<PAGE> 1
As filed with the Securities and Exchange Commission on November 27, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: November 13, 1996
(Date of earliest event reported)
INLAND REAL ESTATE CORPORATION
(Exact name of registrant as specified in the charter)
Maryland 000-28382 36-3953261
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
2901 Butterfield Road
Oak Brook, Illinois 60521
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant's telephone number including area code)
n/a
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
Spring Hill Fashion Corner, West Dundee, Illinois
On November 13, 1996, the Company acquired a Neighborhood Retail Center
located at 830-890 West Main Street, West Dundee, Illinois known as Spring Hill
Fashion Corner ("Spring Hill") from JMB/Spring Hill Associates, an unaffiliated
third party, for approximately $9.2 million. The purchase price was funded
using cash and cash equivalents, including the proceeds of monies previously
drawn against the Company's line of credit provided by LaSalle Bank on
September 30, 1996. The purchase price was approximately $73.48 per square
foot, which the Company concluded was fair and reasonable and within the range
of values indicated in an appraisal received by the Company and presented to
the Company's board of directors.
Spring Hill was built in 1985 and consists of a one-story building
aggregating 125,198 rentable square feet. As of November 1, 1996, Spring Hill
was 95% leased. In evaluating Spring Hill as a potential acquisition, the
Company considered a variety of factors including location, demographics,
tenant mix, price per square foot, existing rental rates compared to market
rates, and the occupancy of the center. The Company believes that the center
is located within a vibrant economic area. According to a 1996 study conducted
by Richard Ellis, the population within a five mile radius of Spring Hill is
111,500, with an estimated average household income in excess of $54,500 per
year, higher than the national average. Although 44% of the rentable square
feet at Spring Hill is leased to two tenants, the Company's management believes
that retenanting of any space which is vacated in the future should be
accomplished relatively quickly and at rental rates comparable to those
currently paid by the tenants at the facility. The Company did not consider
any other factors materially relevant to the decision to acquire the property.
The Company does not anticipate making any significant repairs and
improvements to Spring Hill over the next few years. A substantial portion of
any such cost would be paid by the tenants.
The table below sets forth certain information with respect to the
occupancy rate at Spring Hill expressed as a percentage of total gross leasable
area and the average effective annual base rent per square foot. Information
for prior years is not available to the Company since the property is being
acquired through a foreclosure proceeding.
Occupancy Rate
Year Ending as of December 31 Effective Annual Rental
December 31, of Each Year Per Square Foot
------------ ------------ -----------------------
1995 75% $8.92
Tenants leasing more than 10% of the total square footage are Michael's,
which leases 30,000 square feet, or approximately 24% of the rentable square
feet, and T. J. Maxx, which leases 25,161 square feet, or approximately 20% of
the rentable square feet. Michael's is a national chain of craft stores, and
T. J. Maxx is a discount clothing chain. The lease with Michael's requires
Michael's to pay base rent equal to $7.00 per square foot per annum payable
monthly until January 31, 2001, and $7.50 per square foot per annum payable
monthly from February 1, 2001 until January 31, 2006. The Michael's lease
contains no option to renew. The lease with T.J. Maxx requires T.J. Maxx to
pay base rent equal to $6.50 per square foot per annum payable monthly until
January 31, 2001. The lease with T.J. Maxx also grants T.J. Maxx one option to
renew the lease for a five-year
2
<PAGE> 3
term. If this option is exercised, T.J. Maxx will be required to pay a base
rent of $6.50 per square foot per annum payable monthly from February 1, 2001
until January 31, 2006.
For federal income tax purposes, the Company's depreciable basis in Spring
Hill will be approximately $7,406,000. Depreciation expense, for tax purposes,
will be computed using the straight-line method. Buildings and improvements
are depreciated based upon estimated useful lives of 40 years.
Real estate taxes payable in 1996 for the tax year ended 1995 (the most
recent tax year for which information is available) were $123,314.60. The real
estate taxes payable were calculated by multiplying Spring Hill's assessed
value by an equalizer of 1.00 and a tax rate of 6.2199%.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
3
<PAGE> 4
At November 1, 1996, a total of 119,198 square feet were leased to 18
tenants at Spring Hill. The following tables set forth certain information
with respect to the amount of and expiration of leases at this Neighborhood
Retail Center.
<TABLE>
<CAPTION>
Lessee Square Foot Leased Lease Ends Renewal Options Current Annual Rent Rent per Square Foot
- ------ ------------------ ---------- --------------- ------------------- --------------------
<S> <C> <C> <C> <C> <C>
Pier 1 Imports 8,487 03/2002 - $110,331 $13.00
Travel Agents Int'l 2,000 09/1999 - 21,500 10.75
China Palace 5,000 07/2003 1/5 yr. 62,500 12.50
Wild Bird Unltd. 2,000 12/2000 - 26,120 13.06
Let's Learn 4,000 12/2000 - 39,960 9.99
Michael's 30,000 01/2006 - 210,000 7.00
Fantastic Sam's 900 06/2000 - 22,500 25.00
Jenny Craig 3,600 09/1998 1/5 yr. 41,400 11.50
Sizes Unltd. 4,000 01/2001 - 56,000 14.00
Sally Beauty Supply 2,000 03/1998 1/5 yr. 30,000 15.00
Music Go Round 3,000 09/2001 1/5 yr. 37,500 12.50
Once Upon a Child 4,000 02/2001 1/5 yr. 38,000 9.50
T. J. Maxx 25,161 01/2001 1/5 yr. 163,546 6.50
Play It Again Sports 3,500 02/2000 - 36,750 10.50
Funcoland 2,000 05/1997 - 24,000 12.00
Cosmetic Center 6,000 01/2003 2/5 yr. 60,000 10.00
Celebration Center 8,125 10/2004 - 89,700 11.04
Famous Footwear 5,425 09/2000 - 59,675 11.00
Vacant 3,000 - - - -
Vacant 1,000 - - - -
Vacant 2,000 - - - -
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Percent of
Average Total Percent of
Base Rent Building Annual Base
Approx. GLA Annual Base Per Square GLA Rent
of Expiring Rent of Foot Under Represented Represented by
Year Ending Leases Leases Expiring Total Annual Expiring by Expiring Expiring
December 31, Expiring (square feet) Leases Base Rent (1) Leases Leases Leases
- ------------ ---------- ------------- -------- -------------- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 - - - 1,129,786 - - -
1997 1 2,000 $24,000 1,139,920 $12.00 1.60% 2.11%
1998 2 5,600 71,400 1,150,809 12.75 4.47 6.20
1999 1 2,000 21,500 1,093,874 10.75 1.60 1.97
2000 5 15,825 206,988 1,086,035 13.08 12.64 19.06
2001 4 36,161 301,546 899,123 8.34 28.88 33.54
2002 1 8,487 126,244 601,744 14.87 6.78 20.98
2003 2 11,000 153,000 475,500 13.91 8.79 32.18
2004 1 8,125 97,500 322,500 12.00 6.49 30.23
2005 - - - 225,000 - - -
2006 1 30,000 225,000 225,000 7.50 23.96 100.00
</TABLE>
(1) No assumptions were made regarding the releasing of expired leases. It is
the opinion of the Company's management that the space will be released at
market rates.
The Company received a letter appraisal prepared by an independent
appraiser who is a member in good standing of the American Institute of Real
Estate Appraisers which reported a fair market value for the Spring Hill
property, as of November 15, 1996, of not less than $9,380,000 million.
Appraisals are estimates of value and should not, however, be relied on as a
measure of true worth or realizable value.
Item 5. Other Events
Crestwood Plaza Shopping Center, Crestwood, Illinois
The Company has entered into a non-binding letter of intent to purchase a
Neighborhood Retail Center located at 13335 South Cicero Avenue in Crestwood,
Illinois known as Crestwood Plaza Shopping Center ("Crestwood Plaza"). Under
the proposed terms of the acquisition, the Company would purchase Crestwood
Plaza from Inland Property Sales, Inc. ("IPS"), an affiliated third party, for
approximately $1.8 million. The purchase price does not exceed its fair market
value as determined by a competent independent appraiser who is a member in
good standing of the American Institute of Real Estate Appraisers, and a
majority of the Directors, including a majority of the Independent Directors,
not interested in the transaction have approved the purchase as fair and
reasonable to the Company. The Directors, including all of the Independent
Directors, have approved this acquisition, however, there can be no assurance
that the price to be paid to the Affiliate will not exceed that which would be
paid by an unaffiliated purchaser. The Company anticipates funding the
purchase using cash and cash equivalents. Execution of a definitive agreement
is subject to completion of due diligence, which the Advisor is
5
<PAGE> 6
undertaking on behalf of the Company, and receipt of a final environmental
report indicating no environmental concerns on the property. No acquisition
fees will be payable in connection with the acquisition of Crestwood Plaza.
There can be no assurance that the Company will complete the acquisition of
Crestwood Plaza.
Crestwood Plaza was built in 1992 and consists of a one-story building
comprising a two-tenant neighborhood retail facility aggregating 20,044
rentable square feet. The center is occupied by Entenmann's Bakery, which
leases 13,644 square feet, and Pet Supplies Plus, which leases 6,400 square
feet.
The Summit of Park Ridge, Park Ridge, Illinois
The Company has entered into a non-binding letter of intent to purchase a
Neighborhood Retail Center located at 100-150 Euclid Avenue in Park Ridge,
Illinois known as The Summit of Park Ridge ("The Summit"). Under the proposed
terms of the acquisition, the Company would purchase The Summit from WHPX-S
Real Estate Limited Partnership, a Delaware limited partnership, an
unaffiliated third party, for approximately $3.2 million. The Company
anticipates funding the purchase using cash and cash equivalents. Execution of
a definitive agreement is subject to completion of due diligence, which the
Advisor is undertaking on behalf of the Company, execution and delivery of
leases from three current tenants, receipt of the final appraisal indicating
the value of the property is not less than $3.2 million and receipt of a final
environmental report indicating no environmental concerns on the property. No
acquisition fees will be payable in connection with the acquisition of The
Summit. There can be no assurance that the Company will complete the
acquisition of The Summit.
The Summit was built in 1986 and consists of a one-story building
comprising a multi-tenant neighborhood retail facility aggregating 33,248
rentable square feet. The center is anchored by Giappo's Pizza, which leases
3,683 square feet, and L Peep, which leases 3,621 square feet.
Maple Park Place Shopping Center, Bolingbrook, Illinois
The Company has entered into a non-binding letter of intent to purchase a
Neighborhood Retail Center located at the northwest corner of Naperville Road
and Boughton Road in Bolingbrook, Illinois known as Maple Park Place Shopping
Center ("Maple Park"). Under the proposed terms of the acquisition, the
Company would purchase Maple Park from KBS Retail Limited Partnership, a
Delaware limited partnership, an unaffiliated third party, for approximately
$15.3 million. The Company anticipates funding the purchase using the proceed
of a loan from LaSalle Bank, in the principal amount of approximately $12.0
million, and cash and cash equivalents. The Company has chosen to utilize debt
financing in order to maximize the return on its investment. Execution of a
definitive agreement is subject to completion of due diligence, which the
Advisor is undertaking on behalf of the Company, receipt of the final appraisal
indicating the value of the property is not less than $15.3 million and receipt
of a final environmental report indicating no environmental concerns on the
property. No acquisition fees will be payable in connection with the
acquisition of Maple Park. There can be no assurance that the Company will
complete the acquisition of Maple Park.
Maple Park was built in 1992 with expansions in 1994 and consists of a
one-story building comprising a multi-tenant community retail facility
aggregating 220,095 rentable square feet. The center is anchored by Kart,
which leases 109,033 square feet, and Eagle Foods, which leases 56,706 square
feet.
6
<PAGE> 7
Item 7. Financial Statements and Exhibits
<TABLE>
<CAPTION>
(a) Financial statements of businesses acquired.
Page
<S> <C>
Independent Auditors' Report ........................................................ F-1
Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1995 of Spring Hill Fashion Corner ................... F-2
Notes to Historical Summary of Gross Income and Direct Operating Expenses
for the year ended December 31, 1995 of Spring Hill Fashion Corner ................... F-3
(b) Pro forma financial information.
Pro Forma Balance Sheet at December 31, 1995
(unaudited) of Inland Real Estate Corporation ....................................... F-5
Notes to Pro Forma Balance Sheet at December 31, 1995
(unaudited) of Inland Real Estate Corporation ........................................ F-7
Pro Forma Statement of Operations for the year ended December 31, 1995
(unaudited) of Inland Real Estate Corporation ....................................... F-12
Notes to Pro Forma Statement of Operations for the year ended
December 31, 1995 (unaudited) of Inland Real Estate Corporation ..................... F-14
Pro Forma Balance Sheet at September 30, 1996
(unaudited) of Inland Real Estate Corporation ....................................... F-24
Notes to Pro Forma Balance Sheet at September 30, 1996
(unaudited) of Inland Real Estate Corporation ....................................... F-26
Pro Forma Statement of Operations for the nine months ended
September 30, 1996 (unaudited) of Inland Real Estate Corporation ..................... F-28
Notes to Pro Forma Statement of Operations for the nine months ended
September 30, 1996 (unaudited) of Inland Real Estate Corporation .................... F-30
(c) Exhibits
10.1 Agreement to Purchase by and between JMB/Spring Hill Associates and
Inland Real Estate Corporation dated October 14, 1996
</TABLE>
7
<PAGE> 8
10.2 First Amendment to Agreement to Purchase by and between JMB/Spring
Hill Associates and Inland Real Estate Corporation dated
October 29, 1996
8
<PAGE> 9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Inland Real Estate Corporation
(Registrant)
By: /s/ Kelly Tucek
--------------------------
Kelly Tucek
Chief Financial and Accounting Officer
Date: November 27, 1996
<PAGE> 10
Independent Auditors' Report
The Board of Directors
Inland Real Estate Corporation:
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses (Historical Summary) of the Spring Hill Fashion Corner for
the year ended December 31, 1995. This Historical Summary is the
responsibility of the management of the Company. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summary. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and
for inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation, as described in note 2. It is not intended to be a complete
presentation of the Spring Hill Fashion Corner's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the gross income and direct operating expenses described
in note 2 for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
October 31, 1996
F-1
<PAGE> 11
Spring Hill Fashion Corner
Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1995
<TABLE>
<S> <C>
Gross income:
Base rental income.............................. $1,117,082
Operating expense and real estate
tax recoveries................................. 290,755
----------
Total Gross Income.............................. 1,407,837
----------
Direct operating expenses:
Real estate taxes............................... 133,455
Management fees................................. 51,210
Operating expenses.............................. 125,468
Utilities....................................... 27,974
Insurance....................................... 20,045
Bad debts expense............................... 8,208
----------
Total direct operating expenses................. 366,360
----------
Excess of gross income over direct
operating expenses.............................. $1,041,477
==========
</TABLE>
See accompanying notes to historical summary of gross income and direct
operating expenses.
F-2
<PAGE> 12
Spring Hill Fashion Corner
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1995
1. Business
Spring Hill Fashion Corner is located in West Dundee, Illinois. It
consists of approximately 125,000 square feet of gross leasable area and
was 75% occupied at December 31, 1995. Spring Hill Fashion Corner is owned
by JMB Mortgage Partners Ltd. I, II and III (Seller) who has signed a sale
and purchase agreement for the sale of Spring Hill Fashion Corner to Inland
Real Estate Corporation, an unaffiliated third party.
2. Basis of Presentation
The Historical Summary has been prepared for the purpose of complying with
Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for
inclusion in the Registration Statement on Form S-11 of Inland Real Estate
Corporation and is not intended to be a complete presentation of Spring
Hill Fashion Corner's revenues and expenses. The Historical Summary has
been prepared on the accrual basis of accounting and requires management to
make estimates and assumptions that affect the reported amounts of the
revenues and expenses during the reporting period.
3. Gross Income
Spring Hill Fashion Corner leases retail space under various lease
agreements with its tenants. All leases are accounted for as operating
leases. Certain of the leases include provisions under which Spring Hill
Fashion Corner is reimbursed for certain common area, real estate, and
insurance costs. Operating expenses and real estate tax recoveries
reflected in the Historical Summary include amounts due for 1995 expenses
for which the tenants have not yet been billed. Certain leases contain
options for various periods at various rental rates.
Base rentals are reported as income over the lease term as they become
receivable under the provisions of the leases. However, when rentals vary
from a straight-line basis due to short-term rent abatements or escalating
rents during the lease term, the income is recognized based on effective
rental rates. Related adjustments increased base rental income by $34,437
for the year ended December 31, 1995.
F-3
<PAGE> 13
Spring Hill Fashion Corner
Notes to Historical Summary of Gross Income and Direct Operating Expenses
Year ended December 31, 1995
Minimum rents to be received from tenants under operating leases are
approximately as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1996 $1,128,310
1997 1,133,295
1998 1,084,898
1999 1,052,788
2000 925,329
Thereafter 1,901,462
----------
$7,226,082
==========
</TABLE>
5. Subsequent Event
In November 1996, a current tenant of Spring Hill Fashion Corner executed a
lease extension and amendment agreement which extended its lease term for
an additional five years.
4. Direct Operating Expenses
Direct operating expenses include only those costs expected to be
comparable to the proposed future operations of Spring Hill Fashion Corner.
Costs such as mortgage interest, depreciation, amortization, and
professional fees are excluded from the Historical Summary.
Spring Hill Fashion Corner is managed by Urban Retail Properties Co., for a
fee of 4.0% of gross revenues, as defined. Subsequent to the sale of
Spring Hill Fashion Corner (note 1), the current management agreement will
cease. Any new management agreement may cause future management fees to
differ from the amounts reflected in the Historical Summary.
