Jr. 2,262
Darwin B. Dosch 1,388
Charles F. Downs 1,508
Fitz & Smith Partnership 3,410
Dennis G. Goodwin and
Jeannie L. Goodwin, tenants in the entirety 6,166
<PAGE> 8
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
Internal Investment Company 3,016
Thomas J. Johnson, Jr. and
Sandra L. Johnson, tenants in the entirety 2,142
Nourhan Kailian 2,183
Craig R. Martin 754
Joseph Musti 1,508
Dean A. Nachtigall 10,076
Jack F. Ream 1,071
Glenn C. & Linda A. Rexroth 2,142
Andre G. Richard 1,508
Edward C. Roberts and
Rebecca S. Roberts, tenants in the entirety 8,308
W.F.O. Rosenmiller 634
Edward Jon Sarama 634
<PAGE> 9
LIMITED PARTNERS NUMBER OF UNITS
- ---------------- ---------------
David W. Smith, and
Doris L. Smith, tenants in the entirety 754
Gary L. Smith and
Joyce A. Smith, tenants in the entirety 1,508
SRS PARTNERSHIP 2,142
Barry L. Tracey 2,142
<PAGE> 10
SCHEDULE 1
<TABLE>
<CAPTION>
Additional
Limited Partners Number of Units Capital Contribution
- -------------------- --------------- --------------------
<S> <C> <C>
Emig Income Partners 39,625 $1,109,500
Farmbrook Partners I 18,407 $ 515,396
58,032 $1,624,896
====== ==========
</TABLE>
<PAGE> 11
SCHEDULE 2
<TABLE>
<CAPTION>
Transferror+ New Holder Units Capital Account
- ------------ ---------- ------ ---------------
<S> <C> <C> <C>
Charles T. Andrews 754 $ 21,112
Perry C. Caplan 1,388 38,864
Charles S. Cook and 634 17,752
Shelby H. Cook, tenants in the entirety
George L. Cramer, Jr. 2,262 63,336
Darwin B. Dosch 1,388 37,464
Charles F. Downs 1,508 42,224
Fitz & Smith Partnership 3,410 95,480
Dennis G. Goodwin and 6,166 172,648
Jeannie L. Goodwin, tenants in the
entirety
Internal Investment Company 3,016 84,448
Thomas J. Johnson, Jr. and 2,142 59,976
Sandra L. Johnson, tenants in the entirety
Nourhan Kailian 2,183 61,124
Craig R. Martin 754 21,112
Joseph Musti 1,508 42,224
Dean A. Nachtigall 10,076 282,128
Jack F. Ream 1,071 29,988
Glenn C. & Linda A. Rexroth 2,142 59,976
Andre G. Richard 1,508 42,224
Edward C. Roberts and 8,308 232,624
Rebecca S. Roberts, tenants in the
entirety
W.F.O. Rosenmiller 634 17,752
Edward Jon Sarama 634 17,752
David W. Smith, and 754 21,112
Doris L. Smith, tenants in the entirety
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Transferror+ New Holder Units Capital Account
- ------------ ---------- ------ ---------------
<S> <C> <C> <C>
Gary L. Smith and 1,508 42,224
Joyce A. Smith, tenants in the entirety
SRS PARTNERSHIP 2,142 59,976
Barry L. Tracey 2,142 59,976
------ ----------
58,032 $1,624,896
====== ==========
</TABLE>
+ With respect to each transferee, one or more of the Additional Limited
Partners reflected on Schedule 1.
<PAGE> 1
EXHIBIT 10.58
CONTRIBUTION AGREEMENT
Between
FR ACQUISITIONS, INC.
And
THE OTHER PARTIES LISTED ON
THE SIGNATURE PAGES OF THIS AGREEMENT
(Lazarus Burman Associates)
Dated as of January 31, 1997
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING
THE MERITS AND RISKS INVOLVED. THE SECURITIES REFERENCED HEREIN
HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
Page
<C> <S> <C>
1. CONTRIBUTION.................................................................................. 1
2. CONTRIBUTION; LP UNITS; TAX MATTERS........................................................... 2
(a) General................................................................................. 2
(b) Contribution Consideration.............................................................. 2
(c) LP Units................................................................................ 2
(d) Partnership Agreement and Other Materials............................................... 5
(e) Transfer and Voting Restrictions........................................................ 5
(f) Lock-Up Period.......................................................................... 6
(g) Volume Restriction...................................................................... 6
(h) Registration Rights..................................................................... 7
(i) Partnership Liabilities; Non-Taxable Transactions....................................... 7
(j) Amendments to Partnership Agreement..................................................... 8
(k) Notice of Certain Transactions.......................................................... 8
3. CLOSING AND EARNEST MONEY..................................................................... 9
(a) Closing................................................................................. 9
(b) Earnest Money........................................................................... 9
4. CONTRIBUTOR'S PRE-CLOSING DELIVERIES.......................................................... 10
5. INSPECTION PERIOD............................................................................. 11
(a) Basic Project Inspection................................................................ 11
(b) Environmental Assessment................................................................ 12
(c) Acquiror's Undertaking.................................................................. 13
(d) Confidentiality......................................................................... 14
(e) Deletion of Projects.................................................................... 15
(f) Scope of Representations and Warranties................................................. 15
6. TITLE AND SURVEY MATTERS...................................................................... 15
(a) Conveyance of Title..................................................................... 15
(b) Title Commitments....................................................................... 15
(c) Surveys................................................................................. 16
(d) UCC Searches............................................................................ 16
(e) Defects and Cure........................................................................ 17
7. REPRESENTATIONS AND WARRANTIES................................................................ 18
7.1 Contributor and LP Unit Recipients...................................................... 18
(a) [Intentionally Omitted]................................................................. 18
(b) Title................................................................................... 18
(c) Contributor's Deliveries................................................................ 18
(d) Defaults................................................................................ 18
(e) Contracts............................................................................... 18
(f) Physical Condition...................................................................... 18
(g) Utilities............................................................................... 18
(h) Improvements............................................................................ 19
(i) Employees............................................................................... 19
(j) Compliance with Laws and Codes.......................................................... 19
(k) Litigation.............................................................................. 19
(l) Insurance............................................................................... 19
(m) Financial Information................................................................... 19
(n) Re-Zoning............................................................................... 20
(o) Personal Property....................................................................... 20
(p) Authority............................................................................... 20
(q) Real Estate Taxes....................................................................... 20
(r) Easements and Other Agreements.......................................................... 21
(s) Lease Controversies..................................................................... 21
(t) Soil Condition.......................................................................... 21
</TABLE>
<PAGE> 3
<TABLE>
<C> <S> <C>
(u) United States Person................................................................... 21
(v) Broadvet Lease and Purchase Option..................................................... 21
(w) Existing Mortgage(s)................................................................... 21
(x) Investment Representation.............................................................. 21
(y) Project No. 16......................................................................... 22
(z) Project No. 52......................................................................... 22
(aa) Patomi Realty Co. Mortgage............................................................. 22
7.2 Acquiror............................................................................... 23
(a) Existence and Power.................................................................... 23
(b) Legal Compliance....................................................................... 23
(c) Notice of Violations................................................................... 23
(d) Authorization.......................................................................... 23
(e) Pending Actions........................................................................ 24
7.3 The UPREIT............................................................................. 24
(a) Existence and Power.................................................................... 24
(b) Legal Compliance....................................................................... 24
(c) Notice of Violations................................................................... 24
(d) Partnership Agreement.................................................................. 24
(e) Authorization.......................................................................... 25
(f) Pending Actions........................................................................ 25
(g) Written Information.................................................................... 25
(h) Partnership Classification............................................................. 25
7.4 The REIT............................................................................... 26
(a) Existence and Power.................................................................... 26
(b) Legal Compliance....................................................................... 26
(c) Capitalization......................................................................... 26
(d) Notice of Violations................................................................... 26
(e) REIT Qualification..................................................................... 26
(f) Authorization.......................................................................... 26
(g) Pending Actions........................................................................ 27
(h) Written Information.................................................................... 27
8. ADDITIONAL COVENANTS......................................................................... 27
8.1 Contributor's.......................................................................... 27
(a) New Leases............................................................................. 27
(b) New Contracts.......................................................................... 27
(c) Insurance.............................................................................. 28
(d) Operation of Projects.................................................................. 28
(e) Pre-Closing Expenses................................................................... 28
(f) Good Faith............................................................................. 28
(g) No Assignment.......................................................................... 28
(h) Availability of Records................................................................ 28
(i) Change in Conditions................................................................... 29
(j) Ownership Structure.................................................................... 29
(k) Initial Public Offering................................................................ 29
(l) Existing Mortgages..................................................................... 29
(m) Remediation of Code Violations......................................................... 29
(n) Sewer Hookups.......................................................................... 29
(o) Patomi Mortgage........................................................................ 29
(p) Certain Estoppels...................................................................... 30
8.2 Acquiror's, REIT's and UPREIT's........................................................ 30
(a) Change in Conditions................................................................... 30
(b) Ownership Structure.................................................................... 30
(c) Good Faith............................................................................. 30
(d) Consent Decree......................................................................... 30
9. ENVIRONMENTAL WARRANTIES AND AGREEMENTS...................................................... 31
(a) Definitions............................................................................ 31
(b) Warranties............................................................................. 32
(c) Environmental Indemnities.............................................................. 34
(d) Remediation............................................................................ 37
</TABLE>
<PAGE> 4
<TABLE>
<C> <S> <C>
10. ADDITIONAL CONDITIONS PRECEDENT TO CLOSING................................................... 42
(a) Zoning and Subdivision................................................................. 42
(b) Flood Insurance........................................................................ 42
(c) Utilities.............................................................................. 42
(d) Assumed Indebtedness................................................................... 42
(e) Bankruptcy............................................................................. 42
(f) Representations and Warranties True.................................................... 42
(g) Covenants Performed.................................................................... 42
(h) Leases................................................................................. 42
(i) Occupancy Rate......................................................................... 42
(j) Representations and Warranties True.................................................... 43
(k) Covenants Performed.................................................................... 43
(l) Assumed Indebtedness................................................................... 43
11. LEASES-CONDITIONS PRECEDENT AND REPRESENTATIONS WITH RESPECT THERETO......................... 43
(a) Representations as to Leases........................................................... 43
(b) Estoppel Certificates from Tenants..................................................... 45
(c) Tenants................................................................................ 45
12. CLOSING DELIVERIES........................................................................... 45
12.1 Contributor............................................................................ 45
(a) Deeds.................................................................................. 46
(b) Bill of Sale........................................................................... 46
(c) General Assignment..................................................................... 46
(d) Assignment of Contracts................................................................ 46
(e) Assignment of Leases and Estoppel Certificates......................................... 46
(f) Keys................................................................................... 46
(g) Affidavit of Title and ALTA Statement.................................................. 46
(h) Letters to Tenants..................................................................... 46
(i) Title Policies......................................................................... 46
(j) Original Documents..................................................................... 47
(k) Closing Statement...................................................................... 47
(l) Plans and Specifications............................................................... 47
(m) Tax Bills.............................................................................. 47
(n) Entity Transfer Certificate............................................................ 47
(o) Rent Roll.............................................................................. 47
(p) Ownership Table........................................................................ 47
(q) Partnership Agreement.................................................................. 47
(r) Pay-Off Letters........................................................................ 47
(s) Partnership Agreement Adoption Materials............................................... 47
(t) LP Unit Schedule....................................................................... 47
(u) Registration Rights Agreement.......................................................... 47
(v) County of Suffolk Lease................................................................ 47
(w) JC Penney Lease/Project No. 57......................................................... 47
(x) Closing Certificate.................................................................... 48
(y) Zoning Certifications.................................................................. 48
(z) Satisfaction of Certain Obligations.................................................... 48
(aa) Other.................................................................................. 48
12.2 Acquiror............................................................................... 48
(a) Registration Certificate............................................................... 48
(b) Partnership Agreement.................................................................. 48
(c) Amendment.............................................................................. 48
(d) Organizational Documents............................................................... 48
(e) Assignment of Contracts................................................................ 48
(f) Assignment of Leases................................................................... 48
(g) Contract Notices....................................................................... 48
(h) Closing Statement...................................................................... 48
(i) Registration Rights Agreement.......................................................... 48
(j) LP Unit Schedule....................................................................... 49
(k) Assignment............................................................................. 49
(l) Certain Acknowledgements............................................................... 49
(m) Consent to Pledge...................................................................... 49
</TABLE>
<PAGE> 5
<TABLE>
<C> <S> <C>
(n) Tenant Letters......................................................................... 49
(o) Certificate of Acquiror, UPREIT and REIT............................................... 49
(p) Opinion................................................................................ 49
(q) Assumption............................................................................. 49
(r) Employment Agreement................................................................... 49
(s) Pledge Agreements...................................................................... 49
(t) Certificate of UPREIT.................................................................. 50
(u) Other.................................................................................. 50
13. PRORATIONS AND ADJUSTMENTS................................................................... 50
14. CLOSING EXPENSES............................................................................. 51
15. DESTRUCTION, LOSS OR DIMINUTION OF PROJECTS.................................................. 52
16. DEFAULT...................................................................................... 53
(a) Willful Failure to Close by Contributor................................................ 53
(b) Other Defaults by Contributor.......................................................... 53
(c) Contributor's Breach of Representations Discovered After Closing....................... 54
(d) Intervening Events..................................................................... 54
(e) Default by Acquiror and Failure of Contributor's Condition Precedent................... 55
(f) Breach of Representations by Acquiror, the REIT or the UPREIT
Discovered After Closing............................................................... 55
17. SUCCESSORS AND ASSIGNS....................................................................... 55
18. DISPUTE RESOLUTION........................................................................... 55
(a) Preliminary Dispute Resolution Through Mediation....................................... 55
(b) Arbitration As Optional Means Of Resolution............................................ 56
19. NOTICES...................................................................................... 57
20. BENEFIT...................................................................................... 58
21. LIMITATION OF LIABILITY...................................................................... 58
22. BROKERAGE.................................................................................... 59
23. REASONABLE EFFORTS........................................................................... 59
24. TENANTS IN DEFAULT........................................................................... 59
(a) Applicability of Provision............................................................. 59
(b) Acquiror's Rights...................................................................... 59
25. NON-COMPETE AND NON-SOLICITATION............................................................. 60
26. PRE-CLOSING LEASING.......................................................................... 61
(a) Acquiror's Consent..................................................................... 61
(b) Payment of Tenant Improvement Costs and Brokerage Commission........................... 62
(c) Defaults by Existing Tenants........................................................... 62
(d) Survival............................................................................... 62
27. SENIOR REGIONAL DIRECTOR POSITION AND EMPLOYMENT CONTRACT.................................... 62
28. CONTRIBUTOR'S ORGANIZATION AND STAFF......................................................... 63
29. MANAGEMENT OF RETAINED PROPERTIES............................................................ 63
30. COSMETIC IMPROVEMENTS AND DEFERRED MAINTENANCE ESCROW........................................ 64
31. CAPITAL IMPROVEMENTS ESCROW.................................................................. 65
</TABLE>
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<TABLE>
<C> <S> <C>
32. MAXIMUM DELETION............................................................................. 66
(a) Contributor's Right of Termination..................................................... 66
(b) Acquiror's Right of Termination........................................................ 66
33. OPTION PROJECTS.............................................................................. 66
(a) Trigger Date, and Trigger Notice....................................................... 66
(b) Option Exercise........................................................................ 67
(c) Project Numbers 26, 28 and 29.......................................................... 67
(d) Closing................................................................................ 67
34. PREPAYMENT OF ASSUMED INDEBTEDNESS; REFINANCING.............................................. 69
35. REIMBURSEMENT FOR CERTAIN TAX INCREASES BASED ON HOLBROOK REMEDIATION........................ 69
36. ADDITIONAL TENANT MATTERS.................................................................... 70
(a) Exercise of Termination Options........................................................ 70
(b) Purchase Options....................................................................... 71
(c) Financially Questionable Tenants....................................................... 71
(d) Tenants' Rights of First Refusal....................................................... 71
37. ONGOING ROOF REPAIR.......................................................................... 71
38. MISCELLANEOUS................................................................................ 72
(a) Entire Agreement....................................................................... 72
(b) Time of the Essence.................................................................... 72
(c) Conditions Precedent................................................................... 72
(d) Construction........................................................................... 72
(e) Governing Law.......................................................................... 72
(f) Partial Invalidity..................................................................... 72
(g) Expenses............................................................................... 72
(h) Certain Securities Matters............................................................. 73
(i) Counterparts........................................................................... 73
(j) Calculation of Time Periods............................................................ 73
(k) Exclusive Jurisdiction................................................................. 73
39. PROJECT NUMBER 56............................................................................ 73
40. CODE COMPLIANCE/ADA.......................................................................... 74
41. CERTAIN ADDITIONAL CLOSING PAYMENTS AND ESCROWS.............................................. 74
42. ENGINEERING MATTERS AT PROJECT NO. 24........................................................ 75
43. INDEMNITY WITH RESPECT TO CERTAIN ESTOPPEL CERTIFICATES...................................... 76
</TABLE>
<PAGE> 7
THIS CONTRIBUTION AGREEMENT is made and entered into as of this 31st day
of January, 1997 (the "CONTRACT DATE"), by and between the parties reflected on
the signature pages hereto as "Contributor and Other LP Unit Recipients," which
parties include, but are not limited to, each of the ownership entities listed
on Exhibit A attached hereto (such ownership entities, individually and
collectively, as appropriate, "CONTRIBUTOR"), and FR ACQUISITIONS, INC., a
Maryland corporation ("ACQUIROR").
1. CONTRIBUTION. It shall be a Contributor's Condition Precedent (as
defined below) that, prior to Closing (as defined below), Acquiror shall have
assigned its entire right, title and interest in, to and under this Agreement
to First Industrial, L.P., a Delaware limited partnership (the "UPREIT"), and
the UPREIT shall have assumed all of Acquiror's right, title, interest,
obligations and liabilities under this Agreement (the "ASSIGNMENT").
Thereafter and at Closing, Contributor shall contribute and convey to the
UPREIT, and the UPREIT shall accept and assume from Contributor, for the
Contribution Consideration (as defined below), and pursuant to the terms and
subject to the conditions set forth in this Agreement, all of Contributor's
right, title and interest in the Projects (as defined below), which Projects
are identified on Exhibit A attached hereto and include those certain buildings
(the "BUILDINGS"), each containing that approximate number of net rentable
square feet specified on Exhibit A. The conveyance of the Projects at Closing
shall, however, be exclusive of the Option Projects, as defined in Paragraph
33, and Project No. 56 (as discussed in Paragraph 39). The contribution and
conveyance of such Buildings and the Projects of which they are a part shall be
made subject to the Assumed Indebtedness (as defined below), which shall be
repaid by the UPREIT, in full, on the Closing Date. The Buildings are leased
by Contributor to Tenants (as defined below) for
industrial/warehouse/distribution purposes. Each of the Buildings is commonly
known by the respective street address in the cities, counties and states
described on Exhibit A. For purposes of this Agreement:
(a) The term "ASSUMED INDEBTEDNESS" shall be deemed to mean all of
the indebtedness of Contributor described on Exhibit A-2 attached hereto;
(b) The term "PROJECTS" shall be deemed to mean, on a collective
basis: (i) all of the parcels of land described in Exhibit A-1 attached
hereto (collectively, the "LAND"), together with all rights, easements and
interests appurtenant thereto, including, but not limited to, all right,
title and interest of Contributor in any streets or other public ways
adjacent to the Land and any water or mineral rights owned by, or leased
to, Contributor; (ii) all improvements located on the Land, including, but
not limited to, the Buildings, and all other structures, systems, and
utilities associated with, and utilized by, Contributor in the ownership
and operation of the Buildings (all such improvements being collectively
referred to herein as the "IMPROVEMENTS"), but excluding improvements, if
any, owned by Tenants and subtenants of the Buildings; (iii) all tangible
personal property owned by Contributor and (x) located on or in the Land
or Improvements, or (y) used in connection with the operation and
maintenance of any or all of the Projects (collectively, the "PERSONAL
PROPERTY"), including, without limitation, all (if any) tangible personal
property listed (as being included within the subject transaction) on
Exhibit B attached hereto, but expressly excluding therefrom those
excluded items as expressly set forth on Exhibit B (the "EXCLUDED PERSONAL
PROPERTY"); (iv) all building materials, supplies, hardware, carpeting and
other inventory owned by Contributor and maintained exclusively in
connection with Contributor's ownership and operation of the Land and/or
Improvements (collectively, the "INVENTORY"); (v) Contributor's interest
in all trademarks, tradenames, development rights and entitlements and
other intangible property used in connection with the foregoing
(collectively, the "INTANGIBLE PERSONAL PROPERTY"), but expressly
excluding therefrom those excluded items as expressly set forth on Exhibit
B (the "EXCLUDED INTANGIBLE PROPERTY"); and (vi) Contributor's interest in
all leases and other agreements to occupy all or any portion of the Land
and/or Improvements in effect on the Contract Date (the "EXISTING LEASES")
or into which Contributor enters prior to Closing, but pursuant to the
express terms of this Agreement (the "ADDITIONAL LEASES" and, collectively
with the Existing Leases, the "LEASES"). As noted above, however, for
purposes of (1) the Closing, (2) the representations and warranties
contained herein and (3) the schedules to be attached hereto, the term,
"Projects" shall exclude the Option Projects and Project No. 56; and if
and to the extent that Acquiror acquires the Option Projects and Project
No. 56, such acquisition shall occur pursuant to the terms of Paragraphs
33 or 39, as the case may be; and
<PAGE> 8
(c) The term "PROJECT" shall mean a specific Building, together with
the specific parcel of Land associated with such Building, or on which
such Building is situated, in each case together with (i) all other
Improvements located on such Land; (ii) all Personal Property and
Inventory located on or used in connection with such Land and/or Building
or other Improvements located on that Land; (iii) Contributor's interest
in all Intangible Property used in connection with that Land; and (iv)
Contributor's interest in all Leases of such Land and/or Building or other
Improvements.
2. CONTRIBUTION; LP UNITS; TAX MATTERS.
(a) General. The UPREIT's sole general partner is First Industrial
Realty Trust, Inc., a Maryland corporation (the "REIT"). The REIT is a
publicly-traded real estate investment trust. Prior to the Assignment,
Acquiror shall not constitute the agent of the UPREIT hereunder. As noted
above, the consummation of the Assignment shall be a condition precedent
to the Contributor's obligation to close, as set forth in this Agreement
("CONTRIBUTOR'S CONDITION PRECEDENT").
(b) Contribution Consideration. The consideration to be paid to
Contributor by the UPREIT for all of the Projects (other than the Option
Projects, for which the consideration shall be determined pursuant to
Paragraph 33, and Project No. 56, for which the consideration shall be
determined pursuant to Paragraph 39) [the "CONTRIBUTION CONSIDERATION"]
shall consist of that number of LP Units (as defined below) having an
aggregate value, calculated as provided in Subparagraph 2(c)(iii) below,
equal to (the "TOTAL LP UNIT AMOUNT"): (A) the sum of the "ALLOCATED
AMOUNTS" assigned to all of the Projects, as provided on Exhibit A-2
attached hereto, as Exhibit A-2 may be modified pursuant to this
Subparagraph 2(b); minus (B) the sum of the Assumed Indebtedness with
respect to all Projects, as such amount may be modified as reflected in
the Final Exhibit A-2, as defined in and delivered pursuant to this
Subparagraph 2(b); minus (C) Contributor's Closing Costs (as defined in
Paragraph 14 below); minus (D) any prorations described in Paragraph 13
below ("PRORATIONS") and credited, as of the Closing Date (as defined
below), to Acquiror; plus (E) any Prorations credited, as of the Closing
Date, to Contributor; minus (F) any other adjustments described in this
Agreement ("ADJUSTMENTS"), including, without limitation, those pursuant
to Paragraphs 22 and 34 below, occurring on or prior to the Closing Date
in favor of Acquiror; and plus (G) any Adjustments occurring on or prior
to the Closing Date in favor of the Contributor, including, without
limitation, those pursuant to Paragraphs 26 and 34 below. The parties
acknowledge and agree that the form of Exhibit A-2 attached hereto as of
the date of this Agreement (the "PRELIMINARY EXHIBIT A-2") is for
illustration and planning purposes only. It shall be an Acquiror's
Condition Precedent (as defined below) and a Contributor's Condition
Precedent that the UPREIT and Contributor prepare and reasonably agree
upon an updated Exhibit A-2 (the "FINAL EXHIBIT A-2") to be substituted
for the Preliminary Exhibit A-2 as of and on the Closing Date. (The Final
Exhibit A-2 may be incorporated into the closing statement required to be
delivered at Closing.) If the above-described calculation of Contribution
Consideration would result in a fractional number of LP Units to be
delivered to Contributor, the UPREIT shall round that fraction up or down,
as the case may be, to the nearest whole number of LP Units. The Projects
are to be contributed to the UPREIT subject to the corresponding items of
Assumed Indebtedness, which, subject to Paragraph 34 below, will be
assumed by the UPREIT and paid off, in full, simultaneously with the
occurrence of the Closing. No portion of the Contribution Consideration
shall be paid directly to Contributor in cash. Provided that all
conditions precedent to Acquiror's obligations to close as set forth in
this Agreement (collectively, "ACQUIROR'S CONDITIONS PRECEDENT") have been
satisfied and fulfilled, or waived in writing by Acquiror, the
Contribution Consideration shall be paid to Contributor at Closing
pursuant to Subparagraph 2(c) below.
(c) LP Units.
(i) The Total LP Unit Amount shall be paid by the UPREIT's
delivery of Partnership Units (as that term is defined in the
Partnership Agreement, as defined below) in the UPREIT (the "LP
UNITS"). The Total LP Unit Amount and the allocation thereof shall
be set forth in the LP Unit Schedule (as defined below). The LP
Units shall be redeemable for shares of common stock of the REIT
("STOCK")
2
<PAGE> 9
or cash (or a combination thereof) in accordance with the redemption
procedures described in the Partnership Agreement. Contributor
acknowledges that the LP Units are not certificated and that,
therefore, the issuance of the LP Units shall be evidenced by the
execution and delivery of an amendment to the Partnership Agreement,
which amendment shall be executed and delivered by the REIT at
Closing (the "AMENDMENT").
(ii) Contributor hereby directs the UPREIT to deliver to
Contributor, at Closing, LP Units issued in the names of, and for
distribution to, those LP Unit Recipients set forth on Exhibit A-3
attached hereto (the "LP UNIT RECIPIENTS"). Each LP Unit Recipient
shall receive, with respect to the respective Project(s) in which it
has an interest as reflected on Exhibit A-3, that number of LP Units
(subject to appropriate rounding to eliminate fractional LP Units) as
shall be set forth on the updated Exhibit A-3 to be prepared by
Acquiror and to be mutually and reasonably approved by Contributor
and the UPREIT at Closing (the "UPDATED EXHIBIT A-3" or the "LP UNIT
SCHEDULE"). (The Updated Exhibit A-3/LP Unit Schedule may be
incorporated into the closing statement required to be delivered at
Closing.) With respect to each Project, such number shall be
calculated by multiplying (A) the Total LP Unit Amount, times (B) the
percentage of the Total LP Unit Amount allocated to such Project at
Closing, times (C) the "Ownership Percentage in Subject Project" of
each LP Unit Recipient as reflected on Exhibit A-3.
(iii) For purposes of determining the number of LP Units to be
delivered in satisfaction of payment of the Total LP Unit Amount, the
Total LP Unit Amount shall be divided by a "UNIT PRICE," which shall
be equal to the weighted average (by daily trading volume) of the
closing price of shares of Stock for the forty-five (45) trading days
preceding, but excluding, the five (5) business days prior to the
Closing Date (the "CALCULATED PRICE"). The LP Unit Schedule shall
reflect the Unit Price. Notwithstanding anything to the contrary in
this Subparagraph 2(c)(iii): (A) in the event the Calculated Price
is calculated to be in excess of $30.00, the Unit Price shall be
deemed to be $30.00; and (B) in the event the Calculated Price is
calculated to be less than $22.00, the Unit Price shall be deemed to
be $22.00. In the event that, on the Closing Date, Contributor and
Acquiror fail to agree upon the LP Unit Schedule and Acquiror's
corresponding calculation (as contemplated above) of the weighted
average of the closing price of shares of Stock, then the Closing
shall be postponed until such calculation and determination of the
number of LP Units to be delivered at the rescheduled Closing (the
"INDEPENDENT DETERMINATION") shall be made by KPMG Peat Marwick LLP
(the "INDEPENDENT FIRM"); provided, however, that if KPMG Peat
Marwick LLP, as of the date on which such calculation is required to
be made, represents any or all of Contributor, Acquiror or any or all
of their respective affiliates, then the Independent Firm shall be
another so-called "Big Six" accounting firm mutually and reasonably
agreed to by Coopers & Lybrand LLP, on behalf of Acquiror, and Ernst
& Young LLP, on behalf of Contributor. The Independent Determination
shall be conclusive and binding on Contributor and Acquiror, and each
of Contributor and Acquiror shall pay one-half of the fees imposed by
the Independent Firm in connection with the Independent
Determination.
(iv) Contributor has delivered to Acquiror, and has caused its
partners, shareholders, members (including, without limitation, those
partners, shareholders and members that are LP Unit Recipients) and
any other LP Unit Recipient to deliver to Acquiror, or to any other
party designated by Acquiror, a completed questionnaire and
representation letter (in substantially the form set forth in Exhibit
T attached hereto, the "INVESTOR MATERIALS") [signed by a custodian
under the New York Uniform Gift to Minors Act ("NYUGMA") where
appropriate, for those LP Unit Recipients who are minors under New
York law] providing, among other things, information concerning
Contributor's and each of its partners' and shareholders' status as
an accredited investor ("ACCREDITED INVESTOR"), as such term is
defined in Regulation D promulgated under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), and shall provide or cause to be
provided to Acquiror, or to any other party designated by Acquiror,
such other information and documentation as may reasonably be
requested by Acquiror in furtherance of the
3
<PAGE> 10
issuance of the LP Units as contemplated hereby. Notwithstanding
anything contained in this Agreement to the contrary, in the event
that, in the written opinion of securities or tax counsel for
Acquiror, as the case may be, any such person or entity is not
considered an Accredited Investor, the proposed issuance of LP Units
hereunder might not qualify for the exemption from registration
provided by Section 4(2) of the Securities Act, or the proposed
issuance of LP Units hereunder would violate any applicable federal
or state securities laws, rules or regulations, or agreements to
which the REIT or the UPREIT is privy, or any tax related or other
rules, agreements or constraints applicable to Acquiror, the REIT or
the UPREIT, Acquiror shall so advise Contributor, in writing (the
"REGULATORY VIOLATION NOTICE") within five (5) business days after
such determination is made. The interest of each and every person or
other entity with respect to which Acquiror delivers a Regulatory
Violation Notice shall be redeemed by the appropriate Contributor
prior to the Closing Date. In the event of any such redemption, the
Updated Exhibit A-3 shall reflect the updated list of LP Unit
Recipients and the revised ownership percentages in the appropriate
Projects resulting from such redemption.
(v) Contributor hereby covenants and agrees that it shall
deliver or shall cause each of its partners, shareholders, members
and any other LP Unit Recipient to deliver to Acquiror, or to any
other party designated by Acquiror, any documentation that may be
required under the Partnership Agreement or any charter document of
the REIT, and such other information and documentation as may
reasonably be requested by Acquiror, at such time as any LP Units are
redeemed for shares of Stock ("CONVERSION SHARES"). The preceding
covenant shall survive the Closing and shall not merge into any of
the conveyancing documentation delivered at Closing.
(vi) The UPREIT, the REIT and the Contributor intend to and
shall treat the transfer of the Projects in exchange for LP Units
(the "EXCHANGE") as a partnership contribution pursuant to Section
721 of the Internal Revenue Code of 1986, as amended (the "CODE").
The UPREIT and the REIT shall cooperate in all reasonable respects
with Contributor to effectuate such Exchange; provided, however,
that:
(A) The Closing shall not be extended or delayed by reason
of such Exchange, unless Acquiror has breached its obligations
to Contributor under this Agreement;
(B) None of Acquiror, the UPREIT nor the REIT shall be
required to incur any additional extraordinary (as opposed to a
normal, customary and recurring) cost or expense primarily as a
result of such Exchange, other than the cost of Acquiror's
counsel in connection with the preparation of this Agreement.
Notwithstanding anything to the contrary in the foregoing
sentence, the UPREIT and the REIT shall be responsible for costs
associated with any IRS audit made directly of either or both of
the UPREIT and the REIT (as opposed to an audit that is
ancillary to an audit made of any or all of the entities
comprising the Contributor). Contributor hereby covenants and
agrees that it shall, forthwith on demand, reimburse the UPREIT
or the REIT for any additional extraordinary cost or expense (as
opposed to a normal, customary and recurring cost or expense,
such as the analysis or computation related to the manner in
which depreciation and built-in gain are allocated amongst the
LP Unit Recipients), including, but not limited to, reasonable
attorneys' fees, incurred by either or both of the UPREIT and
the REIT as a result of the characterization of the contribution
of the Projects pursuant to this Agreement as a partnership
contribution pursuant to Section 721 of the Code, or which
additional extraordinary cost or expense is or may be otherwise
directly attributable to the Exchange;
(C) Subject to the UPREIT's and the REIT's performance and
fulfillment in all material respects of the express covenants
and conditions contained in this Agreement, none of Acquiror,
the UPREIT or the REIT
4
<PAGE> 11
warrant, nor shall any of them be responsible for, the federal,
state or local tax consequences to any or all of Contributor,
any or all of Contributor's partners and any or all of the LP
Unit Recipients of the transactions contemplated by this
Agreement (including, without limitation, the allocation of
losses and liabilities under the Code); and
(D) Except as otherwise expressly set forth in this
Agreement and in the documents executed and delivered by
Acquiror at the Closing, none of Acquiror, the UPREIT nor the
REIT shall incur any liability under any document or agreement
required to be executed or delivered in connection with such
Exchange.
The provisions of this Subparagraph 2(c)(vi) shall survive the Closing and
shall not merge into any conveyancing documents delivered at Closing.
(d) Partnership Agreement and Other Materials. For purposes hereof,
the term "PARTNERSHIP AGREEMENT" shall mean the UPREIT's Second Amended
and Restated Limited Partnership Agreement dated as of June 30, 1994, as
amended, a true and complete copy of which Partnership Agreement has been
furnished by Acquiror to Contributor prior to the Contract Date.
Contributor hereby acknowledges and agrees that the ownership of LP Units
by Contributor and its partners and their respective rights and
obligations as limited partners of the UPREIT (including, without
limitation, their right to transfer, encumber, pledge and exchange LP
Units) shall be subject to all of the express limitations, terms,
provisions and restrictions set forth herein and in the Partnership
Agreement. In that regard, Contributor hereby covenants and agrees that,
at Closing, it shall execute any and all documentation reasonably required
by the UPREIT and the REIT to formally memorialize the foregoing
(collectively, the "PARTNERSHIP AGREEMENT ADOPTION MATERIALS").
Contributor further acknowledges that it and its partners have received
and reviewed, prior to the Contract Date, the REIT's Prospectus
Supplement, dated October 21, 1996, and the Prospectus supplemented
thereby dated October 4, 1996 (collectively, the "PROSPECTUS"), which
Prospectus describes the risk factors associated with an investment in the
REIT. Contributor acknowledges that it and its partners have received and
reviewed, prior to the Contract Date, the REIT's Annual Report on Form
10-K for the year ended December 31, 1995, the REIT's Proxy Statement
soliciting proxy materials in connection with the REIT's 1996 annual
meeting of stockholders and the REIT's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1996, June 30, 1996, and September 30, 1996,
and have otherwise had an opportunity to conduct a due diligence review of
the affairs of the UPREIT and the REIT.
(e) Transfer and Voting Restrictions. Each LP Unit Recipient agrees
that it may only sell, transfer, assign, pledge or encumber, or otherwise
convey any or all of the LP Units delivered to it in connection with this
transaction and, if applicable, any Conversion Shares (any of the
foregoing by any LP Unit Recipient, a "TRANSFER") in strict compliance
with this Agreement, the Partnership Agreement, the charter documents of
the REIT, the registration and other provisions of the Securities Act (and
the rules promulgated thereunder), any state securities laws, the rules of
the New York Stock Exchange and the Registration Rights Agreement, in each
case as may be applicable. In the event that the number of Conversion
Shares held by the LP Unit Recipients or their respective successors and
assigns, at any time, or from time to time, exceeds, in the aggregate,
1,252,640 shares of Stock (as adjusted, from time to time, by any dividend
payable in Stock, any stock split, or any reclassification affecting the
Stock) [the "THRESHOLD AMOUNT"] the parties agree that those Conversion
Shares in excess of the Threshold Amount shall be subject to a voting
trust agreement (the "VOTING TRUST AGREEMENT"), the terms and provisions
of which Voting Trust Agreement shall be negotiated in good faith by the
parties promptly upon the parties' determination that the Contributor
shall hold, in the aggregate, Conversion Shares in excess of the Threshold
Amount. It shall be a condition to the redemption of LP Units that would
result in the issuance of Conversion Shares in excess of the Threshold
Amount that the Voting Trust Agreement be executed by the LP Unit
Recipients (or their respective successors and assigns, as the case may
be). The Voting Trust Agreement shall provide, among other terms
negotiated (reasonably and in good faith) by the REIT and the LP Unit
Recipients (or their respective successors and assigns, as the case may
be), that: (i) the chief executive officer of the REIT shall be the
5
<PAGE> 12
trustee of the voting trust established pursuant to the Voting Trust
Agreement (the "VOTING TRUST"), and shall have complete discretion to vote
those Conversion Shares (subject to the Voting Trust) that exceed the
Threshold Amount; (ii) the Voting Trust shall be governed by, and have the
maximum duration permitted under, Maryland law; and (iii) the Conversion
Shares of each LP Unit Recipient with Conversion Shares shall be subject
to the Voting Trust on a pro rata basis (based on the number of Conversion
Shares held by LP Unit Recipients at any time a Voting Trust is created)
unless the applicable parties otherwise agree to an alternative mechanism
for the determination of which Conversion Shares held by which LP Unit
Recipients shall be subject to the Voting Trust. In addition to the
possible Voting Trust, the total amount of LP Units held, from time to
time, by the LP Unit Recipients or any successors or assigns ("LAZARUS
BURMAN UNITS") shall be subject to a voting agreement, which will be
incorporated into the Amendment and shall be in the form of Exhibit U
attached hereto (the "UNIT VOTING AGREEMENT"). The REIT shall not consent
to any amendment to any portion of the Partnership Agreement that sets
forth any provisions of the Unit Voting Agreement without the prior
written consent of the holders of a majority of the then-outstanding
Lazarus Burman Units, which consent shall not be unreasonably withheld or
delayed. The provisions of this Subparagraph 2(e) shall survive the
Closing and shall not merge into any conveyancing documents delivered at
Closing.
(f) Lock-Up Period. The LP Unit Recipients agree that for a period
of one year following the Closing (the "LOCK-UP PERIOD") and except as
otherwise expressly provided in this Subparagraph (f), they may not
Transfer any or all of the LP Units delivered to the LP Unit Recipients in
connection with this transaction. Notwithstanding the foregoing
limitations, prior to the expiration of the Lock-Up Period, the LP Unit
Recipients may (in each case, in accordance with the Partnership
Agreement) each (i) pledge or encumber (to or for the benefit of an
institutional lender, which, in addition to banks, shall include, without
limitation, securities firms, broker/dealers and other entities engaged in
the business of commercial lending) a maximum of fifty percent (50.0%) of
those LP Units issued on the Closing Date to the LP Unit Recipient in
question (and that are not otherwise pledged by such LP Unit Recipient to
the UPREIT or the REIT under the Holbrook Pledge Agreement and the JCP
Pledge Agreement, as those terms are defined below); provided, however,
that any such pledge or encumbrance shall be expressly subject to the
terms and provisions of Subparagraph 2(e) above; and provided, further,
that none of the LP Units pledged to the UPREIT or the REIT under the
Holbrook Pledge Agreement and the JCP Pledge Agreement may be pledged by
any LP Unit Recipient pursuant to this clause (i); (ii) redeem any or all
of their respective LP Units; provided, however, that (x) notwithstanding
such redemption, no LP Unit Recipient may Transfer any of its Conversion
Shares during the Lock-Up Period, and if and to the extent that, under the
terms of this Agreement or any document delivered at Closing, an LP Unit
Recipient pledges any or all of its LP Units to the UPREIT or the REIT,
then as a condition precedent to the redemption of such pledged LP Units,
the LP Unit Recipient shall instead pledge to the UPREIT or the REIT, as
the case may be, those Conversion Shares issued to such LP Unit Recipient
upon the redemption of its pledged LP Units (which pledge of Conversion
Shares shall be substantially comparable to the pledge of the LP Units);
and (iii) Transfer any or all of their LP Units in any transaction
described in Schedule 2(g); provided, however, that if and to the extent
that any transferring LP Unit Recipient has, pursuant to the terms of this
Agreement or any other document delivered at Closing, pledged any or all
of its LP Units to the UPREIT or the REIT, as the case may be, then as a
condition precedent to the Transfer of any of such pledged LP Units, the
transferee LP Unit Recipient shall instead pledge to the UPREIT or the
REIT, as the case may be, those LP Units that are the subject of such
Transfer. The provisions of this Subparagraph 2(f) shall survive the
Closing and shall not merge into any conveyancing documents delivered at
Closing.
(g) Volume Restriction. Subject to the Lock-Up Period, the LP Unit
Recipients agree that, collectively, they shall not (i) during the first
calendar year after the Closing Date, effect a Transfer or series of
Transfers involving an aggregate number of Conversion Shares that exceeds
one-third (1/3) of the number of shares of Stock for which the Lazarus
Burman Units outstanding immediately following the Closing could be
redeemed; (ii) during the second calendar year after the Closing Date,
effect a Transfer or series of Transfers involving an aggregate number of
Conversion Shares that exceeds
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<PAGE> 13
two-thirds (2/3) of the number of shares of Stock for which the Lazarus
Burman Units outstanding immediately following the Closing could be
redeemed; and (iii) during any 10-trading day period, effect a Transfer or
series of Transfers involving an aggregate number of Conversion Shares
that exceeds 30% of the average daily trading volume of the Stock during
the 30 trading days prior to the first day of any such 10-trading day
period. The volume restrictions set forth in this Subparagraph 2(g) shall
be inapplicable to any Conversion Shares sold in (A) an underwritten
offering or (B) those transactions described in Schedule 2(g) attached
hereto. The provisions of this Subparagraph 2(g) shall survive the
Closing and shall not be merged into any of the conveyancing documents
delivered at Closing.
(h) Registration Rights. At Closing, the REIT shall enter into a
"REGISTRATION RIGHTS AGREEMENT" (which for all purposes hereunder shall
include the supplement thereto) substantially in the form of Exhibit S
attached hereto, pursuant to which the REIT shall agree to register the
sale of Conversion Shares.
(i) Partnership Liabilities; Non-Taxable Transactions.
(i) Subject to the last sentence of this Subparagraph 2(i)(i)
and the provisions of Subparagraph 2(i)(ii) hereof, for a period of
ten years following the Closing Date (the "NON-TAXABLE DISPOSITION
PERIOD"), the REIT and the UPREIT shall use their good faith,
reasonable and diligent efforts:
(A) to cause any sale or other voluntary disposition (other
than through a deed in lieu of foreclosure, a foreclosure
action, or an act of eminent domain) of a Project to qualify for
non-recognition of gain under the Code, whether by means of
exchanges contemplated under Code Sections 351, 354, 355, 368,
721, 1031, 1033, or otherwise; provided, however, that the
foregoing shall not require the REIT and UPREIT, in their sole
and absolute discretion, to sell, or otherwise dispose of, or
prevent the REIT and UPREIT, in their sole and absolute
discretion, from selling or otherwise disposing of, a Project in
transactions which would result in a loss for federal income tax
purposes;
(B) to maintain, on a continuous basis, an amount of
indebtedness for which the Contributor (including, for this
purpose, its partners or transferees, collectively) bears the
"economic risk of loss" within the meaning of Treasury
Regulation Section 1.752-2(a), in an amount equal to $27,000,000
(the "MAXIMUM AMOUNT");
(C) to avoid a distribution of property that would cause
Contributor to recognize income or gain pursuant to the
provisions of either or both of Code Sections 704(c)(1)(B) and
737;
(D) to avoid a termination of the UPREIT pursuant to the
provisions of Code Section 708(b)(1)(B); and
(E) as long as Contributor (including, for this purpose,
its partners or transferees, collectively) remains as a partner
of the UPREIT, the REIT and/or UPREIT agree to utilize the
"traditional method," without curative allocations (as provided
for in the Partnership Agreement), of allocating gain and
depreciation under Code Section 704(c) for the Projects.
In all events, the Non-Taxable Disposition Period shall terminate,
and the provisions of this Subparagraph 2(i)(i) shall be of no
further force or effect, as of the earlier to occur of (a) the
failure, for any reason, of any or all of Jan Burman, Jerome Lazarus,
members of their respective immediate families (spouse and children)
[collectively referred to as the "PROTECTED PARTIES"], or entities in
which the Protected Parties own a 10% or greater beneficial interest
(whether by vote or value, including without limitation, through a
trust), to own, in the aggregate, 10% or more of the Lazarus Burman
Units issued on the Closing Date, or (b) with respect to the
requirements of Subparagraph 2(i)(i)(A) only, an amendment or other
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<PAGE> 14
material revision to Code Section 1031 or the Treasury Regulations
promulgated thereunder, which amendment or revision materially and
adversely alters the mechanics for implementing a "like-kind"
exchange of real estate pursuant to such provisions.
(ii) Notwithstanding the above provisions of this Subparagraph
2(i), the obligation of either or both of the REIT and the UPREIT to
undertake those activities set forth in Subparagraphs 2(i)(i)(A)-(E)
hereof shall, in all events, be subject to, and otherwise interpreted
consistent with, the REIT's fiduciary and statutory obligations to
all partners (both present and future) in the UPREIT, and to its
stockholders, both present and future. Notwithstanding the preceding
sentence, however, the UPREIT and/or REIT shall use every reasonable
effort (but shall not be required) to engage in a non-taxable
disposition of a Project. Further, for purposes of this Subparagraph
2(i), and except as otherwise provided in Subparagraph 2(k), the LP
Unit Recipients agree that neither the REIT nor the UPREIT shall be
required to obtain any approval, consent or waiver from, or take
direction from, or otherwise communicate with, any person or
representative or entity concerning a particular Project, other than
those certain persons designated on Schedule 2(i)(ii) attached hereto
(and at the addresses set forth therein) with respect to such Project
(the "PROJECT CONTACTS"). Notification of the Project Contacts for a
Project shall constitute sufficient and effective notification to all
LP Unit Recipients associated with that Project, and written
communications from the Project Contacts for a Project shall bind all
LP Unit Recipients associated with, related to, or having an interest
in, that Project.
The provisions of this Subparagraph 2(i) shall survive the Closing
and shall not merge into any conveyancing documents delivered at Closing.
(j) Amendments to Partnership Agreement. It shall be a Contributor's
Condition Precedent that the Amendment be duly authorized and validly
executed on the Closing Date, and provide for the matters set forth in
Exhibit P hereto.
(k) Notice of Certain Transactions.
(i) In the event, on or before the tenth anniversary of the
Closing Date, of (each, a "TAX-RELATED EVENT"): (A) a post-Closing
sale of any Project; (B) a reduction in the amount of indebtedness to
be maintained pursuant to Subparagraph 2(i)(i)(B) to an amount that
is less than the Maximum Amount (other than by regularly or other
scheduled principal payments); or (C) an attempt by the UPREIT to
effect a Project transfer as permitted by Subparagraph 2(i)(i)(A)
above occurs, but the terms of Section 1031 of the Code or the
regulations promulgated thereunder have changed such that the
mechanics for implementing a tax-deferred exchange of real estate are
materially and adversely altered (whether with respect to the timing
required to identify and close upon an exchange property or
otherwise) from those mechanics in place as of the Contract Date,
and, in any case, provided that the obligations of the REIT and the
UPREIT under Subparagraph 2(i) shall not have otherwise terminated by
the terms of such Subparagraph, the UPREIT shall give written notice
of such Tax-Related Event (a "TAX-RELATED NOTICE") to the relevant
Project Contacts for the subject Project as soon as practicable after
the occurrence of such event becomes reasonably likely, or, if later,
on the date on which the UPREIT is, in the reasonable judgment of its
securities counsel, legally permitted, under applicable federal and
state securities laws and regulations, and the rules and regulations
of the New York Stock Exchange, to disseminate such Tax-Related
Notice to the Project Contacts.
(ii) Upon their receipt of a Tax-Related Notice, the Project
Contacts shall designate a single spokesperson from among them to
represent the LP Unit Recipients in connection with the Tax-Related
Event that triggered the delivery of the such Tax-Related Notice (the
"SPOKESPERSON"). The LP Unit Recipients hereby irrevocably appoint
any Spokesperson so designated as its attorney-in-fact, with full
power to grant in the name of and on behalf of such LP Unit
Recipient, any and all consents, waivers, approvals, and to execute
any and all documents required or
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<PAGE> 15
appropriate to be executed, whether with respect to this Agreement,
the Partnership Agreement or otherwise; provided, however, that such
attorney-in-fact may only act within the scope necessitated by the
event giving rise to the appointment of such Spokesperson. The
UPREIT and the REIT shall be entitled to rely on the first written
notice either of them receives that designates a Spokesperson with
respect to a given Tax-Related Event, and shall be under no
obligation to deal with any person other than the Spokesperson so
designated in connection with the subject Tax-Related Event as it
relates to the LP Unit Recipients. The UPREIT and the REIT shall have
no obligation to deal with any person or entity whatsoever in
connection with a Tax-Related Event unless and until a Spokesperson
is properly designated. The UPREIT and the REIT, and their respective
independent accountants, attorneys and other representatives and
advisors, shall cooperate with the Spokesperson in order to consider
strategies proposed by or through the Spokesperson (it being
understood that neither the REIT nor the UPREIT shall have any
obligation whatsoever to propose any such strategies), on behalf of
affected LP Unit Recipients, which strategies are designed or
intended to defer or mitigate any recognition of gain under the Code
by any LP Unit Recipient or any shareholder or partner in any LP Unit
Recipient (any such gain recognition being referred to herein as an
"ADVERSE TAX CONSEQUENCE") that may result from a Tax-Related Event,
whether such strategies involve any or all of the LP Unit Recipients
(including Contributor) on a basis independent of the REIT and
UPREIT, or in conjunction with the REIT or the UPREIT. Each party
shall pay its own fees and expenses incurred in connection with the
procedure delineated in this Subparagraph 2(k). Under this
Subparagraph 2(k), the UPREIT and the REIT are only obligated to
cooperate with the Spokesperson on behalf of any LP Unit Recipient
(or any partner, shareholder or member of any LP Unit Recipient) who
may be facing an Adverse Tax Consequence, in connection with such LP
Unit Recipient's determination of the efficacy of tax-deferral or
tax-mitigation alternatives proposed by or through the Spokesperson
that may involve the REIT or the UPREIT. In no event shall either the
REIT or the UPREIT be required to incur any expense [other than the
cost of professional fees and expenses and administrative expenses
incurred in complying with this Subparagraph 2(k)] in connection its
cooperation under this Subparagraph 2(k), nor shall any transaction
duly approved by the Board of Directors of the REIT that results in a
Tax-Related Event be required to be suspended, postponed, impeded or
otherwise adversely affected by virtue of any potential Adverse Tax
Consequence. The provisions of this Subparagraph 2(k)(ii) shall
survive to the Closing and shall not merge into any conveyancing
documents delivered at Closing.
3. CLOSING AND EARNEST MONEY.
(a) Closing. The contribution and delivery of LP Units contemplated
herein shall be consummated at a closing ("CLOSING") to take place at the
offices of Contributor's counsel, Rogers & Wells, 200 Park Avenue, New
York, New York 10166, on the basis of a "New York style" closing with a
representative of the Title Company (as defined below) in attendance. The
Closing shall occur on January 30, 1997, at 9:30 a.m. New York time or at
such other time and at such other place as the parties may agree upon in
writing (the "CLOSING DATE"). The Closing shall be effective as of 12:01
a.m. New York time on the Closing Date. Notwithstanding the foregoing,
the risk of loss of all or any portion of any or all of the Projects shall
be borne by Contributor up to and including the actual time of the
Closing, and thereafter by Acquiror, subject to the terms and conditions
of Paragraph 15 below.
(b) Earnest Money.
(i) Escrowee. Unless the Closing shall have already occurred,
within three (3) business days after the Contract Date, the parties
shall enter into escrow instructions in substantially the form
attached hereto as Exhibit C (the "ESCROW AGREEMENT," the escrow
created thereby being referred to herein as the "ESCROW"),
designating Commonwealth Land Title Insurance Company as the escrowee
thereunder (the "ESCROWEE"). The parties hereby authorize their
respective attorneys to execute the Escrow Agreement and to make such
amendments thereto as they
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<PAGE> 16
shall deem necessary or convenient to close the transaction
contemplated by this Agreement.
(ii) Earnest Money Deposit. Unless the Closing shall have
already occurred, not later than three (3) business days following
the Contract Date, Acquiror shall deposit into the Escrow, in
accordance with the terms of the Escrow Agreement, and as its earnest
money deposit (the "EARNEST MONEY"), the sum of One Million and
No/100 Dollars ($1,000,000). The Earnest Money may be in the form of
cash or the Letter of Credit (as defined below).
(iii) Application at Closing. At Closing, the Earnest Money,
and any and all interest earned thereon, shall be paid to Acquiror.
