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EXHIBIT 10.33
SETTLEMENT AGREEMENT
This Settlement Agreement ("Settlement Agreement") is made this 31st day of
January, 2001 by and between First Industrial, L.P., a Delaware limited
partnership ("FIRST INDUSTRIAL"), First Industrial Realty Trust, Inc., a
Maryland corporation ("FR"; FIRST INDUSTRIAL and FR being collectively referred
to herein as "FR") and Gary H. Heigl ("Mr. Heigl").
RECITALS
A. Mr. Heigl has been employed as the Chief Operating Officer of FR;
B. Mr. Heigl is an officer and director of various of FR's affiliates;
C. Mr. Heigl desires to resign all of his officership and directorship
positions, and both FIRST INDUSTRIAL and FR are willing to accept such
resignations; and
D. Mr. Heigl and FR desire to effect an amicable separation, all on the terms
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter contained, it is agreed by and between the
parties hereto as follows:
AGREEMENTS
1. Resignation. Mr. Heigl hereby resigns, effective as of January 31, 2001,
from his employment with, and from all of his officerships and directorships
with, FR and its affiliates.
2. Severance Pay. FR will pay to Mr. Heigl, as a lump sum "Severance
Payment," Five Hundred and Thirty Five Thousand Dollars ($535,000.00), by
federal wire transfer within five (5) business days following the Effective Date
(as defined in Section 11 herein). Mr. Heigl acknowledges and agrees that the
foregoing Severance Payment includes any and all amounts due as a fiscal year
2000 performance bonus, whether such amount would have been paid in cash or
equity-based compensation, and that said payment therefore subsumes any and all
such bonus entitlements.
3. COBRA Payments. If and for so long as Mr. Heigl elects to continue his
and his family's health insurance under FR's group health program pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), FR agrees
to pay Mr. Heigl's COBRA premiums for family coverage until the earlier of: (a)
June, 2002 (so as to cause FR to pay eighteen (18) months of COBRA premiums); or
(b) until such time as substitute health insurance with comparable benefits is
available to him by virtue of other employment or other family members'
insurance benefits secured by or made available to Mr. Heigl. The date of the
qualifying event for purposes of COBRA continuation coverage shall be January
31, 2001.
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4. Acknowledgments Regarding Equity-Based Compensation.
(a) Stock Options. FR and Mr. Heigl agree that the stock options
described below encompass all of the vested and exercisable stock options held
by him under the First Industrial Realty Trust Inc. 1994 and 1997 Stock
Incentive Plans or otherwise and that there are no other FR-related stock
purchase options, warrants, or stock purchase rights outstanding, vested or
exercisable by Mr. Heigl as of January 31, 2001, all of the Stock Options and
other purchase rights held by Mr. Heigl ("Stock Options") being described below:
Grant Number of Exercise
Date Options Price
---- ------- -----
5/13/97 30,000 $30.38
7/10/97 20,000 $28.50
5/14/98 40,000 $31.13
3/4/99 54,000 $25.13
8/28/00 17,333 $27.25
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TOTAL 161,333
Mr. Heigl shall have until the close of business on April 30, 2001, to
deliver written notice to FR of his exercise of the Stock Options listed above.
Effective as of the close of business on April 30, 2001, all of the Stock
Options, to the extent notice of exercise has not been received by FR by such
time, shall forever expire and be of no further force or effect.
(b) Restricted Stock. FR hereby agrees to take all steps necessary to,
as of January 31, 2001, remove any and all restrictive legends from the share
certificates representing 41,733 shares of "Restricted Stock" of FR owned by Mr.
Heigl; provided, however, that Mr. Heigl acknowledges and agrees that 6,100
shares of such Restricted Stock vested on January 1, 2001 and if as of the
Effective Date such previously vested shares have been transferred unrestricted
to Mr. Heigl, or withheld to satisfy any tax withholding with respect to such
shares, then the 41,733 shares of Restricted Stock shall be reduced by 6,100
shares of Restricted Stock. Mr. Heigl hereby acknowledges that the
above-described Restricted Stock includes all of the issued and outstanding
Restricted Stock ever granted to or otherwise now owned by him, and that there
is no other Restricted Stock which Mr. Heigl owns, whether vested or unvested.
