Exhibit 10.22
July 18, 1997
KILICO Realty Corporation and
Xxxxxx Investors Life Insurance Company
c/o ZKS Real Estate Partners, LLC
000 X. Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Re: Triad Development Company
-------------------------
Dear Xxx:
This letter (this "Agreement") sets forth the terms upon which The Prime
Group, Inc. ("PGI"), or one or more of its affiliates or assigns (PGI, together
with certain of its affiliates or assigns, depending on the context, is or are
referred to herein as "Prime"), will purchase, and KILICO Realty Corporation, an
Illinois corporation ("Realty"), KFC Portfolio Corp., a Delaware corporation
("KFC"), and Xxxxxx Investors Life Insurance Company, an Illinois insurance
corporation ("KILICO"; Realty, KFC and KILICO are sometimes referred to
collectively herein as "Xxxxxx"), will sell, the Xxxxxx Triad Interests (defined
below). Upon acceptance of this Agreement by Xxxxxx, this Agreement will
constitute the binding agreement of Xxxxxx and Prime to proceed with the
transactions described herein upon the terms and subject to the conditions set
forth herein:
1. Agreement to Sell and Purchase.
Upon and subject to the terms and conditions set forth in this Agreement,
on the Closing Date (defined below), Xxxxxx shall sell, transfer, convey, assign
and deliver to Prime, and Prime shall purchase, acquire and accept from Xxxxxx,
all of the rights, title and interests (including debt and equity interests,
if any) owned or held by Xxxxxx (the "Xxxxxx Triad Interests") in and to Triad
Development Company, an Illinois limited partnership ("Triad"), all partnerships
in which Triad has an interest (the "Building Partnerships"), Triad Parking
Company, Ltd., a Tennessee limited partnership ("Parking Ltd."), and Triad
Parking Corporation, a
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July 18, 1997
Page 2
Tennessee corporation ("Parking Corp."; Triad, the Building Partnerships,
Parking Ltd. and Parking Corp. are sometimes referred to herein collectively as
the "Triad Entities" and individually as a "Triad Entity"), and in and to the
property owned by any of the Triad Entities. The Xxxxxx Triad Interests are more
fully described on Exhibit A attached hereto. The Building Partnerships are
listed on Exhibit B attached hereto. Xxxxxx and Prime agree that the Xxxxxx
Triad Interests shall include any and all rights and interests, if any, which
Xxxxxx may have in and to any and all cash, deposits, and other funds in any
bank accounts maintained by any of the Triad Entities and any and all securities
held in the name of any of the Triad Entities as of the Closing Date. Xxxxxx and
Prime agree that, between the date of this Agreement and the Closing Date,
unless otherwise specified in this Agreement, none of the Triad Entities shall
make any distributions to any partner in any of the Triad Entities or otherwise
use any of the funds of any of the Triad Entities for any purpose other than the
payment of authorized operating expenses and other authorized expenses.
Authorized operating expenses and other authorized expenses shall mean expenses
set forth or identified in a budget duly authorized and approved by the general
partner or general partners of Triad, a Building Partnership or Parking Ltd., as
applicable, for one or more of the Triad Entities, and expenses otherwise duly
authorized and approved by the general partner or general partners of Triad, a
Building Partnership or Parking Ltd., as applicable.
2. Purchase Price.
(a) The aggregate consideration for all of the Xxxxxx Triad Interests
shall be (i) the amount of the outstanding principal balance of the Parking
Unsecured Note (as such term is defined on Exhibit A attached hereto) as of
the Closing Date, together with all accrued but unpaid interest thereon as
of the Closing Date, which amount shall be applied in repayment, in full,
of such obligations, plus (ii) an amount equal to the difference between
$1,750,000 and the total amount referred to in the preceding clause (i),
plus (iii) the aggregate amount of capital contributions (other than any
capital contributions made pursuant to paragraph 3(a) hereof), if any, made
by Xxxxxx to Triad from and after the date hereof, plus any and all accrued
but unpaid interest thereon if and to the extent provided for in that
certain Second Amended and Restated Agreement of Limited Partnership of
Triad, entered as of April 15, 1991, effective as of December 27, 1990, as
amended (the "Triad Partnership Agreement"), and
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July 18, 1997
Page 3
(iv) the release and termination of all current or future standby credit
enhancement obligations of Xxxxxx and its affiliates (referred to herein as
"Xxxxxx Exiting Standby Credit Enhancement") with respect to the tax exempt
bonds issued for the benefit of the Building Partnerships, which bonds are
described on Exhibit G attached hereto (collectively the "Bonds"). In
addition, at the Closing, Prime shall cause to be repaid to Xxxxxx in full
the outstanding principal balance of all Capital Loans (as such term is
defined in the Triad Partnership Agreement), if any, made by Xxxxxx to
Prime after the date of this Agreement in accordance with the terms of the
Triad Partnership Agreement, plus any and all accrued but unpaid interest
thereon if and to the extent provided for in the Triad Partnership
Agreement. The total of the sums described in the preceding clauses (i),
(ii) and (iii) is referred to herein as the "Purchase Price".
(b) The parties hereto acknowledge that (i) Parking Ltd. issued that
certain Promissory Note, dated as of December 19, 1996 (the "Parking First
Mortgage Note"), payable to the order of First Tennessee Bank National
Association in the original principal amount of $1,150,000.00, which
Parking First Mortgage Note evidences the obligation of Parking Ltd. to
repay a non-recourse loan (the "Parking First Mortgage Loan") secured by a
first mortgage on the property owned by Parking Ltd., and (ii) Nashville
Office Building I, Ltd., one of the Building Partnerships, issued that
certain Promissory Note, dated as of October 20, 1993 (the "Nashville First
Mortgage Note"), payable to the order of First Tennessee Bank National
Association in the original principal amount of $5,600,000.00, which
Nashville First Mortgage Note evidences the obligation of Nashville Office
Building I, Ltd. to repay a non-recourse loan (the "Nashville First
Mortgage Loan") secured by a first mortgage on the property owned by
Nashville Office Building I, Ltd. Prime will either repay in full, on or
prior to the Closing, all amounts payable under the Parking First Mortgage
Loan or assume, or take the Xxxxxx Triad Interests in Parking Ltd. and the
property owned by Parking Ltd. subject to, the Parking First Mortgage Loan,
and Prime will either repay in full, on or prior to the Closing, all
amounts payable under the Nashville First Mortgage Loan or assume, or take
the Xxxxxx Triad Interests in Nashville Office Building I, Ltd. and the
property owned by Nashville Office Building I, Ltd. subject to, the
Nashville First Mortgage Loan. At the Closing, unless either all amounts
under the Parking First
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July 18, 1997
Page 4
Mortgage Loan have been paid in full or Prime has delivered to Xxxxxx
reasonably satisfactory evidence that Xxxxxx has been fully released from
all potential liabilities and obligations with respect to the Parking First
Mortgage Loan, PGI shall execute and deliver to Xxxxxx at Closing an
indemnification agreement whereby PGI agrees to indemnify, defend and hold
Xxxxxx harmless from any and all loss, cost, damage, liability or expense
(including reasonable attorneys' fees and legal expenses) with respect to
Parking First Mortgage Loan. At the Closing, unless either all amounts
payable under the Nashville First Mortgage Loan have been paid in full or
Prime has delivered to Xxxxxx reasonably satisfactory evidence that Xxxxxx
has been fully released from all potential liabilities and obligations with
respect to the Nashville First Mortgage Loan, PGI shall execute and deliver
to Xxxxxx at Closing an indemnification agreement whereby PGI agrees to
indemnify, defend and hold Xxxxxx harmless from any and all loss, cost,
damage, liability, or expense (including reasonable attorneys' fees and
legal expenses) with respect to Nashville First Mortgage Loan.
3. Payment of Centre Square Land Loans; Waiver of Administrative Fees
(a) Within one (1) Business Day following the execution and delivery
by the parties hereto of this Agreement, each of PGI and Xxxxxx shall
contribute, or cause to be contributed, to Triad an amount equal to fifty
percent (50%) of the difference between (i) the aggregate outstanding
principal amount of the Centre Square Land Loans (as such term is defined
on Exhibit A attached hereto), together with all accrued but unpaid
interest thereon (but not including any late payment charges or interest at
a default rate), less (ii) $200,000.00. The parties hereto hereby agree to
cause Triad to pay to KFC, promptly following the receipt by Triad of the
contributions described in the immediately preceding sentence, the
aggregate amount of such contributions plus $200,000.00 of the cash in the
bank accounts of the Triad Entities, in payment in full of all amounts due
under the Centre Square Land Loans, and, in connection with such payment,
KFC shall deliver to Prime, on behalf of Triad, the original Promissory
Notes evidencing the Centre Square Land Loans, which Promissory Notes shall
be marked "PAID IN FULL", and KFC shall release all collateral and other
security securing the Centre Square Land Loans.