(iv) Letter of Credit. The Earnest Money may be in the form of
an irrevocable standby letter of credit ("LETTER OF CREDIT") issued
by an FDIC-insured, national bank having gross assets in excess of
$10,000,000,000 (an "APPROVED DEPOSITORY" and, for purposes of the
Letter of Credit, the "ISSUER"). Escrowee shall be the beneficiary
under the Letter of Credit, and the Letter of Credit shall expire no
earlier than March 31, 1997. The Letter of Credit shall be
non-transferable, and shall permit Escrowee to present it to the
Issuer for payment only if accompanied by a sworn certificate,
executed by or on behalf of Contributor or one or more duly
authorized partner(s) of Contributor (it being understood that for
such purpose Jan Burman and Jerome Lazarus shall each constitute such
an authorized partner), certifying that Contributor has declared
Acquiror to be in default under this Agreement and that Contributor
is, therefore, entitled to the proceeds of the Letter of Credit (the
"DEFAULT CERTIFICATE"); provided, however, that such Default
Certificate shall not be required in the event that Escrowee presents
the Letter of Credit to the Issuer pursuant to the penultimate
sentence of this Subparagraph (b)(iv). Upon its receipt from
Contributor of the Default Certificate, the Escrowee is hereby
instructed to (A) notify Acquiror as provided in Paragraph 19 of this
Agreement; and (B) subject to the terms and notice requirements of
the Escrow Agreement, contemporaneously present the Letter of Credit
to the Issuer and deliver the proceeds thereof to Contributor. In
the event that Contributor delivers a Default Certificate to
Escrowee, Escrowee shall have no right or obligation to review the
underlying facts and circumstances to determine whether or not such
Default Certificate is correct. Notwithstanding anything contained
herein or in the Escrow Agreement to the contrary and irrespective of
any contrary instruction from Acquiror, in the event that the Closing
Date is delayed to a date on or after March 1, 1997, whether by
mutual agreement of the parties or due to the pendency of a dispute
between the parties concerning this Agreement, and any Letter of
Credit on deposit with Escrowee is not renewed or replaced by
Acquiror at least thirty (30) days prior to its expiration date, then
such Letter of Credit shall be presented by Escrowee to the Issuer
for payment prior to its expiration date, and the proceeds thereof
shall be held in the Escrow in accordance with the terms of the
Escrow Agreement. Upon Closing, Escrowee is hereby instructed to
return the Letter of Credit to Acquiror.
4. CONTRIBUTOR'S PRE-CLOSING DELIVERIES. To the extent in Contributor's
possession or control, Contributor shall continue to make available to
Acquiror, from and after the Contract Date, at reasonable times and upon
reasonable notice, copies of all documents, contracts, information, Records (as
defined below) and exhibits relevant to the transaction that is the subject of
this Agreement, including, but not limited to, the documents listed as
"CONTRIBUTOR'S DELIVERIES" on Exhibit D attached hereto. In the event that
Acquiror exercises its unilateral right to terminate this Agreement pursuant to
Paragraph 5 below, all originals of items, if any, so delivered by Contributor
pursuant to this Paragraph 4 shall be returned to Contributor, and all copies
of items so delivered by Contributor pursuant to this Paragraph 4 shall be
destroyed by Acquiror. In the event this Agreement is terminated for any
reason and the transactions contemplated herein do not close, Acquiror shall
promptly deliver to Contributor copies of all diligence reports prepared for
Acquiror by third parties with respect to the physical, structural and/or
environmental condition of the Projects (the "DUE DILIGENCE REPORTS");
provided, however, that this requirement shall only be applicable in the event
that Contributor has reimbursed Acquiror, prior to the date of such delivery by
Acquiror, for due diligence costs
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<PAGE> 17
to the extent required to be paid by Contributor pursuant to those certain
letter agreements dated October 11, 1996 and January 17, 1997 between Jan
Burman (on behalf of Contributor) and Acquiror (and pursuant to any other
letter agreement into which such parties may enter into subsequent to the
Contract Date with respect to the sharing of due diligence costs). The
obligations of the parties under this Paragraph 4 shall survive the Closing or
the termination of this Agreement indefinitely.
5. INSPECTION PERIOD.
(a) Basic Project Inspection. At all times prior to Closing and
during normal business hours, including times following the "INSPECTION
PERIOD" [which Inspection Period is defined to be the period from and
after the Contract Date, through and including: (x) January 30, 1997 with
respect to all matters described in this Paragraph 5 other than that
described in Subparagraph 5(b); and (y) January 30, 1997 with respect to
all matters described in Subparagraph 5(b)], Acquiror, its agents and
representatives shall be entitled to conduct a "BASIC PROJECT INSPECTION,"
which will include the rights to: (i) enter upon the Land and
Improvements, on reasonable notice to Contributor, to perform inspections
and tests of any and all of the Projects, including, but not limited to,
inspection, evaluation and testing of the heating, ventilation and
air-conditioning systems and all components thereof (collectively, the
"HVAC SYSTEM"), all structural and mechanical systems within the
Improvements, including, but not limited to, sprinkler systems, power
lines and panels, air lines and compressors, automatic doors, tanks,
pumps, plumbing and all equipment, vehicles, and Personal Property; (ii)
examine and copy any and all books, records, tax returns, correspondence,
financial data, leases, and all other documents and matters, public or
private, maintained by Contributor or its agents, relating to receipts and
expenditures pertaining to all of the Projects for the three (3) most
recent full calendar years and all or any portion of the current calendar
year and all contracts, rental agreements and all other documents and
matters, public or private, maintained by Contributor or its agents,
relating to operations of the Projects (collectively, the "RECORDS");
(iii) make investigations with regard to zoning, environmental (including
an environmental "ASSESSMENT" or "ADDITIONAL ASSESSMENT" as specified in
Subparagraph 5(b) below, in, under or upon the Projects, or any Containers
(as defined below) on, or under, the Land), building, code, regulatory and
other legal or governmental requirements; (iv) make or obtain market
studies and real estate tax analyses; and (v) upon reasonable notice to
Contributor, interview Tenants (in which event a representative of
Contributor may be present during each and every such interview, if
Contributor so elects) with respect to their current and prospective
occupancies. Acquiror agrees to give no less than 48 hours' prior notice
to Jan Burman or Jeffrey Cohen of any component of the Basic Project
Inspection requiring access to any Project. Contributor may elect to have
a representative(s) accompany Acquiror or its consultants on any part of
the Basic Project Inspection requiring access to any Project. Prior to,
and throughout the performance of, the Basic Project Inspection, Acquiror
shall cause its environmental consultant(s) to maintain workers'
compensation insurance, as required by law, general liability (single
limit) insurance with coverage of no less than $1,000,000 per occurrence,
umbrella liability insurance with coverage of no less than $10,000,000,
professional errors and omissions liability insurance of no less than
$3,000,000, and contractor's pollution liability insurance with coverage
of no less than $1,000,000 per occurrence. Contributor and the other LP
Unit Recipients and the partners therein (including their officers,
directors and employees) shall be named as additional insureds on each
policy described in the immediately preceding two sentences (provided
Contributor advises Acquiror, in writing, on or before the Contract Date,
of the specific names of all desired additional insureds), and
certificates of insurance evidencing such fact shall be delivered to
Contributor prior to the commencement of the Basic Project Inspection.
Acquiror agrees that its environmental consultant shall conduct no soil or
groundwater sampling or other intrusive testing, whether as part of a
Phase I or Phase II test, unless and until the location, scope and
methodology of such sampling or testing, as the case may be, as well as
the identity of the environmental consultant, have all been approved by
Contributor, such approval to not be unreasonably withheld or delayed. In
addition, prior to conducting any such environmental sampling, Acquiror
shall have a "utility markout" performed for the applicable Project and
delivered to Acquiror's environmental consultant and Contributor.
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In addition, Contributor shall provide, and cooperate in all
reasonable respects in providing, Acquiror with copies of, or access to,
such factual information (not previously provided) as may be reasonably
requested by Acquiror, and in the possession or control of Contributor, to
enable the REIT to issue (subsequent to Closing) one or more press
releases concerning the transaction that is the subject of this Agreement
(provided that any press release to be issued by Contributor or Acquiror
shall be subject to the prior approval, not to be unreasonably withheld or
delayed, of the other party), to file a Current Report on Form 8-K (as
specified on Exhibit Q attached hereto), if, as and when such filing may
be required by the Securities and Exchange Commission ("SEC") and to make
any other filings that may be required by any Governmental Authority (as
defined below). The obligation of Contributor to cooperate in providing
Acquiror with such information for Acquiror to file its Current Report on
Form 8-K shall survive the Closing for a period of two (2) years, and
shall not merge into any conveyancing documents delivered at Closing.
Without limitation of the foregoing, Acquiror or its designated
independent or other accountants may, at Acquiror's expense, audit the
Operating Statements (as defined in Exhibit D attached hereto), and
Contributor shall supply such existing documentation as Acquiror or its
accountants may reasonably request in order to complete such audit. If
Acquiror, in its sole and absolute discretion, determines that the results
of any inspection, test or examination do not meet Acquiror's criteria for
the purchase, financing or operation of any or all of the Projects in the
manner contemplated by Acquiror, including, but not limited to, if any
inspection, test or examination reveals the presence of a Hazardous
Condition (as defined below), any Hazardous Material, or toxic substance
(including, but not limited to, asbestos, chlordane or formaldehyde) in or
upon any of the Projects, or the existence of any Containers on, or under,
the Land, or any deficiency or code violation with respect to any aspect
of any Project, or if the information disclosed does not otherwise meet
Acquiror's investment criteria for any reason whatsoever, or if Acquiror,
in its sole and absolute discretion, otherwise determines that any or all
of the Project(s) is/are unsatisfactory to it, then subject to
Subparagraph 5(e) below, Acquiror may terminate this Agreement by written
notice to Contributor (the "TERMINATION NOTICE"), with a copy to Escrowee,
given not later than the last day of the Inspection Period (the "APPROVAL
DATE"), subject to the potential extension of the Approval Date as is
contemplated under Subparagraph 5(b). Upon such termination, the Earnest
Money, together with all interest thereon, shall be returned immediately
to Acquiror and neither party shall have any further liability to the
other under this Agreement, except as otherwise provided herein. If
Acquiror fails to deliver the Termination Notice to Contributor prior to
the Approval Date, Acquiror's right to unilaterally terminate this
Agreement, pursuant to this Subparagraph 5(a) only, shall automatically be
deemed to have been deleted from this Agreement.
In the event of termination of this Agreement pursuant to the terms
of this Subparagraph 5(a), and in consideration of Contributor's
performance of its obligations under this Paragraph 5, Acquiror shall pay
to Contributor the sum of One Hundred and No/100 Dollars ($100.00)
simultaneously with the delivery of the Termination Notice. The parties
hereto acknowledge that Acquiror may expend material sums of money in
reliance on Contributor's obligations under this Agreement, in connection
with negotiating and executing this Agreement, furnishing the Earnest
Money, conducting the inspections contemplated by this Paragraph 5 and
preparing for Closing, and that Acquiror would not have entered into this
Agreement without the availability of an Inspection Period. The parties
therefore agree that adequate consideration exists to support
Contributor's obligations hereunder, even before expiration of the
Inspection Period. Except to the extent otherwise specifically and
expressly provided in this Agreement (including, but not limited to, the
last grammatical paragraph of Paragraph 7.1 and the introductory clauses
of Subparagraph 9(b) below), the effect of any representations, warranties
or undertakings made by Contributor in this Agreement shall not be
diminished, abrogated, or compromised by the Basic Project Inspection, any
Assessment or Additional Assessment (each as defined below), or other
inspections, tests or investigations made by Acquiror.
(b) Environmental Assessment. During the Inspection Period, Acquiror
or Acquiror's agent(s) shall have the right to employ one or more
environmental consultants or other professional(s), such parties to be
approved by Contributor, which approval shall not be unreasonably withheld
or delayed, to perform or complete a "Phase I" environmental inspection
and assessment (the "ASSESSMENT") of the Projects, to evaluate
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the present and past uses of the Projects, and the presence on, in, at,
about, near or under the Land (including land sufficiently proximate to
any or all of the Projects as to pose the risk of migration, or other
adverse effect on any of the Projects) of any Hazardous Materials. The
scope of the Assessment shall be in Acquiror's sole discretion; provided
that it shall not exceed the full extent contemplated under ASTM Document
E 1527, which describes the "Phase I Environmental Site Assessment
Process." Contributor acknowledges and consents to such Assessment.
Acquiror and its consultants shall also have the right to undertake or
complete a technical review of final copies of all documentation, reports,
plans, studies and information in the possession of Contributor and its
environmental counsel concerning the environmental condition of the
Projects. In order to facilitate the Assessment and technical review,
Contributor shall extend its reasonable cooperation (but without
out-of-pocket expense to Contributor, unless reimbursed by Acquiror) to
Acquiror and its environmental consultants, including, without limitation,
providing complete access to (and copies requested by Acquiror of) all
files, documents, reports, maps, plans, photographs, surveys, sampling and
test results, analyses and studies concerning the Projects maintained by
either or both of Contributor and its environmental counsel. In the event
that (i) the results of the Assessment or technical review are
inconclusive as to a particular Project or Projects, or (ii) the results
of the Assessment or technical review reveal Recognized Environmental
Conditions, as defined in ASTM E 1527, then, at Acquiror's sole option (to
be exercised by written notice given to Contributor prior to the
expiration of the initial Inspection Period), the initial Inspection
Period shall be extended for an "ADDITIONAL PERIOD" of thirty (30) days,
with respect to that particular Project or Projects, to allow Acquiror to
conduct additional inspections and tests (the "ADDITIONAL ASSESSMENT").
Following the initial Inspection Period and during any Additional Period,
Acquiror's Basic Project Inspection shall be deemed completed, and
Acquiror shall be deemed satisfied, with respect to all Projects other
than those at which an Additional Assessment is being conducted (the "AA
PROJECTS"); and with respect to those AA Projects, the Basic Project
Inspection shall be deemed completed and Acquiror shall be deemed
satisfied with respect to all due diligence matters other than those that
are the subject of the Additional Assessment; therefore, from and after
the expiration of the initial Inspection Period, Acquiror may not deliver
a Termination Notice except as a result of matters considered in
connection with, or information derived from or as a result of, the
Additional Assessments at any or all of the AA Projects. A Termination
Notice delivered in connection with the Additional Assessment must be
delivered, if at all, no later than the last day of the Additional Period.
Such Additional Period, if applicable, shall automatically and
concomitantly extend the original Inspection Period (but only insofar as
described above), Approval Date and Closing Date, on a day-to-day basis,
for all relevant purposes hereunder, but specifically subject to the
limitations set forth in the preceding sentence (it being understood,
however, that in all events there shall be one Closing with respect to all
Projects that Acquiror elects to acquire pursuant to this Agreement,
excluding the Option Projects and Project No. 56). Any information
concerning the Projects expressly set forth in any writing delivered to
Acquiror by its environmental consultant(s), in connection with any
Assessment or Additional Assessment, shall be deemed to be incorporated by
reference in Schedule 9(b) hereto.
(c) Acquiror's Undertaking. Acquiror hereby covenants and agrees
that it shall cause all studies, investigations and inspections
(including, but not limited to, the Assessment and Additional Assessment,
if any), performed at the Projects pursuant to this Paragraph 5 to be
performed in a manner that does not unreasonably disturb or disrupt the
tenancies or business operations of any of the Projects. In the event
that, as a result of Acquiror's exercise of its rights under Subparagraphs
5(a) and 5(b), physical damage occurs to any or all of the Projects, then
Acquiror shall promptly notify Contributor and repair such damage, at
Acquiror's sole cost and expense, so as to return the damaged Project(s)
to the same condition as exists on the Contract Date. Acquiror hereby
indemnifies, protects, defends and holds harmless Contributor and the
other LP Unit Recipients and the partners therein (including their
officers, directors and employees and agents) from and against any and all
liabilities, losses, damages, claims, causes of action, judgments,
damages, penalties, fines, obligations, costs and expenses (including,
without limitation, the reasonable fees of attorneys or environmental
consultants) that Contributor actually suffers or incurs as a result of
any negligent, willful or intentional act or omission of Acquiror or its
agents or representatives or consultants that occurs during the course of,
or as a result of, any or all of the studies, investigations and
inspections (including,
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but not limited to, the Assessment and Additional Assessment, if any),
that Acquiror elects to perform (or causes to be performed) pursuant to
this Paragraph 5. The provisions of this Subparagraph 5(c) shall survive
the Closing or any sooner termination of this Agreement and shall not be
merged into any conveyance documents delivered at Closing.
(d) Confidentiality. Contributor, Acquiror, the REIT and the UPREIT
each agree to maintain in confidence the information contained in this
Agreement or pertaining to the transaction contemplated hereby and intend
that no claim of privilege or protection from disclosure be waived by
reason of the disclosure or transfer of information among the parties
pursuant to the terms of this Agreement; provided, however, that each
party, its agents and representatives may disclose such information and
data (i) to such party's accountants, attorneys, existing or prospective
lenders, investment bankers, underwriters, ratings agencies, partners,
consultants and other advisors in connection with the transactions
contemplated by this Agreement (collectively, "REPRESENTATIVES") to the
extent that such Representatives reasonably need to know (in the
disclosing party's reasonable discretion) such information and data in
order to assist, and perform services on behalf of, the disclosing party;
(ii) to the extent required by any applicable statute, law, regulation or
Governmental Authority (including, but not limited to, Form 8-K and other
reports and filings required by the SEC and other regulatory entities,
including the Internal Revenue Service, as described in Exhibit Q attached
hereto), or by the New York Stock Exchange in connection with the listing
of the Conversion Shares; (iii) in connection with any litigation that may
arise between the parties in connection with the transactions contemplated
by this Agreement; (iv) to the extent such disclosure is required or
appropriate in connection with any securities offering or other capital
markets or financing transaction undertaken by the REIT; (v) to the extent
such information and data become generally available to the public other
than as a result of disclosure by such party or its agents or
Representatives; (vi) to the extent such information and data become
available to such party or its agents or Representatives from a third
party who, insofar as is known to such party, is not subject to a
confidentiality obligation to the other party hereunder; and (vii) to the
extent necessary in order to comply with each party's respective
covenants, agreements and obligations under this Agreement; provided,
however, that with respect to environmental matters only, disclosure may
be made pursuant to Subparagraphs 5(d)(ii), (iii), (iv) or (vii) only if
the party seeking to disclose any information receives a demand or order
from a federal or state court or governmental agency or authority, or if
disclosure of information is otherwise required by law (the "DISCLOSURE
STANDARD"), and the party believes in good faith that such information
must be disclosed; provided, further, that prior to such disclosure, the
party seeking to disclose the information shall promptly confer in good
faith with the other party about the necessity, form and content of such
disclosure; provided, further that the party seeking to disclose the
information, after conferring with the other party, shall have the final
discretion (subject to the Disclosure Standard), as to whether or not such
disclosure shall be made, and if so, what the form and content of the
disclosure shall be. Each party shall take all necessary and appropriate
measures to ensure that any person who is granted access to any
confidential information pursuant to the terms of this Subparagraph 5(d)
is familiar with the terms hereof and complies with such terms as they
relate to the duties of such person. In the event the transactions
contemplated by this Agreement shall not be consummated, such
confidentiality shall be maintained indefinitely and both parties shall
promptly return all documents or other confidential written information,
together with all copies thereof, to the party that generated such
information. The obligations of the parties (and the REIT and UPREIT)
under this Subparagraph 5(d) shall survive the Closing or any sooner
termination of this Agreement and shall not be merged into any conveyance
documents delivered at Closing. Furthermore, Contributor and Acquiror
acknowledge that, notwithstanding any contrary term of this Subparagraph
5(d), Acquiror shall have the right to conduct Tenant interviews during
the Inspection Period in accordance with Subparagraph 5(a) and the
disclosure of the existence of this Agreement (but none of the material
terms hereof) to the Tenants shall not constitute a breach of the above
restriction. Acquiror and Contributor shall also have the right to issue,
or cause to be issued, a press release upon the consummation of the
transactions described in this Agreement so long as such press release is
approved by the other party prior to its issuance, which approval shall
not be unreasonably withheld or delayed, and, with respect to any press
release issued by Acquiror, does not mention the LP Unit Recipients by
name. The parties acknowledge that the terms and provisions
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<PAGE> 21
of this Subparagraph 5(d) supersede and replace that certain
Confidentiality Agreement, dated October 25, 1996, between Acquiror and
Lazarus Burman Associates.
(e) Deletion of Projects. If Acquiror does not exercise its
unilateral right to deliver a Termination Notice pursuant to Subparagraph
5(a), Acquiror may nevertheless elect to proceed with the acquisition of
less than all of the Projects, and to delete and eliminate from this
Agreement those certain Projects that Acquiror, in its sole discretion,
elects not to acquire (the "INITIAL DELETED PROJECTS"), pursuant to the
delivery to Contributor, not later than January 30, 1997 for any AA
Project and not later than January 30, 1997 for any other Project, of an
"INITIAL PROJECT DELETION NOTICE," under which Acquiror may exercise the
foregoing partial termination option and designate those specific Projects
that shall constitute Initial Deleted Projects under this Agreement. Upon
the delivery by Purchaser of an Initial Project Deletion Notice, this
Agreement shall, without further action of the parties, be deemed to have
been automatically and ipso facto amended, as so to eliminate the Initial
Deleted Projects herefrom, subject to a reduction in the Contribution
Consideration in an amount equal to the aggregate amount of (x) the
Allocated Amounts minus (y) the Assumed Indebtedness of all of the Initial
Deleted Projects, in each case as adjusted by eliminating any and all
appropriate Prorations and Adjustments. Upon such amendment of this
Agreement, all references to the Projects shall automatically exclude the
Initial Deleted Projects, and, except with respect to (i) the deposit of
Earnest Money, (ii) any indemnity or other surviving obligations with
respect to any Initial Deleted Projects, and (iii) the return of
documents, records and studies relating to any Initial Deleted Projects,
no Closing or pre-Closing obligations of Contributor (or Acquiror's
Conditions Precedent) shall apply to the Initial Deleted Projects. In all
events, however, Acquiror's rights under this Subparagraph 5(e) are
expressly subject to the specific limitations imposed under Paragraph 32
below, and except with respect to the Option Projects and Project No. 56,
there shall be one (1) Closing with respect to all Projects that Acquiror
elects to acquire pursuant to the express provisions of this Agreement.
(f) Scope of Representations and Warranties. All Projects being
acquired by Acquiror pursuant to this Agreement shall be transferred and
conveyed on an "AS-IS" and "WHERE-IS" basis, and WITH ALL FAULTS, except
as otherwise expressly set forth in this Agreement or in any document
delivered by Contributor at Closing. Except as expressly set forth in
this Agreement or in any document delivered by Contributor at Closing,
Contributor has not made any representation or warranty as to the present
or future physical condition, value, presence/absence of hazardous or
toxic materials, financing status, leasing, operations, use, tax status,
income and expense or any other matter pertaining to those of the Projects
that Acquiror acquires under the terms of this Agreement.
6. TITLE AND SURVEY MATTERS.
(a) Conveyance of Title. At Closing, Contributor agrees to deliver
to the UPREIT bargain and sale deeds with covenants against grantor's acts
("BARGAIN AND SALE DEEDS"), in recordable form, conveying the Projects to
the UPREIT, free and clear of all liens, claims and encumbrances except
for the following items (the "PERMITTED EXCEPTIONS"): (i) those matters
listed on Exhibit E attached hereto; (ii) those additional matters that
may become Permitted Exceptions pursuant to Subparagraph 6(e); (iii) the
rights of Tenants as tenants under the Leases, and (iv) matters arising as
a direct result of any acts or omissions of Acquiror and its
Representatives. At Closing, Contributor shall also deliver to the UPREIT
each of the documents listed in Paragraph 12.1 below.
(b) Title Commitments. Within twenty (20) days after the Contract
Date, Acquiror shall obtain, at Contributor's sole cost and expense,
commitments, dated after the Contract Date, issued by Commonwealth Land
Title Insurance Company (as to 60%, on a co-insured basis), Chicago Title
Insurance Company (as to 25%, on a co-insured basis) and Old Republic
Title Insurance (as to 15%, on a co-insured basis) [collectively, the
"TITLE COMPANY"], for owner's title insurance policies (the "TITLE
POLICIES") as follows: ALTA Owner's Policy (4-6-90) with a Standard New
York Endorsement, and an endorsement deleting the arbitration provision of
the policy, issued in the State of New York with regard to the Projects
located in the State of New York; and an ALTA Owner's
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Policy (10-21-87), with an endorsement deleting the arbitration provision
of the policy, issued in the State of New Jersey with regard to the
Project located in the State of New Jersey. Each such title commitment
shall be delivered to Contributor and shall reflect the full amount of the
Allocated Amount for each Project, show fee simple title to the Projects
in the Contributor, together with legible and complete copies of all
recorded documents evidencing title exceptions raised in Schedule B of the
title commitment. It shall be an Acquiror's Condition Precedent that the
Title Policies (or "marked-up" title commitments) shall have all standard
and general printed exceptions deleted so as to afford full "extended form
coverage," and, to the extent available in New York and New Jersey, as the
case may be, shall further include an owner's comprehensive endorsement,
or the equivalent by way of affirmative insurance; an endorsement
certifying that the bills for the real estate taxes pertaining to the Land
and Improvements do not include taxes pertaining to any other real estate,
or the equivalent by way of affirmative insurance; an access endorsement,
or the equivalent by way of affirmative insurance; a contiguity
endorsement, or the equivalent by way of affirmative insurance, if
applicable; a survey "land same as" endorsement; and a zoning 3.1
endorsement for the New Jersey Project. As an Acquiror's Condition
Precedent, each commitment shall be marked for later-dating to cover the
Closing and the recording of the Bargain and Sale Deeds, and the Title
Company shall deliver the Title Policies (or "marked-up" title
commitments) to the UPREIT concurrently with the Closing. The cost of all
title insurance charges, premiums and endorsements, including all search,
continuation and later-date fees shall be paid by Contributor, except that
Acquiror shall pay the premium imposed for any comprehensive survey
endorsement required by Acquiror. Should any commitment indicate matters
that do adversely affect the value or marketability of title to any
Project, or other matters which do adversely affect Acquiror's use,
operation or financing of any Project, such matters shall be considered
Defects (as defined below), and the cure provisions set forth in
Subparagraph 6(e) below shall apply, provided that a Defects Notice
(defined below) is timely delivered with respect to such Defects.
(c) Surveys. No later than January 30, 1997, Contributor shall
deliver to Acquiror, at Contributor's sole cost and expense (except that
Acquiror shall pay one-half of the cost if this Agreement is terminated),
an as-built, spotted survey of each Project (the "SURVEYS"), prepared by a
surveyor(s) duly registered in the States of New York or New Jersey (as
corresponds to the location of the surveyed Project), and certified by
said surveyor(s) as having been prepared in accordance with the minimum
detail and classification requirements of the land survey standards of the
American Land Title Association, and specifically incorporating all of the
standards and protocols contemplated by the minimum standard detail
requirements and classifications for ALTA/ASCM land title surveys, as
adopted in 1992 by ALTA/ASCM, including Table A Items 1 (excluding the
placement of monuments), 3, 4, 6 (showing setback lines only), 7(a), 8, 9,
10, 11 and 13, and shall include the certification attached hereto as
Exhibit G. The Surveys shall be dated no earlier than sixty (60) days
prior to the Closing Date. The Surveys shall show any encroachments of
the Improvements onto adjoining properties, easements, set-back lines or
rights-of-way, and any encroachments of adjacent improvements onto any
Project, and shall comply with any requirements imposed by the Title
Company as a condition to the removal of the survey exception from the
standard printed exceptions in Schedule B of the title commitments.
Without limitation of the foregoing, the Surveys shall state the legal
description of the Land, the square footage of the Land and each Building,
the number and location of all legal parking spaces on each parcel of
Land, and shall further state whether any parcel of Land is located in an
area designated by an agency of the United States as being subject to
flood hazards or flood risks. Should any Survey indicate the presence of
any encroachments by or upon any Project, or other matters that do
adversely affect the value or marketability of title to any Project, or
other matters which do adversely affect Acquiror's use, operation or
financing of any Project, such matters shall be considered Defects
(provided the Defects Notice therefor is timely delivered), and the cure
provisions set forth in Subparagraph 6(e) below shall apply.
(d) UCC Searches. Contributor, at its sole cost and expense, shall
deliver to Acquiror, or cause the Title Company to deliver to Acquiror, on
or before December 10, 1996, current searches of all Uniform Commercial
Code financing statements naming Contributor as debtor and filed with
either or both of the Secretaries of State of the States pursuant to the
laws of which Contributor was organized and the Secretaries of State of
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<PAGE> 23
the States in which the Projects are located. Should the UCC Searches
indicate matters that do or could adversely affect the value or
marketability of title to any Project, including, but not limited to,
claims or liens against any of such parties encumbering all or any portion
of any Project, or other matters which do materially adversely affect
Acquiror's use, operation or financing of any Project, such matters shall
be considered Defects (provided the Defects Notice therefor is timely
delivered), and the cure provisions set forth in Subparagraph 6(e) below
shall apply.
(e) Defects and Cure. The items described in this Paragraph 6 are
collectively referred to as "TITLE EVIDENCE." If the Title Evidence
obtained during the Inspection Period discloses claims, liens, exceptions,
or conditions that do adversely affect the use and/or marketability of
title to any Project ("DEFECTS"), Acquiror may, prior to the Approval
Date, give written notice (the "DEFECTS NOTICE") of such Defects to
Contributor. If and to the extent that the Title Evidence discloses any
claims, liens, exceptions or conditions to which Acquiror does not object
in its Defects Notice, then such items shall thereafter constitute
Permitted Exceptions. If Contributor fails or refuses, within a period of
twenty (20) days after its receipt of a Defects Notice ("RESPONSE
PERIOD"), to either (i) cure all Defects; or (ii) cause all Defects to be
insured over by the Title Company (in form and substance reasonably
acceptable to Acquiror); or (iii) provide Contributor's written assurance
and affirmative undertaking to Acquiror that Contributor will, in fact,
undertake (with diligence and good faith) to use all reasonable efforts to
promptly cure or cause the Title Company to insure over (in form and
substance reasonably acceptable to Acquiror) the Defects at Closing (a
"TITLE UNDERTAKING"), then Acquiror may either (A) subject to the
restrictions of Paragraph 32, delete the affected Project in accordance
with the procedures (but not the time limits) described in Subparagraph
5(e) by written notice to the Contributor delivered within ten (10) days
after the expiration of the Response Period; or (B) if the deletion of
Projects [pursuant to clause (A)] encumbered by Defects shall violate the
restrictions imposed under Paragraph 32, then Acquiror may terminate this
Agreement by written notice to Contributor, delivered within ten (10) days
after the expiration of the Response Period, whereupon the Earnest Money,
together with all (if any) interest earned thereon, shall be returned to
Acquiror and neither party shall have any further liability to the other
hereunder, except as otherwise specifically provided in this Agreement.
If Acquiror fails to make an affirmative election of (A) or (B) above
prior to Closing, then Acquiror shall be conclusively deemed to have
accepted title to the Project(s) in question, subject to the Defects in
question.
Notwithstanding anything contained above or elsewhere in this
Agreement to the contrary, Contributor covenants and agrees that it shall
cure (or procure title insurance over, in form and substance reasonably
satisfactory to Acquiror), prior to Closing, any and all of the following
Defects (the "MANDATORY CURE DEFECTS"), whether described in the Title
Commitment, or first arising or first disclosed by the Title Company or
otherwise to Contributor and Acquiror after the date of the Title
Commitment: (1) mortgage liens created by Contributor and not to be paid
off or assumed at the Closing pursuant to this Agreement; (2) any lien,
encumbrance, covenant, easement or restriction arising as a result of, due
to, or because of, any willful or intentional act or omission of
Contributor in violation of this Agreement, which act or omission occurs
after the earlier of (w) the effective date of the applicable Title
Commitment or (x) the Contract Date; (3) judgment liens, tax liens or
broker's liens against Contributor; (4) any mechanics liens (up to a
maximum aggregate amount per Project of $100,000) that are based upon a
written agreement between either (y) the claimant (a "CONTRACT CLAIMANT")
and Contributor or (z) the Contract Claimant and any other contractor,
supplier or materialman with which any contractor of Contributor has a
written agreement, and (5) any Defects as to which Contributor shall have
undertaken the obligation of cure pursuant to a Title Undertaking. In the
event that, as of Closing, any Mandatory Cure Defect remains uncured then,
notwithstanding anything to the contrary contained in this Agreement,
Acquiror shall have the unilateral right to reduce the Total LP Unit
Amount in order to effectuate a cure or obtain a title endorsement over
such Mandatory Cure Defect(s), and such reduction shall be in the amount
of the ascertainable monetary amount required to cure or insure over such
Mandatory Cure Defect(s). Once the Mandatory Cure Defect(s) in question
has been cured, any remaining escrowed or retained funds shall be paid
over to Contributor.
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7. REPRESENTATIONS AND WARRANTIES.
7.1 Contributor and LP Unit Recipients. Each Contributor represents
and warrants to Acquiror, but only with respect to its respective
Project(s), that the following matters are true as of the Contract Date;
and each LP Unit Recipient represents and warrants (but only as to itself)
to Acquiror that the matters set forth in Subparagraph 7.1(x) are true as
of the Contract Date:
(a) [Intentionally Omitted];
(b) Title. Contributor is, as of the Closing Date, the legal fee
simple titleholder of the Projects.
(c) Contributor's Deliveries. To the actual knowledge of
Contributor, all of Contributor's Deliveries listed on Exhibit D attached
hereto and all other items delivered by Contributor pursuant to this
Agreement, including, without limitation, those required pursuant to
Paragraphs 4 and 5 above, are true, accurate, correct and complete in all
material respects, and fairly present, in all material respects and as of
the dates specified therein, the information set forth in a manner that is
not materially misleading. Contributor has delivered to Acquiror,
however, copies of all Leases and other agreements to which Contributor is
presently a party and that relate to or affect the ownership and operation
of the Projects, and that would or will bind Acquiror upon Closing.
(d) Defaults. Contributor has not received any written notice
alleging that it is in default (which default remains uncured), in any
material respect, under any of the documents, recorded or unrecorded,
referred to in the title commitment (other than the Existing Mortgages).
Except as set forth in Schedule 7.1(d), Contributor has not received any
written notice alleging that it is in default (which default remains
uncured), in any material respect, under any of the Major Repair
Contracts, or Governmental Approvals (as such terms are defined in Exhibit
D attached hereto).
(e) Contracts. Contributor is not a party to any existing contracts
of any kind relating to the management, leasing, operation, maintenance or
repair of any Project, except those Contracts listed on Exhibit H attached
hereto, all of which will be terminated by Contributor prior to Closing
unless Acquiror otherwise directs Contributor pursuant to written notice
provided to Contributor at least five (5) business days prior to Closing.
Contributor has not given, nor has Contributor received, any written
notice of a material default under any of the Contracts that remains
uncured, except as set forth in Schedule 7.1(e). Copies of all the
Contracts have been or will be delivered or made readily available to
Acquiror within ten (10) days after the Contract Date.
(f) Physical Condition. To the actual knowledge of Contributor,
other than as expressly or specifically discussed or described in any
written environmental and engineering reports prepared during the Basic
Project Inspection for the benefit of Acquiror, by Acquiror's third party
consultants (collectively, the "REPORTS"), and except for the matters
described in Paragraphs 30, 31 and 37 below, there is no existing latent
structural defect in any Project that will materially impair, or require
the expenditure of more than $25,000 (on an aggregate, but per Project,
basis) to permit the continuing (as of the Closing Date) use, occupancy or
operation of such Project in a manner substantially consistent with the
use, occupancy and operation of such Project as of the Contract Date
(collectively, "PROJECT DEFECTS"), nor to Contributor's actual knowledge,
has Contributor received any written notice from any Tenant or any other
party alleging the existence of any such defect. Furthermore, Contributor
represents and warrants to Acquiror that Contributor has no written
reports in its possession that advise of, or allege the existence of, any
Project Defects that have not been completely remedied and cured.
(g) Utilities. To the best of Contributor's knowledge, all water,
sewer (except as set forth in Schedule 7.1(g) hereto), gas, electric,
telephone, drainage and other utility equipment, facilities and services
that are necessary for the operation of the Projects as they are now being
operated are installed and connected and are operational. Contributor has
not received any written notice (which remains outstanding) providing for
or threatening the termination (on a permanent basis) of the furnishing of
service to the
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Projects of water, sewer, gas, electric, telephone, drainage or other such
utility services. Contributor has paid all amounts owing for utility
services as of the most recent billing period, except to the extent that
the charges for any such utility services are directly billed to any of
the Tenants.
(h) Improvements. To the actual knowledge of Contributor,
Contributor has not received any written notice (that remains outstanding)
from any Governmental Authority alleging that any or all of the
Improvements were not completed and installed substantially in accordance
with the Plans (as defined in Exhibit D attached hereto) therefor approved
by all Governmental Authorities having jurisdiction thereover.
(i) Employees. Contributor does not have any employees. Contributor
is not a party to any collective bargaining or other agreement relating to
the Projects with any labor union, and Contributor is not currently
involved in any labor or union controversy relating to the operation of
the Projects.
(j) Compliance with Laws and Codes. Except as set forth in Schedule
7.1(j), Contributor has not received any written notice from any
Governmental Authority (that remains uncured or otherwise outstanding)
claiming or alleging that: (i) any Project, or the use and operation of
any component, portion or area of any Project, is in material
non-compliance with any applicable municipal or other governmental law,
ordinance, regulation, code, license, permit or authorization; or (ii)
there is not presently and validly in effect any material license, permit
or other authorization necessary for the use, occupancy or operation of
any Project as it is presently being operated by Contributor. Contributor
has not received any written notice from any Governmental Authority (that
remains uncured or otherwise outstanding) alleging that any or all of the
Projects fails to comply with any or all applicable requirements of the
Americans With Disabilities Act of 1990, as amended (42 U.S.C.A.
Sections 12101 et seq., the "ADA"). Project No. 1 is not currently in
violation of any fire code provision, and any previously cited fire code
violations have been remedied. The foregoing representation in this
Subparagraph 7.1(j) shall not apply to Environmental Laws or Environmental
Permits (each as defined below) or any other matters specifically
described in Paragraph 9 below.
(k) Litigation. Except as set forth in Schedule 7.1(k) or Schedule
9(b), there are no pending or, to Contributor's actual knowledge,
threatened (in writing), judicial or administrative proceedings affecting
Contributor's interest in any Project or in which Contributor is a party
by reason of Contributor's ownership or operation of any Project or any
portion thereof, including, without limitation, proceedings for or
involving collections (in excess of $25,000 on an aggregate, but per
Project, basis), condemnation, eminent domain, alleged building code or
zoning violations, or personal injuries (not covered by insurance and the
subject of a claim accepted by the relevant insurer) or property damage
alleged to have occurred on any Project or by reason of the condition, use
of, or operations on, such Project. Except as set forth in Schedule
7.1(k), no attachments, execution proceedings, assignments for the benefit
of creditors, insolvency, bankruptcy, reorganization or other proceedings
are pending or, to Contributor's actual knowledge, threatened, against
Contributor, nor are any of such proceedings about to be commenced by
Contributor.
(l) Insurance. Contributor now has in force customary and
commercially reasonable casualty, liability and business interruption
insurance coverages relating to the Projects. Contributor has received no
written notice (that remains outstanding) from any insurance carrier now
providing coverages for the Projects of any defects or inadequacies in the
Projects that, if not corrected, would result in termination of insurance
coverage or material increase in the present cost thereof.
(m) Financial Information. All Operating Statements (as defined in
Exhibit D attached hereto) delivered by Contributor are complete,
accurate, true and correct, in all material respects; and accurately set
forth, in all material respects, the results of the operation of the
Projects for the periods covered. The tax basis of the Projects indicated
in the schedules to Contributor's federal, state and local tax returns for
the period ending December 31, 1995, as delivered by Contributor to
Acquiror, are complete, accurate, true and correct in all material
respects. There has been no material adverse change in the
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financial condition or operation of the Projects since the latest period
covered by the Operating Statements.
(n) Re-Zoning. To the actual knowledge of Contributor, there is not
now pending or threatened any proceeding for the rezoning of any Project
or any portion thereof that would have a material adverse impact on the
use of any Project.
(o) Personal Property. The Personal Property listed in Exhibit B
attached hereto (other than Excluded Personal Property) is all of the
personal property owned by Contributor and used in (or necessary for) the
operation of the Projects.
(p) Authority. The execution and delivery of this Agreement and the
other documents delivered by Contributor pursuant to this Agreement, and
the performance of all obligations of Contributor under this Agreement and
such other documents by Contributor, have been duly authorized by all
requisite partnership, corporate or limited liability company action, as
the case may be. This Agreement and the other documents delivered by
Contributor pursuant to this Agreement are binding on Contributor and
enforceable against Contributor in accordance with their respective terms,
subject to bankruptcy and similar laws affecting the remedies or recourse
of creditors generally and general principles of equity. Except for
consent required under any partnership agreement of Contributor (or other
similar governing document), which consent shall be obtained prior to
Closing, and except as set forth in Schedule 7.1(p), to the actual
knowledge of Contributor, no consent is required of any creditor,
investor, shareholder, tenant-in-common of Contributor or judicial or
administrative body, Governmental Authority, or other governmental body or
agency having jurisdiction over the Projects, to such execution, delivery
and performance of this Agreement by Contributor. Neither the execution
of this Agreement nor the consummation of the transactions contemplated
hereby by Contributor will (i) result in a breach of, default under, or
acceleration of, any material agreement to which Contributor is a party or
by which Contributor is bound; or (ii) to Contributor's actual knowledge
violate any material restriction, agreement or other legal obligation, or
any court order, to which Contributor is subject. Notwithstanding
anything to the contrary contained in this Subparagraph 7.1(p), this
Subparagraph 7.1(p) excludes any reference to (A) consent by any mortgagee
of any Project and (B) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
(q) Real Estate Taxes. The most recent real estate "TAX BILL(S)" for
(and, to Contributor's knowledge, the only real estate tax bills
applicable to) the Projects have been delivered to Acquiror. Except as
set forth on Exhibit J attached hereto, Contributor has not received
written notice of any proposed increase in the assessed valuation or rate
of taxation of any or all of the Projects from that reflected in the most
recent Tax Bills. There are now pending proceedings or applications for
reductions in the real estate tax assessments for most, if not all, of the
Projects. In the event that any of the pending tax proceedings results in
any rebate of taxes paid after the Closing Date in respect of any period
ending prior to the Closing Date, the amount of such rebate, net of the
fees and expenses owing to certiorari counsel, and all other fees and
expenses (including without limitation, other attorneys' fees and
expenses) payable by Contributor in connection with any such tax
proceeding, shall be the property of and remitted to Contributor (except
if and to the extent that all or any portion of such rebated sums are due
to Tenants), which obligation shall survive the Closing and not be merged
into any conveyancing document delivered at Closing. Except as set forth
in Schedule 7.1(q), there are no outstanding agreements with attorneys or
consultants with respect to the Tax Bills that will be binding on Acquiror
or any of the Projects after the Closing. To the actual knowledge of
Contributor, other than as disclosed by the Tax Bills, no other real
estate taxes have been, or will be, assessed against the Projects, or any
portion thereof, in respect of the year 1996 or any prior year (that have
not been paid), and no special assessments of any kind (special, bond or
otherwise) have been levied against the Projects, or any portion thereof,
that are outstanding or unpaid. Contributor has paid all real estate
taxes and assessments presently due and owing (before the imposition of a
penalty) with respect to the Projects, with the exception of Project Nos.
19, 20 and 21 all of which have past-due taxes and assessments (and
penalties relating thereto) outstanding as of the Contract Date. Such
delinquent taxes, assessments and penalties shall be paid, in full, prior
to or at Closing by Contributor.
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(r) Easements and Other Agreements. Contributor has not received any
written notice (that remains outstanding) alleging that it is in default
in complying with the terms and provisions of any of the material
covenants, conditions, restrictions, rights-of-way or easements
constituting one or more of the Permitted Exceptions.
(s) Lease Controversies. Except as described in Exhibit K or
Schedule 11(a)(iv) attached hereto, neither any material controversy,
complaint, negotiation or renegotiation, nor any proceeding, suit or
litigation relating to all or any of the Existing Leases is pending or has
been threatened, in writing. Contributor is and shall remain responsible
after the Closing Date for defending (or continuing) any such suit,
proceeding or other matter relating to periods prior to the Closing Date
("PENDING CONTROVERSIES"), and all damages, loss, expenses and costs
related to such Pending Controversies; and Contributor shall be entitled
to all (if any) recoveries arising directly from and as a result of such
Pending Controversies. If and to the extent that, prior to Closing, any
controversy, complaint, negotiation, renegotiation, proceeding, suit or
litigation is pending or threatened with respect to, or involving, any
Additional Lease(s) ("ADDITIONAL LEASE CONTROVERSIES"), Contributor shall
so advise Acquiror, in writing and with reasonably detailed information,
as soon as is reasonably possible after Contributor is advised of, or
learns of the existence or potential threat of, any Additional Lease
Controversies.
(t) Soil Condition. Contributor has no written reports in its
possession advising or alleging that the soil condition of the Land at any
Project upon which Contributor constructed (or caused to be constructed)
the Improvements is such that it will not support all of the Improvements
for the foreseeable life of the Improvements without unusual or new
sub-surface excavations, fill, footings, caissons or other installations.
(u) United States Person. Contributor is a "United States Person"
within the meaning of Section 1445(f)(3) of the Code, as amended, and
shall execute and deliver an "Entity Transferor" certification at Closing.
(v) Broadvet Lease and Purchase Option. Broadvet Consumers'
Warehouse is a Tenant at Project No. 9 under a Lease that includes two (2)
purchase options for the benefit of such Tenant, each of which is still
outstanding.
(w) Existing Mortgage(s). Exhibit L attached hereto sets forth a
true, correct and complete schedule of those mortgage(s) or trust deed(s)
("EXISTING MORTGAGES") presently encumbering the Projects or any portion
thereof. Except as set forth in Schedule 7.1(w), all of the loans secured
by the Existing Mortgages may be prepaid, in full, on the Closing Date
without imposition of any penalty or premium.
(x) Investment Representation. Each of Contributor and each LP Unit
Recipient represents that its LP Units are being acquired by it with the
present intention of holding such LP Units for purposes of investment and
not with a view towards sale or any other distribution. Each LP Unit
Recipient recognizes that it may be required to bear the economic risk of
an investment in the LP Units for an indefinite period of time. Each of
Contributor and each LP Unit Recipient is an Accredited Investor.
Contributor and each LP Unit Recipient has (indirectly through a custodian
under the New York Uniform Gift to Minors Act, in the case of LP Unit
Recipients who are minors under New York law) such knowledge and
experience in financial and business matters so as to be fully capable of
evaluating the merits and risks of an investment in the LP Units. No LP
Units will be issued, delivered or distributed to any person or entity who
either (i) is a resident of the State of California or (ii) is other than
an Accredited Investor with respect to whom there has been delivered to
Acquiror a satisfactory accredited investor questionnaire confirming the
status of such person or entity as an Accredited Investor. Each LP Unit
Recipient has been furnished with the informational materials described in
Subparagraph 2(d) above (collectively, the "INFORMATIONAL MATERIALS"), and
has read and reviewed the Informational Materials and understands the
contents thereof. The LP Unit Recipients have been afforded the
opportunity to ask questions of those persons they consider appropriate
and to obtain any additional information they desire in respect of the LP
Units and the business, operations, conditions (financial and otherwise)
and current prospects of the UPREIT and the REIT. The LP Unit Recipients
have consulted their own financial, legal and tax advisors with respect to
the economic, legal and tax consequences of delivery
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of the LP Units and have not relied on the Informational Materials,
Acquiror, the UPREIT, the REIT or any of their officers, directors,
affiliates or professional advisors for such advice as to such
consequences. Nothing contained in this Agreement shall prevent
Contributor or any LP Unit Recipient from (A) converting any of the LP
Units into Conversion Shares subject to the limitations set forth in, and
in accordance with the terms of, all of this Agreement, the Registration
Rights Agreement and the Partnership Agreement, and (B) selling,
transferring or otherwise disposing of any LP Units (or any Conversion
Shares for which any of the LP Units are redeemed) in any transaction that
does not violate the terms of this Agreement, the Partnership Agreement,
the Registration Rights Agreement, federal securities laws or the
securities laws of any state.
(y) Project No. 16. Project No. 16 is owned by LBA Melville
Associates, a general partnership. LBA Melville Associates is 50% owned
by MP/Melville Realty Associates, a New York limited partnership that is
unaffiliated with Contributor, and 50% owned by LBR Melville Associates,
L.P., a New York limited partnership ("LBRMA"). The ownership of LBRMA is
as follows: 49.5% by Constance Lazarus; 24.75% by each of Scott Burman
and David Burman (Susan Burman as custodian for each under the NYUGMA);
and 1% by LBR Commack, Inc., a Delaware corporation ("LBRCI"). Jan Burman
and Jerome Lazarus each own 50% of the outstanding stock of LBRCI.
(z) Project No. 52. Project No. 52 is owned by Stewart & Clinton
Co., LLC, a New York limited liability company ("S&CLLC"). The only
members of S&CLLC that are affiliated with Contributor are Four-Bur Family
Co., L.P. and five individuals who are LP Unit Recipients.
(aa) Patomi Realty Co. Mortgage. Project No. 43 is encumbered by a
$3,800,000 mortgage in favor of Patomi Realty Co. (the "PATOMI MORTGAGE")
that will not be paid off at Closing. The unpaid principal balance of the
note evidencing amounts due pursuant to the Patomi Mortgage (the "PATOMI
NOTE") is $3,800,000. All sums due and payable under the Patomi Mortgage
and Patomi Note, including, without limitation, interest, on or prior to
January 31, 1997 have been paid. To the best knowledge of Contributor, no
default has occurred and is continuing under the Patomi Note and the
Patomi Mortgage. The Patomi Note and the Patomi Mortgage have not been
modified or amended up to and including the date hereof. To the best
knowledge of Contributor, no offsets or defenses exist with respect to the
debt secured by the Patomi Mortgage.
The representations and warranties made in this Agreement by Contributor and
the LP Unit Recipients, as the case may be, shall be deemed remade by
Contributor and the LP Unit Recipients, as the case may be, as of the Closing
Date with the same force and effect as if, in fact, specifically remade at that
time. In the event matters occurring after the Contract Date render
Contributor (or the LP Unit Recipients) unable to remake a representation or
warranty as of the Closing Date, and Contributor specifically so advises
Acquiror, in writing and prior to Closing, of the particular circumstances
rendering any representation or warranty untrue, the failure to remake such
representation and warranty shall not constitute a default hereunder by
Contributor (or any LP Unit Recipient), except in the event or to the extent
that the untruth of such representation or warranty is the result of any
willful or intentional act or omission on the part of Contributor and in breach
of this Agreement; in all events, however, the continuing truth and accuracy of
all representations and warranties made by Contributor in this Agreement shall
be an Acquiror's Condition Precedent. Except as provided in the next sentence,
all representations and warranties made in this Agreement by Contributor or an
LP Unit Recipient shall survive the Closing for a period of one (1) year and
shall not merge into any instrument of conveyance delivered at the Closing;
provided, however, that (i) Acquiror shall be required to advise Contributor
or, if appropriate, the LP Unit Recipients, in writing, prior to the first
anniversary of the Closing of any claims that Acquiror believes it has with
respect to an alleged breach by Contributor or, if appropriate, the LP Unit
Recipients, of any of such representations and warranties and (ii) if Acquiror
determines to file suit for breach of representation or warranty against
Contributor or, if appropriate, the LP Unit Recipients, such suit must be filed
within six (6) months after giving the written notice of claims described in
clause (i) above. In the event that Acquiror receives an Estoppel Certificate
(as hereinafter defined) from a Tenant that addresses and confirms, with
respect to that Tenant's Lease, those particular matters set forth in
Subparagraph 11(a) hereof, Acquiror shall rely on such Estoppel Certificate in
lieu of those representations and warranties of Contributor set forth in
Subparagraph 11(a), but only if
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and to the extent that Contributor's representations and warranties set forth
in Subparagraph 11(a) are actually and specifically addressed and confirmed by
the Estoppel Certificate. In that event and to that extent, the
representations and warranties of Contributor set forth in Subparagraph 11(a)
shall expire as of the Closing Date, but only with respect to those Tenants
(and their respective Leases) from which Acquiror receives an Estoppel
Certificate that actually and specifically addresses and confirms those matters
that are the subject of Subparagraph 11(a). If, prior to Closing, Acquiror
acquires actual knowledge (through the provision of any written documentation
delivered to Acquiror by Contributor, or received by Acquiror from Contributor,
or through the delivery to Acquiror of a written report from any third party
engaged by Acquiror in order to perform any of the tests, studies,
investigations and inspections contemplated under Paragraph 5) of the breach of
any or all of the Contributor's representations and warranties made in this
Agreement, and Acquiror nevertheless elects to close under this Agreement, then
Acquiror shall be deemed to have waived the breach(es) in question, and shall
have no right, at any time after Closing, to assert a claim, of any nature
whatsoever, against Contributor with respect to that breach. As used in this
Agreement with respect to any representation or warranty, the "knowledge" of
Contributor refers to the actual knowledge of each and all of Jan Burman,
Jeffrey Cohen, Harry Szenicer and Dominic Vissichelli (the "EXECUTIVES").
7.2 Acquiror. Acquiror represents and warrants to Contributor that
the following matters are true as of the Contract Date:
(a) Existence and Power. Acquiror is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Maryland.
(b) Legal Compliance. To Acquiror's knowledge, it is not (i) in
violation of any of its organizational documents, (ii) in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a material default, in the due
performance or observance of any material term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is
subject or by which it, or any of them, may be materially affected, or
(iii) in violation, in any material respect, of any material law,
ordinance, governmental rule, regulation or court decree to which it or
its properties or assets may be subject.
(c) Notice of Violations. Acquiror has not received written notice
of any existing violation of any federal, state, county or municipal law,
ordinance, order, code, regulation or requirement affecting Acquiror or
any of its assets that would have a material adverse effect on the
financial condition, business or operations of Acquiror or any of its
assets.
