Exhibit 10.105
AGREEMENT OF
CONTRIBUTION
BY AND BETWEEN
CE CUMBERLAND 2001
LLC
MALDEN CE 2001 LLC
SWAMPSCOTT CE 2001
LLC
CE SOUTHINGTON 2001
LLC
FRAMINGHAM CE 2001
LLC
CE BRISTOL 2001
LLC
CE SICKLERVILLE 2001
LLC
CE GREENVILLE 2001
LLC
and
INLAND REAL ESTATE ACQUISITIONS,
INC.
DATED AS OF February 24,
2006
TABLE OF
CONTENTS
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Page No.
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ARTICLE 1 - Contribution
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1.1
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Covenant to Contribute
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1
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1.2
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Contribution; Escrow Agent
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2
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ARTICLE 2 - Title and Condition of Property;
Financing
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2.1
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State of Title
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6
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2.2
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Investigations; No Reliance on Documents; As-Is
Sale
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7
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2.3
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Due Diligence Period
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11
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2.4
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Inland’s Right to Terminate
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11
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2.5
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Prepayment of Existing Loans; Assumption of
Existing F Property Loan
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12
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ARTICLE 3 - The Closing
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3.1
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Time and Place
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12
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3.2
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Closing
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12
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3.3
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Delivery of Possession
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15
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ARTICLE 4 - Apportionments and Allocation of
Expenses
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4.1
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Credits and Prorations
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15
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4.2
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Other Adjustments
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15
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4.3
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Transaction and Closing Costs
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16
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ARTICLE 5 - Representations and
Warranties
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5.1
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Ceruzzi’s Representations and
Warranties
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17
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5.2
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Inland’s Representations and
Warranties
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19
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5.3
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Changed Circumstances
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19
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5.4
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Survival of Representations and
Warranties
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20
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ARTICLE 6 - Additional Agreements
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6.1
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Operations Pending Closing
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20
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6.2
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Mutual Cooperation
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21
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ARTICLE 7 - Risk of Loss
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7.1
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Casualty
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21
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7.2
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Condemnation
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22
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ARTICLE 8 - Remedies Upon Default
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8.1
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Time of Essence
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23
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8.2
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Default by Inland
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23
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8.3
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Default by Ceruzzi
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23
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ARTICLE 9 - Agents and Commission
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9.1
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Brokers
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23
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ARTICLE 10 - Miscellaneous
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10.1
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Notices
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24
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10.2
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No Recording
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25
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10.3
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No Agency
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25
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10.4
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Severability
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25
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10.5
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Assignment and Succession
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25
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10.6
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Amendments and Waivers
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25
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10.7
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Further Assurances
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26
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10.8
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Absence of Third-Party Beneficiaries
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26
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10.9
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Governing Law; Jurisdiction
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26
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10.10
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Interpretation
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26
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10.11
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Entire Agreement
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27
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10.12
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Counterparts
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27
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10.13
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Expenses
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27
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10.14
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Consents
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27
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10.15
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Headings
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27
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10.16
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Waiver of Trial by Jury
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27
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10.17
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Confidentiality
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27
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10.18
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Drafts not an Offer to Enter into a Legally
Binding Contract
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28
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10.19
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Exculpation
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28
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10.20
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Joint and Several
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29
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ii
AGREEMENT OF
CONTRIBUTION
THIS AGREEMENT OF
CONTRIBUTION (hereinafter
referred to as the “ Agreement ”), dated as of
this 24th day of February, 2006, between CE Cumberland 2001
LLC, and Malden CE 2001 LLC, and Swampscott CE 2001
LLC, and CE Southington 2001 LLC, and Framingham CE
2001 LLC, and CE Bristol 2001 LLC, and CE
Sicklerville 2001 LLC, and CE Greenville 2001 LLC, each
a Delaware limited liability company, having an address at c/o
Ceruzzi Holdings, LLC, 1720 Post Road, Fairfield, CT 06824
(hereinafter collectively referred to as “
Ceruzz i ”), and Inland Real Estate
Acquisitions, Inc., an Illinois corporation having an address
at 2901 Butterfield Road, Oak Brook, Illinois 60523 (hereinafter
referred to as “ Inland ”).
W I T N E S S E T
H :
WHEREAS, Ceruzzi is the owner of those certain parcels of
real property legally described upon group Exhibit
“A” attached hereto and made a part hereof
(hereinafter collectively referred to as the “ Real
Property ”).