F-4
<PAGE> 14
Inland Real Estate Corporation
Pro Forma Balance Sheet
December 31, 1995
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
effect the acquisitions of Mundelein Plaza, the Regency Point Shopping Center,
Prospect Heights Plaza, Montgomery-Sears Shopping Center, the Zany Brainy
store, Salem Square, Hawthorn Village Commons, Six Corners and Spring Hill
Fashion Center as though these transactions occurred December 31, 1995. This
unaudited Pro Forma Balance Sheet should be read in conjunction with the
December 31, 1995 Financial Statements and the notes thereto as filed on Form
10-K.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at December 31, 1995, nor does it
purport to represent the future financial position of the Company. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Prospectus.
F-5
<PAGE> 15
Inland Real Estate Corporation
Pro Forma Balance Sheet
December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
December 31,
December 31, 1995
1995 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
------------- -------------- -------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties................... $ 17,342,538 49,221,080 66,563,618
Cash and cash equivalents..... 738,931 - 738,931
Restricted cash............... 150,000 - 150,000
Accounts and rents
receivable................... 333,823 790,763 1,124,586
Other assets.................. 185,585 42,534 228,119
------------ ---------- ----------
Total assets.................. $ 18,750,877 50,054,377 68,805,254
============ ========== ==========
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and accrued
expenses..................... $ 288,037 7,500 295,537
Accrued real estate taxes..... 374,180 1,008,136 1,382,316
Distributions payable (C)..... 129,532 - 129,532
Security deposits............. 54,483 107,918 162,401
Mortgage payable.............. 750,727 8,428,200 9,178,927
Notes payable to Affiliate.... 360,000 - 360,000
Other liabilities............. 178,852 - 178,852
---------- ---------- ----------
Total liabilities............. 2,135,811 9,551,754 11,687,565
---------- ---------- ----------
Common Stock.................. 19,996 47,097 67,093
Additional paid in capital
(net of Offering costs)...... 16,835,183 40,455,526 57,290,709
Accumulated distributions in
excess of net income......... (240,113) - (240,113)
---------- ---------- ----------
Total Stockholders' equity.... 16,615,066 40,502,623 57,117,689
---------- ---------- ----------
Total liabilities and
Stockholders' equity........ $18,750,877 50,054,377 68,805,254
=========== ========== ==========
</TABLE>
See accompanying notes to pro forma balance sheet.
F-6
<PAGE> 16
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(A) The December 31, 1995 Historical column represents the historical balance
sheet as presented in the December 31, 1995 10-K as filed with the SEC.
(B) The following pro forma adjustment relates to the acquisition of the
subject properties as though they were acquired on December 31, 1995.
The terms are described in the notes that follow.
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------
Mundelein Regency Prospect Montgomery-
Plaza Point Heights Sears
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
- ------
Net investment in
properties......... $ 5,658,230 5,700,000 2,165,000 3,419,000
Accounts and rent
receivable......... 84,375 16,867 38,771 27,842
Other assets........ - - - -
----------- ----------- ----------- -----------
Total assets........ $ 5,742,605 5,716,867 2,203,771 3,446,842
=========== =========== =========== ===========
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and
accrued expenses... $ 7,500 - - -
Accrued real estate
taxes.............. 89,010 16,867 63,517 32,655
Security deposits... 15,000 28,621 8,600 -
Mortgage payable.... - 4,473,200 - -
----------- ----------- ----------- -----------
Total liabilities... 111,510 4,518,688 72,117 32,655
----------- ----------- ----------- -----------
Common Stock(D)..... 6,548 1,393 2,479 3,970
Additional paid in
capital (net of
Offering costs)(D) 5,624,547 1,196,786 2,129,175 3,410,217
----------- ----------- ----------- -----------
Total Stockholders'
equity............. 5,631,095 1,198,179 2,131,654 3,414,187
----------- ----------- ----------- -----------
Total liabilities
and Stockholders'
equity............. $ 5,742,605 5,716,867 2,203,771 3,446,842
=========== =========== =========== ===========
</TABLE>
F-7
<PAGE> 17
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------
Hawthorn
Zany Salem Village
Brainy Square Commons
------------ ------------ ------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties......... $ 2,455,000 6,173,850 8,450,000
Accounts and rent
receivable......... - 270,729 194,400
Other assets........ - - 39,550
----------- ----------- ------------
Total assets........ $ 2,455,000 6,444,579 8,683,950
=========== =========== ============
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and
accrued expenses... $ - - -
Accrued real estate
taxes.............. - 270,729 194,400
Security deposits... - - -
Mortgage payable.... - - 3,955,000
----------- ----------- ------------
Total liabilities... - 270,729 4,149,400
----------- ----------- ------------
Common Stock(D)..... 2,855 7,179 5,273
Additional paid in
capital (net of
Offering costs)(D) 2,452,145 6,166,671 4,529,277
----------- ----------- ------------
Total Stockholders'
equity............. 2,455,000 6,173,850 4,534,550
----------- ----------- ------------
Total liabilities
and Stockholders'
equity............. $ 2,455,000 6,444,579 8,683,950
=========== =========== ============
</TABLE>
F-8
<PAGE> 18
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
December 31, 1995
(unaudited)
(B) Continued
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------
Total
Six Spring Pro Forma
Corners Hill Adjustment
------------ ------------ -------------
<S> <C> <C> <C>
Assets
- ------
Net investment in
properties......... $ 6,000,000 9,200,000 49,221,080
Accounts and rent
receivable......... 65,293 95,470 793,747
Other assets........ - - 39,550
----------- ------------ -------------
Total assets........ $ 6,065,293 9,295,470 50,054,377
=========== ============ =============
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and
accrued expenses... $ - - 7,500
Accrued real estate
taxes.............. 217,643 123,315 1,008,136
Security deposits... 15,542 40,155 107,918
Mortgage payable.... - - 8,428,200
----------- ------------ -------------
Total liabilities... 233,185 163,470 9,551,754
----------- ------------ -------------
Common Stock(D)..... 6,781 10,619 47,097
Additional paid in
capital (net of
Offering costs)(D) 5,825,327 9,121,381 40,455,526
----------- ------------ -------------
Total Stockholders'
equity............ 5,832,108 9,132,000 40,502,623
----------- ------------ -------------
Total liabilities
and Stockholders'
equity............ $ 6,065,293 9,295,470 50,054,377
=========== ============ =============
</TABLE>
F-9
<PAGE> 19
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Mundelein Plaza, Mundelein, Illinois
On March 29, 1996, the Company acquired the Mundelein Plaza property
located in Mundelein, Illinois ("Mundelein Plaza") from an unaffiliated
third party for a purchase price of $5,658,230, including closing costs of
$8,230, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Regency Point Shopping Center, Lockport, Illinois
On April 5, 1996, the Company completed the acquisition of the Regency
Point Shopping Center located in Lockport, Illinois ("Regency Point"), from
an unaffiliated third party for a purchase price of $5,700,000. As part of
the acquisition, the Company will assume the existing first mortgage loan
of $4,473,200 along with a related interest rate swap agreement, with the
balance funded with cash and cash equivalents.
The first mortgage loan has a floating interest rate of 180 basis points
over the 30-day LIBOR rate, which rate is adjusted monthly. The interest
rate swap agreement, in conjunction with the first mortgage, provides for
Bank One, Chicago, to receive from or pay to the Company the difference
between 6.11% and the 30-day LIBOR rate, so that the first mortgage loan
has an effective rate of 7.91% per annum. The first mortgage loan matures
in August 2000. The related interest rate swap agreement was terminated on
April 18, 1996 resulting in $48,419 proceeds to the Company. No pro forma
adjustment has been made as a result of this termination.
Acquisition of Prospect Heights Plaza, Prospect Heights, Illinois
On June 17, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,165,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Montgomery-Sears, Montgomery, Illinois
On June 17, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $3,419,000 on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Zany Brainy, Wheaton, Illinois
On July 1, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $2,455,000 on an all cash basis,
funded from cash and cash equivalents.
F-10
<PAGE> 20
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
December 31, 1995
(unaudited)
Acquisition of Salem Square, Countryside, Illinois
On August 2, 1996, the Company acquired this property from an unaffiliated
third party for the purchase price of $6,173,850, on an all cash basis,
funded from cash and cash equivalents.
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
On August 15, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of $8,450,000.
The Company funded the purchase using: (i) the proceeds of a short-term
loan maturing August 23, 1996 in the amount of $2.9 million from Inland
Mortgage Investment Corporation ("IMIC"), an Affiliate of the Company (the
"Short-Term Loan"), and (ii) cash and cash equivalents. The Company did
not pay any fees in connection with the Short-Term Loan, which bears
interest at a rate of eight percent per annum. A majority of the Company's
board, including a majority of the Independent Directors has approved the
terms and conditions of the Short-Term Loan. The Company repaid the Short-
Term Loan using the proceeds of a loan (the "Mortgage Loan") in the amount
of $3,955,000 from an unaffiliated lender. The Company paid a 1%
origination fee to the lender of the Mortgage Loan. The Mortgage Loan has
a term of five years and, prior to the maturity date, requires payments of
interest only, at an annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
On October 18, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$6,000,000, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Spring Hill Fashion Center, West Dundee, Illinois
On November 13, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$9,200,000, on an all cash basis, funded from cash and cash equivalents.
(C) No pro forma assumptions have been made for the additional payment of
distributions resulting from the additional proceeds raised.
(D) Additional Offering Proceeds of $47,097,000, net of additional Offering
costs of $6,594,377, are reflected as received as of December 31, 1995,
prior to the purchase of the properties. Offering costs consist
principally of registration costs, printing and selling costs, including
commissions.
F-11
<PAGE> 21
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the year ended December 31, 1995
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of the Walgreens/Decatur property, Eagle
Crest Shopping Center, Montgomery-Goodyear property, Nantucket Square Shopping
Center, Mundelein Plaza, Regency Point Shopping Center, Prospect Heights Plaza,
Montgomery-Sears Shopping Center, Salem Square, Hawthorn Village Commons, Six
Corners and Spring Hill Fashion Center as though these transactions occurred on
January 1, 1995. Hartford/Naperville Plaza, Antioch Plaza and the Zany Brainy
store were constructed in 1995 and acquired shortly after construction was
completed and as such, the unaudited Pro Forma Statement of Operations of the
Company is presented to effect these acquisitions as of August 17, 1995,
September 1, 1995 and November 22, 1995, respectively, the date occupancy
commenced at these properties. This unaudited Pro Forma Statement of Operations
should be read in conjunction with the December 31, 1995 Financial Statements
and the notes thereto as filed on Form 10-K.
This unaudited Pro Forma Statement of Operations is not necessarily indicative
of what the actual results of operations would have been for the year ended
December 31, 1995, nor does it purport to represent the future results of
operations of the Company. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-12
<PAGE> 22
Inland Real Estate Corporation
Pro Forma Statement of Operations
for the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------
1995 1995 1996
Historical Acquisitions Acquisitions 1995
(A) (B) (C) Pro Forma
---------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
Rental
income........... $ 869,485 585,614 5,190,974 6,646,073
Additional
rental income.... 228,024 162,536 1,522,774 1,913,334
Interest
income (D)....... 82,913 - - 82,913
---------- -------- --------- ---------
Total income..... 1,180,422 748,150 6,713,748 8,642,320
---------- -------- --------- ---------
Professional
services and
general and
administrative 23,132 - - 23,132
Property operating
expenses.......... 326,721 275,218 2,294,340 2,896,279
Interest expense... 164,161 429,997 662,368 1,256,526
Depreciation (E)... 169,894 111,767 1,169,588 1,451,249
---------- -------- --------- ---------
Total expenses..... 683,908 816,982 4,126,296 5,627,186
---------- -------- --------- ---------
Net income(loss) $ 496,514 (68,832) 2,587,452 3,015,134
========== ======== ========= =========
Weighted average
common stock shares
outstanding (F)... 943,156 5,652,856
========== =========
Net income per weighted
average common stock
outstanding (F)... $ .53 .53
========== =========
</TABLE>
See accompanying notes to pro forma statement of operations.
F-13
<PAGE> 23
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the year ended December 31, 1995
(unaudited)
(A) The 1995 Historical column represents the historical statement of
operations of the Company for the year ended December 31, 1995, as filed
with the SEC on Form 10-K.
(B) Total pro forma adjustments for the year ended December 31, 1995 are as
though the acquisitions were acquired the earlier of January 1, 1995 or
date that operations commenced.
<TABLE>
<CAPTION>
Pro Forma Adjustments
----------------------------------------------------
Hartford
Montgomery Naperville
Walgreens Eagle Crest Goodyear Plaza
--------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Rental
income............. $10,651 95,232 101,359 15,077
Additional
Rental income...... - 2,218 19,203 662
-------- ------- ------- -------
Total income....... 10,651 97,450 120,562 15,739
-------- ------- ------- -------
Property operating
expenses........... 533 17,376 47,758 3,436
Interest expense.... 4,840 77,170 46,325 13,625
Depreciation (E).... 3,141 16,324 20,682 8,867
-------- ------- ------- -------
Total expenses...... 8,514 110,870 114,765 25,928
-------- ------- ------- -------
Net income(loss) $ 2,137 (13,420) 5,797 (10,189)
======== ======= ======= =======
<CAPTION>
Total
Nantucket Antioch 1995
Square Plaza Pro Forma
--------- -------- ---------
<S> <C> <C> <C>
Rental
income............. $340,545 22,750 585,614
Additional
Rental income...... 140,453 - 162,536
-------- ------- -------
Total income....... 480,998 22,750 748,150
-------- ------- -------
Property operating
expenses........... 205,903 212 275,218
Interest expense.... 267,137 20,900 429,997
Depreciation (E).... 57,357 5,396 111,767
-------- ------- -------
Total expenses...... 530,397 26,508 816,982
-------- ------- -------
Net income(loss) $(49,399) (3,758) (68,832)
======== ======= =======
</TABLE>
F-14
<PAGE> 24
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Walgreens/Decatur, Decatur, Illinois
In conjunction with the acquisition, the Company assumed a portion of the
first mortgage loan with a balance of $775,000. This mortgage has an
interest rate of 7.655%, amortizes over a 25-year period and matures May
31, 2004. The Company is responsible for monthly payments of principal
and interest of $5,689. The pro forma adjustment for interest expense for
the period prior to acquisition was estimated using the described loan
terms.
Acquisition of Eagle Crest Shopping Center, Naperville, Illinois
As part of the acquisition, the Company assumed a portion of the first
mortgage loan with a balance of $3,534,000, as well as entering into a
loan agreement with Inland Property Sales, Inc. ("IPS"), an Affiliate of
the Advisor, for the balance of the purchase price for $1,212,427. The
first mortgage bears interest at 9.5% per annum and the loan to IPS bears
interest at 10.5%. The pro forma adjustment for interest expense for the
period prior to acquisition was estimated using the described loan terms.
Acquisition of Montgomery-Goodyear, Montgomery, Illinois
As part of the acquisition, the Company entered into a loan agreement with
Inland Mortgage Investment Corporation ("IMIC"), an affiliate of the
Advisor, for $600,000 which bears interest of 10.9% per annum. The pro
forma adjustment for interest expense for the period prior to acquisition
was estimated using the described loan terms.
Acquisition of Hartford/Naperville Plaza, Naperville, Illinois
In conjunction with the acquisition, the Company entered into a loan
agreement with IMIC for $600,000 which bears interest of 10.9% per annum.
The pro forma adjustment for interest expense was estimated using the
described loan terms.
Acquisition of Nantucket Square Shopping Center, Schaumburg, Illinois
As part of the acquisition, the Company entered into a loan agreement with
IMIC for $3,550,000 which bears interest of 10.5% per annum. The pro
forma adjustment for interest expense for the period prior to acquisition
was estimated using the described loan terms.
F-15
<PAGE> 25
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Antioch Plaza, Antioch, Illinois
This pro forma adjustment reflects the purchase of the Antioch Plaza
property as if the Company had purchased the property as of September 1,
1995, the date the first tenant occupied this newly constructed property.
The pro forma adjustment for operations for the period September 1, 1995
to December 28, 1995 (date of acquisition) was estimated using applicable
lease information. Blockbuster Video was the only tenant occupying the
property during that period. No pro forma adjustment was made for real
estate tax expense and the related recovery income since the property was
vacant land for most of 1995 and the amount would be difficult to estimate
and have an immaterial effect.
As part of the acquisition, the Company entered into a loan agreement with
Inland Real Estate Investment Corporation, an affiliate of the Advisor,
for $660,000 which bears interest of 9.5% per annum. The pro forma
adjustment for interest expense was estimated using the described loan
terms.
F-16
<PAGE> 26
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
(C) Total pro forma adjustments for 1996 Acquisitions are as though they were
acquired the earlier of January 1, 1995 or date that operations commenced.
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------------------------------------
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental
income.......... $ 639,124 541,085 164,152 327,610 28,643
Additional
Rental income... 66,669 63,294 116,175 76,182 5,030
----------- ----------- ----------- ----------- -----------
Total income.... 705,793 604,379 280,327 403,792 33,673
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 141,482 71,615 180,819 102,067 5,502
Interest expense.. - 351,900 - - -
Depreciation (E).. 128,233 162,500 46,900 83,200 4,422
----------- ----------- ----------- ----------- -----------
Total expenses.... 269,715 586,015 227,719 185,267 9,924
----------- ----------- ----------- ----------- -----------
Net income...... $ 436,078 18,364 52,608 218,525 23,749
=========== =========== =========== =========== ===========
<CAPTION>
Hawthorn Total
Salem Village Six Spring 1995
Square Commons Corners Hill Pro Forma
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental
income.......... $ 717,522 970,313 685,443 1,117,082 5,190,974
Additional
Rental income... 387,179 353,145 164,345 290,755 1,522,774
----------- ----------- ----------- ----------- -----------
Total income.... 1,104,701 1,323,458 849,788 1,407,837 6,713,748
----------- ----------- ----------- ----------- -----------
Property operating
expenses........ 435,021 407,404 584,070 366,360 2,294,340
Interest expense.. - 310,468 - - 662,368
Depreciation (E).. 150,000 194,467 153,000 246,866 1,169,588
----------- ----------- ----------- ----------- -----------
Total expenses.... 585,021 912,339 737,070 613,226 4,126,296
----------- ----------- ----------- ----------- -----------
Net income...... $ 519,680 411,119 112,718 794,611 2,587,452
=========== =========== =========== =========== ===========
</TABLE>
F-17
<PAGE> 27
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Mundelein Plaza, Mundelein, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
Mundelein Plaza
----------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- -----------
Rental income.................... $ 639,124 - 639,124
Additional rental income......... 66,669 - 66,669
----------- ----------- -----------
Total income..................... 705,793 - 705,793
----------- ----------- -----------
Property operating expenses...... 141,482 - 141,482
Interest expense................. - - -
Depreciation (E)................. - 128,233 128,233
----------- ----------- -----------
Total expenses................... 141,482 128,233 269,715
----------- ----------- -----------
Net income....................... $ 564,311 (128,233) 436,078
=========== =========== ===========
Acquisition of Regency Point, Lockport, Illinois
As part of the acquisition, the Company will assume the existing first
mortgage loan of $4,473,200, along with a related interest rate swap
agreement.
