Document:

Exhibit
10.1#

 

[*]
Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) would
be competitively harmful if publicly disclosed.

  

 

JOINT
VENTURE AGREEMENT

 

 

This
Joint Venture Agreement (the “Agreement”) is made and entered into this 22nd day of April, 2021 (the “Effective
Date”), by and between Silo Pharma, Inc., a Delaware Corporation (“Silo”) and Zylö Therapeutics, Inc., a Delaware
corporation (“ZTI”), for the formation of [Ketamine Joint Venture, LLC] (the “Joint Venture”). Silo and ZTI are
severally referred to herein as a “Joint Venturer” and collectively as the “Joint Venturers.” The names, addresses,
and interests of the Joint Venturers in the Joint Venture are listed in Exhibit A attached hereto and incorporated herein by reference
for all purposes.

 

		1.	Organization.
                                            For and
                                            in consideration of the mutual covenants contained in this Agreement, the Joint Venturers
                                            form, create and agree to associate themselves in the Joint Venture. Following the execution
                                            of this Agreement, the Joint Venturers shall execute or cause to be executed and file any
                                            documents and instruments with any appropriate authorities that may be necessary or appropriate
                                            to comply with all requirements for the formation and operation of a joint venture as a limited
                                            liability company in Delaware.

		a.	Name.
                                            The activities and business of the Joint Venture shall be conducted under the name of [Ketamine
                                            Joint Venture, LLC.] in Delaware and under any variations of this name that are necessary
                                            to comply with the laws of other states within which the Joint Venture may do business or
                                            make investments.

		b.	Place
                                            of Business. The principal place of business and mailing address of the Joint Venture
                                            shall be 560 Sylvan Avenue, Suite 3160, Englewood Cliffs, NJ 07632. Additional places of
                                            business may be located elsewhere.

		c.	Joint
                                            Venture Governing Document. The affairs of the Joint Venture will be governed by a limited
                                            liability company agreement, which will be consistent with the terms of the Agreement and
                                            will contain other customary terms and conditions.

 

		2.	General
                                            Purposes.
                                            The purpose
                                            of the Joint Venture is for the clinical development of Ketamine using ZTI’s Z-podTM
                                            technology. The Joint Venture shall have the power to exercise all of the powers
                                            to engage in the foregoing business, as well as to engage in activities that are related
                                            or incidental to any of these purposes. The Joint Venture shall not engage in any other business
                                            without the prior written consent of all of the Joint Venturers.

 

		3.	Intellectual
                                            Property.

		a.	Albert
                                            Einstein College of Medicine, Inc. (“University”) owns the Patents and Technology
                                            as set forth on Schedule 5.a(i) (the “Patented Technology”), and University is
                                            the record owner of the Patented Technology, which has been confirmed by the execution of
                                            assignments to University from the Inventors.

		b.	University
                                            and ZTI have entered into a License Agreement effective as of November 21, 2017 (the “License
                                            Agreement”), which permits ZTI to grant sublicenses under terms set forth in the License
                                            Agreement.

		c.	The
                                            Joint Venture wishes to practice the Patented Technology as set forth in Schedule 5.a(i)
                                            for the clinical development of Ketamine, and ZTI shall grant to the Joint Venture a sublicense
                                            (“Sublicense”) under the License Agreement to the full extent permitted by, and
                                            on the terms and conditions required by, the License Agreement at a later date in the event
                                            that, including, but not limited to, (a) a reasonable request is made by Silo or a third
                                            party that the Patented Technology is needed to advance the development of the Joint Venture
                                            or (b) it is contemplated or determined that the Patented Technology will be sold.

		d.	Each
                                            of Silo and ZTI acknowledges and agrees that the Joint Venture shall exclusively own all
                                            right, title and interest in and to the JV IP (as defined herein). Notwithstanding the foregoing,
                                            each Joint Venturer shall retain all right, title and interest in and to its respective intellectual
                                            property developed prior to the formation of the Joint Venture, unless such intellectual
                                            property is specifically assigned in writing to the Joint Venture. “JV IP” shall
                                            mean (a) any intellectual property that is developed, written, made, conceived or reduced
                                            to practice by or on behalf of the Joint Venture at any time following the Effective Date,
                                            and (b) any and all modifications, improvements, updates and derivatives made to any of the
                                            foregoing that may be developed by the Joint Venturers with regards to delivery of Ketamine
                                            prior to the Termination Date (as defined herein). Except as otherwise expressly provided
                                            in the Joint Venture governing document, under no circumstances shall a party,
                                            as a result of this Agreement or the Joint Venture governing document, obtain
                                            any ownership interest or other right, title, or interest in or to any other intellectual
                                            property or confidential information of the other party, whether by implication, estoppel,
                                            or otherwise, including any items controlled or developed by the other party, or delivered
                                            by the other party, at any time pursuant to this Agreement or the Joint Venture governing
                                            document.

 

    

     

    

  

		4.	Term
                                            of the Joint Venture. The
                                            Joint Venture shall begin on the 22nd day of April, 2021 and shall continue until
                                            as set forth in Section 15 hereof (the “Termination Date”).

 

		5.	Contributions.

		a.	Initial
                                            Contributions. Silo and ZTI agree to make their respective contributions as described
                                            below:

		i.	ZTI
                                            shall contribute through a contribution agreement: (1) certain rights to its Patented Technology
                                            as set forth on Schedule 5.a(i), including its Z-podTM
                                            technology in accordance with and pursuant to the Sublicense; (2) a license
                                            to know-how and trade secrets held by ZTI with regards to Z-podTM technology
                                            for the loading and release of Ketamine ; (3) Ketamine
                                            to be used for clinical purposes; (4) reasonable use of its facilities and permits; and (5)
                                            its expertise and know-how to advance the Joint Venture.

		ii.	Silo
                                            shall contribute: (1) capital funding to the Joint Venture in an amount of $[*] for development
                                            costs; (2) its expertise and expertise of its scientific advisory board

		b.	Additional
                                            Contributions. No Joint Venturer shall be required to contribute any property or capital
                                            to the Joint Venture except as provided in Paragraph 5(a) or as may otherwise be agreed on
                                            by both of the Joint Venturers. ZTI shall submit to Silo a budget and timeline for each stage
                                            of development and milestones, in substantially the form attached hereto as Exhibit B.
                                            Either Joint Venturer can request in writing that it contribute additional capital or property
                                            beyond that stipulated in Paragraph 5(a). Such request must contain a detailed description
                                            of the use of the funds/property and shall be considered approved by the other Joint Venturer
                                            unless a good business reason otherwise is detailed in writing within 10 business days after
                                            receipt of request.

		c.	Withdrawal.
                                            Except as otherwise provided in this Agreement, no Joint Venturer shall be entitled to withdraw
                                            any part of its contributions from the Joint Venture.