WHEREAS, Ceruzzi desires to sell to Inland and Inland
desires to purchase from Ceruzzi the Property subject to the terms
and conditions hereinafter provided; and
NOW, THEREFORE,
for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties intending to be legally bound, hereby agree as
follows:
ARTICLE 1
Contribution
1.1
Covenant to Contribute
. Prior to Closing, Inland shall
form and organize the Grantees (as hereinafter defined), the
JV’s (as hereinafter defined) and the Member II Entities (as
hereinafter defined). Ceruzzi, through the collective formation of
the limited liability companies described upon Exhibit
“L” attached hereto and made a part hereof,
(collectively, the “ JV’s ”), by Ceruzzi
and the entities to be formed by Inland as described upon
Exhibit “N,” attached hereto and made a part
hereof (the “Member II Entities”) , shall
contribute to the respective JV’s and convey to Inland, and
Inland shall accept from Ceruzzi, the following (collectively, the
“ Property ” and respectively the
“Property” as the context requires):
(a)
the Real Property owned by Ceruzzi,
together with all of the tenements, hereditaments and appurtenances
appertaining thereto, including any estate, right, title, interest,
property, claim and demand of Ceruzzi in and to all streets,
alleys, rights-of-way, sidewalks, easements, and utility lines or
agreements (hereinafter collectively referred to the “
Land ”);
1
(b)
all improvements, buildings and
structures owned by Ceruzzi situate on the Land, including the
shopping center and other facilities located thereon, and any
apparatus, equipment, appliances and fixtures incorporated therein
and used in connection with the operation and occupancy thereof, to
the extent owned by Ceruzzi (hereinafter collectively referred to
as the “ Improvements ”);
(c)
all right, title and interest of
Ceruzzi in and to the leases and other occupancy agreements with
the tenants set forth on Exhibit “B” attached
hereto covering all or any portion of the Real Property or the
Improvements to the extent they are in effect on the Closing Date
(as such term is defined in Section 3.1 hereof) (hereinafter
collectively referred to as the “ Leases ”),
together with all current rents and other sums due thereunder
(hereinafter referred to as the “ Rents
”);
(d)
the non-exclusive right to use all
of Ceruzzi’s architectural and engineering plans,
specifications and drawings, soil studies, land surveys,
environmental studies and reports, hazardous waste studies and
reports, market reports and surveys which are in the possession of
the Ceruzzi (if any) which relate to the Property (hereinafter
collectively referred to as the “Plans”
);
(e)
all utility, service, equipment,
maintenance and other contracts relating to the ownership,
maintenance or use of the Property, as approved during the Due
Diligence Period (as hereinafter defined) by Inland (hereinafter
collectively referred to as the “ Property Contracts
”);
(f)
to the extent assignable, all
permits, approvals and licenses issued by any federal, state or
local governmental authority or agency pertaining to the ownership,
operation, maintenance or use of the Land, including, without
limitation, zoning, site plan and subdivision approvals and
developers’ agreements (hereinafter collectively referred to
as the “Permits ”);
(g)
all books, records and operating
reports in Ceruzzi’s possession, which are necessary to
ensure continuity of operation of the Property (hereinafter
collectively referred to as the “Records
”);
(h)
all right, title and interest, if
any, of Ceruzzi in and to the operating names of each Property
(which shall expressly exclude the names: Stop & Shop, Giant
and BI-LO in all cases); and
(i)
all warranties and/or guaranties for
materials and workmanship benefiting the Purchaser, to the extent
assignable by their terms (hereinafter collectively referred to as
the “Warranties ”).
1.2
Contribution Value; Escrow
Agent.
(a)
Ceruzzi is to contribute and Inland
is to accept all of the Property for the aggregate Contribution
Value of ONE HUNDRED THIRTY MILLION FOUR HUNDRED THIRTY THOUSAND
and NO/100 DOLLARS ($130,430,000.00) for the
“Property Values” described upon
“Exhibit O,” attached hereto and made a
part
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hereof (hereinafter collectively referred to as
the “Contribution Value ”). The Contribution
Value shall be paid and is subject to adjustment as provided in
subsections 1.2 (g) and 1.2 (h), below.
(b)
Upon the execution and delivery of
this Agreement by Ceruzzi and Inland, Inland shall deposit with
Chicago Title Insurance Company, 171 N. Clark Street, Chicago, IL
60601, the sum of ONE MILLION and NO/100 ($1,000,000.00)
DOLLARS (hereinafter referred to as the “Good Faith
Deposit ”). This Agreement shall not be deemed to be
effective and binding upon the parties hereto unless and until the
Good Faith Deposit is so delivered. If the Good Faith Deposit is
not paid within two business days following complete execution of
this Agreement by all parties, this Agreement shall be null and
void and no party shall be bound by the terms hereof. The Escrow
Agent shall hold the Good Faith Deposit in an interest-bearing
trust account maintained by the Escrow Agent at Chicago Title
Insurance Company, Chicago Office (hereinafter referred to as the
“Deposit Escrow Account ”), in accordance with
the terms and conditions of this Agreement. The term
“Deposit” shall mean and refer to the Good Faith
Deposit excluding all accrued interest in the Deposit Escrow
Account, which shall be the property of Inland in all events. The
Deposit shall be distributed in accordance with the terms of this
Agreement.
(c)
Intentionally deleted.