The first mortgage loan has a floating interest rate of 180 basis points
over the 30-day LIBOR rate, which rate is adjusted monthly. The interest
rate swap agreement, in conjunction with the first mortgage, provides for
Bank One, Chicago, to receive from or pay to the Company the difference
between 6.11% and the 30-day LIBOR rate, so that the first mortgage loan
has an effective rate of 7.91% per annum. The pro forma adjustment for
interest expense for 1995 was estimated using the described loan terms.
The related interest rate swap agreement was terminated on April 18, 1996
resulting in $48,419 proceeds to the Company. The pro forma adjustment
does not give effect to the termination of this agreement.
F-18
<PAGE> 28
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Regency Point
-----------------------------
*As Pro Forma
Reported Adjustments Total
-------- ----------- -----
<S> <C> <C> <C>
Rental income.................... $ 541,085 - 541,085
Additional rental income......... 63,294 - 63,294
--------- -------- --------
Total income..................... 604,379 - 604,379
--------- -------- --------
Property operating expenses...... 71,615 - 71,615
Interest expense................. - 351,900 351,900
Depreciation (E)................. - 162,500 162,500
--------- -------- --------
Total expenses................... 71,615 514,400 586,015
--------- -------- --------
Net income....................... $ 532,764 (514,400) 18,364
========= ======== ========
</TABLE>
Acquisition of Prospect Heights Plaza, Prospect Heights, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Prospect Heights
-----------------------------
*As Pro Forma
Reported Adjustments Total
-------- ----------- -----
<S> <C> <C> <C>
Rental income.................... $ 164,152 - 164,152
Additional rental income......... 116,175 - 116,175
--------- ------- --------
Total income..................... 280,327 - 280,327
--------- ------- --------
Property operating expenses...... 180,819 - 180,819
Interest expense................. - - -
Depreciation (E)................. - 46,900 46,900
--------- ------- --------
Total expenses................... 180,819 46,900 227,719
--------- ------- --------
Net income....................... $ 99,508 (46,900) 52,608
========= ======= ========
</TABLE>
F-19
<PAGE> 29
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Montgomery-Sears, Montgomery, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year ended
December 31, 1995 prepared in accordance with Rule 3.14 of Regulation S-X (*) to
the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Montgomery-Sears
------------------------------------------
*As Pro Forma
Reported Adjustments Total
---------- ----------- ---------
<S> <C> <C> <C>
Rental income.................... $ 327,610 - 327,610
Additional rental income......... 76,182 - 76,182
--------- --------- --------
Total income..................... 403,792 - 403,792
--------- --------- --------
Property operating expenses...... 102,067 - 102,067
Interest expense................. - - -
Depreciation (E)................. - 83,200 83,200
--------- --------- --------
Total expenses................... 102,067 83,200 185,267
--------- --------- --------
Net income....................... $ 301,725 (83,200) 218,525
========= ========= ========
</TABLE>
Acquisition of Zany Brainy, Wheaton, Illinois
This pro forma adjustment reflects the purchase of Zany Brainy as if the Company
had purchased the property as of January 1, 1995. Operations for this property
for the period from November 22, 1995 (date of occupancy) to December 31, 1995
were estimated using the lease and operating expense information supplied by the
seller. This property was purchased on an all cash basis.
F-20
<PAGE> 30
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Salem Square, Countryside, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year ended
December 31, 1995 prepared in accordance with Rule 3.14 of Regulation S-X (*) to
the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Salem Square
---------------------------------------
*As Pro Forma
Reported Adjustments Total
---------- ----------- ---------
<S> <C> <C> <C>
Rental income.................... $ 717,522 - 717,522
Additional rental income......... 387,179 - 387,179
---------- --------- ---------
Total income..................... 1,104,701 - 1,104,701
---------- --------- ---------
Property operating expenses...... 435,021 - 435,021
Interest expense................. - - -
Depreciation (E)................. - 150,000 150,000
---------- --------- ---------
Total expenses................... 435,021 150,000 585,021
---------- --------- ---------
Net income....................... $ 669,680 (150,000) 519,680
========== ========= =========
</TABLE>
Acquisition of Hawthorn Village Commons, Vernon Hills, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year ended
December 31, 1995 prepared in accordance with Rule 3.14 of Regulation S-X (*) to
the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Hawthorn Village Commons
---------------------------------------
*As Pro Forma
Reported Adjustments Total
---------- ----------- ---------
<S> <C> <C> <C>
Rental income.................... $ 970,313 - 970,313
Additional rental income......... 353,145 - 353,145
---------- --------- ---------
Total income..................... 1,323,458 - 1,323,458
---------- --------- ---------
Property operating expenses...... 407,404 - 407,404
Interest expense................. - 310,468 310,468
Depreciation (E)................. - 194,467 194,467
---------- --------- ---------
Total expenses................... 407,404 504,935 912,339
---------- --------- ---------
Net income....................... $ 916,054 (504,935) 411,119
========== ========= =========
</TABLE>
F-21
<PAGE> 31
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
The Company funded the purchase of Hawthorn Village Commons using: (i) the
proceeds of a short-term loan maturing August 23, 1996 in the amount of
$2.9 million from Inland Mortgage Investment Corporation ("IMIC"), an
Affiliate of the Company (the "Short-Term Loan"), and (ii) cash and cash
equivalents. The Company did not pay any fees in connection with the
Short-Term Loan, which bears interest at a rate of eight percent per
annum. A majority of the Company's board, including a majority of the
Independent Directors has approved the terms and conditions of the Short-
Term Loan. The Company repaid the Short-Term Loan using the proceeds of a
loan (the "Mortgage Loan") in the amount of $3,955,000 from an
unaffiliated lender. The Company paid a 1% origination fee to the lender
of the Mortgage Loan. The Mortgage Loan has a term of five years and,
prior to the maturity date, requires payments of interest only, at an
annual rate of 7.85%.
Acquisition of Six Corners, Chicago, Illinois
This pro forma adjustment reflects the purchase of Six Corners as if the
Company had acquired the property as of January 1, 1995. The year ended
December 31, 1995 is based on the Historical Summary of Gross Income and
Direct Operating Expenses for the year ended June 30, 1996 prepared in
accordance with Rule 3-14 of Regulation S-X and information provided by
the seller.
<TABLE>
<CAPTION>
Six Corners
------------------------------------------
Year Ended
December 31, Pro Forma
1995 Adjustments Total
------------- ----------- ------------
<S> <C> <C> <C>
Rental income.................... $ 685,443 - 685,443
Additional rental income......... 164,345 - 164,345
------------- ----------- ------------
Total income..................... 849,788 - 849,788
------------- ----------- ------------
Property operating expenses...... 584,070 - 584,070
Interest expense................. - - -
Depreciation (E)................. - 153,000 153,000
------------- ----------- ------------
Total expenses................... 584,070 153,000 737,070
------------- ----------- ------------
Net income....................... $ 265,718 (153,000) 112,718
============= =========== ============
</TABLE>
F-22
<PAGE> 32
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the year ended December 31, 1995
(unaudited)
Acquisition of Spring Hill Fashion Center, West Dundee, Illinois
Reconciliation of Gross Income and Direct Operating Expenses for the year
ended December 31, 1995 prepared in accordance with Rule 3.14 of
Regulation S-X (*) to the Pro Forma Adjustments:
<TABLE>
<CAPTION>
Spring Hill Fashion Center
----------------------------------------
*As Pro Forma
Reported Adjustments Total
----------- ----------- ----------
<S> <C> <C> <C>
Rental income.................... $1,117,082 - 1,117,082
Additional rental income......... 290,755 - 290,755
----------- ----------- ----------
Total income..................... 1,407,837 - 1,407,837
----------- ----------- ----------
Property operating expenses...... 366,360 - 366,360
Interest expense................. - - -
Depreciation (E)................. - 246,866 246,866
----------- ----------- ----------
Total expenses................... 366,360 246,866 613,226
----------- ----------- ----------
Net income....................... $1,041,477 (246,866) 794,611
=========== =========== ==========
</TABLE>
(D) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(E) Depreciation expense is computed using the straight-line method, based
upon an estimated useful life of thirty years.
(F) The pro forma weighted average common stock shares for the year ended
December 31, 1995 was calculated by estimating the additional shares sold
to purchase each of the Company's properties on a weighted average basis.
F-23
<PAGE> 33
Inland Real Estate Corporation
Pro Forma Balance Sheet
September 30, 1996
(unaudited)
The following unaudited Pro Forma Balance Sheet of the Company is presented to
effect the acquisition of the Six Corners and Spring Hill Fashion Center as
though these transactions occurred September 30, 1996. This unaudited Pro
Forma Balance Sheet should be read in conjunction with the September 30, 1996
Financial Statements and the notes thereto as filed on Form 10-Q.
This unaudited Pro Forma Balance Sheet is not necessarily indicative of what
the actual financial position would have been at September 30, 1996, nor does
it purport to represent the future financial position of the Company. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Prospectus.
F-24
<PAGE> 34
Inland Real Estate Corporation
Pro Forma Balance Sheet
September 30, 1996 (unaudited)
<TABLE>
<CAPTION>
September 30,
September 30, 1996
1996 Pro Forma Pro Forma
Historical(A) Adjustments(B) Balance Sheet
--------------- -------------- ---------------
<S> <C> <C> <C>
Assets
Net investment in
properties................... $ 50,746,249 15,200,000 65,946,249
Cash and cash equivalents..... 19,250,977 - 19,250,977
Accounts and rents
receivable................... 1,087,810 397,779 1,485,589
Other assets.................. 447,025 - 447,025
--------------- -------------- ---------------
Total assets.................. $ 71,532,061 15,597,779 87,129,840
=============== ============== ===============
Liabilities and Stockholders' Equity
- ------------------------------------
Accounts payable and accrued
expenses..................... $ 840,418 - 840,418
Accrued real estate taxes..... 981,687 433,908 1,415,595
Distributions payable (C)..... 372,337 - 372,337
Security deposits............. 112,374 55,697 168,071
Mortgages payable............. 18,003,626 - 18,003,626
Unearned income............... 62,650 - 62,650
Other liabilities............. 28,852 - 28,852
Due to Affiliates............. 244,040 - 244,040
--------------- -------------- ---------------
Total liabilities............. 20,645,984 489,605 21,135,589
--------------- -------------- ---------------
Common Stock.................. 59,824 17,567 77,391
Additional paid in capital
(net of Offering costs)...... 51,965,431 15,090,607 67,056,038
Accumulated distributions in
excess of net income......... (1,139,178) - (1,139,178)
--------------- -------------- ---------------
Total Stockholders' equity.... 50,886,077 15,108,174 65,994,251
--------------- -------------- ---------------
Total liabilities and
Stockholders' equity......... $ 71,532,061 15,597,779 87,129,840
=============== ============== ===============
</TABLE>
See accompanying notes to pro forma balance sheet.
F-25
<PAGE> 35
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
(A) The September 30, 1996 Historical column represents the historical balance
sheet as presented in the September 30, 1996 10-Q as filed with the SEC.
(B) The following pro forma adjustment relates to the acquisition of the
subject properties as though they were acquired on September 30, 1996. The
terms are described in the notes that follow.
<TABLE>
<CAPTION>
Pro Forma Adjustments
----------------------------------------
Total
Six Spring Pro Forma
Corners Hill Adjustments
----------- ---------- -----------
Assets
- ------
<S> <C> <C> <C>
Net investment in
properties............... $ 6,000,000 9,200,000 15,200,000
Accounts and rents
receivable............... 306,203 91,576 397,779
----------- ---------- -----------
Total assets.............. $ 6,306,203 9,291,576 15,597,779
=========== ========== ===========
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C> <C>
Accrued real estate
taxes.................... $ 336,487 97,421 433,908
Security deposits......... 15,542 40,155 55,697
----------- ---------- -----------
Total liabilities......... 352,029 137,576 489,605
----------- ---------- -----------
Common Stock (D).......... $ 6,923 10,644 17,567
Additional paid in capital
(net of Offering
Costs)(D)................ 5,947,251 9,143,356 15,090,607
----------- ---------- -----------
Total Stockholders'
equity................... 5,954,174 9,154,000 15,108,174
----------- ---------- -----------
Total liabilities and
Stockholders' equity..... $ 6,306,203 9,291,576 15,597,779
=========== ========== ===========
</TABLE>
F-26
<PAGE> 36
Inland Real Estate Corporation
Notes to Pro Forma Balance Sheet
(continued)
September 30, 1996
(unaudited)
Acquisition of Six Corners, Chicago, Illinois
On October 18, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$6,000,000, on an all cash basis, funded from cash and cash equivalents.
Acquisition of Spring Hill Fashion Center, West Dundee, Illinois
On November 13, 1996, the Company acquired this property from an
unaffiliated third party for the purchase price of approximately
$9,200,000, on an all cash basis, funded from cash and cash equivalents.
(C) No pro forma assumptions have been made for the additional payment of
distributions resulting from the additional proceeds raised.
(D) Additional Offering Proceeds of $17,567,000, net of additional Offering
costs of $2,458,826 are reflected as received as of September 30, 1996,
prior to the purchase of the properties. Offering costs consist
principally of registration costs, printing and selling costs, including
commissions.
F-27
<PAGE> 37
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the nine months ended September 30, 1996
(unaudited)
The following unaudited Pro Forma Statement of Operations of the Company is
presented to effect the acquisitions of Mundelein Plaza, Regency Point Shopping
Center, Prospect Heights Plaza, Montgomery-Sears Shopping Center, the Zany
Brainy store, Salem Square, Hawthorn Village Commons, Six Corners and Spring
Hill Fashion Center as of January 1, 1996. This unaudited Pro Forma Statement
of Operations should be read in conjunction with the September 30, 1996
Financial Statements and the notes thereto as filed on Form 10-Q.
This unaudited Pro Forma Statement of Operations is not necessarily indicative
of what the actual results of operations would have been for the nine months
ended September 30, 1996, nor does it purport to represent the future financial
position of the Company. Unless otherwise defined, capitalized terms used
herein shall have the same meaning as in the Prospectus.
F-28
<PAGE> 38
Inland Real Estate Corporation
Pro Forma Statement of Operations
For the nine months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
1996 Total
Historical Pro Forma 1996
(A) Adjustments(B) Pro Forma
---------- -------------- ---------
<S> <C> <C> <C>
Rental income............... $ 2,578,953 3,221,285 5,800,238
Additional rental income.... 785,719 1,435,744 2,221,463
Interest income (C)......... 212,063 - 212,063
Other income................ 64,870 - 64,870
----------- --------- ---------
Total income.............. 3,641,605 4,657,029 8,298,634
----------- --------- ---------
Professional services and
general and
administrative fees....... 120,919 - 120,919
Advisor asset management
fee....................... 242,341 252,255 494,596
Property operating expenses. 1,146,661 1,690,234 2,836,895
Interest expense............ 210,132 321,303 531,435
Depreciation (D)............ 561,983 1,061,596 1,623,579
Amortization................ 4,119 - 4,119
Acquisition costs expensed.. 22,511 - 22,511
----------- --------- ---------
Total expenses.............. 2,308,666 3,325,388 5,634,054
----------- --------- ---------
Net income................ $ 1,332,939 1,331,641 2,664,580
=========== ========= =========
Weighted average
common stock shares
outstanding (E)........... 3,688,310 5,445,010
=========== =========
Net income per weighted
average common stock
outstanding (E)........... $ .36 .49
=========== =========
</TABLE>
See accompanying notes to pro forma statement of operations.
F-29
<PAGE> 39
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
For the nine months ended September 30, 1996
(unaudited)
(A) The 1996 Historical column represents the historical statement of
operations of the Company for the nine months ended September 30, 1996, as
filed with the SEC on Form 10-Q.
(B) Total pro forma adjustments for the nine months ended September 30, 1996
are as though the acquisitions of the following properties occurred on
January 1, 1996 on an all cash basis except for the following:
Regency Point
In the purchase of Regency Point the Company assumed the existing first
mortgage loan of $4,473,200, along with a related interest rate swap
agreement. The first mortgage loan has a floating interest rate of 180
basis points over the 30-day LIBOR rate, which rate is adjusted monthly.
The interest rate swap agreement, in conjunction with the first mortgage,
provides for Bank One, Chicago, to receive from or pay to the Company the
difference between 6.11% and the 30-day LIBOR rate, so that the first
mortgage loan has an effective rate of 7.91% per annum. The pro forma
adjustment for interest expense for 1996 was estimated using the described
loan terms. The related interest rate swap agreement was terminated on
April 18, 1996 resulting in $48,419 proceeds to the Company. The pro forma
adjustment does not give effect to the termination of this agreement.