 

		6.	Interest
                                            of Each Joint Venturer. Interest
                                            in the Joint Venture shall initially be 51% owned and controlled by Silo and 49% owned and
                                            controlled by ZTI. However, for every $[*] of capital/property that one Joint Venturer has
                                            contributed beyond what the other Joint Venturer has contributed, that higher-contributing
                                            Joint Venturer shall gain an additional percentage point of control/ownership, with 60% ownership
                                            being the maximum ownership position. Examples of how this would work follow:

		a.	If
                                            Silo contributes (beyond its $[*] initial contribution) $[*] and ZTI contributes $0, then
                                            Silo would have 58% ownership and ZTI would have 42%

		b.	If
                                            Silo contributes (beyond its $[*] initial contribution) $[*] and ZTI contributes $0, then
                                            Silo would have 58% ownership and ZTI would have 42% (i.e., not until Silo has contributed
                                            $[*] more than ZTI would the ownership position increase to 59%)

		c.	If
                                            Silo contributes (beyond its $[*] initial contribution) $[*] and ZTI contributes $[*], then
                                            Silo would have 56% ownership and ZTI would have 44%

		d.	If
                                            Silo contributes (beyond its $[*] initial contribution) $[*] and ZTI contributes $0, then
                                            Silo would have 60% ownership and ZTI would have 40%, as the maximum of 60% would have been
                                            attained

 

		7.	Distributions.
                                            Distributions
                                            from the Joint Venture to the respective Joint Venturers shall be made at the times and in
                                            the amounts in accordance with percentage set opposite each Joint Venturer’s name in
                                            accordance with Section 6 and Section 5 (c) and as agreed upon in the Joint Venture governing
                                            document (Section 1 (c)).

 

		8.	Fiscal
                                            Year. The
                                            fiscal year of the Joint Venture for both accounting and federal income tax purposes shall
                                            end on December 31 of each calendar year.

 

		9.	Books
                                            and Records. Proper
                                            books and records shall be kept with respect to all Joint Venture transactions and maintained
                                            at the principal office of the Joint Venture. Each Joint Venturer or its representative shall
                                            have access to the Joint Venture books and records at all reasonable times during business
                                            hours. The books shall be kept using the method of accounting that shall properly reflect
                                            the income of the Joint Venture and that shall be agreed on by the Joint Venturers. The books
                                            and records shall include the identity and nature of any property in which the Joint Venture
                                            owns a beneficial interest. These records shall include, but shall not be limited to, a statement
                                            of the ownership and nature of real, personal, and mixed property or the interest of the
                                            Joint Venture in that property, as well as the form in which the title to that property is
                                            recorded and maintained, whether in the name of the Joint Venture or in the name of one or
                                            more designated Joint Venturers without designation of the Joint Venture. The books and records
                                            of the Joint Venture shall be reviewed annually at the expense of the Joint Venture by a
                                            certified public accountant selected by the Silo. The selected accountant shall (a) annually
                                            prepare and deliver to the Joint Venture, for filing, the appropriate federal income tax
                                            return and all schedules to those returns, and (b) within 90 days following the end of each
                                            fiscal year of the Joint Venture, deliver to each Joint Venturer financial statements of
                                            the Joint Venture, including balance sheets, profit and loss statements, and statements showing
                                            allocations and distributions to each Joint Venturer.

 

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		10.	Joint
                                            Venture Accounts. All
                                            funds of the Joint Venture shall be deposited in its name in an account or accounts of the
                                            Joint Venture designated by the Manager. Checks shall be drawn on the Joint Venture account
                                            or accounts only for purposes of the Joint Venture business and shall be signed by the persons
                                            that Joint Venturers designate as part of operations of the Joint Venture.

 

		11.	Management.

		a.	Manager.
                                            Silo will act as the Manager (the “Manager”) of the Joint Venture.

		b.	Power
                                            and Authority. Except as provided in the Joint Venture governing document, the
                                            Manager will have full power and authority to conduct and manage the business of the Joint
                                            Venture.

		c.	Requirement
                                            of Good Faith and Fiduciary Duties. The Manager, on behalf of the Joint Venture, shall diligently
                                            and in good faith manage and otherwise conduct the business of the Joint Venture in accordance
                                            with this Agreement and shall be subject to other customary fiduciary duties.

		d.	Collections
                                            and Distributions. The Manager will collect all sums payable to the Joint Venture and will
                                            distribute such amounts, after expenses of the Joint Venture, to the parties in accordance
                                            with their joint instructions or, if no such joint instructions are given, proportionately
                                            to the Joint Venturers in the percentage set opposite each Joint Venturer’s name on
                                            Exhibit A.

 

		12.	Restriction
                                            on Authority of Joint Venturers. The
                                            individual Joint Venturers shall not have any authority with respect to the Joint Venture
                                            and this Agreement to:

		a.	Do
                                            any act in violation of this Agreement.

		b.	Do
                                            any act that would make it impossible to carry on the business of the Joint Venture.

		c.	Possess
                                            Joint Venture property or assign the right of the Joint Venture or its Joint Venturers in
                                            specific Joint Venture property for other than a Joint Venture purpose.

		d.	Make,
                                            execute, or deliver any assignments for the benefit of creditors, or on the assignee’s
                                            promise to pay the debts of the Joint Venture.

		e.	Approve
                                            any material actions that are expressly identified in the Joint Venture governing document
                                            as requiring the consent of both Joint Venturers.

 

		13.	Meetings
                                            of the Joint Venturers. The
                                            Joint Venturers shall hold regular meetings at times and places to be selected by the Manager.
                                            The Joint Venturers shall keep regular minutes of all their proceedings. The minutes shall
                                            be placed in a minute book of the Joint Venture.

 

		14.	Transfers.
                                            Except as
                                            otherwise provided in this Agreement, no Joint Venturer may sell, assign, transfer, encumber,
                                            or otherwise dispose of any Joint Venture interest without the prior written consent of the
                                            other Joint Venturer.

 

		15.	Termination
                                            of the Joint Venture. The
                                            Joint Venture shall terminate upon the Termination Date, or on such other earlier date as
                                            may be determined by the Manager, in its sole and absolute discretion. The Joint Venturers
                                            hereby agree that if the development program does not meet the specifications and milestones
                                            set forth in Exhibit B within thirty (30) days of the date set forth for such milestones
                                            on Exhibit B hereto, the Joint Venturers shall terminate the Joint Venture. Upon the termination
                                            of the Joint Venture, (i) all licenses to Patented Technology and know-how and trade secrets
                                            held by ZTI with regards to Z-podTM technology granted under this Agreement
                                            shall automatically terminate as of the effective date of such expiration or termination;
                                            (ii) each Joint Venturer shall jointly own all right, title, and interest in and to the JV
                                            IP. Each Joint Venturer will have the right, subject to this and applicable law, to make,
                                            have made, use, offer to sell, sell, and import JV IP and freely exercise, transfer, assign,
                                            license, encumber, and enforce all of its rights in the JV IP without the consent, joinder,
                                            or participation of, or payment or accounting, to the other Joint Venturer. Each Joint Venturer
                                            hereby unconditionally and irrevocably waives any right it may have under applicable law
                                            as a joint owner of the JV IP to require such consent, joinder, participation, payment, or
                                            accounting. Each Joint Venturer will, and hereby does, assign, license, and otherwise transfer,
                                            and shall cause its affiliates and its and its affiliates' respective representatives to
                                            assign, license, and otherwise transfer, to the other Joint Venturer and its permitted successors
                                            and assigns, without requirement of additional consideration, all such right, title, and
                                            interest in and to the JV IP as is necessary to fully effect the joint ownership thereof
                                            as provided in this Section.

 

		16.	Distribution
                                            of Assets. On
                                            termination, the assets of the Joint Venture shall be applied to payment of the outstanding
                                            Joint Venture liabilities, although the Manager may maintain an appropriate reserve in the
                                            amount it determines necessary for any contingent liability until the contingent liability
                                            is satisfied.

