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EXHIBIT 10.5
Purchase Agreement for Salem Square
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EXHIBIT 10.5
REAL ESTATE SALE AND
PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made this 11th day of July, 1996, by
and between Salem Square, Ltd., an Illinois limited partnership ("Salem"), and
American National Bank and Trust Company of Chicago, not individually but as
Trustee under a Trust Agreement dated March 1, 1983 and known as Trust Xx.
00000 ("Xxxxx") (Xxxxx and Trust are hereinafter sometimes collectively
referred to as "Seller") and Inland Monthly Income Fund III, Inc., a Maryland
corporation ("Purchaser")
WITNESSETH:
Whereas, the Trust is the fee owner of certain real estate with the
approximate lot size of 9.95 acres located at the southeast xxxxx of Plainfield
Road and Xxxxxxxx Avenue in Countryside, Illinois, which is improved with a
shopping center containing approximately 112,310 square feet and which shopping
center is known as the Salem Square Shopping Center ("Center") (the real estate
and Center are hereinafter sometimes collectively referred to as the "Real
Property"), which Real Property is legally described on Exhibit A attached
hereto and made a part hereof;
Whereas, Salem is the sole beneficiary of the Trust; and
Whereas, Purchaser desires to purchase such Real Property, and Seller
desires to sell, transfer and convey said Real Property to Purchaser, upon the
terms and conditions as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants, representations, undertakings and agreement set forth herein, and
for the sum of Ten Dollars ($10.00) and other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, Seller and
Purchaser hereby agree as follows:
1. AGREEMENT OF SALE AND PURCHASE. Seller does hereby agree to
sell, transfer and convey to Purchaser, and Purchaser does hereby agree to
purchase from Seller: (a) the Real Property, and any and all other improvements
thereon, together with any and all easements, tenements, privileges, rights and
appurtenances thereto; and (b) all fixtures and electrical, plumbing and HVAC
equipment and systems, and equipment located on the Property and used in the
operation and maintenance thereof ("Personalty"). The Real Property and the
Personalty are sometimes collectively referred to as the "Property".
The Property expressly includes: (i) all of Seller's right, title and
interest in and to any land lying in any adjacent or adjoining street, road or
avenue; (ii) the use of all strips and rights of-way, if any, abutting,
adjacent, contiguous to or adjoining the Property; and (iii) all of Seller's
right, title and interest as lessor in and to all leases (together with all
guarantees by third
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parties of the obligations of the tenants thereunder).
2. Purchase Price: Payments.
a. Purchase Price. The purchase price ("Purchase
Price") shall be Six Million Two Hundred Thirty Thousand and No/100 Dollars
($6,230,000). In the event Purchaser requests an extension of the Closing
Date, the Purchase Price shall be increased (to reflect Seller's loss of the
use of funds) by $30,000 for each 30-day period or part thereof.
x. Xxxxxxx Money. Purchaser has delivered to Seller a
check payable to Chicago Title and Trust Company ("Escrowee") in the amount of
$100,000 as xxxxxxx money. Purchaser and Seller shall deliver the check to the
Escrowee to be held as xxxxxxx money, pursuant to the terms of a joint order
escrow. Purchaser shall have the right to cause Escrowee to invest such
xxxxxxx money in an interest bearing account. (The xxxxxxx money and any
interest earned thereon is collectively referred to as the "Xxxxxxx Money").
c. Payment. At Closing, the Xxxxxxx Money shall be
applied against the Purchase Price and Purchaser shall pay the balance of the
Purchase Price, plus or minus applicable prorations (Closing").
3. CLOSING. The Closing shall be on July 31, 1996 or as may be
extended pursuant to Paragraph 5d, unless any other date is mutually agreed
upon by Purchaser and Seller ("Closing Date"), at the office of the Title
Company specified below.
4. PURCHASER'S CONTINGENCIES.
a. Information Documents. On or before July 19, 1996,
Seller shall deliver to Purchaser the following documents (to the extent not
previously delivered):
(1) Copies of all existing leases or tenancies
covering any portion of the Real Property;
(2) Financial statements (including profit and
loss statements) of the operations of the Property for the present calendar
year and each of the preceding two calendar years;
(3) Copies of any other contracts, licenses, or
agreements which will be binding upon the Property or upon Purchaser at and
after the Closing, together with copies of any and all insurance policies,
insurance certificates and invoices for current insurance premiums;
(4) Copies of any and all existing architectural
plans, drawings and specifications for the Center and other improvements on the
Real Property which Seller has in its possession;
(5) Real estate tax bills affecting any portion
of the Real Property for
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the previous two calendar years, together with any and all notices of proposed
or final changes in assessed valuation with respect to the Property received
during the present year;
(6) A copy of Seller's title policy (with the
insurance amount redacted therefrom) which insured Seller's interest in the
Property, along with copies of any recorded documents reflected therein;
(7) A copy of Seller's survey of the Real
Property; and
(8) A list of the personalty, if any, being sold
by Seller pursuant to this Agreement.
(9) Copies of any notices received since January,
1994 from the City of Countryside in which the City asserted any zoning or
building code violations (it being understood that any such notices received by
Seller during its ownership of the Property are maintained in its files which
Purchaser may inspect pursuant to Xxxxxxxxx 0x hereof).
(10) Copies of the environmental indemnity
agreements by and between Seller and Amoco Oil Company and Emro Marketing
Company, respectively.
All of the foregoing documents taken together are sometimes referred to
hereinafter as the "Information Documents". When Seller has delivered the last
of the Information Documents, Seller shall certify to Purchaser that all of the
Information Documents have been delivered, that Information Documents delivered
pursuant to subparagraphs (1) and (2) above are true, accurate and complete,
and that Information Documents delivered pursuant to subparagraphs (3) - (9)
above are to the best of Seller's knowledge true, accurate and complete, along
with a list of the Information Documents furnished.
b. Approval. This Agreement is subject to the condition
that Purchaser shall have until July 26, 1996 to approve the Information
Documents. If within such period, Purchaser notifies Seller that Purchaser
does not approve the Information Documents, this Agreement shall, at the option
of Purchaser, terminate and the Xxxxxxx Money shall be returned to Purchaser
and, thereupon, neither party shall have any further obligation or liability to
the other. Purchaser's failure to notify Seller on or before July 26, 1996
shall be deemed to be Purchaser's approval of the Information Documents and
this condition shall be deemed satisfied.
c. Purchaser's Access: Feasibility. Upon reasonable
advance notice to Seller, Purchaser, and its agents, contractors, invitees,
architects, engineers and consultants may inspect the Property at such times
that Seller reasonably determines does not interfere with tenants' use of the
Property. Purchaser shall have the right, at its sole cost and expense, to
perform or cause to be performed upon the Property such engineering tests on
the physical condition of the Center and environmental tests on the Property as
may be deemed appropriate by Purchaser. In addition, upon reasonable advance
notice to Seller, Purchaser may (between the hours of 9:30 a.m. and 5:00 p.m.,
Monday through Friday) have access to, and inspect, any and all of Seller's
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files regarding the Property including but not limited to any and all
correspondence files and any and all tenant files. Such access and inspection
shall be conducted at Seller's office.