Hawthorn Village Commons
The Company funded the purchase of Hawthorn Village Commons using: (i) the
proceeds of a short-term loan maturing August 23, 1996 in the amount of
$2.9 million from Inland Mortgage Investment Corporation ("IMIC"), an
Affiliate of the Company (the "Short-Term Loan"), and (ii) cash and cash
equivalents. The Company did not pay any fees in connection with the
Short-Term Loan, which bears interest at a rate of eight percent per
annum. A majority of the Company's board, including a majority of the
Independent Directors has approved the terms and conditions of the
Short-Term Loan. The Company repaid the Short-Term Loan using the proceeds
of a loan (the "Mortgage Loan") in the amount of $3,955,000 from an
unaffiliated lender. The Company paid a 1% origination fee to the lender
of the Mortgage Loan. The Mortgage Loan has a term of five years and,
prior to the maturity date, requires payments of interest only, at an
annual rate of 7.85%.
F-30
<PAGE> 40
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the nine months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Mundelein Regency Prospect Montgomery- Zany
Plaza Point Heights Sears Brainy
--------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Rental income..... $ 163,381 139,271 89,105 163,700 137,489
Additional rental
income........... 32,975 16,034 83,593 57,012 24,144
Interest income... - - - - -
--------- -------- -------- -------- --------
Total income...... 196,356 155,305 172,698 220,712 161,633
--------- -------- -------- -------- --------
Advisor asset
management fee.. - - - - -
Property operating
expenses........ 53,986 19,046 91,364 66,944 30,331
Interest expense.. - - - - -
Depreciation (D).. - - - - -
--------- -------- -------- -------- --------
Total expenses.... 53,986 19,046 91,364 66,944 30,331
--------- -------- -------- -------- --------
Net income........ $ 142,370 136,259 81,334 153,768 131,302
========= ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Hawthorn
Salem Village Six Spring
Square Commons Corners Hill
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Rental income..... $ 422,146 548,667 749,262 808,264
Additional rental
income.......... 260,832 270,570 490,551 200,033
--------- -------- -------- --------
Total income...... 682,978 819,237 1,239,813 1,008,297
--------- -------- -------- --------
Advisor asset
management fee.. - - - -
Property operating
expenses........ 270,756 293,132 607,048 257,627
Interest expense.. - - - -
Depreciation (D).. - - - -
--------- -------- -------- --------
Total expenses.... 270,756 293,132 607,048 257,627
--------- -------- -------- --------
Net income........ $ 412,222 526,105 632,765 750,670
========= ======== ======== ========
</TABLE>
F-31
<PAGE> 41
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
for the nine months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments Total
----------- -----
<S> <C> <C>
Rental income..... - 3,221,285
Additional rental
income........... - 1,435,744
----------- ---------
Total income...... - 4,657,029
----------- ---------
Advisor asset
management fee... 252,255 252,255
Property operating
expenses......... - 1,690,234
Interest expense.. 321,303 321,303
Depreciation (D).. 1,061,596 1,061,596
----------- ---------
Total expenses.... 1,635,154 3,325,388
----------- ---------
Net income........ $(1,635,154) 1,331,641
=========== =========
</TABLE>
F-32
<PAGE> 42
Inland Real Estate Corporation
Notes to Pro Forma Statement of Operations
(continued)
For the nine months ended September 30, 1996
(unaudited)
(C) No pro forma adjustment has been made relating to interest income which
would have been earned on the additional Offering Proceeds raised.
(D) Depreciation expense is computed using the straight-line method, based
upon an estimated useful life of thirty years.
(E) The pro forma weighted average common stock shares for the nine months
ended September 30, 1996 was calculated by estimating the additional
shares sold to purchase each of the Company's properties on a weighted
average basis.
F-33
<PAGE> 1
EXHIBIT 10.1
Agreement to Purchase by and between
JMB/Spring Hill Associates and Inland Real
Estate Corporation dated October 14, 1996
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
- ----
ARTICLE I DEFINITIONS ............................................. 1
1.1 Definitions ............................................. 1
ARTICLE II PURCHASE AND SALE ....................................... 3
2.1 Purchase and Sale ....................................... 3
ARTICLE III PURCHASE PRICE .......................................... 3
3.1 Purchase Price .......................................... 3
ARTICLE IV CLOSING MATTERS ......................................... 4
4.1 Survey .................................................. 4
4.2 Title ................................................... 4
4.3 Possession, Prorations and Expenses ..................... 5
4.4 Escrow .................................................. 9
4.5 Closing ................................................. 9
ARTICLE V BROKERAGE ............................................... 11
5.1 Brokerage ............................................... 11
ARTICLE VI DESTRUCTION, DAMAGE OR CONDEMNATION ..................... 12
6.1 Destruction or Damage ................................... 12
6.2 Condemnation ............................................ 12
6.3 Casualty and Rent Loss Insurance ........................ 13
ARTICLE VII COVENANTS, REPRESENTATIONS, WARRANTIES .................. 13
7.1 Affirmative Covenants of Seller ......................... 13
7.2 Representations and Warranties of Seller ................ 15
7.3 Representations and Warranties of Purchaser ............. 16
7.4 Covenants of Purchaser .................................. 17
<PAGE> 3
ARTICLE VIII DEFAULT, CONDITIONS PRECEDENT AND TERMINATION ........... 18
8.1 Conditions to Purchaser's Obligations and
Default by Seller ............................... 18
8.2 Conditions to Seller's Obligations and
Default by Purchaser .................................... 19
ARTICLE IX NOTICES ................................................. 19
9.1 Notices ................................................. 19
ARTICLE X ADDITIONAL COVENANTS .................................... 21
10.1 Entire Agreement, Amendments and Waivers ................ 21
10.2 Further Assurances ...................................... 21
10.3 Survival and Benefit .................................... 21
10.4 No Third Party Benefits ................................. 22
10.5 No Recording ............................................ 22
10.6 Interpretation .......................................... 22
10.7 Seller's Exculpation .................................... 23
10.8 Effective Date .......................................... 24
EXHIBITS
--------
A - Legal Description of Real Property
B - Permitted Title Exceptions
C - List of Personal Property
D - List of Leases
E - List of Service Contracts
F - Form of Tenant Estoppel Letter
G - List of Pending Litigation
H - Criterion for New Leases
<PAGE> 4
AGREEMENT TO PURCHASE
THIS AGREEMENT is made this 14th day of October, 1996, by and between
JMB/Spring Hill Associates, an Illinois general partnership ("Seller") and
Inland Real Estate Corporation, a Maryland corporation ("Purchaser").
RECITALS:
A. Seller is the fee owner of that certain Shopping Center
("Improvements") commonly known as Spring Hill Fashion Corner - Phase I, located
at the intersection of Route 72 and Route 31, West Dundee, Illinois, and legally
described in Exhibit "A" attached hereto (the "Real Property").
B. Seller desires to sell and Purchaser desires to purchase, the
"Property" (as hereinafter defined) upon and subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. When used herein, the following terms shall have the
respective meanings set forth opposite each such term:
AGREEMENT: This Agreement to Purchase including the Exhibits
attached hereto which are by this reference
incorporated herein and made a part hereof.
CLOSING DATE: October 30, 1996 subject to extension to
December 2, 1996 pursuant to Section 4.5(b)(viii)
hereof, or pursuant to Section 4.2 hereof.
CLOSING: The consummation of this Agreement.
DEED: That certain recordable Limited Warranty Deed to
be executed by Seller and delivered by Seller to
Purchaser at the Closing, conveying the Real Property
to Purchaser (or to Purchaser's designee) subject only
to the Permitted Title Exceptions.
<PAGE> 5
DEPOSIT: The sum of $150,000.00 which shall be deposited
by Purchaser with Title Insurer within one business day
after Seller's acceptance hereof, at Title Insurer's
office in Chicago, Illinois, to be held in an interest
bearing account as earnest money subject to the terms
of this Agreement. All interest earned thereon shall be
included in this definition.
LEASES: Those leases for rental of retail space in the
Improvements listed on Exhibit D and those leases
executed hereafter and which are in existence as of the
Closing Date.
LEGAL All laws, statutes, codes, acts, ordinances,
REQUIREMENTS: judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations, directions and
requirements of all governments and governmental
authorities having jurisdiction over the Real Property
and the operation of the Improvements thereon.
NOTICE TO That written notice which may be given by Purchaser
CANCEL: to Seller pursuant to Section 8.1(a).
PERMITTED TITLE The Leases, those matters set forth in Exhibit
EXCEPTIONS: "B" attached hereto, and any other matters which
Purchaser shall approve in writing or be deemed to
have approved pursuant to the terms of this Agreement.
PERSONAL Those items of personalty, which are listed on
PROPERTY: Exhibit "C" attached hereto and which will be conveyed
to Purchaser at Closing by a Bill of Sale (the "Bill of
Sale") containing no warranties, whether express or
implied, except a warranty of title free of any lien or
encumbrance.
PROPERTY: The Real Property, Personal Property, Service
Contracts, and the Leases.
PURCHASE PRICE: The consideration payable by Purchaser to Seller
for the Property, as provided in Article III.
PURCHASER: Inland Real Estate Corporation or its designee.
RENT ROLL: The list of Leases in existence as of the date
of said list, which list is attached hereto as Exhibit
"D."
SELLER: JMB/Spring Hill Associates
-2-
<PAGE> 6
SERVICE Those contracts, agreements, and leases of
CONTRACTS: equipment relating to the servicing, operation,
management and maintenance of the Property which are
listed on Exhibit "E" attached hereto.
SURVEY: Current as-built survey of the Real Property
prepared by a surveyor licensed by the State of
Illinois and certified to Purchaser, Purchaser's
designee, and the Title Insurer, to be prepared in
accordance with minimum standards for an ALTA survey.
TITLE A commitment for an Owner's Title Insurance
COMMITMENT: Policy for the Real Property issued by the Title
Insurer in the full amount of the Purchase Price,
covering title to the Real Property, dated on or after
the date hereof, showing Seller as owner of the Real
Property in fee simple, subject only to the Permitted
Title Exceptions and other exceptions pertaining to
liens or encumbrances of a definite or ascertainable
amount (which, in the aggregate do not exceed the
Purchase Price) which may be removed by the payment of
money at Closing and which Seller shall so remove at
Closing. The Title Commitment will have attached
thereto the following endorsements ("Endorsements"):
Extended Coverage, 3.1 Zoning with Parking Contiguity
and Restrictions.
TITLE INSURER: Near North National Title Corporation, as agent
for First American Title Insurance Company.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE. Subject to the conditions and on the terms
contained in this Agreement, Purchaser agrees to purchase and acquire from
Seller, and Seller agrees to sell and transfer to Purchaser, the Real Property
by the Deed, the Leases and Service Contracts by assignment, and the Personal
Property by the Bill of Sale.
ARTICLE III
PURCHASE PRICE
3.1 PURCHASE PRICE. The purchase price shall be TEN MILLION ONE HUNDRED
TWENTY FIVE THOUSAND AND NO/100 ($10,125,000.00) DOLLARS payable as hereinafter
provided. Purchaser agrees to pay to Seller, and Seller agrees to accept payment
of the Purchase Price as follows:
-3-
<PAGE> 7
(a) The Deposit shall be applied against the Purchase Price
at Closing.
(b) Purchaser shall pay to Seller at Closing the balance of
the Purchase Price, plus or minus adjustments and prorations as
hereinafter provided, by certified, cashier's or escrowee check or bank wire
transfer of collected federal funds, as Seller requests.
ARTICLE IV
CLOSING MATTERS
4.1 SURVEY. No later than ten (10) days following the date hereof,
Seller shall deliver the Survey to Purchaser, at Seller's sole cost and
expense. The Survey shall be dated not more than thirty (30) days prior to date
of delivery, shall show no encroachments by or from the Real Property onto any
adjacent property and no violation of or encroachments upon any recorded
building lines, restrictions, zoning set-backs, or easements affecting the Real
Property. If the Survey discloses any such unpermitted encroachment or
violation or any exceptions to title or matters indicating possible rights of
third parties other than the Permitted Title Exceptions and the same are not
acceptable to Purchaser, or if Purchaser desires to have the surveyor's
certification revised in a reasonable manner, then, within five (5) days from
Purchaser's receipt of the Survey, Purchaser must so notify Seller. If
Purchaser fails to so notify Seller within said five (5) day period, the Survey
will be conclusively deemed to be approved by Purchaser. If, within said five
(5) day period Purchaser notifies Seller that the Survey does not comply with
the terms of this Agreement (which notification must specify in what respects
the Survey does not so comply), Seller shall have ten (10) days from the date
of delivery of Purchaser's notice to have the Title Insurer issue its
endorsements insuring against damage caused by such encroachments, violations
or unpermitted exceptions and provide evidence thereof to Purchaser, or to have
the surveyor's certification revised, as applicable, and if Seller fails to do
so, and provide evidence thereof to Purchaser, within said ten (10) day period,
Purchaser may elect within ten (10) days after the expiration of Seller's ten
(10) day cure period, to (i) terminate this Agreement and thereafter there
shall be no further liability of either party hereunder (in which event the
Deposit shall promptly be returned to Purchaser) or (ii) accept the Real
Property subject to such encroachments, violations and unpermitted exceptions
or the unrevised surveyor's certification, as applicable, without any
diminution of the Purchase Price. Purchaser's failure to make any election
within said ten (10) day period shall be conclusively deemed to mean that
Purchaser has elected the option contained in subsection (i) of this Section
4.1.
4.2 TITLE. No later than ten (10) days following the date hereof,
Seller shall deliver the Title Commitment to Purchaser, at Seller's sole cost
and expense. If the Title Commitment discloses exceptions to title other than
the Permitted Title Exceptions ("Unpermitted Title Exceptions") and such
Unpermitted Title Exceptions are not acceptable to Purchaser, then, within five
(5) days from Purchaser's receipt of the Title Commitment, Purchaser must so
notify Seller. If Purchaser fails to so notify Seller within said five (5) day
period, the Unpermitted Title Exceptions will be conclusively deemed to be
approved by Purchaser. If, within said five (5) day
-4-
<PAGE> 8
period, Purchaser shall notify Seller that all or certain of the Unpermitted
Title Exceptions are not acceptable to Purchaser (which notification must
specify which Unpermitted Title Exceptions are so unacceptable), Seller shall
have ten (10) days from the date of Purchaser's notice to have such exceptions
removed from the Title Commitment or cause the Title Insurer to insure
Purchaser against same and provide evidence thereof to Purchaser, and if
Seller fails to have such exceptions removed, or insured over, Purchaser may
elect, within ten (10) days after the expiration of Seller's ten (10) day cure
period to (i) terminate this Agreement without liability on the part of any
party thereafter (in which event the Deposit shall be promptly returned to
Purchaser), or (ii) accept title subject to such Unpermitted Title Exceptions
without any diminution of the Purchase Price. Purchaser's failure to make any
election within said ten (10) day period shall be conclusively deemed to mean
that Purchaser has elected the option contained in subsection (i) of this
Section 4.2. On the Closing Date, at the expense of Seller as set forth in
Section 4.3(c) hereof, Seller shall cause the Title Insurer to issue an
owner's title insurance policy or prepaid commitment therefor pursuant to and
in accordance with the Title Commitment insuring fee simple title to the Real
Property in Purchaser or its designee as of the Closing Date, subject only to
the Permitted Title Exceptions and such other exceptions as Purchaser may
approve. If Seller is unable to cause the Title Insurer to issue any of the
Endorsements and Purchaser refuses to waive the requirement therefor, then
this Agreement shall become null and void and of no further force or effect,
and the Deposit will be returned to Purchaser. Additionally, Seller will have
no obligation to obtain any of the Endorsements if the Title Insurer charges
other than standard rates for the coverage or if the Title Insurer requires
security or an indemnity from Seller in order to issue any of the Endorsements
If Purchaser shall make objection to the Survey (as described in
Section 4.1) or the Title Commitment (as described in this Section 4.2) and the
Closing Date was to occur prior to the time each party was able to exercise its
rights under Section 4.1 or Section 4.2, as applicable, then the Closing Date
will be extended to a date which is three (3) business days subsequent to the
latest date for notice, objection and remedy permitted by either Section 4.1 or
4.2, as applicable.
4.3 POSSESSION, PRORATIONS AND EXPENSES, AND NEW LEASES.
(a) Sole and exclusive possession of the Property, subject
only to the rights of the tenants under the Leases, shall be delivered to
Purchaser on the Closing Date. Any vacant space will be placed into
Rent Ready Condition which is defined to be that all walls are patched and
freshly painted, each space to be demised has a fully-fixtured and operable
bathroom, and all doors have locks and are operable, the ceiling is completed
with acoustical tile and standard fluorescent lighting and the floor is in
broom-clean condition
(b) If the balance of the Purchase Price is deposited in
immediately available funds with the Title Insurer by 12:00 noon on the
Closing Date, as required by Section 4.5(d) hereof, all prorations will be
computed as of the end of the day immediately prior to the Closing Date
("Proration Date"). If Purchaser fails to deposit the balance of the Purchase
Price by 12:00 noon on the Closing Date, as aforesaid, and if Seller does not
terminate this Contract for such
-5-
<PAGE> 9
default of Purchaser and the Closing occurs, the Proration Date shall be
concurrent with the Closing Date and all prorations will be calculated as of
the end of the day on the Closing Date.
(c) Fixed Rent, Percentage Rent and tenant common area
maintenance and other expense contributions to be made by tenants shall be
prorated as follows:
(i) Fixed Rent - prepaid Fixed Rent will be
prorated as of the Proration Date. All other Fixed Rent which is
delinquent on the Proration Date will not be prorated. All such
arrearages of Fixed Rent unpaid on the Proration Date will remain the
sole and exclusive property of Seller after Closing, provided, however,
if, after Closing, Seller shall receive any such delinquent Fixed Rent,
Seller will remit to Purchaser that portion of such delinquent Fixed
Rent that is attributable to the period after the Proration Date, if
any. Seller shall retain all right, title, power and authority to
enforce payment thereof after Closing, except that Seller will not have
the right to terminate the Lease of a delinquent tenant after Closing
due to such delinquency. If, after Closing, Purchaser or its designee
shall receive any delinquent Fixed Rents (this provision shall not
relate to percentage rents) Purchaser may first apply such payments to
rent delinquencies which relate to any period after the Proration Date,
and Purchaser agrees, on its behalf and on behalf of its designee, to
immediately remit the balance to Seller.