(c) Deferred Income Plan ("DIP") Benefit. The "DIP Payment" for fiscal
year 2000 to which Mr. Heigl is entitled, and that currently remains
outstanding, under the First Industrial Realty Trust, Inc. Deferred Income Plan,
is mutually acknowledged and agreed to be the sum of One Hundred Sixty Three
Thousand Five Hundred and Eighty Two Dollars ($163,582.00), which shall be paid
by FR, by federal wire transfer, within five (5) business days following the
Effective Date.
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5. Confidential Information. Mr. Heigl acknowledges that, during the course
of his employment prior to his entry into this Settlement Agreement, he has
produced, received and had access to, and may hereafter through January 31, 2001
continue to produce, receive and otherwise have access to, various materials,
records, data, trade secrets and information not generally available to the
public, specifically including any information concerning projects in the
"Pipeline" as defined in Section 6(a)(ii) below (collectively, "Confidential
Information") regarding FR and its subsidiaries and affiliates. Accordingly, for
and throughout the six (6) month period following the Effective Date, Mr. Heigl
shall hold in confidence and shall not directly or indirectly, for his own
benefit or for the benefit of any other person or entity, for economic gain or
otherwise, disclose, use, copy or make lists of any such Confidential
Information, except to the extent that (a) such information is or thereafter
becomes lawfully available from public sources; or (b) such disclosure is
authorized in writing by FR; or (c) such disclosure is determined by court order
or official governmental ruling to be required by law or by any competent
administrative agency or judicial authority. All records, files, documents,
computer diskettes, computer programs and other computer-generated material, as
well as all other materials or copies thereof relating to the FR's business,
which Mr. Heigl has prepared or used, remain the sole property of FR and shall
be returned to FR within five (5) business days of the date of this Agreement.
6. Non-Competition.
(a) Initial Restrictive Period. Mr. Heigl agrees, except with the
express prior written consent of FR, that until January 31, 2001 and throughout
the six (6) month period following January 31, 2001 (the "Initial Restrictive
Period"):
(i) He will not directly or indirectly in any manner compete with
the business of FR, including, but not by way of limitation, by directly
or indirectly owning, managing, operating, controlling, financing, or by
directly or indirectly serving as an employee, officer or director of or
consultant to, or by soliciting or inducing, or attempting to solicit or
induce, any employee or agent of FR to terminate employment with FR and
become employed by the following:
(A) any company listed as an industrial or mixed
office/industrial (but not pure office) REIT or Real Estate
Operating Company in the Realty Stock Review, a Dow Jones &
Co. Publication, (a "Peer Group Member") a copy of such
listing for the month prior to the Effective Date hereof
being attached hereto as Exhibit A, or
(B) any person, firm, partnership, corporation, trust or other
entity (including, but not limited to, Peer Group Members)
which, as a material component of its business (other than
for its own use as an owner or user), invests in industrial
warehouse facilities and properties similar to FR's
investments and holdings: (1) in any geographic
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market or territory in which FR owns properties or has an
office as of the date hereof; or (2) in any market in which
an acquisition or other investment by FR or any affiliate
of FR, is pending as of the date hereof, as conclusively
evidenced by the existence of a Request for Proposal or an
executed Agreement of Purchase and Sale, Contribution (or
Merger) Agreement or Letter of Intent, Confidentiality
Agreement, Due Diligence Agreement, Pursuit Cost Agreement,
Partnership or Joint Venture Agreement, or by a Post
Acceptance Conference Call (PACC) memorandum or Investment
Committee (IC) approval in existence at the time of Mr.
Heigl's resignation.