If, prior to July 26, 1996, Purchaser is not, in its sole and
absolute discretion, satisfied with the tests and reports, or with the physical
condition of the Property, or with its inspection of Seller's files regarding
the Property, then Purchaser may: (i) terminate this Agreement by written
notice to Seller, in which event the Xxxxxxx Money shall be returned to
Purchaser and, thereupon, neither party shall have any further obligation or
liability to the other; or (ii) waive its right to terminate this Agreement
pursuant to this subparagraph 4c. In the absence of such written notice from
Purchaser on or before July 26, 1996, Purchaser shall be deemed to have waived
its right to terminate this Agreement under this subparagraph 4c. If Purchaser
terminates this Agreement, then provided Seller pays to Purchaser one-half of
the cost of such tests, studies and reports, Purchaser shall deliver to Seller
copies of all tests, studies and reports which Purchaser has received in
connection with the Property, and this obligation shall survive this
Agreement's termination. Purchaser shall not cause or permit any liens to
attach to the Property as a result of Purchaser's acts hereunder.
d. Indemnity. In connection with tests or inspections
of the Property by Purchaser, or its agents, employees or contractors,
Purchaser shall indemnify, defend and hold harmless Seller and its partners,
officers, employees or agents from and against any lien, claim, suit, loss,
cost, expense (including reasonable attorneys' fees), personal injury, damage
or action arising from any activities of Purchaser, its agents, contractors or
engineers on the Property. If this Agreement is terminated or Purchaser does
not the consummate Closing, Purchaser at its sole cost shall be responsible for
restoring the Property to substantially the same condition that existed prior
to the performance of such tests or inspections. Notwithstanding anything to
the contrary herein, the indemnification obligations of Purchaser under this
Paragraph shall survive the Closing or any termination of this Agreement, and
Purchaser's obligation to restore the Property shall survive any termination of
this Agreement.
5. Conveyance. Title Insurance and Survey.
a. Conveyance. At Closing, good title to the
Real Property shall be conveyed to Purchaser, or Purchaser's nominee, by
warranty or Trustee's deed ("Deed"), free and clear of any and all liens,
encumbrances, conditions, easements, assessments and restrictions, except for
any Permitted Exceptions as deemed in Exhibit B attached hereto and made a part
hereof. The leases and tenancies set forth in the summary schedule of leases
attached hereto as Exhibit C, and any new leases entered into by Seller in
accordance with the terms hereof, shall be deemed Permitted Exceptions.
Ownership of Personalty shall be transferred by a warranty Xxxx of Sale
(excluding warranties of quality, merchantability or fitness) free and clear of
all security interests, liens and encumbrances.
b. Title Commitment. On or before July 19,
1996, Seller shall deliver to Purchaser a Chicago Title Insurance Company (or
another mutually acceptable title insurance company) ("Title Company")
commitment for title insurance ("Title Commitment") for an
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owner's ALTA Form B title insurance policy ("Owner's Title Policy") together
with copies of all recorded instruments indicated in the Title Commitment,
subject only to (i) the Permitted Exceptions, and (ii) title exceptions
pertaining to liens or encumbrances of a definite or ascertainable amount which
may be removed (or at the election of Seller, insured over by the Title
Company) by payment of money at the time of closing and which Seller may so
remove (or insure over) at that time by using all or a portion of the Purchase
Price. At Closing, the Owner's Title Policy shall include an extended coverage
endorsement, a 3.1 zoning endorsement (including parking) and a restrictions
endorsement insuring that the improvements on the Real Property and the use
thereof do not violate restrictive covenants, if any.
c. Survey. Seller shall, at least seven (7)
days prior to Closing, at its sole cost and expense, deliver to Purchaser a
current staked and spotted survey of the Property prepared by a duly licensed
land surveyor in accordance with ALTA standards showing all improvements, all
building and setback lines, easements and rights-of-way ("Survey"). The Survey
shall be certified to the Purchaser, the Purchaser's mortgagee, if any, and the
Title Company that it is correct and that there are no encroachments over
boundary lines, easements or building lines. The Survey also shall show the
number of parking spaces contained within the Property.
d. Unpermitted Exceptions. Survey Defects. In
the event the Title Commitment or Survey discloses either title exceptions
which are not Permitted Exceptions ("Unpermitted Exceptions"), or any
unpermitted encroachments over boundary lines, easements or building lines
("Survey Defects"), Purchaser shall have two (2) days from the date of delivery
of the Title Commitment or Survey, as the case may be, to object to such
Unpermitted Exceptions and/or Survey Defects by notifying Seller of such
Unpermitted Exceptions or Survey Defects. If Purchaser objects to such
Unpermitted Exceptions and/or Survey Defects within such two (2) day period,
then Seller shall have three (3) days from the date of Purchaser's objection to
have such Unpermitted Exceptions removed from the Title Commitment or to
correct such Survey Defects or to have the Title Company commit to insure by
its customary form of endorsement against loss or damage that may be occasioned
by such Unpermitted Exceptions or Survey Defects. If Seller fails to have such
Unpermitted Exceptions removed or such Survey Defects corrected, or in the
alternative, to obtain the commitment for title insurance specified above as to
such Unpermitted Exceptions or Survey Defects within such three (3) day period,
then Purchaser shall elect, by notice to Seller within one (1) day after the
expiration of the three (3) period, either: (i) to take title as it then is, or
(ii) to terminate this Agreement. If Purchaser does not so elect within such
time period, Purchaser shall be deemed to have elected (i) above and the
parties shall proceed to Closing. The Closing Date shall be extended until
five (5) days following expiration of any applicable time periods contained
herein. Matters which are not objected to by Purchaser within the two (2) day
period following the delivery of the Title Commitment or Survey, shall be
deemed to be "Permitted Exceptions".