(ii) Percentage Rent - Percentage Rent which is due
but unpaid at Closing and accrued Percentage Rent not yet
payable at Closing will not be prorated. If, after Closing, however,
Purchaser receives any payment of percentage rent which relates in any
part to sales made prior to the Proration Date, Purchaser shall
immediately remit Seller's share thereof to Seller and may not apply
any portion of such percentage rent to any post Proration Date rent
delinquencies whether delinquent Fixed Rent or tenants' delinquent
obligations to pay their prorata share of taxes or "Expenses" (as
hereinafter defined).
(iii) Tenant CAM and Other Expense Contributions. For
purposes hereof, the term "Expenses" shall mean all common area
maintenance costs and other operating expenses of the Property,
excluding real estate taxes and other items expressly covered in other
provisions of this Section 4.3. All payments by the tenant to the
landlord under the Leases for Expenses ("Tenant Expense Contributions")
shall be prorated between Seller and Purchaser as follows:
(aa) Seller and Purchaser shall each be
entitled to receive and retain a percentage of the
total Tenant Expense Contributions paid by the tenants in the
calendar year of Closing (the "Applicable Year") equal to the
percentage of the actual Expenses for the Applicable Year paid
by said party. As an example, if the total Expenses for the
year of Closing (i.e., 1996) are $200,000, of which Seller
pays $150,000 and Purchaser pays $50,000, and the total Tenant
Expense Contributions for such year are $160,000, then Seller
shall be entitled to $120,000 (75% of $160,000) of said Tenant
Expense Contributions and Purchaser shall be entitled to
$40,000 (25% of $160,000) thereof.
-6-
<PAGE> 10
(bb) At Closing, Seller shall give Purchaser a credit
for a prorated portion of the Tenant Expense Contributions paid
in advance for the month of Closing determined by multiplying
the total such Tenant Expense Contributions paid for such month
by a fraction, the numerator of which is the number of days
from and including the date of Closing to and including the
last day of such month and the denominator of which is the
total number of days in such month.
(cc) At the time of final calculation from the
tenants of the Tenant Expense Contributions for the
Applicable Year, whether in the nature of year-end
reconciliations or payments in arrears, Seller and Purchaser
shall reprorate said Tenant Expense Contributions based on the
total amount thereof and the total actual Expenses as
contemplated under Paragraph (aa) above. If, as a result of
said reproration, the parties determine that either Seller or
Purchaser received from the tenants (as adjusted for the
proration made at Closing pursuant to Paragraph (bb) above) an
amount of Tenant Expense Contributions in excess of the amount
to which such party is entitled pursuant to Paragraph (aa)
above, such party shall pay such excess to the other party
within fifteen (15) days after the reproration is determined.
In connection with the foregoing, Purchaser and Seller agree to
cooperate with each other concerning the calculation of the
reproration, including, without limitation, the delivery by
each party to the other of true and correct information
concerning the actual Expenses paid and the Tenant Expense
Contributions collected by said party, and Purchaser agrees to
use its good faith efforts in collecting Tenant Expense
Contributions after Closing, including the prompt preparation
and delivery to the tenants of all required year-end
reconciliation statements. Seller shall deliver to Purchaser at
Closing information concerning the Expenses paid and Tenant
Expense Contributions collected by Seller prior to the Closing
to the extent reasonably available to Seller at that time.
(dd) The foregoing terms of this Section 4.3(c)(iii)
to the contrary notwithstanding, the parties hereto agree that
they will make best efforts to effectuate a final reproration
of Tenant Expense Contributions within twenty (20) days after
Closing. If they are unable to so agree, then the reprorations
obligation set forth in subparagraph (cc) above will be
complied with.
In addition, security deposits, general and special real estate and
other ad valorem taxes and assessments and other state or city taxes, fees,
charges and assessments affecting the Property, prepaid expenses, utility
charges and deposits, if any, and all other customarily proratable items shall
be prorated as of the Proration Date on the basis of the most recent
ascertainable amounts of or other reliable information in respect to each such
item of income and expense and the net credit to Purchaser or Seller shall be
paid in cash or as a credit or debit against the Purchase Price. In no event
shall Seller be charged or responsible for any increase in real estate taxes on
the Property resulting from any improvements made to the Property after the
Proration Date. In the event that any Lease requires the tenant thereunder to
pay any portion of the real estate taxes (upon presentment of the actual tax
bill) the credit in favor of Purchaser for accrued real estate and other
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ad valorem taxes ("Purchaser's Tax Credit") will be reduced by an amount equal
to the aggregate of all such tenants' obligations to pay any portion of
Purchaser's Tax Credit under all such Leases. If any general or special
assessment (as contrasted to ad valorem taxes) is payable in installments,
only the current installment will be prorated and all subsequent installments
will be the obligation of Purchaser. Real estate taxes will be reprorated (and
such reproration will be a final reproration) within thirty (30) days after
Closing, but in any event not later than December 18, 1996 ("Reproration
Date") as follows:
(i) if the assessment for 1996 has been promulgated by the
Assessor for Kane County, Illinois by the Reproration Date,
then the amount of such assessment for 1996, as well as
the equalization factor and tax rate for the 1995 real estate
taxes will be used in calculating such reproration; or
(ii) if the assessment for 1996 is not available by the Reproration
Date, then the real estate taxes will be reprorated based upon
120% of the real estate tax bill for 1995
In either of the foregoing instances Seller, at the
time of reproration, will be entitled to a credit equal to the
aggregate of all tenants' obligations to pay any portion of
such reprorated amount of real estate taxes under the
provisions of the Leases.
(d) Seller shall pay all title charges required to fulfill
the obligations under Section 4.2, one-half (1/2) of the escrow
charges, all survey charges, and the cost of the State and County Transfer Tax
on the Deed. Purchaser shall pay for one-half (1/2) of the escrow charges, the
charges to record the Deed and the cost of the municipalities' Transfer Tax on
the Deed. The parties shall each be solely responsible for the fees and
disbursements of their respective counsel and other professional advisers.
(e) (i) Seller, until the earlier of the Closing Date
or termination of this Agreement, shall not enter into any new Leases
("New Leases") without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld. Purchaser will not be deemed to
have unreasonably withheld its consent to a proposed New Lease if the terms
thereof do not meet the Criterion for New Leases described on Exhibit H
attached hereto.
(ii) In the event Seller enters into a New Lease
after the date of this Agreement, and such New Lease requires
improvements or the payment of brokerage commissions (collectively the "New
Leasing Costs") at the expense of Seller, as landlord, Purchaser by approving
the execution of the New Lease shall, at Closing, assume the obligation to pay
for all unpaid New Leasing Costs. Any New Leasing Costs paid by Seller prior to
Closing, will be reimbursed to Seller by Purchaser at Closing.
(iii) Failure of the Purchaser to consent or express
its objections with specificity in writing within three (3) business
days after a written request for such consent to the execution of a New Lease
by Seller, shall be deemed to constitute consent.
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(iv) Purchaser at Closing will indemnify and
forever defend and hold Seller, its partners, agents, and employees
harmless from any loss, liability, suit, action, judgment or claim as a result
of Purchaser's non-payment of any New Leasing Costs assumed by Purchaser at
Closing.
4.4 ESCROW. Concurrently herewith, the parties, through their
respective attorneys, shall establish a Strict Joint Order Escrow in the form
customarily used by Title Insurer under which the Deposit will be held. If
Purchaser shall not give the Notice to Cancel, then not later than seven (7)
days prior to the Closing Date, but subject in any event to Section 4.5(g), the
Strict Joint Order Escrow will be terminated, and a new escrow will be created
by the parties through their respective attorneys with the Title Insurer at
Title Insurer's office in Chicago, Illinois through which the Deposit will be
held and invested and the transaction shall be Closed. The escrow instructions
shall be in the form customarily used by the escrowee with such special
provisions added thereto as may be required to conform to the provisions of
this Agreement. Said escrow shall be auxiliary to this Agreement and this
Agreement shall not be merged into nor in any manner superseded by said escrow.
4.5 CLOSING.
(a) The Closing of the transaction contemplated hereby
shall commence at 10:00 a.m. (CST) on the Closing Date at the offices of the
Title Insurer in Chicago, Illinois or on such other date, time and place as the
parties may mutually agree.
(b) Not later than the Proration Date, Seller shall
deposit in the escrow the following:
(i) The Deed;
(ii) An assignment of all of Seller's right, title
and interest in and under the Leases and
Service Contracts;
(iii) The Bill of Sale;
(iv) Originals of the Leases and Service Contracts;
(v) Letters to tenants under the Leases advising
that the Property has been sold to Purchaser
and directing payment of rental under the
Leases in accordance with the directions of
Purchaser;
(vi) An ALTA statement in form required by the
Title Insurer;
(vii) An executed FIRPTA Affidavit in customary form;
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(viii) Estoppel Letters in the form prescribed
in the Lease or if no form is prescribed
in the Lease then substantially in the form
of Exhibit F attached hereto from T. J. Maxx,
Pier One, Famous Footwear, Michael's,
Cosmetic Center and from such other tenants
under the Leases which, when added to the gross
leasable area in the Improvements occupied by
the foregoing five named tenants, aggregate not
less than 80% of the total occupied gross
leasable area in the Improvements. If Seller is
unable to procure such Estoppel Letters by the
Proration Date such failure shall not
constitute a default by Seller hereunder and
Purchaser's sole rights hereunder (unless
Seller shall have elected to postpone the
Closing Date pursuant to the following
sentence) will be to terminate this Agreement
and obtain a return of the Deposit or to waive
this condition and Close this Agreement without
diminution of the Purchase Price or any
liability to Seller. Seller may elect by
written notice to Purchaser given not later
than two (2) days prior to the Closing Date, to
postpone the Closing Date (and thereby extend
the Proration Date) by up to thirty (30) days,
in order to attempt to obtain the minimum
required Estoppel Letters from said tenants. If
by the extended Proration Date Seller is not
able to fulfill this condition, Purchaser shall
have the right to select either of the two
foregoing elections.
(ix) Such other documents, instruments,
certifications and confirmations as may
be reasonably required to fully effect and
consummate the transaction contemplated hereby.
(c) Not later than the Proration Date, Purchaser shall
deposit in the escrow the following:
(i) An ALTA statement in form required by the
Title Insurer;
(ii) An assumption of the Leases (including the
obligation to return or apply the
tenants' security deposits under the Leases,
but only to the extent that Purchaser has
received a proration credit at Closing from
Seller for said tenant security deposit or
unapplied portion thereof) and Service
Contracts; and
(iii) Such other documents, instruments,
certifications and confirmations as may
be reasonably required and to fully effect and
consummate the transaction contemplated hereby.
(d) No later than 12:00 noon (EST) on the Closing Date,
Purchaser shall deposit the balance of the Purchase Price as provided in
Section 3.1(b) with the Title Insurer.
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<PAGE> 14
(e) Not later than the Proration Date, Seller and
Purchaser shall jointly deposit in the escrow an agreed proration
statement and certificates complying with the provisions of state, county and
local law applicable to the determination of documentary and transfer taxes.
(f) All documents or other deliveries required to be made by
Purchaser or Seller on or prior to the Proration Date and all deposits and
transactions required to be consummated concurrently with Closing, shall be
deemed to have been delivered and to have been consummated simultaneously with
all other transactions and all other deliveries, and no delivery shall be
deemed to have been made, and no transaction shall be deemed to have been
consummated, until all deliveries required by Purchaser, or its designee, and
Seller shall have been made, and all concurrent or other transactions shall
have been consummated.
(g) At the request of either party, the transaction shall
be closed by means of a so-called "New York Style Closing," with the
concurrent delivery of the documents of title, transfer of interests, delivery
of the title policy described in Section 4.2 and the payment of the Purchase
Price. The Seller shall provide and pay for any necessary undertaking (the "Gap
Undertaking") to the Title Insurer and the charges of the Title Insurer for
such New York Style Closing shall be paid equally by the parties hereto.
(h) In any event, whether the Closing occurs through escrow
or by way of a New York style closing, the parties and their respective
attorneys shall meet with the Title Insurer on or before the Proration Date
(as they shall mutually agree) to make their respective deposits (except for
the balance of the Purchase Price which will be deposited by Purchaser on the
Closing Date, as aforesaid) and approve the proration statement, all as
described in this Section 4.5, to enable the Closing to occur in a prompt
fashion on the Closing Date.
ARTICLE V
BROKERAGE
5.1 BROKERAGE. Seller hereby represents and warrants to Purchaser
that Seller has not dealt with any broker or finder with respect to the
transaction contemplated hereby except for Richard Ellis, L.L.C. ("Brokers")
whose commission shall be paid by Seller at Closing; and Seller hereby agrees
to indemnify Purchaser for any claim for brokerage commission or finder's fee
asserted by Brokers or any other person, firm or corporation claiming to have
been engaged by Seller. Purchaser hereby represents and warrants to Seller that
Purchaser has not dealt with any broker or finder in respect to the transaction
contemplated hereby except for the Brokers and Purchaser hereby agrees to
indemnify Seller for any claim for brokerage commission or finder's fee
asserted by a person, firm or corporation other than the Brokers claiming to
have been engaged by Purchaser.
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ARTICLE VI
DESTRUCTION, DAMAGE OR CONDEMNATION
6.1 DESTRUCTION OR DAMAGE. In the event that prior to the Closing
Date any portion of the Improvements shall be damaged or destroyed by fire or
other casualty, Seller shall immediately give Purchaser notice of such
occurrence. If the amount of damage caused by such fire or casualty shall
exceed $350,000.00 (as determined by an insurance adjuster selected by Seller)
Purchaser may, within fifteen (15) days after receipt of such notice, elect to
(a) terminate this Agreement, in which event the Deposit shall be returned
promptly to Purchaser, all obligations of the parties hereunder shall cease and
this Agreement shall have no further force and effect, or (b) Close the
transaction contemplated hereby as scheduled (except that if the Closing Date
is less than fifteen (15) days following Purchaser's receipt of such notice,
Closing shall be delayed until after Purchaser makes such election), and Seller
shall assign to Purchaser at Closing all rights under Seller's insurance policy
to collect insurance proceeds for such destruction or damage and loss of rents,
and Purchaser shall receive a credit against the Purchase Price equal to the
amount of any deductible under such policy. Failure to give such notice within
such time shall be conclusive evidence that Purchaser has elected the option
contained in subsection (b) of this Section 6.1.
In the event that the amount of damage caused by such fire or casualty
is less than $350,000.00 (as determined by an insurance adjuster selected by
Seller), Purchaser may not elect to terminate this Agreement and shall Close
the transaction contemplated hereby as scheduled, and Seller shall assign to
Purchaser at Closing all rights under Seller's insurance policy to collect
insurance proceeds for such destruction or damage and loss of rents, and
Purchaser shall receive a credit against the Purchase Price equal to the amount
of any deductible under such policy.
6.2 CONDEMNATION. If, subsequent to the date hereof and prior to the
Closing Date, any proceeding, which shall relate to the proposed taking of any
"material" portion of the Real Property or Improvements by condemnation or
eminent domain or any action in the nature of eminent domain, is instituted or
commenced, Purchaser shall have the right and option to terminate this
Agreement by giving Seller written notice to such effect within fifteen (15)
days after actual receipt of written notification of any such occurrence.
Failure to give such notice within such time shall be conclusive evidence that
Purchaser has waived the option to terminate by reason of the occurrence of
which it has received notice. If any such action is instituted or commenced,
and Purchaser elects or is deemed to elect not to terminate this Agreement, at
Closing, Purchaser shall be assigned all Seller's right to any proceeds
therefrom. Seller agrees to furnish Purchaser written notification with respect
to any such proceedings within forty-eight hours of Seller's receipt of any
such notification or learning of the institution of such proceedings. Should
Purchaser elect to so terminate this Agreement, the Deposit shall be returned
promptly to Purchaser and thereupon the parties hereto shall be released from
any and all further obligations hereunder. If the Closing Date is less than
fifteen (15) days following the last day on which Purchaser is entitled to
elect to terminate this Agreement, the closing shall be delayed until after
Purchaser makes such election.
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The term "material" for purposes of this Section 6.2 shall mean any
taking of any portion of the Improvements or any taking of more than ten (10%)
percent of the land area of the Real Estate.
6.3 CASUALTY AND RENT LOSS INSURANCE. If, under the terms of
Section 6.1, Seller is obligated at Closing, to assign to Purchaser all rights
under Seller's insurance policy to collect insurance proceeds for the repair of
any pre-Closing destruction or damage, Seller shall, at Closing, make Purchaser
a loss payee under such insurance policy in order to effectuate such assignment
obligation of Seller and in addition shall make Purchaser a loss payee for any
Loss of Rents insurance coverage relating to any rental loss arising from said
destruction or damage, but relating solely to the period commencing on the
Proration Date and thereafter while such coverage may be in effect and the rent
is abated under any of the Leases as a result of such destruction or damage.
In the event Seller is obligated to make Purchaser a loss payee for any
Loss of Rents insurance coverage pursuant to the preceding paragraph and
Seller's insurance to cover such Loss of Rents for a period of twelve (12)
months from the date of any fire or casualty is not in effect at the time of
Closing, Purchaser, at its election (to be exercised at or prior to Closing by
written notice to Seller) may terminate this Agreement, obtain a return of its
Deposit and thereupon the parties hereto shall be released from any and all
further obligations hereunder.