 

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		17.	Tax
                                            Matters. It
                                            is intended that the Joint Venture will be taxed as a partnership for tax purposes, subject
                                            to further discussion and mutual agreement between the Joint Venturers. The Joint Venture
                                            governing document will contain customary terms and conditions for tax partnerships.

 

		18.	Attorney’s
                                            Fees. In
                                            the event that it should become necessary for any party entitled hereunder to bring suit
                                            against any other party to this Agreement for enforcement of the covenants herein contained,
                                            the parties hereby covenant and agree that the party who is found to be in violation of said
                                            covenants shall also be liable for all reasonable attorney’s fees and costs of court
                                            incurred by the other parties hereto.

  

		19.	Benefit.
                                            All the
                                            terms and provisions of this Agreement shall be binding upon and inure to the benefit of
                                            and be enforceable by the parties hereto, and their respective heirs, executors, administrators,
                                            personal representatives, successors and permitted assigns.

 

		20.	Notices.
                                            All notices,
                                            requests, demands, and other communications hereunder shall be in writing and delivered personally
                                            or sent by registered or certified United States mail, return receipt requested with postage
                                            prepaid, or by electronic mail, to the Joint Venturers at their respective addresses or e-mail
                                            addresses, shown below. Any party hereto may change its address upon ten (10) days’
                                            written notice to any other party hereto.

 

Notices:

 

Silo
Pharma, Inc.:

Attn:
Eric Weisblum

560
Sylvan Avenue, Suite 3160

Englewood
Cliffs, NJ 07632

e-mail:
eric@silopharma.com

 

Zylö
Therapeutics, Inc.:

Attn:
Scott Pancoast

105A
Ben Hamby Dr

Greenville,
SC 29615

e-mail:
spancoast@zylotherapeutics.com

 

		21.	Construction.
                                            Words of
                                            any gender used in this Agreement shall be held and construed to include any other gender,
                                            and words in the singular number shall be held to include the plural, and vice versa, unless
                                            the context requires otherwise. In addition, the pronouns used in this Agreement shall be
                                            understood and construed to apply whether the party referred to is an individual, partnership,
                                            joint venture, corporation or an individual or individuals doing business under a firm or
                                            trade name, and the masculine, feminine and neuter pronouns shall each include the other
                                            and may be used interchangeably with the same meaning.

 

		22.	Waiver.
                                            No course
                                            of dealing on the part of any party hereto or its agents, or any failure or delay by any
                                            such party with respect to exercising any right, power or privilege of such party under this
                                            Agreement or any instrument referred to herein shall operate as a waiver thereof, and any
                                            single or partial exercise of any such right, power or privilege shall not preclude any later
                                            exercise thereof or any exercise of any other right, power or privilege hereunder or thereunder.

 

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		23.	Cumulative
                                            Rights. The
                                            rights and remedies of any party under this Agreement and the instruments executed or to
                                            be executed in connection herewith, or any of them, shall be cumulative and the exercise
                                            or partial exercise of any such right or remedy shall not preclude the exercise of any other
                                            right or remedy.

 

		24.	Invalidity.
                                            In the event
                                            any one or more of the provisions contained in this Agreement or in any instrument referred
                                            to herein or executed in connection herewith shall, for any reason, be held to be invalid,
                                            illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability
                                            shall not affect the other provisions of this Agreement or any such other instrument.

 

		25.	Headings.
                                            The headings
                                            used in this Agreement are for convenience and reference only and in no way define, limit,
                                            simplify or describe the scope or intent of this Agreement, and in no way effect or constitute
                                            a part of this Agreement.

 

		26.	Multiple
                                            Counterparts. This
                                            Agreement may be executed in one or more counterparts, each of which shall be deemed an original,
                                            but all of which together shall constitute one and the same instrument. A facsimile transmission
                                            or PDF copy of this signed Agreement shall be legal and binding on all parties hereto.

 

		27.	Governing
                                            Law. This
                                            Agreement shall be governed by and construed in accordance with the laws of the State of
                                            Delaware, without regard to any conflicts of laws provisions thereof.

 

		28.	Perfection
                                            of Title. The
                                            parties hereto shall do all other acts and things that may be reasonably necessary or proper,
                                            fully or more fully, to evidence, complete or perfect this Agreement, and to carry out the
                                            intent of this Agreement.

 

		29.	Entire
                                            Agreement. This
                                            instrument contains the entire Agreement of the parties and may not be changed orally, but
                                            only by an instrument in writing signed by the party against whom enforcement of any waiver,
                                            change, modification, extension, or discharge is sought.

 

		30.	Option.
                                            If
                                            the Joint Venture is consummated and a definitive Joint Venture governing document is entered
                                            into, ZTI will agree to grant Silo an exclusive option to enter into a separate joint venture
                                            for the purpose of the clinical development of psilocybin using ZTI’s Z-podTM
                                            technology on the same terms as set forth in this Agreement (the
                                            “Option”). The Option shall expire 24 months from the Effective Date.

  

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IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first written above

  

	Silo
    Pharma, Inc.

     

    Officer
    Name: Eric Weisblum

     

    Officer
    Signature: /s/ Eric Weisblum

     

    Officer
    Title: Chief Executive Officer

     

    Date:
    April 22, 2021
	Zylo
    Therapeutics Inc.

     

    Officer
    Name: Scott Pancoast

     

    Officer
    Signature: /s/ Scott Pancoast

     

    Officer
    Title: Chief Executive Officer

     

    Date:
    April 22, 2021

 

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Exhibit
A

 

	Name	Address	Interest
	Silo
    Pharma, Inc.	560
    Sylvan Avenue, Suite 3160

    Englewood
    Cliffs, NJ 07632

     
	51%
	Zylo
    Therapeutics Inc.	105A
    Ben Hamby Rd., Greenville, SC 29615	49%

 

 

    7

     

    

 

Exhibit
B 

 

Budget,
Timeline and Milestones

 

[*]

 

    8

     

    

  

Schedule
5a(i) 

Patented
Technology 

 

[*]

 

    9ex_245050.htm

Exhibit 10.1

 

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (the “Agreement”) is made as of April 23, 2021 (the “Effective Date”), by and between YUNHONG CTI LTD., an Illinois corporation, f/k/a CTI Industries Corporation (“Seller”), and ICY MELLON LLC, a Texas limited liability company (“Purchaser”).

 

W I T N E S S E T H:

 

 

Seller is the owner of the “Property” (more specifically defined herein) located at 22160 N. Pepper Road, Lake Barrington, Illinois. On the terms set forth herein, Seller desires to sell the Property to Purchaser and Purchaser desires to purchase the Property from Seller.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Purchaser hereby agree as follows:

 

ARTICLE I

PURCHASE AND SALE

 

1.1         Agreement of Purchase and Sale. Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey and Purchaser agrees to purchase the following:

 

1.1.1         that certain tract or parcel of land situated in Lake County, Illinois, more particularly described on EXHIBIT A attached hereto and made a part hereof, together with all and singular the rights and appurtenances pertaining to such property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of-way (collectively, the “Land”); and

 

1.1.2         the buildings, and structures, and other improvements on the Land, (collectively, the “Improvements”), but specifically excluding any fixtures.

 

1.2         Property Defined. The Land and the Improvements are hereinafter sometimes referred to collectively as the “Property.” The Property shall not include any bank accounts of Seller.

 

1.3         Permitted Exceptions. The Property shall be conveyed subject to the matters which are, or are deemed to be, Permitted Exceptions pursuant to ARTICLE II hereof (herein collectively referred to as the “Permitted Exceptions”).