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July 18, 1997
Page 5
(b) Prime hereby waives its rights to receive, and agrees not to
cause or accept payment of, any and all administrative fees or other fees
payable to Prime from and after the date hereof by any of the Triad
Entities, excepting only an overhead reimbursement fee in the amount of
$6,250 per month.
(c) Contemporaneously with the execution and delivery of this
Agreement, Prime shall cause Parking Corp. to deliver to Xxxxxx a certified
copy of (i) the current Certificate of Limited Partnership of Parking Ltd.,
(ii) the current Certificate of Incorporation of Parking Corp., (iii) the
current By-Laws of Parking Corp., (iv) the current Shareholders Agreement
of Parking Corp., (v) any other documents or agreements of which Parking
Corp. is aware which may restrict the ability of Xxxxxx to transfer its
stock in Parking Corp. as contemplated by this Agreement and (vi) all
amendments to any of the foregoing.
4. Closing; Closing Date.
(a) The sale and purchase of the Xxxxxx Triad Interests (the
"Closing") shall occur on a date (the "Closing Date") designated by Prime
and reasonably acceptable to Xxxxxx upon not less than five (5) Business
Days (defined below) written notice to Xxxxxx; provided, however, the
Closing Date shall not be later than September 30, 1997 (the "Outside
Closing Date"), subject to the provisions of Section 4(b) hereof;
(b) Prime shall have the right to extend the Outside Closing Date for
up to five (5) months (with the monthly periods ending October 31, 1997,
December 1, 1997, December 31, 1997, February 2, 1998 and February 27,
1998), on a month-for-month basis, by (i) the delivery by Prime to Xxxxxx
of written notice of such extension, which written notice must be delivered
on or before the fifteenth (15th) day prior to the then applicable Outside
Closing Date, as previously extended, and by the payment by Prime to Xxxxxx
of the sum of Two Hundred Thousand and no/100 Dollars ($200,000.00) for
each one-month extension (the "Extension Payments"), and (ii) the taking of
all actions required by Prime to cause a contemporaneous extension of the
closing date to the end of the same monthly period under the terms of
that certain Amended and Restated Agreement, dated as of the date hereof,
among (A) PGI, Prime Group Limited Partnership and Prime 77
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July 18, 1997
Page 6
Fitness Center, Inc., (B) Realty, KILICO, Xxxxxx Federal Life Assurance
Company, FKLA Realty Corporation and KR 77 Fitness Center, Inc.
(collectively, the "Xxxxxx 77 Sellers"), and (C) 77 West Xxxxxx Limited
Partnership providing for, among other things, the purchase and sale of the
interests in the Xxxxxx 77 Sellers of all of their interests in the office
building located at 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx. The Extension
Payments shall not be refundable to Prime for any reason except as provided
otherwise in Section 9(b) hereof, but one-half of the Extension Payments
shall be credited against, and shall reduce, the Purchase Price.
5. Closing Deliveries.
(a) At the Closing, Prime shall deliver to Xxxxxx such documents
reasonably requested by Xxxxxx evidencing that Xxxxxx and its affiliates
have been released from all of their obligations under Xxxxxx'x Existing
Standby Credit Enhancement and under the Standby Bond Purchase and
Indemnity Agreements evidencing Xxxxxx'x Existing Standby Credit
Enhancement.
(b) At the Closing, Xxxxxx shall deliver, or cause to be delivered,
all instruments, certificates and other documents, reasonably acceptable to
Prime, pursuant to which the Xxxxxx Triad Interests are transferred,
conveyed, assigned and delivered to Prime and pursuant to which Xxxxxx
releases any and all security interests held by Xxxxxx in or with respect
to the Xxxxxx Triad Interests and the Triad Entities.
(c) At the Closing, Xxxxxx will release any and all security interests
in units in Ambassador Apartments, L.P. securing any obligations to Xxxxxx
of Prime, any of the Triad Entities or any of their affiliates relating to
the Triad Entities or to the property owned by, or the obligations of, any
of the Triad Entities.
(d) At the Closing, Prime shall cause an amount equal to the Purchase
Price (plus the outstanding principal balance of all Capital Loans, if any,
made by Xxxxxx to Prime after the date of this Agreement in accordance with
the terms of the Triad Partnership Agreement, plus any and all accrued but
unpaid interest thereon if and to the extent provided in the Triad
Partnership Agreement), less one-half of any and all Extension Payments
made pursuant hereto, to be paid to Xxxxxx by wire transfer in immediately
available funds. The parties
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July 18, 1997
Page 7
agree that there shall be no proration adjustments at the Closing related
to the Xxxxxx Triad Interests and that there will be no other adjustments
to the Purchase Price except that the Purchase Price shall be reduced by
one-half of any and all Extension Payments made pursuant hereto. Prime will
not be entitled to any fee or commission by reason of this Agreement or the
transactions contemplated hereunder which would result in a reduction in
the amount payable to Xxxxxx hereunder.
(e) At the Closing, Xxxxxx and Prime shall each execute and deliver to
the other an Assignment and Assumption of Partnership Interests in the form
of Exhibit C attached hereto, pursuant to which the Xxxxxx Triad Interests
which are partnership interests are transferred, assigned and delivered to
Prime and certain obligations related thereto are assumed by Prime.
(f) At the Closing, Realty shall execute and deliver to Prime a Stock
Power executed in blank pursuant to which Realty transfers and assigns the
stock in Parking Corp. owned by Realty.
(g) At the Closing, Xxxxxx shall execute and deliver to Prime a
Release and Covenant Not to Xxx in the form of Exhibit D attached hereto,
and Prime shall execute and deliver, and shall cause Prime of Tennessee,
Inc. and Triad to execute and deliver, to Xxxxxx a Release and Covenant Not
to Xxx in the form of Exhibit E attached hereto (Xxxxxx hereby consenting
to the execution by Triad of such Release and Covenant Not to Xxx).
(h) At Closing, Prime shall execute and deliver to Xxxxxx the
indemnification agreement or indemnification agreements if and to the
extent required to be delivered pursuant to the last two sentences of
paragraph 2(b) hereof.
(i) At Closing, Prime shall cause to be delivered to Xxxxxx an opinion
of counsel, from Winston & Xxxxxx or another law firm reasonably acceptable
to Xxxxxx and in a form reasonably acceptable to Xxxxxx, to the effect that
the assignment by Xxxxxx to Prime (or to Prime's assignee or designee) of
the Xxxxxx Triad Interests as contemplated by this Agreement will not have
an adverse effect on the tax-exempt status of the Bonds.
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July 18, 1997
Page 8
(j) At the Closing, Xxxxxx and Prime shall execute and deliver any
and all other instruments, certificates and other documents reasonably
requested by the other party to cause, effect, accomplish or evidence the
transactions contemplated by this Agreement.
6. Representations and Warranties of Xxxxxx. In order to induce Prime to
enter into this Agreement, Xxxxxx hereby represents and warrants to Prime that
on the date of this Agreement and on the Closing Date:
(a) Each of Realty, KFC and KILICO is a corporation duly formed and
validly existing and is in good standing under the laws of its respective
state of incorporation and is duly qualified to do business and is in good
standing under the laws of each state in which the failure to qualify to do
business would have a material adverse affect on such entity's ability to
perform its obligations under this Agreement.
(b) The execution and delivery of this Agreement by Realty, KFC and
KILICO and the performance by Realty, KFC and KILICO of their respective
obligations under this Agreement have been duly and validly authorized by
all necessary corporate action of Realty, KFC and KILICO. This Agreement
has been duly executed and delivered by a duly authorized officer or agent
of Realty, KFC and KILICO and constitutes the legal, valid and binding
obligations of Realty, KFC and KILICO, enforceable against each such entity
in accordance with the terms hereof.
(c) No consent, waiver, approval or authorization of, or notice to,
any governmental unit or any other person is required to be made, obtained
or given by Realty, KFC or KILICO in connection with the execution and
delivery of this Agreement by Realty, KFC and KILICO, or in connection with
the performance by Realty, KFC and KILICO of their respective obligations
under this Agreement, except to the extent any such consents, waivers,
approvals and authorizations have been obtained prior to the date of this
Agreement, or any such notices have been given prior to the date of this
Agreement, as applicable.
(d) None of the execution or delivery of this Agreement by Realty,
KFC and KILICO, or the performance by Realty, KFC and KILICO of their
respective obligations under this
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July 18, 1997
Page 9
Agreement does or will, with or without the giving of notice, lapse of
time, or both, violate, conflict with or constitute a default under any
term or condition of (i) any organizational document (including articles of
incorporation, charters and by-laws) of Realty, KFC or KILICO or any
material agreement to which Realty, KFC or KILICO is a party or by which
Realty, KFC or KILICO is bound or which is applicable to any of the
properties or assets of Realty, KFC or KILICO, or (ii) any term or
provision of any presently existing judgment, decree, order, statute,
injunction, rule or regulation of any governmental unit applicable to
Realty, KFC or KILICO or any of the assets or properties of Realty, KFC or
KILICO; provided, however, no representation or warranty is made with
respect to any possible violation, conflict or default under any document
or instrument made by any of the Triad Entities or under any document or
instrument of which any of the Triad Entities is aware affecting the assets
or properties of any of the Triad Entities or affecting the Xxxxxx Triad
Interests.