(d)
(i)
The duties of the Escrow Agent are
limited to those specifically provided for herein and are purely
ministerial in nature. Escrow Agent shall incur no liability
hereunder or otherwise except for its own gross negligence or
willful misconduct, and Ceruzzi and Inland hereby release Escrow
Agent from any liability (other than as excepted herein) for any
action taken by it hereunder or for any failure or refusal to act
hereunder or for any other matter. Unless Escrow Agent shall have
been guilty of gross negligence or willful misconduct, Ceruzzi and
Inland, jointly and severally, agree to indemnify and hold harmless
Escrow Agent from and against any liability incurred by it as a
result of its acting as escrow Agent hereunder. Notwithstanding the
immediately preceding sentence, however, Inland shall be solely
responsible for the payment of all fees and other compensation
charged by the Escrow Agent for acting as such hereunder, including
the reimbursement of any costs and expenses incurred by the Escrow
Agent in connection with its acting as Escrow Agent
hereunder.
(ii)
Escrow Agent shall not be bound in
any way or by any agreement or contract between Ceruzzi or Inland,
whether or not it has knowledge thereof, and Escrow Agent’s
only duties and responsibilities shall be to hold the Deposit as
escrow agent and to dispose of the Deposit in accordance with the
terms of this Agreement. Without limiting the generality of the
foregoing, Escrow Agent shall, in the absence of its gross
negligence or willful misconduct, have no responsibility to protect
the Deposit and shall not be responsible for any failure to demand,
collect or enforce any obligation with respect to the Deposit or
for any diminution in value of the Deposit for any cause. Escrow
Agent may, at the expense of Ceruzzi and Inland, consult with
counsel and accountants in connection with its duties under this
Agreement and Escrow
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Agent shall be fully protected in any act taken,
suffered or permitted by it in good faith in accordance with the
advice of such counsel and accountants. Escrow Agent shall not be
obligated to take any action hereunder which may, in its reasonable
judgment, involve it in any liability unless Escrow Agent shall
have been furnished with reasonable indemnity satisfactory in
amount, form and substance to Escrow Agent.
(iii)
Escrow Agent is acting as a
stakeholder only with respect to the Deposit. If there is any
dispute as to whether Escrow Agent is obligated to disburse the
Deposit or as to whom the Deposit is to be delivered, Escrow Agent
shall not make any delivery, but in such event Escrow Agent shall
hold the Deposit until receipt by Escrow Agent of any authorization
in writing, signed by all parties having an interest in such
dispute, directing the disposition of the Deposit. In the absence
of such authorization Escrow Agent shall hold the Deposit until the
final determination of the rights of the parties in any appropriate
proceeding. Escrow Agent shall have no responsibility to determine
the authenticity or validity of any notice, in accordance with any
written notice, direction or instruction given to it under this
Agreement and believed by it to be authentic. If such written
authorization is not given, or proceedings for such determination
are not begun, within thirty (30) days after the dispute arises,
Escrow Agent may, but is not required to, bring an appropriate
action or proceeding for leave to deposit the Deposit with a court
of the State of Connecticut. Pending such determination Escrow
Agent shall be reimbursed for all costs and expenses of such action
or proceeding, including, without limitation, attorneys’ fees
and disbursements by the party determined not to be entitled to the
Deposit. Upon making delivery of the Deposit in the manner provided
in this Agreement, Escrow Agent shall have no further liability
hereunder. In no event shall Escrow Agent be under any duty to
institute, defend or participate in any proceeding which may arise
between Ceruzzi and Inland in connection with the
Deposit.
(iv)
Escrow Agent or any successor Escrow
Agent may resign at any time by giving fifteen (15) days’
prior notice of resignation to the other parties hereto, such
resignation to be effective on the date specified in such notice.
In case the office of Escrow Agent shall become vacant for any
reason, Ceruzzi may appoint a title company, bank or trust company
that is reasonably acceptable to Inland as successor Escrow Agent
to the retiring Escrow Agent, whereupon such successor Escrow Agent
shall succeed to all rights and obligations of the retiring Escrow
Agent as if originally named hereunder, and the retiring Escrow
Agent shall duly transfer and deliver to such successor Escrow
Agent the funds and records, including without limitation the
Deposit, held by the retiring Escrow Agent hereunder.
(e)
Escrow Agent shall execute this
Agreement solely for the purpose of being bound by the provisions
of Sections 1.2(b) and (d) hereof and to acknowledge its receipt of
the Good Faith Deposit.
(f)
(i) At Closing, Ceruzzi shall
receive the Contribution Value in operating units equal to or
greater than Forty-three Million Four Hundred Thirty Thousand and
no/100 Dollars ($43,430,000.00) (the “Operating Units
”) in the JV’s described upon
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Exhibit “L” as so-called “down REIT” Delaware
limited liability companies (collectively, the “DR LLC
”), which operating units shall be valued at $10.00 per unit;
and (ii) the balance of the Contribution Value in cash. Attached
hereto as Exhibit “K” and made a part hereof is
the base form of DR LLC operating agreement (collectively, the
“DR LLC OA ”). The parties hereto agree to
execute and/or cause the execution of the DR LLC OA at or prior to
the date of Closing.