 

1.4         Purchase Price. Seller is to sell and Purchaser is to purchase the Property for a total of THREE MILLION FIVE HUNDRED THOURSAND AND NO/100 DOLLARS ($3,500,000.00) (the “Purchase Price”).

 

1.5         Payment of Purchase Price. The Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be payable in full at Closing in cash by wire transfer of immediately available federal funds to an escrow bank account of the Escrow Agent (as defined in Section 2.1 below), provided that a portion of the Purchase Price not to exceed ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00) may be satisfied by Purchaser delivering to Seller the Promissory Note in the form attached hereto as EXHIBIT D and made a part hereof (the “Promissory Note”)

 

 

 

 

 

1.6         Lease of Property. On the Closing Date, Purchaser shall lease the Property to Seller pursuant to the Lease, the form of which is attached hereto as EXHIBIT C and made a part hereof (the “Lease”).

 

 

ARTICLE II

TITLE AND SURVEY

 

2.1         Commitment for Title Insurance. Seller has delivered to Purchaser a commitment for a ALTA 2006 title insurance policy covering the Land (the “Title Commitment”) prepared by Riverside Abstract LLC, as agent for Chicago Title Insurance Company (the “Title Company” and/or the “Escrow Agent” as applicable), together with copies of all instruments referenced in Schedule B of the Title Commitment. Delivery of the Title Commitment and Schedule B documents may be made by way of electronic document portal provided by the Title Company to which Purchaser is granted access.

 

2.2         Survey. Purchaser, at Purchaser’s sole cost and expense, may order a 2021 ALTA survey of the Land and Improvements (the “Updated Survey”).

 

2.3         Subject to Section 2.4 below, but notwithstanding anything else contained in this Agreement to the contrary, Seller shall be obligated to (i) satisfy any mortgage or other consensual, monetary liens granted by Seller and (ii) cure any other title defect which can be cured by the payment of money.

 

2.4         Conveyance of Title. At Closing, Seller shall convey and transfer to Purchaser such title to the Property as will enable the Title Company to issue to Purchaser an ALTA 2006 extended coverage Owner’s Policy of Title Insurance (the “Title Policy”) covering the Property, in the amount of the Purchase Price. It shall not be a condition to Closing that the Title Policy contain any endorsements. Notwithstanding anything contained herein to the contrary, the Property shall be conveyed subject to (and the Title Policy may be subject to or contain exceptions for) the following matters, all of which shall be deemed to be Permitted Exceptions:

 

2.4.1         the rights of Seller under the Lease;

 

2.4.2         the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the Closing Date;

 

2.4.3         local, state and federal laws, ordinances or governmental regulations, including but not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect relating to the Property;

 

2

 

 

2.4.4         acts done or caused by or through Purchaser or matters arising by virtue of the identity or status of Purchaser; and

 

2.4.5 that certain Real Property Mortgage made by Seller (f/k/a CTI Industries Corporation) and PNC Bank, National Association (“Seller’s Lender”) dated December 14, 2017 and recorded with the Lake County Recorder of Deeds on December 19, 2017 as File 7452039.

 

 

ARTICLE III

DUE DILIGENCE

 

3.1         Due Diligence Information. Prior to the Effective Date, to the extent in Seller possession or control, Seller shall deliver or cause to be delivered to Purchaser (or made available through a document portal on the Internet which Purchaser has free access to or at the Property), copies of the following documents, schedules and other information described below (collectively, the “Due Diligence Information”):

 

3.1.1    Permits. A list or copies of all current licenses or permits issued to Seller with respect to the Property (collectively “Permits”).

 

3.1.2    Property Taxes. Copies of the tax bills for calendar years 2019 and 2020 with respect to the Property, including, without limitation, real and personal property taxes and any special assessments.

 

3.1.3    Utilities. Copies of utility bills for the Property will be available for review at the Property only.

 

3.1.4    Insurance. Copies of Seller’s certificates of insurance for the Property.

 

Except for the Seller Representations (defined below), Seller makes no representations or warranties as to the truth, accuracy or completeness of any of the Due Diligence Information. It is the parties’ express understanding and agreement that subject to the Seller Representations, any Due Diligence Information is provided only for Purchaser’s convenience in making its own examination and determination prior to the end of the Inspection Period as to whether it wishes to purchase the Property, and, in doing so, Purchaser shall rely exclusively on its own independent investigation and evaluation of every aspect of the Property and the Seller Representations and not on any Due Diligence Information or other materials supplied by Seller (as defined in Section 8.1 below).

 

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ARTICLE IV

CLOSING

 

4.1         Time and Place. The consummation of the transaction contemplated hereby (“Closing”) shall be held through an escrow at the offices of Title Company at 10:00 AM (Chicago Time) on April 23, 2021, or on such other date as the parties may mutually agree (the “Scheduled Closing Date”). The Closing shall occur on a so-called “New York style” basis with the disbursement of closing funds prior to the recordation of the Deed, but only upon satisfaction of the conditions precedent to Closing set forth herein. At Closing, Seller and Purchaser shall perform the obligations set forth in, respectively, Section 4.2 and Section 4.3, the performance of which obligations shall be concurrent conditions. As used in this Agreement, the term “Closing Date” shall mean the Scheduled Closing Date or such other date to which the Closing may be expressly adjourned pursuant to the terms and conditions of this Agreement including by the express rights granted to Purchaser and Seller in this Agreement.

 

4.2         Seller’s Obligations at Closing. At Closing, Seller shall:

 

4.2.1         deliver to Purchaser a duly executed special warranty deed (the “Deed”), in the form attached hereto as EXHIBIT B, conveying the Land and Improvements, subject only to the Permitted Exceptions;

 

4.2.2         deliver to Purchaser Seller’s counter-signed signature pages to the Lease;

 

4.2.3         deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

 

4.2.4         deliver to Purchaser an affidavit duly executed by Seller stating that Seller is not a “foreign person” as defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act;

 

4.2.5         deliver to the Title Company an acceptable form of owner’s affidavit sufficient to cause the Title Policy to be issued in accordance with this Agreement, along with a gap indemnity (if required by the Title Company);

 

4.2.6         deliver to the Title Company a settlement statement/closing statement setting forth the Purchase Price and all additions and subtractions thereto made in accordance with the terms and conditions of this Agreement; and

 

4.2.7         deliver to the Title Company any required transfer declarations executed by Seller (if required).

 

4.3         Purchaser’s Obligations at Closing. At Closing, Purchaser shall:

 

4.3.1         pay to Seller the full amount of the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, in immediately available wire transferred funds pursuant to Section 1.5 above, it being agreed that at Closing the Earnest Money shall be delivered to Seller and applied towards payment of the Purchase Price;

 

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4.3.2         deliver to Seller Purchaser’s counter-signed signature pages to the Lease;

 

4.3.3         join Seller (if required) in the execution of any instruments described in Section 4.2.6 or Section 4.2.7 ;

 

4.3.4         deliver to Seller such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Purchaser; and

 

4.3.5 deliver to Seller the executed Promissory Note.

 

4.4         Credits and Prorations. In view of the subsequent lease of the Property to Seller pursuant to the Lease and Seller’s obligations thereunder, there shall be no proration of insurance, taxes, special assessments, utilities or any other costs related to the Property between Seller and Purchaser at Closing.