6. REPRESENTATIONS AND WARRANTIES
a. Sellers' Representations. Seller represents
and warrants to
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Purchaser as follows:
(1) Salem has the requisite power and authority
to execute this Agreement and to consummate the transaction contemplated
hereby; it is the sole beneficiary of the Trust and is duly authorized to
direct the Trust to consummate this transaction.
(2) Salem is the owner of the Personalty.
(3) To the best of Seller's knowledge, all of the
documents furnished by Seller to Purchaser are true, authentic, correct, full
and complete and to the best of Seller's knowledge, all of the Information
Documents to be furnished by Seller to Purchaser shall be true, authentic,
correct, full and complete.
(4) To the best of Seller's knowledge, there is
no threatened or pending suit or litigation against the Property, or against
Seller that would result in a lien against the Real Property or impose any
liability upon Purchaser after Closing.
(5) There are no options or rights in any party
(including without limitation any tenants under any lease) to purchase, or
acquire any fee ownership interest in the Property, and Seller shall not grant
any such options or rights prior to Closing.
(6) All work, if any, required to be performed
prior to the Closing Date by landlord under any lease will be performed and
fully paid for.
(7) Exhibit C contains a true, correct and
complete list of all of the leases or tenancies, rents, expiration dates and
security deposits, of any portion of the Center as of the date hereof, and
except as expressly noted on Exhibit C none of the leases, or tenancies contain
any options for renewal, extension or purchase and (i) no tenant is in default
under any of the leases; (ii) no tenant has any claim for any offset or
reduction of rent by reason of any advance payment or rent concession; and
(iii) to the best of Seller's knowledge, Seller is not in default under any of
the leases. Notwithstanding the foregoing, Seller disclosed to Purchaser that
TJX asserts that it is being overcharged for certain common area maintenance
expenses in connection with premiums paid by Seller for liability insurance
relating to TJX's premises and TJX has not paid for its prorate share of
Seller's insurance premium allocated to liability insurance for its premises.
(8) To the best of Seller's knowledge, there is
no pending or threatened condemnation, special assessment or special taxing
district, or similar type proceeding or matter, affecting the Property, or any
part thereof, nor to the best of Seller's knowledge is any such proceeding,
assessment or special taxing district contemplated by any governmental
authority.
(9) To the Seller's best knowledge and belief,
based solely on the environmental report dated December 20, 1994 prepared by
Environmental Design International, Inc. as supplemented by letter dated
January 30, 1995 (collectively "Environmental Report") and
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except as disclosed therein, there are no hazardous or toxic materials, wastes,
substances or pollutants located anywhere on the Property or within the Center
or improvements, the presence, use or removal of which is either regulated,
controlled, limited, prohibited or required to be reported by any local, state
or federal environmental or pollution control laws, regulations or ordinances
("Toxic Materials"). The Environmental Report states that there were leaking
underground storage tanks at the Amoco station located at 5620 Xxxxxxxx and the
Speedway station located at 5555 X. Xxxxxxxx. In the event that prior to
Closing, Toxic Materials are determined to be located on or within the Property
from a source other than the Amoco or Speedway station (whether or not Seller
had any knowledge of their presence), then notwithstanding any other provisions
contained in this Agreement to the contrary, Purchaser may as its sole and
exclusive remedy either: (i) proceed to close the transaction contemplated
herein; or (ii) terminate this Agreement in which case the Xxxxxxx Money shall
be paid to Purchaser.
(10) Neither the Property nor the transaction
contemplated in this Agreement is subject to the Illinois Responsible Party
Transfer Act, 765 ILCS 90/1 et seq.
(11) All of the representations and warranties
made by Seller in subparagraphs 6a and fib, or elsewhere in this Agreement,
shall merge into the Deed at the Closing, except that the representations and
warranties made by Seller in subparagraphs 6a(1) and 6a(2) shall survive
Closing and the representations and warranties made by Seller in subparagraphs
6a(3)-(6) and 6a(8) shall survive for a period of 180 days following the
Closing Date and expire thereafter. Purchaser shall have the right to bring an
action based on any material breach of such surviving representations and
warranties provided that written notice of such breach is given to Seller
within such 180 day period.
b. Condition Of Property. Purchaser represents to
Seller that Purchaser knows, has examined or will examine, and has investigated
or will investigate to its full satisfaction, the physical nature and condition
of the Property including all improvements, fixtures and appurtenances attached
thereto, and any Personalty to be transferred to Purchaser hereunder. Except
as set forth in subparagraph 6b(1) below, neither Salem nor any agent,
attorney, employee or representative of Salem has made any representation
whatsoever regarding the subject matter of this sale, including (without
limiting the generality of the foregoing) representations as to the physical
nature or condition of the soil, the Center or the Personalty transferred to
Purchaser hereunder, or the fitness of the Property for Purchaser's uses.
Purchaser agrees to take the Property in a strict "as is" condition as of the
date hereof, reasonable wear and tear excepted. Seller has received a notice
from the Pleasantview Fire Department advising Seller that the water pressure
to the Center was inadequate for the sprinkler system and that a new water main
must be installed. The Fire Department has also speculated that the water
pressure at the two fire hydrants in front of the Center may be inadequate but
that, to the extent that a problem exists, it may also be solved by utilizing
the new water main.
(1) Seller represents and warrants to Purchaser that,
except as set forth in paragraph 6(b) above, to the best of Seller's knowledge
it has not, and its employees or Cloverleaf Investments as its property manager
(collectively "Employees" and "Cloverleaf") have
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not, received any notice from any governmental agency or from any tenant which
notice advised Salem, or its Employees or Cloverleaf, that there were any
Material Defects in the physical condition of the Property which Material
Defects have not been remedied by Seller. For the purposes hereof, "Material
Defect" means a condition to the Property which such governmental agency or
tenant, as the case may be, advised Salem, or its Employees or Cloverleaf, to
repair pursuant to any applicable law, statue, rule, regulation (in the case of
a governmental agency) or lease (in the case of a tenant) and that the cost of
such repair would expeed $10,000.