(d) Authorization. Acquiror has all requisite corporate power and
authority to enter into this Agreement, the Assignment and all other
Acquiror Documents (as defined below) and perform its obligations
hereunder and thereunder. The execution and delivery to Contributor of
all agreements and other documents Acquiror executes and delivers in
connection with the transactions described in this Agreement, including,
without limitation, this Agreement and the Assignment ("ACQUIROR
DOCUMENTS"), and the performance by Acquiror of its obligations under the
Acquiror Documents and of its other obligations arising out of this
Agreement, if any, have been (or, prior to execution, shall be) duly
authorized by all requisite corporate action. The Acquiror Documents are
(or, upon execution, shall be) binding on Acquiror and enforceable against
Acquiror in accordance with their terms, subject to bankruptcy and similar
laws affecting the remedies or recourse of creditors generally and general
principles of equity. Neither the execution and delivery of the Acquiror
Documents, nor compliance with the terms and provisions thereof on the
part of Acquiror and consummation of the transactions contemplated
thereby, will violate any statute, license, decree, order or regulation of
any Governmental Authority, judicial or administrative body, or other
governmental body or agency having jurisdiction over Acquiror, or will, at
the Closing Date, breach, conflict with, or result in a breach of, any of
the terms, conditions or provisions of any material agreement or
instrument to which Acquiror is a party, or by which it is or may be
bound, or constitute a default thereunder, or, to Acquiror's actual
knowledge, result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon, or give to others any interest
or rights in, the LP Units to be issued to Contributor. No consent,
waiver, approval or
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authorization of, or filing, registration or qualification with, or notice
to, any Governmental Authority, judicial or administrative body, or other
governmental body or agency having jurisdiction over Acquiror, is required
to be made (including, but not limited to, any governmental bodies,
agencies, tenants, partners or lenders) obtained, or given by Acquiror in
connection with the execution, delivery and performance of the Acquiror
Documents.
(e) Pending Actions. There is no existing or, to Acquiror's
knowledge, threatened, legal action or governmental proceedings of any
kind involving Acquiror, any of its assets or the operation of any of the
foregoing, which, if determined adversely to Acquiror or its assets, would
have a material adverse effect on the financial condition, business or
operations of Acquiror or its assets or which would interfere with
Acquiror's ability to perform Acquiror's obligations under this Agreement
and the other Acquiror Documents or prevent the consummation of the
transactions contemplated by this Agreement. Acquiror has not (i) made a
general assignment for the benefit of creditors, (ii) filed any voluntary
petition in bankruptcy or suffered the filing of an involuntary petition
by its creditors, (iii) suffered the appointment of a receiver to take
possession of all or substantially all of its assets, (iv) suffered the
attachment, or other judicial seizure of all, or substantially all, of its
assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or compromise to
its creditors generally.
7.3 The UPREIT. It shall be a Contributor's Condition Precedent that
the UPREIT make the following representations and warranties, in writing,
as of the Closing Date, to Contributor:
(a) Existence and Power. The UPREIT is a limited partnership duly
formed, validly existing and in good standing under the laws of the State
of Delaware, and is duly qualified to do business in all jurisdictions
where such qualification is necessary to carry on its business, except
where the failure to so qualify would not materially and adversely affect
the financial condition, business or operations of the UPREIT. The UPREIT
is treated as a partnership for federal income tax purposes and not as an
association taxable as a corporation or a "publicly-traded partnership."
The UPREIT has all partnership power and authority under the Partnership
Agreement and its certificate of limited partnership to enter into the
Assignment and all other documents and agreements executed by it in
connection with the transaction that is the subject of this Agreement (the
Assignment and all such other documents and agreements, the "UPREIT
TRANSACTION DOCUMENTS") and to perform its obligations under this
Agreement following the Assignment and the other UPREIT Transaction
Documents.
(b) Legal Compliance. To the UPREIT's knowledge, it is not (i) in
violation of any of its organizational documents, (ii) in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a material default, in the due
performance or observance of any material term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is
subject or by which it, or any of them, may be materially affected, or
(iii) in violation, in any material respect, of any material law,
ordinance, governmental rule, regulation or court decree to which it or
its properties or assets may be subject.
(c) Notice of Violations. The UPREIT has not received written notice
of any existing violation of any federal, state, county or municipal law,
ordinance, order, code, regulation or requirement affecting the UPREIT or
any of its assets that would have a material adverse effect on the
financial condition, business or operations of the UPREIT or any of its
assets.
(d) Partnership Agreement. Contributor has received a true and
correct copy of the Partnership Agreement, as amended through the Contract
Date and the Closing Date, as applicable. The Partnership Agreement is in
full force and effect. The LP Units to be issued to Contributor hereunder
have been duly authorized for issuance to Contributor and, upon such
issuance, will be validly issued, fully paid and non-assessable and will
not be
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subject to preemptive rights upon their issuance. Upon admission of the
LP Unit Recipients to the UPREIT, pursuant to the Partnership Agreement,
every LP Unit Recipient will acquire legal and equitable title to its LP
Units, free and clear of all liens, encumbrances, claims and rights of
others, except to the extent any lien, encumbrance, claim or right of
others is created or conferred by an LP Unit Recipient or by the express
terms of the Partnership Agreement.
(e) Authorization. The execution and delivery to Contributor of the
UPREIT Transaction Documents, and the performance of all obligations of
Acquiror under this Agreement, all of which will become obligations of the
UPREIT upon its execution of and on the date of the Assignment, and all
other obligations under the other UPREIT Transaction Documents, are
permitted under the Partnership Agreement and have been duly authorized by
all requisite partnership action. The Assignment and all other UPREIT
Transaction Documents are (or, upon execution, shall be) binding on the
UPREIT and enforceable against the UPREIT in accordance with their terms,
subject to bankruptcy and similar laws affecting the remedies or recourse
of creditors generally and general principles of equity. Neither the
execution and delivery of the UPREIT Transaction Documents, nor compliance
with the terms and provisions thereof on the part of the UPREIT, and
consummation of the transactions contemplated thereby, will violate any
statute, license, decree, order or regulation of any Governmental
Authority, judicial or administrative body, or other governmental body or
agency having jurisdiction over the UPREIT, or will, at the Closing Date,
breach, conflict with or result in a breach of any of the terms,
conditions or provisions of any material agreement or instrument to which
the UPREIT is a party, or by which it is or may be bound, or constitute a
default thereunder, or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon, or give to others any
interest or rights in, the LP Units to be issued to Contributor. No
consent, waiver, approval or authorization of, or filing, registration or
qualification with, or notice to, any Governmental Authority, judicial or
administrative body, or other governmental body or agency having
jurisdiction over the UPREIT, is required to be made, obtained or given by
the UPREIT prior to the Closing Date in connection with the execution,
delivery and performance of the UPREIT Transaction Documents.
(f) Pending Actions. There is no existing or, to the UPREIT's
knowledge, threatened, legal action or governmental proceedings of any
kind involving the UPREIT, any of its assets or the operation of any of
the foregoing, which, if determined adversely to the UPREIT or its assets,
would have a material adverse effect on the financial condition, business
or operations of the UPREIT or its assets or which would interfere with
the UPREIT's ability to perform Acquiror's obligations under this
Agreement following the Assignment or any of its other obligations under
the other UPREIT Transaction Documents or prevent the consummation of the
transactions contemplated by this Agreement. The UPREIT has not (i) made
a general assignment for the benefit of creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of an involuntary
petition by its creditors, (iii) suffered the appointment of a receiver to
take possession of all or substantially all of its assets, (iv) suffered
the attachment, or other judicial seizure of all, or substantially all, of
its assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or compromise to
its creditors generally.
(g) Written Information. The Prospectus, as of its date, including
those documents incorporated by reference in the Prospectus as of the date
of the Prospectus, did not contain an untrue statement of a material fact
and did not omit to state a material fact necessary in order to make the
statements therein (in light of the circumstances under which they were
made), not misleading.
(h) Partnership Classification. The UPREIT (i) has been at all
times, and presently intends to continue to be, classified as a
partnership or a publicly traded partnership taxable as a partnership for
federal income tax purposes and not an association taxable as a
corporation or a publicly traded partnership taxable as a corporation, and
(ii) will not be rendered unable to be classified as a partnership or a
publicly traded partnership taxable as a partnership for federal income
tax purposes as a consequence of the transaction contemplated hereby.
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7.4 The REIT. It shall be a Contributor's Condition Precedent that
the REIT make the following representations and warranties, in writing, as
of the Closing Date, to Contributor:
(a) Existence and Power. The REIT is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Maryland, and is duly qualified to do business in all jurisdictions where
such qualification is necessary to carry on its business, except where the
failure to so qualify would not materially and adversely affect the
financial condition, business or operations of the REIT. The REIT is the
sole general partner in the UPREIT.
(b) Legal Compliance. To the REIT's knowledge, it is not (i) in
violation of its charter or by-laws, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a material default, in the due performance or
observance of any material term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or by which
it, or any of them, may be materially affected, or (iii) in violation, in
any material respect, of any material law, ordinance, governmental rule,
regulation or court decree to which it or its properties or assets may be
subject.
(c) Capitalization. The Conversion Shares will be duly authorized
and, to the extent delivered upon redemption of the LP Units, will have
been validly issued, fully paid, nonassessable and free of any preemptive
or similar rights.
(d) Notice of Violations. The REIT has not received written notice
of any existing violation of any federal, state, county or municipal law,
ordinance, order, code, regulation or requirement affecting the REIT or
any of its assets that would have a material adverse effect on the
financial condition, business or operations of the REIT or any of its
assets.
(e) REIT Qualification. The REIT (i) has, in its federal income tax
return for its tax year ended December 31, 1994, elected to be taxed as a
"real estate investment trust" within the meaning of Section 856 of the
Code, which election remains in effect and is currently intended to
continue to remain in effect for each of the REIT's taxable years, (ii)
has complied (or will comply) with all applicable provisions of the Code
relating to real estate investment trusts for each of its taxable years,
(iii) has operated, and intends to continue to operate, in such manner as
to qualify as a real estate investment trust for each of its taxable
years, (iv) has not taken or omitted to take any action which could result
in a challenge to its status as a real estate investment trust, and no
such challenge is pending or has been threatened (in writing), and (v)
will not be rendered unable to qualify as a real estate investment trust
for federal income tax purposes as a consequence of the transaction
contemplated hereby.
(f) Authorization. The REIT has all requisite corporate power and
authority to perform its obligations as described in this Agreement. The
execution and delivery to Contributor of all agreements and other
documents the REIT executes and delivers in connection with the
transactions described in this Agreement, including, without limitation,
the Assignment and the Amendment (the "REIT DOCUMENTS"), and performance
by the REIT under the REIT Documents and of its other obligations arising
out of this Agreement, if any, have been (or, prior to execution, shall
be) duly authorized by all requisite corporate action. The REIT Documents
are (or, upon execution, shall be) binding on the REIT and enforceable
against the REIT in accordance with their terms, subject to bankruptcy and
similar laws affecting the remedies or recourse of creditors generally and
general principles of equity. Neither the execution and delivery of the
REIT Documents, nor the compliance with the terms and provisions thereof
on the part of the REIT, and consummation of the transactions contemplated
thereby, will violate any statute, license, decree, order or regulation of
any Governmental Authority, judicial or administrative body, or other
governmental body or agency having jurisdiction over the REIT, or will, at
the Closing Date, breach, conflict with, or result in a breach of, any of
the terms, conditions or provisions of any material agreement or
instrument to which
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REIT is a party, or by which it is or may be bound, or constitute a
default thereunder, or result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon, or give to others any
interest or rights in, the LP Units to be issued to Contributor. No
consent, waiver, approval or authorization of, or filing, registration or
qualification with, or notice to, any Governmental Authority, judicial or
administrative body, or other governmental body or agency having
jurisdiction over the REIT, is required to be made, obtained or given by
the REIT prior to the Closing Date, in connection with the execution,
delivery and performance of the REIT Documents.
(g) Pending Actions. There is no existing, or, to the REIT's
knowledge, threatened legal action or governmental proceedings of any kind
involving the REIT, any of its assets or the operation of any of the
foregoing, which, if determined adversely to the REIT or its assets, would
have a material adverse effect on the financial condition, business or
operations of the REIT or its assets and which would interfere with the
REIT's ability to perform its obligations under the REIT Documents, or
prevent the consummation of the transactions contemplated in this
Agreement. The REIT has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition by its creditors, (iii) suffered the
appointment of a receiver to take possession of all or substantially all
of its assets, (iv) suffered the attachment, or other judicial seizure of
all, or substantially all, of its assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or compromise to its creditors generally.
(h) Written Information. The Prospectus, as of its date, including
those documents incorporated by reference in the Prospectus as of the date
of the Prospectus, did not contain an untrue statement of a material fact
and did not omit to state a material fact necessary in order to make the
statements therein (in light of the circumstances under which they were
made), not misleading.
All representations and warranties made (and to be made) in this Paragraph 7 by
Acquiror, the UPREIT or the REIT shall survive the Closing for a period of one
(1) year and shall not merge into any instrument of conveyance delivered at the
Closing; provided, however, that (i) Contributor shall be required to advise
Acquiror, the UPREIT and/or the REIT, as the case may be, in writing, prior to
the first anniversary of the Closing of any claims that Contributor believes it
has with respect to an alleged breach by Acquiror, the UPREIT and/or the REIT,
as the case may be, of any such representations and warranties and (ii) if
Contributor determines to file suit for breach of representation or warranty
against Acquiror, the UPREIT or the REIT, as the case may be, such suit must be
filed within six (6) months after giving the written notice of claims described
in clause (i) above. As used in this Agreement with respect to any
representation or warranty, the "knowledge" of Acquiror, the UPREIT and the
REIT refers to the actual knowledge of each and all of Michael Tomasz, Michael
Havala, Michael Brennan and Johannson Yap. From and after the date of the
Assignment, the UPREIT shall be liable for any breach or default by the
Acquiror under this Agreement.
8. ADDITIONAL COVENANTS.
8.1 Contributor's. Effective as of the execution of this Agreement,
Contributor hereby covenants with Acquiror, with respect to the period
ending at Closing for all but clauses 8.1(f) and (h), as follows:
(a) New Leases. Subject to the terms of Paragraph 26 below,
Contributor shall neither amend any Lease in any economic or other
material respect nor execute any new lease, license, or other occupancy
agreement affecting the ownership or operation of all or any portion of
the Projects or for personal property, equipment, or vehicles (unless in
replacement of any existing personal property lease on substantially
similar or better terms), without Acquiror's prior written approval (which
approval shall not be unreasonably withheld or delayed and shall
automatically be deemed given if Acquiror fails to respond within five (5)
business days following Contributor's written request for approval).
(b) New Contracts. Contributor shall not enter into any contract
with respect to the management or operation of all or any portion of any
or all of the Projects that will
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survive the Closing, or that would otherwise materially affect the use,
operation or enjoyment of any or all of the Projects, without Acquiror's
prior written approval (which approval shall not be unreasonably withheld
or delayed and shall automatically be deemed given if Acquiror fails to
respond within five (5) business days following Contributor's written
request for approval), except for service contracts entered into in the
ordinary course of business that are terminable, without penalty, on not
more than sixty (60) days' notice, for which no consent shall be required.
(c) Insurance. The insurance coverage described in Subparagraph
7.1(l) shall remain continuously in force through and including the
Closing Date.
(d) Operation of Projects. Contributor shall operate and manage the
Projects in the same manner as in effect on the Contract Date, maintaining
present services (including, but not limited to, pest control), and shall
maintain the Projects in the condition required under the Leases and in
substantially the same condition as exists on the Contract Date (casualty
and reasonable wear and tear excepted), shall keep on hand sufficient
materials, supplies, equipment and other Personal Property for the
operation and management of the Projects in substantially the same manner
as in effect on the Contract Date; and shall perform, when required by the
terms of the underlying document or by law, all of Contributor's material
obligations under the Leases, Contracts, Governmental Approvals and other
agreements binding on Contributor and relating to the Projects; provided
that nothing contained in this Subparagraph 8.1(d) shall require
Contributor to make any unscheduled capital improvements or repairs or
bring any of the Projects up to current code requirements. Except as
otherwise specifically provided herein (including, without limitation,
Paragraph 15), Contributor shall deliver the Projects at Closing in
substantially the same condition as each of them is in on the Contract
Date (subject to the performance of tenant improvements and improvements
provided for, and contemplated, in Contributor's current budget for that
particular Project), reasonable wear and tear excepted, and shall
terminate, as of the Closing Date, the Contracts, unless otherwise advised
to the contrary by Acquiror, in writing, no later than the Approval Date.
None of the Personal Property, fixtures or Inventory (except as such
Inventory may be consumed in the ordinary course of business) shall be
removed from the Projects, unless replaced by personal property, fixtures
or inventory of substantially equal or greater utility and value.
(e) Pre-Closing Expenses. Subject to the provisions of Paragraphs 13
and 26 below, Contributor will pay in full, prior to Closing (or the same
shall be subject to reproration after the Closing if the bill or invoice
is not issued by Closing), all bills and invoices for labor, goods,
material and services of any kind rendered to or at the request of
Contributor relating to the Projects and utility charges, relating to the
period prior to Closing, but excluding therefrom all utility and other
charges billed directly to Tenants or subtenants of the Projects. Except
as the parties may otherwise agree herein, any alterations, installations,
decorations and other work required to be performed by Contributor prior
to the Closing under any and all agreements affecting the Projects to
which Contributor is a party and by which Acquiror will be bound will, by
the Closing, be completed and paid for, in full or subject to proration.
(f) Good Faith. All actions required pursuant to this Agreement that
are necessary to effectuate the transaction contemplated herein will be
taken promptly and in good faith by Contributor and Acquiror, as the case
may be, and each party shall furnish the other party with such documents
or further assurances as such other party may reasonably require.
(g) No Assignment. After the Contract Date and prior to Closing,
Contributor shall not assign, alienate, lien, encumber or otherwise
transfer all or any part of any or all of the Projects except as permitted
herein.
(h) Availability of Records. Upon Acquiror's request, for a period
of two (2) years after Closing, Contributor shall (i) make the Records
available to Acquiror for inspection, copying and audit (at Acquiror's
expense) by Acquiror's designated accountants; and (ii) reasonably
cooperate with Acquiror (without any third party expense to Contributor)
in obtaining any and all permits, licenses, authorizations, and other
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Governmental Approvals necessary for the operation of any or all of the
Projects. Without limitation of the foregoing in this Subparagraph
8.1(h), Contributor agrees to abide by the terms of Exhibit Q attached
hereto, but without any third-party expense to Contributor. The
provisions of this Subparagraph 8.1(h) shall survive the Closing for a
period of two (2) years.
(i) Change in Conditions. Prior to Closing, Contributor shall
promptly notify Acquiror of any material adverse change (about or of which
Contributor has actual knowledge) of any condition with respect to any or
all of the Projects or of the occurrence of any event or circumstance that
makes any representation or warranty of Contributor to Acquiror under this
Agreement untrue or misleading in any material respect, or any covenant of
Acquiror under this Agreement incapable of being performed in any material
respect, it being understood that Contributor's obligation to provide
notice to Acquiror under this Subparagraph 8.1(i) shall in no way relieve
Contributor of any liability for a breach by Contributor of any of its
representations, warranties or covenants under this Agreement or otherwise
impair any cure period of Contributor set forth herein, except to the
extent Contributor elects to exercise the Contributor's Mitigation Option
pursuant to (and as defined in) Subparagraph 9(d)(ii).
(j) Ownership Structure. From the Contract Date through and
including the Closing Date, Contributor shall maintain the same
composition of its partners, shareholders and members as exists on the
Contract Date, subject to redemption of certain partners and intra-family
transfers, unless otherwise required pursuant to Subparagraph 2(c)(iv)
above.
(k) Initial Public Offering. From and after the Contract Date to the
Closing Date, Contributor shall not file, and shall not permit any
partner, shareholder, member, affiliate or Representative of Contributor
to file, any registration statement (on Form S-11 or otherwise) with the
SEC that in any way relates to any Project or the business of Lazarus
Burman Associates.
(l) Existing Mortgages. Contributor shall, prior to Closing, comply
in all material respects with the requirements of the Existing Mortgages.
(m) Remediation of Code Violations. Notwithstanding anything to the
contrary contained herein, Contributor agrees to remediate, or otherwise
respond to, at Contributor's sole expense and in a prompt and commercially
reasonable fashion, in a manner reasonably satisfactory to Acquiror, any
existing violation of any municipal or other governmental law, ordinance,
regulation, code, license, permit or authorization cited by a municipality
with respect to any Project. Contributor shall have no obligation
pursuant to this Subparagraph 8.1(m) unless, within 45 days of the Closing
Date, Acquiror delivers to Contributor a written notice concerning such a
violation issued by a municipal agency.
(n) Sewer Hookups. The parties acknowledge that certain of the
Projects are not currently hooked up to and into the applicable
municipality's sewer system; however, given the availability of municipal
sewer lines at and near those Projects, Contributor has advised Acquiror
that these Projects are eligible for connection to and into the applicable
municipality's sewer system. As a result, Contributor hereby covenants
and agrees that, as soon as is reasonably possible, but in all events
within one year after the Closing Date, Contributor shall cause Projects
Nos. 22, 45, 46, 47, 48 and 49 to be hooked up to the appropriate
municipal sewer system in accordance with all applicable laws, regulations
and ordinances (the "HOOKUPS").
(o) Patomi Mortgage. JB shall use his good faith, diligent and
reasonable efforts to obtain and deliver to Acquiror promptly following
the Closing a mortgagee estoppel with respect to the Patomi Mortgage in
form and substance reasonably acceptable to Acquiror from Patomi Realty
Co. Such mortgagee's estoppel shall include, among other things, an
unqualified consent from the mortgagee to the transfer of Project 43 to
the UPREIT. Post-Closing Contributor hereby agrees to immediately
reimburse Acquiror for (i) any penalty or premium assessed against it
under the Patomi Mortgage or Patomi Note in connection with the
contribution of Project No. 43 hereunder and (ii) any prepayment
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of the Patomi Note. Post-Closing Contributor further agrees to provide to
Acquiror and its counsel (Barack Ferrazzano Kirschbaum Perlman &
Nagelberg), promptly following the Closing, copies of all documents in its
possession relating to the Patomi Mortgage and the Patomi Note.
(p) Certain Estoppels. Post-Closing Contributor hereby agrees to
protect, defend, indemnify and hold Acquiror, the UPREIT, the REIT and any
of their partners, officers, directors, shareholders, successors and
assigns harmless from and against any and all losses that any or all of
the indemnified parties suffers or incurs as a result of any matter raised
in the estoppel certificates delivered in connection with the Closing
hereunder by the following Tenants that is not contemplated by the form
estoppel certificate attached as Exhibit O: Langer Biomechanics Group,
Inc.; Metro Area Sales Inc.; and Dictaphone Corporation (which Dictaphone
estoppel certificate shall include the matters referenced by hand in that
certain letter dated December 13, 1996 from Harry Szenicer to Dictaphone
Corporation).
In all events, however, the satisfaction of, and compliance with (in all
material respects), all of the covenants made by Contributor in this Agreement
shall be an Acquiror's Condition Precedent. All covenants made in this
Agreement by Contributor shall survive the Closing for a period of one (1)
year, unless otherwise expressly provided herein, and shall not be merged into
any instrument of conveyance delivered at Closing. If, prior to Closing,
Acquiror acquires actual knowledge (through the provision of any written
documentation delivered to Acquiror by Contributor, or received by Acquiror
from Contributor, or through the delivery to Acquiror of a written report from
any third party engaged by Acquiror in order to perform any of the tests,
studies, investigations and inspections contemplated under Paragraph 5) of the
Contributor's failure to satisfy and comply with any or all of the covenants
made by Contributor in this Agreement, and Acquiror nevertheless elects to
close under this Agreement, then Acquiror shall be deemed to have waived the
failure(s) in question, and shall have no right, at any time after Closing, to
assert a claim, of any nature whatsoever, against Contributor, with respect to
that failure to so satisfy or comply with any or all of such covenants of
Contributor.
8.2 Acquiror's, REIT's and UPREIT's. Effective as of the execution
of this Agreement, Acquiror and, effective as of the Closing Date, the
REIT and the UPREIT hereby covenant with Contributor, with respect to the
period ending at Closing for all but clauses 8.2(c) and (d), as follows:
(a) Change in Conditions. Any or all of Acquiror, the REIT and the
UPREIT shall promptly notify Contributor of any material change in any
condition with respect to the business of any or all of Acquiror, the REIT
and the UPREIT, or of the occurrence of any event or circumstance that
makes any representation or warranty of any or all of Acquiror, the REIT
and the UPREIT to Contributor under this Agreement untrue or misleading,
in any material respect, or any covenant of any or all of Acquiror, the
UPREIT and the REIT under this Agreement incapable of being performed in
any material respect, it being understood that Acquiror's, the REIT's and
the UPREIT's obligation to provide notice to Contributor under this
Subparagraph 8.2(a) shall in no way relieve Acquiror, the REIT and the
UPREIT of any liability for a breach by them of their respective
representations, warranties or covenants under this Agreement.
(b) Ownership Structure. From the Contract Date through and
including the Closing Date, Acquiror, the REIT and the UPREIT shall each
maintain (unless prevented by death or incapacity) substantially the same
composition of their respective executive officers, boards of directors or
general partner, as the case may be, as exists on the Contract Date.
(c) Good Faith. All actions required pursuant to this Agreement that
are necessary to effectuate the transaction contemplated herein will be
taken promptly and in good faith by Acquiror, the UPREIT and the REIT, as
applicable, and the appropriate representatives, officers or partners of
such parties shall furnish Contributor with such documents or further
assurances as Contributor may reasonably require.
(d) Consent Decree. With respect to Projects 8 and 9, Acquiror
acknowledges that Contributor has advised it of the existence of that
certain "Consent Decree"
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concerning these two Projects signed by the Regional Administrator of the
United States Environmental Protection Agency, Region II, on or about
September 30, 1996; and if Acquiror acquires these Projects, Acquiror
shall fully comply with the obligations imposed on the owner of these two
Projects under the following paragraphs of the Consent Decree: Paragraph
9 (Notice of Obligations to Successors-in-Title), Paragraph 22(a) and (b)
(Site Access) and Paragraph 23 (Institutional Controls). Acquiror shall
not be bound or required to comply with any other provisions of the
Consent Decree. The provisions of this Subparagraph shall survive the
Closing so long as the requirements imposed under the relevant Consent
Decree(s) remain in effect.
In all events, however, the satisfaction of, and compliance with, in all
material respects, all of the covenants made by Acquiror, the REIT and the
UPREIT in this Agreement shall be a Contributor's Condition Precedent. All
covenants made in this Agreement by Acquiror, the REIT and the UPREIT, shall
survive the Closing for a period of one (1) year, unless otherwise expressly
provided herein, and shall not be merged into any instrument of conveyance
delivered at Closing.
9. ENVIRONMENTAL WARRANTIES AND AGREEMENTS.
(a) Definitions.
Unless the context otherwise requires:
(i) "ENVIRONMENTAL LAW" or "ENVIRONMENTAL LAWS" shall mean all
applicable state and local statutes, regulations, directives,
ordinances, rules, court orders, judicial or administrative decrees,
binding arbitration awards and the common law, which pertain to the
environment, soil, water, air, flora and fauna, or health and safety
matters, as such have been amended, modified or supplemented from
time to time, and are in effect on the Closing Date (including all
present amendments thereto and re-authorizations thereof).
Environmental Laws include, without limitation, those relating to:
(i) the manufacture, processing, use, distribution, treatment,
storage, disposal, generation or transportation of Hazardous
Materials; (ii) air, soil, surface, subsurface, groundwater or noise
pollution; (iii) Releases; (iv) protection of endangered species,
wetlands or natural resources; (v) the operation and closure of
Containers; (vi) health and safety of employees and other persons;
and (vii) notification and reporting requirements relating to the
foregoing. Without limiting the above, Environmental Law also
includes the following: (i) the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Sections 9601 et
seq.), as amended ("CERCLA"); (ii) the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act (42 U.S.C.
Sections 6901 et seq.), as amended ("RCRA"); (iii) the Emergency
Planning and Community Right to Know Act of 1986 (42 U.S.C. Sections
11001 et seq.), as amended; (iv) the Clean Air Act (42 U.S.C.
Sections 7401 et seq.), as amended; (v) the Clean Water Act (33
U.S.C. Sections 1251 et seq.), as amended; (vi) the Toxic Substances
Control Act (15 U.S.C. Sections 2601 et seq.), as amended; (vii) the
Hazardous Materials Transportation Act (49 U.S.C. Sections 1801 et
seq.), as amended; (viii) the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Sections 136 et seq.), as amended;
(ix) the Federal Safe Drinking Water Act (42 U.S.C. Sections 300f et
seq.), as amended; (x) the Federal Radon and Indoor Air Quality
Research Act (42 U.S.C. Sections 7401, et seq.); (xi) the
Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.),
as amended; (xii) any state, county, municipal or local statutes,
laws or ordinances similar or analogous to (including counterparts
of) any of the statutes listed above; and (xiii) any rules,
regulations, directives, orders or the like adopted by a Governmental
Authority pursuant to or implementing any of the above.
(ii) "ENVIRONMENTAL PERMIT" or "ENVIRONMENTAL PERMITS" shall
mean licenses, certificates, permits, directives, requirements,
registrations, government approvals, agreements, authorizations, and
consents which are required under or are issued pursuant to an
Environmental Law or are otherwise required by Governmental
Authorities.
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(iii) "GOVERNMENTAL AUTHORITY" shall mean any agency,
commission, department or body of any municipal, township, county,
local, state or Federal governmental or quasi-governmental regulatory
unit, entity or authority having jurisdiction or authority over all
or any portion of the Projects or the management, operation, use or
improvement of any of them.
(iv) "HAZARDOUS CONDITION" or "HAZARDOUS CONDITIONS" refers to
the existence or presence of any Hazardous Materials on, in, under or
at, the Projects (including air, soil and groundwater) or any portion
of any of them.
(v) "HAZARDOUS MATERIAL" or "HAZARDOUS MATERIALS" shall mean any
chemical, pollutant, contaminant, pesticide, petroleum or petroleum
product or by-product, radioactive substance, hazardous or extremely
hazardous solid waste, special or toxic waste, substance, chemical or
material regulated, listed, limited or prohibited under any
Environmental Law, including without limitation: (i) friable or
damaged asbestos, asbestos-containing material, polychlorinated
biphenyls ("PCBS"), solvents and waste oil; (ii) any "hazardous
substance" as defined under CERCLA; and (iii) any "hazardous waste"
as defined under RCRA or comparable state or local law.
(vi) "RELEASE" means any spill, discharge, leak, migration,
emission, escape, injection, dumping or other release or threatened
release of any Hazardous Material into the environment, whether or
not notification or reporting to any governmental agency was or is
required. Release includes, without limitation, historical releases
and the meaning of Release as defined under CERCLA.
(vii) "QUALIFIED CONSULTING FIRM" shall mean a first-class
nationally or regionally recognized environmental engineering and/or
consulting firm (the parties hereby specifically recognize C.A. Rich
Consultants, Inc., ERM, Warzyn Engineering, Ground Water
Technologies, Inc., ICF Kaiser, Roux Associates, Inc. and Dames and
Moore as such firms).
(viii) "REMEDIAL ACTION" shall mean any and all corrective or
remedial action, preventative measures, response, removal, transport,
disposal, clean-up, abatement, treatment and monitoring of Hazardous
Materials or Hazardous Conditions, whether voluntary or mandatory,
and includes all studies, assessments, reports or investigations
performed in connection therewith to determine if such actions are
necessary or appropriate (including investigations performed to
determine the progress or status of any such actions), all occurring
on or after the Contract Date.
(ix) "CONTAINER" or "CONTAINERS" means above-ground and
underground storage tanks and related equipment containing or
previously containing any Hazardous Material or fraction thereof.
(x) "REMEDIAL COSTS" shall include all costs, liabilities
expenses and fees incurred on or after the date of this Agreement in
connection with Remedial Action, including but not limited to: (i)
the reasonable fees of environmental consultants and contractors;
(ii) reasonable attorneys' fees (including compensation for in-house
and corporate counsel provided such compensation does not exceed
customary rates for comparable services); (iii) the costs associated
with the preparation of reports, and laboratory analysis (including
charges for expedited results if reasonably necessary); (iv)
regulatory, permitting and review fees; (v) costs of soil and/or
water treatment (including groundwater monitoring) and/or transport
and disposal; and (iv) the cost of supplies, equipment, material and
utilities used in connection with Remedial Action.
(b) Warranties. Contributor represents and warrants to Acquiror
that: (i) it has provided complete access, to all of Acquiror, Acquiror's
counsel and Acquiror's environmental consultants, to all documents
concerning the Projects that are (x) within any and all of the files in
the possession of each of Contributor and its environmental counsel and
(y) relevant to the representations and warranties set forth in this
Subparagraph 9(b);
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(ii) to Contributor's actual knowledge, no other documents concerning the
Projects and the environmental condition thereof are in the possession of
any parties other than (x) Contributor, (y) Contributor's environmental
counsel, and (z) those environmental consultants whose names have been
provided to Acquiror, in writing, to whom Contributor has sent letters
advising such consultants that they may disclose to Acquiror information
in their possession concerning any of the Projects; and (iii) except as
(x) revealed in those particular documents to which Acquiror has had
complete access (pursuant to clause (i) above) or (y) set forth on
Schedule 9(b) attached hereto (which Schedule shall also be deemed to
incorporate any information developed or acquired by Acquiror's
environmental consultants during or as a result of any environmental
Assessments or Additional Assessments performed pursuant to Subparagraph
5(b) and expressly set forth in Reports delivered to Acquiror by its
environmental consultants), to Contributor's actual knowledge, the
following matters are true and correct as of the Contract Date and shall
be true and correct as of the Closing Date:
(i) The Projects have been and continue to be owned and operated
in material compliance with all Environmental Laws and Environmental
Permits.
(ii) There have been no past and there are no pending or
threatened: (i) claims, complaints, notices, correspondence or
requests for information received by Contributor with respect to any
violation or alleged violation of any Environmental Law or
Environmental Permit or with respect to any corrective or remedial
action for or cleanup of the Projects or any portion of any of them;
and (ii) written correspondence, claims, complaints, notices, or
requests for information from or to Contributor regarding any actual,
potential or alleged liability or obligation under or violation of
any Environmental Law or Environmental Permit with respect to the
Projects or any portion of any of them.
(iii) There have been no Releases, and there has not been a
threatened Release of a Hazardous Material at, on, under or in any of
the Projects or any portion of any of them which could give rise to
any material claim, liability or obligation.
(iv) No conditions exist at, on, in, or under the Land or the
Projects that would give rise to any material claim, liability or
obligation arising out of a Hazardous Condition under any
Environmental Law or Environmental Permit.
(v) Contributor has been issued and is in material compliance
with all Environmental Permits required for the operation of the
Projects.
(vi) The Projects are not listed, proposed or nominated for
listing on the National Priorities List pursuant to CERCLA (the
"NPL"), or the New York State Registry of Inactive Hazardous Waste
Disposal Sites.
(vii) Contributor has not transported, disposed of or treated,
or arranged for the transportation, disposal or treatment of, any
Hazardous Material from any or all of the Projects to any location
that is: (i) listed, proposed or nominated for listing on the NPL, or
the New York State Registry of Inactive Hazardous Waste Disposal
Sites; and (ii) the subject of any pending Federal, state or local
enforcement action or other investigation that includes any claim or
liability against Contributor as a result of any Remedial Action,
damage to natural resources or personal injury, including, but not
limited to, any claim under CERCLA.
(viii) There are no Containers at, in, on or under the Projects
which could give rise to any material claims, obligations, or
liabilities under Environmental Laws; Contributor has not removed,
closed or abandoned any Containers at any or all of the Projects in a
manner which could give rise to any material claims, obligations, or
liabilities under Environmental Laws; and Contributor has no
knowledge of the existence, abandonment, closure or removal of
Containers at any or all of the Projects in a manner which could give
rise to any material claims, obligations, or liabilities under
Environmental Laws. Any and all Containers which
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have heretofore been removed from, or closed at, any or all of the
Projects have been removed or closed in accordance with all
Environmental Laws.
(ix) There are no PCBs or friable or damaged asbestos at any or
all of the Projects which could give rise to any material claims,
obligations, or liabilities under Environmental Laws.
(x) There has been no storage, treatment, disposal, generation,
transportation or Release of any Hazardous Materials by Contributor
or by its predecessors in interest, or by any other person or entity
for which Contributor is or may be held responsible, at, on, under or
in any or all of the Projects (or any portion of any of them) in
violation of, or which could give rise to, any material claim,
obligation or liability under Environmental Laws.
(xi) No drums containing or previously containing any Hazardous
Material or fraction thereof are buried or otherwise stored under the
surface of any soil at any of the Projects.
(c) Environmental Indemnities.
(i) Indemnification Concerning Projects 8, 9, 10, 11 and 33-37.
The LP Unit Recipients (jointly and severally, "POST-CLOSING
CONTRIBUTOR") hereby indemnify, defend, and hold harmless Acquiror,
its partners, shareholders and the respective agents, contractors,
employees, shareholders, trustees and representatives of each of
Acquiror, its partners and shareholders, and each of their successors
and assigns, from and against any and all liabilities, claims,
demands, suits, administrative proceedings, causes of action,
penalties, fines, liens, reasonable fees, costs (including reasonable
attorneys' fees and costs and environmental consultants' fees, as
limited by Subparagraph 9(c)(ii)), damages (including reasonable
attorneys' fees and costs and environmental consultants' fees and
expenses incurred by Acquiror with respect to enforcing its rights
hereunder), personal injuries and property damages, losses and
expenses, both known and unknown, present and future, at law or in
equity, but not including consequential damages (collectively, "LOSS"
or "LOSSES") as a result of or arising from:
(A) the presence at Projects 8 and 9 (the "GOLDISC SITE")
of (i) any Hazardous Materials in the groundwater, and (ii) the
presence at the Goldisc Site of any petroleum products or
petroleum degradation products in the soil or groundwater at
Areas of Environmental Concern ("AEC") 5 and 13 as depicted in
Figure 2-2 of Phase II Remedial Investigation Report: Former
Goldisc Recordings Facility, Holbrook, New York, prepared by
ERM-Northeast, April 1995; provided, however, that the
activities, events, conditions or occurrences that resulted in
Losses concerning the Goldisc Site occurred prior to the Closing
Date (and such conditions or occurrences shall be deemed to
include the continued spread of contamination that may occur
after the Closing Date); provided further, however, that all
indemnities concerning groundwater contamination at the Goldisc
Site shall immediately terminate only after the remedial action
for groundwater selected by the USEPA is completed, including,
but not limited to, any monitoring and/or operations and
maintenance required by a Governmental Authority, and all
indemnities concerning AEC 5 and 13 of the Goldisc Site shall
terminate only after the remedial actions for AEC 5 and 13 have
been completed (as "completed" is defined in Subparagraph
9(d)(ii)(E) herein), including, but not limited to, any
monitoring and/or operations and maintenance required by a
Governmental Authority; and
(B) any Hazardous Conditions at Projects 10 and 11 (the
"ALSY SITE"); provided, however, that the activities, events,
conditions or occurrences which resulted in Losses concerning
the Alsy Site occurred prior to the Closing Date; provided
further, however, that all indemnities concerning the Alsy Site
shall terminate upon the removal of the Alsy Site from the New
York State Registry of Inactive Hazardous Waste Disposal Sites
or the reclassification of
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the Alsy Site to a class "5" site. Post-Closing Contributor
shall have an affirmative obligation to petition the New York
State Department of Environmental Conservation for such removal
or reclassification of the Alsy Site and shall take all
reasonable steps to pursue diligently such petition until such
removal or reclassification is obtained, including any appeals
or challenges to denials of such petition as may be appropriate.
It shall be in Post-Closing Contributor's sole discretion as to
when to initiate any such petition; provided, however, that
Post-Closing Contributor shall initiate such petition within six
months of completion of the Remedial Work at the Alsy Site
required by any Governmental Authority (including any monitoring
and/or operation and maintenance).
(C) the presence of volatile organic compounds in the
groundwater (and any associated source area in the soil) at
Projects 33, 34, 35 and 37; provided, however, that the
activities, events, conditions or occurrences that resulted in
such Losses occurred prior to the Closing Date (such occurrence
shall include the continued spread and/or migration of
contamination that may occur after the Closing Date); provided,
further, that any such Losses relate to a demand, claim, suit,
administrative proceeding or other action brought by, or on
behalf of, a Governmental Authority or other third party. This
indemnity shall terminate five (5) years after the Closing Date.
(ii) Indemnification Procedure. Within a reasonable period of
time after receipt by Acquiror of its first notice of any Loss in
respect of which Acquiror will seek indemnification under
Subparagraph 9(c)(i) above, but in no event later than ten (10)
business days prior to the expiration of any required response
period, or, if the required response period is less than ten (10)
business days, immediately upon receipt by Acquiror of its first
notice of the Loss in respect of which indemnification is sought:
(1) Acquiror shall notify Post-Closing Contributor thereof in
writing, and, subject to the other provisions of this Subparagraph
9(c)(ii), any failure to so notify Post-Closing Contributor shall
relieve Post-Closing Contributor from any liability for
indemnification that it may have to Acquiror (but such relief shall
apply only to the alleged Loss about which Acquiror fails to timely
notify Post-Closing Contributor); provided, however, that as long as
JB is employed pursuant to the Employment Agreement (or pursuant to
any other written agreement between JB and Acquiror or any of its
Affiliates), receipt of notice of a Loss in Acquiror's New York
office (in which JB is employed by Acquiror [or any of its
Affiliates] in a management position) shall constitute notice to
Post-Closing Contributor of that Loss; and (2) Acquiror shall consult
and cooperate with Post-Closing Contributor as to the proper course
of action to be taken and shall not take any action that may result
in the acknowledgement of any liability of Acquiror or may result in
settlement or compromise of any claim against Acquiror, unless
Acquiror obtains Post-Closing Contributor's prior written consent,
which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, any failure by Acquiror to notify Post-Closing
Contributor within such 10 business day period (or less, as the case
may be) shall not, to the extent that Acquiror can establish that
Post-Closing Contributor has not been materially prejudiced by such
delay, relieve Post-Closing Contributor of any or all of its
indemnification obligations under this Paragraph 9; and any
reasonable additional costs or expenses actually incurred by
Post-Closing Contributor as a result of such delay shall be borne by
Acquiror and shall be paid by Acquiror within thirty (30) days after
Acquiror's receipt of an invoice describing, in reasonable detail,
such costs or expenses. Post-Closing Contributor shall have final
approval over any settlement or material decisions concerning any
Losses. Post-Closing Contributor shall be entitled to select counsel
in the defense of any action, suit, or administrative proceeding, and
in any other actions that may result in Losses for which a claim for
indemnity may be made under Subparagraph 9(c)(i) above (collectively,
"ACTION") and to assume control of the defense of such Action.
Acquiror shall have the right to approve of the selection of counsel
and if it chooses to exercise this right, such approval shall not be
unreasonably withheld. After written notice by Post-Closing
Contributor to Acquiror of its election to assume control of the
defense of such Action, and provided that Post-Closing Contributor
does, in fact, defend such Action, Post-Closing Contributor shall not
be liable to
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Acquiror hereunder for any legal expenses subsequently incurred by
Acquiror in connection with the defense of that particular Action,
including any appeals. Post-Closing Contributor shall regularly
apprise Acquiror, in reasonable detail, of the status of any Action
for which Post-Closing Contributor assumes the defense. If
Post-Closing Contributor assumes control of the defense and selects
counsel, and if counsel chosen by Post-Closing Contributor has or
develops a conflict of interest and is unable to continue its
representation, the reasonable fees and expenses of Acquiror's
counsel thereafter incurred shall, to the extent that Acquiror can
show that it has, or reasonably could have, been materially
prejudiced by such delay, be at the expense of Post-Closing
Contributor, provided that no substitute for Post-Closing
Contributor's original counsel is engaged by Post-Closing Contributor
within a reasonable period of time (subject to the right of Acquiror
to approve selection of counsel, which consent shall not be
unreasonably withheld). If Post-Closing Contributor does not assume
control of the defense of such Action within the longer of (A) ten
(10) business days after the first notice of such Losses to
Post-Closing Contributor or (B) the time to respond to such action or
proceeding (inclusive of extensions of time to respond), but in no
event more than 45 days from the date of receipt of such first
notice, Acquiror (within 30 days after Acquiror's delivery of a
written demand therefore) shall control the defense in such manner as
it deems appropriate and Post-Closing Contributor shall reimburse
Acquiror for all reasonable costs and expenses in connection with
such defense.
(iii) Limitation of Indemnities and Reservation of Rights.
Except for the indemnities provided in Subparagraph 9(c)(i) above
concerning Projects 8, 9, 10, 11, 33, 34, 35, and 37, Post-Closing
Contributor provides no environmental indemnities for any of the
Projects to be acquired by Acquiror pursuant to this Agreement.
Post-Closing Contributor also retains all of its rights to (x) assert
claims, causes of action, demands, and suits against any third party
("THIRD-PARTY ACTIONS") concerning Losses which Post-Closing
Contributor has incurred or may incur in the future relating to any
of the Projects subject to this Agreement, including without
limitation Projects 8, 9, 10, 11, 33, 34, 35 and 37; (y) retain
control of any such Third-Party Actions; and (z) retain in full any
and all amounts recovered thereby.
(iv) Indemnification for Offsite Disposal. Post-Closing
Contributor hereby indemnifies, defends, and holds harmless Acquiror,
its partners, shareholders and the respective agents, contractors,
employees, shareholders, trustees and representatives of each of
Acquiror, its partners and shareholders, and each of their successors
and assigns, from and against any and all Losses as a result of or
arising from the disposal of any Hazardous Material by Contributor
from any Project at any offsite location ("OFFSITE LOSS OR LOSSES");
provided, however, that this indemnity does not extend to any such
disposal by any current or former tenant or occupant at any Project,
but does extend to disposal by Contributor (or any agents directly
engaged by Contributor for disposal) of such tenants' wastes. Within
a reasonable period of time after receipt by Acquiror of its first
notice of any Offsite Loss in respect of which Acquiror will seek
indemnification under this paragraph, but in no event later than ten
(10) business days prior to the expiration of any required response
period, or, if the required response period is less than ten (10)
business days, immediately upon receipt by Acquiror of its first
notice of the Offsite Loss, Acquiror shall notify Post-Closing
Contributor thereof in writing, and any failure to so notify
Post-Closing Contributor shall relieve Post-Closing Contributor from
any liability for indemnification that it may have to Acquiror for
that particular Offsite Loss about which Acquiror fails to timely
notify Post-Closing Contributor; provided, however, that as long as
JB is employed pursuant to the Employment Agreement (or pursuant to
any other written agreement between JB and Acquiror or any of its
Affiliates), receipt of notice of a Loss in Acquiror's New York
office (in which JB is employed by Acquiror in a management position)
shall constitute notice to Post-Closing Contributor of that Loss; and
provided, further, that any failure by Acquiror to notify
Post-Closing Contributor within such 10 business day period (or less,
as the case may be) shall not, to the extent that Acquiror can show
that Post-Closing Contributor has not been materially prejudiced by
any such delay, relieve Post-Closing Contributor of any or all of its
indemnification obligations
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under this Paragraph 9, and any reasonable additional costs or
expenses actually incurred by Post-Closing Contributor as a result of
such delay by Acquiror shall be borne by Acquiror and shall be paid
by Acquiror within thirty (30) days after Acquiror's receipt of an
invoice describing, in reasonable detail, such costs or expenses.
Post-Closing Contributor shall at all times retain complete control
of the defense of any such Offsite Loss, including the selection of
counsel to conduct the defense of any such Offsite Loss, and shall
regularly apprise Acquiror of the status of its defense concerning
any such Offsite Loss.
All of the provisions of this Subparagraph 9(c) shall survive the Closing and
shall not merge into any of the conveyancing documents delivered at Closing.
Furthermore, with respect to any of the indemnities set forth in this
Subparagraph 9(c), Contributor and Post-Closing Contributor acknowledge and
agree that if Acquiror makes any claim for or otherwise seeks indemnification
pursuant to the requirements of Subparagraph 9(c)(ii) and the matter about
which Acquiror makes such claim for, or otherwise seeks, indemnification (the
"INDEMNIFICATION CLAIM") remains pending and unresolved (whether in whole or in
part) as of the date on which the applicable indemnity expires pursuant to the
specific limitations expressly set forth above in this Subparagraph 9(c) (the
"OUTSTANDING INDEMNIFICATION MATTER") then the indemnity in question shall
nevertheless remain in full force and effect, but only with respect to such
Outstanding Indemnification Matter, and shall not expire until the date on
which the Outstanding Indemnification Matter is resolved and satisfied, in its
entirety.
(d) Remediation. Post-Closing Contributor agrees and acknowledges
that it shall cause the following to be completed:
(i) Contributor's Remediation Requirement. Post-Closing
Contributor shall cause the Hazardous Conditions and all other
conditions and matters set forth on Schedule 9(d) attached hereto to
be corrected and remediated in accordance with applicable
Environmental Law and at Contributor's sole cost and expense
("CONTRIBUTOR'S REMEDIATION REQUIREMENT"). For the purposes of this
Paragraph 9(d) only, the term "HAZARDOUS CONDITION" or "HAZARDOUS
CONDITIONS" shall be deemed to be all matters and conditions
described on Schedule 9(d). There shall be no Contributor's
Remediation Requirement for those Projects not listed on Schedule
9(d). Notwithstanding the foregoing, Post-Closing Contributor shall
be and remain liable hereunder, as and to the extent elsewhere
provided in the Agreement, for any breach of warranty or
representation relating to the existence of any Hazardous Conditions
existing as of the Closing Date, and not detected in the Assessment
or otherwise not described on Schedule 9(d).
(ii) Procedure for Post-Closing Contributor's Remediation
Requirement. Post-Closing Contributor shall undertake the following
steps:
(A) Within sixty (60) days after the Closing Date,
Post-Closing Contributor shall select a Qualified Consulting
Firm to provide a work plan ("SCOPE OF WORK") setting forth (in
reasonable detail) the Remedial Action planned to correct or
remediate the Hazardous Conditions set forth on Schedule 9(d)
(the "REMEDIAL WORK") for the approval of Acquiror, which
approval shall not be unreasonably withheld. Within five (5)
business days after receipt from Post-Closing Contributor of the
Scope of Work, Acquiror shall advise Post-Closing Contributor in
writing of its approval thereof or objections thereto. If
Acquiror fails to respond, in writing, within such five (5)
business day period, then Acquiror shall automatically be deemed
to have approved the Scope of Work. If Acquiror objects to the
Scope of Work for any such Hazardous Conditions, or any
additional work related thereto, and the parties are unable to
resolve such objection, either Post-Closing Contributor or
Acquiror shall have the unilateral right, but not the
obligation, to provide written notice to, and/or consult with
("NOTIFY"), the applicable Government Authority regarding the
appropriate Scope of Work for the Project or Project(s) for
which Acquiror and Post-Closing Contributor fail to agree upon a
Scope of Work; provided, however, that the party that desires to
notify and/or consult with such Governmental Authority shall
first give the
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other party five (5) business days' prior written notice thereof
(the "SCOPE OF WORK NOTICE") in accordance with the following
procedure:
(1) within five (5) days after Acquiror or
Post-Closing Contributor (as the case may be) receives the
Scope of Work Notice, Post-Closing Contributor shall Notify
the applicable Governmental Authority, in writing,
regarding the appropriate Scope of Work for the Project or
Projects for which Acquiror and Post-Closing Contributor
disagree upon a Scope of Work; and
(2) in the event that Post-Closing Contributor fails
to Notify the Governmental Authority within such 5 day
period, Acquiror shall have the right, but not the
obligation, to Notify the Governmental Authority, in
writing, in order to determine the appropriate Scope of
Work.
(B) After the Scope of Work is determined pursuant to
subparagraph (A) above, then, prior to undertaking the Remedial
Work, Post-Closing Contributor shall, at any time, consult with
Acquiror regarding whether any notice to, or consultation with,
any Governmental Authority is required under applicable
Environmental Laws. If Post-Closing Contributor reasonably
determines that any such notice or consultation is required
under applicable Environmental Laws (which determination shall
be resolved in favor of such notice to, or consultation with,
the responsible Governmental Authority where there is any
doubt), Post-Closing Contributor shall undertake such notice or
consultation and, if required by the Governmental Authority with
jurisdiction over the Remedial Work, shall seek approval of the
Remedial Work from that Governmental Authority. Post-Closing
Contributor agrees that, from time to time, the Scope of Work
for the Remedial Work may be revised and shall be deemed to
include any and all Remedial Action required by such
Governmental Authority; provided, however, that Post-Closing
Contributor shall have the right to conduct negotiations with,
and undertake appeals to, such Governmental Authority. Nothing
contained herein shall be deemed to prevent Post-Closing
Contributor from complying with applicable reporting
requirements under Environmental Laws. Post-Closing Contributor
shall have the right to delay commencement or continuation of
Remedial Work as long as it properly obtains any necessary stays
pending appeals from the Governmental Authority, if needed.
(C) Promptly following approval of the Scope of Work by
Acquiror and any Governmental Authorities consulted or notified,
Post-Closing Contributor shall diligently cause and continue to
cause the Remedial Work and all Additional Work to be diligently
performed by its Qualified Consulting Firm until such work is
completed (as that term is defined under Subparagraph
9(d)(ii)(E) herein). From and after Acquiror's approval of any
Scope of Work, Post-Closing Contributor may not materially
modify, amend, restrict, expand, alter or eliminate any
provision or component of the Scope of Work without Acquiror's
prior consent, which consent shall not be unreasonably withheld.
(D) In the event that the Governmental Authority with
jurisdiction over the Remedial Work agrees that the level of
remediation required at a Project at which Remedial Work is
being performed may be reduced by the imposition of
institutional controls at the Project, including but not limited
to restrictions limiting the use and occupancy of the Project to
non-residential uses or limiting the construction, renovation or
maintenance activities that may be performed at the Project, and
such institutional controls will not materially impair the use
of the Project (as it exists as of the Closing Date), Acquiror
shall not unreasonably withhold its consent to the imposition of
such institutional controls and shall not seek any compensation
therefor from Post-Closing Contributor, provided that
Post-Closing Contributor shall make reasonable and good-faith
efforts to limit the areal extent of any such institutional
controls.