 

 

4.5         Closing Costs.

 

4.5.1         Notwithstanding anything to the contrary, all of the following shall be considered “Closing Costs” which shall be the responsibility of Purchaser as part of the Purchase Price: (i) any escrow fees which may be charged by the Escrow Agent or Title Company; (ii) the cost of the search and exam fee for the Title Commitment; (iii) the cost of the base premium for the issuance of the Title Policy and the premium for the issuance of all endorsements to the Title Policy; (iv) the cost of the Updated Survey; (v) any deed or transfer tax due to the State of Illinois and County of Lake; (vi) the fees for recording the deed conveying the Property to Purchaser; and (vii) all other costs and expenses incident to this transaction and the closing thereof (subject to Section 4.5.2, below).

 

4.5.2         The fees of any counsel representing it in connection with this transaction shall be paid by the party incurring same.

 

4.6         Conditions Precedent to Obligation of Purchaser. The obligation of Purchaser to consummate the transaction hereunder shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Purchaser in its sole discretion:

 

4.6.1         Seller shall have delivered to Purchaser all of the items required to be delivered to Purchaser pursuant to the terms of this Agreement.

 

4.6.2         All of the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date (except with respect to modifications permitted under this Agreement or other modifications that are not materially adverse to Purchaser).

 

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4.6.3         Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date.

 

4.6.4         Seller shall provide evidence that Seller’s Lender consents to the transactions contemplated herein (“Lender’s Consent”).

 

If Closing shall occur, all of the foregoing conditions precedent shall be deemed to have been satisfied.

 

4.7         Conditions Precedent to Obligation of Seller. The obligation of Seller to consummate the transaction hereunder shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Seller in its sole discretion:

 

4.7.1         Seller shall have received the Purchase Price.

 

4.7.2         Purchaser shall have delivered to Seller all of the items required to be delivered to Seller pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.3.

 

4.7.3         All of the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Closing Date.

 

4.7.4         Purchaser shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Purchaser as of the Closing Date.

 

4.8         Possession and Post-Closing Deliveries. Possession of the Property (subject to the Permitted Exceptions and the Lease) shall be delivered by Seller to Purchaser at Closing, subject to the terms of the Lease.

 

4.9         Title Company’s Instructions at Closing. At Closing, Seller and Purchaser agree to execute such additional escrow instructions as Title Company may reasonably require and which are not inconsistent with the provisions hereof in order to consummate the transactions contemplated hereunder; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control.

 

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ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

5.1         Representations and Warranties of Seller. Seller hereby makes the following representations and warranties to Purchaser as of the Effective Date:

 

5.1.1         Organization and Authority. Seller has been duly organized and is validly existing and in good standing under the laws of Illinois. Seller has the full right and authority to enter into this Agreement and to transfer all of the Property to be conveyed by Seller pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein to be made by Seller. The person signing this Agreement on behalf of Seller is authorized to do so.

 

5.1.2         Conflicts; Pending Actions. Subject to receipt of Lender’s Consent, there is no agreement to which Seller is a party or, to Seller’s knowledge, binding on Seller which is in conflict with this Agreement, or which limits or impairs Seller’s ability to execute or perform its obligations under this Agreement. To Seller’s knowledge and except as disclosed in writing to Purchaser, there is no action, suit, arbitration, unsatisfied order or judgment, governmental investigation or proceeding pending against the Property or Seller, which, if adversely determined, could individually or in the aggregate have a material adverse effect on the Property or any portion thereof or which could in any material way interfere with the consummation by Seller of the transaction contemplated by this Agreement.

 

5.1.3         No Violations. To Seller’s knowledge and except as set forth in the Due Diligence Information, Seller has not received prior to the Effective Date any written notification from any governmental or public authority (i) that the Property is in violation of any applicable fire, health, building, use, occupancy or zoning laws and which violation remains outstanding as of the Effective Date; or (ii) that any work is required to be done upon or in connection with the Property, where such work remains outstanding.

 

5.1.4         Condemnation. To Seller’s knowledge, no condemnation proceedings relating to the Property are pending or have been threatened in writing.

 

5.1.5         OFAC/USA Patriot Act. Seller is not a person or entity with whom U.S. persons are restricted from doing business under the regulations of the Office of Foreign Assets Control (“OFAC”) of the Department of Treasury (e.g. OFAC’s Specially Designated and Blocked Persons list), Executive Order Number 13224 on Terrorism Financing, effective September 24, 2001 (“Executive Order 13224”), or the United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, H.R. 3162, Public Law 107-56 (“USA Patriot Act”).

 

5.1.6         Bankruptcy. Seller has not filed for relief as a debtor under any state receivership laws or federal bankruptcy laws.

 

5.1.7         Governmental Work Orders. Seller has not received any written notifications from any city, county, state or federal authority having jurisdiction over the Property, or from any utility providing service to the Property requiring any work to be done to, or affecting the use, operation and/or occupancy of the Propertys or any portion thereof, and Seller has not received written notice of, and has no knowledge of, any federal, state, county, municipal or other governmental plans to change the highway or road system in the vicinity of the Property which could materially restrict or change access from any such highway or road to the Property.

 

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5.1.8         Zoning. Seller has no pending, and has not previously filed within the preceding one (1) year, applications for changes of zone, variances, or any other land use matter affecting any portion of the Property. The present zoning of the Land permits the current use thereof without special variances; there exists no judicial, quasi-judicial, administrative or other proceeding which might adversely affect the validity of such zoning; and Seller has no notice of threatened action or proceeding which could result in a modification or the termination of such zoning.

 

5.1.9         No Purchase Rights. As of the date hereof, Seller has not granted any option rights or rights of first refusal with respect to the Property.

 

5.1.10          No Tenancies. There are no leases, tenancies, licenses or other rights of occupancy, written or oral, with respect to the Property.

 

5.1.11         Environmental. The Property is in compliance with all applicable environmental laws (“Environmental Laws”), and all operations and activities currently performed on the Property are, and all previous operations and activities were performed, in compliance with all applicable Environmental Laws. No hazardous material is or has been used, generated, manufactured, processed, treated, stored, transported, incinerated, released, or disposed of in, on, under, to, or from the Property, except in strict compliance with all applicable Environmental Laws. No underground storage tank currently exists, or, has ever existed, in, on, or under the Property, no part of the Property has been used for landfill, dumping, or other waste disposal activities or operations, and there is no friable asbestos or any substance containing asbestos deemed hazardous by federal or state regulations on the Property or in the improvements. Seller has not received, and Seller is not aware of any previous owner or occupant of the Property receiving, any citation, directive, demand, pleading, complaint, claim, information inquiry, notice of potential responsibility, notice of violation, order, notice of investigation, or other communication, oral or written, actual or threatened, from any governmental authority, or any person or entity, regarding (i) the existence of any hazardous material(s) in, on, under, or migrating from, the Property in violation of applicable laws; or (ii) the potential liability or responsibility of Seller, or any past or present owner or occupancy of the Property, under any such law(s).

 

5.1.12         Utilities. The Property and the improvements are connected to and are served by water, solid waste and sewage disposal drainage, telephone, gas, electricity and other utility equipment facilities, and services required by law or necessary for its current and future operation and use.