(2) Notwithstanding anything contained in this Agreement
to the contrary, in the event of Seller's breach of its warranty contained in
subparagraph 6b(1) above, Purchaser may as its sole and exclusive remedy for
such breach of Seller's warrant either: (i) proceed to close the transaction
contemplated herein; or (ii) terminate this Agreement in which case the Xxxxxxx
Money shall be paid to Purchaser. Neither the foregoing statement of
Purchaser's sole and exclusive remedy, nor the merger of the warranty contained
in paragraph 6b(1) into the Deed at Closing shall be deemed to limit in any way
the rights and remedies that Purchaser may have against Seller which may arise
in the event of Seller's fraudulent failure to disclose a Material Defect.
C. Operations Pending Closing. From and after the date
hereof, Seller shall:
(1) not make or enter into any tenancy or lease,
or renewal or extension thereof which extends beyond the Closing Date without
first obtaining Purchaser's prior written consent which shall not be
unreasonably withheld, and Seller shall not cancel, modify or amend any
existing lease or tenancy without first obtaining Purchaser's prior written
consent which shall not be unreasonably withheld; provided, however, that Seller
may, without such consent: (i) extend or renew any existing lease or tenancy, or
fill any vacancy, at a rent not less than the prevailing rent for a term not
longer than month-to-month and (ii) make or enter into any tenancy or lease for
all 3742 square foot space currently leased by Kids Mart ("Kids Mart Space")
provided that the rental rate for such space is the same rental rate (or higher)
as the rate paid by Kids Mart ($9.60 per square foot net) or if leased to Dress
Barn that Seller may extend the existing Dress Barn lease and set a blended
rental rate for all Dress Barn space to a blended rate not less than $ll.54 per
square foot net. All leasing commissions attributable to any new lease or such
lease amendment shall be allocated between Seller and Purchaser as follows:
Seller shall pay for the cost of leasing commission incurred for such lease
multiplied by the fraction 1500/3742, but Seller's liability shall not exceed
$5,250. Purchaser shall pay the balance. By way of example: If the cost of the
commission is $30,000 for a 5 year lease Seller shall pay ($30,000 x 1500/3742
= $12,025.65) which shall be reduced to $5,250 because of the maximum amount of
Seller's liability. Seller's failure to lease the Kids Mart space shall not be
a condition of closing, and Purchaser shall remain obligated to close in
accordance with the terms hereof.
(2) be responsible for the collection of all
rents and accrued liabilities of tenants due on or before, or applicable to the
period prior to, the Closing Date; and
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(3) continue to make or cause to be made ordinary
repairs, replacements and maintenance and maintain the Center and the Property
in its present condition until Closing, normal wear and tear excepted; and
continue to maintain all casualty, hazard and liability insurance currently in
force with respect to the Property. In addition to the foregoing, Seller
agrees to install a new water main to provide adequate water pressure for the
Center's sprinkler system pursuant to plans dated July 3, 1996 prepared by
Xxxxxxx & Associates, Inc. for its project number 95103 ("Plans"). In the
event that the installation of the water main is not completed on or before
Closing, the amount remaining unpaid under Seller's contract for the
installation of such water main shall be retained in escrow at the title
company for payment to Seller's contractor. Seller represents and warrants
that the Fire Department's requirements as to the adequacy of water pressure
for the Center's sprinkler system will be satisfied by installation of the
water main in accordance with the Plans.
7. RENT GUARANTY
a. Salem's Guaranty. In the event that, as of
the Closing Date, Seller has not leased the Kids Mart Space whereby rent is
being paid for such space as of closing, then Salem shall guaranty a portion of
the rent and a portion of commissions related to leasing such space in
accordance with the provisions of this Paragraph 7.
b. Amount of Salem's Rent Guaranty, Payment,
Proration. The amount of Salem's rent guaranty shall not exceed $20,700
($13.80 per square foot for 1500 square feet of the Kids Mart Space for 12
months) ("Salem's Guaranty"). Salem's Guaranty shall be inclusive of any rent
abatement or concessions given for such space in accordance with subparagraph
7(d) hereof. The amount of Salem's Guaranty shall be paid to Purchaser in
installments, with the first such installment being paid in the form of a
credit to Purchaser at Closing. The amount of such credit shall be calculated
by dividing Salem's Guaranty by 365 and multiplying the quotient by the number
of days in the month of Closing during which Purchaser will own the Property.
The remaining installments shall be paid to Purchaser monthly on the first day
of each month following the month in which the Closing occurs, and shall be in
the amount of Salem's Guaranty divided by 12, provided however that the final
installment shall be prorated accordingly. A credit shall be given to
Purchaser at Closing for that portion of the month during which the Closing
occurs for which period the Property will be owned by Purchaser.
c. Credit Against Rent Guaranty. Salem shall
receive a credit against its obligation to pay Salem's Guaranty as set forth
herein for all rent received by Purchaser for space in the Kids Mart Space
(including both base rent and pass thrus), except that Salem guarantees that
Purchaser shall receive at least $13.80 for each square foot of Kids Mart
Space.
d. Purchaser's Efforts. Purchaser shall make
good faith efforts to lease all of the Kids Mart Space at market rates and at
other market terms and conditions. Leasing commissions attributable to leasing
all of the Kids Mart Space and the cost of any tenant improvements required to
be made to the Kids Mart Space shall be allocated between Seller and
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Purchaser as follows: Seller shall pay for the cost of leasing commission
incurred for such lease multiplied by the fraction 1500/3742 but Seller's
liability shall not exceed $5,250. Purchaser shall pay the balance. By way of
example: If there are 266 days remaining on the Rent Guaranty; and the
commission is $30,000, then Seller shall pay ($30,000 x 1500/3742) = $12,025.65
which shall be reduced to $5,250 because of the maximum amount of Seller's
liability. As part of its Rent Guaranty, Seller shall be responsible for any
rent concessions granted under any lease of the Kids Mart Space for an amount
not to exceed two months rent but such responsibility shall be included within
the Rent Guaranty and not in addition thereto. Neither party shall be obligated
to pay for or contribute to the cost of tenant improvements. Seller's payment of
its share of the leasing commission shall be in addition to, and not a part of,
the Rent Guaranty.