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(E) Upon the completion of the Remedial Work at any
Project, Post-Closing Contributor shall so advise Acquiror and shall
provide such documentation as Acquiror may reasonably require to
satisfy Acquiror that the Remedial Work (and Additional Work, as the
case may be) has been completed. For the purposes of this Paragraph
9, "completed" or "completion" shall mean: (i) in the event that
Post-Closing Contributor has provided notice to or consulted with a
Governmental Authority with respect to the Remedial Work (and
Additional Work, as the case may be), Post-Closing Contributor shall
have: (x) obtained a written statement by the Governmental Authority
with jurisdiction over the Remedial Work (and Additional Work, as the
case may be) in question that no further action is required with
respect to such Project, and (y) if applicable, formally requested
and obtained, in writing, the closure, de-listing and/or removal of
the relevant Project(s) from any list maintained by such Governmental
Authority; or (ii) in the event that a Governmental Authority has not
been consulted, completion of the Remedial Work (and Additional Work,
as the case may be) in accordance with the Scope of Work approved by
Acquiror, which completion shall be evidenced by a written
certification to Acquiror from Post-Closing Contributor's Qualified
Consulting Firm, in a form reasonably acceptable to Acquiror, stating
that all such work has been completed.
(F) Prior to, and throughout the performance of the
Remedial Work by Post-Closing Contributor, Post-Closing
Contributor shall cause its Qualified Consulting Firm to
maintain workers' compensation insurance, as required by law,
professional errors and omissions liability insurance of not
less than $3,000,000, contractor's pollution liability insurance
with coverage of not less than $1,000,000 per occurrence,
general liability insurance with coverage of not less than
$1,000,000 per occurrence and umbrella liability insurance with
coverage of not less than $10,000,000. Acquiror shall be named
as an additional insured on each policy described in this
Subparagraph.
(G) Post-Closing Contributor shall cause the Remedial Work
to be performed in a manner that does not unreasonably disturb
or disrupt the tenancies or business operations located on any
of the applicable Projects. In the event that physical damage
occurs to any of the Projects as a result of the Remedial Work
or any Additional Work, then Post-Closing Contributor shall
promptly notify Acquiror and repair any such damage, at
Post-Closing Contributor's sole cost and expense, so as to
return the damaged Project(s) to the same condition as exists on
the Contract Date. Post-Closing Contributor hereby indemnifies,
protects, defends and holds harmless Acquiror (including its
partners, shareholders, and the respective partners,
shareholders, officers, directors, employees and agents of each
of Acquiror, its partners and shareholders and all of the
respective successors and assigns of such above-described
indemnitees) from and against any and all Losses that Acquiror
actually suffers or incurs as a result of any negligent, willful
or intentional act or omission of any or all of Post-Closing
Contributor or its agents, contractors, subcontractors or
representatives or consultants that occur during the course, or
as a result of, the performance of the Remedial Work.
(H) On the Closing Date, Contributor shall execute a
written assignment (the "ASSIGNMENT"), to Acquiror, of that
certain Indemnity Agreement (the "INDEMNITY"), dated August,
1995, by and between SmithKline Beecham Corporation and
SmithKline Clinical Laboratories, Inc. (individually and
collectively, "INDEMNITOR") and 290 Industrial Co., LLC, which
Assignment shall be in the form of Exhibit AA attached hereto.
Post-Closing Contributor shall have discretion to negotiate with
Indemnitor concerning the imposition of a deed restriction upon
Project 50; provided, however, that:
(1) in accordance with Subparagraph 9(d)(ii)(D)
herein, Post-Closing Contributor shall make reasonable
efforts to limit the areal extent of any such deed
restriction to the smallest area possible, which
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may include any portion of or all of "Area 3", as defined
by the Letter Report, dated August 7, 1996, Re:
Supplemental Area 3 Investigation Report, Magnusonic
Devices, Inc., Hicksville, New York, prepared by Roux
Associates for Indemnitor. Acquiror shall not unreasonably
withhold its consent to the imposition of such a deed
restriction placed upon Project 50;
(2) Post-Closing Contributor shall regularly apprise
Acquiror of the status of its negotiations, and/or contacts
with, Indemnitor; and
(3) promptly upon Post-Closing Contributor's receipt
of any compensation or any other amount(s) or benefits
(including, but not limited to, a release of all or any
portion of a mortgage or other lien interest encumbering
all or any portion of Project 50) ["COMPENSATION"] from
Indemnitor, Post-Closing Contributor shall give Acquiror
fifty (50) percent of such Compensation, net the reasonable
costs incurred by Post-Closing Contributor after the
Closing Date and in connection with reaching an agreement
with Indemnitor regarding such deed restriction, which
costs shall include, but shall not be limited to,
reasonable attorneys' or consultants' fees or other
reasonable costs associated with negotiating and
implementing such deed restriction.
(I) All of the provisions of this Subparagraph 9(d)(ii)
shall survive the Closing and shall not merge into any
conveyance documents delivered at Closing.
(iii) Completion of Remedial Work. The following shall apply to
the aggregate of all Remedial Work and any and all additional work
("ADDITIONAL WORK") relating to the investigation, correction and/or
remediation (including, but not limited to, any monitoring, operation
and/or maintenance) of the Hazardous Conditions described in Schedule
9(d), which Additional Work is required by any Governmental Authority
or otherwise determined to be necessary by Post-Closing Contributor's
Qualified Consulting Firm:
(A) In the event that Post-Closing Contributor does not, at
any time or for any reason whatsoever, cause any Remedial Work
or Additional Work to diligently commence, continue and/or be
completed with respect to any one or more Project(s) (the
"REMEDIATION DEFAULT"), Acquiror shall give Post-Closing
Contributor written notice thereof (the "FIRST REMEDIATION
DEFAULT NOTICE") specifying, in reasonable detail, the nature of
the Remediation Default. From and after the date that the First
Remediation Default Notice is deemed to have been delivered to
Post-Closing Contributor, Post-Closing Contributor shall have
thirty (30) days (the "REMEDIATION DEFAULT CURE PERIOD") in
which to cure the Remediation Default. If Post-Closing
Contributor fails to cure any Remediation Default within the
applicable Remediation Default Cure Period, Acquiror shall give
Post-Closing Contributor written notice thereof (the "FINAL
REMEDIATION DEFAULT NOTICE"), and thereafter, without further
notice or action by Acquiror, Acquiror shall have the right, but
not the obligation, to cause the Remedial Work and/or Additional
Work described in the applicable Remediation Default Notice to
be completed by a Qualified Consulting Firm pursuant to the
applicable Scope of Work for that Project(s); and Acquiror shall
have the right, but not the obligation, to enforce any or all of
its rights and/or remedies under the Environmental Pledge
Agreement (as defined below) and under this Agreement, from
time-to-time, in order to pay for and cause the performance of
such work. Notwithstanding the foregoing, Post-Closing
Contributor shall immediately become obligated to pay Acquiror
(in accordance with the payment structure described in Paragraph
9(d)(iii)(D) herein) any and all reasonable costs and expenses
incurred by Acquiror in connection with a Remediation Default
and/or Acquiror's causing the cure of same (including, but not
limited to, reasonable attorney's and consultant's fees and any
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<PAGE> 47
amounts that, as a result of a Remediation Default, cause the
cost of performing Remedial Work and/or Additional Work to
exceed the total estimated cost to complete the Scope of Work
for that particular Project or Projects).
(B) As an Acquiror's Condition Precedent to Closing,
Acquiror and Post-Closing Contributor shall enter into an
Environmental Pledge and Security Agreement (the "ENVIRONMENTAL
PLEDGE AGREEMENT") in form reasonably satisfactory to Acquiror.
(C) Post-Closing Contributor shall pay, in full, the cost
of all Remedial Work and Additional Work. For purposes of this
Subparagraph 9(d)(iii)(C), "PAYMENT IN FULL" shall be deemed to
be made by Post-Closing Contributor only after Post-Closing
Contributor delivers to Acquiror a complete release and waiver
of any and all liens, in a form reasonably satisfactory to
Acquiror, or other evidence of payment reasonably satisfactory
to Acquiror, covering all claims (including but not limited to
claims and/or liens of, by and/or from contractors or
subcontractors) arising out of any Remedial Work or Additional
Work at the applicable Project.
(D) In the event Acquiror receives any bills from
Post-Closing Contributor's Qualified Consulting Firm for
Remedial Work or Additional Work, Acquiror shall forward those
bills to Post-Closing Contributor, and Post-Closing Contributor
shall pay directly such bills within thirty (30) days after
receipt. If any such bills remain unpaid by Post-Closing
Contributor for a period of thirty (30) days after receipt and
Post-Closing Contributor's Qualified Consulting Firm seeks
payment from Acquiror, Acquiror has the right, but not the
obligation, to pay such bills on Post-Closing Contributor's
behalf, upon five (5) days prior notice to Post-Closing
Contributor (which notice shall include a copy of the bill to be
paid) [the "PAYMENT"]. If Acquiror makes a Payment,
Post-Closing Contributor shall immediately become obligated to
re-pay all such sums to Acquiror. Any such Payment made by
Acquiror shall be due and payable by Post-Closing Contributor to
Acquiror within ten (10) days of Post-Closing Contributor's
receipt of written notice from Acquiror that Acquiror has made
such a Payment. Any amounts not paid by Post-Closing
Contributor to Acquiror as and when due shall accrue interest at
a rate of interest per annum equal to the lesser of the "prime
rate" as then published in The Wall Street Journal (or a
comparable business/financial publication if The Wall Street
Journal ceases publication) plus four (4) percentage points or
the highest rate allowable by law. In addition to accruing
interest as provided above, in the event that any amount or
Payment is collected by, through or with the use of any attorney
at law, Post-Closing Contributor shall also be liable and
responsible for reasonable attorney's fees incurred by Acquiror
in connection therewith. In addition, Post-Closing Contributor
hereby indemnifies, defends and holds harmless Acquiror for all
Losses incurred in connection with removing liens which may be
filed against any Project as a result of Post-Closing
Contributor's failure to timely pay in full for any work
performed by Post-Closing Contributor's Qualified Consulting
Firm, consultants and/or contractors in connection with Remedial
Work or Additional Work.
(E) Notwithstanding anything to the contrary in the
Management Agreement, in no event shall the REIT, the UPREIT or
any affiliate of the REIT receive any fees or commissions in
connection with the performance of any or all of the Remaining
Remedial Work or Additional Work.
(F) Until completion of the Remedial Work and Additional
Work, JB shall have primary responsibility and the authority to
coordinate and contract for all components of services,
materials and work to perform all of the Remedial Work and
Additional Work and JB shall also have primary responsibility
for all contacts with Governmental Authorities and for arranging
for such contact to occur if required; provided, however, that
Acquiror has
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not assumed responsibility for such Remedial Work and/or
Additional Work pursuant to Subparagraph 9(d)(iii)(A).
(G) All of the provisions of this Subparagraph 9(d)(iii)
(including, but not limited to, any and all indemnities) shall
survive the Closing and shall not merge into any conveyancing
documents delivered at the Closing.
Any and all notices required under any provision of this Paragraph 9 shall
be sent pursuant to Paragraph 19 of this Agreement, and any notice sent to,
and/or received by, Post-Closing Contributor, JB or Lazarus Burman Associates
shall be deemed to have been sent to, and/or received by, Post-Closing
Contributor, as the case may be.
10. ADDITIONAL CONDITIONS PRECEDENT TO CLOSING. In addition to the other
conditions enumerated in this Agreement, the following shall be additional
Acquiror's Conditions Precedent:
(a) Zoning and Subdivision. On the Closing Date, no proceedings
shall be pending or threatened (in writing) that would involve the
material adverse change, redesignation, redefinition or other modification
of the zoning classifications of any or all of the Projects, or any
portion thereof, or any property adjacent to any Project. On or before
the Closing Date, Contributor shall have obtained and delivered to
Acquiror a certification(s) with respect to each Project located in the
State of New York, in the form of Exhibit V attached hereto (collectively,
the "ZONING CERTIFICATIONS"), issued by Robert M. Nerzig, an architect
licensed and certified in the State of New York.
(b) Flood Insurance. As of the Closing Date, if any material
Improvement at a Project is located in a flood plain, Acquiror shall have
obtained flood plain insurance in form and substance reasonably acceptable
to Acquiror.
(c) Utilities. On the Closing Date, no moratorium or legal
proceeding shall be pending or threatened (in writing) affecting the
continuing availability of sewer, water, electric, gas, telephone or other
services or utilities servicing the Projects.
(d) Assumed Indebtedness. Contributor shall provide to Acquiror a
pay-off letter (the "PAY-OFF LETTER") issued by each mortgagee holding an
Existing Mortgage securing any Assumed Indebtedness, setting forth the
amount of principal and interest outstanding on the Closing Date.
Contributor shall also provide a statement of account from each other
creditor holding any Assumed Indebtedness, setting forth the amount
necessary to retire such Assumed Indebtedness, which statements of account
shall also constitute Pay-Off Letters for purposes of this Agreement.
(e) Bankruptcy. As of the Closing Date, no Contributor and no
Project is the subject of any bankruptcy proceeding for which approval of
this transaction has not been given and issued by the applicable
bankruptcy court.
(f) Representations and Warranties True. The representations and
warranties of Contributor contained herein are true and correct as of the
Closing Date.
(g) Covenants Performed. All covenants of Contributor required to be
performed prior to the Closing Date have been performed, in all material
respects.
(h) Leases. There shall have been no event or occurrence, nor shall
any circumstance have arisen, that causes or results in the untruth, as of
the Closing Date, of any of the representations and warranties set forth
in Subparagraph 11(a).
(i) Occupancy Rate. The Occupancy Rate of those Projects being
acquired on the Closing Date shall be no less than 95% (based on the
aggregate gross annual Base Rental income from all Leases in full force
and effect on the Closing Date with respect to all of such Projects).
In the event an Acquiror's Condition Precedent is not satisfied at Closing and
the failure of such condition relates to certain of, but not all of the
Projects ("FAILED CONDITION PROJECTS"),
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Acquiror shall not be entitled to terminate this Agreement, but instead may
eliminate from this Agreement those Failed Condition Projects affected by the
failure of the subject Condition Precedent (the Project elimination mechanics
of Subparagraph 5(e) shall apply to any such deletion of Failed Condition
Projects). Notwithstanding anything to the contrary in Paragraph 32 or the
immediately preceding sentence, (i) Contributor shall have the right to
terminate this Agreement in the event the limitations set forth in Subparagraph
32(a) are exceeded due to the inclusion of any or all of the Failed Condition
Projects within the Deleted Projects; and (ii) Acquiror shall have the right to
terminate this Agreement in the event that (x) the limitations set forth in
Subparagraph 32(b) are exceeded due to the inclusion of any or all of the
Failed Condition Projects within the Deleted Projects and (y) Contributor does
not exercise its right, under Subparagraph 32(a), to terminate this Agreement.
In addition to the other conditions enumerated in this Agreement, the
following shall be additional Contributor's Conditions Precedent:
(j) Representations and Warranties True. The representations and
warranties of Acquiror contained herein, and the representations and
warranties of the UPREIT and the REIT required to be delivered at Closing,
are true and correct as of the Closing Date.
(k) Covenants Performed. All covenants of Acquiror, the UPREIT and
the REIT required to be performed prior to the Closing Date have been
performed, in all material respects.
(l) Assumed Indebtedness. The UPREIT shall assume responsibility for
the payment of all Assumed Indebtedness.
In the event that one or more of the Contributor's Conditions Precedent is not
satisfied at Closing, then Contributor shall have the rights set forth under
Subparagraph 16(e).
11. LEASES-CONDITIONS PRECEDENT AND REPRESENTATIONS WITH RESPECT
THERETO.
(a) Representations as to Leases. With respect to each of the
Tenants listed on the Rent Roll (as defined in Exhibit D) provided to
Acquiror by Contributor, Contributor represents and warrants to Acquiror
as follows, as of the Contract Date:
(i) Except as otherwise specifically disclosed in a writing
delivered by Contributor, each of the Leases is in full force and
effect according to the terms set forth therein and in the Rent Roll,
and has not been modified, amended, or altered, in any material
respect, in writing or otherwise. Except as otherwise specifically
disclosed on the Rent Roll, Contributor has not granted any
concessions, abatements or offsets under the Leases that will remain
in effect after the Closing;
(ii) Except as set forth on Schedule 11(a)(ii) attached hereto,
all material obligations of the lessor under the Leases that have
accrued to the date of this Agreement have been performed, including,
but not limited to, all required tenant improvements, cash or other
inducements, rent abatements or moratoria, installations and
construction (for which payment in full has been made or will be made
prior to Closing, or subject to proration hereunder, in all cases),
and, to Contributor's actual knowledge, each Tenant has
unconditionally accepted lessor's performance of such obligations.
Except as set forth on Schedule 11(a)(ii) attached hereto, no Tenant
has asserted, in a writing delivered to Contributor, any offsets,
defenses or claims available against rent payable by it or other
performance or obligations otherwise due from it under any Lease,
which assertion remains outstanding;
(iii) Except as otherwise specifically disclosed in a writing
delivered by Contributor, no Tenant is currently in default in the
payment of any rent required of it under its Lease (the foregoing
does not apply to any delinquencies in the payment of monthly rent
that (x) have existed for less than thirty (30) days or (y)
represent Leases that constitute, on an aggregate basis, less than 2%
of the aggregate gross monthly rental income from the Projects);
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(iv) Except as set forth on Schedule 11(a)(iv) attached hereto,
with respect to the Existing Leases, during the 12-month period
immediately preceding the Contract Date: (A) no Tenant has, on two
(2) or more occasions (including currently), been more than thirty
(30) days delinquent in its respective payment of its regular monthly
rent; (B) no Tenant has requested, in writing, that Contributor
provide that Tenant with any material reduction in the Tenant's
monetary obligations under its Lease; (C) no Tenant has expressed to
Contributor, in writing, any material decline in that Tenant's
financial condition that would prevent it from complying with its
obligations under its Lease, nor has any Tenant requested that
Contributor, in its capacity as landlord, permit the Tenant to
sublease its leased premises, or assign its Lease, or terminate its
Lease on an accelerated basis; (D) Contributor has not "written off"
any delinquent sums in excess of $20,000 (on a per Tenant basis) owed
by any Tenant, and in excess of $200,000, on an aggregate basis with
respect to all Tenants, to satisfy its obligation to contribute to
the payment of real estate taxes, common area maintenance charges,
and insurance premiums; and (E) Contributor has not been engaged in
any legal proceeding with any Tenant concerning that Tenant's failure
to make payments under the terms of its Lease toward real estate
taxes, insurance premiums and common area maintenance charges or
other charges imposed under its Lease;
(v) Except as set forth on Schedule 11(a)(iv) attached hereto,
Contributor has not received any written notice (which remains
outstanding) from any Tenant stating that a petition in bankruptcy
has been filed by or against it;
(vi) Except as set forth on the schedules to the Closing
Statement, and except with respect to security deposits, neither base
rent ("BASE RENT"), nor regularly payable estimated Tenant
contributions or operating expenses, insurance premiums, real estate
taxes, common area charges, and similar or other "pass through" or
non-base rent items including, without limitation, cost-of-living or
so-called "C.P.I." or other such adjustments (collectively,
"ADDITIONAL RENT"), nor any other material item payable by any Tenant
under any Lease has been prepaid for more than one (1) month;
(vii) Except as specifically disclosed in a writing delivered by
Contributor, to Contributor's actual knowledge, no guarantor(s) of
any Lease has been released or discharged, partially or fully,
voluntarily or involuntarily, or by operation of law, from any
obligation under any Lease;
(viii) Except as otherwise specifically disclosed on Schedule
11(a)(viii) attached hereto, there are no brokers' commissions,
finders' fees, or other charges presently payable to any third party
on behalf of Contributor in connection with any Lease including, but
not limited to, any exercised option(s) to expand or renew;
(ix) Each security deposit set forth on the Rent Roll shall be
assigned to Acquiror at the Closing (or Acquiror shall receive a
credit therefor). Except as set forth on Schedule 11(a)(ix), no
Tenant or any other party has asserted any written claim (other than
for customary refund at the expiration of a Lease) to all or any part
of any security deposit (which claim remains outstanding);
(x) Contributor shall pay (or Acquiror shall receive a credit
therefor), and retains sole and exclusive responsibility for, all
expenses due on or before the Closing Date connected with or arising
out of the negotiation, execution and delivery of the Existing
Leases, including, without limitation, brokers' commissions (but
excluding those applicable, if any, to future expansions or renewals
by a Tenant), leasing fees and recording fees (as well as the cost of
all tenant improvements not required to be paid for by Tenants);
(xi) Except as set forth in Schedule 36(a) or 36(e) and as
otherwise described in Paragraph 36 below, no Tenant has, by virtue
of its Existing Lease or any other written agreement or understanding
with Contributor, any purchase option with respect to any Project, or
any portion thereof, or any right of first refusal to purchase any
Project, or a portion thereof, whether triggered by the transactions
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contemplated by this Agreement or by a subsequent sale of such
Project or a portion thereof. Except as otherwise specifically
disclosed on Schedule 36(a) or 36(e) attached hereto, and except as
otherwise described in Paragraph 36 below, no Tenant has, by virtue
of its Lease or any other agreement or understanding binding upon
Contributor any of the following: (A) the right or option to
terminate its Lease prior to the expiration of the current term (not
including termination rights arising from casualty, condemnation or
default); and (B) the right or option to reduce the rentable space at
any Project that such Tenant is currently occupying (not including
reduction by reason of condemnation);
(xii) Except as otherwise expressly disclosed in a writing
delivered by Contributor, to Contributor's knowledge: (A) no Tenant
under an Existing Lease has sublet its leased premises; (B) no
assignment of the lessee's interest in a Lease has been made by any
Tenant; and (C) there are no outstanding written requests from any
Tenants to Contributor, requesting any consent to an assignment of
the Tenant's Lease or to a sublease of all or some portion of a
Tenant's leased premises; and
(b) Estoppel Certificates from Tenants. Contributor shall use its
reasonable, good faith and diligent efforts (but without any obligation to
make any payment or to institute any action or proceeding) to obtain and
deliver to Acquiror, on or prior to the Closing Date, a tenant's estoppel
certificate (the "ESTOPPEL CERTIFICATE") dated no earlier than December 6,
1996; provided, however, that in the event that, for any reason
whatsoever, the Closing Date occurs after January 31, 1997, then as an
Acquiror's Condition Precedent, Contributor shall use its good faith,
diligent and reasonable efforts to procure Estoppel Certificates from all
Tenants that are dated no earlier than forty-five (45) days prior to the
Closing Date. Each such Estoppel Certificate shall be substantially in
the form attached hereto as Exhibit O; except that with respect to those
Required Estoppel Tenants (as defined below) designated with an asterisk,
Paragraph 10 of such Estoppel Certificate shall be revised pursuant to (or
other written evidence satisfactory to Acquiror with respect to such
Tenants shall be provided to Acquiror in accordance with) that certain
memorandum dated December 4, 1996 from Elliot Molk to Harry Szenicer and
Jeffrey Cohen. It shall be an Acquiror's Condition Precedent that
Contributor shall obtain and deliver to Acquiror, at Closing, Estoppel
Certificates for (i) 85% of the total aggregate gross rental income for
all of the Projects (as shown on the Rent Roll delivered at Closing); (ii)
any single-Tenant Project; and (iii) those particular Tenants reflected in
Schedule 11(b) ("REQUIRED ESTOPPEL TENANTS"). If Contributor satisfies
clauses (ii) and (iii) above and obtains estoppels representing 75% of the
total aggregate gross rental income for all of the Projects, but (despite
its good faith and diligent efforts) is unable to obtain all of the
remaining Estoppel Certificate(s) it is required to obtain, then, at
Closing, Contributor shall deliver to Acquiror its own Estoppel
Certificate with respect to such Tenant(s) as is necessary to satisfy the
percentage requirement in clause (i) above; provided, however, that in the
event that Contributor ultimately procures (within sixty (60) days after
Closing) an Estoppel Certificate from any Tenant with respect to which
Contributor issues its own Estoppel Certificate and such Tenant's Estoppel
Certificate complies with the requirements of this Paragraph 11(b), then
Contributor shall be released from its own Estoppel Certificate with
respect to that Tenant.
(c) Tenants. For all purposes under this Agreement, the term,
"Tenants," shall mean each of the tenants listed on the Rent Roll
delivered to Acquiror by Contributor and any other tenants leasing space
in any or all of the Projects pursuant to Additional Leases; provided,
however, that all representations and warranties made by Contributor as of
the Contract Date with respect to any Leases shall apply only to the
Existing Leases and the Tenants thereunder.
12. CLOSING DELIVERIES.
12.1 Contributor. It shall be an Acquiror's Condition Precedent that
at Closing (or such other times as may be specified below), Contributor
shall deliver or cause to be delivered to Acquiror the following, each in
form and substance reasonably acceptable to Acquiror and its counsel:
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(a) Deeds. Bargain and Sale Deeds, duly executed by Contributor, in
recordable form conveying the Projects to Acquiror free and clear of all
liens and encumbrances except for the Permitted Exceptions, and, for those
Projects located in New York, corresponding New York State Transfer Tax
Declaration Forms TP-584;
(b) Bill of Sale. A warranty assignment and Bill of Sale, duly
executed by Contributor, assigning, conveying and warranting to Acquiror
title to the Personal Property and Inventory, free and clear of all
encumbrances, other than the Permitted Exceptions, and assignments of
title to all vehicles, if any, included in the Personal Property, together
with the original certificates of title thereto;
(c) General Assignment. An assignment, duly executed by Contributor,
to Acquiror of all right, title and interest of Contributor and its agents
in and to the Intangible Personal Property (including, but not limited to,
the Governmental Approvals);
(d) Assignment of Contracts. An assignment, duly executed by
Contributor, to Acquiror of Contributor's right, title and interest in and
to those of the Contracts that will remain in effect after Closing (the
"ASSIGNED CONTRACTS"), with (i) the agreement of Contributor to indemnify,
protect, defend and hold Acquiror harmless from and against any and all
claims, damages, losses, suits, proceedings, costs and expenses
(including, but not limited to, reasonable attorneys' fees) resulting from
a default by Contributor under the Assigned Contracts and relating to the
period of time prior to Closing and (ii) the corresponding agreement of
Acquiror to indemnify, protect, defend and hold Contributor harmless for
claims arising in connection with the Assigned Contracts and relating to
the period of time from and after the Closing. To the extent assignable,
Contributor shall also assign all existing guarantees and warranties given
to Contributor in connection with the operation, construction,
improvement, alteration or repair of any or all of the Projects;
(e) Assignment of Leases and Estoppel Certificates. An assignment of
Contributor's (and, if different than Contributor, the respective
landlord's) right, title and interest in and to the Leases (including all
security deposits and/or other deposits thereunder, except to the extent
an appropriate credit is given to Acquiror at Closing), with the
reciprocal indemnity provisions described in Subparagraph 12.1(d) above,
together with the Estoppel Certificates of the Tenants in conformity with
Subparagraph 11(b) above (where landlord is assigning its right in Leases,
evidence reasonably satisfactory to Acquiror of the authority of the party
signing the assignment of leases on behalf of such landlord shall also be
delivered);
(f) Keys. Keys to all locks located at each Project, to the extent
in Contributor's possession;
(g) Affidavit of Title and ALTA Statement. As to each Project, an
Affidavit of Title and an ALTA Statement (or comparable forms required by
the Title Company in New York and New Jersey and required by the Title
Company as a condition to the issuance of the Title Policies), each
executed by Contributor and in form and substance reasonably acceptable to
the Title Company;
(h) Letters to Tenants. Letters executed by Contributor and, if
applicable, its management agent, addressed to all Tenants, in form
approved by Contributor and Acquiror (the "TENANT LETTERS"), notifying all
Tenants of the transfer of ownership and directing payment of all rents
accruing after the Closing Date to be made to Acquiror or at its
direction;
(i) Title Policies. The Title Policies (or "marked-up" title
commitments) issued by the Title Company, dated as of the Closing Date in
the amount of the Allocated Amounts for each Project, with such
endorsements and otherwise in accordance with the requirements of
Paragraph 6 above (it being understood that Contributor will provide any
certificates or undertakings reasonably required in order to induce the
Title Company to insure over any "gap" period resulting from any delay in
recording of documents or later-dating the title insurance file);
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(j) Original Documents. To the extent not previously delivered to
Acquiror, originals of the Leases, Assigned Contracts and Governmental
Approvals in Contributor's possession or subject to its control;
(k) Closing Statement. A closing statement conforming to the
proration and other relevant provisions of this Agreement (the "CLOSING
STATEMENT"), duly executed by Contributor;
(l) Plans and Specifications. To the extent not previously delivered
to Acquiror, all plans and specifications in Contributor's possession and
control or otherwise available to Contributor;
(m) Tax Bills. To the extent not previously delivered to Acquiror,
copies of the most currently available Tax Bills;
(n) Entity Transfer Certificate. Entity transfer certification
confirming that Contributor is a "United States Person" within the meaning
of Section 1445 of the Internal Revenue Code of 1986, as amended;
(o) Rent Roll. A Rent Roll, prepared as of the Closing Date,
certified by Contributor to be true, complete and correct through the
Closing Date;
(p) Ownership Table. A chart or table reflecting the direct and
indirect ownership interest (including percentages) of each LP Unit
Recipient with respect to each Project, and any assumed or fictitious
names utilized by any entity reflected on such chart or table, certified
by Jan Burman;
(q) Partnership Agreement. The documents that are referred to in
Section 8.7 of the Partnership Agreement (or any similar provision in any
amendment to the Partnership Agreement) in connection with the admission
of an additional limited partner (including, but not limited to, an
appropriate amendment to the Partnership Agreement), each of such
documents to be duly executed by Contributor and each LP Units Recipient;
(r) Pay-Off Letters. Contributor shall procure and deliver the
Pay-Off Letters with respect to each and every Existing Mortgage except as
reflected on Schedule 12.1(r), which Existing Mortgages are to be paid off
by Acquiror substantially simultaneously with the Closing, as reflected on
Schedule 12.1(r);
(s) Partnership Agreement Adoption Materials. The Partnership
Agreement Adoption Materials, duly executed by the LP Unit Recipients;
(t) LP Unit Schedule. The LP Unit Schedule, duly executed by
Contributor;
(u) Registration Rights Agreement. The Registration Rights
Agreement, or the appropriate supplement thereto, as the case may be,
executed by the LP Unit Recipients;
(v) County of Suffolk Lease. Contributor shall deliver written
evidence that the County of Suffolk has failed to timely exercise its
right to terminate its Lease (pursuant to Paragraph 22 of such lease) as a
result of the transfer of the Project in which the County is a Tenant
(such evidence may be included in the Estoppel Certificate delivered by
Contributor at Closing in respect of such tenant);
(w) JC Penney Lease/Project No. 57. An agreement, duly executed by
those LP Unit Recipients to whom LP Units are issued in respect of the
contribution of Project No. 57 (the "PROJECT 57 UNIT RECIPIENTS"), in form
reasonably satisfactory to Acquiror and the Project 57 Unit Recipients,
pursuant to which the Project 57 Unit Recipients shall pledge all those LP
Units received in respect of the contribution of Project No. 57 as
security for the performance of certain obligations of Contributor with
respect to JC Penney's Lease at Project No. 57 (the "JCP PLEDGE
AGREEMENT");
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(x) Closing Certificate. A certificate, signed by Contributor,
certifying to the UPREIT that the representations and warranties of
Contributor contained in this Agreement are true and correct as of the
Closing Date;
(y) Zoning Certifications. The Zoning Certifications, which may be
delivered prior to Closing;
(z) Satisfaction of Certain Obligations. Contributor shall deliver
the documents cited as missing or not having been properly issued on, and
cure (to Acquiror's reasonable satisfaction) the violations described on,
Schedule 12.1(z), which Schedule reflects matters raised with Contributor
by Acquiror as a result of municipal searches conducted by Acquiror as
part of its Basic Project Inspection (notwithstanding the foregoing,
however, Contributor shall have no obligation with respect to (i) matters
dating prior to 1980, or (ii) subject to Paragraph 33, matters relating to
Option Projects, or (iii) matters relating to work performed by Tenants);
and
(aa) Other. Such other documents and instruments as may reasonably
be required by Acquiror, its counsel or the Title Company and that may be
necessary to consummate the transaction that is the subject of this
Agreement and to otherwise effect the agreements of the parties hereto.
12.2 Acquiror. It shall be a Contributor's Condition Precedent that
at Closing (or such other times as may be specified below) Acquiror shall
deliver or cause to be delivered to Contributor the following, each in
form and substance reasonably acceptable to Contributor and its counsel:
(a) Registration Certificate. A certificate from the REIT's transfer
agent (KeyCorp Shareholder Services, Inc.) attesting to the registration
of the LP Units in the books and records of the UPREIT;
(b) Partnership Agreement. A copy of the Partnership Agreement, duly
certified by the secretary of the REIT as true, complete and correct;
(c) Amendment. The Amendment, duly executed by the REIT;
(d) Organizational Documents. (i) A copy certified by the Secretary
of State of the State of Maryland of the Articles of Incorporation of
Acquiror and the REIT and a good standing certificate for Acquiror and the
REIT; (ii) a copy certified by the Secretary of State of the State of
Delaware, dated not more than ten (10) days before the Closing Date, of
the certificate of limited partnership of the UPREIT; (iii) a copy,
certified by the secretary of the REIT, of the resolution of the REIT's
board of directors, authorizing the transaction described herein; and (iv)
an incumbency certificate from the secretary of Acquiror and the REIT with
respect to those documents executed by Acquiror and the REIT (in its own
capacity and as sole general partner of the UPREIT), respectively, in
connection with the subject transaction, certifying the names and
signatures of the officers of the REIT authorized to execute those
documents (and who have in fact signed such documents) required to be
delivered by the REIT and the UPREIT under the terms of this Agreement;
(e) Assignment of Contracts. An Assignment of Contracts, duly
executed by the UPREIT;
(f) Assignment of Leases. An Assignment of Leases, duly executed by
the UPREIT;
(g) Contract Notices. Notices to parties to Contracts which are
being assigned pursuant to the Assignment of Contracts, duly executed by
the UPREIT;
(h) Closing Statement. A Closing Statement, duly executed by the
UPREIT;
(i) Registration Rights Agreement. The Registration Rights
Agreement, duly executed by the REIT;
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(j) LP Unit Schedule. The LP Unit Schedule, duly executed by the
UPREIT;
(k) Assignment. The Assignment, duly executed by Acquiror and the
UPREIT;
(l) Certain Acknowledgements. The written acknowledgements of (i)
the REIT and the UPREIT with respect to their respective obligations under
Subparagraphs 2(h), 2(i) and 2(j), (ii) of the REIT with respect to its
obligations under Subparagraph 2(e) and Paragraph 28 and (iii) of the
UPREIT with respect to its obligations under Paragraphs 30 and 31;
(m) Consent to Pledge. Evidence reasonably satisfactory to
Contributor that the REIT shall consent to the pledge, if any, of LP Units
by the LP Unit Recipients in order to secure financing from institutional
lenders (subject, however, to the limitations imposed under Subparagraph
2(f) above);
(n) Tenant Letters. The Tenant Letters, duly executed by the UPREIT;
(o) Certificate of Acquiror, UPREIT and REIT. A certificate from
Acquiror, the UPREIT and the REIT, respectively, certifying to Contributor
that the representations and warranties of Acquiror, the UPREIT and the
REIT, respectively, contained in this Agreement are true and correct as of
the Closing Date;
(p) Opinion. An opinion of counsel of Acquiror, the UPREIT and the
REIT, in form and substance reasonably satisfactory to Contributor and
Contributor's counsel, providing or with respect to: (i) the legal
existence and good standing of each of Acquiror, the UPREIT and the REIT,
respectively, in their various jurisdictions of organization and
qualification; (ii) the due authorization, execution and delivery of this
Agreement, the Amendment and the other documents required (under the terms
of this Agreement) to be delivered by each of Acquiror, the UPREIT and the
REIT, as applicable; (iii) that this Agreement, the Amendment and the
other documents required (under the terms of this Agreement) to be
delivered by each of Acquiror, the UPREIT and the REIT, as applicable,
constitute the legal, valid and binding obligations of Acquiror, the
UPREIT and the REIT, as the case may be, enforceable against them in
accordance with their respective terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights and by the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding of equity or at law);
(iv) the LP Units being validly issued and fully paid and, except as
otherwise provided in accordance with applicable law, non-assessable; (v)
the number of (x) authorized and (y) issued and outstanding shares of
Stock; (vi) that the UPREIT qualifies as a partnership for federal income
tax purposes; and (vii) that the REIT is organized in conformity with the
requirements for qualification as a real estate investment trust for
federal income tax purposes; it being understood, however, that those
opinions described in items (vi) and (vii) shall be based upon
certifications made to the counsel issuing the opinion from a senior
officer of the REIT, on behalf of itself and in its capacity as sole
general partner of the UPREIT;
(q) Assumption. An assumption of the Assumed Indebtedness, duly
executed by the UPREIT (it being understood and agreed that in the event
that the UPREIT does not pay all Assumed Indebtedness, in full and
together with all interest accrued thereon, on the Closing Date and
pursuant to the Pay-Off Letters, then the UPREIT shall not only formally
assume the Assumed Indebtedness, but shall also protect, defend,
indemnify, and hold Contributor harmless from and against those
liabilities and obligations arising from any failure of the UPREIT to pay
such Assumed Indebtedness);
(r) Employment Agreement. The REIT shall execute and deliver the
Employment Agreement;
(s) Pledge Agreements. The JCP Pledge Agreement and the Holbrook
Pledge Agreement, both duly executed by Acquiror.
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(t) Certificate of UPREIT. A certificate of the UPREIT certifying to
Contributor that the Closing Date Percentage is true and correct as of the
Closing Date; and
(u) Other. Such other documents and instruments as may reasonably be
required by Contributor, an LP Unit Recipient or its or their respective
counsel or the Title Company, and that are necessary to consummate the
transaction which is the subject of this Agreement and to otherwise effect
the agreements of the parties hereto.
After Closing, each of Acquiror and Contributor shall execute and deliver to
the other such further documents and instruments as the other reasonably
requests to effect this transaction and otherwise effect the agreements of the
parties hereto.
13. PRORATIONS AND ADJUSTMENTS. The following shall be prorated and
adjusted between Contributor and Acquiror as of the Closing Date, except as
otherwise specified:
(a) The amount of all security and other Tenant deposits, and
interest due thereon, if any, shall be credited to Acquiror;
(b) Acquiror and Contributor shall divide the cost of the earnest
money, closing, capital improvements and cosmetic improvements escrows
established pursuant to this Agreement equally between them;
(c) To the extent such charges are not billed directly to Tenants,
water, electricity, sewer, gas, telephone and other utility charges shall
be prorated based, to the extent practicable, on final meter readings and
final invoices, or, in the event final readings and invoices are not
available, based on the most currently available billing information, and
reprorated upon issuance of final utility bills;
(d) Amounts paid or payable under any Assigned Contracts shall be
prorated based, to the extent practicable, on final invoices, or, in the
event final invoices are not available, based on the most currently
available billing information, and reprorated upon issuance of final
invoices;
(e) Except for Project No. 3 (where the sole Tenant pays the Tax
Bills directly to the appropriate taxing authority), all real estate,
personal property and ad valorem taxes applicable to the Projects and
levied with respect to calendar year 1996 and 1997 shall be prorated on an
accrual basis, as of the Closing Date, utilizing the actual final Tax
Bills for those Projects. Prior to or at Closing, Contributor shall pay
or have paid all Tax Bills that are due and payable prior to or on the
Closing Date and shall furnish evidence of such payment to Acquiror and
the Title Company. Each party's respective obligations to reprorate real
estate taxes shall survive the Closing and shall not merge into any
instrument of conveyance delivered at Closing. The taxes to be prorated
(i.e., county, school, village, town) for each Project and the billing and
accrual schedule for each such tax are set forth in Schedule 13(e);
(f) All assessments, general or special, shall be prorated as of the
Closing Date on a "due date" basis such that Contributor shall be
responsible for any installments of assessments which are first due or
payable prior to the Closing Date and Acquiror shall be responsible for
any installments of assessments which are first due or payable on or after
the Closing Date;
(g) Subject to the provisions of Paragraph 26, commissions of leasing
and rental agents for any Lease entered into as of or prior to the Closing
Date that are due and payable at or prior to the Closing Date, whether
with respect to the current lease term, future expansions, renewals, or
otherwise, shall be paid in full at or prior to Closing by Contributor,
without contribution or proration from Acquiror;
(h) Except for non-recurring charges incurred prior to Closing (e.g.,
snow plowing), which Contributor shall pay and have the right to bill and
collect from Tenants following the Closing, all Base Rents and other
Tenant charges, including, without limitation, all Additional Rent, shall
be prorated at Closing. At the time(s) of final
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calculation and collection from Tenants of Additional Rent for 1996 and
1997, there shall be a reproration between Acquiror and Contributor as to
Additional Rent adjustments, which reproration shall be paid upon
Acquiror's presentation of its final accounting to Contributor, certified
as to accuracy by Acquiror. In the event that Contributor fails to agree
on the accounting of final reproration of 1996 and 1997 Additional Rent
adjustments prepared by Acquiror, Contributor shall so notify Acquiror in
writing, in which event such accounting shall be made by the Independent
Firm. The accounting by the Independent Firm shall be conclusive and
binding on Contributor and Acquiror, and each of Contributor and Acquiror
shall pay one-half of the fees imposed by the Independent Firm in
connection with such accounting. The party's respective obligations to
reprorate Additional Rent shall survive the Closing and shall not merge
into any instrument of conveyance delivered at Closing. At the Closing,
no "DELINQUENT RENTS" (rents or other charges which are due and owing as
of the Closing) shall be prorated in favor of Contributor (such Delinquent
Rents shall remain the property of Contributor, subject to the Rent
collection provisions below). Notwithstanding the foregoing, Acquiror
shall use reasonable efforts after the Closing Date to collect any
Delinquent Rents due to Contributor from Tenants. Further, after the
Closing Date, Contributor shall continue to have the right, enforceable at
its sole expense, to pursue legal action against any Tenant (and any
guarantors) who have defaulted, prior to the Closing Date, under a Lease;
provided, however, that Contributor gives Acquiror advance written notice
of its intent to pursue such action and further provided that Contributor
shall have no right to terminate any Lease (or any right to dispossess any
Tenant thereunder). Subject to the requirement of the second sentence of
this Subparagraph 13(h), all rents and other charges received from any
Tenant after the Closing shall be applied, first, against current and past
due rental obligations owed to, or for the benefit of, Acquiror [with
respect to those rental obligations accruing subsequent to the Closing
Date (including, but not limited to, obligations to replenish any security
deposit withdrawal by Contributor or Acquiror), or any obligations
accruing prior to the Closing Date that Contributor does not pay or for
which Acquiror does not receive a credit at Closing], and, second, any
excess shall be delivered to Contributor, but only to the extent of
Delinquent Rents owed to, and for the benefit of, Contributor for the
period prior to the Closing Date (in no event, however, shall any sums be
paid to Contributor to the extent Contributor has been previously
reimbursed for such default out of any security deposit);
(i) Dividends in respect of the LP Units acquired by Contributor or
its partners shall begin to accrue from and after the Closing Date
(notwithstanding the fact that such date may not be the record date for
acquisition of such LP Units), and the amount of dividends paid or to be
paid to Contributor or its partners for any quarter shall be prorated
accordingly; and
(j) Such other items that are customarily prorated in transactions of
this nature shall be ratably prorated.
For purposes of calculating prorations, Acquiror shall be deemed to be in title
to the Projects, and therefore entitled to the income therefrom and responsible
for the expenses thereof, for the entire Closing Date. All such prorations
shall be made on the basis of the actual number of days of the year and month
that shall have elapsed as of the Closing Date.
14. CLOSING EXPENSES. Contributor will pay the entire cost of the Title
Policies (except for the cost of comprehensive survey endorsements), the
Surveys (inclusive of any updates thereof required under this Agreement, but
subject to reimbursement by Acquiror in the event this Agreement is terminated
as provided herein) and the UCC searches (including any and all "date downs"
thereto), all documentary and state, county and municipal transfer taxes
relating to the instruments of conveyance contemplated herein, all release
fees, prepayment fees and any other fees in connection with the payoff, release
and satisfaction of the Existing Mortgages (subject to Paragraph 34 below),
one-half of any escrows hereunder, and all fees and expenses imposed by its
accountants and attorneys in connection with this Agreement and the transaction
contemplated hereunder. The aggregate amount of such costs to Contributor is
referred to herein as "CONTRIBUTOR'S CLOSING COSTS." The payment obligation of
Contributor with respect to Contributor's Closing Costs shall be satisfied by
reducing the Total LP Unit Amount otherwise due at Closing by the amount of
such Contributor's Closing Costs. Without limiting any other term of this
Agreement, Acquiror will pay the cost of recording the Bargain and Sale Deeds
(but
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not any related transfer tax), one-half of any escrows hereunder and all fees
and expenses imposed by Acquiror's accountants and attorneys, and the costs of
Acquiror's due diligence pursuant to Paragraph 5, subject, however, to the
terms and provisions of those certain letter agreements, dated October 11, 1996
and January 17, 1997, by and between Jan Burman (on behalf of Contributor) and
Acquiror (and subject to the terms and provisions of any other letter agreement
into which such parties may enter into subsequent to the Contract Date with
respect to the sharing of due diligence costs).
15. DESTRUCTION, LOSS OR DIMINUTION OF PROJECTS. If, prior to Closing,
all or any portion of any Project is damaged by fire or other natural casualty
(collectively "DAMAGE"), or is taken or made subject to condemnation, eminent
domain or other governmental acquisition proceedings (a "TAKING"), then the
following procedures shall apply:
(a) As used herein, a "MATERIAL EVENT" shall mean any of the
following:
(i) Damage to all or any portion of a Project, and the cost of
repair or replacement of such Damage exceeds 20% of the Allocated
Amount of such Project; or
(ii) Taking of all or any portion of a Project, and the value of
such Taking exceeds 20% of the Allocated Amount of such Project; or
(iii) any Taking or Damage that results in the cancellation or
termination of any Lease of a Required Estoppel Tenant, or that
provides to a Required Estoppel Tenant the right to cancel or
terminate its Lease upon the giving of subsequent notice (unless such
termination right is waived, in writing, by such Tenant), or that
otherwise results in the permanent loss of a Required Estoppel
Tenant.
(b) In the event of Damage or a Taking that does not constitute a
Material Event, Acquiror shall close and take the Projects as diminished
by such Damage or Taking, subject to a reduction in the Total LP Unit
Amount in an amount equal to the deductible, if any, under Contributor's
casualty insurance policy applicable to such Project.
(c) If the Damage or Taking is a Material Event, then subject to the
terms and provisions of Paragraph 32 below, Acquiror, at its sole option,
shall elect, within fifteen (15) days after its acquisition of actual
knowledge of such Damage or Taking, to either: (i) delete and eliminate
from this Agreement any Project that has sustained Damage or is taken or
made subject to a Taking by giving written notice to Contributor, in which
event (x) this Agreement shall be deemed to have been automatically and
ipso facto amended so as to eliminate the deleted Projects herefrom, and
(y) Acquiror and Contributor shall proceed to close on the remaining
Projects (i.e., the non-deleted Projects) subject to a reduction in the
Contribution Consideration equal to the aggregate amount of (x) the
Allocated Amounts minus (y) the Assumed Indebtedness of the Project(s) so
deleted, in each case as adjusted by eliminating any and all appropriate
Prorations and Adjustments; or (ii) proceed to close on all of the
Projects, subject to a reduction in the Contribution Consideration in an
amount equal to the aggregate of all deductible(s) imposed under any of
Contributor's casualty insurance policies applicable to the Project(s)
that is the subject of Damage, and an assignment of Contributor's interest
in any unpaid insurance proceeds or condemnation awards (as provided in
Subparagraph 15(d) below).
(d) In the event that Acquiror elects to close on any Project that is
subject to any Damage or Taking, each party shall fully cooperate with the
other party in the adjustment and settlement of the insurance claim (or
governmental acquisition proceeding) and if, as of Closing, all or any
portion of the insurance proceeds assignable, or condemnation awards
payable, to Acquiror shall not have been collected from the insurer or
Governmental Authority, then Contributor shall irrevocably and
unconditionally assign to Acquiror its entire right, title and interest in
and to the outstanding proceeds or award. The proceeds and benefits under
any rent loss or business interruption policies attributable to the period
following the Closing shall likewise be transferred, assigned and paid
over to Acquiror.
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(e) In the event of a dispute between Contributor and Acquiror with
respect to the cost of repair, restoration or replacement as to any Damage
or the value of a Taking, an engineer designated by Contributor and an
engineer designated by Acquiror shall select an independent third engineer
licensed to practice in the jurisdiction where the Project is located who
shall resolve such dispute. The determination of such third engineer
shall be final and binding on the parties and judgment may be rendered
thereon in any appropriate court of record. All fees, costs and expenses
of such third engineer so selected shall be shared equally by Acquiror and
Contributor.
16. DEFAULT.
(a) Willful Failure to Close by Contributor. In the event that
Contributor willfully and wrongfully fails or refuses to close, or
willfully and wrongfully fails or refuses to take such actions (as herein
provided) as are required of it to close, Acquiror may elect either to (i)
terminate this Agreement by written notice (the "DEFAULT TERMINATION
NOTICE") to Contributor, with a copy to Escrowee, in which event the
Earnest Money, together with all (if any) interest earned thereon, shall
be returned immediately to Acquiror and Acquiror shall be entitled to
recover Acquiror's damages, which shall be limited to those actual
out-of-pocket costs and expenses that Acquiror incurs prior to and on the
Closing Date in order to negotiate this Agreement, perform its due
diligence efforts with respect to the Projects, and prepare to finance and
consummate the subject acquisition (including, but not limited to, the
fees and costs imposed by lenders, attorneys, accountants, appraisers,
environmental engineers, and other consultants engaged by Acquiror), up to
a maximum aggregate amount of $1,000,000; provided, however, that such
right of termination shall be subject to the limitation set forth below in
this Subparagraph 16(a); or (ii) close, in which event Acquiror may file
an action for specific performance of this Agreement to compel Contributor
to close or otherwise perform its obligations hereunder, whereupon
Acquiror shall be entitled to deduct from the Contribution Consideration
all reasonable, third-party expenses actually incurred by Acquiror in
connection with such action and cure. Notwithstanding anything to the
contrary in this Subparagraph 16(a), in the event that Acquiror delivers a
Default Termination Notice, Acquiror shall also describe, with reasonable
specificity in the Default Termination Notice, the nature and scope of the
default that allegedly has occurred, and in the event that such default
may be cured by the payment of a liquidated sum of money (a "LIQUIDATED
DEFAULT"), then Contributor shall have five (5) business days from the
date on which Acquiror delivers the Default Termination Notice to advise
Acquiror that Contributor shall cure the Liquidated Default and pay, in
cash, the entire liquidated sum required to do so ("CONTRIBUTOR'S CURE
NOTICE"). In the event that Contributor timely delivers Contributor's
Cure Notice, then Contributor shall be required to proceed to so cure the
Liquidated Default within five (5) business days after its delivery of
Contributor's Cure Notice. Upon the completion of such cure, Acquiror's
Default Termination Notice shall automatically be rendered null and void,
and this Agreement shall remain in full force and effect. In the event,
however that Contributor timely delivers a Contributor's Cure Notice, but
fails to timely cure the Liquidated Default, the Acquiror shall once again
have the right to deliver a Default Termination Notice, but Contributor
shall have no further right to deliver a Contributor's Cure Notice, but
rather, this Agreement shall automatically terminate as provided above.
If, however, the default(s) that is the subject of a Default Termination
Notice is not a Liquidated Default(s), then Contributor shall have no
right, of any nature whatsoever, to deliver a Contributor's Cure Notice.
(b) Other Defaults by Contributor. If any of Contributor's
representations and warranties contained herein shall not be true and
correct on the date made, or if Contributor shall have failed to perform,
in any material respect, any of the covenants and agreements contained
herein to be performed by Contributor within the time for performance as
specified herein, and the occurrence of such event or failure is not due
to, or the result of, Contributor's willful and wrongful failure or
refusal to close, or to take such actions as are required of it to close,
and such untruth or failure is not cured (to Acquiror's reasonable
satisfaction) within ten (10) business days after the date on which
Acquiror delivers its written notice thereof to Contributor, then subject
to the requirements of Subparagraph 16(d), Acquiror may elect either (i)
to terminate Acquiror's obligations under this Agreement by written notice
to Contributor, with a copy to Escrowee, in which
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event the Earnest Money, together with all (if any) interest earned
thereon, shall be returned immediately to Acquiror; or (ii) to close, in
which event Acquiror may file an action for specific performance of this
Agreement to compel Contributor to cure all or any of such default(s), in
whole or in part (to the extent same are capable of being cured),
whereupon Acquiror shall be entitled to deduct from the Contribution
Consideration the actual out-of-pocket cost of such action and cure, and
all reasonable expenses incurred by Acquiror in connection therewith,
including, but not limited to, reasonable fees of Acquiror's counsel, up
to a maximum aggregate amount of $1,000,000. Notwithstanding anything to
the contrary contained above in this Subparagraph 16(b), if any of
Acquiror's Conditions Precedent shall not have been satisfied (except with
respect to the truth and correctness of Contributor's representations and
warranties on the date made, which situation is addressed in the first
sentence of this Subparagraph 16(b)), and the failure to so satisfy all of
such Acquiror's Conditions Precedent is not due to, or the result of,
Contributor's willful and wrongful failure or refusal to close or to take
such actions as are required of it to close, and such non-satisfaction is
not cured (to Acquiror's reasonable satisfaction) within ten (10) business
days after the date on which Acquiror delivers its written notice thereof
to Contributor, then Acquiror may elect to terminate Acquiror's
obligations under this Agreement by written notice to Contributor, with a
copy to Escrowee, in which event the Earnest Money, together with all (if
any) interest earned thereon, shall be returned immediately to Acquiror.