 

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5.2         Knowledge Defined. References to the “knowledge” of Seller shall refer only to the actual knowledge of the Designated Individual (as hereinafter defined) who is affiliated with the Seller, and shall not be construed, by imputation or otherwise, to refer to the knowledge of Seller, to any affiliate of Seller, to any property manager, or to any other officer, agent, manager, representative or employee of Seller or any affiliate thereof. There shall be no obligation or duty upon such Designated Individual to investigate the matter to which such actual knowledge, or the absence thereof, pertains. Purchaser acknowledges that the Designated Individual named above is named solely for the purpose of defining and narrowing the scope of Seller’s knowledge and not for the purpose of imposing any liability on or creating any duties running from the Designated Individual to Purchaser. As used herein, the term “Designated Individual” shall mean Jana Schwan.

 

5.3         Limitations Regarding Seller’s Representations and Warranties.

 

5.3.1         The representations and warranties of Seller in this Agreement (including Section 5.1) or in any document delivered in connection with this Agreement (collectively, the “Seller Representations”) shall survive Closing for a period of one (1) year (the “Survival Period”). Additionally, in no event shall Seller be liable to Purchaser for, or be deemed to be in default hereunder by reason of, any breach of any Seller Representations which results from any change that (i) occurs between the Effective Date and the Closing Date (other than a change resulting from the Seller’s breach or default of an express obligation set forth in this Agreement), (ii) is disclosed to Purchaser in writing prior to Closing, (iii) is expressly permitted under the terms of this Agreement, or (iv) is beyond the reasonable control of Seller to prevent; provided, however, that the occurrence of any such change which is not expressly permitted hereunder or is beyond the reasonable control of Seller to prevent shall, if materially adverse to Purchaser, constitute the non-fulfillment of the condition set forth in Section 4.6.2 (but not a default by Seller hereunder).

 

5.3.2         No claim for a breach of any Seller Representation shall be actionable or payable: (i) if the breach in question results from or is based on a condition, state of facts or other matter which was known to Purchaser prior to Closing, (ii) unless the valid claims for all such breaches collectively aggregate more than Twenty-Five Thousand and No/100 Dollars ($25,000.00) (the “Basket”), in which event the full amount of such claims shall be actionable, (iii) to the extent such claims shall exceed in the aggregate One Hundred Thousand and No/100 Dollars ($100,000.00) (the “Cap”) and (iv) unless written notice containing a description of the specific nature of such breach shall have been given by Purchaser to Seller prior to the expiration of the Survival Period and an action shall have been commenced by Purchaser against Seller within thirty days after the end of the Survival Period. Purchaser agrees to first seek recovery under any insurance policies, prior to seeking recovery from Seller, and Seller shall not be liable to Purchaser if Purchaser’s claim is satisfied from such sources.

 

5.4         Intentionally Omitted.

 

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5.5         Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Seller:

 

5.5.1         ERISA. Purchaser is not acquiring the Property with the assets of an employee benefit plan as defined in Section 3(3) of ERISA.

 

5.5.2         Authority. Purchaser has the full right, power and authority to purchase the Property as provided in this Agreement and to carry out Purchaser’s obligations hereunder, and all requisite action necessary to authorize Purchaser to enter into this Agreement and to carry out its obligations hereunder have been, or by the Closing will have been, taken. The person signing this Agreement on behalf of Purchaser is authorized to do so.

 

5.5.3         Pending Actions. There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Purchaser which, if adversely determined, could individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this Agreement.

 

5.5.4         OFAC/USA Patriot Act. Purchaser’s source of funds for the acquisition of the Properties will not involve any amounts that violate or would be subject to seizure under 18 U.S.C. §§1956-1957 (Laundering of Money Instruments), 18 U.S.C. §§ 981-986 (Federal Asset Forfeiture), 21 U.S.C. § 881 (Drug Property Seizure), Executive Order 13224, or the USA Patriot Act. Neither Purchaser nor any of its affiliates nor any person or entity owning an interest in either of them is a person or entity with whom U.S. persons are restricted from doing business under OFAC, Executive Order 13224 or the USA Patriot Act.

 

5.6         Survival of Purchaser’s Representations and Warranties. The representation and warranties of Purchaser set forth in Section 5.5.1 and Section 5.5.2 shall survive Closing and shall be a continuing representation and warranty without limitation. All other representations and warranties of Purchaser shall survive Closing for the Survival Period.

 

ARTICLE VI

DEFAULT

 

6.1         After the Closing, in the event of any breach of any of the covenants, representations or warranties hereunder or under any other agreement, document, certificate or instrument delivered by the parties which survive the Closing (a “Post-Closing Default”), each party shall have all remedies existing under applicable law with respect to such Post-Closing Default; provided, however, in no event shall either party ever be entitled to rescind this Agreement or to recover damages from the other party: (i) in excess of the Cap; (ii) under any theory of tort or other action other than breach of contract based on the express provisions of this Agreement; or (iii) in any way resulting from consequential or punitive damages. Further, if a Post-Closing Default is curable, prior to a party’s exercise of any right or remedy as a result thereof, the other party shall first deliver written notice to the other and give the other ten (10) days thereafter in which to cure said Post-Closing Default.

 

6.2         Attorneys’ Fees. Should any party hereto employ an attorney for the purpose of enforcing or construing this Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, the prevailing party shall be entitled to receive from the other party or parties thereto reimbursement for all reasonable attorneys’ fees and all costs, whether incurred at the trial or appellate level, including but not limited to service of process, filing fees, court and court reporter costs, investigative costs, expert witness fees and the cost of any bonds, whether taxable or not, and such reimbursement shall be included in any judgment, decree or final order issued in that proceeding. The “prevailing party” means the party in whose favor a judgment, decree, or final order is rendered. A party’s rights and remedies under this Section 6.4 shall not limit and shall, in any event, be in addition to its rights and remedies under any other provision of this Agreement.

 

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ARTICLE VII

RESERVED

 

ARTICLE VIII

COMMISSIONS

 

8.1         Brokerage Commissions. Each party agrees that (i) neither party has engaged any broker or finder in connection with the transactions contemplated by this Agreement, and (ii) should any claim be made for brokerage commissions or finder’s fees by any broker or finder by, through or on account of any acts of said party or its representatives, said party will indemnify, defend and hold the other party free and harmless from and against any and all loss, liability, cost, damage and expense in connection therewith. The provisions of this paragraph shall survive Closing and any termination of this Agreement.

 

ARTICLE IX

DISCLAIMERS AND WAIVERS

 

9.1         No Reliance on Documents. Except as expressly stated in Section 5.1 and in any closing document delivered to Purchaser by Seller, Seller makes no representation or warranty as to the truth, accuracy or completeness of any materials, data or information delivered by Seller to Purchaser in connection with the transaction contemplated hereby. Purchaser acknowledges and agrees that all materials, data and information delivered by Seller to Purchaser in connection with the transaction contemplated hereby are provided to Purchaser as a convenience only and that any reliance on or use of such materials, data or information by Purchaser shall be at the sole risk of Purchaser, except as otherwise expressly stated in Section 5.1. Without limiting the generality of the foregoing provisions, Purchaser acknowledges and agrees that (i) any environmental or other report with respect to the Property which is delivered by Seller to Purchaser shall be for general informational purposes only, (ii) Purchaser shall not have any right to rely on any such report delivered by Seller to Purchaser, but rather will rely on its own inspections and investigations of the Property and any reports commissioned by Purchaser with respect thereto, and (iii) neither Seller, any affiliate of Seller nor the person or entity which prepared any such report delivered by Seller to Purchaser shall have any liability to Purchaser for any inaccuracy in or omission from any such report.