e. Termination. Salem's Guaranty shall: (i) terminate
in full upon 365 days following the Closing Date; and (ii) terminate for the
portion of the monthly amount guaranteed which Purchaser is entitled to receive
from a new tenant of the last 1500 square feet of Kids Mart Space provided that
the rent obligation for the new tenant in the Kids Mart Space (or portion
thereof) has commenced and a month's base rent has been paid, provided further,
however, that in the event Purchaser grants a rent concession which abates rent
for more than the initial two months of the new lease term, then such tenant
shall be deemed to have paid rent on the first day of the third month of the
new lease. Notwithstanding anything contained in this Agreement to the
contrary, the obligations contained in this Paragraph 7 shall not merge into
the Deed and shall survive the Closing.
f. Escrow. An escrow shall be established at the Title
Company for the mutual benefit of the parties to secure the obligations under
this Paragraph 7, which escrow shall contain provisions necessary to conform
with the terms hereof and provide among other things that each monthly payment,
if any, to be made in accordance with the terms hereof shall be made directly
to Purchaser and any amounts to be credited against the Rent Guaranty in
accordance with the terms hereof, shall be immediately paid to Seller. The
amount equal to $13.80 multiplied by the certified square footage of unleased
Kids Mart Space (not to exceed 1500 square feet) shall be deposited in the
escrow by Salem. Upon termination of the Rent Guaranty, all remaining funds in
the escrow, in the case of a full termination, and all funds not necessary to
secure Salem's remaining obligations hereunder, in the case of a partial
termination, shall be paid to Seller. The escrow shall provide that Seller
shall have the right to cause all funds deposited by it to be invested with
Purchaser's consent (which may not be unreasonably withheld) for the Seller's
benefit. The cost of such investments) shall be paid by Seller. The cost of
the escrow shall be shared equally by the parties.
8. ESCROW CLOSING. DOCUMENTS; PRORATIONS.
a. Escrow. This sale shall be closed through an escrow
in accordance with the general provisions of the usual form of Deed and Money
Escrow Agreement then in use by the Escrowee, with such special provisions
inserted in the escrow agreement as may be required to conform with the terms of
this Agreement. The escrow shall provide that Purchaser shall have the right to
cause all funds deposited by it to be invested with Seller's consent (which may
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not be unreasonably withheld) for Purchaser's benefit, pending the Closing.
Upon the creation of such an escrow, anything herein to the contrary
notwithstanding, payment of the balance of the Purchase Price and delivery of
the deed shall be made through the escrow.
b. Seller's Closing Documents. At the Closing, Seller
shall deliver to Purchaser any and all documents reasonably required to
consummate the transaction contemplated hereunder, which documents shall
include, without limitation:
(1) A later-date of the Title Commitment covering the
recording of the Deed, together with Seller's customary ALTA statement, which
Title Commitment shall provide for the issuance of the Owner's Title Policy for
an amount of title insurance equal to the Purchase Price.
(2) The Deed conveying the Real Property to Purchaser or
Purchaser's nominee, as designated by written notice to Seller, subject only to
the Permitted Exceptions.
(3) The Xxxx of Sale executed by Salem conveying title to
the Personalty to Purchaser or Purchaser's nominee, which title shall be free
and clear of all liens, claims or encumbrances
(4) Seller's duly executed assignment of all leases
(including all security deposits as certified in tenants' estoppel
certificate), together with assignments of any third party guarantees of
tenants' obligations, original executed counterparts of each lease and any
amendments (including extensions and renewals) thereto.
(5) Seller's duly executed notices to all tenants stating
that the Property has been sold and that all future rents should be paid as
Purchaser may direct.
(6) Tenant estoppel certificates from each tenant dated
no earlier than thirty (30) days prior to the Closing Date, each such
certificate stating: (a) that such lease is in full force and effect (or if
such is not the case, stating the status of the lease and an explanation
thereof); (b) that to the tenant's best knowledge and belief, neither the
tenant nor the landlord is in default thereunder (or if such is not the case,
stating in detail such default(s); (c) that the lease is unmodified (or if
there have been modifications, identifying the modifications); (d) the annual
and monthly rental rates and the date to which rent has been paid; (e) any
percentage rent (including, if applicable, the dollar break point of sales and
the percentage factor), the additional rent, if any, for real estate taxes,
operating expenses, common area maintenance, merchant's association,
advertising, utilities or other matters, and the date to which it has been
paid; (f) that there are no setoffs, defenses or counterclaims against the
enforcement of the obligations to be performed under the lease (or if such is
not the case, stating in detail such matters and the grounds or reasons
thereof); and (g) whether there are any options to renew, expand or purchase.
In the event that Seller shall fail to obtain any of the estoppel certificates
referred to in this subparagraph (6) from any tenants of less than 6,000 square
feet, Seller shall certify (to the extent true) to Purchaser as to the
information to be contained in the estoppel certificates
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which Seller failed to obtain ("Seller's Estoppel Certificate"). If Seller
provides Seller's Estoppel Certificate at Closing, then Seller shall make good
faith efforts to obtain and subsequently deliver all outstanding tenant's
estoppel certificates to Purchaser and in such event Purchaser shall return the
corresponding Seller's Estoppel Certificate to Seller. An estoppel certificate
from TJX, which makes reference to its dispute regarding common area
maintenance expenses referred to in paragraph 6(a)(7) hereof shall be
acceptable to Purchaser, provided that it otherwise satisfies the requirements
of this paragraph 8(b)(6).
(7) To the extent assignable, Seller's duly executed
assignments to Purchaser of all guaranties and warranties (including, but not
limited to, guaranties and warranties for the roof, HVAC and for any of the
Personalty) from all manufacturers and suppliers of all equipment, appliances
or other goods installed or used on the Property, and from all contractors with
respect to all work done at the Property.
(8) Seller's duly executed assignment of any operating
agreements which Purchaser elects to be assigned to it or its nominee.
(9) All state, county and local declarations, affidavits,
or transfer statements required in connection with the recording of the Deed,
duly executed by Seller.
(10) An affidavit of title executed by Seller subject only
to the Permitted Exceptions.
(11) Certification of Non-Foreign Status of Seller,
pursuant to section 1445 of the Internal Revenue Code (Foreign Investment in
Property Tax Act).
(12) A duly executed closing statement.
(13) All certificates, permits and licenses in Seller's
possession from the city of St. Xxxxxxx and any governmental authorities
having jurisdiction over the Property.
(14) A certificate issued by the Illinois Department of
Revenue showing that Seller has no liability for the payment of any assessed
but unpaid tax, penalty or interest under the Illinois Income Tax Act and any
tax, penalty or interest due under the Retailer's Occupation Tax.