(c) Contributor's Breach of Representations Discovered After Closing.
In the event that, at any time during the one (1) year period after
Closing, Acquiror first acquires actual knowledge that any representation
or warranty of the Contributor contained in this Agreement was untrue
(taking into account any applicable knowledge qualification), as of the
date made, Acquiror's sole and exclusive remedy shall be to file an action
within six (6) month's after such knowledge is acquired to recover the
actual damages sustained by Acquiror by reason of Contributor's breach of
the representations and warranties contained herein.
(d) Intervening Events. Subparagraphs 16(a), (b) and (c) above
notwithstanding, in the event that as a direct and proximate result of any
Intervening Events (as hereinafter defined), the warranties and
representations of the Contributor hereunder become untrue after the
Contract Date, or any or all of Contributor's covenants hereunder become
incapable of being performed in any material respect, Acquiror shall have
the right, at its sole election, exercisable at any time prior to the
Closing Date, to either (i) waive the requirement that the warranties and
representations in question be true or that the covenants in question be
performed in any material respect, and proceed to close; or (ii) delay the
Closing for a period not to exceed thirty (30) days (the "INTERVENING
EVENTS PERIOD") and permit Contributor to attempt to (A) cause the
Intervening Events to no longer exist or, if they continue to exist, to no
longer prevent Contributor's warranties and representations from being
true, or Contributor's covenants from being performed, or (B) mitigate the
consequences of the Intervening Events [it being understood that if
Contributor is unable to effect a cure or Acquiror is not reasonably
satisfied with the results of (B), as the case may be, then Acquiror may,
on or before the expiration of the Intervening Events Period, elect either
of the remedies described in clause (i) or (iii) of this Subparagraph
16(d)]; or (iii) terminate this Agreement by sending written notice (the
"INTERVENING EVENTS TERMINATION NOTICE") to Contributor, in which event
the Earnest Money, together with all (if any) interest thereon, shall be
returned immediately to Acquiror and neither party shall have any further
liability to the other except as otherwise specifically provided in this
Agreement; provided, however, that such right of termination shall be
subject to the limitations set forth below in this Subparagraph 16(d).
For purposes of this Paragraph 16(d), "INTERVENING EVENTS" shall be
defined as events, circumstances or conditions that (w) first arise after
(and did not exist as of) the Contract Date; and (x) arise on the basis of
acts of a Governmental Authority or other such independent, disinterested
third party, unrelated to the subject matter of this Agreement (including,
but not limited to, Tenants), or acts otherwise beyond the control of
Contributor; and (y) would not reasonably have been known by Contributor
as of the Contract Date; and (z) are disclosed by Contributor to Acquiror
no later than the time of Contributor's delivery of its Closing
Certificate pursuant to Paragraph 12 hereof. Without limiting the
generality of the foregoing, Intervening Events shall include, as to any
warranty or representation of Contributor in this Agreement that is
limited to the
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"Contributor's knowledge" or words of similar import, the initial
acquisition of actual knowledge by Contributor after the Contract Date
that renders such warranty or representation no longer true as of the
Closing Date; provided, however, that this limitation shall not apply with
respect to any representation or warranty that is rendered untrue as a
result of, or due to, or because of, any voluntary or willful or
intentional act or omission of Contributor that occurs after the Contract
Date. Notwithstanding anything to the contrary in this Subparagraph
16(d), in the event that Acquiror delivers an Intervening Events
Termination Notice, Acquiror shall also describe, with reasonable
specificity in the Intervening Events Termination Notice, the nature and
scope of the Intervening Event(s) that has occurred, whereupon Contributor
shall have the right (at its option) to advise Acquiror, in writing and
within five (5) business days after Acquiror's delivery of the Intervening
Events Termination Notice, that Contributor shall remedy and cure the
Intervening Events, at Contributor's sole cost and expense ("CONTRIBUTOR'S
INTERVENING EVENTS CURE NOTICE"). In the event that Contributor timely
delivers a Contributor's Intervening Events Cure Notice, then Contributor
shall be required to proceed to so cure the Intervening Events within
fifteen (15) days after its delivery of Contributor's Intervening Events
Cure Notice, whereupon Acquiror's Intervening Events Termination Notice
shall automatically be rendered null and void, and this Agreement shall
remain in full force and effect. In the event, however, that Contributor
timely delivers Contributor's Intervening Events Cure Notice, but fails to
timely remedy and cure the Intervening Events, then Acquiror shall once
again have the right to deliver an Intervening Events Termination Notice,
but Contributor shall have no further right to deliver a Contributor's
Intervening Events Cure Notice, but rather, this Agreement shall
automatically terminate as provided in (iii) above.
(e) Default by Acquiror and Failure of Contributor's Condition
Precedent. If any of Acquiror's representations and warranties contained
herein shall not be true and correct on the Contract Date and on the
Closing Date, or if Acquiror fails to perform (in any material respect)
any of the covenants and agreements contained herein to be performed by
such party within the time for performance as specified herein (including,
without limitation, Acquiror's obligation to close), then Contributor
shall have, as its sole and exclusive remedy, the right to terminate this
Agreement by written notice to Acquiror, in which event, the Earnest Money
shall be paid to (or drawn upon by) Contributor and, except as otherwise
expressly provided in this Agreement, neither Contributor nor Acquiror
shall have any further rights or obligations under this Agreement. Except
as otherwise specifically provided in the conclusory grammatical paragraph
of Paragraph 7, Contributor shall have no remedy other than as provided in
this Subparagraph 16(e) for any default by Acquiror discovered prior to
Closing.
(f) Breach of Representations by Acquiror, the REIT or the UPREIT
Discovered After Closing. In the event that, at any time during the one
(1) year period after Closing, Contributor first acquires actual knowledge
that any representation or warranty of the Acquiror, the REIT or the
UPREIT contained in this Agreement was untrue (taking into account any
applicable knowledge qualification), as of the date made, Contributor's
sole and exclusive remedy shall be to file an action within six (6)
month's after such knowledge is acquired to recover the actual damages
sustained by Contributor by reason of the breach of the representations
and warranties of Acquiror, the REIT or the UPREIT contained herein.
17. SUCCESSORS AND ASSIGNS. The terms, conditions and covenants of this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective permitted nominees, successors, beneficiaries and assigns;
provided, however, subject to the terms of Subparagraph 2(a), no direct or
indirect conveyance, assignment or transfer of any interest whatsoever of, in
or to any of this Agreement shall be made by Contributor or Acquiror during the
term of this Agreement.
18. DISPUTE RESOLUTION.
(a) Preliminary Dispute Resolution Through Mediation.
(i) Notice of Dispute. If a claim or controversy arises out of,
or relating to, this Agreement either (1) on a post-Closing basis or
(2) on a pre-Closing basis,
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but the claim or controversy in question gives rise to a right, by
either Contributor or Acquiror, to terminate this Agreement, then the
party raising the claim or controversy must give notice (a "DISPUTE
NOTICE") to the other party specifying the details of the dispute,
including the claim being made or the matter in controversy, the
factual basis for the claim or controversy, any purported damages,
and any requested relief. The Dispute Notice must be given prior to
initiating any arbitration concerning the dispute, as provided in
Subparagraph 18(b) below. If either party commences any arbitration
concerning a matter covered by this Subparagraph 18(a) prior to
sending the required Dispute Notice and mediating in good faith, such
failure constitutes grounds for both dismissal of the arbitration,
and the levy of attorneys' fees, costs, and expenses against the
defaulting party.
(ii) Good Faith Negotiations. Within 15 days after delivery of
the Dispute Notice, the contesting parties shall make reasonable
efforts to settle the dispute through communication and negotiations
through a designated representative of each party to the dispute,
each of whom shall have the authority to settle the dispute. If the
dispute is not settled within the 15-day period, then the dispute
must be submitted to a mutually acceptable mediator. Neither party
may unreasonably withhold acceptance of a proposed mediator. If the
parties fail to agree upon a mediator, each party shall select a
mediator and the two mediators selected by the parties shall promptly
select a third mediator to preside over the mediation. If either
party does not select a mediator, the mediator selected by the other
party shall preside over the mediation. Mutual approval of a
mediator or selection of mediators by the parties must occur within
25 days after the date of the delivery of the Dispute Notice. The
cost of the mediation, and any other subsequent alternative dispute
resolution procedures agreed to by the parties, shall be shared
equally, except as otherwise expressly provided in Subparagraph
18(b)(iv). The parties shall appear before the selected mediator and
engage in mediation in good faith. The mediation must be completed
within 60 days after the date of the delivery of the Dispute Notice.
(b) Arbitration As Optional Means Of Resolution.
(i) Arbitration. In the event that the contesting parties fail
to agree upon the resolution of any claim or controversy,
notwithstanding preliminary mediation under Subparagraph 18(a) above,
then either of them may then institute arbitration proceedings
administered by the American Arbitration Association (the
"ASSOCIATION") under its Commercial Arbitration Rules (the "RULES"),
to resolve the matter in dispute. Any such arbitration proceeding
shall commence by the delivery by one party of a written notice of
demand for arbitration (the "DEMAND NOTICE") to the other party. A
copy of the Demand Notice shall be simultaneously delivered to the
New York City chapter of the Association as provided by the Rules.
Arbitration proceedings shall commence no later than thirty (30) days
after delivery of the Demand Notice, pursuant to procedure set forth
below.
(ii) The arbitration proceeding shall be conducted in New York,
New York by a single arbitrator (the "ARBITRATOR"), who shall be
selected pursuant to the provisions of this Subparagraph 18(b)(ii).
The Demand Notice shall direct the Association to assemble a list of
eleven (11) proposed independent arbitrators, each of whom shall be a
member of the Association and none of whom may be related to, or
affiliated with, any of Acquiror or Contributor or any affiliates of
any of them. Within ten (10) days of the delivery of the Demand
Notice, the Association shall deliver its list of the names of those
eleven (11) proposed independent arbitrators to each party. No later
than ten (10) days after delivery of said list of proposed
independent arbitrators by the Association to the parties, the
parties shall cause a meeting to occur between their respective
spokespersons (or their authorized representatives), which meeting
shall occur at a mutually convenient location in New York, New York.
At that meeting, the two (2) spokespersons shall examine the list of
eleven (11) names submitted to the parties by the Association, and
they shall each eliminate five (5) of those names, and the sole
remaining proposed arbitrator shall be the Arbitrator. In order to
eliminate ten (10) of the proposed arbitrators whose names were
submitted by the Association, first, the spokesperson for the party
who
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issued the Demand Notice shall eliminate a proposed arbitrator of his
choice and then the other spokesperson shall eliminate a proposed
arbitrator of his choice. The two (2) spokespersons shall continue
to eliminate names from the Association's list in this manner until
each of them has eliminated five (5) names, and they have thereby
selected the Arbitrator through mutual elimination. The two (2)
spokespersons shall immediately notify the Association, in writing
and by telephone, of the name of the Arbitrator, and they shall
direct the Association to contact the Arbitrator in order to schedule
the commencement of the arbitration proceedings within the required
time period described above. In the event that the chosen Arbitrator
is not available to commence the Arbitration proceedings within a
thirty (30) day limit, the parties shall direct the Association to
engage the last eliminated Arbitrator whose schedule permits
commencement of the proceedings within such thirty (30) day period.
In the event any party fails to participate in the elimination
process, the other party may unilaterally choose the Arbitrator.
(iii) In connection with the arbitration proceedings, each party
shall submit, in writing, a description of the dispute(s) giving rise
to the arbitration proceedings, together with the specific requested
resolution that the submitting party seeks with respect to each
component of the dispute(s) or each matter(s) in dispute. The
Arbitrator shall be obligated to choose one (1) party's specific
requested resolution with respect to each component of, or each
matter comprising, the dispute(s), without being permitted to
effectuate any compromise position as to any component of such
matters or disputes. Except as otherwise stated in this Subparagraph
18(b), and as the parties otherwise expressly agree in writing, the
arbitration proceeding shall be conducted in accordance with the
Rules then in effect. The decision or award rendered by the
Arbitrator shall be final and non-appealable, and judgment may be
entered upon it in accordance with applicable law in the State of New
York or any other court of competent jurisdiction.
(iv) The party whose requested resolution is not selected by the
Arbitrator shall bear the cost of all counsel, experts or other
representatives which are retained by the parties in the arbitration
proceeding, together with all other costs of the arbitration
proceeding, including, without limitation, the fees, costs and
expenses imposed or incurred by the Arbitrator (collectively,
"Arbitration Expenses"). If the dispute resolved by the Arbitrator
involves more than one matter, issue or component, then the burden to
pay the Arbitration Expenses shall be allocated between each of
Acquiror and Contributor, in the manner reasonably deemed appropriate
by the Arbitrator in light of the value to each of Acquiror and
Contributor, respectively, of those matters or components for which
their respective requested resolution was not selected.
(v) Unless otherwise agreed in writing, during the period of
time that any arbitration proceeding is pending under this Agreement,
the parties shall continue to comply with all those terms and
provisions of this Agreement which are not the subject of their
dispute and the pending arbitration proceeding.
(vi) Subject to Subparagraph 38(k), nothing herein contained
shall deny any party the right to seek injunctive or other equitable
relief from a court of competent jurisdiction in the context of a
bona fide emergency or prospective irreparable harm, and such an
action may be filed and maintained notwithstanding or auxiliary to
any previously commenced arbitration proceeding.
Notwithstanding any provision of this Agreement to the contrary, the
obligations of the parties under this Paragraph 18 shall survive termination of
this Agreement and the Closing, and shall not merge into any conveyancing
documents delivered at Closing.
19. NOTICES. Any notice, demand or request which may be permitted,
required or desired to be given in connection therewith shall be given in
writing and directed to Contributor and Acquiror as follows:
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Contributor: Lazarus Burman Associates
575 Underhill Boulevard, Suite 125
P.O. Box 830
Syosset, New York 11791
Attn: Jan Burman, President
Fax: (516) 364-5019
With a copy to
its attorneys: Rogers & Wells
200 Park Avenue
New York, New York 10166
Attn: Alan L. Gosule, Esq. and
Jeffrey H. Weitzman, Esq.
Fax: (212) 878-8375
Acquiror: FR Acquisitions, Inc.
150 North Wacker Drive, Suite 150
Chicago, Illinois 60606
Attn: Johannson Yap, Senior Vice President
Fax: (312) 704-6606
With a copy to
its attorneys: Barack Ferrazzano Kirschbaum Perlman & Nagelberg
333 West Wacker Drive, Suite 2700
Chicago, Illinois 60606
Attn: Suzanne Bessette-Smith, Esq. and
Elliot I. Molk, Esq.
Fax: (312) 984-3150
Notices shall be deemed properly delivered and received when and if either (i)
personally delivered; or (ii) on the first business day after deposit with
Federal Express or other commercial overnight courier for delivery on the next
business day.
20. BENEFIT. This Agreement is for the benefit only of the parties hereto
and their nominees, successors, beneficiaries and assignees as permitted in
Paragraph 17 above, and no other person or entity shall be entitled to rely
hereon, receive any benefit herefrom or enforce against any party hereto any
provision hereof.
21. LIMITATION OF LIABILITY. Upon the Closing, none of the UPREIT, the
REIT and Acquiror shall assume or undertake to pay, satisfy or discharge any
liabilities, obligations or commitments of Contributor other than those
specifically agreed to between the parties and set forth in this Agreement. In
the event that the UPREIT, in its sole and absolute discretion, elects to
assume any of the obligations under any one or more of the Contracts delivered
pursuant to Exhibit D attached hereto, Acquiror shall so notify Contributor, in
writing, no later than the Approval Date. Except with respect to the foregoing
obligations, and subject to Subparagraph 5(f) above, none of the UPREIT, the
REIT and Acquiror shall assume or discharge any debts, obligations, liabilities
or commitments of Contributor, whether accrued now or hereafter, fixed or
contingent, known or unknown. Subject to all applicable limitations expressly
imposed under this Agreement, the LP Unit Recipients shall be liable, on a
joint and several basis, with respect to any and all claims made by Acquiror
against Contributor pursuant to the terms of this Agreement; provided, however,
that the liability of the LP Unit Recipients shall be limited as follows: (i)
with respect to claims made prior to the first anniversary of the Closing Date
(the "FIRST ANNIVERSARY"), to the market value of those LP Units delivered at
Closing and still held by any or all of Contributor and any or all of the LP
Unit Recipients (and any or all of their transferees and assigns), determined
as of the date on which Acquiror first delivers notice to Contributor of
Acquiror's claim; provided, however, that if and to the extent that any LP Unit
Recipient redeems any or all of its LP Units (pursuant to Subparagraph 2(f)
above) prior to the date on which Acquiror first delivers notice to Contributor
of Acquiror's claim, then the maximum liability of such redeeming LP Unit
Recipient shall also include the market value of such LP Unit Recipient's
Conversion Shares, determined as of the date on which Acquiror first delivers
notice to Contributor of Acquiror's claim; and (ii) with respect to claims made
on or after the First Anniversary, to the product of (x) the market value of a
share of
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Stock on the date on which Acquiror first delivers notice to Contributor of
Acquiror's claim and (y) the number of LP Units delivered at Closing and still
held by any or all of Contributor and any or all of the LP Unit Recipients (and
any or all of their transferees and assigns) on the First Anniversary;
provided, however, that if and to the extent that any LP Unit Recipient redeems
any or all of its LP Units (pursuant to Subparagraph 2(f) above), on or before
the First Anniversary, then the maximum liability of such redeeming LP Unit
Recipient shall also include the market value of such LP Unit Recipient's
Conversion Shares, determined as of the First Anniversary. Notwithstanding
anything to the contrary in this Agreement, Acquiror agrees that prior to and
following Closing, it will not bring any claim against Contributor pursuant to
the terms of this Agreement except and unless the actual damages allegedly
incurred by Acquiror as a result of all alleged claims, on an aggregate basis,
exceed $200,000.
22. BROKERAGE. Each party hereto represents and warrants to the other
that it has dealt with no brokers or finders in connection with this
transaction except Merrill Lynch & Co. ("MERRILL LYNCH"), and that no broker,
finder or other party (except Merrill Lynch) is entitled to a commission,
finder's fee or other similar compensation as a result hereof. Contributor
hereby indemnifies, protects and defends and holds Acquiror harmless from and
against all losses, claims, costs, expenses, damages (including, but not
limited to, reasonable attorneys' fees of counsel selected by Acquiror)
resulting or arising from the claims of any other broker, finder or other such
party, claiming by, through or under the acts or agreements of Contributor.
Acquiror hereby indemnifies, defends and holds Contributor harmless from and
against all losses, claims, costs, expenses, damages (including, but not
limited to, reasonable attorneys' fees of counsel selected by Contributor)
resulting or arising from the claims of any other broker, finder or other such
party claiming by, through or under acts or agreements of Acquiror. At
Closing, Acquiror shall pay the commission due and owing to Merrill Lynch (in
an amount determined pursuant to a separate agreement but in no event greater
than one percent (1.0%) of the aggregated Allocated Value of all Projects
acquired by Acquiror on the Closing Date), and such payment shall constitute an
Adjustment against the Total LP Unit Amount in favor of Acquiror. The
obligations of this Paragraph 22 shall survive any termination of this
Agreement.
23. REASONABLE EFFORTS. Contributor and Acquiror shall use their
reasonable, diligent and good faith efforts, and shall cooperate with and
assist each other in their efforts, to obtain such consents and approvals of
third parties (including, but not limited to, governmental authorities), to the
transaction contemplated hereby, and to otherwise perform as may be necessary
to effectuate the transfer of the Projects to Acquiror in accordance with this
Agreement.
24. TENANTS IN DEFAULT.
(a) Applicability of Provision. If, subsequent to the Approval Date,
and prior to the Closing, any Project shall be leased to (or subject to
Leases with) one or more "TENANTS IN DEFAULT" (as hereinafter defined),
and the total monthly rent payable with respect to such Project by its
Tenants in Default shall, in the aggregate, represent fifteen percent
(15.0%) or more of the total rentals then being realized from that Project
(whether one or more, the "DEFAULTED BUILDING"), then, at the Closing, the
provisions of this Paragraph 24 shall be applicable. Upon Contributor's
discovery, subsequent to the Approval Date, of the existence of a Tenant
in Default in any Project, Contributor shall promptly notify Acquiror, in
writing, of the specific facts and circumstances giving rise to such
conditions (such written notice being a "TID NOTICE"). For purposes
hereof, a "TENANT IN DEFAULT" shall be any Tenant who (i) commits a
material default under its Lease, monetary or otherwise, which default has
(without regard to applicable notice and cure provisions of its Lease)
continued more than fifty-eight (58) days; or (ii) vacates or abandons its
respective leased premises without timely paying rent therefor (i.e.,
within fifty-eight (58) days after the applicable due date); or (iii)
files, or has filed against it, any petition for bankruptcy or
reorganization or other debtor or creditor relief procedure under any
state or federal law; or (iv) who repudiates in writing all of its
obligations under its Lease; or (v) who admits or asserts, in writing, its
inability or unwillingness either to pay its debts as they become due or
otherwise to comply with the terms of its respective Lease.
(b) Acquiror's Rights. For and during a period of fifteen (15) days after
its receipt of a TID Notice (the "TID STUDY PERIOD"), Acquiror shall have
the right to re-
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examine all of the records relating to the Tenant In Default and its
respective Lease; to inspect the Defaulted Building and leased premises of
the Tenant(s) In Default; to interview representatives of the Tenant(s) In
Default in order to ascertain the cause and likely effects and
ramifications of the particular default(s) in question; and to otherwise
evaluate the impact of that particular default on Acquiror's acquisition
of the Defaulted Building as a component of the Projects. Within seven
(7) days after the conclusion of the applicable TID Study Period, and
subject to Paragraph 32 hereof, Acquiror shall have the unilateral right
to delete and eliminate those Projects that include Defaulted Buildings
from this Agreement (the "DELETED BUILDINGS") by giving written notice to
Contributor ("DELETION NOTICE"). Upon any such identification by
Purchaser of Deleted Buildings and delivery of the Deletion Notice to
Contributor, this Agreement shall, without further action of the parties,
be deemed to have been amended, ipso facto, so as to eliminate herefrom
all Projects in which such Deleted Buildings are located, subject to a
reduction in the Contribution Consideration equal to the aggregate of the
(x) Allocated Amounts minus (y) the Assumed Indebtedness of the Projects
so deleted, in each case as adjusted by eliminating any and all
appropriate Prorations and Adjustments. Upon such amendment, all
references to the Projects shall automatically exclude the Projects so
deleted and, except as otherwise provided in Subparagraph 5(e) above, no
Closing or pre-Closing obligations of Contributor (or Acquiror's
Conditions Precedent) shall apply to the Projects so deleted.
Notwithstanding anything set forth above, Acquiror may, in the event of
the existence of multiple Deleted Buildings, exercise its rights to delete
any or all of the Projects in which those Deleted Buildings are located,
it being agreed hereby that, subject to Paragraph 32 hereof, Acquiror may
selectively exercise its rights to delete on a Project-by-Project basis,
as opposed to an all-or-none or otherwise consistent basis.
25. NON-COMPETE AND NON-SOLICITATION. In consideration of Acquiror's
agreement to purchase the Projects, JB (as defined below) hereby covenants and
agrees that, subject to the third-to-last sentence of this Paragraph 25, during
and throughout the period commencing on the Closing Date and ending on (the
"NON-COMPETE EXPIRATION DATE") the earlier of (x) the fifth (5th) anniversary
of the Closing Date, (y) the date on which the Employment Agreement (as defined
below) is terminated by the REIT in accordance with its terms, other than for
cause and (z) the date on which the Employment Agreement is terminated by JB in
accordance with its terms, neither JB, nor any entity controlled by, or under
common control with JB (control requiring the ownership of more than fifty
percent (50%) of the ownership interest of the entity in question)
[collectively, "JB AFFILIATES"], shall, directly or indirectly, solicit,
initiate contact with, or approach, on behalf of any entity other than the
UPREIT, any Tenant leasing space (or otherwise having any possessory interests
in any space), as of the Closing Date, in any Project that Acquiror actually
acquires pursuant to this Agreement (a "CLOSING DATE TENANT") or any other
third party with whom Acquiror enters into any lease after the Closing ("NEW
TENANT"), for the purpose of leasing, selling, contracting for, constructing or
otherwise directly or indirectly providing any or all of warehouse or
industrial space, or office space in an industrial building that is ancillary
to the use of warehouse or industrial space in the same building ("ANCILLARY
OFFICE SPACE"), within Long Island, New York and Essex County, New Jersey. In
the event that any Closing Date Tenant or New Tenant shall independently
initiate contact with any or all of JB and the JB Affiliates to lease, purchase
or otherwise occupy warehouse or industrial space or Ancillary Office Space
within either or both of Long Island, New York or Essex County, New Jersey, JB
or JB Affiliates shall forthwith (and prior to entering into any lease,
commitment letter of intent, contract or other agreement with such Closing Date
Tenant or New Tenant) notify the UPREIT, in writing, of the particulars of such
Closing Date Tenant's or New Tenant's request for warehouse or industrial space
or Ancillary Office Space (a "COMPETITION NOTICE"). Upon receipt of a
Competition Notice, the UPREIT shall have five (5) business days (excluding the
day of receipt) to determine whether or not it wishes to compete for any such
Closing Date Tenant or New Tenant. If the UPREIT notifies JB, in writing and
prior to the expiration of the applicable five (5) business day period, that it
is interested in so competing, the UPREIT shall have the right to compete
(within the ninety (90) day period following the date on which Contributor
delivers the Competition Notice, the "COMPETITION PERIOD"), with JB and the
applicable JB Affiliates, in good faith and on "equal footing," to attempt to
provide such desired space to such Closing Date Tenant or New Tenant. If the
UPREIT fails to respond, in writing, within the applicable five (5) business
day period, then the UPREIT shall automatically be deemed to have waived its
right to compete with respect to the then-applicable Closing Date Tenant or New
Tenant. Provided that JB and JB Affiliates comply with their obligations set
forth in this Paragraph 25, then from and after the expiration
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of the applicable Competition Period, they shall not be prohibited from
entering into any such lease, construction or sales transaction with any
Closing Date Tenant or New Tenant. In further consideration of Acquiror's
agreement to purchase the Projects, JB hereby covenants and agrees that,
subject to the penultimate sentence of this Paragraph 25, during and throughout
the period commencing on the Closing Date and ending on the Non-Compete
Expiration Date, neither JB nor any entity in which JB has any ownership
interest, of any nature whatsoever, whether directly or indirectly, shall
solicit, initiate contact with, approach, negotiate with, or hold discussions
with, or on behalf of, any entity (other than the REIT, the UPREIT, or any
entity affiliated with either or both of the REIT and the UPREIT) in connection
with any matter relating to the purchase, sale, ground lease, development or
acquisition of any other interests, of any nature whatsoever, of any warehouse
or industrial property in either or both of the States of New York and New
Jersey; provided, however, that the foregoing limitation shall not apply with
respect to the Retained Properties (as defined below). In further
consideration of Acquiror's agreement to purchase the Projects, JB further
covenants and agrees, during and throughout the period commencing on the
Closing Date and ending on the Non-Compete Expiration Date, that neither he nor
any entity in which he has any interest whatsoever shall, within either or both
of the States of New York and New Jersey, in any manner own, manage, control,
participate in, consult with, render services for or otherwise deal with in any
manner any entity involved in the development, management, leasing or operation
of other projects or properties used for industrial, warehouse or distribution
purposes (the foregoing covenant shall not apply to the Retained Properties,
with respect to which JB's rights are governed by Paragraph 27). JB further
agrees that, in the event of breach of any or all of the covenants contained in
this Paragraph 25, and notwithstanding the provisions of Paragraph 18, the
UPREIT shall be entitled to all available remedies against any or all of JB and
the JB Affiliates, at law or in equity, including without limitation,
injunctive relief, all of which remedies shall be cumulative and not exclusive.
Nothing contained herein shall be deemed to limit or restrict JB's and the JB
Affiliates' right to continue to lease space to, or otherwise deal with (1)
existing (as of the Contract Date and the Closing Date) tenants of any Project
that is a Retained Property, and (2) any Closing Date Tenant or New Tenant with
respect to which a Competition Notice is delivered to Acquiror, but Acquiror
either fails to timely respond thereto, or Acquiror timely responds to the
Competition Notice, but then fails to enter into a lease with the applicable
Closing Date Tenant or New Tenant during the Competition Period; provided,
however, that in the case of (2), Contributor's right to deal directly with
such Closing Date Tenant or New Tenant shall be limited to the specific
opportunity and circumstances described in the relevant Competition Notice and
any subsequent renewal of the lease or expansion of the same space demised to
such Closing Date Tenant or New Tenant as a result of the transaction described
in the relevant Competition Notice. If the conditions of the foregoing clause
(2) are met at any time with respect to a given Tenant or New Tenant and the
respective lease, Contributor shall have no obligation to deliver a Completion
Notice with respect to the same Tenant or New Tenant, and respective lease, in
connection with any renewal or expansion of such lease. The terms and
provisions of this Paragraph 25 shall survive the Closing and shall not merge
into any conveyancing documents delivered at Closing.
26. PRE-CLOSING LEASING. Contributor and Acquiror acknowledge that
various of the Projects may contain certain vacancies (i) as of October 21,
1996 and all such vacancies are reflected on the Rent Roll; and (ii) as a
result of space that was occupied on October 21, 1996 but becomes vacant prior
to the Closing Date and after October 21, 1996 (collectively, the "VACANCIES").
Given the parties' mutual desire and expectation that various of the Vacancies
may be leased prior to Closing, Contributor and Acquiror have determined that,
from and after October 21, 1996, and continuing to the Closing Date (subject to
any earlier termination of this Agreement), Contributor has the right to seek
tenants for the Vacancies (and Acquiror shall have the right to submit to
Contributor proposed tenants for the Vacancies). The following parameters have
applied (since October 21, 1996) and shall continue to apply with respect to
such pre-Closing leasing:
(a) Acquiror's Consent. Attached to this Agreement as Exhibit "F" is
Contributor's current form lease utilized at the Projects (the "FORM
LEASE"). Contributor agrees to use its reasonable, good faith and
diligent efforts to ensure that any tenant leasing all or any portion of
any Vacancy shall enter into a lease substantially in the form of the Form
Lease. Prior to entering into such new lease with a prospective new
Tenant under an Additional Lease, Contributor shall deliver to Acquiror a
copy of the proposed lease and a term sheet summarizing all of the
economic and material terms of the proposed
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Additional Lease ("TERM SHEET") so as to enable Acquiror to decide whether
or not to consent to such proposed Additional Lease. In the event that
Acquiror does not specifically reject a proposed Additional Lease, in
writing delivered to Contributor within three (3) business days after
Acquiror's receipt from Contributor of a request for consent (which notice
from Acquiror shall specify the reasons for rejection, if applicable),
Acquiror shall be deemed conclusively to have consented to such lease
transaction. Contributor shall not enter into any Additional Leases for
Vacancies if Acquiror timely rejects such proposed Additional Lease in
accordance with this Subparagraph 26(a).
(b) Payment of Tenant Improvement Costs and Brokerage Commission. If
an Additional Lease is executed prior to Closing and in accordance with
Subparagraph 26(a), then, at Closing, Acquiror shall pay to Contributor,
in cash and in addition to the Contribution Consideration, those portions
(if any) of the tenant improvement costs and brokerage commissions
attributable to the initial term of the Lease ("INITIAL ADDITIONAL LEASE
COSTS") and actually paid by Contributor prior to Closing; provided,
however, that the maximum amount that Acquiror shall be required to pay
for such Initial Additional Lease Costs shall be those amounts set forth
in the applicable Term Sheet (with respect to tenant improvement costs and
leasing commissions) prepared by Contributor for that particular
Additional Lease. In the event that, prior to Closing, Contributor does
not advance all Initial Additional Lease Costs with respect to all
Additional Leases approved (or deemed approved) by Acquiror, then after
Closing, Contributor shall remain liable for the payment of all Initial
Additional Lease Costs that are due and payable after the Closing, but
only if and to the extent that the Initial Additional Lease Costs for a
given Additional Lease exceed those corresponding amounts set forth by
Contributor in the Term Sheet for that particular Additional Lease; and
Acquiror shall remain liable for the payment of those Initial Additional
Lease Costs for a given Additional Lease approved (or deemed approved by
Acquiror) that are equal to, or less than, those corresponding amounts set
forth on the Term Sheet for the particular Additional Lease.
Notwithstanding the preceding terms of this Subparagraph 26(b), in the
event that this Agreement is terminated prior to Closing, then Acquiror
shall have no liability or obligation with respect to any Additional Lease
or any Initial Additional Lease Costs; and in the event that a Project for
which an Additional Lease is executed becomes a Deleted Project, then
Acquiror shall have no liability for that Additional Lease or the Initial
Additional Lease Costs associated therewith.
(c) Defaults by Existing Tenants. Notwithstanding anything to the
contrary contained in this Paragraph 26, in the event that, prior to
Closing, Contributor enters into an Additional Lease with respect to
premises that are the subject of a Vacancy arising or occurring after
October 21, 1996 as a result of a default by an Existing Tenant (a
"DEFAULTING EXISTING TENANT"), Acquiror shall retain the approval rights
set forth in Subparagraph 26(a), and, if Acquiror does not timely reject
such Additional Lease, Contributor shall be solely responsible for the
payment of that percentage (the "SHARED PERCENTAGE") of the Initial
Additional Lease Costs equal to (x) the number of months of the term of
the Defaulting Existing Tenant's Existing Lease remaining unexpired as of
the first date on which such Defaulting Existing Tenant defaulted under
the requirements of its respective Existing Lease; divided by (y) the
number of months in the initial term of the proposed Additional Lease that
shall replace the Existing Lease of the Defaulting Existing Tenant;
provided, however, that the Shared Percentage shall be deemed to be zero
if the occupancy rate of the Projects (based on aggregate gross rental
income of the Projects) exceeds 95% both immediately prior to and after
the first date on which possession of the leased premises vacated by the
applicable Defaulting Existing Tenant is unconditionally delivered to
Contributor.
(d) Survival. The terms and provisions of this Paragraph 26 shall
survive the Closing and shall not merge into any conveyancing documents
delivered at Closing.
27. SENIOR REGIONAL DIRECTOR POSITION AND EMPLOYMENT CONTRACT. At the
Closing, Jan Burman ("JB"), a principal of Contributor, and the REIT shall
enter into an employment agreement pursuant to which the REIT engages JB as a
"SENIOR REGIONAL DIRECTOR," and agrees to compensate JB on terms, and pursuant
to financial arrangements, that are commensurate with those pursuant to which
the REIT engages its other Senior Regional Directors (i.e., base and incentive
compensation, health insurance and other benefits, and stock
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options). JB's employment agreement (the "EMPLOYMENT AGREEMENT"), shall be in
the form of Exhibit X attached hereto. In his capacity as a Senior Regional
Director ("SRD"), JB shall also be elected (effective upon Closing), as a
"signing officer" of the REIT, thereby authorizing JB (to the same extent as
the REIT's other SRDs are authorized) to execute various acquisition-,
leasing-, operational-, disposition- and development-related documentation for
and on behalf of both the UPREIT and the REIT.
Notwithstanding the foregoing, however, Acquiror acknowledges that from
and after the Closing Date, JB, in his capacity as a principal of Contributor,
shall continue to retain a significant interest in (i) the Deleted Projects (as
defined below); (ii) subject to Acquiror's rights to acquire the Option
Projects and Project No. 56 pursuant to Paragraphs 33 and 39, respectively, the
Option Projects and Project No. 56; and (iii) certain other commercial real
properties (primarily of a non-industrial nature), that Contributor, or an
affiliate thereof, current owns and which are not included within the scope of
this Agreement (collectively with the Deleted Projects, the Option Projects and
Project No. 56, the "RETAINED PROPERTIES"). At Closing, Acquiror and
Contributor shall prepare and agree upon a schedule of all of the Retained
Properties. (Pursuant to Paragraph 29 of this Agreement, at Closing, the
owner(s) of the Retained Properties and First Industrial Management Corporation
("FIMC") shall enter into a property management and leasing agreement pursuant
to the terms of which FIMC shall manage and lease certain of the Retained
Properties.) During the term of the Employment Agreement, JB shall have the
right to participate in strategic and significant business decisions (e.g.,
sale and refinance) concerning the Retained Properties, but JB, acting in his
individual capacity, shall not participate in the day-to-day management and
leasing decisions concerning any or all of the Retained Properties.
The Employment Agreement, among other things, shall have a five-year term
and shall include the REIT's covenant to cause JB to be elected to the Board of
Directors of FI Development Services Corporation, a Maryland corporation
("FIDS") and the sole general partner of First Industrial Development Services
Group, L.P., a Delaware limited partnership, as soon as is reasonably possible,
in the good faith determination of the REIT, after the Closing.
28. CONTRIBUTOR'S ORGANIZATION AND STAFF. Acquiror acknowledges that
Contributor engages various individuals to lease, manage, and operate the
Projects on a day-to-day basis (collectively, the "MANAGER EMPLOYEES"). Given
the familiarity of the Manager Employees with the Projects and the Long Island
market, Acquiror has advised Contributor that the REIT may desire to engage
certain of the Manager Employees (or to cause FIMC to engage some or all of
such Manager Employees) after the Closing. Acquiror acknowledges that, given
JB's role as an SRD of the REIT, with the post-Closing responsibility to
operate and manage the Projects, JB is likely to require that either or both of
the REIT and FIMC engage employees to work under his direction. In light of
the foregoing, Contributor agrees that Acquiror (with JB's consent, which
consent shall not be unreasonably withheld or delayed) may directly contact,
interview and extend offers of employment to any or all of the Manager
Employees at any time and from time to time after the Approval Date and prior
to the Closing Date. Acquiror hereby covenants and agrees that, if and to the
extent that either or both of the REIT and FIMC determine that it is
appropriate to engage Long Island-based employees (in connection with the
acquisition, ownership, leasing and management of any or all of the Retained
Properties and the Projects), then Acquiror shall cause either or both of the
REIT and FIMC, as the case may be, to consider, in good faith, the possibility
of engaging some or all of the Manager Employees; provided, however, that
neither the REIT nor FIMC shall be obligated to extend offers of employment to
any or all of the Manager Employees. Notwithstanding the foregoing, JB, in his
capacity as an SRD, shall be authorized to extend offers of employment to those
Manager Employees listed on Schedule 28 attached hereto, and on terms set forth
in Schedule 28. JB acknowledges that any Manager Employee hired by the REIT
will be expected to devote his or her full-time, diligent and good faith
efforts to the operation of the business of the REIT, UPREIT or FIMC, as the
case may be.
29. MANAGEMENT OF RETAINED PROPERTIES. At the Closing, Contributor shall
cause the owner(s) of the Retained Properties (collectively, the "RP OWNER") to
enter into property management and leasing agreements with FIMC, pursuant to
which the RP Owner shall engage FIMC to manage, operate and lease certain of
the Retained Properties (collectively, the "MANAGEMENT AGREEMENT"). The
Retained Properties to be made subject to the Management Agreement are listed
on Schedule 29 attached hereto. The Management Agreement for those
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Retained Properties that are designated with an asterisk on Schedule 29 (being
properties owned in whole or in substantial part by Judith Draizin or entities
she or members of her immediate family controls) [the "DRAIZIN PROPERTIES"]
shall have a 2-year term; provided, however, that upon the expiration of such
2-year term, the term will automatically renew for a 2-year period; subject,
however, to the right of the RP Owner of a Draizin Property to terminate the
Management Agreement with respect to that Draizin Property upon not less than
six months' written notice to FIMC, which notice may not, however, be delivered
prior to the second anniversary of the Closing. The term of the Management
Agreement for all other Retained Properties shall be equal to the lesser of (x)
five years and (y) the duration of JB's tenure as Senior Regional Director (or
as an equivalent or senior officer) of the REIT (if such tenure is terminated
in accordance with terms of the Employment Agreement, either by the REIT other
than for cause or by JB). Contributor and Acquiror shall each act reasonably
and in good faith to agree upon the terms and conditions of the Management
Agreement prior to the Approval Date; provided, however, that the Management
Agreement shall include, but not be limited to, an annual management fee equal
to 4% of aggregate annual gross rental income (which fee shall be payable,
however, on a monthly basis), but without any allocation to Contributor of any
responsibility to contribute to the payment of FIMC's overhead expenses, and
the terms and provisions set forth on Exhibit "W" attached hereto and
incorporated herein by this reference (including, but not limited to, the right
to terminate, without a penalty, a Management Agreement with respect to a given
Retained Property in the event of a sale and transfer of that Retained Property
to a third party or, in the case of Option Project, to the UPREIT, whereupon
such termination shall be effective on the date on which such sale is
consummated).
30. COSMETIC IMPROVEMENTS AND DEFERRED MAINTENANCE ESCROW. Contributor
and Acquiror have agreed that certain cosmetic improvements and deferred
maintenance shall be required at certain of the Projects, and shall be
completed as soon as is reasonably possible after Closing, but in all events
and under all circumstances, substantially completed by December 31, 1997.
Such cosmetic improvement items and deferred maintenance are described in
separate sections of Exhibit Y (collectively, "COSMETIC IMPROVEMENTS"). At
Closing, Acquiror shall deposit the amounts set forth in the separate sections
of Exhibit Y, on an aggregated basis (the "COSMETIC IMPROVEMENTS FUND"), into
an escrow with the Chicago Title and Trust Company, Nassau County, New York
office ("CT&T"), and the amount of the Cosmetic Improvements Fund shall be
deducted from the Total LP Unit Amount, as an Adjustment. The escrow into
which the Cosmetic Improvements Fund is deposited shall be governed by escrow
instructions into which Contributor, Acquiror and the Title Company enter at
Closing. Acquiror hereby covenants and agrees that it shall expend the
proceeds of the Cosmetic Improvements Fund for the performance only of the
Cosmetic Improvements, which covenant (together with those additional covenants
made by Contributor in this Paragraph 30) shall survive the Closing and shall
not merge into any conveyancing documents delivered at Closing. In the event
that Acquiror completes the performance of all Cosmetic Improvements, but
Acquiror does not expend the entire Cosmetic Improvements Fund for such
purposes, the balance of such unexpended Cosmetic Improvements Fund, including
all interest earned thereon (the "COSMETIC IMPROVEMENTS FUND BALANCE"), shall
be paid to the UPREIT; and, subject to compliance with Subparagraph 2(c)(iv) in
connection with such issuance, the UPREIT shall promptly thereafter issue an
aggregate amount (rounded to the nearest whole number of LP Units) of LP Units,
equal to the quotient of (x) the Cosmetic Improvements Fund Balance divided by
(y) the Unit Price, to the those LP Unit Recipients as are, and in the amounts,
designated in writing by JB. In such event, neither Acquiror, the UPREIT nor
the REIT shall have any liability or responsibility with respect to such
distribution. In the event the entire Cosmetic Improvements Fund is properly
applied towards the completion of the Cosmetic Improvements, but the Cosmetic
Improvements are not completed, Contributor shall be responsible for the
payment (or reimbursement of Acquiror) of the additional amounts necessary to
complete the Cosmetic Improvements in accordance with Exhibit Y.
Notwithstanding anything to the contrary in the Management Agreement, in no
event shall the REIT, the UPREIT or any affiliate of the REIT receive any fees
or commissions in connection with the performance and installation of any or
all of the Cosmetic Improvements. Acquiror acknowledges that certain Leases
require the Tenants thereunder to reimburse the landlord if and to the extent
that the landlord expends monies for certain Cosmetic Improvement items,
located at and on the Project in which such Tenants' respective leased premises
are located (the "TENANT-FUNDED COSMETIC IMPROVEMENTS"); therefore, if and to
the extent that Acquiror performs any Tenant-Funded Cosmetic Improvements as
part of the Cosmetic Improvements, Acquiror shall use reasonable, good faith
efforts to bill to, and collect from, the relevant Tenants the costs incurred
to perform
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such Tenant-Funded Cosmetic Improvements (the "TF COSMETIC COSTS"). If and to
the extent that Acquiror collects all or any portion of the TF Cosmetic Costs
from Tenants, and Acquiror has already been reimbursed, from the Cosmetic
Improvements Fund, for such TF Cosmetic Costs, then Acquiror shall deliver to
JB those monies that Acquiror receives from Tenants as reimbursement for TF
Cosmetic Costs, and JB shall be solely and entirely responsible for the
distribution of such TF Cosmetic Costs monies to Contributor. For as long as
JB is employed pursuant to the Employment Agreement, JB shall have primary
responsibility and the authority to coordinate and contract for all components
of services, materials and work to perform all of the Cosmetic Improvements;
therefore, JB acknowledges and agrees that, in his capacity as SRD, he shall be
required to complete the Cosmetic Improvements as soon as is reasonably
possible after Closing, but in all events such improvements shall be
substantially completed by December 31, 1997. The provisions of this Paragraph
30 shall survive the Closing and shall not merge into any conveyancing
documents delivered at Closing.
31. CAPITAL IMPROVEMENTS ESCROW. Contributor and Acquiror have agreed
that certain capital improvements and items of deferred maintenance shall be
required at certain of the Projects (collectively, "CAPITAL IMPROVEMENTS"),
which Capital Improvements shall be substantially completed on or before the
5th anniversary of the Closing Date. Such Capital Improvements are described
in Exhibit Z. At Closing, Acquiror shall deposit the aggregate sum reflected
in Exhibit Z (the "CAPITAL IMPROVEMENTS FUND") into an escrow with the Title
Company, and the amount of the Capital Improvements Fund shall be deducted from
the Total LP Unit Amount, as an Adjustment. The escrow into which the Capital
Improvements Fund is deposited shall be governed by escrow instructions into
which Contributor, Acquiror and the CT&T enter at Closing. Acquiror hereby
covenants and agrees that it shall expend the proceeds of the Capital
Improvements Fund for the repair, maintenance and replacement of Capital
Improvements only, which covenant (together with those additional covenants
made by Contributor in this Paragraph 31) shall survive the Closing and shall
not merge into any conveyancing documents delivered at Closing. In the event
that Acquiror completes the performance of all Capital Improvements, but
Acquiror does not expend the entire Capital Improvements Fund for such
purposes, the balance of such unexpended Capital Improvements Fund, including
all interest earned thereon (the "CAPITAL IMPROVEMENTS FUND BALANCE"), shall be
paid to the UPREIT; and, subject to compliance with Subparagraph 2(c)(iv) in
connection with such issuance, the UPREIT shall promptly thereafter issue an
aggregate amount (rounded to the nearest whole number of LP Units) of LP Units,
equal to the quotient of (x) the Capital Improvements Fund Balance divided by
(y) the Unit Price, to the those LP Unit Recipients as are, and in the amounts,
designated in writing by JB. In such event, neither Acquiror, the UPREIT nor
the REIT shall have any liability or responsibility with respect to such
distribution. In the event the entire Capital Improvements Fund is properly
applied towards the completion of the Capital Improvements, but the Capital
Improvements are not completed, Contributor shall be responsible for the
payment (or reimbursement of Acquiror) of the additional amounts necessary to
complete the Capital Improvements in accordance with Exhibit Z.
Notwithstanding anything to the contrary in the Management Agreement, in no
event shall the REIT, the UPREIT or any affiliate of the REIT receive any fees
or commissions in connection with the performance and installation of any or
all of the Capital Improvements. Acquiror acknowledges that certain Leases
require the Tenants thereunder to reimburse the landlord if and to the extent
that the landlord expends monies for certain Capital Improvement items, located
at and on the Project in which such Tenants' respective leased premises are
located (the "TENANT-FUNDED IMPROVEMENTS"); therefore, if and to the extent
that Acquiror performs any Tenant-Funded Improvements as part of the Capital
Improvements, Acquiror shall use reasonable, good faith efforts to bill to, and
collect from, the relevant Tenants the costs incurred to perform such
Tenant-Funded Improvements (the "TF COSTS"). If and to the extent that
Acquiror collects all or any portion of the TF Costs from Tenants, and Acquiror
has already been reimbursed, from the Capital Improvements Fund, for such TF
Costs, then Acquiror shall deliver to JB those monies that Acquiror receives
from Tenants as reimbursement for TF Costs, and JB shall be solely and entirely
responsible for the distribution of such TF Costs monies to Contributor. For
as long as JB is employed pursuant to the Employment Agreement, JB shall have
primary responsibility and the authority to coordinate and contract for all
components of services, materials and work to perform all of the Capital
Improvements; therefore, JB acknowledges and agrees that, in his capacity as
SRD, he shall be required to complete the Capital Improvements as soon as is
reasonably practicable after Closing, but in all events, such improvements
shall be substantially completed on or before the fifth (5th) anniversary of
the Closing Date. The
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provisions of this Paragraph 31 shall survive the Closing and shall not merge
into any conveyancing documents delivered at Closing.
32. MAXIMUM DELETION.
(a) Contributor's Right of Termination. If Acquiror shall elect,
under any or all of Subparagraphs 5(e), 6(e), 9(d), 10, 15(c) and 24(b)
hereof, to delete and eliminate from this Agreement two (2) or more
Projects (each such deleted Project, a "DELETED PROJECT") which, in the
aggregate, represent more than fifteen percent (15%) of the total
aggregate gross rental income of all of the Projects originally
contemplated to be conveyed and acquired (on the Closing Date) under this
Agreement (determined as of the Contract Date), then Contributor shall
have the right, exercisable by written notice to Acquiror ("CONTRIBUTOR'S
TERMINATION NOTICE"), within five (5) business days after the date on
which Acquiror delivers its notice of deletion, to terminate this
Agreement in its entirety, whereupon the Earnest Money, together with all
(if any) interest thereon, shall be immediately refunded to Acquiror and
the parties shall have no further obligations hereunder, except as
specifically provided in this Agreement to the contrary. Upon its receipt
of a Contributor's Termination Notice, Acquiror shall have the right,
exercisable by written notice to Contributor ("REINSTATEMENT NOTICE"),
given within five (5) business days after its receipt of such
Contributor's Termination Notice, to reinstate this Agreement by
withdrawing its prior deletion of one or more Projects sufficient in size
to reduce the aggregate square footage of Deleted Projects to a number
which results in an aggregate deletion of fifteen percent (15%) or less of
the total aggregate gross rental income of all of the Projects originally
contemplated by this Agreement. Upon the delivery of such Reinstatement
Notice, Contributor's Termination Notice shall be rendered null and void,
and the parties shall proceed to close on all non-deleted Projects as
herein provided, subject to an extension of the Closing Date, on a
day-for-day basis, equal to the number of days that elapse between the
delivery of Contributor's Termination Notice and the delivery of
Acquiror's Reinstatement Notice.
(b) Acquiror's Right of Termination. If Acquiror shall elect, under
any or all of Subparagraphs 5(e), 6(e), 9(d), 10, 15(c) and 24(b) hereof,
to delete and eliminate from this Agreement two or more Deleted Projects
which, in the aggregate, represent more than thirty percent (30%) of the
total aggregate gross rental income of all of the Projects originally
contemplated to be conveyed and acquired (on the Closing Date) under this
Agreement (determined as of the Contract Date), and Contributor fails to
timely deliver a Contributor's Termination Notice, then Acquiror shall
have the right, exercisable by written notice to Contributor, delivered
within five (5) business days after the last date on which Contributor may
deliver (pursuant to Subparagraph 32(a) above) the Contributor's
Termination Notice, to terminate this Agreement in its entirety, whereupon
the Earnest Money, together with all (if any) interest thereon, shall be
immediately refunded to Acquiror and the parties shall have no further
obligations hereunder, except as specifically provided in this Agreement
to the contrary.
33. OPTION PROJECTS. Acquiror desires to acquire an option (the "PURCHASE
OPTION") to purchase (on a date after the Closing Date) Projects Nos. 16, 26,
28, 29 and 52 (collectively, the "OPTION PROJECTS"), on the following terms and
conditions, which terms and conditions shall survive the Closing hereunder:
(a) Trigger Date, and Trigger Notice. From and after the Closing
Date and continuing to the second anniversary thereof, JB shall use his
reasonable, good faith and diligent efforts to cause (without being
required to pay any consideration or commence litigation) the requisite
number of partners in Project No. 16, and the requisite number of members
of the limited liability company that owns Project No. 52, to
unconditionally agree to the transfer, sale and conveyance of fee simple
interest in each such respective Project to Acquiror for the prices
determined in accordance with Subparagraph 33(d) (each, the "PARTNER
CONSENT"). Upon the occurrence, and provided such occurrence happens
prior to, or on, the second anniversary of the Closing Date, of either or
both of: (x) the receipt of the Partner Consent with respect to, Project
No. 16; and (y) the receipt of the Partner Consent with respect to,
Project No. 52; (the dates on which either or both of (x) and (y) occur is
hereinafter referred to as a "TRIGGER DATE"), JB shall, if and only if
such Trigger Date occurs within the period from and after the Closing Date
through,
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but excluding, the second anniversary of the Closing Date, promptly send
written notice to Acquiror (the "TRIGGER NOTICE"), advising Acquiror that
the requirements described in either or both of (i) and (ii) above have
been satisfied with respect to the applicable Option Project(s).
(b) Option Exercise. Acquiror shall have thirty (30) days from the
date on which a Trigger Notice is delivered (the "OPTION RESPONSE PERIOD")
to conduct, at and with respect to the applicable Option Project, subject
to the terms and requirements of Paragraph 5, all of the deliveries,
tests, inquiries and inspections described in Paragraph 5 with respect to
the then-applicable Option Project(s) and to advise JB, on behalf of the
owner of such Option Project, in writing (the "OPTION RESPONSE NOTICE"),
as to whether or not Acquiror exercises its Purchase Option with respect
to that particular Option Project. The Option Response Period shall be
subject to extension on the terms and conditions provided in Subparagraph
5(b) with respect to the performance of an Additional Assessment
concerning and with respect to the then-applicable Option Project(s) if
Acquiror reasonably determines that an Additional Assessment is warranted
in connection with that Option Project(s). If Acquiror fails to timely
deliver an Option Response Notice or otherwise declines to exercise its
Purchase Option on an Option Project, Acquiror shall be deemed to have
automatically and irrevocably waived its Purchase Option with respect to
that particular Option Project, and Acquiror shall execute and deliver to
Contributor (upon Contributor's written request) any documents (in
recordable form) reasonably requested by Contributor to reflect the
termination of the Purchase Option with respect to that Option Project.