(ii) The base form of DR LLC
OA shall be modified to apply to the terms of this transaction,
including but not limited to the following (in the event of any
conflict between the terms of the attached form of DR LLC OA and
this Agreement, the terms of this Agreement shall
control):
A. The “ Investor Preferred
Return” (as described by the DR LLC OA) shall be a per
annum rate equal to five and one-half (5 ½%) percent on
“ Investor’s Invested Capital” (as
described by the DR LLC OA).
B. Ceruzzi shall have the right to redeem (put)
all of its units (i.e., partial redemption is not permitted) at any
time from and after December 15, 2008; and
C. Inland shall have the right to call (redeem)
the Ceruzzi units at any time from and after the fifth (5
th ) anniversary of the date of Closing
(“Inland’s Call Notice ”), provided
however that Ceruzzi shall have the right to toll the call
(redemption) of the Ceruzzi units pursuant to the terms of
Inland’s Call Notice by electing, within 5-business days of
the date of receipt of Inland’s Call Notice, to freeze the
Investor Preferred Return at 5.5% per annum for a maximum period
expiring on the date which is 10-years from the date of Closing
(the “10-Year Date”).
D. In any event, Inland shall have the right to
call (redeem) the Ceruzzi units at any time from and after the
10-Year Date.
(iii)
The Member II Entities and Ceruzzi
shall (through the JV’s, as sole member) form single purpose
limited liability companies to take title to each Property (the
“Grantees ”). The names of the Grantees are
shown upon Exhibit “M” attached hereto and made
a part hereof.
(iv)
No later than the Closing Date,
Ceruzzi shall obtain the agreement of Stop & Shop, Giant and
BI-LO, as applicable, to make per diem payments to Inland (at a
minimum, on a prorated monthly basis) together with the rental
payments required to be made pursuant to the terms of the Leases,
equal to the “Make Whole Payments” described
upon Exhibit “O” for each day from the date of
Closing through the respective date each tenant is required to
increase its payment of base rent in accordance with the terms of
the Leases.
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ARTICLE 2
Title and Condition of Property;
Financing
2.1
State of Title.
(a)
Title shall be conveyed to the
Grantees at Closing in fee simple by local jurisdiction form
bargain and sale deed with covenants against grantor’s acts
and shall be insurable at regular rates free and clear of any and
all liens, claims, encumbrances, mortgages, deeds of trust and
security interests (except for the lien of real estate taxes not
yet due and payable), but subject to all Permitted Exceptions (as
such term is defined in Section 2.1(c) hereof).
(b)
Inland, the cost and expense thereof
to be paid by Inland, shall obtain a preliminary title search of
each Property (hereinafter collectively referred to as the
“Title Commitment ”) from Chicago Title
Insurance Company (in such capacity, hereinafter referred to as the
“Title Company ”), pursuant to which the Title
Company shall commit to insure (upon the payment of a requisite
premium at regular rates) that the Grantees shall own good and
indefeasible fee simple title to the Property as described in
Section 2.1(a) of this Agreement. Inland shall forward a complete
copy of the Title Commitment to Ceruzzi within five (5) business
days after Inland’s receipt of same. Inland shall have until
5 p.m. on April 24, 2006 (hereinafter referred to as the
“Due Diligence Period ”) within which to object,
by written notice to Ceruzzi, to any exceptions to title set forth
in the Title Commitment. Ceruzzi, at the sole cost and expense of
Inland, shall cause a reputable surveyor licensed in the state of
situs of each Property, to prepare and deliver an ALTA as-built
survey of each Property (to specifications approved by Inland)
(collectively, the “Survey ”) to the Grantees
and Ceruzzi and the Title Company no later than 30-days prior to
the expiration of the Due Diligence Period. Inland shall have until
5:00 p.m. on the last day of the Due Diligence Period within which
to notify Ceruzzi in writing that Inland objects to any state of
facts as shown on any Survey, which written notice must be given
contemporaneously with any written notice given as to exceptions to
title referred to above. If Inland notifies Ceruzzi in writing that
Inland objects to any exceptions to title and/or to any state of
facts in the Survey (hereinafter referred to as a “Title
Objection Notice” ), Ceruzzi shall have ten (10) business
days after receipt of such notification to notify Inland (i) that
Ceruzzi will remove the Title Objection Notice exceptions from
title or, if applicable, remove the matters as shown on the Survey
on or before the Closing or (ii) that Ceruzzi elects not to cause
such exceptions or matters to be removed. If Ceruzzi fails to
notify Inland within such ten (10) business days, Ceruzzi shall be
deemed to have given notice under clause (ii) above. If Ceruzzi
gives (or is deemed to have given) Inland notice under clause (ii)
above, Inland shall have five (5) business days from the date of
receipt of such notice (or in a case where Ceruzzi gives no such
notice, from the last date on which such notice could have been
given) in which to notify Ceruzzi and the Escrow Agent (x) that
Inland will nevertheless proceed with the transactions contemplated
by this Agreement and the Grantees shall then take title to the
Property subject to such exceptions and such matters without
reduction of the Contribution Value or (y) that Inland will
terminate this
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Agreement. If Inland does not provide any notice
contemplated by the immediately preceding sentence, Inland shall be
deemed to have elected that the Grantees shall take title to the
Property pursuant to clause (x) above. If this Agreement is
terminated pursuant to the provisions of Section 2.1(b)(y), (i)
this Agreement shall terminate and be of no further force and
effect, (ii) no party hereto shall have any further rights or
obligations hereunder (except for representations, warranties
and/or any indemnity obligations of any party pursuant to the
provisions of this Agreement which expressly survive termination of
this Agreement), and (iii) the Escrow Agent shall immediately
return the Deposit to Inland.