(15) A release affidavit from the Broker identified in
Paragraph 9, in form and substance satisfactory to the Title Company.
(16) The certification of the square footage of Guaranteed
Space.
c. Purchaser's Closing Documents; Payment. All payments under
this Agreement shall be made by wire transfer to the Escrowee (except for the
Xxxxxxx Money which may be paid by Purchaser's check as described in Paragraph
2b hereof.) At Closing, Purchaser shall
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deliver to Seller any and all documents reasonably required to consummate the
transaction contemplated hereunder, which documents shall include, without
limitation:
(1) The balance of the Purchase Price.
(2) An ALTA loan and extended coverage statement.
(3) All state, county and local declaratory, affidavits,
or transfer statements requested in connection with the recording of the Deed,
duly executed by Purchaser.
(4) Acceptance by Purchaser of items described in
Paragraphs 8(b)(4), 8(b)(7) and 8(b)(8).
(5) A duly executed closing statement.
(6) Purchaser's written waiver and release of any and all
warranties, representations or obligations express or implied, except as
otherwise expressly provided in this Agreement, as to fairness or
merchantability, relating to the physical, geological, environmental,
structural or other condition or status of the Property. The waiver and
release shall provide that Seller is not liable or bound in any manner by any
oral or written statements, representations, projections or other information
pertaining to the Property or its operation, made by any party, except as
provided in this Agreement.
(7) The certification of the square footage of the
Guaranteed Space.
(8) A release affidavit from Mid - America Real Estate
Group and Inland Real Estate Network, Inc. in form and substance satisfactory
to the Title Company.
d. Possession. Possession of the Property, subject to the leases
and tenancies, shall be delivered to Purchaser upon receipt of the Purchase
Price at Closing.
e. Prorations. The following adjustments to the Purchase Price
shall be prorated on a per diem basis as of the Closing Date:
(1) Real estate taxes, for the then current tax fiscal
year, and any installment of real estate taxes for any prior tax fiscal year
not yet due and payable, shall be prorated. If the Closing occurs prior to
Seller's receipt of the tax xxxx(s) for the tax fiscal year in which the
Closing occurs, or for any prior tax fiscal year, Purchaser and Seller shall
prorate the real estate taxes for such tax fiscal year or years based upon the
amount of the real estate taxes for the most recent tax fiscal year for which a
tax xxxx is available (or if then available, based upon the most current
assessed valuation, tax rates or equalization factor which will be reflected in
the tax xxxx(s) when issued).
Thereafter, upon receipt of the tax xxxx(s) for the tax fiscal year in which
the Closing occurs, and
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for any prior tax fiscal years, taxes shall be reprorated based upon the amount
of real estate taxes shown by such tax xxxx(s), and Purchaser or Seller, as the
ease may be, shall pay to the other on demand the appropriate amount.
(2) Purchaser shall receive a credit for all advance
rentals received by Seller covering any period after and including the Closing
Date, including Purchaser's pro rata share of all rentals received by Seller
for the month in which the Closing occurs. Any delinquent rents for the period
before the Closing Date shall remain the claim of, and be collectible by the
Seller, and Purchaser shall not be obligated to collect such delinquent rents
from tenants. After the Closing Date, all rental payments received by
Purchaser shall be first applied to the current rentals, next to any past due
or delinquent rents for any periods subsequent to the Closing Date, and last to
any prior delinquent rents for periods prior to the Closing Date. Seller shall
remit to Purchaser, Purchaser's pro rata share of rentals received by Seller,
if any, after the Closing Date. Purchaser shall remit to Seller, Seller's pro
rata share, if any, of rentals received by Purchaser after Closing.
(3) All funds, sums or amounts received from the tenants
by Seller as landlord under the leases, including without limitation all
charges for common area maintenance, operating expenses, real estate taxes,
contributions to merchant's association, contributions to common advertising
and promotional activities, contributions to common area replacement reserves,
and estimated payments of percentage rentals or other additional rentals,
together with all interest earned on such funds or accounts, shall be prorated
between Seller and Purchaser based on the most current available information
and shall be reprorated based on the final actual information as promptly as
practical after Closing.
(4) Purchaser shall receive a credit for the amount of
all security deposits as certified in tenants' estoppel certificates (or if a
tenant's estoppel certificate has not been delivered, then as set forth in the
lease) without offset.
(5) Utilities, if any, shall be prorated based upon the
last reading of meters prior to the Closing Date, which readings shall be
obtained by Seller not more than five (5) days prior to the Closing Date.
(6) If insurance policies are being assigned to Purchaser
(which assignments Seller agrees to make, if Purchaser so elects, subject to
the terms of any such policies), then any prepaid or post-paid insurance
premiums shall be prorated.
(7) All items of income from common areas of the
Property, including income from vending machines, parking charges and the like
shall be prorated on the basis of such income for the immediately preceding
month.
(8) All other expenses incurred in the operation of the
Property which are allocable to any period which commences before and ends
after the Closing Date, and which are approved by Purchaser, shall be prorated,
including, but not limited to, wages, vacation pay
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and fringe benefits payable to employees of Seller who become, at Purchaser's
sole and exclusive decision, employees of Purchaser or Purchaser's designee,
and fees paid or payable with respect to permits and licenses assigned by
Seller to Purchaser at the Closing.
f. Title, Transfer Tax and Recording. Seller shall pay the
amount of any State or County transfer taxes, customary Seller's title
insurance charges for the Owner's Title Policy, the cost of extended coverage
and other required endorsements, all recording charges for any release
documents relating to the Property and one-half of the deed and money escrow
charges. Purchaser shall pay all recording charges for mortgages, and other
security documents, if any, the cost of the lender's title insurance policy, if
any, and one-half the charge for the deed and money escrow; and all of any
money lender's escrow charges. Any local transfer tax shall be paid by
Purchaser unless otherwise designated in the ordinance creating such tax.