JB hereby covenants and agrees that, during any Option Response Period, JB
shall use his reasonable, diligent and good faith efforts to cause the
owner of the applicable Option Project(s) to provide Acquiror, its agents,
employees and representatives with access to, and the ability to perform
the inspections contemplated under Paragraph 5 at, the applicable Option
Project, but subject to all of the requirements and restriction imposed
under Paragraph 5. In the event Acquiror exercises its option with
respect to Project No. 52, JB agrees to use his reasonable, diligent and
good faith efforts to cause the owner of the applicable Option Project(s)
to complete the legal subdivision (the "SUBDIVISION") of Project No. 52
such that the municipality in which such Project is located permits the
conveyance of such Project as a separate and distinct parcel.
Notwithstanding anything to the contrary contained herein, Acquiror shall
have no obligation to consummate the closing of Project No. 52 unless and
until the Subdivision of Project No. 52 occurs.
(c) Project Numbers 26, 28 and 29. From and after the Closing Date
and continuing to the second anniversary thereof, Acquiror shall have the
opportunity to advise Contributor that it may wish to exercise its option
to purchase any or all of Projects Nos. 26, 28 and 29 by so advising
Contributor, in writing, on or before the second anniversary of the
Closing Date (each, a "CARLE PLACE PROJECT TRIGGER NOTICE"). The thirty
(30) day period of time after the date on which the Carle Place Project
Trigger Notice is delivered to Contributor shall constitute the Option
Response Period for whichever of Projects Nos. 26, 28 and 29 is the
subject of a Carle Place Project Trigger Notice; therefore, during that
Option Response Period, Acquiror shall have the rights described under
Paragraph 33(b) above. If Acquiror exercises its option with respect to
either or both of Projects Nos. 26 and 28, the Closing thereof shall be
conditioned on the recording of easements reasonably acceptable to
Acquiror governing access-related matters between such properties and
those properties contiguous thereto, as appropriate and as the case may
be. Acquiror shall have no obligation to acquire any of such Option
Projects if no such easement is agreed upon and recorded. Contributor
shall negotiate reasonably and in good faith to reach agreement on any
such easements. Notwithstanding anything to the contrary contained
herein, Acquiror shall have no obligation to consummate the closing of
Project No. 26 and/or Project No. 28, as the case may be, unless and until
the Subdivision of such Project(s) occurs.
(d) Closing. If Acquiror timely delivers an Option Response Notice
in accordance with the terms of this Paragraph 33, then such purchase and
sale shall occur in accordance with, and pursuant to, the provisions of
this Agreement (to the extent applicable and having due regard for the
purchase price of the Option Project in question), except as follows:
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(i) Closing. The consummation of the purchase and sale of the
Option Project shall occur on the thirtieth (30th) day after the
expiration of the applicable Option Response Period (the "OPTION
PROJECT CLOSING DATE");
(ii) Calculation of Contribution Consideration. The purchase
price for each Option Project (the "OP PURCHASE PRICE") shall be as
follows: Acquiror and Contributor shall calculate the OP Purchase
Price as of the expiration of the applicable Option Response Period
(the "DETERMINATION DATE") and such calculation shall be the quotient
of (1) the net operating income ("NOI") of that Option Project as of
the applicable Determination Date, divided by (2) .107. Acquiror and
Contributor acknowledge and agree that, on a semi-annual basis from
and after the Closing Date and continuing to the second anniversary
of the Closing Date, they shall determine the OP Purchase Price
applicable to each Option Project with respect to which a Purchase
Option remains outstanding, which calculation shall be made on an
informational basis so as to facilitate the procurement of any
Partner Consents that may be required as a condition to the sale of
any Option Project. For all purposes herein, "NOI" shall mean, with
respect to any Project and at the time of calculation, Project
revenues (i.e., base rent, plus recoveries from tenants) generated by
leases at the Project during the preceding 12 full calendar months
less Project operating expenses during the same period. The revenue
component of the NOI calculation shall be reduced by 1% as a credit
loss factor.
(iii) Payment of OP Purchase Price. Acquiror shall pay the
applicable OP Purchase Price at each and every Option Project closing
in cash or LP Units, as directed by Contributor and any partner or
member that delivers a Partner Consent; provided, however, that LP
Units may only be issued to LP Unit Recipients having a direct or
indirect interest in such Option Project. Additionally, if and to
the extent that all or any portion of an OP Purchase Price is paid in
LP Units, the pricing of such LP Units shall be calculated pursuant
to the formula described in Subparagraph 2(c)(iii), but without the
limitations of the third sentence of that subparagraph. Prorations
and adjustments required (under the terms of this Agreement) in
connection with the consummation of the purchase and sale of each
Option Project shall be in accordance with the terms of this
Agreement;
(iv) Partnership Agreements and Subdivision. The parties agree
to negotiate in good faith to enter into and/or deliver on the
appropriate Option Project Closing Date any additional covenants,
conditions or representations or warranties with respect to the
partnership agreement and operating agreement affecting Projects Nos.
16 and 52, respectively, and the Subdivision of Project No. 52 that
may be reasonably requested by either party.
(v) Exclusivity. Contributor shall have no right, of any nature
whatsoever, to market an Option Project for sale, or solicit any
offer, of any nature, to purchase all or any part of Contributor's
interest in an Option Project, or participate in any negotiations to
sell (whether by fee simple interest, ground lease, installment sale
or otherwise), or agree to sell, all or any portion of, or any
interest in, an Option Project unless and until Contributor complies
with the obligations of this Paragraph 33 with respect to that Option
Project.
(vi) Schedule 12.1(z). It shall be an Acquiror's Condition
Precedent with respect to the Closing of any Option Project that any
matters reflected on Schedule 12.1(z) dating from and after 1980 with
respect to any such Option Project be resolved to the reasonable
satisfaction of Acquiror.
At Closing, Contributor and Acquiror shall execute, and record against
Projects No. 26, 28 and 29, a memorandum of Acquiror's Purchase Option,
provided that such recordation does not result in a default under any existing
mortgage thereon. Each such memorandum shall expire on the date that is thirty
(30) days after the second anniversary of the Closing Date. The terms and
provisions of this Paragraph 33 shall survive the Closing and shall not merge
into the conveyancing documents delivered at Closing.
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34. PREPAYMENT OF ASSUMED INDEBTEDNESS; REFINANCING. Contributor shall
have the right (but not the obligation) to negotiate with the lenders of the
loans secured by the Existing Mortgages regarding the prepayment of any such
loans, in full and at Closing, at a discount from the principal amount (after
application of accrued interest) that would be otherwise outstanding and due
and owing as of the Closing Date (such discount, net of any prepayment penalty
that may nevertheless be required by the applicable lender, a "PREPAYMENT
DISCOUNT"). To the extent that a Prepayment Discount has been negotiated with
respect to any or all of the Existing Mortgages (as reflected on the Pay-Off
Letter delivered with respect to such Existing Loan), one-half (50%) of any
such Prepayment Discount shall be credited to Contributor by an increase in the
Total LP Unit Amount. At Closing, the UPREIT shall satisfy and pay, in full,
all of the Assumed Indebtedness, including, but not limited to, the Existing
Mortgages. The Total LP Unit Amount shall be reduced by an amount equal to
one-half percent (1/2%) of the principal amount, as such principal amount is
discounted, of all loans secured by Existing Mortgages that are the beneficiary
of a Prepayment Discount.
35. REIMBURSEMENT FOR CERTAIN TAX INCREASES BASED ON HOLBROOK REMEDIATION.
Contributor and Acquiror acknowledge that the Allocated Values of Projects
Nos. 8 and 9 (the "HOLBROOK PROPERTIES") were determined, in part, based on the
most currently known real property taxes levied against the Holbrook
Properties, which amounts are reflected on Schedule 35 hereto ("CURRENT
TAXES"). The Holbrook Properties may be encumbered, at the request of the
United States Environmental Protection Agency ("USEPA"), by deed restrictions
as a result of currently pending environmental remediation that is ongoing at
the Holbrook Properties and more fully described in Schedule 9(b) hereto (the
"HOLBROOK REMEDIATION"). The Holbrook Remediation consists of two components,
namely (i) the remediation of contaminated soil (the "SOIL REMEDIATION") and
(ii) the monitoring and, depending on the maximum contaminant levels for nickel
to be promulgated by the USEPA, the remediation of contaminated ground water
(the "GROUNDWATER REMEDIATION"). If, at any time within the Selected
Assessment Period (hereinafter defined), the real property taxes levied against
either or both of the Holbrook Properties increase to an amount in excess of
the Current Taxes (a "TAX INCREASE"), the UPREIT shall promptly advise
Contributor, in writing, of such Tax Increase, together with a copy of the
billing statement evidencing the Tax Increase (the "TAX INCREASE NOTICE"). The
Holbrook Recipients (as hereinafter defined) shall be required, within thirty
(30) days after the UPREIT's delivery of the Tax Increase Notice, to promptly
reimburse the UPREIT (in cash) for the amount (the "TAX REIMBURSEMENT AMOUNT")
equal to the quotient of: (a) the difference between (1) the newly effective
real property taxes levied against the affected Holbrook Properties, as
reflected on the Tax Increase Notice (the "NEWLY APPLICABLE TAXES") and (2) the
most currently known and most recently paid real estate taxes levied against
such Holbrook Project pursuant to the tax bill issued immediately prior to the
tax increase reflected in the Tax Increase Notice; divided by (b) .107. For
purposes of this paragraph, (i) the term "Selected Assessment Period" shall
mean the two (2) fiscal years (for real property tax purposes) following the
fiscal year in which the Soil Remediation and the Groundwater Remediation are
completed (if and to the extent that Groundwater Remediation is required), (ii)
completion of the Soil Remediation will be evidenced by a written notification
thereof issued by the USEPA and (iii) completion of the Groundwater Remediation
will be evidenced by a written approval thereof issued by the USEPA; provided,
however, that if, by the fifth (5th) anniversary of the Closing Date, the USEPA
has failed to issue a written approval of the Groundwater Remediation due to
the lack of ground water remediation standards, completion of the Groundwater
Remediation shall be deemed, for purposes of this Agreement, to have occurred
on such fifth (5th) anniversary. Notwithstanding the foregoing, the
computation of the Tax Reimbursement Amount shall not include (x) any portion
of the real property taxes payable by tenants of the Holbrook Projects and (y)
any portion of the increase in real property taxes unrelated to either or both
of the Soil Remediation and Groundwater Remediation. In determining what
portion, if any, of the increase in real property taxes is related to either or
both of Soil Remediation and Groundwater Remediation, the parties may rely upon
a written allocation from the applicable taxing authority. If such allocation
is not available, and the Holbrook Recipients and the UPREIT fail to agree upon
such allocation, the Holbrook Recipients may submit this issue to
mediation/arbitration in accordance with Paragraph 18. The obligation of the
Holbrook Recipients with respect to the payment of the Tax Reimbursement Amount
pursuant to this Paragraph 35 shall be secured by a first priority pledge in
favor of the UPREIT of those LP Units issued in respect of the contribution of
the Holbrook Properties (the "HOLBROOK UNITS"), which pledge shall expire on
the expiration date of the Selected Assessment Period (the "HOLBROOK EXPIRATION
DATE"). At Closing, the LP Unit Recipients to whom the
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Holbrook Units are issued in consideration of the contribution of the Holbrook
Properties (collectively, the "HOLBROOK RECIPIENTS") shall execute and deliver
to the UPREIT (on a joint and several basis) a pledge agreement (and ancillary
UCC Financing Statements) in form and substance mutually and reasonably
satisfactory to the Holbrook Recipients and the UPREIT, with respect only to
the Holbrook Units (the "HOLBROOK PLEDGE AGREEMENT"). The Holbrook Pledge
Agreement shall provide, among other things, that (A) the pledge of the
Holbrook Units shall terminate upon a sale of the Holbrook Properties, (B) if
any one of the Holbrook Properties is sold, that portion of the Holbrook Units
relating thereto shall be released from such pledge, (C) the Holbrook Units, or
portions thereof, may be sold by the Holbrook Recipients only to satisfy their
obligations with respect to the payment of the Tax Reimbursement Amount under
this Paragraph 35, and (D) when and as the Holbrook Remediation is completed
for any of the Holbrook Properties and the Holbrook Recipients perform their
obligations under this Paragraph 35 with respect to the payment of the Tax
Reimbursement Amount, that portion of the Holbrook Units relating thereto shall
be released from the pledge. In the event that any or all of the Holbrook
Recipients elect to redeem any or all of their pledged Holbrook Units prior to
the Holbrook Expiration Date, then the UPREIT shall release its security
interest in those particular Holbrook Units provided that, as a condition to
such release and simultaneously with the issuance of the applicable Conversion
Shares, the applicable Holbrook Recipients pledge (on a joint and several
basis) those Conversion Shares to the UPREIT, and grant the UPREIT a first
priority security interest in such Conversion Shares, which pledge shall be
memorialized by the execution and delivery of a pledge agreement in form and
substance reasonably and mutually satisfactory to the UPREIT and the applicable
Holbrook Recipients (such pledge to include the release and termination
provisions contained in the original pledge), and such pledge (and
corresponding security interest) shall not be released until the Holbrook
Expiration Date. The obligations of the Holbrook Recipients under this
Paragraph 35 to pay the Tax Reimbursement Amount shall survive the Closing for
a period of seven (7) years, and shall not merge into the conveyancing
documents delivered at Closing.
36. ADDITIONAL TENANT MATTERS.
(a) Exercise of Termination Options. Contributor has advised
Acquiror that the Leases of those Tenants listed on Schedule 36(a)
attached hereto provide such Tenants with the right to terminate their
respective Leases on an accelerated basis, prior to the expiration of the
now-current terms of each such Lease. In the event that, at any time and
from time to time from and after the Closing Date, if any or all of the
tenants designated with an asterisk on such Schedule 36(a) (the
"TERMINATING TENANTS") exercise their respective termination rights, then,
from and after the effective date of each such accelerated termination,
Post-Closing Contributor shall be obligated to pay to the UPREIT, on the
first day of each month and continuing through the date on which the
relevant Lease would have expired, but for the Terminating Tenant's
exercise of its termination option (the "CONTRACT EXPIRATION DATE"), all
Base Rent, Additional Rent and other amounts that would have been due for
each calendar month in question under that particular terminated Lease
(had such Lease not been terminated on an accelerated basis); provided,
however, that (i) Post-Closing Contributor's obligation to make such
monthly payments with respect to a given terminated Lease shall cease on
the first date on which (x) the entire leased premises that were the
subject of that terminated Lease are re-leased to a New Tenant on lease
terms reasonably acceptable to the UPREIT, and (y) Post-Closing
Contributor pays, or reimburses the UPREIT for, Post-Closing Contributor's
proportionate share of all costs and expenses incurred to perform those
tenant improvements required under the New Tenant's lease and the leasing
commission due in connection with that New Tenant's lease (collectively,
"RE-LETTING COSTS") and (z) such New Tenant accepts occupancy of its
leased premises and pays to the UPREIT the first month's Base Rent and
Additional Rent (if any) due under its respective lease; and (ii) if and
to the extent that any Terminating Tenant actually pays to Acquiror any
termination fee, penalty or premium in consideration of the accelerated
termination of its respective Lease (each, a "TERMINATION FEE"), then
Acquiror shall apply that Termination Fee to the payment of those
installments of Base Rent and Additional Rent that would have been due
under the terminated Lease (but for its accelerated termination) from and
after its effective date of termination; therefore, Post-Closing
Contributor shall not be required to pay any monthly installments of Base
Rent and Additional Rent with respect to a given Terminating Tenant's
terminated Lease until such time as Acquiror has exhausted any Termination
Fee paid by the Terminating Tenant in question by so applying that
Termination Fee in the
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manner required above. With respect to component (y) above, Post-Closing
Contributor's proportionate share of Re-Letting Costs attributable to a
given New Lease shall be the product of (A) the Re-Letting Costs in
question and (B) a fraction, in which the numerator is the number of
months from the commencement date of the New Lease in question through the
Contract Expiration Date of the terminated Lease now being replaced by
that New Lease, and the denominator of which is the number of months
comprising the initial term of the New Lease then in question (without
regard to renewal or extension options or rights). Notwithstanding
anything herein to the contrary (1) if portions, but not the entire,
leased premises subject to a terminated Lease are re-let to a New Tenant
as provided above, then all rents received from the New Tenant shall be
applied to Post-Closing Contributor's obligations hereunder with respect
to that particular terminated Lease, and (2) Post-Closing Contributor
shall have no obligations under this Subparagraph 36(a) with respect to
Capital Management, a Tenant in Project No. 10, if such Tenant fails to
timely exercise its right to terminate its Lease on or prior to the second
anniversary of the Closing Date.
(b) Purchase Options. Post-Closing Contributor hereby agrees to pay
to Acquiror (in cash and simultaneously with the closing of the sale of
Project No. 8 to Broadvet Consumer's Warehouse, a Tenant at Project No. 8
("BROADVET"), any deficiency between the Allocated Amount for Project No.
8 and the net purchase price payable by Broadvet (pursuant to the
applicable provisions of its Lease and exclusive of benefits provided
voluntarily by the UPREIT to Broadvet) if and when Broadvet exercises any
purchase option it has under its Lease.
(c) Financially Questionable Tenants. In the event that, at any time
and from time to time after the Closing, any or all of Aid-Auto, a Tenant
in Project No. 36; Speed & Chrome, a Tenant at Project No. 33; and Prime
Time Sports, a Tenant in Project No. 24, defaults on any payment
obligation (of any nature) under its respective Lease, and such default is
not cured within 30 days of the due date of any such payment, then the
UPREIT shall so advise Post-Closing Contributor, in writing, and
Post-Closing Contributor shall pay such delinquent payment directly to the
UPREIT, in cash, less any security deposit for such Tenant held by the
UPREIT and not otherwise applied by the UPREIT to restore the relevant
Tenant's leased premises to the condition required under the applicable
Lease. The UPREIT agrees that, in such an event, it will use its
reasonable, good faith and diligent efforts to pursue any legal remedies
it may have against the applicable delinquent Tenant in the event of a
breach of its respective Lease, and to reimburse Post-Closing Contributor
for any such payment of delinquent sums that Post-Closing Contributor
makes to the UPREIT, if and to the extent that the UPREIT actually
collects such delinquencies from the applicable Tenant (after subtracting
the UPREIT's reasonable costs, including attorneys' fees, associated with
pursuing any such remedy). The foregoing provisions apply only to the
current terms of (which terms may not be expressly provided in) the Leases
described above, and not to any post-Closing renewal or extension of those
terms.
(d) Tenants' Rights of First Refusal. Those Tenants listed on
Schedule 36(e) have (pursuant to the terms of their respective Leases)
rights of first refusal or purchase options to acquire the Projects in
which their respective leased premises are located; therefore, it shall be
an Acquiror's Condition Precedent that Contributor procure from each of
such Tenants a written confirmation that each such Tenant irrevocably and
unconditionally waives its respective right of first refusal or purchase
option, as the case may be, with respect to the transaction contemplated
by this Agreement.
The provisions of Subparagraphs 36(a), (b), and (c) shall survive the
Closing and shall not be merged into any of the conveyancing documents
delivered at Closing.
37. ONGOING ROOF REPAIR. Contributor has provided to Acquiror a true and
complete copy of a certain agreement, including specifications, with respect to
the currently pending repair of the roof of Project No. 25 (the "ROOFING
AGREEMENT"). Post-Closing Contributor hereby covenants and agrees to assign
the Roofing Agreement and any warranty relating thereto to the UPREIT at
Closing. Nevertheless, Post-Closing Contributor agrees that he shall timely
pay (or promptly reimburse the UPREIT for the payment of) all amounts owing (by
the owner of Project No. 25) under the Roofing Agreement, from time to time,
but not
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including amounts arising from any change orders requested by the UPREIT.
Post-Closing Contributor further agrees that, if the UPREIT so desires, he
shall reasonably assist and cooperate with the UPREIT in the enforcement of the
Roofing Agreement and the pursuit of any remedies available with respect
thereto in the event of a breach thereof. In the event the work required to be
performed under the Roofing Agreement has been completed as of the Closing, it
shall be an Acquiror's Condition Precedent that final lien waivers with respect
to such work, in form and substance satisfactory to the Title Company, be
delivered at Closing. Post-Closing Contributor's obligations under this
Paragraph 37 shall survive the Closing.
38. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the entire
understanding between the parties with respect to the transaction
contemplated herein, and all prior or contemporaneous oral agreements,
understandings, representations and statements, and all prior written
agreements, understandings, letters of intent and proposals are merged
into this Agreement. Neither this Agreement nor any provisions hereof may
be waived, modified, amended, discharged or terminated except by an
instrument in writing signed by the party against which the enforcement of
such waiver, modification, amendment, discharge or termination is sought,
and then only to the extent set forth in such instrument.
(b) Time of the Essence. Time is of the essence of this Agreement.
If any date herein set forth for the performance of any obligations by
Contributor or Acquiror or for the delivery of any instrument or notice as
herein provided should be on a Saturday, Sunday or legal holiday, the
compliance with such obligations or delivery shall be deemed acceptable on
the next business day following such Saturday, Sunday or legal holiday.
As used herein, the term "legal holiday" means any state or federal
holiday for which financial institutions or post offices are generally
closed in the State of New York for observance thereof.
(c) Conditions Precedent. Each of Acquiror and Contributor shall
have the right, at any time and from time to time, to waive any or all of
Acquiror's or Contributor's, as the case may be, respective Conditions
Precedent, each of which is for the sole benefit of Acquiror or
Contributor, as the case may be, and may be waived at any time by written
notice thereof from Acquiror to Contributor, or from Contributor to
Acquiror, as the case may be. The waiver of any particular Acquiror's or
Contributor's Condition Precedent shall not constitute the waiver of any
other.
(d) Construction. This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the
fact that it may have been prepared by counsel for one of the parties, it
being recognized that both Contributor and Acquiror have contributed
substantially and materially to the preparation of this Agreement. The
headings of various Paragraphs in this Agreement are for convenience only,
and are not to be utilized in construing the content or meaning of the
substantive provisions hereof.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law.
(f) Partial Invalidity. The provisions hereof shall be deemed
independent and severable, and the invalidity or partial invalidity or
enforceability of any one provision shall not affect the validity of
enforceability of any other provision hereof.
(g) Expenses. Except as and to the extent otherwise expressly
provided to the contrary herein and in those certain letter agreements,
dated October 11, 1996 and January 17, 1997, by and between JB (on behalf
of Contributor) and Acquiror (and in any other letter agreement into which
such parties may enter subsequent to the Contract Date with respect to the
sharing of due diligence costs), Acquiror and Contributor shall each bear
its own respective costs and expenses relating to the transactions
contemplated hereby, including, without limitation, fees and expenses of
legal counsel or other representatives for the services used, hired or
connected with the proposed transactions mentioned above.
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(h) Certain Securities Matters. No sale of LP Units is intended by
the parties by virtue of their execution of this Agreement. Any sale of
LP Units referred to in this Agreement will occur, if at all, upon the
Closing.
(i) Counterparts. This Agreement may be executed in any number of
identical counterparts, any of which may contain the signatures of less
than all parties, and all of which together shall constitute a single
agreement.
(j) Calculation of Time Periods. Notwithstanding anything to the
contrary contained in this Agreement, any period of time (other than any
cure periods and any time period set forth in Paragraph 13) provided for
in this Agreement that is intended to expire on or prior to the Closing
Date, but that would extend beyond the Closing Date if permitted to run
its full term, shall be deemed to expire upon Closing.
(k) Exclusive Jurisdiction. SUBJECT TO PARAGRAPH 18, THE PARTIES
AGREE THAT ALL DISPUTES BETWEEN ANY OF THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN LAW OR
EQUITY OR OTHERWISE, SHALL BE RESOLVED BY STATE OR FEDERAL COURTS LOCATED
IN NEW YORK COUNTY, NEW YORK, BUT THE PARTIES ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT OUTSIDE OF SUCH COUNTY.
39. PROJECT NUMBER 56. From and after the Closing Date and continuing to
the second anniversary thereof, Acquiror shall have a continuing right of first
refusal to purchase Contributor's interest in Project No. 56, to be exercised
as provided in this Paragraph 39. In the event that Contributor enters into
any agreement to sell, convey, transfer or assign all, or any portion of, its
interest in such Project (whether by transfer of fee simple interest, a ground
lease, sale of an interest in the Contributor entity owning this Project, an
installment sale, or otherwise), Contributor shall immediately notify the
UPREIT and provide the UPREIT with a copy of such agreement (collectively, the
"SALE NOTICE"). The date on which such Sale Notice is deemed (pursuant to
Paragraph 19) delivered to the UPREIT shall hereinafter be referred to as the
"OFFER NOTICE DATE" and the transaction described in the Sale Notice shall
hereinafter be referred to as the "PROPOSED TRANSACTION." Contributor shall be
prohibited from consummating a Proposed Transaction unless and until the UPREIT
declines to exercise its right of first refusal with respect to the Proposed
Transaction and declines to close on Project No. 56 in accordance with this
Paragraph 39. For a period of fifteen (15) days following the Offer Notice
Date (the "DELIBERATION PERIOD"), the UPREIT shall have the right to review the
Sale Notice and determine whether or not it shall exercise its right of first
refusal with respect to Project No. 56. If the UPREIT advises Contributor, in
writing, prior to the expiration of the Deliberation Period that the UPREIT
wishes to exercise its right of first refusal in accordance with the terms of
the Sale Notice (a "RIGHT OF FIRST REFUSAL ACCEPTANCE"), Contributor shall be
required to sell Project No. 56 to the UPREIT on the same terms and conditions
as described in the Sale Notice; provided, however, that the purchase price for
Project No. 56 shall equal the price set forth in the Sale Notice. In
addition, upon delivery of a Right of First Refusal Acceptance, the mechanics
of a closing for an Option Project (as set forth in Subparagraphs 33(b) and
(d)) will apply to the UPREIT's acquisition of Project No. 56. The UPREIT
shall forego whatever rights it may have under this Paragraph 39 in the event
the UPREIT, having delivered a Right of First Refusal Acceptance, willfully and
wrongfully fails to take such action as is required to close the acquisition of
Project No. 56. In the event the UPREIT fails to timely deliver a Right of
Refusal Acceptance, Contributor shall have 120 days (the "SALES PERIOD") to
consummate the sale of Project No. 56 on the express terms set forth in the
Sale Notice. If (a) Contributor fails to close the Proposed Transaction
(pursuant to the terms set forth in the Sale Notice) by the expiration of the
subject Sales Period or (b) the terms of the Proposed Transaction (as described
in the Sale Notice) change in any material respect, Contributor shall
immediately notify the UPREIT of such fact, which notice shall be treated, for
all purposes, as another Sale Notice, with the date on which such notice is
deemed (pursuant to Paragraph 19) to have been delivered as another Offer
Notice Date for purposes of this Paragraph 39. The provisions of this
Paragraph 39 shall not apply to a Transfer pursuant to Subparagraph 2(f)(iii).
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<PAGE> 80
At Closing, Contributor and Acquiror shall execute, and record against
Project No. 56, a memorandum of Acquiror's Right of First Refusal, provided
that such recordation does not result in a default under any existing mortgage
thereon. Such memorandum shall expire on the date that is thirty (30) days
after the second anniversary of the Closing Date. The terms and provisions of
this Paragraph 39 shall survive the Closing and shall not merge into the
conveyancing documents delivered at Closing.
40. CODE COMPLIANCE/ADA. In the event that, at any time or from time to
time from and after the Closing Date and continuing through the First
Anniversary, the UPREIT receives any written notice from any Governmental
Authority, claiming or alleging that (any such written notice, a "VIOLATIONS
NOTICE"): (i) a Project listed under the appropriate heading on Schedule 40
attached hereto, or the use or operation of all or any portion of any such
Project, is in material non-compliance with any applicable municipal or other
governmental law (other than the ADA and Environmental Laws), ordinance,
regulation, code, license, permit or authorization; or (ii) a Project listed
under the appropriate heading on Schedule 40 attached hereto is in material
non-compliance with the ADA, then the provisions of this Paragraph 40 shall
apply. Promptly upon receipt of a Violations Notice, the UPREIT shall deliver
a copy thereof to JB. The UPREIT agrees to consult with JB with respect to the
UPREIT's response to a particular Violations Notice, although the final
decision on how to respond to any to such Violations Notice shall be the
UPREIT's alone. Post-Closing Contributor shall (pursuant to this and the
succeeding sentence) pay any and all costs and expenses reasonably incurred by
the UPREIT in its response to a Violations Notice (including, without
limitation, those of attorneys, engineers and architects), whether incurred in
connection with any or all of analysis, research, strategy, protest, and
compliance with respect to any or all of the matters set forth in any
Violations Notice (collectively, "VIOLATION CURE COSTS"); provided, however,
that Post-Closing Contributor's maximum aggregate liability under this
Paragraph 40 (x) with respect to the matters in clause (i) above shall not
exceed $40,250 and (y) with respect to the matters in clause (ii) above shall
not exceed $64,000. In such regard, Post-Closing Contributor shall promptly
reimburse the UPREIT for any Violation Cure Costs upon Post-Closing
Contributor's receipt of written evidence as to the amount of Violation Cure
Costs, or directly pay any third-party invoices delivered by the UPREIT and
evidencing any Violation Cure Costs, as the case may be. The foregoing
obligation in this Paragraph 40 shall not apply to any Violations Notices
relating to Environmental Laws or Environmental Permits. The provisions of
this Paragraph 40 shall survive the Closing and shall not merge into any
conveyancing documents delivered at Closing.
41. CERTAIN ADDITIONAL CLOSING PAYMENTS AND ESCROWS.
(a) At Closing, Contributor shall pay to the UPREIT (as a Closing
Cost) the Asset Management fees described below. Such fees shall be
allocated pro rata (based on Allocated Value) to all Projects that are
affected by such fees and that shall be contributed to Acquiror on the
Closing Date (the "CLOSING PROJECTS"). The fees shall be set forth, under
an appropriate heading, on the Closing Statement to be agreed to by the
parties at Closing. In consideration of the UPREIT's provision to
Contributor, on a pre-closing basis, of various asset management services,
including, but not limited to, services and consultations involving or
relating to matters of ownership structure, financing, leasing, and sale,
Contributor shall pay to Acquiror a fee comprised of two components: (x)
a "set-up" fee, equal to 0.25% of the aggregate Allocated Value of the
Closing Projects; and (y) a "management" fee, equal to an annualized rate
of 0.75% of the aggregate Allocated Value of the Closing Projects, which
latter fee component shall be applicable for the period of time commencing
on July 1, 1996 and continuing through the Closing Date. No portion of
the fees paid to Acquiror at Closing pursuant to the requirements of this
Paragraph 41(a) shall be refundable.
(b) At Closing, Acquiror shall deposit into escrow with CT&T the sum
set forth under the appropriate caption on the Closing Statement (the
"DEFERRED FEE ESCROW"), which Deferred Fee Escrow shall constitute a
Closing Cost, and therefore, the Contribution Consideration shall be
reduced by the amount of the Deferred Fee Escrow. The Deferred Fee Escrow
shall be comprised of the following three components:
(i) Financing Facilitation Fee. In consideration of the
UPREIT's pre-Closing assistance in negotiations with Contributor's
existing lenders to procure
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relief from prepayment restrictions and other financial
accommodations relating to the pay-off of certain Existing Mortgages,
the Deferred Fee Escrow shall include a "Financing Facilitation Fee"
in an aggregate amount equal to one-half (50%) of each discount or
other financial accommodation provided or granted to Contributor by
any or all of the holders of any of the Existing Mortgages that shall
be paid, in full, as of the Closing Date (the "ADJUSTED DISCOUNT").
The amount in the Referred Fee Escrow corresponding to each Adjusted
Discount may (but shall not necessarily) be withdrawn from the
Deferred Fee Escrow by Acquiror in equal monthly installments,
prorated over that number of months remaining in the term of the
Existing Mortgage corresponding to such Adjusted Discount, but not to
exceed 24 months for any Adjusted Discount, as of the Closing Date.
(ii) Land Planning Fee. In consideration of the UPREIT's
provision of pre-Closing consultation services to Contributor
concerning land planning issues in connection with Project 56, on
which parcel the UPREIT has a right of first refusal pursuant to
Paragraph 39, the Deferred Fee Escrow shall also include the sum of
$200,000, which amount may (but shall not necessarily) be withdrawn
from the Deferred Fee Escrow in equal monthly installments over the
24-month term of the right of first refusal.
(iii) Strategic Planning. In consideration of the UPREIT's
provision of pre-Closing consultation services with Contributor
concerning strategic planning issues involving the Option Projects,
the Deferred Fee Escrow shall also include a sum equal to 2% of the
aggregate projected fair market value of all of the Option Projects,
calculated as of the expiration date of the two-year option term (the
"Strategic Planning Fee"). At or prior to Closing, Acquiror and
Contributor shall mutually and reasonably agree upon such projected
fair market values. The Strategic Planning Fee may (but shall not
necessarily) be withdrawn from the Deferred Fee Escrow in equal
monthly installments over the 24-month option period.
The establishment and administration of, and disbursements from, the Deferred
Fee Escrow shall be governed exclusively by written instructions between (A)
the UPREIT or the REIT and (B) CT&T. Contributor shall have no right, title or
interest, of any nature whatsoever, in any or all of the monies in the Deferred
Fee Escrow. Provided that the Closing shall have occurred, all of the fees
described in this Paragraph 41 shall be deemed to have been fully earned as of
the Closing Date; therefore, from and after the Closing Date, neither the
UPREIT nor the REIT shall have any obligation to provide to Contributor any of
the services described in this Paragraph 41.
42. ENGINEERING MATTERS AT PROJECT NO. 24. Acquiror has been advised by
its consultants that there is a void or hole in the soil beneath the surface
relating to an improperly closed leaching pool at Project No. 24 (the "Soil
Condition"). In order to determine whether and the extent to which the Soil
Condition is adverse or potentially adverse to the normal use and operation of
Project No. 24 (as in effect on the Closing Date), JB and Acquiror agree that,
following closing, they shall mutually agree on the selection of an appropriate
licensed and third-party engineer (the "Engineer") to investigate and analyze
the Soil Condition, and advise Acquiror and JB of the Engineer's
recommendations with respect to the Soil Condition (collectively, the
"ENGINEERING ANALYSIS"). Post-Closing Contributor shall be responsible for all
fees and expenses incurred to engage the Engineer and procure the Engineering
Analysis. The Engineer shall commence the Engineering Analysis no later than
30 days following the Closing Date. In the event the Engineer concludes (in
the Engineering Analysis) that it is appropriate to remedy the Soil Condition,
Acquiror shall, following reasonable consultation with JB, arrange for the
remediation of the Soil Condition in accordance with the Engineering Analysis
and corresponding recommendations. Post-Closing Contributor shall be
responsible for the entire cost of any such remediation, and shall reimburse
Acquiror for such costs within ten (10) business days after Acquiror delivers
written demand to Contributor, together with written evidence of the costs for
which Acquiror requires reimbursement. The provisions of this Paragraph 42
shall survive the Closing and shall not merge into any conveyancing document
delivered at Closing.
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43. INDEMNITY WITH RESPECT TO CERTAIN ESTOPPEL CERTIFICATES. The Estoppel
Certificates delivered in connection with the Closing by J.C. Penney Company,
Inc. with respect to its premises at Project No. 55 and dated December 30, 1996
(the "JCP ESTOPPEL") and SmithKline Beecham Chemical Laboratories, Inc. with
respect to its premises at Project No. 18 and dated January 21, 1992 (the "SBCL
ESTOPPEL") describe certain problems that the parties wish to address following
the Closing pursuant to the terms of this Paragraph 43. In light of such
problems, JB hereby agrees to cooperate fully with Acquiror to attempt to
obtain a new Estoppel Certificate from such Tenants in form reasonably
satisfactory to Acquiror (the "NEW ESTOPPEL DELIVERY CONDITION"). Post-Closing
Contributor hereby agrees to protect, defend, indemnify and hold Acquiror, the
UPREIT, the REIT and any of their partners, officers, directors, shareholders,
successors and assigns harmless from and against any and all Losses that any or
all of the indemnified parties suffers or incurs as a result of any matter
raised in the JCP Estoppel or SBCL Estoppel that is not contemplated by the
form estoppel certificate attached as Exhibit O. The indemnity provided by the
foregoing sentence shall expire with respect to each of the JCP Estoppel and
the SBCL Estoppel, respectively, immediately upon the satisfaction of the New
Estoppel Delivery Condition for that particular estoppel and the issues raised
therein. The provisions of this Paragraph 43 shall survive the Closing and
shall not merge into any conveyancing documents delivered at closing.
44. SECURITY DEPOSIT DISPUTES. Schedule 44 attached hereto reflects
certain leases ("SECURITY DEPOSIT LEASES") with respect to which Acquiror and
Contributor have a disagreement as to the appropriate amount of the security
deposits required by each of such leases, respectively. The disputed amounts
(the "DISPUTED AMOUNTS") are also reflected on Schedule 44. If, following the
Closing, any tenant under a Security Deposit Lease delivers an estoppel letter
or other written evidence in a form reasonably acceptable to Acquiror (a
"SECURITY DEPOSIT DOCUMENT") that confirms the amount of a security deposit
(the "STATED AMOUNT"), Post-Closing Contributor shall promptly pay to Acquiror
the positive difference, if any, between the Stated Amount and the amount
reflected in Schedule 44 as "Security Deposit Per Contributor." Post-Closing
Contributor's obligation under this Paragraph 44 with respect to any Tenant
that delivers a Security Deposit Document shall terminate upon delivery of the
corresponding payment required pursuant to the preceding sentence. With
respect to those Tenants reflected on Schedule 44 that do not deliver a
Security Deposit Document ("VACATING TENANTS"), Post-Closing Contributor's
obligations under this Paragraph 44 shall be as set forth below. Post-Closing
Contributor hereby agrees to promptly pay to Acquiror, upon Acquiror's request,
an amount equal to the Security Deposit Correction Amount [(as defined below),
which amount, if it exceeds the Disputed Amount, shall be deemed to equal the
Disputed Amount] with respect to each Vacating Tenant if the following
conditions are met: (i) the Vacating Tenant has vacated the premises and
requested a refund of its security deposit; and (ii) (x) the amount requested
to be refunded by such Tenant (the "REFUND AMOUNT") exceeds (y) the amount
reflected in Schedule 44 as the "Security Deposit Per Contributor" [the
"CONTRIBUTOR'S AMOUNT"] (the difference between (x) and (y) is the "SECURITY
DEPOSIT CORRECTION AMOUNT"). The provisions of this Paragraph 44 shall survive
the Closing and shall not merge into any conveyancing documents delivered at
Closing.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Contribution
Agreement on the date first above written.
ACQUIROR:
FR ACQUISITIONS, INC.,
a Maryland corporation
By: Johannson L. Yap
---------------------------------------
Name: Johannson L. Yap
Title: Senior Vice President-Acquisitions
CONTRIBUTOR AND OTHER LP UNIT RECIPIENTS:
LAZARUS BURMAN ASSOCIATES, a New York
general partnership
JAN BURMAN MANAGEMENT CO., a New York
general partnership
JERRY LAZARUS MANAGEMENT CO., a New
York general partnership
CONNIE LAZARUS MANAGEMENT CO., a New
York general partnership
RED GROUND CO., a New York general partnership
SURREY CO., a New York general partnership
L.B. MANAGEMENT CO., a New York
general partnership
SJB REALTY CO., a New York general
partnership
By: Jan Burman
---------------------------------------
Name: Jan Burman
Title: Partner of each of the above general
partnerships
JERNIE INVESTORS CO., a New York
general partnership
C 4-6-7 CO., a New York general partnership
C 3-5 CO., a New York general partnership
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<PAGE> 84
LAZ-BUR CO., a New York general partnership
By: Constance Lazarus, partner of each of
the above general partnerships
By: Jan Burman
---------------------------
Name: Jan Burman
Title: Attorney-in-fact
109 INDUSTRIAL CO., L.L.C., a New York
limited liability company
FOURBUR CO., L.L.C., a New York limited liability
company
By: Jan Burman
---------------------------
Name: Jan Burman
Title: Member of each of the above limited liability
companies
116 LEHIGH INDUSTRIAL CO., L.L.C., a New Jersey
limited liability company
By: Fourbur Family Co., L.P., a New York limited
partnership and its manager
By: Jan Burman
---------------------------
Name: Jan Burman
Title: General Partner
185 PRICE PARKWAY, L.L.C., a New York limited
liability company
290 INDUSTRIAL CO., L.L.C., a New York limited
liability company
By: Four Bur Co., L.L.C., a New York limited
liability company and manager of each of the
above limited liability companies
By: Susan Burman, member
By: Jan Burman
---------------------------
Name: Jan Burman
Title: Attorney-in-fact
JUDITH DRAIZIN (d/b/a JDHJ CO.)
By: Judith Draizin
By: Jan Burman
---------------------------
Name: Jan Burman
Title: Attorney-in-fact
SUSAN BURMAN (d/b/a SUSIECO CO.)
By: Susan Burman
By: Jan Burman
---------------------------
Name: Jan Burman
Title: Attorney-in-fact
S-2
<PAGE> 85
JERNIE HOLDINGS CORP., a New York corporation
By: Jan Burman
----------------------
Name: Jan Burman
Title: President
FOURBUR FAMILY CO., L.P., a New York limited
partnership
By: Jan Burman
----------------------
Name: Jan Burman
Title: General Partner
JEROME LAZARUS, individually
CONSTANCE LAZARUS, individually
SUSAN BURMAN, individually
JUDITH DRAIZIN, individually
Jan Burman
----------------------------
JAN BURMAN, individually and as attorney-in-fact
for the above named individuals
HEATHER DRAIZIN, individually
DANIELLE DRAIZIN, individually
JASON DRAIZIN, individually
By: Judith Draizin, custodian for Heather Draizin,
Danielle Draizin and Jason Draizin
By: Jan Burman
---------------------------
Name: Jan Burman
Title: Attorney-in-fact
S-3
<PAGE> 86
JOINDER
The undersigned, being duly authorized, hereby agree to be bound by their
obligations set forth in Subparagraph 5(d) of this Contribution Agreement.
FIRST INDUSTRIAL, L.P., a
Delaware limited partnership
By: First Industrial Realty Trust, Inc.,
a Maryland corporation and its sole
general partner
By: Johannson L. Yap
----------------------------
Name: Johannson L. Yap
Title: Senior Vice President - Acquisitions
FIRST INDUSTRIAL REALTY TRUST, INC., a
Maryland corporation
By: Johannson L. Yap
----------------------------
Name: Johannson L. Yap
Title: Senior Vice President - Acquisitions
The undersigned hereby agrees to be bound by its obligations set forth in
Paragraphs 25, 30, 31, 33(a), 33(b), 36(a), (b), and (c), 37 and 40 of this
Contribution Agreement.
Jan Burman
---------------------------
Jan Burman
S-4
<PAGE> 87
[EXHIBITS TO THIS CONTRIBUTION AGREEMENT HAVE BEEN OMITTED]
<PAGE> 1
EXHIBIT 10.59
MICHAEL T. TOMASZ
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), is made and entered into as
of the 4th day of December, 1996 (the "Effective Date"), by and between First
Industrial Realty Trust, Inc., a Maryland corporation (the "Employer"), and
Michael T. Tomasz (the "Executive").
RECITALS
A. The Employer desires to employ the Executive as an officer of the
Employer for a specified term, and the Executive is willing to accept such
employment upon the terms and conditions hereinafter set forth.
B. The Employer recognizes that circumstances may arise in which a change
of control of the Employer, through acquisition or otherwise, may occur,
thereby causing uncertainty of employment without regard to the competence or
past contributions of the Executive, and that such uncertainty may result in
the loss of valuable services of the Executive. Accordingly, the Employer and
the Executive wish to provide reasonable security to the Executive against
changes in the employment relationship in the event of any such change of
control.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:
AGREEMENTS
1. POSITION AND DUTIES. The Employer hereby employs the Executive as the
President and Chief Executive Officer of the Employer, or in such other
capacity as shall be mutually agreed between the Employer and the Executive.
During the period of the Executive's employment hereunder, the Executive shall
devote his best efforts and full business time, energy, skills and attention to
the business and affairs of the Employer. The Executive's duties and authority
shall consist of and include all duties and authority customarily performed and
held by persons holding equivalent positions with business organizations
similar in nature and size to the Employer, as such duties and authority are
reasonably defined, modified and delegated from time to time by the Board of
Directors of the Employer (the "Board"). The Executive shall have the powers
necessary to perform the duties assigned to him, and shall be provided such
supporting services, staff, secretarial and other assistance, office space and
accouterments as shall be reasonably necessary and appropriate in the light of
such assigned duties.
2. COMPENSATION. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:
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(a) BASE SALARY. The Executive shall receive an aggregate annual
minimum "Base Salary" at the rate of Two Hundred Fifty Thousand dollars
($250,000) per annum, payable in periodic installments in accordance with the
regular payroll practices of the Employer. Such Base Salary shall be subject
to review annually by the Compensation Committee of the Board during the term
hereof, in accordance with the Employer's established compensation policies.
(b) PERFORMANCE BONUS. The Executive shall receive an annual cash
"Performance Bonus," payable within forty-five (45) days after the end of the
fiscal year of the Employer, which shall be based upon company-wide and
individual performance criteria mutually agreed upon from time to time by the
Executive and the Board, and which shall be determined by the Board based upon
the recommendation of the Compensation Committee thereof.
(c) BENEFITS. The Executive shall be entitled to all perquisites
extended to similarly situated executives, as such are stated in the Employer's
Executive Perquisite Policy (the "Perquisite Policy") promulgated for the
Board by the Compensation Committee of the Board, and which Perquisite Policy
is hereby incorporated by reference, as amended from time to time. In
addition, the Executive shall be entitled to participate in all plans and
benefits generally, from time to time, accorded to employees of the Employer
("Benefit Plans"), all as determined by the Board from time to time based upon
the input of its Compensation Committee. In addition to the foregoing
perquisites, plans and benefits, the Executive shall receive the following
"Cash Allowances":
(i) a one thousand dollar ($1,000) per month automobile allowance;
and
(ii) four thousand dollars ($4,000) per year for personal financial
planning and personal income tax preparation.
(d) WITHHOLDING. The Employer shall be entitled to withhold, from
amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which it is from time to time required to
withhold. The Employer shall be entitled to rely upon the opinion of its
independent accountants, with regard to any question concerning the amount or
requirement of any such withholding.
3. TERM AND TERMINATION.
(e) BASIC TERM. The Executive's employment hereunder shall be for a
continuous and self-renewing three (3) year term, commencing as of the
Effective Date, unless terminated by either party, with or without cause,
effective as of the first (1st) business day after written notice to that
effect is delivered to the other party. Notwithstanding the foregoing, the
term of this Agreement shall, if not previously terminated, expire of its own
accord, and without notice to or from either party, on the seventieth (70th)
birthday of Executive ("Retirement Date").
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(b) PREMATURE TERMINATION.
(i) In the event of the termination of the employment of the
Executive under this Agreement by the Employer for any reason other than
a "for-cause" termination in accordance with the provisions of paragraph
(d) of this Section 3, then notwithstanding any actual or allegedly
available alternative employment or other mitigation of damages by or
available to the Executive, the Executive shall, subject to the
"Age-Based Adjustments" provided and defined in Section 3(h) below, be
entitled to a "Lump Sum Payment" equal to the sum of: (w) his monthly
Base Salary then payable, multiplied by the lesser of the number of full
months the Executive has theretofore been employed by the Employer or
thirty-six (36); plus (x) three (3) times the average of the three (3)
most recent annual Performance Bonuses that the Executive received;
provided, however, that if the Executive has been employed by the
Employer for fewer than three (3) years at the date of termination, then
the amount set forth in (x) above shall be equal to three (3) times the
average of the annual Performance Bonus the Executive has theretofore
received from the Employer. For purposes of calculating the Lump Sum
Payment amounts due under (w) and (x) above, the Executive's employment
with the Employer shall be agreed to have commenced on July 1, 1994. In
the event of a termination governed by this subparagraph (b)(i) of
Section 3, the Employer shall also: (y) notwithstanding the vesting
schedule otherwise applicable, fully vest all of Executive's options
outstanding under the First Industrial Realty Trust, Inc. 1994 Stock
Incentive Plan ("SIP Options"), and awards outstanding under the First
Industrial Realty Trust, Inc. Deferred Income Plan ("DIP Awards"), and
allow a period of eighteen (18) months following the termination of
employment for the Executive to exercise any such SIP Options; and (z)
continue for the Executive (provided that such items are not available to
him by virtue of other employment secured after termination) the
perquisites, plans and benefits provided under the Employer's Perquisite
Policy and Benefit Plans as of and after the date of termination,
together with the Cash Allowances, as well as non-exclusive secretarial
assistance, office space and accouterments [all items in (z) being
collectively referred to as "Post-Termination Perquisites and Benefits"],
for the lesser of the number of full months the Executive has theretofore
been employed by the Employer or thirty six (36) months following such
termination, subject to the proviso that all of the Post-Termination
Perquisites and Benefits set forth above shall in all events terminate as
of the Retirement Date. The payments and benefits provided under (w),
(x), (y) and (z) above by the Employer shall not be offset against or
diminish any other compensation or benefits accrued as of the date of
termination.
(ii) Payment to the Executive under this Section 3(b) will be made
in a lump sum.
(c) CONSTRUCTIVE TERMINATION. If at any time during the term of this
Agreement, except in connection with a "for-cause" termination pursuant to
paragraph (d) of this Section 3, the Executive is Constructively Discharged (as
hereinafter defined), then the Executive shall have the right, by written
notice to the Employer given within one hundred and
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twenty (120) days of such Constructive Discharge, to terminate his services
hereunder, effective as of thirty (30) days after such notice, and the
Executive shall have no rights or obligations under this Agreement other than
as provided in Section 5 hereof. The Executive shall in such event be entitled
to a Lump Sum Payment of Base Salary and Performance Bonus compensation
[subject to the Age-Based Adjustments set forth in Section 3(h) below], as well
as, up to (and terminating as of) the Retirement Date, all of the
Post-Termination Prerequisites and Benefits, as if such termination of his
employment had been effectuated pursuant to paragraph (b) of this Section 3.
For purposes of this Agreement, the Executive shall be deemed to have been
"Constructively Discharged" upon the occurrence of any one of the following
events:
(i) The Executive is not re-elected to, or is removed from, both of
the positions with the Employer set forth in Section 1 hereof, other than
as a result of the Executive's election or appointment to positions of
equal or superior scope and responsibility; or
(ii) The Executive shall fail to be vested by the Employer with the
powers, authority and support services normally attendant to any of said
offices; or
(iii) The Employer shall notify the Executive that the employment of
the Executive will be terminated or materially modified in the future or
that the Executive will be Constructively Discharged in the future; or
(iv) The Employer changes the primary employment location of the
Executive to a place that is more than fifty (50) miles from the primary
employment location as of the Effective Date of this Agreement; or
(v) The Employer otherwise commits a material breach of its
obligations under this Agreement.
(d) TERMINATION FOR CAUSE. The employment of the Executive and this
Agreement may be terminated "for-cause" as hereinafter defined. Termination
"for-cause" shall mean the termination of employment on the basis or as a
result of: (i) the Executive's death or his permanent disability, which latter
term shall mean the Executive's inability, as a result of physical or mental
incapacity, substantially to perform his duties hereunder for a period of
either six (6) consecutive months, or one hundred and twenty (120) business
days within a consecutive twelve (12) month period; (ii) a material violation
by the Executive of any applicable material law or regulation respecting the
business of the Employer; (iii) the Executive being found guilty of, or being
publicly associated with, to the Employer's detriment, a felony or an act of
dishonesty in connection with the performance of his duties as an officer of
the Employer, or the Executive's commission of an act which disqualifies the
Executive from serving as an officer or director of the Employer; or (iv) the
willful or negligent failure of the Executive to perform his duties hereunder
in any material respect. The Executive shall be entitled to at least thirty
(30) days' prior written notice of the Employer's intention to terminate his
employment for any cause (except the Executive's death), specifying
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the grounds for such termination, affording the Executive a reasonable
opportunity to cure any conduct or act (if curable) alleged as grounds for such
termination, and a reasonable opportunity to present to the Board his position
regarding any dispute relating to the existence of such cause.
(e) TERMINATION UPON DEATH. In the event payments are due and owing under
this Agreement at the death of the Executive, such payments shall be made to
such beneficiary, designee or fiduciary as Executive may have designated in
writing, or failing such designation, to the executor or administrator of his
estate, in full settlement and satisfaction of all claims and demands on behalf
of the Executive. Such payments shall be in addition to any other death
benefits of the Employer made available for the benefit of the Executive, and
in full settlement and satisfaction of all payments provided for in this
Agreement.
(f) TERMINATION UPON DISABILITY. The Employer may terminate the
Executive's employment after the Executive is determined to be disabled under
the current Employer program or by a physician engaged by the Employer. In the
event of a dispute regarding the Executive's "disability," such dispute shall
be resolved through arbitration as provided in paragraph (d) of Section 9
hereof, except that the arbitrator appointed by the American Arbitration
Association shall be a duly licensed medical doctor. The Executive shall be
entitled to the compensation and benefits provided for under this Agreement
during any period of incapacitation occurring during the term of this
Agreement, and occurring prior to the establishment of the Executive's
"disability" during which the Executive is unable to work due to a physical or
mental infirmity. Notwithstanding anything contained in this Agreement to the
contrary, until the date specified in a notice of termination relating to the
Executive's disability, the Executive shall be entitled to return to his
positions with the Employer as set forth in this Agreement, in which event no
disability of the Executive will be deemed to have occurred.
(g) TERMINATION UPON CHANGE OF CONTROL.