ARTICLE VII
COVENANTS, REPRESENTATIONS, WARRANTIES
7.1 AFFIRMATIVE COVENANTS OF SELLER.
(a) Seller, at Seller's sole cost and expense, shall until
the earlier of, the Closing Date or termination of this Agreement, keep
and perform or cause to be performed in all material respects: (i) all
obligations of the lessor under the Leases, and (ii) all obligations of Seller
under the Legal Requirements if Seller's failure to perform any of such Legal
Requirements would adversely affect Seller's ability to consummate this
Agreement.
(b) From the date of Seller's acceptance hereof to the
earlier of, the Closing Date or termination of this Agreement, Seller
shall not do, suffer or permit or agree to do any of the following:
(i) Enter into any transaction in respect to or
affecting the Property out of the ordinary course of business;
(ii) Except for Seller's execution of new Leases,
as provided in Section 4.3(e), sell, encumber, or grant any interest in
the Property in any form or manner whatsoever, or otherwise perform or permit
any act which will diminish or otherwise affect Purchaser's interest
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<PAGE> 17
under this Agreement or in the Property, or which will prevent Seller's full
performance of its obligations hereunder.
(c) From the date of Seller's acceptance hereof to the
earlier of the Closing Date or termination of this Agreement, upon
reasonable advance notice from Purchaser (which notice shall be not less than
one business day in advance and shall be two (2) business days in advance if
Purchaser desires to inspect any occupied portions of the Improvements) Seller
shall permit representatives, accountants, agents, employees, lenders,
contractors, appraisers, architects and engineers designated by Purchaser
(collectively "Permittees") access to and entry upon the Property to examine,
inspect, measure and test the Property and access to the office of Seller to
review Seller's books and records relating to the operation thereof. Seller
shall have the right to require that a representative of Seller may accompany
any or all of the Permittees.
If Purchaser desires to conduct any environmental sampling or testing
at the Property (other than a customary Phase 1 Environmental Report which
involves no intrusive testing or sampling), Purchaser shall first provide
Seller with the proposed study plan therefor ("Plan"). The Plan is subject to
the approval of Seller and no environmental sampling or testing shall be
performed until the Plan therefor has been approved by Seller. Purchaser agrees
that Seller may have a representative present at any inspection, sampling or
testing, including, but not limited to, an environmental engineer or consultant
designated by Seller (in connection with any environmental sampling or testing
conducted by Purchaser in accordance with this Section 7(c). At Seller's
request, any sampling or testing by Purchaser's environmental consultant shall
be conducted in a manner so as to provide "split" samples or data to Seller's
environmental consultant.
Purchaser does hereby indemnify and forever defend and hold Seller, its
partners, agents, and employees harmless from any loss, liability, suit, action
judgment, or claim (including, without limitation, any mechanics' liens which
may be filed against the Property) which any of the indemnified parties may
suffer or sustain as a result of the exercise by Purchaser of its rights (and
that of its Permittees) to enter upon the Property or the office of Seller
pursuant to this Section 7.1(c). Prior to any such entry, Purchaser (or its
Permittees) will deliver to Seller a certificate of Commercial General
Liability insurance naming Seller and its partners as additional insured
thereunder in coverage amounts of not less than $1,000,000.00 per occurrence.
If the Closing does not occur for any reason, Purchaser will restore (or cause
to be restored), the Property to its former condition to the extent Purchaser
or its Permittees have altered or damaged the Property in any manner.
(d) Seller shall notify Purchaser promptly if Seller becomes aware
of any transactions or occurrence prior to the Closing Date which would make
any of the representations or warranties of Seller contained in Section 7.2
hereof not true in any material respect.
(e) Any vacant rentable space in the Real Property will be placed
into Rent Ready Condition which is defined to be that all walls are patched and
freshly painted, each space to be demised has a fully-fixtured and operable
bathroom, and all doors have locks and are
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<PAGE> 18
operable, the ceiling is completed with acoustical tile and standard
fluorescent lighting and the floor is in broom-clean condition.
(f) Seller agrees to cooperate with Purchaser's accountants
(at no cost or expense to Seller) relative to the performance by said
accountants of an audit of Seller's books and records relating to the Property.
If Purchaser's auditors shall request Seller to execute a representation letter
addressed to the auditors and Seller and the auditors cannot agree on the
content thereof, Purchaser may terminate this Agreement at any time prior to
the Closing Date by written notice to Seller whereupon Purchaser shall obtain
a return of the Deposit and Seller shall reimburse Purchaser for the actual
costs of Purchaser's appraisal and environmental study to a maximum amount of
$8,500.00 and this Agreement shall become null and void and of no further force
or effect.
7.2 REPRESENTATIONS AND WARRANTIES OF SELLER. To induce Purchaser to
execute, deliver and perform this Agreement, Seller hereby represents and
warrants to Purchaser on and as of the date hereof and on and as of the Closing
Date (except as set forth in any written communication from Seller to Purchaser
given on or prior to the Closing Date and setting forth any changes in such
representations or warranties) as follows:
(a) Seller owns fee simple title to the Real Property.
(b) Exhibit D hereto attached contains a list of all Leases
presently in existence and lists all modifications or amendments to the Leases
known to Seller. The interest of Seller in the Leases and Service Agreements
is free and clear of all liens and encumbrances and has not been assigned to
any other person.
(c) Except for Seller and tenants under the Leases, to Seller's
actual knowledge, there are no persons in possession or occupancy of the Real
Property or Improvements or any part hereof, nor are there any persons who
have possessory rights in respect to the Real Property or Improvements or any
part thereof. Except as may be set forth in the Leases, there are no rights of
first refusal to purchase or options to purchase the Property in favor of any
tenant under the Leases.
(d) Seller has full capacity, right, power and authority to
execute, deliver and perform this Agreement and all documents to be executed by
Seller pursuant hereto, and all required action and approvals therefor have
been duly taken and obtained. This Agreement and all documents to be executed
pursuant hereto by Seller are, and shall be, binding upon Seller.
(e) To Seller's actual knowledge, there are no causes of action
or other litigation pending in respect to the ownership of the Property or any
part thereof or the ownership, enforcement or validity of the Leases except
matters covered by insurance and except for any matters listed on Exhibit G
hereto attached.
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<PAGE> 19
(f) To Seller's actual knowledge, there are no existing
condemnation proceedings of any part of the Real Property, and Seller has not
received written notice from a condemning authority of its intent to condemn any
portion of the Real Property.
(g) To Seller's actual knowledge, Seller has not received
written notice from any Governmental Authority that: the Property is in
violation of any Legal Requirements which have not previously been corrected;
or, any special assessment lien has been, or will be, spread of record.
(h) To Seller's actual knowledge, the Financial Statements
provided by Seller to Purchaser entitled (i) "Springhill Fashion Corner-Phase I
Historical Operating Results" and covering calendar years 1993, 1994 and 1995,
and (ii) "Operating Expenses through July 1996", are each true, accurate and
complete in all material respects.
For purposes of this Agreement, the expression "Seller's actual
knowledge" shall mean the actual knowledge of Neil Davidson, the property
manager of the Property, and Julie Walner, the portfolio manager (collectively
the "Managers") and no knowledge of any employee, agent, or independent
contractor of Seller or Managers shall be imputed to the Managers, nor shall
the Managers be bound to, or obligated to, make or cause to be made any
independent inquiry or investigation relating to the subject matter of any
representation or warranty made to "Seller's actual knowledge."
7.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. To induce Seller to
execute, deliver and perform this Agreement, Purchaser hereby represents and
warrants to Seller on and as of the date hereof and on and as of the Closing
Date as follows:
(a) All representations and warranties of Purchaser appearing
in other Sections of this Agreement are true and correct.
(b) Purchaser has full capacity, right, power and authority to
execute and deliver this Agreement. At Closing, Purchaser's designee, if any,
will have full capacity, right, power, and authority to perform this Agreement
and all documents to be executed by Purchaser pursuant hereto. This Agreement
and all documents to be executed pursuant hereto by Purchaser are and shall be
binding upon Purchaser in accordance with their respective terms.
(c) Purchaser certifies and warrants to Seller that the
purchase of the Property by Purchaser or its designee will not result in a
prohibited transaction under Section 406 of the Employee Retirement Income
Security Act of 1974, Section 4975 of the Internal Revenue Code of 1986, or any
similar state law applicable to governmental plans. Purchaser shall indemnify
and hold Seller harmless from all loss (including reasonable attorneys' fees
and costs) arising out of a breach of the foregoing certification and warranty.
The terms of this Section 7.3(c) shall survive the Closing.
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<PAGE> 20
7.4 COVENANTS OF PURCHASER.
(a) Purchaser shall notify Seller promptly if Purchaser becomes
aware of any transactions or occurrence prior to the Closing Date which would
make any of the representations or warranties of Seller contained in this
Agreement untrue in any material respect.
Purchaser's failure to so notify Seller shall constitute a
waiver by Purchaser of any liability of Seller to Purchaser or its designee
arising from the untruth of any such representations or warranties of Seller
known to Purchaser prior to Closing, it being agreed by the parties hereto that
such representations and warranties known by Purchaser to be untrue at or prior
to Closing, shall not survive Closing.
(b) Purchaser acknowledges and agrees that the sale of the
Property is made on an "AS IS, WHERE-IS WITH ALL FAULTS" basis and, except as
specifically set forth in Section 7.2, without representations or warranties of
any kind or nature, express, implied or otherwise, including, but not limited
to, any representation or warranty made by the Brokers or any representation or
warranty concerning zoning, financial, environmental, or physical condition of
the Property, or any income, expenses, charges, liens, encumbrances, rights,
claims on or affecting or pertaining to the Property. Purchaser acknowledges
that if it elects to purchase the Property, it will be doing so predicated
upon its own independent investigations, the investigations of its Permittees
and the representations and warranties of the Sellers expressly made herein or
in any other document executed and delivered by Seller to Purchaser at Closing
as described in Section 4.5(b). Purchaser hereby waives any and all claims
which may currently exist or which may arise in the future, by contract,
common law or statute currently in effect, as amended or subsequently enacted,
and which relate to the Property or environmental conditions on, under, or
near the Property and are not the direct result of a default of this Agreement
by Seller, in which latter event Purchaser's remedies shall be limited for any
such default prior to Closing to the provisions of Section 8.1(b) and for any
default discovered after Closing to the provisions of Section 10.3.
(c) Purchaser acknowledges and agrees that except as provided
in Section 4.3(d), nothing in this Agreement shall be deemed to preclude or
prohibit Seller from operating, managing, leasing (including terminating any
Lease for breach by the tenant) and repairing the Property in the same manner
as the same was operated, managed, leased, and repaired prior to execution
hereof. Seller will not voluntarily terminate any of the Leases prior to their
expiration date without Purchaser's written approval which will not be
unreasonably withheld or unduly delayed.
(d) Purchaser agrees that it will not attempt to contact any of
the tenants of the Property (whether by telephone, correspondence, or in person)
until such time, if ever, as the Inspection Period shall have expired and
Purchaser has not given Seller a Notice to Cancel. Thereafter, Purchaser may
contact any of the tenants so long as it shall first notify Seller and give
Seller the opportunity to review any written communication with any of the
tenants or to be present at any personal meeting with the tenants, as
applicable.
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ARTICLE VIII
DEFAULT, CONDITIONS PRECEDENT AND TERMINATION
8.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AND DEFAULT BY SELLER.
(a) The obligation of Purchaser to close the transaction
contemplated hereby is, at Purchaser's option, subject to Purchaser's review
and approval of: the Leases, Service Contracts, the environmental and
structural condition of the Property, the Title Commitment, and such market
research, inspection of the Property, determinations as to the Property's
compliance with the Legal Requirements and review of financial statements
relating to the Property, as Purchaser deems necessary to make its final
determination to acquire the Property. Purchaser shall have until 5:00 p.m.
(CST) October 18, 1996 ("Inspection Period") within which to make such reviews
and approve the same. If, by the conclusion of the Inspection Period,
Purchaser has not given Seller written notice ("Notice to Cancel") that it
intends to cancel this Agreement it will be conclusively presumed that
Purchaser has approved the matters described in this paragraph 8.l(a) and
has determined to acquire the Property. Purchaser will then have a period
of seven (7) days after the expiration of the Inspection Period within which
to obtain the approval by its Board of Directors of the acquisition of the
Property pursuant to the terms hereof. If on or before the conclusion of the
Inspection Period Purchaser has given the Notice To Cancel, or if it has not
given the Notice to Cancel but notifies Seller within seven (7) days after the
expiration of the Inspection Period that it did not obtain Board of Directors'
approval, the Deposit will be paid to Purchaser and this Agreement will be
terminated and become null and void except for Purchaser's obligations under
paragraph 7.1(c) which will survive such termination.
If Purchaser shall not have given a Notice to Cancel within the time
aforesaid, the Deposit shall be non-refundable except as set forth in Sections
8.1(b), 6.1 and 6.2.
(b) The obligation of Purchaser to Close the transaction
contemplated hereby is, at Purchaser's option, further subject to all material
representations and warranties of Seller contained in this Agreement being
true and correct in every material respect at and as of the Closing Date and
all material obligations of Seller to have been performed on or before the
Closing Date having been timely and duly performed. If the condition
precedents to Purchaser's obligation to Close as described in Sections 4.1,
4.2, and 4.5(b)(viii) have not occurred on or prior to the times required
therein (subject to Seller's extension rights under Section 4.5(b)(viii)).
Purchaser shall have only the following options to be exercised by written
notice to Seller prior to the Closing Date: (i) to terminate this Agreement,
obtain a return of the Deposit and thereafter this Agreement shall be null and
void, or (ii) to waive such conditions and Close this Agreement on the Closing
Date without diminution of the Purchase Price. If Seller shall be in default
of its obligation under this Agreement (in contrast to Seller's inability to
perform any of the conditions precedent described above and elsewhere in this
Agreement which shall not constitute a default), Purchaser shall have only the
following options as its sole and exclusive remedy for said default to be
exercised by written notice to Seller on or prior to Closing Date: (aa) to
terminate this Agreement and obtain a return of the Deposit, whereupon this
Agreement shall become null and void and of
-18-
<PAGE> 22
no further force or effect, except that if the default of Seller shall be of
such a nature as to be willful and wanton in conduct, then Purchaser also
shall be entitled to receive from Seller the sum of $75,000 as and for full,
final and agreed upon liquidated damages (the parties hereto hereby
acknowledge that the amount of such damages are otherwise incapable of
ascertainment) or (bb) to obtain a return of the Deposit and seek specific
performance of this Agreement. If Purchaser does not file suit for Specific
Performance within six (6) months of Seller's alleged default, it will be
conclusively presumed that Purchaser has elected the option set forth in
Section 8.1(b)(aa). Purchaser's failure to give such written notice on or
prior to the time described above, shall be conclusive evidence that all such
conditions precedent to Purchaser's obligations to Close have been satisfied.
If this Agreement is terminated pursuant to this Section 8.1(b), the Deposit
shall promptly be returned to Purchaser, and all other funds and documents
theretofore delivered hereunder or deposited in escrow by either party shall
be promptly returned to such party. The rights and remedies granted to the
Purchaser in this Section 8.1(b) are the sole rights and remedies available to
the Purchaser in the event of Seller's default of its obligations under this
Agreement and Purchaser hereby waives any other rights it may have at law
(including claims for any tortious conduct it may allege against Seller) or in
equity.
8.2 CONDITIONS TO SELLER'S OBLIGATIONS AND DEFAULT BY PURCHASER. The
obligation of Seller to Close the transaction contemplated hereby is, at
Seller's option, conditioned upon Purchaser's representations and warranties
contained in this Agreement being true and correct in every material respect at
and as of the Closing Date, and upon fulfillment by Purchaser of all
obligations of Purchaser which were to have been performed on or before the
Closing Date having been timely and duly performed. If any condition precedent
to Closing of Seller as set forth in this Section 8.2 has not been fulfilled
and satisfied on or before the Closing Date, Seller may, by notice to
Purchaser, elect at any time thereafter to terminate this Agreement, and if
such termination is due to Purchaser's fault, Seller shall be entitled to
retain the Deposit as full and complete liquidated damages (and not as a
penalty or forfeiture) in lieu of any and all other legal and equitable rights
which Seller may have hereunder, and all other funds and documents theretofore
delivered hereunder or deposited in escrow by either party shall be promptly
returned to such party. Upon such termination and retention of the Deposit by
Seller, except as set forth in the last sentence of the first grammatical
paragraph of Section 10.3 hereof, this Agreement shall become null and void and
of no further force or effect.
ARTICLE IX
NOTICES
9.1 NOTICES. Any notice, request, demand, instrument or other
document to be given or served hereunder shall be in writing and shall be
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, or by overnight express courier, or by facsimile
transmission and addressed to the parties at their respective addresses set
forth below, and the same shall be effective upon receipt if delivered
personally or two (2) business days after deposit in the mails, if mailed, or
upon receipt if deposited with an overnight express courier or
-19-
<PAGE> 23
sent by facsimile transmission. A party may change its address or facsimile
transmission number for receipt of notices by service of a notice of such
change in accordance herewith.
If to Seller:
c/o JMB Realty Corporation
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Julie Walner
Facsimile Number: (312) 915-2310
with copies to:
Richard Ellis, L.L.C.
Attention: Stanley Warnick
Three First National Plaza
Chicago, Illinois 60602
Facsimile Number: (312) 899-0923
and to:
Robert W. Newman, Esq.
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, Illinois 60606-1229
Facsimile Number: (312) 201-2555
If to Purchaser:
Inland Real Estate Corporation
2901 Butterfield Road
Oak Brook, Illinois 60521
Attention: Robert D. Parks, President
Facsimile Number: (630) 218-4935
with a copy to:
The Inland Group, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60521
Attention: Sam Orticelli, Esq.
Facsimile Number: (630) 218-4900
-20-
<PAGE> 24
ARTICLE X
ADDITIONAL COVENANTS
10.1 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement contains
the entire agreement and understanding of the parties with respect to the
subject matter hereof, and the same may not be amended, modified or discharged
nor may any of its terms be waived except by an instrument in writing signed by
the party to be bound thereby.