9. BROKER'S COMMISSION. Seller and Purchaser each represent and
warrant to the other that they know of no brokers or other persons or entities
who have been instrumental in submitting or showing the Property to Purchaser
other than Mid - America Real Estate Group ("Broker") and Inland Real Estate
Network, Inc. and Xxxxx Xxxxxxx at CB Commercial. Seller agrees to pay a real
estate commission in an amount, and as per the terms, set forth in a separate
written agreement between Seller and Broker and $5,000 to Xxxxx Xxxxxxx at CB
Commercial; provided, however, Purchaser may, at its option, pay such
commission directly to Broker and Xxxxx Xxxxxxx in which case Purchaser will be
entitled to a credit against the Purchase Price in the amount of such
commissions. The commission shall be paid through the Deed and Money Escrow,
with Inland Real Estate Network, Inc. receiving $31,150 as its portion of the
brokerage commission. Seller and Purchaser shall indemnify, defend and hold
each other harmless from and against any and all loss, damage, liability, cost
or expense (including litigation costs and reasonable attorneys' fees),
judgment or decree which Seller or Purchaser, as the case may be, may incur or
sustain by reason of any claim, demand or suit for a commission or fee arising
out of breaches of their respective representations and warranties contained in
this Paragraph.
It is expressly understood and agreed that the covenants and
indemnities of this Paragraph shall expressly survive the Closing, and it shall
not be a condition precedent to invoking the effectiveness, applicability or
enforcement of any indemnity set forth herein that the indemnified party shall
have made any payment, or incurred any obligation or liability, on account of
any claim, loss, damage, obligation, liability, deficiency, penalty, cost or
expense for which such party is being indemnified against herein.
10. TERMINATION AND REMEDIES.
a. Seller Default. If Seller defaults in its
obligations hereunder, then, provided such default is not due to Purchaser's
fault, Purchaser shall have the right as its sole and exclusive remedy to
either: (i) seek specific performance and/or damages; or (ii) terminate the
Agreement. In the event that the Agreement is terminated, the Xxxxxxx Money
shall be paid to Purchaser.
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b. Purchaser Default. If Purchaser defaults in its
obligations hereunder, then, provided such default is not due to Seller's
fault, Seller shall have the right, as its sole and exclusive remedy to either:
(i) seek damages; or (ii) terminate this Agreement. In either case, the
Xxxxxxx Money shall be paid to Seller but in the event that it ultimately is
determined that Purchaser is obligated to pay damages to Seller, then Purchaser
shall receive a credit in the amount of the Xxxxxxx Money which has already
been paid to Seller towards the amount of damages owed by Purchaser in the
event that damages are determined to be less than the amount of the Xxxxxxx
Money, then Seller shall refund the difference to Purchaser.
11. RISK OF LOSS. If the improvements located on the Real
Property are damaged prior to the Closing Date by fire, other casualty or any
act or occurrence, the provisions of the Uniform Vendor and Purchaser Risk of
Loss Act shall apply.
12. CERTIFIED AUDIT. Within the fifteen (15) day approval period
set forth in paragraph 4(b), Purchaser may obtain an audited financial
operating statement for the Property for the year ended December 31, 1995 (in a
form typically required for SEC filings) certified by KPMG Peat Marwick LLP,
Chicago, Illinois provided that the form certification letter to Peat Marwick
from Seller shall be substantially in the form attached hereto as Exhibit D.
Representations made by Seller to Peat Marwick are made solely for the benefit
of Peat Marwick and shall not be deemed to be representations to Purchaser and
may not be relied upon by Purchaser. Purchaser shall pay for the cost of said
audited financial operating statements regardless of whether the transaction
contemplated hereby is completed.
13. Miscellaneous.
a. Entire Agreement. This Agreement embodies the entire
contract and agreement between the parties, and there are no other agreements
or understandings, oral or written, between Purchaser and Seller, except as
recited herein.
b. Amendments. No amendment of this Agreement shall be
valid unless in writing and signed by the parties hereto.
c. Notices. Any notice or other communication required
or permitted to be delivered hereunder shall be in writing, signed by the party
giving the same and served upon the parties at the following addresses:
If to Seller: Salem Square, Ltd.
c/o The Cloverleaf Group, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
(Facsimile (000) 000-0000)
with a copy to: Xxxxxxxx X. Xxxx
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Lord, Bissell & Brook
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(Facsimile (000) 000-0000)
If to Purchaser: Inland Monthly Income Fund III, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxx
(Facsimile (000) 000-0000)
with a copy to: The Inland Group, Inc.
Law Department
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
(Facsimile (000) 000-0000)
Any such notice or other communication shall be either delivered in person;
sent by a recognized commercial express courier, with instructions for next
day's delivery, and with freight and/or delivery charges paid by the sender;
sent by telephonic facsimile transmittal to the intended recipient's phone
number for the receipt of such transmittals (with a duplicate copy of such
notice or other communication also sent to the intended recipient by
first-class United States mail, postage prepaid within one (1) business day
after being sent by telephonic facsimile); or sent by United States mail,
postage prepaid, registered or certified mail, return receipt requested. Any
such notice or other communication sent as above set forth shall be deemed
properly delivered, whether or not actually received, as follows: if by
personal delivery or commercial express courier, on the date that delivery is
made to the intended recipient (or the date that such delivery is refused by
the intended recipient); if by telephonic facsimile, on the date such
transmittal is sent to the intended recipient's phone number for the receipt of
such transmittals; and if by registered or certified mail, on the date which is
three (3) business days after the date such notice or other communication is
deposited in the U.S. mail. The above addresses and facsimile numbers may be
changed by written notice to the other party in accordance with this provision.
d. Successors And Assigns. All of the terms and
conditions of this Agreement are hereby made binding on the respective
executors, heirs, devisees, administrators, personal representatives,
successors and permitted assigns of both parties hereto.
e. Captions. The captions and headings used in
connection with the paragraphs and provisions of this Agreement are for
convenience only and shall not be deemed to limit, construe, affect or alter
the meaning, scope or intent of the provisions hereof.