(e) None of Realty, KFC, KILICO or any subsidiary or affiliate of
Realty, KFC or KILICO has relied upon or engaged any real estate broker or
other finder in connection with, or to assist Realty, KFC or KILICO or any
subsidiary or affiliate of Realty, KFC or KILICO in entering into or
consummating, the transactions contemplated by this Agreement. Realty, KFC
and KILICO shall indemnify, defend and hold harmless Prime from and against
any and all losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) suffered or incurred
by Prime in connection with any claims asserted by any real estate broker
or finder based on any agreement or alleged agreement with Realty, KFC or
KILICO or any subsidiary or affiliate of Realty, KFC or KILICO in
connection with this Agreement or any of the transactions contemplated by
this Agreement.
(f) Realty is the sole owner and holder of the Xxxxxx Triad Interests
owned by it as shown on Exhibit A hereto and has good title thereto free
and clear of any liens, claims, pledges, encumbrances or security interests
of any person or party which will not be terminated or released on or
before the Closing Date, and has full power and authority to sell, assign,
transfer and deliver such Xxxxxx Triad Interests in accordance with the
terms of this Agreement.
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July 18, 1997
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(g) KILICO is the sole owner and holder of the Xxxxxx Triad
Interests owned or held by it as shown on Exhibit A hereto and has good
title thereto free and clear of any liens, claims, pledges, encumbrances or
security interests of any person or party which will not be terminated or
released on or before the Closing Date, and has full power and authority to
sell, assign, transfer and deliver such Xxxxxx Triad Interests in
accordance with the terms of this Agreement.
(h) KFC is the sole owner and holder of the Xxxxxx Triad Interests
owned or held by it as shown on Exhibit A hereto and has good title thereto
free and clear of any liens, claims, pledges, encumbrances or security
interests of any person or party which will not be terminated or released
on or before the Closing Date, and has full power and authority to sell,
assign, transfer and deliver such Xxxxxx Triad Interests in accordance with
the terms of this Agreement.
(i) The Xxxxxx Triad Interests, as described on Exhibit A attached
hereto, are all of the rights, title and interests (including debt and
equity interests) owned or held by Realty, KILICO, KFC, Xxxxxx Corporation
or any subsidiary or affiliate of Realty, KFC, KILICO or Xxxxxx Corporation
in and to any of the Triad Entities or any of the properties or assets of
any of the Triad Entities (other than any interests which Realty, KFC,
KILICO, Xxxxxx Corporation or any subsidiary or affiliate of Realty, KFC
KILICO or Xxxxxx Corporation may have under or by reason of Xxxxxx'x
standby credit enhancement obligations with respect to the Bonds, which
interests shall be terminated as of the Closing).
7. Representations and Warranties of Prime. In order to induce Xxxxxx
to enter into this Agreement, Prime hereby represents and warrants to Xxxxxx
that, on the date of this Agreement and on the Closing Date:
(a) PGI is a corporation duly formed and validly existing and is in
good standing under the laws of the State of Illinois and is duly qualified
to do business and is in good standing under the laws of each state in
which the failure to qualify to do business would have a material adverse
affect on the ability of PGI to perform its obligations under this
Agreement.
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July 18, 1997
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(b) The execution and delivery of this Agreement by PGI and the
performance by PGI of its obligations under this Agreement have been duly
and validly authorized by all necessary corporate action of PGI. This
Agreement has been duly executed and delivered by a duly authorized officer
or agent of PGI and constitutes the legal, valid and binding obligations of
PGI, enforceable against PGI in accordance with the terms hereof.
(c) No consent, waiver, approval or authorization of, or notice to,
any governmental unit or any other person is required to be made, obtained
or given by PGI in connection with the execution and delivery by PGI of
this Agreement, or in connection with the performance by PGI of its
obligations under this Agreement, except to the extent any such consents,
waivers, approvals and authorizations have been obtained prior to the date
of this Agreement, or any such notices have been given prior to the date of
this Agreement, as applicable.
(d) None of the execution or delivery of the this Agreement by PGI or
the performance by PGI of its obligations under this Agreement does or
will, with or without the giving of notice, lapse of time, or both,
violate, conflict with or constitute a default under any term or condition
of (i) any organizational document (including, articles of incorporation
and by-laws) of PGI or any material agreement to which PGI is a party or by
which PGI is bound or which is applicable to any of the properties or
assets of PGI, or (ii) any term or provision of any presently existing
judgment, decree, order, statute, injunction, rule or regulation of any
governmental unit applicable to PGI or any of the assets or properties of
PGI.
(e) Neither PGI nor any subsidiary or affiliate of PGI has relied upon
or engaged any real estate broker or other finder in connection with, or to
assist PGI in entering into or consummating, the transactions contemplated
by this Agreement. PGI shall indemnify, defend and hold harmless Xxxxxx
from and against any and all losses, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
suffered or incurred by Xxxxxx in connection with any claims asserted by
any real estate broker or finder based on any agreement or alleged
agreement with PGI or any subsidiary or affiliate of PGI in connection with
this Agreement or any of the transactions contemplated by this
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July 18, 1997
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Agreement. The representations and warranties set forth in the first
sentence of this subparagraph 7(e) shall not apply to any agreements or
arrangements that PGI or any subsidiary or affiliate of PGI may have for or
related to any financing or replacement credit enhancement obtained by
Prime in connection with the transactions contemplated by this Agreement,
and PGI shall be responsible for the payment of any and all fees with
respect thereto and shall indemnify Xxxxxx with respect thereto as provided
in the second sentence of this paragraph 7(e).
(f) PGI has no knowledge and has received no written notice: (a) that
any property owned by any of the Triad Entities or the use or operation
thereof violates any laws, rules, or regulations of any federal, state,
city or county governmental body or subdivision thereof; (b) of any pending
or threatened claim, actions, suits or proceedings against or affecting any
of the Triad Entities or their respective properties or the use or
operation thereof except as disclosed on Exhibit F attached hereto; or (c)
of any other material liabilities or obligations concerning any of the
Triad Entities or their respective properties or the business or operations
thereof that are not reflected in the most recent available financial
statements of the Triad Entities, which financial statements are attached
hereto as Exhibit H.
(g) All disclosures of this Agreement, any provisions of this
Agreement or any of the parties to this Agreement in any registration
statement, prospectus, offering memorandum or similar document filed by or
on behalf of Prime with the Securities and Exchange Commission (the "SEC")
or pursuant to any state securities law or disseminated by or on behalf of
Prime to underwriters or other potential investors are and will be true and
accurate in all material respects and will not omit to state a material
fact necessary to make the statements therein not misleading. PGI hereby
covenants and agrees to deliver, or cause to be delivered, to Xxxxxx a copy
of all registration statements, prospectuses, offering memorandums or
similar documents filed by or on behalf of Prime with the SEC in which this
Agreement or any provisions of this Agreement are disclosed or otherwise
described, together with all material drafts thereof prior to each such
filing. Notwithstanding the provisions of the preceding sentence, Xxxxxx
shall have no obligation or responsibility whatsoever, to respond or
communicate in any way with respect
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July 18, 1997
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to the accuracy or inaccuracy of any information contained in any such
registration statement, prospectus, offering memorandum or similar document
referred to above. From and after the date of this Agreement and continuing
whether or not the Closing hereunder occurs, Prime agrees to indemnify,
defend and hold harmless Xxxxxx, its affiliates and controlling persons
from and against any and all costs, expenses, losses, liabilities, causes
of actions and damages suffered or incurred by such parties arising out of
a breach of the provisions of the first sentence of this paragraph 7(g).
8. Acknowledgments of PGI. PGI has inspected and familiarized itself with
the respective properties and assets of the Triad Entities, and is fully aware
of all of the conditions thereof and restrictions applicable thereto; and Prime
will accept such properties and assets on the Closing Date in their "as is"
condition. PGI further acknowledges and agrees that no representations,
warranties or agreements, expressed or implied, of any kind whatsoever have been
made by Xxxxxx concerning the state of title or condition of any property or
asset of any of the Triad Entities, the ability of any of the Triad Entities to
obtain all permits, licenses and approvals required for its business and
operations, or the financial condition, results of operations or prospects of
the respective businesses and operations of any of the Triad Entities. Except
as otherwise provided herein, Prime expressly assumes all risks attendant to the
ownership of the Xxxxxx Triad Interests.