(i) In the event of a Change in Control (as defined below) of the
Employer and the termination of the Executive's employment by Executive
or by the Employer under either 1 or 2 below, the Executive shall,
subject to the Age-Based Adjustments described in Section 3(h) below, be
entitled to a Lump Sum Payment equal to the sum of: (w) his monthly Base
Salary then payable, multiplied by the lesser of the number of full
months the Executive has theretofore been employed by the Employer or
thirty-six (36); plus (x) three (3) times the average of the three (3)
most recent annual Performance Bonuses that the Executive received;
provided, however, that if the Executive has been employed by the
Employer for fewer than three (3) years, then the amount set forth in (x)
above shall be equal to three (3) times the average of the annual
Performance Bonuses that the Executive has theretofore received from the
Employer. The Employer shall also: (y) notwithstanding the vesting
schedule otherwise applicable, fully vest all of Executive's options
outstanding under the "SIP Options," as well as any awards outstanding
under the "DIP Awards," and allow a period of eighteen (18) months
following the termination of employment of the
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Executive for the Executive's exercise of the SIP Options; and (z)
continue for the Executive (provided that such items are not available to
him by virtue of other employment secured after termination) all of the
perquisites, plans and benefits provided under paragraph (c) of Section
2, as well as non-exclusive secretarial assistance, office space and
accouterments, for the lesser of the number of full months the Executive
has been employed by the Employer or thirty six (36) months following
such termination. The payments and benefits provided under (w), (x), (y)
and (z) above by the Employer shall not be offset against or diminish any
other compensation or benefits accrued as of the date of termination.
The following shall constitute termination under this paragraph:
1. The Executive terminates
his employment under this Agreement pursuant to a
written notice to that effect delivered to the
Board within six (6) months after the occurrence
of the Change in Control.
2. Executive's employment is
terminated, including Constructively Discharged,
by the Employer or its successor either in
contemplation of or within two (2) years after the
Change in Control, other than on a for-cause
basis.
(ii) For purposes of this paragraph, the term "Change in Control"
shall mean the following:
1. The consummation of the acquisition by any person (as
such term is defined in Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"))
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of forty percent (40%) or
more of the combined voting power embodied in the
then-outstanding voting securities of the Employer; or
2. Approval by the stockholders of the Employer of: (1)
a merger or consolidation of the Employer, if the
stockholders of the Employer immediately before such merger
or consolidation do not, as a result of such merger or
consolidation, own, directly or indirectly, more than fifty
percent (50%) of the combined voting power of the then
outstanding voting securities of the entity resulting from
such merger or consolidation in substantially the same
proportion as was represented by their ownership of the
combined voting power of the voting securities of the
Employer outstanding immediately before such merger or
consolidation; or (2) a complete or substantial liquidation
or dissolution, or an agreement for the sale or other
disposition, of all or substantially all of the assets of the
Employer.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because forty percent (40%) or more of the combined voting
power of the
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then-outstanding securities is acquired by: (1) a trustee or other
fiduciary holding securities under one or more employee benefit plans
maintained for employees of the entity; or (2) any corporation or other
entity which, immediately prior to such acquisition, is owned directly
or indirectly by the stockholders of the Employer in the same proportion
as their ownership of stock in the Employer immediately prior to such
acquisition.
(iii) If it is determined, in the opinion of the Employer's
independent accountants, in consultation with the Employer's independent
counsel, that any amount payable to the Executive by the Employer under
this Agreement, or any other plan or agreement under which the Executive
participates or is a party, would constitute an "Excess Parachute
Payment" within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code") and be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), the Employer shall pay to
the Executive a "grossing-up" amount equal to the amount of such Excise
Tax and all federal and state income or other taxes with respect payment
of the amount of such Excise Tax, including all such taxes with respect
to any such grossing-up amount. If at a later date, the Internal Revenue
Service assesses a deficiency against the Executive for the Excise Tax
which is greater than that which was determined at the time such amounts
were paid, the Employer shall pay to the Executive the amount of such
unreimbursed Excise Tax plus any interest, penalties and professional
fees or expenses, incurred by the Executive as a result of such
assessment, including all such taxes with respect to any such additional
amount. The highest marginal tax rate applicable to individuals at the
time of payment of such amounts will be used for purposes of determining
the federal and state income and other taxes with respect thereto. The
Employer shall withhold from any amounts paid under this Agreement the
amount of any Excise Tax or other federal, state or local taxes then
required to be withheld. Computations of the amount of any grossing-up
supplemental compensation paid under this subparagraph shall be made by
the Employer's independent accountants, in consultation with the
Employer's independent legal counsel. The Employer shall pay all
accountant and legal counsel fees and expenses.
(h) AGE-BASED ADJUSTMENTS. It is recognized and acknowledged that
Executive intends and wishes to retire by the Retirement Date, on which date he
shall have attained the age of 70, which shall be the mandatory retirement age
for senior management of the Employer. This Agreement shall accordingly
terminate, on an automatic basis, as provided in Section 3(a) above, as of said
Retirement Date. In addition, it is mutually acknowledged and agreed that the
Lump Sum Payments owed to the Executive in the event of a termination of this
Agreement pursuant to Section 3(b), 3 (c) or 3(g) hereof (respectively dealing
with Premature Termination, Constructive Termination and Termination Upon
Change of Control) shall be gradually reduced during the three (3) year
pre-retirement transition period preceding the Retirement Date, by being made
subject to "Age-Based Adjustments," based on the following schedule:
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Age of Executive as of % of Lump Sum Payments Due
---------------------- --------------------------
Date of Termination Per Age-Based Adjustment
---------------------- --------------------------
67 75%
68 50%
69 25%
70 0%
The foregoing Age-Based Adjustments shall apply against the Lump Sum Payments
of Base Salary and Performance Bonus provided in Sections 3(b), 3(c) and 3(g)
hereof, and shall not apply to the Post-Termination Perquisites and Benefits,
which shall remain intact until the Retirement Date, whereupon they shall be
completely terminated.
4. CONFIDENTIALITY AND LOYALTY. The Executive acknowledges that
heretofore or hereafter during the course of his employment he has produced and
received, and may hereafter produce, receive and otherwise have access to
various materials, records, data, trade secrets and information not generally
available to the public (collectively, "Confidential Information") regarding
the Employer and its subsidiaries and affiliates. Accordingly, during and
subsequent to termination of this Agreement, the Executive shall hold in
confidence and not directly or indirectly disclose, use, copy or make lists of
any such Confidential Information, except to the extent that such information
is or thereafter becomes lawfully available from public sources, or such
disclosure is authorized in writing by the Employer, required by law or by any
competent administrative agency or judicial authority, or otherwise as
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties hereunder. All records, files, documents, computer
diskettes, computer programs and other computer-generated material, as well as
all other materials or copies thereof relating to the Employer's business,
which the Executive shall prepare or use, shall be and remain the sole property
of the Employer, shall not be removed from the Employer's premises without its
written consent, and shall be promptly returned to the Employer upon
termination of the Executive's employment hereunder. The Executive agrees to
abide by the Employer's reasonable policies, as in effect from time to time,
respecting confidentiality and the avoidance of interests conflicting with
those of the Employer.
5. NON-COMPETITION COVENANT.
(a) RESTRICTIVE COVENANT. The Employer and the Executive have jointly
reviewed the tenant lists, property submittals, logs, broker lists, and
operations of the Employer, and have agreed that as an essential ingredient of
and in consideration of this Agreement and the payment of the amounts described
in Sections 2 and 3 hereof, the Executive
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hereby agrees that, except with the express prior written consent of the
Employer, for a period equal to the lesser of the number of full months the
Executive has at any time been employed by the Employer or thirty-six (36)
months after the termination of the Executive's employment with the Employer
(the "Restrictive Period"), he will not directly or indirectly compete with the
business of the Employer, including, but not by way of limitation, by directly
or indirectly owning, managing, operating, controlling, financing, or by
directly or indirectly serving as an employee, officer or director of or
consultant to, or by soliciting or inducing, or attempting to solicit or
induce, any employee or agent of Employer to terminate employment with Employer
and become employed by any person, firm, partnership, corporation, trust or
other entity which owns or operates a business similar to that of the Employer
(the "Restrictive Covenant"). For purposes of this subparagraph (a), a
business shall be considered "similar" to that of the Employer if it is engaged
in the acquisition, development, ownership, operation, management or leasing of
warehouse, distribution or light industrial property (i) in any geographic
market or territory in which the Employer owns properties either as of the date
hereof or as of the date of termination of the Executive's employment; or (ii)
in any "Target Market" publicly identified by the Employer; or (iii) in any
market in which an acquisition is pending at the time of the termination of the
Executive's employment. If the Executive violates the Restrictive Covenant and
the Employer brings legal action for injunctive or other relief, the Employer
shall not, as a result of the time involved in obtaining such relief, be
deprived of the benefit of the full period of the Restrictive Covenant.
Accordingly, the Restrictive Covenant shall be deemed to have the duration
specified in this paragraph (a) computed from the date the relief is granted
but reduced by the time between the period when the Restrictive Period began to
run and the date of the first violation of the Restrictive Covenant by the
Executive. In the event that a successor of the Employer assumes and agrees to
perform this Agreement or otherwise acquires the Employer, this Restrictive
Covenant shall continue to apply only to the primary service area of the
Employer as it existed immediately before such assumption or acquisition and
shall not apply to any of the successor's other offices or markets. The
foregoing Restrictive Covenant shall not prohibit the Executive from owning,
directly or indirectly, capital stock or similar securities which are listed on
a securities exchange or quoted on the National Association of Securities
Dealers Automated Quotation System which do not represent more than five
percent (5%) of the outstanding capital stock of any corporation.
(b) REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The Executive
acknowledges that the restrictions contained in Sections 4 and 5 of this
Agreement are reasonable and necessary for the protection of the legitimate
proprietary business interests of the Employer; that any violation of these
restrictions would cause substantial injury to the Employer and such interests;
that the Employer would not have entered into this Agreement with the Executive
without receiving the additional consideration offered by the Executive in
binding himself to these restrictions; and that such restrictions were a
material inducement to the Employer to enter into this Agreement. In the event
of any violation or threatened violation of these restrictions, the Employer
shall be relieved of any further obligations under this Agreement, shall be
entitled to any rights, remedies or damages available at law, in equity or
otherwise under this Agreement, and shall be entitled to preliminary and
temporary injunctive relief granted by a court of competent jurisdiction to
prevent or restrain any such
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violation by the Executive and any and all persons directly or indirectly
acting for or with him, as the case may be, while awaiting the decision of the
arbitrator selected in accordance with paragraph (d) of Section 9 of this
Agreement, which decision, if rendered adverse to the Executive, may include
permanent injunctive relief to be granted by the court.
6. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be deemed
to terminate or modify this Agreement, and the employing corporation to which
the Executive shall have been transferred shall, for all purposes of this
Agreement, be construed as standing in the same place and stead as the Employer
as of the date of such transfer. For purposes hereof, an affiliate of the
Employer shall mean any corporation or other entity directly or indirectly
controlling, controlled by, or under common control with the Employer. The
Employer shall be secondarily liable to the Executive for the obligations
hereunder in the event the affiliate of the Employer cannot or refuses to honor
such obligations. For all relevant purposes hereof, the tenure of the
Executive shall be deemed to include the aggregate term of his employment by
the Employer or its affiliate.
7. INTEREST IN ASSETS. Neither the Executive nor his estate shall acquire
hereunder any rights in funds or assets of the Employer, otherwise than by and
through the actual payment of amounts payable hereunder; nor shall the
Executive or his estate have any power to transfer, assign, anticipate,
hypothecate or otherwise encumber in advance any of said payments; nor shall
any of such payments be subject to seizure for the payment of any debt,
judgment, alimony, separate maintenance or be transferable by operation of law
in the event of bankruptcy, insolvency or otherwise of the Executive.
8. INDEMNIFICATION.
(a) The Employer shall provide the Executive (including his heirs,
personal representatives, executors and administrators), during the term of
this Agreement and thereafter throughout all applicable limitations periods,
with coverage under the Employer's then-current directors' and officers'
liability insurance policy, at the Employer's expense.
(b) In addition to the insurance coverage provided for in paragraph (a)
of this Section 8, the Employer shall defend, hold harmless and indemnify the
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law, and subject to the requirements, limitations
and specifications set forth in the Bylaws and other organizational documents
of the Employer, against all expenses and liabilities reasonably incurred by
him in connection with or arising out of any action, suit or proceeding in
which he may be involved by reason of his having been an officer of the
Employer (whether or not he continues to be an officer at the time of incurring
such expenses or liabilities), such expenses and liabilities to include, but
not be limited to, judgments, court costs and attorneys' fees and the cost of
reasonable settlements.
(c) In the event the Executive becomes a party, or is threatened to be
made a party, to any action, suit or proceeding for which the Employer has
agreed to provide insurance coverage or indemnification under this Section 8,
the Employer shall, to the full
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extent permitted under applicable law, advance all expenses (including the
reasonable attorneys' fees of the attorneys selected by Employer and approved
by Executive for the representation of the Executive), judgments, fines and
amounts paid in settlement (collectively "Expenses") incurred by the
Executive in connection with the investigation, defense, settlement, or appeal
of any threatened, pending or completed action, suit or proceeding, subject to
receipt by the Employer of a written undertaking from the Executive
covenanting: (i) to reimburse the Employer for all Expenses actually paid by
the Employer to or on behalf of the Executive in the event it shall be
ultimately determined that the Executive is not entitled to indemnification by
the Employer for such Expenses; and (ii) to assign to the Employer all rights
of the Executive to insurance proceeds, under any policy of directors' and
officers' liability insurance or otherwise, to the extent of the amount of
Expenses actually paid by the Employer to or on behalf of the Executive.
9. GENERAL PROVISIONS.
(a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Executive, the Employer and his and its respective
personal representatives, successors and assigns, and any successor or assign
of the Employer shall be deemed the "Employer" hereunder. The Employer shall
require any successor to all or substantially all of the business and/or assets
of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the
Employer would be required to perform if no such succession had taken place.
(b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by
written agreement signed by the Executive and the Employer.
(c) ENFORCEMENT AND GOVERNING LAW. The provisions of this Agreement
shall be regarded as divisible and separate; if any of said provisions should
be declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of
Illinois as it constitutes the situs of the corporation and the employment
hereunder, without reference to the law regarding conflicts of law.
(d) ARBITRATION. Except as provided in paragraph (b) of Section 5, any
dispute or controversy arising under or in connection with this Agreement or
the Executive's employment by the Employer shall be settled exclusively by
arbitration, conducted by a single arbitrator sitting in Chicago, Illinois, in
accordance with the rules of the American Arbitration Association (the "AAA")
then in effect. The arbitrator shall be selected by the parties from a list of
eleven (11) arbitrators provided by the AAA, provided that no arbitrator shall
be related
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to or affiliated with either of the parties. No later than ten (10) days after
the list of proposed arbitrators is received by the parties, the parties, or
their respective representatives, shall meet at a mutually convenient location
in Chicago, Illinois, or telephonically. At that meeting, the party who
sought arbitration shall eliminate one (1) proposed arbitrator and then the
other party shall eliminate one (1) proposed arbitrator. The parties shall
continue to alternatively eliminate names from the list of proposed arbitrators
in this manner until each party has eliminated five (5) proposed arbitrators.
The remaining arbitrator shall arbitrate the dispute. Each party shall submit,
in writing, the specific requested action or decision it wishes to take, or
make, with respect to the matter in dispute, and the arbitrator shall be
obligated to choose one (1) party's specific requested action or decision,
without being permitted to effectuate any compromise or "new" position;
provided, however, that the arbitrator is authorized to award amounts not in
dispute during the pendency of any dispute or controversy arising under or in
connection with this Agreement. The Employer shall bear the cost of all
counsel, experts or other representatives that are retained by both parties,
together with all costs of the arbitration proceeding, including, without
limitation, the fees, costs and expenses imposed or incurred by the arbitrator.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction; including, if applicable, entry of a permanent injunction under
paragraph (b) of Section 5.
(e) PRESS RELEASES AND PUBLIC DISCLOSURE. Any press release or other
public communication by either the Executive or the Employer with any other
person concerning the terms, conditions or circumstances of Executive's
employment, or the termination of such employment, shall be subject to prior
written approval of both the Executive and the Employer, subject to the proviso
that the Employer shall be entitled to make requisite and appropriate public
disclosure of the terms of this Agreement, without the Executive's consent or
approval, as required under applicable statutes, and the rules and regulations
of the Securities and Exchange Commission and New York Stock Exchange.
(f) WAIVER. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
(g) NOTICES. Notices given pursuant to this Agreement shall be in
writing, and shall be deemed given when received, and, if mailed, shall be
mailed by United States registered or certified mail, return receipt requested,
postage prepaid. Notices to the Employer shall be addressed to the principal
headquarters of the Employer, Attention: Chairman. Notices to the Executive
shall be sent to the address set forth below the Executive's signature on this
Agreement, or to such other address as the party to be notified shall have
given to the other.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FIRST INDUSTRIAL REALTY TRUST, INC., MICHAEL T. TOMASZ
a Maryland corporation
By: /s/ Jay H. Shidler /s/ Michael T. Tomasz
------------------------------------- ------------------------
Jay H. Shidler Address of Executive:
Chairman of the Board of Directors ------------------------
2236 North Burling
Chicago, Illinois 60614
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EXHIBIT 10.60
MICHAEL W. BRENNAN
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), is made and entered into as
of the 1st day of February, 1997 (the "Effective Date"), by and between First
Industrial Realty Trust, Inc., a Maryland corporation (the "Employer"), and
Michael W. Brennan (the "Executive").
RECITALS
A. The Employer desires to employ the Executive as an officer of the
Employer for a specified term, and the Executive is willing to accept such
employment upon the terms and conditions hereinafter set forth.
B. The Employer recognizes that circumstances may arise in which a change
of control of the Employer, through acquisition or otherwise, may occur,
thereby causing uncertainty of employment without regard to the competence or
past contributions of the Executive, and that such uncertainty may result in
the loss of valuable services of the Executive. Accordingly, the Employer and
the Executive wish to provide reasonable security to the Executive against
changes in the employment relationship in the event of any such change of
control.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:
AGREEMENTS
1. POSITION AND DUTIES. The Employer hereby employs the Executive as the
Chief Operating Officer of the Employer, or in such other capacity as shall be
mutually agreed between the Employer and the Executive. During the period of
the Executive's employment hereunder, the Executive shall devote his best
efforts and full business time, energy, skills and attention to the business
and affairs of the Employer. The Executive's duties and authority shall
consist of and include all duties and authority customarily performed and held
by persons holding equivalent positions with business organizations similar in
nature and size to the Employer, as such duties and authority are reasonably
defined, modified and delegated from time to time by the Board of Directors of
the Employer (the "Board"). The Executive shall have the powers necessary to
perform the duties assigned to him, and shall be provided such supporting
services, staff, secretarial and other assistance, office space and
accouterments as shall be reasonably necessary and appropriate in the light of
such assigned duties.
2. COMPENSATION. As compensation for the services to be provided by the
Executive hereunder, the Executive shall receive the following compensation and
other benefits:
<PAGE> 2
(a) BASE SALARY. The Executive shall receive an aggregate annual minimum
"Base Salary" at the rate of One Hundred and Ninety-Five Thousand dollars
($195,000) per annum, payable in periodic installments in accordance with the
regular payroll practices of the Employer. Such Base Salary shall be subject
to review annually by the Compensation Committee of the Board during the term
hereof, in accordance with the Employer's established compensation policies.
(b) PERFORMANCE BONUS. The Executive shall receive an annual cash
"Performance Bonus," payable within forty-five (45) days after the end of the
fiscal year of the Employer, which shall be based upon company-wide and
individual performance criteria mutually agreed upon from time to time by the
Executive and the Board, and which shall be determined by the Board based upon
the recommendation of the Compensation Committee thereof.
(c) BENEFITS. The Executive shall be entitled to all perquisites extended
to similarly situated executives, as such are stated in the Employer's
Executive Perquisite Policy (the "Perquisite Policy") promulgated for the
Board by the Compensation Committee of the Board, and which Perquisite Policy
is hereby incorporated by reference, as amended from time to time. In
addition, the Executive shall be entitled to participate in all plans and
benefits generally, from time to time, accorded to employees of the Employer
("Benefit Plans"), all as determined by the Board from time to time based upon
the input of its Compensation Committee. In addition to the foregoing
perquisites, plans and benefits, the Executive shall receive the following
"Cash Allowances":
(i) an eight hundred dollar ($800) per month automobile allowance;
and
(ii) three thousand dollars ($3,000) per year for personal financial
planning and personal income tax preparation.
(d) WITHHOLDING. The Employer shall be entitled to withhold, from amounts
payable to the Executive hereunder, any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold. The
Employer shall be entitled to rely upon the opinion of its independent
accountants, with regard to any question concerning the amount or requirement
of any such withholding.
3. TERM AND TERMINATION.
(a) BASIC TERM. The Executive's employment hereunder shall be for a
continuous and self-renewing two (2) year term, commencing as of the Effective
Date, unless terminated by either party, with or without cause, effective as of
the first (1st) business day after written notice to that effect is delivered
to the other party. Notwithstanding the foregoing, the term of this Agreement
shall, if not previously terminated, expire of its own accord, and without
notice to or from either party, on the seventieth (70th) birthday of the
Executive ("Retirement Date").
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<PAGE> 3
(b) PREMATURE TERMINATION.
(i) In the event of the termination of the employment of the
Executive under this Agreement by the Employer for any reason other than
a "for-cause" termination in accordance with the provisions of paragraph
(d) of this Section 3, then notwithstanding any actual or allegedly
available alternative employment or other mitigation of damages by or
available to the Executive, the Executive shall, subject to the
"Age-Based Adjustments" provided and defined in Section 3(h) below, be
entitled to a "Lump Sum Payment" equal to the sum of: (w) his monthly
Base Salary then payable, multiplied by twenty-four (24); plus (x) two
(2) times the average of the two (2) most recent annual Performance
Bonuses that the Executive received from the Employer. In the event of a
termination governed by this subparagraph (b)(i) of Section 3, the
Employer shall also: (y) notwithstanding the vesting schedule otherwise
applicable, fully vest all of Executive's options outstanding under the
First Industrial Realty Trust, Inc. 1994 Stock Incentive Plan ("SIP
Options"), and awards outstanding under the First Industrial Realty
Trust, Inc. Deferred Income Plan ("DIP Awards"), and allow a period of
eighteen (18) months following the termination of employment for the
Executive to exercise any such SIP Options; and (z) continue for the
Executive (provided that such items are not available to him by virtue of
other employment secured after termination) the perquisites, plans and
benefits provided under the Employer's Perquisite Policy and Benefit
Plans as of and after the date of termination, together with the Cash
Allowances, [all items in (z) being collectively referred to as
"Post-Termination Perquisites and Benefits"], for twenty-four (24) months
following such termination, subject to the proviso that all of the
Post-Termination Perquisites and Benefits set forth above shall in all
events terminate as of the Retirement Date. The payments and benefits
provided under (w), (x), (y) and (z) above by the Employer shall not be
offset against or diminish any other compensation or benefits accrued as
of the date of termination.
(ii) Payment to the Executive under this Section 3(b) will be made
in a lump sum.
(c) CONSTRUCTIVE TERMINATION. If at any time during the term of this
Agreement, except in connection with a "for-cause" termination pursuant to
paragraph (d) of this Section 3, the Executive is Constructively Discharged (as
hereinafter defined), then the Executive shall have the right, by written
notice to the Employer given within one hundred and twenty (120) days of such
Constructive Discharge, to terminate his services hereunder, effective as of
thirty (30) days after such notice, and the Executive shall have no rights or
obligations under this Agreement other than as provided in Section 5 hereof.
The Executive shall in such event be entitled to a Lump Sum Payment of Base
Salary and Performance Bonus compensation [subject to the Age-Based Adjustments
set forth in Section 3(h) below], as well as, up to (and terminating as of) the
Retirement Date, all of the Post-Termination Perquisites and Benefits, as if
such termination of his employment had been effectuated pursuant to paragraph
(b) of this Section 3.
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<PAGE> 4
For purposes of this Agreement, the Executive shall be deemed to have been
"Constructively Discharged" upon the occurrence of any one of the following
events:
(i) The Executive is not re-elected to, or is removed from, both of
the positions with the Employer set forth in Section 1 hereof, other than
as a result of the Executive's election or appointment to positions of
equal or superior scope and responsibility; or
(ii) The Executive shall fail to be vested by the Employer with the
powers, authority and support services normally attendant to any of said
offices; or
(iii) The Employer shall notify the Executive that the employment of
the Executive will be terminated or materially modified in the future or
that the Executive will be Constructively Discharged in the future; or
(iv) The Employer changes the primary employment location of the
Executive to a place that is more than fifty (50) miles from the primary
employment location as of the Effective Date of this Agreement; or
(v) The Employer otherwise commits a material breach of its
obligations under this Agreement.
(d) TERMINATION FOR CAUSE. The employment of the Executive and this
Agreement may be terminated "for-cause" as hereinafter defined. Termination
"for-cause" shall mean the termination of employment on the basis or as a
result of: (i) the Executive's death or his permanent disability, which latter
term shall mean the Executive's inability, as a result of physical or mental
incapacity, substantially to perform his duties hereunder for a period of
either six (6) consecutive months, or one hundred and twenty (120) business
days within a consecutive twelve (12) month period; (ii) a material violation
by the Executive of any applicable material law or regulation respecting the
business of the Employer; (iii) the Executive being found guilty of, or being
publicly associated with, to the Employer's detriment, a felony or an act of
dishonesty in connection with the performance of his duties as an officer of
the Employer, or the Executive's commission of an act which disqualifies the
Executive from serving as an officer or director of the Employer; or (iv) the
willful or negligent failure of the Executive to perform his duties hereunder
in any material respect. The Executive shall be entitled to at least thirty
(30) days' prior written notice of the Employer's intention to terminate his
employment for any cause (except the Executive's death), specifying the grounds
for such termination, affording the Executive a reasonable opportunity to cure
any conduct or act (if curable) alleged as grounds for such termination, and a
reasonable opportunity to present to the Board his position regarding any
dispute relating to the existence of such cause.
(e) TERMINATION UPON DEATH. In the event payments are due and owing under
this Agreement at the death of the Executive, such payments shall be made to
such beneficiary, designee or fiduciary as Executive may have designated in
writing, or failing such designation, to the executor or administrator of his
estate, in full settlement and satisfaction of
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all claims and demands on behalf of the Executive. Such payments shall be in
addition to any other death benefits of the Employer made available for the
benefit of the Executive, and in full settlement and satisfaction of all
payments provided for in this Agreement.
(f) TERMINATION UPON DISABILITY. The Employer may terminate the
Executive's employment after the Executive is determined to be disabled under
the current Employer program or by a physician engaged by the Employer. In the
event of a dispute regarding the Executive's "disability," such dispute shall
be resolved through arbitration as provided in paragraph (d) of Section 9
hereof, except that the arbitrator appointed by the American Arbitration
Association shall be a duly licensed medical doctor. The Executive shall be
entitled to the compensation and benefits provided for under this Agreement
during any period of incapacitation occurring during the term of this
Agreement, and occurring prior to the establishment of the Executive's
"disability" during which the Executive is unable to work due to a physical or
mental infirmity. Notwithstanding anything contained in this Agreement to the
contrary, until the date specified in a notice of termination relating to the
Executive's disability, the Executive shall be entitled to return to his
positions with the Employer as set forth in this Agreement, in which event no
disability of the Executive will be deemed to have occurred.
(g) TERMINATION UPON CHANGE OF CONTROL.
(i) In the event of a Change in Control (as defined below) of the
Employer and the termination of the Executive's employment by Executive
or by the Employer under either 1 or 2 below, the Executive shall,
subject to the Age-Based Adjustments described in Section 3(h) below, be
entitled to a Lump Sum Payment equal to the sum of: (w) his monthly Base
Salary then payable, multiplied by twenty-four (24); plus (x) two (2)
times the average of the two (2) most recent annual Performance Bonuses
that the Executive received from the Employer. The Employer shall also:
(y) notwithstanding the vesting schedule otherwise applicable, fully vest
all of Executive's options outstanding under the "SIP Options," as well
as any awards outstanding under the "DIP Awards," and allow a period of
eighteen (18) months following the termination of employment of the
Executive for the Executive's exercise of the SIP Options; and (z)
continue for the Executive (provided that such items are not available to
him by virtue of other employment secured after termination) all of the
perquisites, plans and benefits provided under paragraph (c) of Section
2, as well as non-exclusive secretarial assistance, office space and
accoutrements for twenty-four (24) months following such termination. The
payments and benefits provided under (w), (x), (y) and (z) above by the
Employer shall not be offset against or diminish any other compensation
or benefits accrued as of the date of termination. The following shall
constitute termination under this paragraph:
1. The Executive terminates
his employment under this Agreement pursuant to a
written notice to that effect delivered to the
Board within six (6) months after the occurrence
of the Change in Control.
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2. Executive's employment is
terminated, including Constructively Discharged,
by the Employer or its successor either in
contemplation of or within two (2) years after the
Change in Control, other than on a for-cause
basis.
(ii) For purposes of this paragraph, the term "Change in Control"
shall mean the following:
1. The consummation of the acquisition by any person (as
such term is defined in Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"))
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of forty percent (40%) or
more of the combined voting power embodied in the
then-outstanding voting securities of the Employer; or
2. Approval by the stockholders of the Employer of: (1)
a merger or consolidation of the Employer, if the
stockholders of the Employer immediately before such merger
or consolidation do not, as a result of such merger or
consolidation, own, directly or indirectly, more than fifty
percent (50%) of the combined voting power of the then
outstanding voting securities of the entity resulting from
such merger or consolidation in substantially the same
proportion as was represented by their ownership of the
combined voting power of the voting securities of the
Employer outstanding immediately before such merger or
consolidation; or (2) a complete or substantial liquidation
or dissolution, or an agreement for the sale or other
disposition, of all or substantially all of the assets of the
Employer.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because forty percent (40%) or more of the
combined voting power of the then-outstanding securities is acquired by:
(1) a trustee or other fiduciary holding securities under one or more
employee benefit plans maintained for employees of the entity; or (2) any
corporation or other entity which, immediately prior to such acquisition,
is owned directly or indirectly by the stockholders of the Employer in
the same proportion as their ownership of stock in the Employer
immediately prior to such acquisition.
(iii) If it is determined, in the opinion of the Employer's
independent accountants, in consultation with the Employer's independent
counsel, that any amount payable to the Executive by the Employer under
this Agreement, or any other plan or agreement under which the Executive
participates or is a party, would constitute an "Excess Parachute
Payment" within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code") and be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), the Employer shall pay to
the Executive a
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<PAGE> 7
"grossing-up" amount equal to the amount of such Excise Tax and all
federal and state income or other taxes with respect payment of the
amount of such Excise Tax, including all such taxes with respect to any
such grossing-up amount. If at a later date, the Internal Revenue
Service assesses a deficiency against the Executive for the Excise Tax
which is greater than that which was determined at the time such amounts
were paid, the Employer shall pay to the Executive the amount of such
unreimbursed Excise Tax plus any interest, penalties and professional
fees or expenses, incurred by the Executive as a result of such
assessment, including all such taxes with respect to any such additional
amount. The highest marginal tax rate applicable to individuals at the
time of payment of such amounts will be used for purposes of determining
the federal and state income and other taxes with respect thereto. The
Employer shall withhold from any amounts paid under this Agreement the
amount of any Excise Tax or other federal, state or local taxes then
required to be withheld. Computations of the amount of any grossing-up
supplemental compensation paid under this subparagraph shall be made by
the Employer's independent accountants, in consultation with the
Employer's independent legal counsel. The Employer shall pay all
accountant and legal counsel fees and expenses.
(h) AGE-BASED ADJUSTMENTS. It is recognized and acknowledged that
Executive intends and wishes to retire by the Retirement Date, on which date he
shall have attained the age of seventy (70), which shall be the mandatory
retirement age for senior management of the Employer. This Agreement shall
accordingly terminate, on an automatic basis, as provided in Section 3(a)
above, as of said Retirement Date. In addition, it is mutually acknowledged
and agreed that the Lump Sum Payments owed to the Executive in the event of a
termination of this Agreement pursuant to Section 3(b), 3 (c) or 3(g) hereof
(respectively dealing with Premature Termination, Constructive Termination and
Termination Upon Change of Control) shall be gradually reduced during the three
(3) year pre-retirement transition period preceding the Retirement Date, by
being made subject to "Age-Based Adjustments," based on the following schedule:
Age of Executive as of % of Lump Sum Payments Due
---------------------- --------------------------
Date of Termination Per Age-Based Adjustment
---------------------- --------------------------
67 75%
68 50%
69 25%
70 0%
The foregoing Age-Based Adjustments shall apply against the Lump Sum Payments
of Base Salary and Performance Bonus provided in Sections 3(b), 3(c) and 3(g)
hereof, and shall not
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apply to the Post-Termination Perquisites and Benefits, which shall remain
intact until the Retirement Date, whereupon they shall be completely terminated.
4. CONFIDENTIALITY AND LOYALTY. The Executive acknowledges that
heretofore or hereafter during the course of his employment he has produced and
received, and may hereafter produce, receive and otherwise have access to
various materials, records, data, trade secrets and information not generally
available to the public (collectively, "Confidential Information") regarding
the Employer and its subsidiaries and affiliates. Accordingly, during and
subsequent to termination of this Agreement, the Executive shall hold in
confidence and not directly or indirectly disclose, use, copy or make lists of
any such Confidential Information, except to the extent that such information
is or thereafter becomes lawfully available from public sources, or such
disclosure is authorized in writing by the Employer, required by law or by any
competent administrative agency or judicial authority, or otherwise as
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties hereunder. All records, files, documents, computer
diskettes, computer programs and other computer-generated material, as well as
all other materials or copies thereof relating to the Employer's business,
which the Executive shall prepare or use, shall be and remain the sole property
of the Employer, shall not be removed from the Employer's premises without its
written consent, and shall be promptly returned to the Employer upon
termination of the Executive's employment hereunder. The Executive agrees to
abide by the Employer's reasonable policies, as in effect from time to time,
respecting confidentiality and the avoidance of interests conflicting with
those of the Employer.
5. NON-COMPETITION COVENANT.
(a) RESTRICTIVE COVENANT. The Employer and the Executive have jointly
reviewed the tenant lists, property submittals, logs, broker lists, and
operations of the Employer, and have agreed that as an essential ingredient of
and in consideration of this Agreement and the payment of the amounts described
in Sections 2 and 3 hereof, the Executive hereby agrees that, except with the
express prior written consent of the Employer, for a period equal to the lesser
of the number of full months the Executive has at any time been employed by the
Employer or twenty-four (24) months after the termination of the Executive's
employment with the Employer (the "Restrictive Period"), he will not directly
or indirectly compete with the business of the Employer, including, but not by
way of limitation, by directly or indirectly owning, managing, operating,
controlling, financing, or by directly or indirectly serving as an employee,
officer or director of or consultant to, or by soliciting or inducing, or
attempting to solicit or induce, any employee or agent of Employer to terminate
employment with Employer and become employed by any person, firm, partnership,
corporation, trust or other entity which owns or operates a business similar to
that of the Employer (the "Restrictive Covenant"). For purposes of this
subparagraph (a), a business shall be considered "similar" to that of the
Employer if it is engaged in the acquisition, development, ownership,
operation, management or leasing of warehouse, distribution or light industrial
property (i) in any geographic market or territory in which the Employer owns
properties either as of the date hereof or as of the date of termination of the
Executive's employment; or (ii) in any "Target Market" publicly identified by
the Employer; or (iii) in any market in which an acquisition is
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pending at the time of the termination of the Executive's employment. If the
Executive violates the Restrictive Covenant and the Employer brings legal
action for injunctive or other relief, the Employer shall not, as a result of
the time involved in obtaining such relief, be deprived of the benefit of the
full period of the Restrictive Covenant. Accordingly, the Restrictive Covenant
shall be deemed to have the duration specified in this paragraph (a) computed
from the date the relief is granted but reduced by the time between the period
when the Restrictive Period began to run and the date of the first violation of
the Restrictive Covenant by the Executive. In the event that a successor of
the Employer assumes and agrees to perform this Agreement or otherwise acquires
the Employer, this Restrictive Covenant shall continue to apply only to the
primary service area of the Employer as it existed immediately before such
assumption or acquisition and shall not apply to any of the successor's other
offices or markets. The foregoing Restrictive Covenant shall not prohibit the
Executive from owning, directly or indirectly, capital stock or similar
securities which are listed on a securities exchange or quoted on the National
Association of Securities Dealers Automated Quotation System which do not
represent more than five percent (5%) of the outstanding capital stock of any
corporation.
(b) REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The Executive
acknowledges that the restrictions contained in Sections 4 and 5 of this
Agreement are reasonable and necessary for the protection of the legitimate
proprietary business interests of the Employer; that any violation of these
restrictions would cause substantial injury to the Employer and such interests;
that the Employer would not have entered into this Agreement with the Executive
without receiving the additional consideration offered by the Executive in
binding himself to these restrictions; and that such restrictions were a
material inducement to the Employer to enter into this Agreement. In the event
of any violation or threatened violation of these restrictions, the Employer
shall be relieved of any further obligations under this Agreement, shall be
entitled to any rights, remedies or damages available at law, in equity or
otherwise under this Agreement, and shall be entitled to preliminary and
temporary injunctive relief granted by a court of competent jurisdiction to
prevent or restrain any such violation by the Executive and any and all persons
directly or indirectly acting for or with him, as the case may be, while
awaiting the decision of the arbitrator selected in accordance with paragraph
(d) of Section 9 of this Agreement, which decision, if rendered adverse to the
Executive, may include permanent injunctive relief to be granted by the court.
6. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be deemed
to terminate or modify this Agreement, and the employing corporation to which
the Executive shall have been transferred shall, for all purposes of this
Agreement, be construed as standing in the same place and stead as the Employer
as of the date of such transfer. For purposes hereof, an affiliate of the
Employer shall mean any corporation or other entity directly or indirectly
controlling, controlled by, or under common control with the Employer. The
Employer shall be secondarily liable to the Executive for the obligations
hereunder in the event the affiliate of the Employer cannot or refuses to honor
such obligations. For all relevant purposes hereof, the tenure of the
Executive shall be deemed to include the aggregate term of his employment by
the Employer or its affiliate.
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7. INTEREST IN ASSETS. Neither the Executive nor his estate shall acquire
hereunder any rights in funds or assets of the Employer, otherwise than by and
through the actual payment of amounts payable hereunder; nor shall the
Executive or his estate have any power to transfer, assign, anticipate,
hypothecate or otherwise encumber in advance any of said payments; nor shall
any of such payments be subject to seizure for the payment of any debt,
judgment, alimony, separate maintenance or be transferable by operation of law
in the event of bankruptcy, insolvency or otherwise of the Executive.
8. INDEMNIFICATION.
(a) The Employer shall provide the Executive (including his heirs,
personal representatives, executors and administrators), during the term of
this Agreement and thereafter throughout all applicable limitations periods,
with coverage under the Employer's then-current directors' and officers'
liability insurance policy, at the Employer's expense.
(b) In addition to the insurance coverage provided for in paragraph (a)
of this Section 8, the Employer shall defend, hold harmless and indemnify the
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law, and subject to the requirements, limitations
and specifications set forth in the Bylaws and other organizational documents
of the Employer, against all expenses and liabilities reasonably incurred by
him in connection with or arising out of any action, suit or proceeding in
which he may be involved by reason of his having been an officer of the
Employer (whether or not he continues to be an officer at the time of incurring
such expenses or liabilities), such expenses and liabilities to include, but
not be limited to, judgments, court costs and attorneys' fees and the cost of
reasonable settlements.
(c) In the event the Executive becomes a party, or is threatened to be
made a party, to any action, suit or proceeding for which the Employer has
agreed to provide insurance coverage or indemnification under this Section 8,
the Employer shall, to the full extent permitted under applicable law, advance
all expenses (including the reasonable attorneys' fees of the attorneys
selected by Employer and approved by Executive for the representation of the
Executive), judgments, fines and amounts paid in settlement (collectively
"Expenses") incurred by the Executive in connection with the investigation,
defense, settlement, or appeal of any threatened, pending or completed action,
suit or proceeding, subject to receipt by the Employer of a written undertaking
from the Executive covenanting: (i) to reimburse the Employer for all Expenses
actually paid by the Employer to or on behalf of the Executive in the event it
shall be ultimately determined that the Executive is not entitled to
indemnification by the Employer for such Expenses; and (ii) to assign to the
Employer all rights of the Executive to insurance proceeds, under any policy of
directors' and officers' liability insurance or otherwise, to the extent of the
amount of Expenses actually paid by the Employer to or on behalf of the
Executive.
9. GENERAL PROVISIONS.
(a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Executive, the Employer and his and its respective
personal
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representatives, successors and assigns, and any successor or assign of the
Employer shall be deemed the "Employer" hereunder. The Employer shall
require any successor to all or substantially all of the business and/or assets
of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the
Employer would be required to perform if no such succession had taken place.
(b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by
written agreement signed by the Executive and the Employer.
(c) ENFORCEMENT AND GOVERNING LAW. The provisions of this Agreement shall
be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of
Illinois as it constitutes the situs of the corporation and the employment
hereunder, without reference to the law regarding conflicts of law.
(d) ARBITRATION. Except as provided in paragraph (b) of Section 5, any
dispute or controversy arising under or in connection with this Agreement or
the Executive's employment by the Employer shall be settled exclusively by
arbitration, conducted by a single arbitrator sitting in Chicago, Illinois, in
accordance with the rules of the American Arbitration Association (the "AAA")
then in effect. The arbitrator shall be selected by the parties from a list of
eleven (11) arbitrators provided by the AAA, provided that no arbitrator shall
be related to or affiliated with either of the parties. No later than ten (10)
days after the list of proposed arbitrators is received by the parties, the
parties, or their respective representatives, shall meet at a mutually
convenient location in Chicago, Illinois, or telephonically. At that meeting,
the party who sought arbitration shall eliminate one (1) proposed arbitrator
and then the other party shall eliminate one (1) proposed arbitrator. The
parties shall continue to alternatively eliminate names from the list of
proposed arbitrators in this manner until each party has eliminated five (5)
proposed arbitrators. The remaining arbitrator shall arbitrate the dispute.
Each party shall submit, in writing, the specific requested action or decision
it wishes to take, or make, with respect to the matter in dispute, and the
arbitrator shall be obligated to choose one (1) party's specific requested
action or decision, without being permitted to effectuate any compromise or
"new" position; provided, however, that the arbitrator is authorized to award
amounts not in dispute during the pendency of any dispute or controversy
arising under or in connection with this Agreement. The Employer shall bear the
cost of all counsel, experts or other representatives that are retained by both
parties, together with all costs of the arbitration proceeding, including,
without limitation, the fees, costs and expenses imposed or incurred by the
arbitrator. Judgment may be entered on the arbitrator's award in any court
having
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jurisdiction; including, if applicable, entry of a permanent injunction under
paragraph (b) of Section 5.
(e) PRESS RELEASES AND PUBLIC DISCLOSURE. Any press release or other
public communication by either the Executive or the Employer with any other
person concerning the terms, conditions or circumstances of Executive's
employment, or the termination of such employment, shall be subject to prior
written approval of both the Executive and the Employer, subject to the proviso
that the Employer shall be entitled to make requisite and appropriate public
disclosure of the terms of this Agreement, without the Executive's consent or
approval, as required under applicable statutes, and the rules and regulations
of the Securities and Exchange Commission and New York Stock Exchange.
(f) WAIVER. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
(g) NOTICES. Notices given pursuant to this Agreement shall be in
writing, and shall be deemed given when received, and, if mailed, shall be
mailed by United States registered or certified mail, return receipt requested,
postage prepaid. Notices to the Employer shall be addressed to the principal
headquarters of the Employer, Attention: Chairman. Notices to the Executive
shall be sent to the address set forth below the Executive's signature on this
Agreement, or to such other address as the party to be notified shall have
given to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FIRST INDUSTRIAL REALTY TRUST, INC., MICHAEL W. BRENNAN
a Maryland corporation
By: /s/ Michael T. Tomasz /s/ Michael W. Brennan
------------------------------------- -----------------------------------
Michael T. Tomasz Address of Executive:
President and Chief Executive Officer --------------------
215 North Lincoln
Hinsdale, Illinois 60521
TPX\RAS\FIRT\BRENNAN EMPLOYMENT AGREEMENT January 2, 1997 (2)
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EXHIBIT 10.61
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is made as of this 31st day of January, 1997
by and between JAN BURMAN (hereinafter "Burman") and FIRST INDUSTRIAL REALTY
TRUST, INC., a Maryland corporation (hereinafter "Employer"). Capitalized terms
contained herein and otherwise undefined shall have the respective meanings
given to each of them in that certain Contribution Agreement, dated as of
January 31, 1997, by and among FR Acquisitions, Inc. and the other parties
thereto (the "Contribution Agreement").
The parties hereto agree as follows:
ARTICLE I - TERM OF EMPLOYMENT
1.01 Employer hereby employs Burman and Burman hereby accepts employment by
Employer commencing on the date hereof and pursuant to the terms hereof.
1.02 The term of this Agreement (the "Term") shall end at 12:01 a.m. New
York time on the fifth anniversary of the date hereof (the "Expiration Date"),
except as otherwise provided herein.
ARTICLE II - DUTIES AND POWERS OF BURMAN
2.01 Except as may be otherwise approved by the Board of Directors of
Employer (the "Board") or as otherwise expressly provided herein, Burman shall
devote his full-time, diligent and good faith efforts to the operation of the
business of Employer, as more fully detailed below, at all times in accordance
with any and all written rules and policies of Employer, if and to the extent
that such rules and policies are uniformly enforced with respect to all Senior
Regional Directors of Employer (the "SRDs"). Additionally during the Term,
except as may otherwise be approved by the Board, Employer shall be entitled to
the exclusive benefits of Burman's knowledge, experience, business contacts and
opportunities relating to the business of Employer. Notwithstanding anything to
the contrary contained in this Agreement, however, Burman shall have the right
to participate in strategic and significant business decisions (e.g., sale and
refinance) concerning the Retained Properties, but Burman, acting in his
individual capacity, shall not have the right to participate in the day-to-day
management and leasing decisions concerning any or all of the Retained
Properties. The "business of Employer" shall consist of the acquisition,
development, ownership, management, leasing and sale of warehouse and industrial
real property.
Burman shall be responsible to Employer to perform and/or oversee the
following:
<PAGE> 2
1. The day-to-day management and operation of real property assets
located (collectively, the "Territory"), owned by Employer or by entities in
which Employer holds an ownership interest ("Property Management");
2. The marketing for lease or sale of real property assets located in
the Territory and owned or managed by Employer or entities in which
Employer holds an ownership interest (together with Employer, the "Employer
Entities") and the negotiation, documentation and consummation of lease and
sale transactions involving real property assets located in the Territory and
owned or managed by Employer Entities (the "Real Property Assets")
[collectively, "Marketing"];
3. The acquisition of Real Property Assets, if and to the extent such
acquisitions are approved by the Board (or the Board's Investment Committee, as
the case may be) or the appropriate partners, officers or directors of any other
applicable affiliate of Employer ("Acquisition").
2.02 Burman will hold the title of SRD of the Territory, and shall have
primary responsibility for the conducting of Employer's business in the
Territory. The Territory's Regional Headquarters will be located initially in
Syosset, New York, but may be relocated elsewhere in Nassau County, New York by
Employer.
2.03 If (a) a proposed Acquisition is presented to Employer by Burman; (b)
Employer approves such Acquisition in accordance with its policies and
procedures then in effect; and (c) the property to be acquired (the "New
Property") is located outside the then-applicable geographic boundaries of the
Territory, then, upon the closing of such Acquisition, the Territory shall
automatically be expanded to include the city (or township, village or
municipality, as the case may be) in which the New Property is located unless
(i) the New Property is located in the existing territory of another SRD (it
being understood and agreed that, except as is otherwise expressly provided in
this Section 2.03 with respect to the Territory, the senior officers of Employer
shall have the sole discretion to establish the geographic boundaries of each
SRD's respective territory); or (ii) the Board (or the Investment Committee, as
the case may be), in the process of approving the acquisition of the New
Property, specifically determines that the Territory shall not so expand. In the
event that either (i) or (ii) above is applicable, then none of Burman and the
employees engaged by Employer in the Territory shall be responsible for the
day-to-day management and operation of that particular New Property. Except as
otherwise expressly provided above in this Section 2.03, any other expansion or
contraction of the Territory shall be made by amendment to this Agreement and
shall be subject to Burman's prior approval.
2.04 Subject to: (a) with respect to those matters that may require Board
approval, the specific approval of the Board; (b) policies or guidelines
implemented by Employer out of its Chicago headquarters or by the Board, and
uniformly applied with respect to all SRDs; and (c) any budget adopted by
Employer, from time to time during the Term, with respect to all or some portion
of the Territory (a "Budget"), Burman shall have the right and obligation within
the Territory to: (i) hire and fire employees (pursuant to Employer's personnel
policies, as such
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policies may be modified or amended from time to time); (ii) establish, review,
and revise the compensation of employees engaged to perform services in the
Territory (excepting only himself); (iii) negotiate, document, and enter into
contracts for Property Management and Marketing; (iv) negotiate, document, and
enter into contracts with such suppliers of products and services as Burman
deems appropriate for the rendering of Property Management and Marketing
services to Employer; (v) purchase or lease equipment for Employer for the
performance and rendering of Property Management, Marketing and Acquisition
services, and tend to all matters relating thereto; (vi) lease building space
for occupancy by Employer for Employer's offices and for such other reasonable
functions as Burman deems appropriate for the business of Employer in the
Territory; and (vii) negotiate, document, execute and perform under leases on
behalf of any Employer Entities, whether as landlord or management/leasing
agent, as the case may be ("Leases"). Notwithstanding anything to the contrary
contained in this Section 2.04, and, with respect to leasing commissions and
tenant improvements, Section 2.06, if any expenditure proposed to be made by
Burman pursuant to his duties to Employer (1) is not contemplated or provided
for in the relevant Budget and (2) exceeds $25,000, per item or occasion,
Burman shall refrain from making such expenditure until Burman receives the
approval for such expenditure from any Vice President or more senior officer
based in the Chicago headquarters of Employer.
2.05 Without the prior approval of the Board or the Investment Committee,
as the case may be (which, as in all cases requiring the approval or consent of
the Board or Investment Committee under this Agreement, may be given or withheld
in the Board's or the Investment Committee's sole discretion), Burman shall not
do any or all of the following:
1. Increase his compensation or extend the Term;
2. Purchase, or contract to purchase, any real
property on behalf of Employer or any Employer Entities; or
3. Sell or refinance, or contract to sell or
refinance, any Real Property Assets on behalf of Employer or
any Employer Entities.
Burman agrees that he shall promptly advise the Employer's chief investment
officer or its Senior Vice President-Acquisitions (individually or
collectively, "Head of Acquisitions") of the pendency of any acquisition or
disposition of any real property on behalf of Employer or any Employer
Entities, and shall follow the directions of the Head of Acquisitions with
respect to the further pursuit of any such potential acquisition or
disposition. If, at any time during the Term, however, Burman seeks approval
or direction from the Head of Acquisitions with respect to a particular
acquisition or disposition, and the Head of Acquisitions is not available, then
Burman may seek approval or direction from Employer's Chief Operating Officer
(the "COO"). If Burman receives the approval of the Head of Acquisitions or
the COO, as applicable, to pursue an acquisition or disposition, and Burman
desires that a formal purchase and sale contract be executed in connection
therewith, then any one of the President, Chief Operating Officer, Chief
Financial Officer or Senior Vice President - Acquisitions of Employer shall be
the signatory to any such contract for an acquisition or disposition. Burman
acknowledges that, as of the date of this Agreement, no acquisition or
disposition may be consummated on behalf
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of the Employer without the approval of the Investment Committee or, in certain
instances, the Board. As of the date of this Agreement, acquisitions or
dispositions of real property on behalf of Employer require only the approval
of the Investment Committee if the aggregate consideration required to be paid
for such acquisition or disposition does not exceed $15,000,000. Currently,
then, the Board must approve acquisitions or dispositions involving
consideration in excess of $15,000,000. Notwithstanding anything to the
contrary contained in this Section 2.05, if the Board modifies its policies
with respect to the matters provided in this Section 2.05, and such
modifications are applicable to all SRDs, or to Burman, as an SRD,
specifically, then Burman shall abide by such modified policies to the extent
such policies differ from what is provided above in this Section 2.05.
2.06 Notwithstanding anything to the contrary contained above, without the
prior approval of the COO, or such other officer designated by the COO for such
purpose, Burman shall not enter into any Lease (i) with respect to premises
exceeding 100,000 rentable square feet, or (ii) with annual fixed net base rent
exceeding $500,000 for any year of the lease term, assuming the exercise of all
options in the Lease, or (iii) with an initial term exceeding five (5) years, or
with a full term, assuming the exercise of all options in the Lease, exceeding
ten (10) years, or (iv) that requires the expenditure of $100,000 or more, in
the aggregate, by Employer to both satisfy the obligations imposed on the
landlord under that Lease to perform tenant improvements and pay any leasing
commissions owed by Employer in connection with such Lease.
2.07 As an SRD, Burman shall also have the authority to negotiate the terms
and provisions of, and enter into, any third-party management contracts for the
day-to-day leasing, operation and management of New Properties if and to the
extent that, in the process of approving an Acquisition, the Investment
Committee or the Board (if the Board's approval of the Acquisition is required)
approve the engagement of a third-party manager for the applicable New Property.
In such an event, Burman must engage the third-party manager in accordance with
any additional terms, with respect to such third-party management arrangement,
required by the Investment Committee and the Board (if the Board's approval of
the Acquisition is required).
ARTICLE III - COMPENSATION
3.01 Burman shall receive a guaranteed minimum annual salary ("Annual
Salary"), based on the duration of his employment during any year, equal to the
Annual Salary payable to all other SRDs engaged by Employer, from time to time;
and such Annual Salary shall be payable in twenty-four (24) equal installments
on the fifteenth day and last day of each month during the Term (a "Payment
Date"). The Annual Salary shall be $125,000 for each of 1996 and 1997. If any
Payment Date falls on other than a normal business day, the salary payment due
on such Payment Date shall instead be payable on the last normal business day
preceding such Payment Date.