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f. Governing Law. This Agreement shall be construed and
governed by the laws of the State of Illinois, without regard to its conflict
of laws provisions. This Agreement shall be merged in any Deed.
g. Counterparts. This Agreement may be executed by the
parties in separate duplicate counterparts, all of which taken together shall
constitute one agreement binding on all the parties hereto, notwithstanding
that all parties hereto may not be signatories to the original or the same
counterpart.
h. Time Computation. In computing any period of time
pursuant to this Agreement, the day of the act or event from which the
designated period of time begins to run will not be included. The last day of
the period so computed will be included, unless it is a Saturday, Sunday or
legal holiday, in which event the period shall run until the end of the next
day which is not a Saturday, Sunday or such legal holiday.
i. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
j. No Recording. This Agreement may not be recorded by
Purchaser, and any recording of this Agreement or memorandum thereof shall
constitute a Purchaser's default hereunder and Seller shall be entitled to its
rights and remedies pursuant to Paragraph lOb hereof.
k. Exculpation. This Agreement is executed by American
National Bank and Trust Company of Chicago, as Trustee under the
above-described Trust Agreement and not by it individually and any claims
against the Trustee which may result from signing this Agreement shall be
payable only out of the Trust Property. It is expressly understood and agreed
by and between the parties, anything in this Agreement to the contrary
notwithstanding, that each and all of the warranties, indemnities,
representations, covenants, undertakings and agreements of the Trustee are not
made and are not intended as individual or personal warranties, indemnities,
representations, covenants, undertakings and agreements by the Trustee or any
of its officers, employees or agents individually or personally, but are made
and intended for the purpose of binding only the Trust Property and are
executed and delivered by the Trustee not in its own right, but solely in the
exercise of the powers conferred upon it as such Trustee under the Trust
Agreement which is made a part of this Agreement and that no individual or
personal responsibility or individual or personal liability is assumed by nor
shall at any time be asserted or enforced against the Trustee or any of its
officers, employees or agents or under the Trust Agreement, on account of this
Agreement or on account of any warranty, indemnity, representation, covenant,
undertaking or agreement.
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14. Acceptance. This Agreement is executed and submitted by the
Purchaser as of the date first written above. A duplicate original of this
Agreement, duly executed by the Seller shall be delivered to the Purchaser not
later than July 12, 1996; otherwise, at the Purchaser's option, this Agreement
shall become null and void, the Xxxxxxx Money shall be promptly refunded to the
Purchaser and, thereupon, neither party shall have any further obligation or
liability to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement by the
duly authorized individuals in their respective capacities as set forth below.
PURCHASER: SELLER:
Inland Monthly Income Fund III, Inc. Salem Square, Ltd.
By: [SIG] By: The Cloverleaf Group, Inc.
--------------------------------
Its: President Its General Partner
--------------------------------
By: XXXXXXX X. XXXXXXX
-------------------------------
Xxxxxxx X. Xxxxxxx, President
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, AS TRUSTEE
UNDER TRUST AGREEMENT DATED
MARCH 1, 1983, AND KNOWN AS TRUST
NUMBER 57190
By: [SIG]
------------------------------
Its: Assistant Vice President
------------------------------
DATE OF SELLER'S ACCEPTANCE:
July 12, 1996
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PERMITTED EXCEPTIONS
1. Real Estate Taxes not yet due and payable.
2 Terms, powers, provisions and limitations of the Trust under which
title to the land is held.
3. Easements for sanitary sewer and water mains as created by grant of
easement made by Xxxxxx Trust and Savings Bank, a corporation of
Illinois, as trustee under trust agreement dated September 1, 1960 and
known as trust no. 30006 to the City of Countryside, a municipal
corporation of Illinois, filed October 29, 1976 as document no.
LR2902811.
4. Amendment to Grant of Easement intend into by and between American
National Bank and Trust Company of Chicago, as trustee under trust
agreement dated March 1, 1983 known as trust no. 57190 and the City of
Countryside, Xxxx County, Illinois, dated May 23, 1984 and filed
August 23, 1984 as Document LR3390241 relocating, in part, the
easement created by Grant of Easement filed as Document LR2902811.
6. Terms, powers, provisions and conditions contained in ordinance
recorded as Document 87502663 by City Clerk of Countryside.
7. Grant of Easement for a permanent exclusive easement is hereby granted
to the City of Countryside in, upon, across, over, under and through
land for the Purpose of installing, constructing, inspecting,
operating, replacing, renewing, altering, enlarging, removing,
repairing, cleaning and maintaining a water main and all pipes and
connections as may he required in connection therewith, and such
appurtenances and additions thereto as said city may deem necessary
recorded July 19, 1989 as Document 809329058.
8. Leases.
9. Acts of Purchaser.
EXHIBIT B
22
EXHIBIT C
[Intentionally Deleted]
23
[THE CLOVERLEAF GROUP, Inc. LETTERHEAD]
June 25, 1996
KPMG Peat Marwick LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Re: Xxxxx Xxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxx
Ladies and Gentlemen:
We are writing you at your request to confirm our understanding that your audit
of the Historical Summary of Gross Income and Direct Operating Expenses
(Historical Summary) of Salem Square for the year ended December 31, 1995, was
made for the purpose of expressing an opinion as to whether the Historical
Summary present fairly, in all material respects, the gross income and direct
operating expenses in conformity with generally accepted accounting principles.
In connection with your audit we confirm, to the best of our knowledge and
belief, the following representations made to you during your audit:
1. We made available to you:
A. All financial records and related data.
2. There have been no violations or possible violations of laws or
regulations, the effects of which should be considered for disclosure
in the Historical Summary or as a basis for recording a loss contingency.
3. There are no:
A. Unasserted claims or assessments that our lawyer had advised
us are probable of assertion and must be disclosed in
accordance with Statement of Financial Accounting Standards
No. 5 (SFAS No. 5).
EXHIBIT D
24
KPMG Peat Marwick LLP
June 25, 1996
Page Two
B. Material liabilities or gain or loss contingencies including
oral and written guarantees that are required to be accrued or
disclosed by SFAS No. 5.
C. Material transactions that have not been properly recorded in
the accounting records underlying the Historical Summary.
D. Events that have occurred subsequent to the Historical Summary
date that would require adjustment to or disclosure in the
Historical Summary.
4. The Partnership has satisfactory title to all owned assets, and there
are no liens or encumbrances on such assets nor has any asset been
pledged, except for the $4,000,000 mortgage to First Midwest Bank,
N.A., and such other matters disclosed in the financial statements.
5. The Partnership has complied with all aspects of contractual
agreements that would have a material effect on the Historical Summary
in the event of noncompliance.
6. All income from operating leases is included as gross income in the
Historical Summary. No other forms of revenue are included in the
Historic Summary.
7. Other items as necessary.
Further, we acknowledge that we are responsible for the fair presentation in
the Historical Summary of Gross Income and Direct Operating Expenses in
conformity with generally accepted accounting principles.
Very truly yours,
THE CLOVERLEAF GROUP, INC.