9. Remedies.
(a) In the event Prime fails to purchase the Xxxxxx Triad Interests in
accordance with the terms and conditions of this Agreement for any reason
other than a default by Xxxxxx, or in the event of any other material
default by PGI in any of its obligations under this Agreement, or in the
event PGI is in material breach of any of its representations and
warranties contained in this Agreement and such material default or
material breach is not cured within ten (10) Business Days after written
notice to PGI specifying such default or breach, Xxxxxx shall have the
right, upon notice to PGI, to terminate this Agreement as Xxxxxx'x sole and
exclusive remedy, in addition to its retention of any Extension Payments
and rights granted under Sales Right Reconfirmation (defined below). In the
event of such
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July 18, 1997
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termination, neither Xxxxxx nor Prime shall have any further obligations to
the other under this Agreement.
(b) In the event of a material default by Xxxxxx in any of its
obligations under this Agreement or in the event Xxxxxx is in material
breach of any of its representations and warranties contained in this
Agreement, and such material default or material breach is not cured within
ten (10) Business Days after written notice to Xxxxxx specifying such
default or breach, Prime may terminate this Agreement, and receive the
prompt return of any and all Extension Payments made pursuant hereto, and
may pursue any and all other rights and remedies available to Prime at law
or in equity, including, but not limited to the right to seek specific
performance; provided, in no event, shall Xxxxxx be liable for monetary
damages in excess of One Million and no/100 Dollars ($l,000,000.00). In no
event shall Xxxxxx be liable for consequential damages, including damages
suffered by Prime on account of a delay or an abandonment of a public
offering of stock of an entity to which Prime expected to assign its rights
under this Agreement, even if such delay or abandonment is caused, in whole
or in part, by a default by Xxxxxx under this Agreement.
(c) Prime hereby acknowledges that, under Section 6.2 of the Triad
Partnership Agreement, Realty has the right at any time to terminate for
cause or without cause the appointment of Prime of Tennessee, Inc. as
Managing General Partner (as such term is defined in the Triad Partnership
Agreement) of Triad. Realty hereby agrees not to exercise such right at any
time prior to the Outside Closing Date (as may be extended), and Prime
hereby acknowledges that Realty may exercise such right at any time after
the Outside Closing Date (as may be extended) in the event the Closing does
not occur on or prior to the Outside Closing Date (as may be extended).
Upon and in connection with the execution of this Agreement, Prime shall
cause PGI, Prime of Tennessee, Inc. and PGC Development, Ltd. to execute
and deliver the Fourth Amendment to Second Amended and Restated Agreement
of Limited Partnership of Triad (the "Fourth Amendment"), in the form
attached hereto as Exhibit J. The Fourth Amendment shall not be effective
unless the transactions contemplated by this Agreement do not occur on or
before the Outside Closing Date (as extended) for any reason other than a
material default by Xxxxxx, and the
Xx. Xxxxxx X. Xxxxxxx
July 18, 1997
Page 15
Fourth Amendment shall be held in accordance with the provisions of the
Sales Right Reconfirmation.
10. No Amendment or Waiver.
(a) Except as otherwise provided herein, this Agreement shall not
constitute, and shall not be interpreted to be, a modification or amendment
to, or waiver or release of, any of the terms of any document, instrument
or agreement now in effect between Xxxxxx and Prime. Xxxxxx and Prime shall
continue to perform in compliance with all terms and conditions of such
agreements as presently in force unless and until the same shall be
modified and amended by definitive documents. Except as otherwise provided
herein, this Agreement shall not (a) limit Xxxxxx or Prime in initiating,
continuing or otherwise proceeding to exercise any right or remedy either
of them may have under any of such existing agreements, instruments or
other documents or (b) relieve Prime or Xxxxxx of any obligation under any
loan, partnership or other documents and agreements between Prime and
Xxxxxx. Without limitation of the foregoing, the obligation to obtain
Xxxxxx'x and Prime's approval of all "Major Decisions" under the
applicable partnership agreements of the Triad Entities shall remain in
force. Notwithstanding the foregoing, unless and until this Agreement has
terminated, Xxxxxx shall not transfer to any third party any of the Xxxxxx
Triad Interests or portion thereof, nor shall Xxxxxx xxxxx to any third
party any option or right to acquire any of the Xxxxxx Triad Interests or
any portion thereof. If, during the term of this Agreement, Xxxxxx receives
any written offer or any written expression of interest in, or any written
inquiry for, the purchase of any of the Xxxxxx Triad Interests or in the
purchase of any of the Triad Entities or any project owned by any of the
Triad Entities, Xxxxxx shall notify Prime of such offers or expressions of
interest or inquiries.
(b) Upon and in connection with the execution of this Agreement,
Prime shall cause Prime of Tennessee, Inc. (in its capacity as managing
general partner of Triad, the managing general partner of each Building
Partnership) and Parking Corp. (in its capacity as managing general partner
of Parking Ltd.) to execute and deliver that certain letter agreement (the
"Sales Right Reconfirmation"), with Realty and KILICO, substantially in the
form attached hereto as Exhibit I. Realty and KILICO hereby consent to and
approve the execution
Xx. Xxxxxx X. Xxxxxxx
July 18, 1997
Page 16
on behalf of each Building Partnership and Parking Ltd. of the Sales Right
Reconfirmation. Upon and in connection with the execution of this
Agreement, Realty and KILICO shall execute and deliver the Sales Right
Reconfirmation, and PGI shall execute and deliver, and cause Prime of
Tennessee, Inc. and PGC Development, Ltd. to execute and deliver, the
consent to the Sales Right Reconfirmation.
11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
12. Notices. All notices and other communications permitted or required
hereunder between the parties shall be (a) in writing and shall be deemed to be
given and received (i) when delivered in person, (ii) one (1) Business Day after
sent by private courier guaranteeing next-day delivery, delivery charges
prepaid, (iii) three (3) Business Days after sent by United States registered or
certified mail, postage prepaid, return receipt requested ("Certified Mail") or
(iv) if sent by facsimile transmission, upon receipt by the sender of written
confirmation from the addressee's facsimile machine that the transmission has
been received, provided a "hard copy" of the notice or other communication is
sent by Certified Mail within one (1) Business Day after transmission, or (v) on
the date either party refuses delivery in person, by Certified Mail or by
private courier service, and, (b) in any case, addressed to the respective
parties at the following addresses:
If to Xxxxxx, to:
c/o ZKS Real Estate Partners, LLC
000 X. Xxxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000/1549
with a copy to:
Zurich Xxxxxx Life
c/o ZKS Real Estate Partners, LLC
22S X. Xxxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Xx. Xxxxxx X . Xxxxxxx
July 18, 1997
Page 17
Facsimile: (000) 000-0000/1549
and to:
X'Xxxxxx & Xxxxxx
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Prime, to:
The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
or to each such party at such other addresses as such party may designate in a
written notice to the other party.
13. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. It is expressly agreed that
Xx. Xxxxxx X. Xxxxxxx
July 18, 1997
Page 18
Prime shall have the right to assign its rights and interests, or any portion of
such rights and interests, in and to this Agreement to any party, provided that
the assignee shall be subject to the terms and conditions of this Agreement, and
Prime shall not be relieved of its obligations under this Agreement.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement.
15. Entire Understanding. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof, and
the parties hereby represent that as of the date of this Agreement there are no
oral covenants, promises, agreements, conditions or understandings between them
relating to the transactions contemplated by this Agreement except as stated in
this Agreement. This Agreement may not be altered, amended, changed or modified,
except by a subsequent or contemporaneous agreement reduced to writing and
signed by all of the parties hereto. Time is of the essence of this Agreement.
16. Expenses and Legal Fees. Each party hereto shall be responsible for
the payment of any and all fees and other charges due any attorney, attorneys,
law firm or law firms, and any consultants, engineers and accountants retained
by such party in connection with the negotiation, delivery and performance by or
on behalf of such party of this Agreement or the transactions contemplated
hereby.
17. Waiver and Severability. No covenant, term or condition of this
Agreement shall be deemed to have been waived by either party, unless such
waiver is in writing signed by the party charged with such waiver. If any term,
covenant or condition of this Agreement or the application thereof to any
person, entity or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the application of such term,
covenant or condition to persons, entities or circumstances other than those as
to which it is held invalid or unenforceable shall not be affected thereby, and
each term, covenant or condition of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
18. Further Assurances. Xxxxxx and Prime each agree, that upon the
reasonable request of the other, that they will each
Xx. Xxxxxx X. Xxxxxxx
July 18, 1997
Page 19
execute, acknowledge and deliver such further documents and instruments and
perform such further acts as may be reasonably necessary, desirable or proper to
carry out the transactions contemplated by this Agreement.
19. Business Day. The term "Business Day" shall mean any calendar day
other than Saturday, Sunday and any day on which banks in Chicago, Illinois are
authorized to close.
20. Prevailing Party. In the event any litigation is commenced with
respect to this Agreement, the party determined to be the prevailing party in
such litigation shall be entitled to collect reasonable attorneys' fees and
costs from the other party.