 

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9.2         DISCLAIMERS. ACCORDINGLY, EXCEPT FOR SELLER’S REPRESENTATIONS OR AS EXPRESSLY STATED HEREIN OR IN ANY CLOSING DOCUMENT DELIVERED BY SELLER TO PURCHASER, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE DUE DILIGENCE INFORMATION OR ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS, WITH ALL FAULTS”, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THE SELLER’S REPRESENTATIONS OR IN ANY CLOSING DOCUMENT DELIVERED BY SELLER TO PURCHASER. PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, DUE DILIGENCE INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR BROKER OR ANY OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN SELLER’S REPRESENTATIONS. PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S OFFICERS, DIRECTORS, MEMBERS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S OFFICERS, DIRECTORS, MEMBERS, SHAREHOLDERS, EMPLOYEES AND AGENTS) OR PROPERTY MANAGER AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS). PURCHASER AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS MATERIALS OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED AFTER THE CLOSING DATE, PURCHASER HEREBY WAIVES ANY RIGHT TO PURSUE ANY ACTION AGAINST SELLER WITH RESPECT TO SUCH CLEAN-UP, REMOVAL OR REMEDIATION.

 

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9.3         Effect and Survival of Disclaimers. Seller and Purchaser acknowledge that the compensation to be paid to Seller for the Property has been decreased to take into account that the Property is being sold subject to the provisions of this ARTICLE IX. Seller and Purchaser agree that the provisions of this ARTICLE IX shall survive Closing.

 

ARTICLE X

MISCELLANEOUS

 

10.1         Confidentiality. All information (collectively, “Inspection Material”) acquired by Purchaser or any of its Representatives (as hereinafter defined) with respect to the Property, whether delivered by Seller or any of its Representatives or obtained by Purchaser as a result of its inspection of the Property, examination of Seller’s files or otherwise shall be used solely for the purpose of determining whether or not the Property is suitable for Purchaser’s purpose and for no other reason. All Inspection Material shall be kept in strict confidence and shall not be disclosed to any individual or entity other than those Representatives of Purchaser who need to know the information for the purpose of assisting Purchaser in making such determination.

 

10.2         Public Disclosure. Prior to Closing, any release to the public of information with respect to the sale contemplated herein or any matters set forth in this Agreement will be made only in the form approved in writing by Purchaser and Seller and their respective counsel.

 

10.3         Discharge of Obligations. The acceptance of the Deed by Purchaser shall be deemed to be a full performance and discharge of every representation and warranty made by Seller herein and every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated to survive Closing.

 

10.4         Assignment. Purchaser may not assign its rights under this Agreement without first obtaining Seller’s written approval, which approval may be given or withheld in Seller’s sole discretion. The assignment of any of Purchaser’s rights under this Agreement without Seller’s prior written consent, which consent or approval, as the case may be, may be given or withheld in Seller’s sole discretion, shall constitute a default by Purchaser under this Agreement.

 

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10.5         Notices. Any notice pursuant to this Agreement shall be given in writing by (i) personal delivery, or (ii) reputable overnight delivery service with proof of delivery, or (iii) via e-mail transmission (provided such is also sent by one of the other designated means) sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith. Notices shall be deemed to have been given: (x) at the time of personal delivery, (y) in the case of overnight delivery, one business day after depositing with the courier, postage prepaid; or (z) in the case of e-mail transmission, as of the date of the transmission provided such is prior to 5:00 PM (Chicago Time), otherwise such shall be deemed to have been received on the next business day. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement shall be as follows:

 

	 	If to Seller: 	22160 N. Pepper Road
	 	 	Lake Barrington, Illinois 60010
	 	 	Attention: Jana Schwan
	 	 	Email: jmschwan@ctiindustries.com
	 	 	 
	 	With a copy to:  	Levenfeld Pearlstein, LLC
	 	 	Two North LaSalle Street, Suite 1300
	 	 	Chicago, Illinois 60602
	 	 	Attention: Harold Israel and Josh Bashioum
	 	 	Email: hisrael@lpegal.com and jbashioum@lplegal.com
	 	 	 
	 	If to Purchaser: 	Icy Mellon LLC
	 	 	7324 Southwest Fwy. Suite 608
	 	 	Houston, TX 77074
	 	 	Attention: Alex Feng
	 	 	Email: chaofeng1107@gmail.com
	 	 	 
	 	With copies to:  	Farrell Fritz, P.C.
	 	 	100 Motor Parkway, Suite 300
	 	 	Hauppauge, NY 11788
	 	 	Attention: Christopher Kent and David Curry
	 	 	Email: ckent@farrellfritz.com and dcurry@farrellfritz.com

 

Any counsel designated above or any replacement counsel which may be designated respectively by either party or such counsel by written notice to the other party is hereby authorized to give notices hereunder on behalf of its respective client.

 

10.6         Binding Effect. This Agreement shall not be binding in any way upon either Seller or Purchaser unless and until Seller shall execute and deliver the same to Purchaser.

 

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10.7         Modifications. This Agreement cannot be changed orally, and no executory agreement shall be effective to waive, change, modify or discharge it in whole or in part unless such executory agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought.

 

10.8         Calculation of Time Periods. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday under the laws of the State in which the Property is located, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or legal holiday. The final day of any such period shall be deemed to end at 5 p.m., Chicago time. The term “business day” as used herein shall mean any day that federal banks are open for business within the City of Chicago, other than Saturdays and Sundays.

 

10.9          Successors and Assigns. The terms and provisions of this Agreement are to apply to and bind the permitted successors and assigns of the parties hereto.

 

10.10          Entire Agreement. This Agreement, including the Exhibits, contains the entire agreement between the parties pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter.

 

10.11          Further Assurances. Each party agrees that it will without further consideration execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be reasonably requested by the other party to consummate more effectively the purposes or subject matter of this Agreement, but without any obligation on the part of either party to incur any liability or make any undertaking beyond that provided in this Agreement. Without limiting the generality of the foregoing, Purchaser shall, if requested by Seller, execute acknowledgments of receipt with respect to any materials delivered by Seller to Purchaser with respect to the Property. The provisions of this Section 10.11 shall survive Closing.

 

10.12          Counterparts/Facsimile Execution. This Agreement may be executed in counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving this Agreement. A counterpart of this Agreement transmitted by electronic means (including so-called PDF) or facsimile will, if it is executed, be deemed in all respects to be an original document, and any signature on that document shall be deemed to be an original signature with the same binding legal effect as an original executed counterpart of this Agreement.

 

10.13          Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect.

 

15

 

 

10.14          Applicable Law. This Agreement is performable in the state in which the Land is located and shall in all respects be governed by, and construed in accordance with, the substantive federal laws of the United States and the laws of such state. Seller and Purchaser hereby irrevocably submit to the jurisdiction of any state or federal court sitting in the state in which the Land is located in any action or proceeding arising out of or relating to this Agreement and hereby irrevocably agree that all claims in respect of such action or proceeding shall be heard and determined in a state or federal court sitting in the state in which the Land is located. Purchaser and Seller agree that the provisions of this Section 10.14 shall survive the Closing of the transaction contemplated by this Agreement.

 

10.15          No Third Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser (together with any Permitted Assignee) only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.