(c)
The term “Permitted
Exceptions” as used herein shall mean (i) the lien of
real estate taxes, assessments and water and sewer charges not yet
due and payable, (ii) all matters set forth in the Title Commitment
and approved by Inland or deemed approved by Inland as provided
hereinabove, provided, however, matters set forth in the Title
Commitment for which the Standards of Title (or equivalent) of the
Bar Association of each state in which a Property is located
recommend no curative action be taken shall be deemed approved
(iii) intentionally deleted, (iv) all existing building, zoning and
other city, state, county or federal laws, codes and regulations
affecting the Property, (v) any existing general utility easements
serving the Property (provided that such easements do not subject
any owner of such Property to obligations other than are usual and
customary in similar easements and provided further that no
Improvements (other than parking areas and access aisles) are
constructed on such easements), (vi) such state of facts as would
be shown by accurate survey of the Property, (vii) the Leases, and
(viii) any title exception created directly by any act or omission
of Inland or its representatives, agents, employees or
invitees.
(d)
Ceruzzi’s obligation to convey
title to the Property is solely as set forth in Section 2.1(a)
hereof. To the extent that Inland may elect, at its option, to
request the Title Company to issue endorsements to the most current
form of ALTA owner’s title insurance policy as currently and
customarily used in the state of situs of each Property, the
issuance of such endorsements shall be paid by Inland, and (to the
extent that Inland has not terminated this Agreement during the Due
Diligence Period in accordance with the terms of Section 2.4
hereof) the issuance of any such endorsements shall not be a
pre-condition to Inland’s obligation to consummate the
transactions contemplated by this Agreement.
2.2
Investigations; No Reliance on
Documents; As-Is Sale.
(a)
Except as expressly set forth in
this Agreement, neither Ceruzzi nor Inland makes any
representations or warranties as to the truth, accuracy or
completeness of any materials, data or information delivered by
such party or its brokers or agents to the other party in
connection with the transaction contemplated hereby Ceruzzi and
Inland acknowledge and agree that all materials, data and
information delivered by the other party in connection with the
transactions contemplated hereby are provided to the other party as
a convenience only and that any reliance on or use of such
materials, data or information shall be at the sole risk of the
party receiving such materials, data or information from the other
party, except as otherwise expressly stated
7
herein. Neither Ceruzzi, nor any affiliate of
Ceruzzi, nor the persons or entities which prepared any report or
reports (unless Inland has obtained reliance letters from any such
persons or entities or has established legal privity with such
persons or entities by some other means) delivered by Ceruzzi to
Inland, shall have any liability to Inland for any inaccuracy in or
omission from any such reports.
(b)
Except as expressly set forth in
this Agreement and in any documents delivered by Ceruzzi at the
Closing, it is understood and agreed that Ceruzzi is not making and
has not at any time made any warranties or representations of any
kind or character, express or implied, with respect to the
Property, including, but not limited to, any warranties or
representations as to habitability, merchantability or fitness for
a particular purpose, or as to the state of title, physical
condition, environmental condition and/or zoning of the
Property.