10.2 FURTHER ASSURANCES. The parties each agree to do, execute,
acknowledge and deliver all such further acts, instruments and assurances and
to take all such further action before or after the Closing as shall be
necessary or desirable to fully carry out this Agreement and to fully
consummate and effect the transaction contemplated hereby.
10.3 SURVIVAL AND BENEFIT. Only those agreements, covenants,
indemnifications, and obligations of the parties hereunder set forth in
Sections 4.3(b), 5.l, 7.l(c), 7.l(d), 7.4(b), and the representations and
warranties of Purchaser set forth in Section 7.3 shall survive the Closing and
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. The indemnifications set forth in Sections 5.l and
7.l(c) shall survive termination of this Agreement prior to Closing.
Subject to the provisions of the second paragraph of Section 7.4(a):
(i) the representations and warranties of Seller, as contained in this
Agreement shall survive the Closing only as hereinafter set forth and (ii) any
liability of Seller to Purchaser based upon any inaccuracy of Seller's
representations and warranties contained in this Agreement shall expire without
notice from or to any party hereto (including Purchaser's designee) unless:
(a) Purchaser (or its designee) shall give written notice to
Seller within three (3) months after the Closing Date that any of such
representations and warranties were inaccurate in any material respect,
specifying in detail the nature of any such inaccuracy and certifying to
Seller that Purchaser and its designee and Permittees were not aware of such
inaccuracy at the time of the Closing; and
(b) Purchaser (or its designee) shall commence legal
proceedings against Seller for damages suffered as a result of the inaccuracy
specified in such notice given to Seller (pursuant to (a) above) within six (6)
months after the Closing Date.
Notwithstanding anything herein to the contrary, and subject to the
provisions of Section 10.7 hereof, the maximum amount of liability of Seller
for any agreements, indemnification, obligations, representations, and
warranties which shall survive the Closing shall be $400,000.00, including any
costs of litigation which Purchaser or its designee may incur to enforce such
post-closing obligations or liabilities of Seller.
-21-
<PAGE> 25
10.4 NO THIRD PARTY BENEFITS. This Agreement may not be assigned by
Purchaser. However, not earlier than two (2) days prior to the Proration Date,
Purchaser may nominate in writing a land trust as to which Purchaser is the
sole beneficiary to accept title to the Property. Such nomination by Purchaser
will not absolve or release Purchaser from liability under this Agreement
whether prior to or subsequent to Closing. This Agreement is for the sole and
exclusive benefit of the parties hereto and the designee of Purchaser and no
third party is intended to or shall have any rights hereunder.
10.5 NO RECORDING. The Purchaser agrees not to record this Agreement or
any short form, memorandum, or notice thereof in any public or governmental
office.
10.6 INTERPRETATION.
(a) The headings and captions herein are inserted for convenient
reference only and the same shall not limit or construe the paragraphs or
Sections to which they apply or otherwise affect the interpretation hereof.
(b) The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms shall refer to this Agreement, and the term
"hereafter" shall mean after and the term "heretofore" shall mean before, the
date of this Agreement.
(c) Words of the masculine, feminine or neuter gender shall
mean and include the correlative words of other genders and words importing the
singular number shall mean and include the plural number and vice versa.
(d) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other
legal entities, including public bodies, as well as natural persons.
(e) The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
(f) Whenever under the terms of this Agreement the time for
performance of a covenant or condition or the last day to give notice falls
upon a Saturday, Sunday or holiday (whether in the United States or Canada),
such time for performance shall be extended to the next business day. Otherwise
all references herein to "day" shall mean calendar days.
(g) This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
(h) In any action to enforce any of the terms of this
Agreement, the prevailing party shall be entitled to recover its expenses,
including reasonable attorneys fees and costs of litigation, including those in
any appellate proceedings.
-22-
<PAGE> 26
(i) Time is of the essence of this Agreement.
(j) This Agreement and any document or instrument executed
pursuant hereto may be executed in any number of counterparts each of which
shall be deemed an original, but all of which together shall constitute the same
instrument.
10.7 SELLER'S EXCULPATION. Notwithstanding anything herein to the
contrary, in the event of a default hereunder by Seller prior to or at Closing,
neither Seller nor any direct or indirect partner (whether general or limited)
of Seller, nor any shareholder of any partner, nor any director, officer,
employee, agent, shareholder, trustee or beneficiary of any of them shall have
any liability hereunder or in connection therewith, and Purchaser's sole and
exclusive remedies are as set forth in Section 8.1(b) hereof. In the event
that Purchaser (or its designee) discovers, after Closing, that Seller has
breached any of the representations and warranties made by Seller in this
Agreement, they shall be limited to resort against the assets of Seller only,
under Section 10.3 hereof and no direct or indirect partner (whether general or
limited) of Seller, nor any shareholder of any partner, nor any director,
officer, employee, agent, shareholder, trustee, or beneficiary of any of them
shall be liable to Purchaser or its designee in connection with such claimed
breach of representation or warranty. For purposes of the foregoing, neither
the negative capital account of any partner of Seller nor any obligation of any
partner of Seller to restore a negative capital account or to contribute
capital to Seller or to any partner of Seller, shall at any time be deemed to
be the property or an asset of Seller or any partner of Seller (and neither
Purchaser nor any of its successors or assigns shall have any right to collect,
enforce or proceed against or with respect to any such negative account or a
partner's obligation to restore the same or contribute capital to Seller or a
partner of Seller).
-23-
<PAGE> 27
10.8 EFFECTIVE DATE. Wherever herein contained the expression "date
hereof" is used it shall be deemed to mean the date that Seller has accepted
this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Seller and Purchaser on the respective dates set forth beneath each of their
signatures and is intended to be effective as of the latest such date.
PURCHASER:
INLAND REAL ESTATE CORPORATION
By: Roberto S. Matlen
----------------------------
Its: Vice President
------------------------
Dated: October 14, 1996.
SELLER:
JMB/SPRING HILL ASSOCIATES,
an Illinois general partnership
By: JMB Mortgage Partners,
Ltd.-III,
an Illinois limited
partnership,
general partner
By: JMB REALTY CORPORATION,
an Illinois corporation,
corporate general partner
By:
---------------------------
Its:
-----------------------
Date of Seller's Acceptance:
October __, 1996.
Newman\JMB\Springhl.K4
10-11-96
-24-
<PAGE> 28
10.8 EFFECTIVE DATE. Wherever herein contained the expression "date
hereof" is used it shall be deemed to mean the date that Seller has accepted
this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Seller and Purchaser on the respective dates set forth beneath each of their
signatures and is intended to be effective as of the latest such date.
PURCHASER:
INLAND REAL ESTATE CORPORATION
By:
--------------------------------
Its:
----------------------------
Dated: October , 1996.
SELLER:
JMB/SPRING HILL ASSOCIATES, an Illinois
general partnership
By: JMB Mortgage Partners, Ltd.-III,
an Illinois limited partnership,
general partner
By: JMB REALTY CORPORATION,
an Illinois corporation,
corporate general partner
By: Julie Walker
----------------------------------
Its: Vice President
-----------------------------
Date of Seller's Acceptance:
October 14, 1996.
Newman\JMB\Springhl.K4
10-11-96
-24-
<PAGE> 29
EXHIBIT A
Legal Description of Real Property
PARCEL ONE:
LOTS 1, AND 3 IN SPRING HILL FASHION CORNER, BEING A RESUBDIVISION OF LOTS 5,
6, 7, 8 AND 9 OF THE PLAT OF SPRING HILL SOUTHEAST AND UNSUBDIVIDED LANDS IN
THE SOUTHWEST QUARTER OF SECTION 22, TOWNSHIP 42 NORTH, RANGE 8, EAST OF THE
THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED NOVEMBER 21,
1984 AS DOCUMENT 1702859 IN KANE COUNTY, ILLINOIS.
PARCEL TWO:
EASEMENT CREATING A MEANS OF DRAINAGE OF SURFACE WATER FOR THE BENEFIT OF
PARCEL ONE AS SET FORTH IN EASEMENT AGREEMENT DATED OCTOBER 26, 1984 AND
RECORDED OCTOBER 30, 1984, AS DOCUMENT NUMBER 1700606 GRANTED BY HOMART
DEVELOPMENT CO., A DELAWARE CORPORATION IN FAVOR OF SPRING HILL ASSOCIATES, AN
OHIO GENERAL PARTNERSHIP OVER THE STORM DRAINAGE ROUTING DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT, DEFINED AS THE INTERSECTION OF THE CENTER LINE OF
ENTRANCE ROAD B OF SPRING HILL MALL AND THE NORTHERN R.O.W. LINE OF STATE
HIGHWAY 72; THENCE, NORTHERLY ALONG SAID CENTERLINE OF ENTRANCE ROAD B A
DISTANCE OF 260 FEET TO A POINT; THENCE EASTERLY 40 FEET TO AN EXISTING STORM
SEWER MANHOLE; THENCE EAST 17 FEET ALONG A 36 INCH CMP TO THE WEST PROPERTY
LINE OF LOT NUMBER 9 OF SPRING HILL SOUTHEAST SUBDIVISION, TO THE TRUE POINT
OF BEGINNING; THENCE WEST 17 FEET ALONG THE 30 INCH CMP TO THE AFOREMENTIONED
STORM SEWER MANHOLE; THENCE WESTERLY 162 FEET ALONG AN EXISTING 36 INCH CMP TO
AN OUTFALL STRUCTURE IN THE SPRING HILL MALL DETENTION POND; THENCE TO THE
AFOREMENTIONED DETENTION POND.
PARCEL THREE:
ACCESS EASEMENT OVER, ACROSS AND UPON THAT PORTION OF THE SOUTHWEST QUARTER OF
SECTION 22, TOWNSHIP 42 NORTH, RANGE 8, EAST OF THE THIRD PRINCIPAL MERIDIAN
KNOWN AS "RING ROAD" AS DESCRIBED AS DELINEATED ON EXHIBIT "B" ATTACHED TO
AND FORMING A PART OF THE OPERATING AGREEMENT RECORDED APRIL 27, 1981 AS
DOCUMENT 1575014, IN THE OFFICE OF THE RECORDER OF DEEDS, KANE COUNTY,
ILLINOIS.
PARCEL FOUR:
EASEMENT FOR PARKING AND INGRESS AND EGRESS ON, OVER AND THROUGH LOTS 1, 2, 3
AND 4 OF SPRING HILL FASHION CORNER, AS MORE FULLY DESCRIBED IN PARCEL ONE
ABOVE, AS CREATED BY DECLARATION OF COMMON AREA INGRESS-EGRESS AND PARKING
EASEMENT RECORDED OCTOBER 30, 1984 AS DOCUMENT 1700608, IN THE OFFICE OF THE
RECORDER OF DEEDS, KANE COUNTY, ILLINOIS.
<PAGE> 30
EXHIBIT B
Permitted Title Exceptions
[To be approved by Purchaser's counsel on or before October 18, 1996 at
the time of the expiration of the Inspection Period]
<PAGE> 31
EXHIBIT C
List of Personal Property
NONE
<PAGE> 32
EXHIBIT D
LEASES
1. LED'S CORPORATION, d/b/a Travel Agents International:
Lease dated August 3, 1994
Rider to Lease dated July 27, 1994
2. PIER 1 IMPORTS:
Lease dated July 16, 1986
Agreement dated September 2, 1986
3. BLUE JAY VENTURES INC., d/b/a Celebration Center:
Lease dated August 8, 1994
4. PAMELA SEVERSON TURNER, d/b/a Play It Again Sam:
Lease dated October 19, 1994
5. FUNCO INC., d/b/a Funcoland:
Lease dated November 18, 1993
Addendum to Lease dated November 18, 1993
6. TOM TANG AND MICHAEL WANG d/b/a China Palace:
Lease dated November 15, 1988
First Amendment to Lease dated July 25, 1993
7. JENNY CRAIG WEIGHT LOSS CENTRES, INC.:
Lease dated June 30, 1988
First Amendment to Lease dated August 14, 1993
Exhibit D - Page 1 of 3
<PAGE> 33
EXHIBIT D
LEASES - PAGE 2
8. FTB, INC., d/b/a Let's Learn:
Lease dated November 14, 1995
9. SALLY BEAUTY COMPANY INC.:
Lease dated April 22, 1986
Lease Addendum dated February 24, 1993
Lease Rider dated February 24, 1993
10. RICHARD KUBERSKI d/b/a Wild Birds Unlimited
Lease dated October 25, 1995
11. WOHL SHOE COMPANY, d/b/a Famous Footwear
Lease dated May 3, 1985
Rider dated May 3, 1985
Tenant's Rider dated May 3, 1985
Amendment To Be Executed
12. THE TJX COMPANIES INC., d/b/a TJ MAX:
Lease dated September 14, 1984
Memorandum of Lease dated September 14, 1984
Letter dated February 16, 1995 Exercising Option
13. MICHAELS STORES, INC.:
Lease dated March 12, 1996
Letter dated April 1, 1996 re: Satellite Antenna
Exhibit D - Page 2 of 3
<PAGE> 34
EXHIBIT D
LEASES - PAGE 3
14. UNITED RETAIL INCORPORATED, d/b/a Sizes Unlimited:
Lease dated June 13, 1985
Lease Extension and Amendment Agreement dated October 20, 1995
15. SLS MUSIC, INC., d/b/a Music Go Round:
Lease dated June 13, 1996
16. ENCORE APPAREL CORPORATION, d/b/a Once Upon A Child:
Lease dated February 26, 1996
17. SANJUANA M. DIAZ AND GERARDO DIAZ, d/b/a Fantastic Sams
Lease dated August 22, 1995
18. ADAM MICHAEL COSMETICS, INC., d/b/a Cosmetic Center
Lease dated August 6, 1992
Lease Amendment dated September 29, 1995
Exhibit D - Page 3 of 3
<PAGE> 35
EXHIBIT E
List of Service Contracts
1. Browning-Ferris Industries of Illinois, Inc.
Dated May 17, 1995
Commencing June 1, 1995 and ending May 31, 1996
2. Williams Awning Co.
Dated January I5, 1996
3. Mike Cork Plumbing & Engineering
Dated April 1996
4. Tecza Brothers, Inc.
Dated July 26, l995
5. Climate Service, Inc.
Dated July 30, 1996
<PAGE> 36
EXHIBIT F
TENANT ESTOPPEL LETTER
TENANT ESTOPPEL CERTIFICATE
To: Inland Real Estate Corporation
2901 Butterfield Road
Oak Brook, Illinois 60521
Re: Lease Dated: (the "Lease")
-----------------------------------
Tenant: ("Tenant")
----------------------------------------
Landlord: ("Landlord")
--------------------------------------
Common Address of Building:
--------------------
(the "Building")
-----------------------------------------------
Leased Premises within the Building: (the "Premises")
-----------
Tenant acknowledges that (a) Inland Real Estate Corporation
("Purchaser") has entered into a contract (the "Purchase Agreement") with the
Landlord as Seller to purchase the Building and the land on which the Building
is located, and (b) The Purchase Agreement requires that Landlord obtain this
certificate from Tenant and deliver same to Purchaser as a condition to
Purchaser's obligations under the Purchase Agreement. Accordingly, Tenant
hereby certifies and confirms to Purchaser and acknowledges and agrees as
follows:
1. Tenant is in full and complete possession of the Premises demised
under the Lease, such possession having been delivered by the Landlord
pursuant to the Lease and having been accepted by the Tenant.
2. The improvements to the Premises that Landlord is required to furnish
under the Lease have been completed in all respects to the
satisfaction of Tenant, and the Premises are open for the use of
Tenant, its customers, employees and invitees. All contributions
required to be paid by Landlord to Tenant in connection with
improvements to the Premises have been paid in full.
3. All duties or obligations of Landlord required under the Lease which
were an inducement to Tenant to enter into the Lease have been
fully performed.
4. The Lease is in full force and effect. No default exists on the part
of Landlord or Tenant under the Lease, nor does any
circumstance currently exist that, but for the giving of notice or the
passage of time, or both, would be such a default. The Lease
constitutes the entire rental agreement between Landlord and Tenant
with respect to the Premises and has not been amended, modified,
supplemented or superseded. A true and correct copy of the Lease
(including all amendments thereto) is attached to this Certificate.
Exhibit F - Page 1 of 3
<PAGE> 37
5. No rents under the Lease have been prepaid, except the current month's
rent. Tenant agrees that it shall not prepay any rents under
the Lease more than one month from the date when such rents are due.
Tenant does not now have or hold any claim or defense against Landlord
which might be set off or credited against future accruing rents or
which might otherwise excuse Tenant's performance under the Lease.
6. Tenant has received no notice of a prior sale, transfer, assignment,
hypothecation or pledge of the Lease or of the rents required
thereunder.
7. Tenant does not have any outstanding options or rights of first
refusal to purchase the Premises, or any part thereof, or to
purchase or lease any other part of the Building.
8. No actions, whether voluntary or involuntary, are pending
against Tenant or any guarantor of the Lease under any bankruptcy,
insolvency or similar laws of the United States or any state thereof.
9. The term of the Lease commenced on the ____ day of __________, 19__ and
ends on the ____ day of __________, ____, subject to options to renew,
if any, set forth in the Lease.
10. The current base monthly rental required under the Lease is
$________, and the Lease requires Tenant to pay its prorata share of
real estate taxes and common area expenses for the Building and the
land on which the Building is located.
11. The security deposit under the Lease is currently $___________.
12. Purchaser will rely on the representations and agreements
made by Tenant herein in connection with the performance by Purchaser
of its obligations under the Purchase Agreement and Tenant agrees that
Purchaser may so rely on such representations and agreements.
Executed this ____ day of September, 1996.