 

10.16          Exhibits and Schedules. The following schedules or exhibits attached hereto shall be deemed to be an integral part of this Agreement:

 

	Exhibit A -   	Legal Description of the Land
	Exhibit B -  	Form of Deed
	Exhibit C -   	Form of Lease
	Exhibit D -  	Promissory Note

      

10.17          Captions. The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof.

 

10.18          Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

 

10.19          Termination of Agreement. It is understood and agreed that if either Purchaser or Seller terminates this Agreement pursuant to a right of termination granted hereunder, such termination shall operate to relieve Seller and Purchaser from all obligations under this Agreement, except for such obligations as are specifically stated herein to survive the termination of this Agreement.

 

10.20          Survival. The provisions of this ARTICLE X and any other provisions of this Agreement which by their terms are intended to be performed or be applicable after Closing shall survive Closing or any termination of this Agreement prior thereto and shall not be merged into the execution and delivery of the Deed (subject to any express limitation upon the time period of such survival contained herein, including Section 5.3.1). The foregoing is in addition to and not in exclusion of any survival provisions elsewhere set forth in this Agreement.

 

16

 

 

10.21          No Recordation. Neither this Agreement nor any memorandum of the terms hereof shall be recorded or otherwise placed of public record and any breach of this covenant shall, unless the party not placing same of record is otherwise in default hereunder, entitle the party not placing same of record to pursue its rights and remedies under ARTICLE VI.

 

10.22         Limited Liability. Purchaser’s recourse for any breach or default hereunder by Seller shall be limited solely to the Property and Purchaser shall have no recourse against any other properties or assets of Seller or any member or affiliate of Seller, provided that following the Closing, but subject to the limitations set forth in Section 5.3 and elsewhere in this Agreement, recourse may be had by Purchaser against Seller’s interest in the proceeds of the sale, assignment and transfer of the Property pursuant to this Agreement to the extent that Seller may be liable to Purchaser for such breach or default pursuant to the express provisions of this Agreement.

 

10.23         Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THEY HAVE RETAINED COUNSEL OF THEIR OWN CHOOSING AND SUCH COUNSEL HAS FULLY EXPLAINED THE CONTENT AND LEGAL EFFECT OF THIS SECTION.

 

10.24         Time is of the Essence. Time is of the essence in the performance of each term, condition and covenant contained in this Agreement. No extension of time for performance of any obligation or act shall be deemed an extension of time for performance of any other obligation or act.

 

[signatures on next page – Page S-1]

 

17

 

 

 

IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Purchase and Sale Agreement as of the Effective Date.

 

	 	SELLER:
	 	 
	 	YUNHONG CTI LTD.,
	 	an Illinois corporation, f/k/a CTI Industries Corporation
	 	 
	 	By:         ________________________________
	 	Name:         Jana Schwan
	 	Title:         Authorized Signatory
	 	 
	 	 
	 	 
	 	PURCHASER:
	 	 
	 	ICY MELLON LLC,
	 	a Texas limited liability company
	 	 
	 	By: _________________________________
	 	Name: _______________________________
	 	Title: ________________________________

 

S-1

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF THE LAND

 

All that certain real property located in Lake County, State of Illinois, described as follows:

 

PARCEL 1:

 

THAT PART OF THE SOUTH 1/2 OF SECTION 21, TOWNSHIP 43 NORTH, RANGE 9, EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

COMMENCING AT A POINT IN THE EAST LINE OF THE WEST 1/2 OF THE SOUTH EAST 1/4 OF SAID SECTION 21, 691.81 FEET NORTH OF THE SOUTHEAST CORNER THEREOF; THENCE WEST PARALLEL WITH THE SOUTH LINE OF SAID SOUTH EAST 1/4 746.66 FEET; THENCE NORTH PARALLEL WITH THE EAST LINE OF THE SAID WEST 1/2 OF THE SOUTH EAST 1/4 291.81 FEET; THENCE EAST PARALLEL WITH THE SOUTH LINE OF SAID SOUTH EAST 1/4 746.66 FEET TO THE EAST LINE OF THE WEST 1/2 OF THE SOUTH EAST 1/4; THENCE SOUTH 291.81 FEET TO THE POINT OF BEGINNING, IN LAKE COUNTY, ILLINOIS.

 

PIN: 13-21-400-014

Street Address: 22160 N. Pepper Road, Lake Barrington, IL 60010

 

A-1

 

 

EXHIBIT B

 

FORM OF DEED

 

	
			PREPARED BY:

			 

			Josh Bashioum

			Levenfeld Pearlstein, LLC

			2 North LaSalle Street

			Suite 1300

			Chicago, Illinois 60602

			 

			 

			 

			WHEN RECORDED

			RETURN TO:

			 

			Farrell Frit, P.C.

			400 RXR Plaza

			Uniondale, New York 11556

			Attention: David M. Curry, Esq.

			     

			     

			     

				
			(Above Space for Recorder’s use only)

			

 

SPECIAL WARRANTY DEED

 

THE GRANTOR, YUNHONG CTI LTD., an Illinois corporation, whose address is 22160 N. Pepper Road, Lake Barrington, Illinois 60010, for and in consideration of TEN AND 00/100 DOLLARS ($10.00), the receipt and sufficiency of which is hereby acknowledged, and other good and valuable consideration in hand paid, hereby GRANTS, BARGAINS, CONVEYS AND SELLS with special warranty to ICY MELLON LLC, a Texas limited liability company whose address is _____________________(the “Grantee”), its successors and assigns forever, the following described land, situate, lying and being in the County of Lake, State of Illinois, to wit (the “Land”):

 

See Exhibit A attached hereto and by this reference made a part hereof,

 

together with Grantor’s right and interest in and to all and singular the buildings and improvements, rights, alleys, ways, easements, privileges, tenements, hereditaments and appurtenances of Grantor belonging or in any wise appertaining to the Land (collectively, the “Property”), and the reversion or reversions, remainder or remainders, rents, issues and profits thereof, and all the estate, right, title, interest, claim or demand whatsoever, of Grantor, either in law or in equity, of in and to the above described Property, subject only to the Permitted Exceptions set forth on Exhibit B, attached hereto and made a part hereof.

 

To have and to hold the Property in fee simple forever.

 

B-1

 

 

The Grantor, for itself and its successors and assigns, does hereby warrant the title to said Property against all persons lawfully claiming by, through or under Grantor, but not otherwise.

 

PINs and Common Address(es): See Exhibit A

 

[Signatures begin on next page]

 

B-2

 

 

IN WITNESS WHEREOF, Grantor has executed this Special Warranty Deed as of the ___ day of _______, 2021.

 

	 	GRANTOR
	 	 
	 	YUNHONG CTI LTD.,
	 	an Illinois corporation, f/ka/ CTI Industries Corporation
	 	 
	 	 
	 	By: ________________________________
	 	Name: ________________________________
	 	Title: ________________________________

 

	
			STATE OF

				
			)

				 
	 	
			)

				
			ss.

			
	
			COUNTY OF

				
			)

				 

 

I, ______________________, a Notary Public in and for said County, in the State aforesaid, do hereby certify that ____________, the ____________ of YUNHONG CTI LTD., an Illinois limited liability company, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument in as such capacity, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said entity, for the uses and purposes therein set forth.

 

GIVEN under my hand and notarial seal, this _______ day of ____________ 2021.

 

	
			______________________

			Notary Public

			My Commission Expires: _______

				
			(Seal)

			
	
			Send future real estate tax bills to:

				 

 

B-3

 

 

EXHIBIT C

 

LEASE

 

 

C-1

 

 

EXHIBIT D

 

PROMISSORY NOTE

 

 

D-1

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