[signature page follows]
Xx. Xxxxxx X. Xxxxxxx
July 18, 1997
Page 20
If the foregoing corresponds to Xxxxxx'x understanding of the terms of the
agreement between Xxxxxx and Prime with respect to the matters addressed herein,
please so signify by having a duly authorized officer of Xxxxxx execute the
enclosed copy of this letter and returning the executed copy of this letter to
the undersigned.
Very truly yours,
THE PRIME GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------
Title: President
-----------------------
ACCEPTED AND AGREED TO:
KILICO Realty Corporation
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
-----------------------
Title: Vice President
-----------------------
Date: July 21, 1997
-----------------------
Xxxxxx Investors Life Insurance Company
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
-----------------------
Title: Authorized Signatory
-----------------------
Date: July 21, 1997
-----------------------
By: /s/ Xxxxxxxxx Xxxxxxxx
-----------------------
Name: Xxxxxxxxx Xxxxxxxx
-----------------------
Title: Authorized Signatory
-----------------------
Date: July 21, 1997
-----------------------
KFC Portfolio Corp.
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
-----------------------
Title: Vice President
-----------------------
Date: July 21, 1997
-----------------------
EXHIBIT A
---------
THE XXXXXX TRIAD INTERESTS
--------------------------
1. 25% general partnership interest in Triad Development Company held by
KILICO Realty Corporation.
2. 25% limited partnership interest in Triad Development Company held by
Xxxxxx Investors Life Insurance Company.
3. 500 shares of stock in Triad Parking Corporation, a Tennessee corporation,
owned by KILICO Realty Corporation.
4. The Promissory Note, dated as of December 26, 1996, issued by Triad Parking
Company, Ltd. payable to the order of Xxxxxx Investors Life Insurance
Company ("KILICO") in the original principal amount of $290,000.00 (the
"Parking Unsecured Note") held by KILICO.
5. The Promissory Note, dated as of July 24, 1986, issued by Triad Development
Company payable to the order of Xxxxxx Investors Life Insurance Company in
the original principal amount of $475,000.00, as assigned to KFC Portfolio
Corp. ("KFC") and as modified by that certain First Allonge to Promissory
Note, dated as of July 24, 1994, and by that certain Second Allonge to
Promissory Note, dated as of July 31, 1996, with respect to the land on
which the One Centre Square Building is situated, together with all
documents and instruments evidencing or securing the loan (the "One Centre
Square Land Loan") evidenced by such Promissory Note and all documentation
and collateral securing the One Centre Square Land Loan held by KFC.
6. The Promissory Note, dated as of July 24, 1986, by Triad Development Company
payable to the order of Xxxxxx Investors Life Insurance Company in the
original principal amount of $665,000.00, as assigned to KFC and as modified
by that certain First Allonge to Promissory Note, dated as of July 24, 1994,
and by that certain Second Allonge to Promissory Note, dated as of July 31,
1996, with respect to the land on which the Two Centre Square Building is
situated, together with all documents and instruments evidencing or securing
the loan (the "Two Centre Square Land Loan"; the Xxx Xxxxxx Xxxxxx Xxxx
Loan and the Two Centre Square Land Loan are referred to collectively as the
"Centre Square Land Loans") evidenced by such Promissory Note and all
documentation and collateral securing the Two Centre Square Land Loan held
by KFC.
EXHIBIT B
---------
THE BUILDING PARTNERSHIPS
-------------------------
1. Professional Plaza, Ltd., a Tennessee limited partnership.
2. Centre Square II, Ltd., a Tennessee limited partnership.
3. Old Kingston Properties, Ltd., a Tennessee limited partnership.
4. Nashville Office Building I, Ltd., a Tennessee limited partnership.
EXHIBIT C
---------
ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP INTEREST
-------------------------------------------------
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, ________________________, a __________________ corporation
("Assignor"), does hereby sell, assign, transfer and convey to
_________________________, a _____________________corporation ("Assignee"), the
partnership interest held by Assignor consisting of a ______ percent (_______%)
percentage interest as a ____________________________ partner of ______________,
an Illinois ____________________ partnership (the "Interest"), standing in the
name of Assignor on the books and records of _______________________________, an
Illinois limited partnership (the "Partnership"), together with any and all
right, title and interest in any property, both real and personal, to which the
Interest relates, and any other rights, privileges and benefits appertaining
thereto including, without limitation, all of Assignor's right, title and
interest in and to the profits, losses, assets and distributions to which
Assignor is or may be entitled as a holder of the Interest.
This Assignment is made subject to all of the terms and conditions of
the partnership agreement of the Partnership, as amended (the "Agreement"), and
Assignee, by execution of this Assignment, agrees to hereafter abide by and to
be bound by all of the terms and provisions of the Agreement as now in effect or
hereafter amended, in the place and stead of Assignor. Assignee hereby (1)
accepts the assignment and transfer of the Interest and expressly assumes any
and all duties, obligations and liabilities with respect to or in connection
with the Interest (a) occurring or arising from and after the date of this
Assignment, and (b) relating to obligations or liabilities of the Partnership
with respect to deposits or fees paid by tenants for security or otherwise,
whether arising prior to or after the date of this Assignment, and (2) agrees to
indemnify and hold harmless Assignor and Assignor's officers, directors,
stockholders, employees and agents, and its and their respective heirs, legal
representatives, successors and assigns from and against any liability, demand,
claim or action arising from or relating to any and all duties, obligations and
liabilities so assumed.
Assignor hereby represents that it has full power and authority to
make this Assignment, that it has good and valid title to the Interest free and
clear of all liens, security interests and encumbrances and that the Interest
has not otherwise been conveyed, sold, transferred, assigned, pledged or
encumbered. Except as expressly set forth herein, this Assignment is made
without representation or warranty.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment, effective as of the __________ day of ____________________, 1997.
ASSIGNOR:
____________________________________________________________
______________________, a________________________corporation
By:_________________________________________________________
Its:________________________________________________________
ASSIGNEE:
___________________________________________________
______________, a ______________________________ corporation
By:
_________________________________________________________
Its:
_________________________________________________________
EXHIBIT D
RELEASE AND COVENANT NOT TO XXX
THIS RELEASE AND COVENANT NOT TO XXX (this "Release") is made as of
the ___________ day of _____________, 1997, by the undersigned entities, Kilico
Realty Corporation, an Illinois corporation ("Realty"), KFC Portfolio Corp., a
Delaware corporation ("KFC"), and Xxxxxx Investors Life Insurance Company, an
Illinois insurance corporation ("Kilico"), each for itself and on behalf of each
of its and their respective successors and assigns (collectively, the
"Releasors"), in favor of The Prime Group, Inc., an Illinois corporation
("Prime"), and all of its direct or indirect subsidiaries and affiliates
(including, without limitation, Prime Group Limited Partnership, an Illinois
limited partnership, Prime of Tennessee, Inc., an Illinois corporation, Triad
Development Company, an Illinois limited partnership, and the "Entities" defined
below), and each of its and their respective officers, directors, shareholders,
partners, employees and agents, in such capacities, and each of the respective
successors and assigns of the foregoing (collectively, the "Released Parties").
RECITALS:
A. Realty, KFC, Kilico and Prime entered into a letter agreement
dated March __, 1997 (the "Letter Agreement") providing for the sale and
purchase of the interests directly or indirectly owned by Realty, KFC and Kilico
in the projects (collectively, the "Projects") owned by any Triad Entity (as
such term is defined in the Letter Agreement).
B. The undersigned have agreed to execute and deliver this Release
upon the consummation of the transactions contemplated under the Letter
Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration given to the Releasors, the receipt and sufficiency
of which are hereby acknowledged, the Releasors hereby agree as follows:
I. Subject to the terms of Section 2, below, each of the Releasors
hereby releases and forever discharges each and every one of the Released
Parties from, and covenants and agrees not to xxx and not to assert, file or
commence in any court, arbitration proceeding or other tribunal, any suit,
action, litigation, complaint, counterclaim, cross claim or other pleading
setting forth any cause of action or claim against any of the Released Parties
for, any of the following (individually, a "Released Claim," and collectively,
the "Released Claims"):
any claim, demand, debt, sum of money, account, judgment, liability,
obligation, loss, damage, suit, action or cause of action of any kind
or nature whatsoever, known or unknown, fixed or contingent, at law or
in equity which any of the Releasors now has, claims to have, has had
or may have had, as of the date hereof, or may hereafter have or claim
to have under any obligations or agreements existing prior to or as of
the date hereof, against any one or more of the Released Parties, in
its or their capacities as a purchaser, owner, joint venturer,
partner, shareholder, director, option holder or other interest
holder, with respect to, or in any way arising from or in connection
with the Projects or the Triad Entities, or any of them.
II. Notwithstanding the express release and covenant not to xxx set
forth in paragraph 1, above, the Released Claims shall not include, and this
Release shall not be construed as a release of any Released Party from any
obligations or liabilities such Released Party may have (a) under the Letter
Agreement, or any documents or agreements entered into by any such Released
Party pursuant to the Letter Agreement to the extent such obligations are to be
performed after the date hereof, (b) under any loan agreement, partnership,
joint venture or similar agreement, commitment or other agreement or document
which does not pertain to the Projects or the Triad Entities, or (c) under any
environmental or other indemnity or agreement, which obligation or liability by
its terms survives release of any applicable security documents in favor of any
Releasor.