INLAND ACKNOWLEDGES AND AGREES THAT UPON CLOSING
CERUZZI SHALL CONTRIBUTE AND CONVEY OR ASSIGN TO THE JV’S AND
GRANTEES AND INLAND SHALL ACCEPT THE Property “ AS IS,
WHERE IS, WITH ALL FAULTS ” AND WITH ALL LATENT OR PATENT
DEFECTS, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS
AGREEMENT OR THE DOCUMENTS EXECUTED AND DELIVERED BY CERUZZI AT THE
CLOSING. INLAND HAS NOT RELIED AND WILL NOT RELY ON, AND CERUZZI IS
NOT LIABLE FOR OR BOUND BY ANY EXPRESS OR IMPLIED WARRANTIES,
GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING
TO ANY PROPERTY OR RELATING THERETO MADE OR FURNISHED BY CERUZZI,
OR ANY REAL ESTATE BROKER OR AGENT PURPORTING TO REPRESENT CERUZZI,
TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN
WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR
DOCUMENTS EXECUTED AND DELIVERED BY CERUZZI AT THE CLOSING. INLAND
ALSO ACKNOWLEDGES THAT THE CONTRIBUTION VALUE REFLECTS AND TAKES
INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD “ AS IS,
WHERE IS, WITH ALL FAULTS. ” IN ADDITION, CERUZZI
WILL HAVE NO OBLIGATION TO PROVIDE ANY REPAIRS, ALTERATIONS OR
IMPROVEMENTS TO THE PROPERTY AS A CONDITION PRECEDENT TO
INLAND’S OBLIGATION TO CLOSE TITLE. IN FURTHERANCE OF THE
FOREGOING AND NOT IN LIMITATION THEREOF, INLAND SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT EXCEPT AS SPECIFICALLY SET FORTH
HEREIN TO THE CONTRARY, INLAND IS NOT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL
OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM
CERUZZI OR ANY PARTNER, MEMBER, MANAGER, SHAREHOLDER, OFFICER OR
DIRECTOR OF CERUZZI OR FROM ANY EMPLOYEE, ATTORNEY, AGENT OR
REPRESENTATIVE OF CERUZZI AS TO ANY MATTER CONCERNING ANY PROPERTY
OR ANY MATERIALS PROVIDED BY THE CERUZZI PURSUANT TO SECTION 2.3
HEREOF, INCLUDING WITHOUT LIMITATION: (i) THE QUALITY,
NATURE, HABITABILITY, MERCHANTABILITY, USE, OPERATION, VALUE,
MARKETABILITY, ADEQUACY OR PHYSICAL CONDITION OF THE
PROPERTY
8
OR ANY ASPECT OR PORTION THEREOF, INCLUDING,
WITHOUT LIMITATION, STRUCTURAL ELEMENTS, FOUNDATIONS, ROOFS,
APPURTENANCES, ACCESS, LANDSCAPING, PARKING FACILITIES, ELECTRICAL,
MECHANICAL, HVAC, PLUMBING, SEWAGE, UTILITY SYSTEMS, FACILITIES,
APPLIANCES, SOILS, GEOLOGY OR GROUNDWATER, (ii) THE DIMENSIONS OR
LOT SIZE OF ANY PROPERTY OR THE SQUARE FOOTAGE OF THE IMPROVEMENTS
THEREON OR OF ANY TENANT SPACE THEREIN, (iii) THE DEVELOPMENT OR
INCOME POTENTIAL, OR DEVELOPMENT OR OTHER RIGHTS OF OR RELATING TO
PROPERTY, (iv) PROPERTY’S INSURABILITY, MERCHANTABILITY,
FITNESS, SUITABILITY, OR ADEQUACY FOR ANY PARTICULAR PURPOSE, (v)
THE ZONING OR OTHER LEGAL STATUS OF PROPERTY OR ANY OTHER PUBLIC OR
PRIVATE RESTRICTIONS ON THE USE OF PROPERTY, (vi) THE COMPLIANCE OF
THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS,
REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS OR
RESTRICTIONS OF ANY GOVERNMENTAL AUTHORITY OR OF ANY OTHER PERSON
OR ENTITY (INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH
DISABILITIES ACT), (viii) THE ABILITY OF INLAND TO OBTAIN ANY
GOVERNMENTAL APPROVALS, LICENSES OR PERMITS NECESSARY FOR
INLAND’S INTENDED USE OR DEVELOPMENT OF THE PROPERTY, (viii)
THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS ON, IN, UNDER, ABOVE
OR ABOUT THE PROPERTY OR ANY ADJOINING OR NEIGHBORING PROPERTY,
(ix) THE DESIGN, CONSTRUCTION OR THE QUALITY OF ANY LABOR AND
MATERIALS USED IN THE CONSTRUCTION OF ANY IMPROVEMENTS, (x) THE
CONDITION OF TITLE TO THE PROPERTY, (xi) THE LEASES, CONTRACTS OR
ANY OTHER AGREEMENTS AFFECTING THE PROPERTY OR THE INTENTIONS OF
ANY PARTY WITH RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF ANY
LEASE OR CONTRACT WITH RESPECT TO THE PROPERTY, OR THE APPLICABLE
CERUZZI’S OWNERSHIP, DEVELOPMENT OR OPERATION OF THE PROPERTY
OR (xii) THE ECONOMICS OF, OR THE INCOME AND EXPENSES, REVENUE OR
EXPENSE PROJECTIONS OR OTHER FINANCIAL MATTERS, RELATING TO THE
PROPERTY, OR THE OPERATION THEREOF. WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, INLAND AGREES THAT INLAND IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY OF CERUZZI, WHETHER SUCH REPRESENTATION
OR WARRANTY IS IMPLIED, PRESUMED OR EXPRESSLY PROVIDED, ARISING BY
VIRTUE OF ANY STATUTE OR COMMON LAW. INLAND AGREES THAT CERUZZI IS
UNDER NO DUTY TO MAKE ANY INQUIRY REGARDING ANY MATTER THAT MAY OR
MAY NOT BE KNOWN TO ANY CERUZZI OR TO CONFIRM, INVESTIGATE OR
QUESTION THE ADEQUACY OF ANY APPRAISAL, REPORT, ANALYSES OR STUDY
OF ANY ASPECT OF THE PROPERTY PREPARED OR OBTAINED BY
CERUZZI.