Tenant:
-------------------------------
-------------------------------
By:
----------------------------
Print Name:
--------------------
Title:
-------------------------
Exhibit F - Page 2 of 3
<PAGE> 38
EXHIBIT A
COPY OF LEASE
[TO BE ATTACHED BY TENANT]
Exhibit F - Page 3 of 3
<PAGE> 39
EXHIBIT G
List of Pending Litigation
NONE
<PAGE> 40
EXHIBIT H
CRITERIA FOR NEW LEASES
- Term shall be not less than three years but not more than ten
years
- Base rent shall be at market rates
- Landlord's obligation to pay for tenant improvements shall not
exceed ten dollars ($10.00) per square foot
- Landlord's obligation to pay for brokerage commission shall
not exceed four dollars and fifty cents ($4.50) per square foot
- The lease shall provide that the use to be made of the demised
premises shall not violate any covenants in any of the other
leases at the center, nor shall it violate any zoning or
other municipal ordinance
- The net worth of the tenant shall be at least ten times the
annual base rent required under the lease
<PAGE> 1
EXHIBIT 10.2
FIRST AMENDMENT TO AGREEMENT TO PURCHASE
THIS FIRST AMENDMENT TO AGREEMENT TO PURCHASE ("Amendment") is made as
of this 29th day of October, 1996, by and between JMB/Spring Hill Associates, an
Illinois general partnership ("Seller") and Inland Real Estate Corporation, a
Maryland corporation, ("Purchaser").
RECITALS:
A. Seller and Purchaser have previously executed that
certain Agreement to Purchase dated October 14, 1996
("Agreement");
B. On October 18, 1996, Purchaser gave its "Notice to
Cancel" pursuant to the terms of Paragraph 8.1 (a)
of the Agreement;
C. In consideration of a reduction in the
Purchase Price by Seller and for other consideration
set forth in this Amendment, the parties do hereby
desire to vitiate the Notice to Cancel and to reinstate
the terms of the Agreement in full, except to the
extent modified by this Amendment;
D. All terms defined in the Agreement shall
have the same meanings when used in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Amendment and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:
1. The Notice to Cancel dated October 18, 1996, from
Purchaser to Seller is hereby vitiated, and the
Agreement is hereby reinstated in full except to the
extent amended hereby;
2. A new definitional term is hereby added to
Article I of the Agreement and shall read as follows:
"PIER 1 LEASE: That certain Lease to
be executed by
Seller, as Landlord,
and Pier 1 Imports,
Inc. as Tenant, and
containing the Fixed
Minimum Rent,
Percentage Rent and
other financial terms
set forth on Exhibit A
attached to this
Amendment;"
<PAGE> 2
3. The definition of "Closing Date", as set forth in the Agreement is
hereby deleted and in lieu thereof, the following is hereby substituted:
"Three (3) business days after execution of the Pier 1 Lease
and delivery of a copy thereof to Purchaser, subject to
extension to December 23, 1996, pursuant to Section
4.5(b)(viii) hereof, and pursuant to Section 4.2 hereof."
4. If the Pier 1 Lease is not executed by December 20, 1996, in
substantially the same form as used in the existing Lease
between Seller and Pier 1 Imports, Inc., then this Agreement shall be
and become null and void and of no further force or effect, except as
set forth in paragraph 7.1(c) and the Deposit will forthwith be
returned to Purchaser;
5. The Purchase Price set forth in paragraph 3.1 of the Agreement is hereby
changed to "9,200,000.00";
6. Purchaser acknowledges receipt of the Survey and Title Commitment and
Purchaser's comments thereon are contained in that certain letter dated
October 22, 1996, from Samuel A. Orticelli, counsel to Purchaser, and
addressed to Robert W. Newman, counsel to Seller. The ten (10) day
period of time that Seller shall have to attempt to cure the
matters set forth in the October 22, 1996, letter shall commence from
and after the date that this Amendment is executed;
7. Paragraph 4.3(c)(iii)(dd) shall be modified such that the parties will
make best efforts to effect a final reproration of Tenant Expense
Contributions not later than December 27, 1996, or such earlier date
after Closing as Seller shall direct in writing to Purchaser, provided
that such notice from Seller shall be accompanied by Seller's
reproration calculations, and Purchaser shall have not less than two
(2) business days to review and comment upon same;
8. The "Reproration Date", as defined on page 8 of the Agreement, shall be
redefined as follows:
"Real estate taxes will be reprorated (and such
reproration will be a final reproration) not later than
December 27, 1996, or such earlier date after Closing as Seller
shall direct in a written notice to Purchaser ("Reproration
Date") as follows:"
9. Purchaser acknowledges that the Inspection Period has expired and that
Purchaser has approved the matters described in paragraph 8.1(a) of the
Agreement and has determined to acquire the Property. In addition,
Purchaser
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<PAGE> 3
acknowledges that it has obtained the approval of its
Board of Directors to acquire the Property, and that condition,
as contained in paragraph 8.1(a) is acknowledged by Purchaser
to be satisfied.
10. This Amendment and any document or instrument
executed pursuant hereto may be executed in any number of
counterparts, each of which shall be deemed an original, and
all of which together shall constitute the same instrument.
In all other respects, the Agreement remains unmodified and in full force and
effect.
PURCHASER:
INLAND REAL ESTATE CORPORATION
By:
-------------------------------------
Its: Authorized Agent
----------------------------
SELLER:
JMB/SPRING HILL ASSOCIATES, an
Illinois general partnership
By: JMB Mortgage Partners, Ltd.-III,
an Illinois limited
partnership, general partner
By: JMB REALTY CORPORATION, an
Illinois corporation,
corporate general partner
By:
-------------------------------------
Its:
----------------------------
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<PAGE> 4
acknowledges that it has obtained the approval of its
Board of Directors to acquire the Property, and that condition,
as contained in paragraph 8.1(a) is acknowledged by Purchaser
to be satisfied.
10. This Amendment and any document or instrument
executed pursuant hereto may be executed in any number of
counterparts, each of which shall be deemed an original, and
all of which together shall constitute the same instrument.
In all other respects, the Agreement remains unmodified and in full force and
effect.
PURCHASER:
INLAND REAL ESTATE CORPORATION
By:
-----------------------------
Its:
---------------------
SELLER:
JMB/SPRING HILL ASSOCIATES, an
Illinois general partnership
By: JMB Mortgage Partners, Ltd.-III,
an Illinois
limited partnership,
general partner
By: JMB REALTY CORPORATION,
an Illinois corporation,
corporate general
partner
By: Julie Walker
----------------------------
Its: Vice President
---------------------
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<PAGE> 5
Pier One: xls
URBAN RETAIL PROPERTIES CO. New Lease _______
TENANT COMMITMENT REPORT (TCR) Renewal Lease ___X___
Extension _______
================================================================================
SUBMITTED BY: Edgar Cepuritis DATE: 6/19/96 OFFICE: Chicago
CENTER: Spring Hill Fashion Corner
PREMISES: SPACE #: 100 SQUARE FT: 8,487 LEVEL: ______
TENANT:
TRADE NAME: Pier One
LEGAL NAME TO APPEAR ON LEASE
(i.e. ENTITY THAT IS SIGNING THE LEASE): Pier One, Inc.
STATE OF INCORPORATION Delaware
ADDRESS: 301 Commerce Street
Ft. Worth, TX 76102
_________________________________
IS TENANT A FRANCHISEE? _____ __X__
YES NO
DOES THE TENANT ENTITY LISTED ABOVE (TO APPEAR ON LEASE) HAVE SUFFICIENT NET
WORTH TO FULFILL ALL OBLIGATIONS UNDER THE LEASE?
__X__ _____ (IF NO, FILL OUT
YES NO SECTION BELOW)
GUARANTOR:
LEGAL NAME TO APPEAR ON LEASE (i.e. ENTITY
THAT IS GUARANTEEING THE LEASE): _________________________________
STATE OF INCORPORATION: _________________________________
ADDRESS: _________________________________
_________________________________
_________________________________
PERIOD: (x) Term OR ______________yrs.
Note: Explain if less than the full term: _________________________
___________________________________________________________________
FINANCIAL STATEMENT SUBMISSION:
TENANT ENTITY: ( ) n/a - I am requiring a Guarantor (see below).
( ) financials attached.
(X) financials on file . . . this is a national tenant.
GUARANTOR: ( ) there is not a Guarantor because the tenant entity has
a sufficient net worth.
( ) financials attached.
( ) financials on file . . . this is a national tenant.
NOTE: FINANCIALS MUST BE INCLUDED FOR ALL NON-NATIONAL TENANTS!
TENANT HISTORY:
________ New tenant to this center; OR
________ Relocation, Tenant's lease of space _________ expires _________; OR
________ Early renewal, tenant's lease expires _________________________; OR
___X____ Renewal (Lease expires one day before the new commencement date)
PROJECTED DELIVERY DATE: ___________________________________________
TENANT COMMENCEMENT DATE: 4/1/97
LEASE TERM: 5 YEARS, FROM 4/1/97 TO 3/31/02
SECURITY DEPOSIT: ____________________
RADIUS RESTRICTION: ____________________ miles
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EXHIBIT A
<PAGE> 6
PERMITTED USE: The retail sale of imported and domestic giftware,
housewares, home furnishings and accessories, novelties,
decorator items, packaged gourmet foods, packaged
candies, adult clothing (But no more than 30% of the
square footage of the premises shall be used for the
sale of adult clothing) and related items.
THE SQUARE FOOTAGE USED TO CALCULATE RENT AND CHARGES IS: 8,487 SQ. FT.
( x ) This is the same square footage as found on page one.
( ) This square footage differs from that on page one. See
"explanation" section below.
FIXED MINIMUM RENT:
Years 1 Monthly $9,194.25 Annually $ 110,331.00 P.S.F $13.00
Years 2 Monthly $9,547.88 Annually $ 114,572.50 P.S.F $13.50
Years 3 Monthly $9,901.50 Annually $ 118,818.00 P.S.F $14.00
Years 4 Monthly $10,255.13 Annually $ 123,061.50 P.S.F $14.50
Years 5 Monthly $10,608.75 Annually $ 127,305.00 P.S.F $15.00
PERCENTAGE RENT:
Years 1 5 % of Gross Sales over $3,206,620.00 per year ( $ %)
Years 2 5 % of Gross Sales over $2,291,490.00 per year ( $ %)
Years 3 5 % of Gross Sales over $2,376,360.00 per year ( $ %)
Years 4 5 % of Gross Sales over $2,461,230.00 per year ( $ %)
Years 5 5 % of Gross Sales over $2,546,100.00 per year ( $ %)
OPTION:
Years 6 Monthly $10,962.38 Annually $ 131,548.30 P.S.F $15.50
Years 7 Monthly $11,316.00 Annually $ 135,792.00 P.S.F $16.00
Years 8 Monthly $11,669.63 Annually $ 140,035.50 P.S.F $16.50
Years 9 Monthly $12,023.25 Annually $ 144,279.00 P.S.F $17.00
Years 10 Monthly $12,376.88 Annually $ 148,522.50 P.S.F $17.50
OPTION PERCENTAGE RENT:
Years 6 5 % of Gross Sales over $2,630,970.00 per year ( $ %)
Years 7 5 % of Gross Sales over $2,715,840.00 per year ( $ %)
Years 8 5 % of Gross Sales over $2,800,710.00 per year ( $ %)
Years 9 5 % of Gross Sales over $2,885,580.00 per year ( $ %)
Years 10 5 % of Gross Sales over $2,970,450.00 per year ( $ %)
ADDITIONAL CHARGES:
__X___ Full pro rata to be paid; current estimated charges are: $2.99
______ Full pro rata to be paid: estimated charges for the next lease
year are not yet available, currently charges are:
______ This is a gross deal (complete "Explanation Section").
Negotiated charges have been adjusted as follows:
Common Area Maint.: Monthly $1,011.37 Annually $12,136.41 P.S.F. $1.43
(estimated, includes insurance)
Real Estate Taxes: Monthly $ 749.69 Annually $8,996.22 P.S.F. $1.06
(estimated)
Promotion Fund/ Monthly $ 353.63 Annually $4,243.50 P.S.F. $ 0.50
Merchant's Assoc.: (estimated)
Media Fund: Monthly $0.00 Annually $0.00 P.S.F. $ -
Utilities: Monthly $0.00 Annually $0.00 P.S.F. $ -
(trash removal supplied by Landlord)
Utilities: Monthly $0.00 Annually $0.00 P.S.F. $ -
(water supplied by Landlord)
Utilities: Monthly $0.00 Annually $0.00 P.S.F. $ -
(electricity supplied by Landlord)
Sprinkler Charge: Monthly $0.00 Annually $0.00 P.S.F. $ -
(estimated)
All HVAC: Monthly $0.00 Annually $0.00 P.S.F. $ -
(estimated)
Other: Monthly $0.00 Annually $0.00 P.S.F. $ -
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Pier One: xls
OTHER CHARGES/CONTRIBUTIONS: __________________________________________________
________________________________________________________________________________
________________________________________________________________________________
EXPLANATION: _________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
STATUS OF NEW SPACE(S): (Please mark each category that applies)
_____ Reconfiguration (Please use Special Provision Section to elaborate)
_____ Raw Space, space number(s) _______________________________________; OR
_____ Vacant (Landlord has legal possession, free and clear); OR
_____ Leased - Tenant in possession.
Tenant under the tradename _______________________is in space no. 2001.
Their Lease expires ________________________________________. However,
Landlord has the right to terminate Lease on ______ days notice; or
their lease will be terminated effective ___________________. The
termination request is:
( ) Attached ( ) Previously Submitted ( ) Not applicable
Additional Space (if applicable)
Tenant under the tradename ________________________is in space no. ____
their Lease expires ________________________________________; or
Landlord has the right to terminate Lease on ______ days notice; or
their lease will be terminated effective ___________________. The
termination request is:
( ) Attached ( ) Previously Submitted ( ) Not applicable
PLEASE NOTE: The TCR will not be processed until the termination request has
been approved. If the termination request is not attached, please
explain under "Special Provisions".
CONSTRUCTION PROVISIONS:
Premises shall be delivered to tenant in "as is", "where is" condition.
Tenant's initial work shall include:
No new work.
Tenant shall complete their work by: None
Landlord shall perform the following work: No work
For an estimated cost (attached), not to exceed: $____-_____
TENANT ALLOWANCE:
Landlord's Work: $____-_____
Cash: $____-_____ (To be paid after Tenant opens for
business and has satisfied Landlord's
standard requirements)
Abatement: $____-_____ (Minimum rent only)
(If based on months, how many months? 0
Total: $____-_____
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Pier One: xls
SPECIAL PROVISIONS: ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
MAILING INSTRUCTIONS:
Send Leases to (x) Tenant: Diane Blagg Telephone 817/878-8079
Fax 817/878/7888
Send Leases to ( ) Tenant's Rep: ________________ Telephone _______________
Firm: ________________ Fax _______________
Address: ________________
________________
Send Tenant Package to: ________________ (specify if different from
Firm: ________________ Tenant)
Address: ________________ Telephone ________________
________________ Fax ________________
________________
This letter of intent is not intended to be an enforceable contract, but only
an indication of the understanding of the undersigned with respect to the
matter herein set forth so that both parties may proceed to the negotiation,
preparation and execution of a formal lease agreement. It is understood that a
formal lease is a prerequisite to the creation of any enforceable contract
between the parties, and that such lease may contain additional terms to be
mutually agreed upon which may only be evidenced by the execution and delivery
of said lease by both parties thereto.
VERBALLY APPROVED:
Tenant: _______________________________________________________________
By: _______________________________________________________________
Its: _______________________________________________________________
Date: _______________________________________________________________
APPROVED:
URBAN RETAIL PROPERTIES CO.
a Delaware Corporation
By: ???????
Its: Senior Vice President
Date: 6/20/96
FINANCIAL STATEMENT REVIEW (To be completed by Ross Glickman);
_______ I have reviewed and approved the tenant's (and/or guarantor's)
financial statement(s).
___X___ OK to finalize execution and delivery of lease without further
verification of Tenant's financial condition. (applies to
national tenants only)
APPROVED: URBAN RETAIL PROPERTIES CO.
a Delaware Corporation
By: ???????
Its: Executive Vice President/National Leasing Director
Date: 6/24/96
cc Portfolio Manager
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Pier One: xls
URBAN REVIEW OF NEGOTIATIONS
FOR INTERNAL USE ONLY
Please mark whether the following items have been discussed:
not discussed discussed, comments
discussed denied
Floating:
commencement date: _________ _________ _________________________
Opening co-tenancies: _________ _________ _________________________
Optional renewals: _________ _________ _________________________
Use clause: _________ _________ _________________________
Exclusives: _________ _________ _________________________
Remedies for
breach of exclusive: _________ _________ _________________________
Operating co-tenancy: _________ _________ _________________________
Remedies (go dark,
% rent, termination): _________ _________ _________________________
Special hours: _________ _________ _________________________
Right to close for
specified holidays: _________ _________ _________________________
Cap on center expenses: _________ _________ _________________________
Cap on promo fund: _________ _________ _________________________
Cap on media: _________ _________ _________________________
Tenant audit rights: _________ _________ _________________________
Term of the guaranty: _________ _________ _________________________
Special exclusions
from gross sales: _________ _________ _________________________
Chargebacks by
Landlord: _________ _________ _________________________
Radius Restriction: _________ _________ _________________________
Other:
____________________ _________ _________ _________________________
Other:
____________________ _________ _________ _________________________
Comments: ________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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[graphic shows map of Spring Hill Fashion Corner
West Dundee, Illinois 60116]
100 Pier One Imports
200 The Great Frame Up
210 Travel Agents Int'l
220 China Palace
230
240 Wild Birds Unlimited
245 Let's Learn
300 Michael's
400 Fantastic Sam's
405 Jenny Craig
410 Sizes Unlimited
420 Sally Beauty
430
440
450 Once Upon A Child
500 TJ Maxx
600 Play it Again Sports
610 Funcoland
620 Cosmetic Center
640 Celebration Center
660 Famous Footwear