III. Each of the Releasors severally represents and warrants to the
Released Parties that it has not encumbered or sold, transferred, assigned or
otherwise conveyed to any other person or entity (other than another Releasor),
in whole or in part, any Released Claims.
IV. Each of the Releasors hereby covenants and agrees not to assist
any third party in bringing any claim, cause of action or proceeding of any
nature against any of the Released Parties with respect to any matter relating
to any of the Projects, the Triad Entities or the Released Claims.
V. This Release shall be governed by and construed in accordance
with the internal laws of the State of Illinois.
VI. This Release may be executed in multiple counterparts, all of
which taken together shall constitute one and same instrument.
VII. This Release pertains only to the Released Claims. No obligation,
liability or undertaking of any kind or nature whatsoever of any Released Party
in favor of any of the Releasors other than the Released Claims shall be deemed
released, terminated, canceled or in any other way modified or amended by this
Release.
VIII. The undersigned Releasors hereby severally represent and warrant
that no subsidiaries or affiliates of the undersigned have any claim, demand or
cause of action of any kind or nature whatsoever against any one or more of the
Released Parties with respect to or in any way arising from or in connection
with the Projects or the Triad Entities.
IX. The Releasors hereby acknowledge and confirm that any prior
release given in connection with any of the Projects or Triad Entities remains
in full force and effect in accordance with its terms, and in no event shall any
such prior release be deemed to be superseded, diminished or otherwise affected
by the execution of this Release.
X. The undersigned Releasors jointly and severally represent and
warrant that each Releasor has the power and authority to execute and deliver
this Release and the execution and delivery of this Release has been duly and
validly authorized by such Releasor.
[Signature Page to Follow]
IN WITNESS WHEREOF, the undersigned have caused this Release to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
XXXXXX INVESTORS LIFE INSURANCE
COMPANY
By:
--------------------------------
Its:
-------------------------------
By:
--------------------------------
Its:
-------------------------------
KILICO REALTY CORPORATION
By:
--------------------------------
Its:
-------------------------------
KFC Portfolio Corp.
By:
--------------------------------
Its:
-------------------------------
EXHIBIT E
---------
RELEASE AND COVENANT NOT TO XXX
-------------------------------
THIS RELEASE AND COVENANT NOT TO XXX (this "Release") is made as of the
day of ________, 1997, by The Prime Group, Inc., an Illinois corporation
("Prime"), Prime of Tennessee, Inc., an Illinois corporation ("POT"), and Triad
Development Company, an Illinois limited partnership ("Triad"), for themselves
and on behalf of each of their respective successors and assigns in favor of
Kilico Realty Corporation, an Illinois corporation ("Realty"), KFC Portfolio
Corp., a Delaware corporation ("KFC") and Xxxxxx Investors Life Insurance
Company, an Illinois insurance corporation ("Kilico"), and all of the direct or
indirect subsidiaries and affiliates of Realty, KFC and Kilico, and each of its
and their respective officers, directors, shareholders, partners, employees and
agents, in such capacities, and each of the respective successors and assigns of
the foregoing (collectively, the "Released Parties").
RECITALS:
--------
A. Realty, KFC, Kilico and Prime entered into a letter agreement
dated March , 1997 (the "Letter Agreement") providing for the sale and
purchase of the interests directly or indirectly owned by Realty, KFC and
Kilico in the projects (collectively, the "Projects") that are owned by any of
the Triad Entities (as such term is defined in the Letter Agreement).
B. Prime has agreed to execute and deliver this Release upon the
consummation of the transactions contemplated under the Letter Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration given to Prime, POT and Triad, the receipt and
sufficiency of which are hereby acknowledged, Prime, POT and Triad hereby agree
as follows:
I. Subject to the terms of Section 2, below, each of Prime, POT and
Triad hereby releases and forever discharges each and every one of the Released
Parties from, and covenants and agrees not to xxx and not to assert, file or
commence in any court, arbitration proceeding or other tribunal, any suit,
action, litigation, complaint, counterclaim, cross claim or other pleading
setting forth any cause of action or claim against any of the Released Parties
for, any of the following (individually, a "Released Claim," and collectively,
the "Released Claims"):
any claim, demand, debt, sum of money, account, judgment, liability,
obligation, loss, damage, suit, action or cause of action of any kind
or
nature whatsoever, known or unknown, fixed or contingent, at law or in
equity which Prime, POT or Triad now has, claims to have, has had or
may have had, as of the date hereof, or may hereafter have or claim to
have under any obligations or agreements existing prior to or as of
the date hereof, against any one or more of the Released Parties, in
its or their capacities as a lender, credit enhancer, purchaser,
owner, joint venturer, partner, shareholder, director, option holder
or other interest holder, with respect to, or in any way arising from
or in connection with the Projects or the Triad Entities, or any of
them, including without limitation (i) any lender liability or
recharacterization claim or any claim against a Released Party
alleging that such Released Party has taken actions in the nature of a
partner of the borrower or otherwise outside of its capacity as a
lender, or (ii) any claim asserting, or arising in connection with,
any funding obligations or commitments or any environmental
indemnity/liability sharing agreements.
II. Notwithstanding the express release and covenant not to xxx set
forth in paragraph 1, above, the Released Claims shall not include, and this
Release shall not be construed as a release of any Released Party from any
obligations or liabilities such Released Party may have (a) under the Letter
Agreement, or any documents or agreements entered into by any such Released
Party pursuant to the Letter Agreement to the extent such obligations are to be
performed after the date hereof, or (b) under any loan agreement, partnership,
joint venture or similar agreement, commitment or other agreement or document
which does not pertain to the Projects or the Triad Entities.
III. Each of Prime, POT and Triad represents and warrants to the
Released Parties that it has not encumbered or sold, transferred, assigned or
otherwise conveyed to any other person or entity, in whole or in part, any
Released Claims.
IV. Each of Prime, POT and Triad hereby covenants and agrees not to
assist any third party in bringing any claim, cause of action or proceeding of
any nature against any of the Released Parties with respect to any matter
relating to any of the Projects, Triad Entities or the Released Claims.
V. This Release shall be governed by and construed in
accordance with the internal laws of the State of Illinois.
VI. This Release may be executed in multiple counterparts, all of
which taken together shall constitute one and same instrument.
VII. This Release pertains only to the Released Claims. No
obligation, liability or undertaking of any kind or nature whatsoever of any
Released Party in favor of Prime other than the Released Claims shall be deemed
released, terminated, canceled or in any other way modified or amended by this
Release.
VIII. Each of Prime, POT and Triad hereby represents and warrants that
no subsidiaries or affiliates of Prime, POT or Triad have any claim, demand or
cause of action of any kind or nature whatsoever against any one or more of the
Released Parties with respect to or in any way arising from or in connection
with the Projects or the Triad Entities.
IX. Each of Prime, POT and Triad hereby acknowledges and confirms
that any prior release given in connection with any of the Projects or Triad
Entities remains in full force and effect in accordance with its terms, and in
no event shall any such prior release be deemed to be superseded, diminished or
otherwise affected by the execution of this Release.
X. Each of Prime, POT and Triad represents and warrants that it has
the power and authority to execute and deliver this Release and the execution
and delivery of this Release has been duly and validly authorized by Prime.
IN WITNESS WHEREOF, the undersigned have caused this Release to be
duly executed and delivered by its respective duly authorized officers as of the
day and year first above written.
THE PRIME GROUP, INC., an Illinois corporation
By: _____________________________________
Its:_____________________________________
PRIME OF TENNESSEE, INC., an Illinois corporation
By: _____________________________________
Its: _____________________________________
TRIAD DEVELOPMENT COMPANY
By: Prime of Tennessee, Inc.
Managing General Partner
By: _________________________________
Its: _________________________________
EXHIBIT F
SCHEDULE OF LITIGATION
No material pending or threatened litigation.
EXHIBIT G
THE BONDS
1. $9,000,000 The Industrial Development Board of the County of Xxxx, Tennessee
Floating Rate Monthly Demand Industrial Development Revenue Bonds
(Professional Plaza, Ltd. Project).
2. $9,000,000 The Industrial Development Board of the County of Xxxx, Tennessee
Floating Rate Monthly Demand Industrial Development Revenue Bonds (Centre
Square II, Ltd. Project).
3. $3,500,000 The Industrial Development Board of the County of Xxxx, Tennessee
Floating Rate Monthly Demand Industrial Development Revenue Bonds (Old
Kingston Properties, Ltd. Project).
4. $4,800,000 The Industrial Development Board of the Metropolitan Government
of Nashville and Davidson County Floating Rate Monthly Demand Industrial
Development Revenue Bonds (Nashville Office Building I, Ltd. Project).