(c)
Inland’s acceptance of
Ceruzzi’s deed for the Property in favor of the Grantees
shall be deemed to be full performance by Ceruzzi of, and will
discharge Ceruzzi from, all liabilities and obligations under this
Agreement, and thereafter Ceruzzi shall have no liability or
obligation to Inland or to any subsequent owner of the
Property
9
with respect to the Property, nor any liability
or obligation to any other person, firm, corporation or public body
with respect to actions or claims which arise on or after the
Closing Date with respect to the Property. Upon transfer of the
Property, Inland shall be deemed to have accepted and shall be
subject to the terms, conditions and other obligations applicable
to the owner of, and relating to, the Property which are set forth
in any governmental approvals relating to the construction, use or
occupancy of the Property, including without limitation, site plan
approvals and developer’s agreements, whether or not same
shall have been recorded.
(d)
Inland, in consideration for the
promises and covenants contained in this Agreement, and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, as of Closing does hereby release and forever
discharge Ceruzzi from any and all actions, causes of action,
suits, controversies, claims and demands whatsoever, in law and in
equity, for or on account of injuries claimed to have been received
by Inland in connection with the condition of the Property as of
the date of Closing, including without limitation the geophysical
and environmental condition on, or originating from, the Property.
It is expressly understood and agreed by Inland and Ceruzzi that
this release specifically applies to any claims made in connection
with any possible environmental contamination on, or originating
from, the Property, and/or any violation of the Environmental Laws
(as such term is hereinafter defined) by the Ceruzzi in connection
with the Property. For the purposes of this release, the term
“environmental contamination” shall include any type of
environmental orders, statutes or regulations applicable to the
Property, including without limitation to the Comprehensive
Environmental Response, Compensation and Liability Act, the
Superfund Amendments and Reauthorization Act, the Federal Clean
Water Act, the Spill Compensation and Control Act, the Federal
Water Pollution Control Act, the Underground Storage of Hazardous
Substances Act, the Resource Conservation and Recovery Act and all
other applicable federal, state and/or local environmental acts
(hereinafter collectively referred to as the “Environmental
Laws”) as the same are currently in force or may be later
amended, as well as any other claims, suits or actions arising from
or related to the environmental condition of the Property. By
accepting title to the Property through the Grantees at Closing,
Inland shall be deemed to have agreed that Inland: (i) is
satisfied with the environmental conditions of the Property
(regardless of whether the Property complies with all Environmental
Laws or other laws, orders, statutes or regulations affecting the
Property) and that Inland shall have been given the opportunity to
determine, to its own satisfaction, that the Property complies with
all Environmental Laws or other laws, orders, statutes or
regulations affecting the Property; (ii) accepts that Property in
an “AS IS” condition without relying on any verbal or
written statement or representation relating to the Property that
may have been made by the Ceruzzi (except as expressly set forth in
this Agreement); and (iii) shall be solely responsible for any
environmental contamination on, or originating from, the Property
which is not disclosed in the Environmental Assessments to be
obtained by Inland pursuant to Section 2.3 hereof or which
otherwise occurs after the Closing Date due to the actions or
inactions of the Inland, its successors and/or assigns or any third
party, and Inland agrees that it will be solely responsible for any
such environmental contamination. It is understood and agreed that
Ceruzzi does not admit any liability for any environmental
contamination, and liability on the part of Ceruzzi is expressly
denied.
10
(e)
The provisions of this Section 2.2
shall survive Closing or termination of this Agreement.
2.3
Due Diligence Period. Inland shall
have until 5 p.m. (prevailing New York City, New York time) on the
last day of the Due Diligence Period to inspect the Property, to
conduct and prepare studies, tests and surveys and to investigate
and review any and all matters relating to the Property which
Inland shall reasonably deem appropriate, including, without
limitation, zoning matters, environmental matters, the Plans, the
Property Contracts, the Permits, the Leases, the Records, the Title
Commitment and the condition of the Property. In connection with
Inland’s review of the Property, Ceruzzi, shall deliver to
Inland within five (5) business days after the signing of this
Agreement copies of the documents described on the Due Diligence
Checklist attached hereto as Exhibit “C” and
made a part hereof, including copies (if any) of (i) the most
recent tax bills, (ii) the most recent title report and survey of
the Property as are available, (iii) each of the Leases and any
amendments thereto, (iv) all Property Contracts, (v) all Plans,
(vi) all Permits, (vii) all Records, (viii) all Warranties, (ix)
all environmental reports and studies relating to the Property and
(x) all unrecorded developer’s agreements. All of the
foregoing tests, investigations and studies shall be conducted by
Inland or its agents at Inland’s sole risk, cost and expense.