3.02 In addition to the Annual Salary, Burman shall also be entitled to
participate in all incentive, bonus and stock option programs offered by
Employer from time to time to the SRDs, as such may be approved or implemented
from time to time by the Compensation
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Committee of the Board. Burman's right to participate in, and to receive
compensation under, such programs shall in no event be on lesser terms or in
lesser amounts than those offered to the SRDs; provided, however, that
incentive or bonus arrangements (a) for which Burman and the SRDs are eligible;
(b) that are based upon the achievement or surpassing of performance goals
established by Employer, and (c) that are based upon specified commercial
criteria made known to Burman and the SRDs in advance, may vary among the
different regions of Employer based upon relative regional performance.
3.03 Employer shall be entitled to withhold from those amounts payable to
Burman from time to time under this Agreement any and all federal, state or
local withholding or other taxes or charges which Employer is, from time to
time, required (by applicable law, statute, ordinance or regulation) to
withhold. Employer shall be entitled to rely upon the opinion of its legal
counsel with regard to any question concerning the amount or requirement of any
such withholding.
ARTICLE IV - BURMAN'S BENEFITS AND BONUSES
4.01 Employer will provide Burman with medical/hospitalization/major
medical insurance coverage, including dental benefits, in the same amounts,
pursuant to the same terms, and subject to the same deductible, as is provided
pursuant to the insurance coverage made available, from time to time, to the
SRDs.
4.02 Employer will provide Burman with, and keep in effect during the
Term, a term life insurance policy which Employer will purchase from an insurer
satisfactory to Burman and providing coverage in an amount equal to the amount
of such term life insurance provided to the SRDs. Burman shall have the right
to designate such individual or other entity as he wishes as the owner of such
life insurance policy, and shall have the power to designate and change, from
time-to-time, the beneficiary under such insurance policy.
4.03 Employer will provide Burman with a disability income insurance policy
that will (i) provide Burman with income per year equal to that amount of annual
income provided to the SRDs under their respective disability insurance
policies, (ii) have a waiting period of not greater than three (3) months from
the date of sickness, injury or other disability prior to any disability
payment, (iii) provide for lifetime benefits, and (iv) contain a waiver of
premium clause. At Burman's option, he may elect to pay the annual premiums for
such disability insurance himself, in which case his Annual Salary will be
increased by the amount equal to such annual premium. The foregoing disability
income insurance policy will define disability in terms of the functions which
Burman is required to perform pursuant to this Agreement, and should Burman not
be able to perform such functions, he shall be deemed disabled under such
policy.
4.04 Burman shall be entitled to vacation leave of three (3) weeks during
each calendar year, beginning January 1, 1997, with full pay (determined on a
pro rata basis, based on the then-applicable Annual Salary). The time for
vacation shall be chosen by Burman and must be taken within fifteen (15) months
after the start of the calendar year with respect to which such vacation leave
is made available. Burman's right to be paid in lieu of any vacation leave not
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timely taken shall be determined by the Compensation Committee of the Board
and shall be consistent with the policy established for the SRDs.
4.05 Burman shall be entitled to the following paid holidays per year (if
falling on a day other than a Saturday or Sunday): New Year's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
4.06 Burman shall be entitled to fifteen (15) days per calendar year,
beginning January 1, 1997, as sick or personal leave days with full pay
(determined on a pro rata basis, based on the then-applicable Annual Salary).
Sick or personal leave may be accumulated up to a total of twenty (20) days.
4.07 If Burman becomes disabled during the Term for any reason that
prevents him from fully performing his duties under this Agreement and, as a
result, he would be entitled, but for any waiting period, to disability payments
under the disability insurance policy described above, Employer agrees to
continue his salary (determined on a pro rata basis, based on the
then-applicable Annual Salary) during the period of his disability until such
time as benefits due under the disability income insurance policy (provided
pursuant to Section 4.03 above), begin to accrue, but in no event beyond the end
of the Term.
4.08 So long as this Agreement is in full force and effect, Burman shall
have the right to provide reasonable office space accommodations at the
Territory's Regional Headquarters for use by Jerome Lazarus (the allocation of
such space will be applied against the Budget in effect from time to time).
4.09 As soon as practicable (i) after the commencement of the Term,
Employer shall cause Burman to be elected as a member of the board of directors
of FI Development Services Corporation, a wholly-owned subsidiary of Employer,
and (ii) after the commencement of the Term and after such entity has been
incorporated, Employer shall cause Burman to be elected as a member of the board
of directors of First Industrial Development Services Group, Inc.
4.10 Upon the commencement of the Term of this Agreement, Burman shall be
elected as a "Signing Officer" of Employer, with authority as designated by the
Board (to the same extent as the SRDs in their respective territories) to
execute various acquisition-, leasing-, operational-, disposition-, and
development-related documents for and on behalf of Employer (either directly or
as general partner of First Industrial, L.P., a Delaware limited partnership).
In addition, during such period of time as Burman is SRD of the Territory and
Jeffrey Cohen is employed in the Territory by Employer, Jeffrey Cohen shall have
the authority to execute Leases so long as (i) Burman has approved the Lease in
question, (ii) Burman is unavailable and will not be available to execute an
original of that Lease within the prescribed timeframe to execute such Lease and
(iii) the Lease is for premises not exceeding 10,000 rentable square feet in
size, and has an initial term not exceeding five (5) years and a full term
(assuming the exercise of all options in the Lease) not exceeding ten (10)
years.
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ARTICLE V - REIMBURSEMENT OF BURMAN'S EXPENSES
5.01 Burman is authorized to incur reasonable business expenses for
promoting the business of Employer, including expenditures for entertainment,
gifts, and travel. Employer will reimburse Burman in accordance with its normal
expense-reimbursement procedure for all business expenses reasonably incurred,
provided that Burman presents to Employer both of the following:
(a) A monthly expenses report in which Burman records:
(i) the amount of each expenditure;
(ii) the date, place, and designation of the type of entertainment,
travel, or other expenses or the date and description of any gift
given by Burman for a business purpose;
(iii) the business purpose for each expenditure; and
(iv) the name, occupation, address, and other relevant information of
each person who is entertained or given a gift sufficient to
establish the business relationship to Employer.
(b) Documentary evidence (such as receipts or paid bills) providing
sufficient information to establish the amount, date, place, and essential
character of each business expenditure of $75.00 or more.
5.02 In addition to the foregoing, it is understood and agreed that, in
order to properly perform his duties, Burman must have the use of a mobile
telephone. Employer agrees to pay directly, or to reimburse Burman for, any and
all costs associated with the purchase, installation, activation, and business
use of such mobile telephone (in the ordinary course of Burman's performance of
his duties under this Agreement).
ARTICLE VI - TERMINATION
6.01 Employer may terminate this Agreement for any reason whatsoever,
including, without limitation, under the following circumstances:
(a) The occurrence of a breach of this Agreement by Burman (including,
but not limited to, excessive absence) that Burman does not cure within ten
(10) days after Employer delivers to Burman written notice of the alleged
breach ("Default Notice"). Notwithstanding the foregoing, if such breach
is not capable of being cured within such ten-day period, but Burman
commences to cure such breach within five (5) days of Employer's delivery
of the Default Notice, then Burman may have such additional time as may be
reasonably necessary, up to a maximum of 30 days, to complete such cure,
acting diligently and in good faith. A termination pursuant to this
paragraph shall take
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effect upon the expiration of the relevant cure period, if the subject
breach has not been cured.
(b) For "cause," which, for purposes of this Agreement, shall include,
without limitation, (i) the fraudulent or criminal conduct of Burman
adversely affecting Employer, (ii) alcoholism of, or illegal substance
abuse by, Burman, (iii) any willful, reckless, or grossly negligent act, or
failure to act, of Burman, or any breach of the fiduciary duty owed by
Burman to Employer, which breach has a material adverse effect on either or
both of (x) the reputation of either or both of Burman and Employer and (y)
Employer's products, trademarks or goodwill (including, without limitation,
the reputation thereof), or (iv) any dishonesty, disclosure of Confidential
Information (as hereinafter defined) or aiding a competitor of Employer. A
termination "for cause" shall take effect immediately upon written notice
to Burman from Employer;
(c) Burman suffering a long-term disability. A long-term disability
shall be defined as Burman's inability (based on the standard for honoring
a claim established under the disability insurance policy procured for
Burman pursuant to this Agreement), due to illness or injury (including
alcoholism or illegal substance abuse), to perform his duties as
established in Article II above, for a period of three (3) consecutive
months. A termination pursuant to this paragraph shall take effect
immediately upon written notice to Burman from Employer after the
expiration of such three-month period;
(d) Burman's death, in which case the Agreement shall terminate
immediately; and
(e) The occurrence of a breach of this Agreement on three or more
occasions during any 12-month period of the Term (regardless of whether or
not such breaches are cured in a timely fashion), in which case this
Agreement shall terminate immediately upon written notice to Burman from
Employer.
In the event Employer exercises its right of termination for reasons other than
any of those specified for in paragraphs (a) through (e) above ("Unstated
Reasons"), such termination shall be effective thirty (30) days after
Employer's delivery of its written notice of such termination; provided,
however, from and after the effective date of a termination for any Unstated
Reason, and continuing for a period of six (6) months (or such longer severance
period as may be applicable to all of the other SRDs, based on Employer's
then-applicable policy at the time of Burman's termination), or through the
Expiration Date, whichever occurs first, Employer shall continue to pay to
Burman, the Annual Salary and benefits to which he would have been entitled
(under the express terms of this Agreement), but for the accelerated
termination hereof.
6.02 Burman shall have no right to terminate this Agreement, except (a) as
provided in Sections 6.06 and 6.07 below, and (b) in the event of the occurrence
of a breach of this Agreement by Employer, which Employer does not cure within
ten days after delivery of Burman's written notice of such alleged breach.
Notwithstanding the foregoing, if such breach is not capable of being cured
within such ten-day period, but Employer commences to cure such breach within
five (5) days of Burman's delivery of written notice of such alleged breach, it
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may have such additional time as may be reasonably necessary to complete such
cure, provided Employer acts diligently and in good faith.
6.03 Subject to Article 8, termination of this Agreement by Employer or by
Burman pursuant to any of the provisions of this Article VI shall not prejudice
any other remedy to which the terminating party may be entitled as a result of a
breach of this Agreement by the non-terminating party, whether at law, in
equity, or under this Agreement.
6.04 In the event this Agreement is terminated for any reason, Burman shall
be entitled to receive a prorated portion of his Annual Salary through the
effective date of such termination. In addition, in the event this Agreement is
terminated for any reason, Burman shall be entitled to reimbursement of all
business expenses incurred by him (pursuant to Section 5.01) prior to the
effective date of termination that would otherwise be reimbursable hereunder.
Further, Burman shall also be entitled to the remuneration provided in Sections
6.01, 6.06 and 6.07.
6.05 Upon the termination of this Agreement for any reason, Burman shall
forthwith return and deliver to Employer, and shall not retain any originals or
copies of, any books, papers, price lists or customer contracts, written
proposals of Employer or prospective customers or tenants, customer/tenant
lists, rent rolls, leases, files, books of account, notebooks and other
documents and data relating to the performance of services rendered by Burman
hereunder, except for those materials relating to the Retained Properties or in
Burman's possession immediately prior to the commencement of the Term
(collectively, "Employer's Materials"), all of which Employer Materials are
hereby deemed to constitute the property of Employer.
6.06 Constructive Termination. If, at any time during the Term, except in
connection with a termination pursuant to Section 6.01(a), (b) or (e) above,
Burman is Constructively Discharged (as hereinafter defined), then Burman shall
have the right, by written notice to the Employer, given within one hundred and
twenty (120) days of the effective date of such Constructive Discharge, to
terminate his services hereunder (the "Termination Notice"), effective as of the
date that is thirty (30) days after the date on which such Termination Notice is
delivered, and Burman shall have no further rights or obligations under this
Agreement other than as provided in this Section 6.06 and in Article VII. For
purposes of this Agreement, Burman shall be deemed to have been "Constructively
Discharged" upon the occurrence of any of the following events:
(i) Burman is not re-elected to, or is otherwise removed from,
his position as the SRD in the Territory with the Employer other than
as a result of (x) Burman's election or appointment to positions of
equal or superior scope and responsibility or (y) Burman's breach of,
or default under, the terms of this Agreement; or
(ii) Employer fails to vest Burman with the powers, authority and
support services normally attendant, from time to time, to the other
SRDs; or
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<PAGE> 10
(iii) The Employer notifies Burman, in writing, that Burman's
employment will be terminated (other than pursuant to Section 6.01(a),
(b) or (e) above) or materially modified in the future, or that Burman
will be Constructively Discharged in the future.
If Burman is Constructively Discharged and timely delivers a
Termination Notice, then from and after the effective date of a
termination pursuant to a Termination Notice, and continuing for a
period of six months or through the Expiration Date, whichever occurs
first, Employer shall continue to pay to Burman the Annual Salary and
benefits to which he would have been entitled (under the express terms
of this Agreement), but for the accelerated termination hereof.
6.07 Termination Upon Change of Control.
(a) In the event of a Change in Control (as defined below) of the
Employer and the termination of Burman's employment by Burman or by
the Employer under either (i) or (ii) below, Burman shall be entitled
to the "Severance Payment" described below. The Severance Payment
shall not be offset against or diminish any other compensation or
benefits accrued as of the effective date of termination. The
following shall constitute termination under this Section 6.07:
(i) Burman terminates his employment under this Agreement
pursuant to a written notice to that effect delivered to the Board
within six (6) months after the occurrence of the Change in Control;
or
(ii) Burman's employment is terminated, including Constructively
Discharged, by the Employer or its successor either in contemplation
of or within two (2) years after the Change in Control, other than
pursuant to Section 6.01(a), (b) or (e) above.
(b) For purposes of this paragraph, the term "Change in Control" shall mean
the following:
(i) The consummation of the acquisition by any person [as such
term is defined in Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "1934 Act")] of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934 Act) of
forty percent (40%) or more of the combined voting power embodied in
the then-outstanding voting securities of the Employer; or
(ii) Approval by the stockholders of the Employer of: (1) a
merger or consolidation of the Employer, if the stockholders of the
Employer immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the
then-outstanding voting securities of the entity resulting from such
merger or consolidation in substantially the same proportion as was
represented by their ownership of the combined voting power of the
voting securities of the Employer outstanding immediately before such
merger or consolidation; or (2) a complete or substantial
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<PAGE> 11
liquidation or dissolution, or an agreement for the sale or other
disposition, of all or substantially all of the assets of the Employer.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because forty percent (40%) or more of the combined voting power of
the then-outstanding securities is acquired by: (x) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
for employees of the entity; or (y) any corporation or other entity which,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of the Employer in the same proportion as their ownership of stock
in the Employer immediately prior to such acquisition. For purposes of this
Section 6.07, the "Severance Payment" shall be deemed to be mean the Annual
Salary and benefits to which Burman would have been entitled (under the express
terms of this Agreement), but for the accelerated termination hereof, and such
Severance Payment shall be due and payable with respect to and during the period
of time commencing on the effective date of the termination of Burman's
employment under this Section 6.07, and continuing for a period of six (6)
months or through the Expiration Date, whichever occurs first.
ARTICLE VII - NONCOMPETITION AND CONFIDENTIALITY
7.01 Burman hereby reaffirms his obligations under, and all of the terms
set forth in, Paragraph 25 of the Contribution Agreement.
7.02 Employer acknowledges that heretofore or hereafter during the course
of Burman's employment, Employer has produced, and Burman may hereafter produce
or have access to, records, data, trade secrets and information not generally
available to the public, including, but not limited to, the Employer's Materials
("Confidential Information"), regarding Employer, its subsidiaries and
affiliates, the business of Employer, and its real properties and tenants in the
Territory and elsewhere in the United States. Accordingly, during and
subsequent to the Term, Burman shall hold in confidence and not directly or
indirectly disclose, copy or make lists of any or all of such Confidential
Information, except to the extent that (i) such information is or hereafter
becomes lawfully available from public sources; (ii) such disclosure is
authorized in writing by Employer; (iii) such disclosure is required by a law or
any competent administrative agency or judicial authority; or (iv) otherwise as
is reasonably necessary or appropriate in connection with the performance by
Burman of his duties hereunder. All records, files, documents and other
materials or copies thereof relating to Employer's business that Burman
prepares, has access to, or utilizes (including, but not limited to, the
Employer Materials), shall be and remain the sole property of Employer; and
shall be promptly returned to Employer upon termination of Burman's employment
hereunder. Subject to Section 7.01, during the term of this Agreement, Burman
agrees to abide by Employer's reasonable policies, as in effect from time to
time and applicable to the SRDs, respecting avoidance of interests conflicting
with those of Employer.
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<PAGE> 12
ARTICLE VIII - ARBITRATION
8.01 Preliminary Dispute Resolution Through Mediation.
(a) Notice of Dispute. If a claim or controversy arises out of,
or relating to, this Agreement, then the party raising or alleging the
existence of the claim or controversy shall give notice to the other
party specifying (in reasonable detail) the nature of the dispute,
including the claim being made or the matter in controversy; the
factual basis for the claim or controversy; any purported damages; and
any requested relief (a "Dispute Notice"). The Dispute Notice must be
given prior to initiating any arbitration concerning the dispute, as
provided in Section 8.02 below. If either party commences any
arbitration concerning a matter covered by this Section 8.01 prior to
sending the required Dispute Notice and mediating in good faith (the
"Non-Complying Party"), such failure constitutes grounds for both
dismissal of the arbitration, and the levy of attorneys' fees, costs,
and expenses against the Non-Complying Party.
(b) Good Faith Negotiations and Mediation. Within 15 days after
delivery of the Dispute Notice, the contesting parties shall make
reasonable and good faith efforts to settle the dispute through
communication and negotiations through a designated representative of
each party to the dispute, each of whom shall have the authority to
settle the dispute. If the dispute is not settled within the 15-day
period (the "Settlement Period"), then the dispute shall be submitted
to a mutually acceptable mediator. Neither party may unreasonably
withhold acceptance of a proposed mediator. If the parties fail to
agree upon a mediator with ten (10) business days after the
expiration of the Settlement Period, each party shall select a
mediator and the two mediators selected by the parties shall promptly
select a third mediator to preside over the mediation. If either
party does not select a mediator within ten (10) business days after
the expiration of the Settlement Period, the mediator selected by the
other party shall preside over the mediation. The cost of the
mediation, and any other subsequent alternative dispute resolution
procedures agreed to by the parties, shall be shared equally, except
as otherwise expressly provided in Section 8.02(d). The parties
shall appear before the selected mediator and engage in mediation in
good faith. The mediation must be completed within 60 days after the
date of the delivery of the Dispute Notice.
8.02 Arbitration As Optional Means Of Resolution.
(a) Arbitration. In the event that the parties fail to agree
upon the resolution of any claim or controversy, notwithstanding
preliminary mediation under Section 8.01 above, then either of them
may then institute arbitration proceedings administered by the
American Arbitration Association (the "Association") under its
Commercial Arbitration Rules (the "Rules"), to resolve the matter in
dispute. Any such arbitration proceeding shall commence by the
delivery by one party of a written notice of demand for arbitration
(the "Arbitration Demand Notice") to the other party. A copy of the
Arbitration Demand Notice shall be simultaneously delivered to the New
York City chapter of the Association, as provided by the Rules.
Arbitration proceedings shall
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<PAGE> 13
commence no later than thirty (30) days after delivery of the
Arbitration Demand Notice, pursuant to procedure set forth below.
(b) The arbitration proceeding shall be conducted in New York
City by a single arbitrator (the "Arbitrator"), who shall be selected
pursuant to the provisions of this Section 8.02(b). The Arbitration
Demand Notice shall direct the Association to assemble a list of five
(5) proposed independent arbitrators, each of whom shall be a member
of the Association and none of whom may be related to, or affiliated
with, any of Employer or Burman or any affiliates of any of them.
Within ten (10) days of the delivery of the Arbitration Demand Notice,
the Association shall deliver its list of the names of those five (5)
proposed independent arbitrators to each party. No later than ten
(10) days after delivery of said list of proposed independent
arbitrators by the Association to the parties, the parties shall cause
a meeting to occur between their respective spokespersons (or their
authorized representatives), which meeting shall occur at a mutually
convenient location in New York City. At that meeting, the two (2)
spokespersons shall examine the list of five (5) names submitted to
the parties by the Association, and they shall each eliminate two (2)
of those names, and the sole remaining proposed arbitrator shall be
the Arbitrator. In order to eliminate four (4) of the proposed
arbitrators whose names were submitted by the Association, first, the
spokesperson for the party who issued the Arbitration Demand Notice
shall eliminate a proposed arbitrator of his choice and then the other
spokesperson shall eliminate a proposed arbitrator of his choice. The
two (2) spokespersons shall continue to eliminate names from the
Association's list in this manner until each of them has eliminated
two (2) names, and they have thereby selected the Arbitrator through
mutual elimination. The two (2) spokespersons shall immediately
notify the Association, in writing and by telephone, of the name of
the Arbitrator, and they shall direct the Association to contact the
Arbitrator in order to schedule the commencement of the arbitration
proceedings within the required time period described above. In the
event that the chosen Arbitrator is not available to commence the
Arbitration proceedings within a thirty (30) day limit, the parties
shall direct the Association to engage the last eliminated Arbitrator
whose schedule permits commencement of the proceedings within such
thirty (30) day period. In the event any party fails to participate in
the elimination process, the other party may unilaterally choose the
Arbitrator.
(c) In connection with the arbitration proceedings, each party
shall submit, in writing, a description of the dispute(s) giving rise
to the arbitration proceedings, together with the specific requested
resolution that the submitting party seeks with respect to each
component of the dispute or each matter in dispute. The Arbitrator
shall be obligated to choose one (1) party's specific requested
resolution with respect to each component of, or each matter
comprising, the dispute, without being permitted to effectuate any
compromise position as to any such matters or disputes. Except as
otherwise stated in this Section 8.02 and as the parties otherwise
expressly agree in writing, the arbitration proceeding shall be
conducted in accordance with the Rules then in effect. The decision
or award rendered by the Arbitrator shall be final and non-appealable,
and judgment may be entered upon it in accordance with applicable law
in the State of New York, or any other court of competent
jurisdiction.
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<PAGE> 14
(d) The party whose requested resolution is not selected by the
Arbitrator shall bear the cost of all counsel, experts or other
representatives which are retained by the parties in the arbitration
proceeding, together with all other costs of the arbitration
proceeding, including, without limitation, the fees, costs and
expenses imposed or incurred by the Arbitrator (collectively,
"Arbitration Expenses"). If the dispute resolved by the Arbitrator
involves more than one matter, issue or component, then the burden to
pay the Arbitration Expenses shall be allocated between each of
Acquiror and Contributor, in the manner reasonably deemed appropriate
by the Arbitrator in light of the value to each of Acquiror and
Contributor, respectively, of those matters or components for which
their respective requested resolution was not selected.
(e) Unless otherwise agreed in writing, during the period of time
that any arbitration proceeding is pending under this Agreement, the
parties shall continue to comply with all those terms and provisions
of this Agreement which are not the subject of their dispute and the
pending arbitration proceeding.
(f) Subject to Section 9.05, nothing herein contained shall deny
any party the right to seek injunctive or other equitable relief from
a court of competent jurisdiction in the context of a bona fide
emergency or prospective irreparable harm, and such an action may be
filed and maintained notwithstanding or auxiliary to any previously
commenced arbitration proceeding.
Notwithstanding any provision of this Agreement to the contrary, the
obligations of the parties under this Article VIII shall survive termination or
expiration of this Agreement.
ARTICLE IX - GENERAL PROVISIONS
9.01 Any notices to be given under this Agreement by either party to the
other must be in writing and may be effected either by personal delivery or by a
reputable next-day overnight delivery service which obtains a signed receipt for
its deliveries. Notices delivered personally shall be deemed communicated as of
the actual receipt by the addressee. Notices sent by next-day overnight
delivery service shall be deemed communicated on the next business day after
being sent. Notices shall be addressed as follows:
If intended for Burman:
Jan Burman
575 Underhill Boulevard, Suite 125
P.O. Box 830
Syosset, New York 11791
If intended for Employer:
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<PAGE> 15
First Industrial Realty Trust, Inc.
150 North Wacker Drive, Suite 150
Chicago, Illinois 60606
Attn: Michael Brennan,
Chief Operating Officer
9.02 This Agreement shall be governed by and construed in accordance with
the laws of New York.
9.03 This Agreement is a contract for personal services of Burman, and as
such, is not assignable by Burman.
9.04 This Agreement shall not be assignable by Employer except with the
prior written approval of an assignment and of the proposed assignee by Burman.
Notwithstanding the foregoing, Employer may assign its rights under this
Agreement to any entity which acquires title to all of Employer's Real Property
Assets in the Territory, without Burman's prior approval, subject to the
following two (2) conditions:
1. Employer shall stand as surety for the performance of the assignee
under this Agreement; and
2. If, after being informed of the assignment and of the identity of
the assignee, Burman is not willing to be employed by the assignee, upon three
(3) months' prior written notice to Employer and to the assignee, Burman may
terminate this Agreement.
9.05 SUBJECT TO SECTION 8.02, THE PARTIES AGREE THAT ALL DISPUTES BETWEEN
ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND
WHETHER ARISING IN LAW OR EQUITY OR OTHERWISE, SHALL BE RESOLVED BY STATE OR
FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK, BUT THE PARTIES ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT OUTSIDE OF
SUCH COUNTY.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Employment Agreement to be duly signed the day and year
first above written.
FIRST INDUSTRIAL REALTY TRUST, INC.
By: Johannson L. Yap
----------------------------------------------
Name: Johannson L. Yap
Title: Senior Vice President -- Acquisitions
Jan Burman
----------------------------------------------
Jan Burman
16
<PAGE> 1
EXHIBIT 10.62
FIRST INDUSTRIAL REALTY TRUST, INC.
1997 STOCK INCENTIVE PLAN
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS AND DETERMINE AWARDS. . . . . . 6
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4. ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5. STOCK OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. RESTRICTED STOCK AWARDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7. PERFORMANCE SHARE AWARDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8. STOCK APPRECIATION RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9. DIVIDEND EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 10. TAX WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 11. TRANSFER, LEAVE OF ABSENCE, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 12. AMENDMENTS AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 13. STATUS OF PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 14. CHANGE OF CONTROL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 15. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 16. EFFECTIVE DATE OF PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 17. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
<PAGE> 3
FIRST INDUSTRIAL REALTY TRUST, INC.
1997 STOCK INCENTIVE PLAN
SECTION 1.GENERAL PURPOSE OF THE PLAN; DEFINITIONS.
The name of the plan is the First Industrial Realty Trust, Inc. 1997
Stock Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and
enable the officers, employees and Directors of First Industrial Realty Trust,
Inc. (the "Company") and its Affiliates upon whose judgment, initiative and
efforts the Company largely depends for the successful conduct of its business
to acquire a proprietary interest in the Company. It is anticipated that
providing such persons with a direct stake in the Company's welfare will assure
a closer identification of their interests with those of the Company, thereby
stimulating their efforts on the Company's behalf and strengthening their
desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan, provided that the Company
directly or indirectly owns at least 20% of the combined voting power
of all classes of stock of such entity or at least 20% of the
ownership interests in such entity.
"Award" or "Awards", except where referring to a particular
category of grant under the Plan, shall include Incentive Stock
Options, Non-Qualified Stock Options, Restricted Stock Awards,
Performance Share Awards and Dividend Equivalents.
"Board" means the Board of Directors of the Company.
<PAGE> 4
"Cause" means and shall be limited to a vote of the Board to
the effect that the participant should be dismissed as a result of (i)
any material breach by the participant of any agreement to which the
participant and the Company or an Affiliate are parties, (ii) any act
(other than retirement) or omission to act by the participant,
including without limitation, the commission of any crime (other than
ordinary traffic violations), which may have a material and adverse
effect on the business of the Company or any Affiliate or on the
participant's ability to perform services for the Company or any
Affiliate, or (iii) any material misconduct or neglect of duties by
the participant in connection with the business or affairs of the
Company or any Affiliate.
"Change of Control" is defined in Section 14.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor Code, and related rules, regulations and
interpretations.
"Committee" means any Committee of the Board referred to in
Section 2. "Director" means a member of the Board.
"Disability" means disability as set forth in Section 22(e)(3)
of the Code.
"Dividend Equivalent" means a right, granted under Section 9,
to receive cash, Stock, or other property equal in value to dividends
paid with respect to a specified number of shares of Stock or the
excess of dividends paid over a specified rate of return. Dividend
Equivalents may be awarded on a free-standing basis or in connection
with another Award, and may be paid currently or on a deferred basis.
"Effective Date" means the date on which the Plan is approved
by the Board as set forth in Section 16.
4
<PAGE> 5
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the related rules, regulations and
interpretations.
"Fair Market Value" on any given date means the last reported
sale price at which Stock is traded on such date or, if no Stock is
traded on such date, the most recent date on which Stock was traded,
as reflected on the New York Stock Exchange or, if applicable, any
other national stock exchange which is the principal trading market
for the Stock.
"Incentive Stock Option" means any Stock Optiondesignated and
qualified as an "incentive stock option" as defined in Section 422 of
the Code.
"Non-Employee Director" means a member of the Board who: (i)
is not currently an officer of the Company or any Affiliate; (ii) does
not receive compensation for services rendered to the Company or any
Affiliate in any capacity other than as a Director; (iii) does not
possess an interest in any transaction with the Company for which
disclosure would be required under the securities laws; or (iv) is not
engaged in a business relationship with the Company for which
disclosure would be required under the securities laws.
"Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares
of Stock granted pursuant to Section 5.
"Parent" means a "parent corporation" as defined in Section
424(e) of the Code.
5
<PAGE> 6
"Performance Share Award" means Awards granted pursuant to
Section 7.
"Restricted Stock Award" means Awards granted pursuant to
Section 6.
"Stock" means the Common Stock, $.01 par value per share, of
the Company, subject to adjustment pursuant to Section 3.
"Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations, beginning with the Company if each
of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO
SELECT PARTICIPANTS AND DETERMINE AWARDS.
(a) Committee. The Plan shall be administered by a committee of
not less than two Non-Employee Directors, as appointed by the Board from time
to time (the "Committee").
(b) Powers of Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees and Directors of
the Company and Affiliates to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the
extent, if any, of Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock, Performance Shares and Dividend
Equivalents, or any combination of the foregoing, granted to any
officer, employee or Director;
(iii) to determine the number of shares to be covered by
any Award granted to an officer, employee or Director;
6
<PAGE> 7
(iv) to determine and modify the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan,
of any Award granted to an officer, employee or Director, which terms
and conditions may differ among individual Awards and participants,
and to approve the form of written instruments evidencing the Awards;
(v) to accelerate the exercisability or vesting of all
or any portion of any Award granted to a participant;
(vi) subject to the provisions of Section 5(ii), to
extend the period in which Stock Options granted may be exercised;
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an Award
granted to a participant shall be deferred either automatically or at
the election of the participant and whether and to what extent the
Company shall pay or credit amounts equal to interest (at rates
determined by the Committee) or dividends or deemed dividends on such
deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments) granted to a participant; and to decide all disputes
arising in connection with and make all determinations it deems
advisable for the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
7
<PAGE> 8
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS;
SUBSTITUTION.
(a) Shares Issuable. The maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 1,500,000. For
purposes of this limitation, the shares of Stock underlying any Awards which
are forfeited, canceled, reacquired by the Company, satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan so long
as the participants to whom such Awards had been previously granted received no
benefits of ownership of the underlying shares of Stock to which the Award
related. Shares issued under the Plan may be authorized but unissued shares or
shares reacquired by the Company.
(b) Stock Dividends, Mergers, etc. In the event of any
recapitalization, reclassification, split-up or consolidation of shares of
Stock, separation (including a spin-off), dividend on shares of Stock payable
in capital stock, or other similar change in capitalization of the Company or a
merger or consolidation of the Company or sale by the Company of all or a
portion of its assets or other similar event, the Committee shall make such
appropriate adjustments in the exercise prices of Awards, including Awards then
outstanding, in the number and kind of securities, cash or other property which
may be issued pursuant to Awards under the Plan, including Awards then
outstanding, and in the number of shares of Stock with respect to which Awards
may be granted (in the aggregate and to individual participants) as the
Committee deems equitable with a view toward maintaining the proportionate
interest of the participant and preserving the value of the Awards.
8
<PAGE> 9
(c) Substitute Awards. The Committee may grant Awards under the
Plan in substitution for stock and stock based awards held by employees of
another corporation who concurrently become employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate or the acquisition by the Company
or an Affiliate of property or stock of the employing corporation. The
Committee may direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY.
Participants in the Plan will be Directors and such full or part-time
officers and other employees of the Company and its Affiliates who are
responsible for or contribute to the management, growth or profitability of the
Company and its Affiliates and who are selected from time to time by the
Committee, in its sole discretion.
SECTION 5. STOCK OPTIONS.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options, subject to required stockholder approval, or Non-Qualified Stock
Options. To the extent that any option does not qualify as an Incentive Stock
Option, it shall constitute a Non-Qualified Stock Option.
No Incentive Stock Option may be granted under the Plan after the
tenth anniversary of the Effective Date.
9
<PAGE> 10
The Committee in its discretion may grant Stock Options to employees
of the Company or any Affiliate. Stock Options granted to Directors and
employees pursuant to this Section 5 shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(i) Exercise Price. The per share exercise price of a
Stock Option granted pursuant to this Section 5 shall be determined by
the Committee at the time of grant. The per share exercise price of
an Incentive Stock Option shall not be less than 100% of Fair Market
Value on the date of grant. If an employee owns or is deemed to own
(by reason of the attribution rules applicable under Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Subsidiary or Parent corporation and an
Incentive Stock Option is granted to such employee, the option price
shall be not less than 110% of Fair Market Value on the grant date.
(ii) Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Incentive Stock Option shall be
exercisable more than ten years after the date the option is granted.
If an employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Subsidiary
or Parent corporation and an Incentive Stock Option is granted to such
employee, the term of such option shall be no more than five years
from the date of grant.
10
<PAGE> 11
(iii) Exercisability; Rights of a Shareholder. Stock
Options shall become exercisable at such time or times, whether or not
in installments, as shall be determined by the Committee at or after
the grant date. The Committee may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee
shall have the rights of a shareholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock
Options.
(iv) Method of Exercise. Stock Options may be exercised
in whole or in part, by giving written notice of exercise to the
Company, specifying the number of shares to be purchased. Payment of
the purchase price may be made by one or more of the following
methods:
(A) In cash, by certified or bank check or other
instrument acceptable to the Committee;
(B) In the form of shares of Stock that are not
then subject to restrictions under any Company plan, if
permitted by the Committee in its discretion. Such
surrendered shares shall be valued at Fair Market Value on the
exercise date; or
(C) By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay
the purchase price; provided that in the event the optionee
chooses to pay the purchase price as so provided, the optionee
and the broker shall comply with such procedures and enter
into such
11
<PAGE> 12
agreements of indemnity and other agreements as the Committee
shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection.
The delivery of certificates representing shares of Stock to be
purchased pursuant to the exercise of the Stock Option will be
contingent upon receipt from the Optionee (or a purchaser acting in
his stead in accordance with the provisions of the Stock Option) by
the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Stock Option or
applicable provisions of laws.
(v) Non-transferability of Options. No Stock Option
shall be transferable by the optionee otherwise than by will or by the
laws of descent and distribution, except that a Non-Qualified Stock
Option may be transferred by gifting for the benefit of a
participant's descendants for estate planning purposes or pursuant to
a certified domestic relations order, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(vi) Termination by Death. If any optionee's service
with the Company and its Affiliates terminates by reason of death, the
Stock Option may thereafter be exercised, to the extent exercisable at
the date of death, by the legal representative or legatee of the
optionee, for a period of six months (or such longer period as the
Committee shall specify at any time) from the date of death, or until
the expiration of the stated term of the Option, if earlier.
(vii) Termination by Reason of Disability.
(A) Any Stock Option held by an optionee whose
service with the Company and its Affiliates has terminated by
reason of Disability may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for
12
<PAGE> 13
a period of twelve months (or such longer period as the
Committee shall specify at_any time) from the date of such
termination of service, or until the expiration of the stated
term of the Option, if earlier.
(B) The Committee shall have sole authority and
discretion to determine whether a participant's service has
been terminated by reason of Disability.
(C) Except as otherwise provided by the Committee
at the time of grant or otherwise, the death of an optionee
during a period provided in this Section 5(vii) for the
exercise of a Non-Qualified Stock Option, shall extend such
period for six months from the date of death, subject to
termination on the expiration of the stated term of the
Option, if earlier.
(viii) Termination for Cause. If any optionee's service
with the Company and its Affiliates has been terminated for Cause, any
Stock Option held by such optionee shall immediately terminate and be
of no further force and effect; provided, however, that the Committee
may, in its sole discretion, provide that such Stock Option can be
exercised for a period of up to 30 days from the date of termination
of service or until the expiration of the stated term of the Option,
if earlier.
(ix) Other Termination. Unless otherwise determined by
the Committee, if an optionee's service with the Company and its
Affiliates terminates for any reason other than death, Disability, or
for Cause, any Stock Option held by such optionee may thereafter be
exercised, to the extent it was exercisable on the date of termination
of service, for three months (or such longer period as the Committee
shall specify at any
13
<PAGE> 14
time) from the date of termination of service or until the expiration
of the stated term of the Option, if earlier.
(x) Annual Limit on Incentive Stock Options. To the
extent required for "incentive stock option" treatment under Section
422 of the Code, the aggregate Fair Market Value (determined as of the
time of grant) of the Stock with respect to which Incentive Stock
Options granted under this Plan and any other plan of the Company or
its Subsidiaries become exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000.
(xi) Form of Settlement. Shares of Stock issued upon
exercise of a Stock Option shall be free of all restrictions under the
Plan, except as otherwise provided in this Plan.
SECTION 6. RESTRICTED STOCK AWARDS.
(a) Nature of Restricted Stock Award. The Committee may grant
Restricted Stock Awards to Directors and employees of the Company or any
Affiliate. A Restricted Stock Award is an Award entitling the recipient to
acquire, at no cost or for a purchase price determined by the Committee, shares
of stock subject to such restrictions and conditions as the Committee may
determine at the time of grant ("Restricted Stock"). Conditions may be based
on continuing service and/or achievement of pre-established performance goals
and objectives. In addition, a Restricted Stock Award may be granted to a
Director or employee by the Committee in lieu of any compensation due to such
Director or employee.
(b) Acceptance of Award. A participant who is granted a
Restricted Stock Award shall have no rights with respect to such Award unless
the participant shall have accepted the Award within 60 days (or such shorter
date as the Committee may specify) following the
14
<PAGE> 15
award date by making payment to the Company, if required, by certified or bank
check or other instrument or form of payment acceptable to the Committee in an
amount equal to the specified purchase price, if any, of the shares covered by
the Award and by executing and delivering to the Company a written instrument
that sets forth the terms and conditions of the Restricted Stock in such form
as the Committee shall determine.
(c) Rights as a Shareholder. Upon complying with Section 6(b)
above, a participant shall have all the rights of a shareholder with respect to
the Restricted Stock including voting and dividend rights, subject to
transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Stock Award. Unless the
Committee shall otherwise determine, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such
shares are vested as provided in Section 6(e) below.
(d) Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein.
(e) Vesting of Restricted Stock. The Committee at the time of
grant shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested."
15
<PAGE> 16
(f) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Restricted Stock Award may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Restricted Stock.
SECTION 7. PERFORMANCE SHARE AWARDS.
(a) Nature of Performance Shares. A Performance Share Award is an
award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to Directors and
employees of the Company or any Affiliate, including those who qualify for
awards under other performance plans of the Company. The Committee in its sole
discretion shall determine whether and to whom Performance Share Awards shall
be made, the performance goals applicable under each such Award, the periods
during which performance is to be measured, and all other limitations and
conditions applicable to the awarded Performance Shares; provided, however,
that the Committee may rely on the performance goals and other standards
applicable to other performance based plans of the Company in setting the
standards for Performance Share Awards under the Plan.
(b) Restrictions on Transfer. Performance Share Awards and all
rights with respect to such Awards may not be sold, assigned, transferred,
pledged or otherwise encumbered.
(c) Rights as a Shareholder. A participant receiving a
Performance Share Award shall have the rights of a shareholder only as to
shares actually received by the participant under the Plan and not with respect
to shares subject to the Award but not actually received by the participant. A
participant shall be entitled to receive a stock certificate evidencing the
acquisition of shares of Stock under a Performance Share Award only upon
satisfaction of all
16
<PAGE> 17
conditions specified in the written instrument evidencing the Performance Share
Award (or in a performance plan adopted by the Committee).
(d) Termination. Except as may otherwise be provided by the
Committee at any time prior to termination of service, a participant's rights
in all Performance Share Awards shall automatically terminate upon the
participant's termination of service with the Company and its Affiliates for
any reason (including, without limitation, death, Disability and for Cause).
(e) Acceleration, Waiver, Etc. At any time prior to the
participant's termination of service with the Company and its Affiliates, the
Committee may in its sole discretion accelerate, waive or, subject to Section
12, amend any or all of the goals, restrictions or conditions imposed under any
Performance Share Award; provided, however, that in no event shall any
provision of the Plan be construed as granting to the Committee any discretion
to increase the amount of compensation payable under any Performance Share
Award to the extent such an increase would cause the amounts payable pursuant
to the Performance Share Award to be nondeductible in whole or in part pursuant
to Section 162(m) of the Code and the regulations thereunder, and the Committee
shall have no such discretion notwithstanding any provision of the Plan to the
contrary.
SECTION 8. STOCK APPRECIATION RIGHTS.
(a) Notice of Stock Appreciation Rights. A Stock Appreciation
Right ("SAR") is a right entitling the participant to receive cash or Stock
having a fair market value equal to the appreciation in the Fair Market Value
of a stated number of shares from the date of grant, or in the case of rights
granted in tandem with or by reference to an Option granted prior to the
17
<PAGE> 18
grant of such rights, from the date of grant of the related Option to the date
of exercise. SARs may be granted to Directors and employees of the Company or
any Affiliate.
(b) Terms of Awards. SARs may be granted in tandem with or with
reference to a related Option, in which event the participant may elect to
exercise either the Option or the SAR, but not both, as to the same share
subject to the Option and the SAR, or the SAR may be granted independently. In
the event of an Award with a related Option, the SAR shall be subject to the
terms and conditions of the related Option. In the event of an independent
Award, the SAR shall be subject to the terms and conditions determined by the
Committee.
(c) Restrictions on Transfer. SARs shall not be transferred,
assigned or encumbered, except that SARs may be exercised by the executor,
administrator or personal representative of the deceased participant within six
months of the death of the participant (or such longer period as the Committee
shall specify at any time) and transferred pursuant to a certified domestic
relations order.
(d) Payment Upon Exercise. Upon exercise of an SAR, the
participant shall be paid the excess of the then Fair Market Value of the
number of shares to which the SAR relates over the Fair Market Value of such
number of shares at the date of grant of the SAR, or of the related Option, as
the case may be. Such excess shall be paid in cash or in Stock having a Fair
Market Value equal to such excess or in such combination thereof as the
Committee shall determine.
SECTION 9. DIVIDEND EQUIVALENTS.
The Committee is authorized to grant Dividend Equivalents to Directors
and employees of the Company or any Affiliate. The Committee may provide, at
the date of grant or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be
18
<PAGE> 19
deemed to have been reinvested in additional Shares, or other investment
vehicles as the Committee may specify, provided that Dividend Equivalents
(other than freestanding Dividend Equivalents) shall be subject to all
conditions and restrictions of the underlying Awards to which they relate.
SECTION 10. TAX WITHHOLDING.
(a) Payment by Participant. Each participant shall, no later than
the date as of which the value of an Award or of any Stock or other amounts
received thereunder first becomes includible in the gross income of the
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with respect
to such income. The Company and its Affiliates shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant.
(b) Payment in Shares. A participant may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from shares of Stock to be issued pursuant to any Award a
number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due, or (ii)
transferring to the Company shares of Stock owned by the participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due with respect to any participant who is
subject to Section 16 of the Act, the following additional restrictions shall
apply:
(A) the election to satisfy tax withholding
obligations relating to an Award in the manner permitted by
this Section 10(b) and the actual tax withholding shall be
made during the period beginning on the third business day
19
<PAGE> 20
following the date of release of quarterly or annual summary
statements of revenues and earnings of the Company and ending
on the twelfth business day following such date.
Alternatively, such election may be made at least six months
prior to the date as of which the receipt of such an Award
first becomes a taxable event for Federal income tax purposes;
(B) such election shall be irrevocable;
(C) such election shall be subject to the consent
or disapproval of the Committee; and
(D) the Stock withheld to satisfy tax
withholding, if granted at the discretion of the Committee,
must pertain to an Award which has been held by the
participant for at least six months from the date of grant of
the Award.
SECTION 11. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of service:
(a) a transfer to the employment of the Company from an Affiliate
or from the Company to an Affiliate, or from one Affiliate to another; and
(b) an approved leave of absence for military service or sickness,
or for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 12. AMENDMENTS AND TERMINATION.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or
20
<PAGE> 21
reduced exercise or purchase price or with no exercise or purchase price, but
such price, if any, must satisfy the requirements which would apply to the
substitute or amended Award if it were then initially granted under this Plan)
for the purpose of satisfying changes in law or for any other lawful purpose,
but no such action shall adversely affect rights under any outstanding Award
without the holder's consent.
SECTION 13. STATUS OF PLAN.
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
unsecured creditor of the Company unless the Committee shall otherwise
expressly determine in connection with any Award or Awards. In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the Company's obligations to deliver Stock or make
payments with respect to Awards hereunder, provided that the existence of such
trusts or other arrangements is consistent with the provision of the foregoing
sentence.
SECTION 14. CHANGE OF CONTROL PROVISIONS.
Upon the occurrence of a Change of Control as defined in this Section
14:
(a) Each Stock Option shall automatically become fully
exercisable unless the Committee shall otherwise expressly provide at the time
of grant.
(b) Restrictions and conditions on Awards of Restricted Stock,
Performance Shares and Dividend Equivalents shall automatically be deemed
waived, and the recipients of such Awards shall become entitled to receipt of
the maximum amount of Stock subject to such Awards unless the Committee shall
otherwise expressly provide at the time of grant.
21
<PAGE> 22
(c) Unless otherwise expressly provided at the time of grant,
participants who hold Options shall have the right, in lieu of exercising the
Option, to elect to surrender all or part of such Option to the Company and to
receive cash in an amount equal to the excess of (i) the higher of (x) the Fair
Market Value of a share of Stock on the date such right is exercised and (y)
the highest price paid for Stock or, in the case of securities convertible into
Stock or carrying a right to acquire Stock, the highest effective price (based
on the prices paid for such securities) at which such securities are
convertible into Stock or at which Stock may be acquired, by any person or
group whose acquisition of voting securities has resulted in a Change of
Control of the Company over (ii) the exercise price per share under the Option,
multiplied by the number of shares of Stock with respect to which such right is
exercised.
(d) "Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person", as such term is used in Sections 13(d)
and 14(d) of the Act (other than the Company, any of its Subsidiaries,
any trustee, fiduciary or other person or entity holding securities
under any employee benefit plan of the Company or any of its
Subsidiaries), together with all "affiliates" and "associates" (as
such terms are defined in Rule 12b-2 under the Act) of such person,
shall become the "beneficial owner" (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the
Company representing 40% or more of either (A) the combined voting
power of the Company's then outstanding securities having the right to
vote in an election of the Company's Board of Directors ("Voting
Securities") or (B) the then outstanding shares of Common Stock of the
Company (in either such case other than as a result of acquisition of
securities directly from the Company); or
22
<PAGE> 23
(ii) persons who, as of the date of the closing of the
Company's initial public offering, constitute the Company's Board of
Directors (the "Incumbent Directors") cease for any reason, including
without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of
the Board, provided that any person becoming a director of the Company
subsequent to the Closing of the Company's initial public offering
whose election or nomination for election was approved by a vote of at
least a majority of the Incumbent Directors shall, for purposes of
this Plan, be considered an Incumbent Director; or
(iii) the stockholders of the Company shall approve (A)
any consolidation or merger of the Company or any Subsidiary where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Act), directly or indirectly, shares representing in the aggregate 50%
or more of the voting stock of the corporation issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of
the assets of the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases (x) the proportionate number of shares of Common Stock beneficially
owned by any person to 40% or more of the shares of Common Stock then
23
<PAGE> 24
outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any person to 40% or more of the combined
voting power of all then outstanding Voting Securities; provided, however, that
if any person referred to in clause (x) or (y) of this sentence shall
thereafter become the beneficial owner of any additional shares of Common Stock
or other Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction), then a "Change of Control" shall be deemed
to have occurred for purposes of the foregoing clause (i).
SECTION 15. GENERAL PROVISIONS.
(a) No Distribution; Compliance with Legal Requirements. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities laws and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) Delivery of Stock Certificates. Delivery of stock
certificates to participants under this Plan shall be deemed effected for all
purposes when the Company or a stock transfer agent of the Company shall have
delivered such certificates in the United States mail, addressed to the
participant, at the participant's last known address on file with the Company.
(c) Other Compensation Arrangements; No Employment Rights.
Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, subject to stockholder
approval if such approval is required;
24
<PAGE> 25
and such arrangements may be either generally applicable or applicable only in
specific cases. The adoption of the Plan and the grant of Awards do not confer
upon any employee any right to continued employment with the Company or any
Subsidiary.
SECTION 16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon approval by the Board, or any
committee thereof with such authority. The ability to grant Incentive Stock
Option Awards requires approval by the stockholders, and no such Awards may be
issued hereunder prior to such approval.
SECTION 17. GOVERNING LAW.
THIS PLAN SHALL BE GOVERNED BY NEW YORK LAW EXCEPT TO THE EXTENT SUCH
LAW IS PREEMPTED BY FEDERAL LAW.
25
<PAGE> 1
EXHIBIT 21.1
FIRST INDUSTRIAL REALTY TRUST, INC.
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
State of
Incorporation
Name Formation Registered Names in Foreign Jurisdictions
- ---------------------------------------------- -------- -------------------------------------------------
<S> <C> <C>
First Industrial, L.P. Delaware First Industrial (Michigan), Limited Partnership
First Industrial (Minnesota), Limited Partnership
First Industrial Tennessee, L.P.
First Industrial Limited Partnership
First Industrial Finance Corporation Maryland N/A
First Industrial Financing Partnership, L.P. Delaware First Industrial Financing Partnership, Limited Partnership
First Industrial Financing Partnership (Minnesota),
Limited Partnership
First Industrial Financing Partnership (Wisconsin),
Limited Partnership
First Industrial Management Corporation Maryland N/A
First Industrial Enterprises of Michigan, Inc. Michigan N/A
(Formerly Damone/Andrew Enterprises, Inc.)
First Industrial Group of Michigan, Inc. Michigan N/A
(Formerly Damone/Andrew Enterprises, Inc.)
First Industrial of Michigan, Inc. (Formerly Michigan N/A
Damone/Andrew Incorporated)
First Industrial Associates of Michigan, Inc. Michigan N/A
(Formerly Damone/Andrew Associates, Inc.)
First Industrial Construction Company of Michigan N/A
Michigan, Inc. (Formerly Damone/Andrew
Construction Company)
FR Acquisitions, Inc. Maryland FIR Acquisitions, Inc.
First Industrial Pennsylvania Corporation Maryland N/A
First Industrial Pennsylvania, L.P. Delaware N/A
First Industrial Harrisburg Corporation Maryland N/A
First Industrial Harrisburg, L.P. Delaware N/A
First Industrial Securities Corporation Maryland N/A
First Industrial Securities, L.P. Delaware First Industrial Securities, Limited Partnership
First Industrial Mortgage Corporation Maryland N/A
First Industrial Mortgage Partnership, L.P. Delaware First Industrial Mortgage Partnership, Limited Partnership
First Industrial Indianapolis Corporation Maryland N/A
First Industrial Indianapolis, L.P. Delaware N/A
FI Development Services Corporation Maryland N/A
(Formerly First Industrial Development
Services, Inc.)
First Industrial Development Services Group L.P. Delaware N/A
</TABLE>
<PAGE> 1
EXHIBIT 23
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 10-K and the incorporation by
reference into the Registrant's five previously filed Registration Statements
on Form S-3 (File Nos. 33-95190, 333-03999, 333-13225, 333-21873 and 333-21887)
and the Registrant's previously filed Registration Statement on Form S-8 (File
No. 33-95188) of our report dated February 12, 1997, on our audit of the
consolidated financial statements and the financial statement schedule of First
Industrial Realty Trust, Inc. and the combined financial statements of the
Contributing Businesses.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
February 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
FINANCIAL STATEMENTS OF FIRST INDUSTRIAL REALTY TRUST, INC. FOR THE YEAR ENDED
DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B)
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 7,646
<SECURITIES> 0
<RECEIVABLES> 5,267
<ALLOWANCES> (600)
<INVENTORY> 0
<CURRENT-ASSETS> 12,313
<PP&E> 1,050,779
<DEPRECIATION> (91,457)
<TOTAL-ASSETS> 1,022,600
<CURRENT-LIABILITIES> 18,374
<BONDS> 0
0
17
<COMMON> 299
<OTHER-SE> 532,245
<TOTAL-LIABILITY-AND-EQUITY> 1,022,600
<SALES> 0
<TOTAL-REVENUES> 140,055
<CGS> 0
<TOTAL-COSTS> (39,224)
<OTHER-EXPENSES> (35,353)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (28,954)
<INCOME-PRETAX> 37,937
<INCOME-TAX> 0
<INCOME-CONTINUING> 37,937
<DISCONTINUED> 0
<EXTRAORDINARY> (2,373)
<CHANGES> 0
<NET-INCOME> 35,664
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 0
</TABLE>