EXHIBIT H
---------
FINANCIAL STATEMENTS
--------------------
[OMITTED]
EXHIBIT I
---------
SALES RIGHT RECONFIRMATION
--------------------------
See Attached.
July 18, 1997
KILICO Realty Corporation, KFC Portfolio Corp.
and Xxxxxx Investors Life Insurance Company
c/o ZKS Real Estate Partners, LLC
000 X. Xxxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Re: Triad Development Company
Gentlemen:
Reference is made to that certain Letter Agreement dated June 12, 1995, as
amended and reaffirmed by Letter Agreement dated January 8, 1996 (the "Sale
Right Letter Agreement") among Professional Plaza Ltd., Centre Square II, Ltd.,
Old Kingston Properties, Ltd. and Nashville Office Building I, Ltd. (each a
Tennessee limited partnership and herein referred to individually as a "Project
Partnership" and collectively as the "Project Partnerships"), KILICO Realty
Corporation and Xxxxxx Investors Life Insurance Company, pursuant to which each
Project Partnership grants to KILICO Realty Corporation the rights, among other
rights, to market, negotiate a contract for sale, and sell the "Projects"
(defined therein) owned by the Project Partnerships.
Contemporaneously herewith, you and The Prime Group, Inc. ("Prime") are
entering into an agreement of even date (the "Sale Agreement") pursuant to which
you agree to sell, and Prime agrees to purchase, the Xxxxxx Triad Interests (as
defined in the Sale Agreement) on and subject to the terms and conditions set
forth therein. As an inducement to you to enter into the Sale Agreement, the
undersigned agree as follows:
1. The Sale Right Letter Agreement constitutes the valid and binding
obligation of the undersigned, enforceable against the undersigned in accordance
with its terms. As of the date hereof, the undersigned have no defenses to the
performance of any of the rights granted to you under the Sale Right Letter
Agreement or any claim against you which might become a defense against the
enforceability of the obligations of the undersigned under the Sale Right Letter
Agreement. The undersigned hereby agree that the "Effective Time" under the Sale
Right Letter Agreement is August 1, 1996 notwithstanding any assertions to the
contrary relating to that certain Prime Portfolio Letter Agreement dated June
12, 1995, as amended and restated.
2. Until the "Outside Closing Date" (as defined in, and as may be extended
under the provisions of the Sale Agreement) the rights granted to you under the
Sale Right Letter Agreement will be suspended and may not be enforced. However,
from and after the Outside Closing Date or upon earlier termination of the Sale
Agreement for any reason whatsoever (excepting only the concatenation of the
transactions thereunder), the rights granted to you under the Sale Right Letter
Agreement will be automatically reinstated and the Sale Right Letter Agreement
shall be fully enforceable against the undesigned. The Sale Right Letter
Agreement will automatically terminate upon the consummation of the
transactions contemplated by the Sale Agreement.
3. In the event the transactions contemplated under the Sale Agreement
have not been consummated on or before the Outside Closing Date, then from and
after the Outside Closing Date
KILICO Realty Corporation and
Xxxxxx Investors Life Insurance Company
July 18, 1997
Page 2
or the earlier termination of the Sale Agreement, the Sale Right Letter
Agreement shall automatically be deemed amended as follows: (a) Triad Parking
Company, Ltd., a Tennessee limited partnership ("Triad Parking") shall be added
as an additional "Project Partnership", and the commercial real estate project
owned and operated by Triad Parking and situated on the real estate legally
described in Exhibit "A" hereto, together with all improvements thereon and all
rights, easements and appurtenances thereunto belonging, shall be added as an
additional "Project"; and (b) Triad Parking hereby joins in the execution and
delivery of, and agrees to be bound by all of the provisions of, the Sale Right
Letter Agreement, as amended hereby, as applicable to it as a "Project
Partnership" and the "Project" owned and operated by it; provided, however, that
there are no outstanding "Bonds" (within the meaning of the Sale Right Letter
Agreement) and any gross proceeds realized by Triad Parking from any sale or
disposition of its Project after deducting and paying the existing first
mortgage balance, commissions, disposition fees, title insurance and survey
charges, legal expenses and other costs or expenses incurred in connection
therewith, shall be immediately applied at the closing of such transaction to
repayment of that certain Promissory Note dated as of December 26 1996, issued
by Triad Parking and payable to the order of Xxxxxx Investors Life Insurance
Company in the original principal amount of $290,000, with the balance, if any,
distributed to the partners of Triad Parking in accordance with the terms of the
agreement of limited partnership of Triad Parking.
4. To effectuate the provisions hereof: (a) the undersigned Project
Partnerships are each executing and delivering herewith an irrevocable power of
attorney (undated) in favor of KILICO Realty Corporation authorizing it to
exercise, in the name of and on behalf of the undersigned, the rights granted
under the Sale Right Letter Agreement, as amended hereby; (b) the partners of
Triad Development Company are executing and delivering herewith a Fourth
Amendment to Second Amended and Restated Agreement of Limited Partnership of
Triad Development Company and a Certificate of Amendment to the Certificate of
Limited Partnership of Triad Development Company (both undated); and (c) PGC
Development, Ltd. is executing and delivering an Assignment Separate From
Certificate (undated) whereby it assigns and transfers 500 shares of stock in
Triad Parking Corporation, a Tennessee corporation representing 50% of the
issued and outstanding shares of capital stock of said corporation. Until the
reinstatement of the Sale Right Letter Agreement as provided in paragraph 2
above, KILICO Realty Corporation shall hold the documents and instruments
referred to in the preceding subparagraphs (a), (b) and (c), after which time it
may date and complete such documents and instruments and take any and all
actions authorized thereunder or required to effectuate the same. At the closing
of the transactions contemplated by the Sale Agreement, KILICO Realty
Corporation shall return to the appropriate party the documents and instruments
referred to in the preceding subparagraphs (a), (b) and (c), and the rights
granted to you under the Sale Right Letter Agreement shall automatically
terminate.
5. KILICO Realty Corporation shall have full power and authority to
exercise the rights granted under the Sale Right Letter Agreement with respect
to the Project owned by Triad Parking. notwithstanding any provisions requiring
a minimum sale or disposition price as set forth in a letter agreement dated
March 8, 1996 between you and Prime, which provisions are hereby terminated.
To confine your agreement to suspend the operation of the Sale Right Letter
Agreement as provided in Paragraph 2 above, to acknowledge the termination of
the Sale Right Letter Agreement
KILICO Realty Corporation and
Xxxxxx Investors Life Insurance Company
July 18, 1997
Page 3
upon the consummation of the transactions contemplated by the Sale Agreement and
hold the documents and instruments as provided in Paragraph 3 above, please sign
the enclosed copy of this letter and return it to the undersigned.
Sincerely,
PROFESSIONAL PLAZA, LTD., a Tennessee
limited partnership
By: TRIAD DEVELOPMENT COMPANY, an Illinois
limited partnership, its general partner
By: PRIME OF TENNESSEE, INC., an Illinois
limited partnership, its general partner
By:
------------------------------------
Its:
------------------------------------
CENTRE SQUARE II, LTD., a Tennessee limited
partnership
By: TRIAD DEVELOPMENT COMPANY, an Illinois
limited partnership, its general partner
By: PRIME OF TENNESSEE, INC., an
Illinois limited partnership, its
general partner
By:
--------------------------------
Its:
--------------------------------
OLD KINGSTON PROPERTIES, LTD., a Tennessee
limited partnership
By: TRIAD DEVELOPMENT COMPANY, an Illinois
limited partnership, its general partner
By: PRIME OF TENNESSEE, INC., an
Illinois limited partnership, its
managing general partner
By:
--------------------------------
Its:
-------------------------------
KILICO Realty Corporation and
Xxxxxx Investors Life Insurance Company
July 18, 1997
Page 4
NASHVILLE OFFICE BUILDING I, LTD., a
Tennessee limited partnership
By: TRIAD DEVELOPMENT COMPANY, an Illinois
limited partnership, its managing
general partner
By: PRIME OF TENNESSEE, INC., an
Illinois limited partnership, its
general partner
By:
--------------------------------
Its:
--------------------------------
TRIAD PARKING COMPANY, LTD., a Tennessee
limited partnership
By: TRIAD PARKING CORPORATION, its general
partner
By:
-------------------------------------
Its:
------------------------------------
CONFIRMED:
KILICO REALTY CORPORATION, an Illinois corporation
By:
---------------------------------------
Its:
--------------------------------------
XXXXXX INVESTORS LIFE INSURANCE COMPANY, an Illinois insurance
corporation
By:
---------------------------------------
Its:
--------------------------------------
By:
---------------------------------------
Its:
--------------------------------------
KFC PORTFOLIO CORP., a Delaware corporation
By:
---------------------------------------
Its:
--------------------------------------
KILICO Realty Corporation and
Xxxxxx Investors Life Insurance Company
July 18, 1997
Page 5
CONSENT:
The Prime Group, Inc., PGC Development, Ltd. and Prime of Tennessee, Inc.,
individually and as Managing General Partner of Triad Development Company, the
general partner of Professional Plaza, Ltd., Centre Square II, Ltd., Old
Kingston Properties, Ltd. and Nashville Office Building I, Ltd., each hereby
consents to and agrees to be bound by the provisions of the foregoing letter.