Prior to any such entry unto the Property, Inland shall afford
Ceruzzi not less that one (1) business day’s advance written
notice of such inspection. Inland covenants and agrees that none of
its tests, investigations or studies shall materially interfere
with or disrupt in any manner whatsoever (hereinafter referred to
collectively as “Interference”) (x) the operation of
any Property or any part thereof by any Ceruzzi or any tenant under
any Lease or (y) the conduct of business by any Ceruzzi or any
tenant under any Lease. Prior to entry on any Property by Inland,
Inland shall deliver to Ceruzzi certificates of insurance (prepared
on an insurance certificate form known as an “Accord
27”) from an insurance company or companies reasonably
satisfactory to Ceruzzi, naming Ceruzzi and any other party
requested by Ceruzzi as additional insureds which certificates
shall evidence policies of insurance insuring against claims for
bodily injury, death and property damage with confirmed single
limit amounts of $1,000,000.00 and aggregate amounts of
$2,000,000.00. So long as no Interference results therefrom,
Ceruzzi will provide Inland and its agents with access to all
structures located on the respective Property to permit Inland to
fully conduct its due diligence activities. Inland shall repair and
restore any damage caused to the Property as a result of entry by
Inland or its agents or representatives. Inland shall defend,
indemnify and hold Ceruzzi harmless from and against any and all
damages, losses, liabilities, costs and expenses (including,
without limitation, reasonable attorneys’ fees and court
costs) suffered or incurred by Ceruzzi or any tenant under any
Leases with respect to all claims for personal injury, death or for
loss or damage to property in connection with Inland’s or its
agents’, representatives’, contractors’ or
subcontractors’ entry onto the Property and/or performance of
such studies, tests and surveys. Inland’s indemnification
obligations under this Section 2.3 shall survive the Closing or
termination of this Agreement.
2.4
Inland’s Right to Terminate.
Inland shall have until 5:00 p.m. (prevailing New York City, New
York time) on the last day of the Due Diligence Period within which
to notify Ceruzzi and Escrow Agent in writing (hereinafter referred
to as a
11
“Termination Notice
”), of its election to
terminate this Agreement in its entirety (but not otherwise), for
any reason or for no reason whatsoever. If this Agreement is
terminated pursuant to the provisions of this Section 2.4, (i) this
Agreement shall terminate and be of no further force and effect,
(ii) no party hereto shall have any further rights or obligations
hereunder (except for representations, warranties and/or any
indemnity obligations of any party pursuant to the provisions of
this Agreement which expressly survive termination of this
Agreement), and (iii) the Escrow Agent shall immediately return the
Deposit to Inland. If Inland shall not deliver an appropriate
Termination Notice within the time period set forth herein, Inland
shall be deemed to have accepted the results of its due diligence
examination of the Property, this Agreement shall remain in full
force and effect and Inland shall have no further right to cancel
or terminate this Agreement, except as otherwise expressly provided
herein. If Inland terminates this Agreement, Inland shall promptly
return all due diligence material provided by Ceruzzi.
2.5
Prepayment of Existing
Loans.
Inland hereby acknowledges that the Property is
currently subject to those certain mortgage loans generally
described on Exhibit “D” attached hereto and
made a part hereof (hereinafter collectively referred to as the
“ Existing Loan ”) made by the Lender
(hereinafter referred as the “ Existing Lender
”) identified on Exhibit “D” hereto.
Inland and Ceruzzi hereby acknowledge and agree that Inland is not
assuming the obligations of the Ceruzzi under the Existing Loan,
and that all principal and accrued and unpaid interest under the
Existing Loan shall be prepaid out of the proceeds of the Closing
of the transactions contemplated hereby (including any defeasance
costs and expenses).
ARTICLE 3
The Closing
3.1
Time and Place. Consummation of the
transactions contemplated hereby (hereinafter referred to as the
“Closing ”) shall take place using the services
of Chicago Title Insurance Company ( “Chicago Title
”), as escrow agent. Ceruzzi and Inland shall deliver all of
their respective closing documents in escrow to Chicago with
instructions on the distribution of the documents at such time as
Chicago Title has wired to Ceruzzi the net funds due Ceruzzi in
accordance with the closing statement agreed upon between the
parties. The Closing shall take place no later than 5-business days
after the expiration of the Due Diligence Period (hereinafter
referred to as the “Closing Date ”). Ceruzzi
agrees to reasonably cooperate with Inland in its attempt to take
an assignment of the existing loan documents encumbering the
Property.
3.2
Closing. At the Closing (or such
earlier date as set forth herein), Ceruzzi and Inland shall take
such actions and deliver such agreements and other instruments and
documents necessary or appropriate to effect the transactions
contemplated by this Agreement in accordance with the terms hereof,
including, without limitation, the following:
12
(a) Inland shall deliver to Ceruzzi the portion of
the Contribution Value payable pursuant to Section 1.2(c) hereof
and the Escrow Agent shall deliver the Deposit to the
Ceruzzi.
(b) Ceruzzi and Inland shall execute and deliver
closing statements each in a form reasonably acceptable to Ceruzzi,
Inland and their respective counsel.
(c) Ceruzzi shall convey and transfer to the
Grantees good and insurable title to the Property, subject to the
Permitted Exceptions, by executing, acknowledging and delivering
the deeds to the Grantees (collectively, the “Deed
”).
(d) Ceruzzi and Inland shall execute a