THE PRIME GROUP, INC., an Illinois
corporation
By:
-----------------------------------------
Its:
-----------------------------------------
Date:
----------------------------------------
PRIME OF TENNESSEE, INC., an Illinois
corporation
By:
-----------------------------------------
Its:
-----------------------------------------
Date:
----------------------------------------
PGC DEVELOPMENT, LTD., an Illinois united
partnership
By: PGC, INC., a Delaware corporation, its
general partner
By:
--------------------------------------
Its:
--------------------------------------
EXHIBIT J
---------
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TRIAD DEVELOPMENT COMPANY
See Attached.
FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
TRIAD DEVELOPMENT COMPANY
THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF TRIAD DEVELOPMENT COMPANY (this "Amendment") is made and entered
into as of the ______ day of _________, 199___, by and among Prime of Tennessee,
Inc., an Illinois corporation ("PTI"), KILICO Realty Corporation, an Illinois
corporation ("Realty"), The Prime Group, Inc., an Illinois corporation
("Prime"), Xxxxxx Investors Life Insurance Company, an Illinois insurance
corporation ("KILICO"), and PGC Development, Ltd., an Illinois limited
partnership ("PGC Development") (collectively, the "Partners" and individually,
a "Partner").
R E C I T A L S:
A. Realty, KILICO and PGC Development entered into that certain Agreement
of Limited Partnership of Triad Development Company, dated March 26, 1986
("Original Agreement"), as amended by that certain First Amendment to Original
Agreement, dated as of June 18, 1986, that certain Second Amendment to Original
Agreement, dated January 14, 1988, that certain Third Amendment to Original
Agreement, dated April 6, 1989, that certain Fourth Amendment to Original
Agreement, dated January 22, 1990, and that certain Fifth Amendment to Original
Agreement, dated May 14, 1990, providing for, among other things, the formation
of the partnership known as Triad Development Company, an Illinois limited
partnership (the "Partnership"). The Partners entered into that certain Amended
and Restated Agreement of Limited Partnership of Triad Development Company,
dated December 11, 1990, as amended and restated by that certain Second Amended
and Restated Agreement of Limited Partnership of Triad Development Company,
dated April 15, 1991, effective as of December 27, 1990, as amended by that
certain First Amendment to Second Amended and Restated Agreement of Limited
Partnership of Triad Development Company, dated December 31, 1991 (the "First
Amendment"), by that certain Second Amendment to Second Amended and Restated
Agreement of Limited Partnership of Triad Development Company, dated March 22,
1994 (the "Second Amendment"), and by that certain Third Amendment to Second
Amended and Restated Agreement of Limited Partnership of Triad Development
Company entered into as of June 12, 1995, effective as of August 31, 1994 (the
"Third Amendment") (the Original Agreement as both amended and restated and
further amended by the First Amendment, Second Amendment and Third Amendment is
hereinafter referred to as the "Partnership Agreement"). Terms used herein and
not otherwise defined herein and which are defined in the Partnership Agreement
shall have the meaning given such terms in the Partnership Agreement.
B. The Partners desire to amend the Partnership Agreement to, among other
things, convert the interest of PTI from that of a General Partner to that of a
Limited Partner, and to modify the authority and powers of the General Partners
and Limited Partners on the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
are herein acknowledged, the Partners hereby agree as follows:
1. Section 1.4 of the Partnership Agreement is hereby amended in its
entirety as follows:
"1.4 'Approved by the General Partners' or 'Approval of the General
Partners', or any other similar references in the Partnership
Agreement, means approved by the Managing General Partner."
2. Section 2.4 of the Partnership Agreement is hereby amended in its
entirety to read as follows:
"2.4 Principal Place of Business. The principal place of business
of the Partnership shall be c/o ZKS Real Estate Partners, LLC, 000
Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, or any
other location approved by the Managing General Partner."
3. Section 2.6(c) of the Partnership Agreement is hereby amended in its
entirety to read as follows:
"(c) The agent for service of process on the Partnership in the State
of Illinois shall be Xxxxxxx X. Xxxxxxxx, c/o ZKS Real Estate
Partners, LLC, 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000, or any successor appointed by the Managing General
Partner."
4. Realty is hereby designated the sole General Partner of the
Partnership. PTI is hereby designated a Limited Partner of the Partnership and
shall no longer be deemed, or act as, a General Partner of the Partnership.
PTI's ownership interest in the Partnership, including its interest in capital,
Profits and Losses and rights to distribution, shall be an Interest as a Limited
Partner. For purposes of Sections 3.1 and 3.2 of the Partnership Agreement,
Exhibit "A" of the Partnership Agreement is hereby replaced by Exhibit "A-1"
attached to this Amendment, setting forth the names, addresses, Capital
Contributions and Percentage Interests of the General Partner and Limited
Partners, respectively.
5. Section 3.5 of the Partnership Agreement is hereby amended in its
entirety to read as follows:
"3.5 Additional Capital Contributions. The General Partner may make
additional Capital Contributions to the Partnership from time to time
in the exercise of its sole and absolute discretion."
2
6. Sections 3.6, 3.7 and 3.8 of the Partnership Agreement are hereby
deleted.
7. Section 6.1 of the Partnership Agreement is hereby amended in its
entirety to read as follows:
"6.1 Management of Partnership. The exclusive management and control
of the business and affairs of the Partnership shall be vested in the
General Partner. PTI shall not have any power or authority to bind the
Partnership with respect to the conduct, business, or affairs of the
Partnership. Neither PTI nor any other Limited Partner shall have any
right to give or to withhold any approval or consent, or to participate
in any decision, or exercise any right, in each case with respect to
the business or affairs of the Partnership. Each Partner hereby waives
any and all claims such Partner may have against the Partnership or any
Partner for breach of fiduciary duty, or any other similar
responsibility or obligation whether or not relating to any agreement,
commitment, loan or extension of credit by or on behalf of a Partner or
an Affiliate of a Partner."
8. Section 6.2 of the Partnership Agreement is hereby amended in its
entirety to read as follows:
"6.2 Managing General Partner. Realty is hereby designated the
Managing General Partner with the full and complete authority,
discretion and power with respect to the conduct of the business and
the affairs of the Partnership in accordance with the terms of this
Agreement. Any actions performed by or obligations undertaken by the
Managing General Partner shall be binding on and enforceable against
the Partnership, whether or not any other Partner consents thereto or
concurs therewith. The Managing General Partner shall have the right
to designate another Person (including an Affiliate) as Managing Agent
of the Partnership ("Manager"). Any Manager so designated shall have
all the rights, duties and responsibilities of the Managing General
Partner under this Agreement. The Manager shall be entitled to receive
a reasonable fee for its services and be reimbursed reasonable out-of-
pocket expenses incurred in the performance of its duties hereunder,
any amounts so paid or reimbursed shall be an expense of the
Partnership."
9. All "Major Decisions" described in Section 6.3 of the Partnership
Agreement may be taken and implemented by the Managing General Partner in its
sole discretion without the approval or consent of any other Partner.
3
10. Section 6.12 of the Partnership Agreement is hereby amended in its
entirety to read as follows:
"6.12 Voting Rights. The Limited Partners shall have no voting
rights whatsoever under this Agreement."
11. Article VII of the Partnership Agreement is hereby deleted in its
entirety.
12. Sections 9.2 and 12.16 of the Partnership Agreement are hereby deleted
in their entirety.
13. Section 10.1(d) of the Partnership Agreement is hereby amended by
adding the word "or" at the end of clause (iv), deleting "; or" at the end of
clause (v) and substituting a period and deleting all of clause (vi).
14. The Partnership shall have no liability or obligation for payment
of Administration Fees, and all references thereto in the Second Amendment and
Third Amendment are hereby deleted.
15. Except as expressly amended herein, the Partnership Agreement
shall remain in full force and effect, in accordance with its terms.
[Signature Page Follows]
4
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the
day and year first above written.
PRIME OF TENNESSEE, INC., an Illinois
corporation
By:
_______________________________________
Its:
_______________________________________
KILICO REALTY CORPORATION, an Illinois
corporation
By:
___________________________________________
Its:
__________________________________________
THE PRIME GROUP, INC., an Illinois corporation
By:
___________________________________________
Its:
___________________________________________
XXXXXX INVESTORS LIFE INSURANCE
COMPANY, an Illinois insurance corporation
By:
___________________________________________
Its:
___________________________________________
By:
___________________________________________
Its:
___________________________________________
PGC DEVELOPMENT, LTD., an Illinois limited
partnership
By: PGC, INC., a Delaware corporation
its general partner
By:
_______________________________________
Its:
______________________________________
5