(ii) In addition, during the Initial Restrictive Period, Mr. Heigl
shall not act as a principal, investor or broker/intermediary, or serve
as an employee, officer, advisor or consultant, to any person or entity,
in connection with or concerning any investment opportunity of FR that
is in the "Pipeline" (as defined below) as of the date hereof. Within
five (5) business days after the date hereof, the Chief Executive
Officer ("CEO") of FR shall deliver (or cause another officer or
employee of FR to deliver) to Mr. Heigl a written statement of the
investment opportunities in the Pipeline as of the date hereof (the
"Pipeline Statement"), and Mr. Heigl shall then review the Pipeline
Statement for accuracy and completeness, to the best of his knowledge,
and advise the CEO of any corrections required to the Pipeline
Statement. Mr. Heigl's receipt of any amount hereunder shall be
conditioned on his either acknowledging, in writing, the accuracy and
completeness of the Pipeline Statement, or advising the CEO, in writing,
of any corrections or revisions required to the Pipeline Statement in
order to make it accurate and complete, to the best of Mr. Heigl's
knowledge. The restrictions concerning any one individual investment
opportunity in the Pipeline shall continue until the first to occur of
(i) expiration of the Initial Restrictive Period; or (ii) Mr. Heigl's
receipt from FR of written notice that FR has abandoned such investment
opportunity, such notice not to affect the restrictions on all other
investment opportunities contained in the Pipeline Statement during the
remainder of the Initial Restrictive Period. An investment opportunity
shall be considered in the "Pipeline" if, as of the date hereof, the
investment opportunity is pending (for example, is the subject of a
letter of intent) or proposed (for example, has been presented to, or
been bid on by, FR in writing or otherwise) or under consideration by
FR, whether at the PACC, IC, staff level(s) or otherwise, and relates to
any of the following potential forms of transaction: (A) an acquisition
for cash; (B) an UPREIT transaction; (C) a transaction under the "First
Exchange" program; (D) a development project or venture; (E) a joint
venture partnership or other cooperative relationship, whether through a
DOWNREIT relationship or otherwise; (F) an "Opportunity Fund" or other
private investment in or co-investment with FR; (G) any debt placement
opportunity by or in FR; (H) any
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service or other fee-generating opportunity by FR; or (I) any other
investment by FR or an affiliate of FR, in or with any party or by any
party in FR or an affiliate of FR.
(b) Extended Restrictive Period. In addition to the restrictions
provided in (a) above that are operative during the Initial Restrictive Period,
Mr. Heigl agrees that from July 31, 2001, to and through January 31, 2003 (the
"Extended Restrictive Period"):
(i) He will not solicit or induce, or attempt to solicit or induce,
any employee or agent of FR to terminate employment with FR and become
employed by the following:
(A) any company listed as an industrial or mixed
office/industrial (but not pure office) REIT or Real Estate
Operating Company in the Realty Stock Review, a Dow Jones &
Co. Publication, (a "Peer Group Member") a copy of such
listing for the month prior to the Effective Date hereof
being attached hereto as Exhibit A, or
(B) any person, firm, partnership, corporation, trust or other
entity (including, but not limited to, Peer Group Members)
which, as a material component of its business (other than
for its own use as an owner or user), invests in industrial
warehouse facilities and properties similar to FR's
investments and holdings: (1) in any geographic market or
territory in which FR owns properties or has an office as
of the date hereof; or (2) in any market in which an
acquisition or other investment by FR or any affiliate of
FR, is pending as of the date hereof, as conclusively
evidenced by the existence of a Request for Proposal or an
executed Agreement of Purchase and Sale, Contribution (or
Merger) Agreement or Letter of Intent, Confidentiality
Agreement, Due Diligence Agreement, Pursuit Cost Agreement,
Partnership or Joint Venture Agreement, or by a Post
Acceptance Conference Call (PACC) memorandum or Investment
Committee (IC) approval in existence at the time of Mr.
Heigl's resignation.
(C) Notwithstanding the foregoing, Mr. Heigl will not be in
breach or violation of this subsection 6(b)(i) if an
employee or agent of FR voluntarily quits without Mr.
Heigl's encouragement or suggestion.
(ii) In addition, during the Extended Restrictive Period, Mr. Heigl
shall not act as a principal, investor or broker/intermediary, or serve
as an employee, officer, advisor or consultant, to any person or entity,
in connection
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with or concerning any investment opportunity of FR that is in the
"Pipeline" (as defined below) as of the date hereof. Within five (5)
business days after the date hereof, the Chief Executive Officer ("CEO")
of FR shall deliver (or cause another officer or employee of FR to
deliver) to Mr. Heigl a written statement of the investment
opportunities in the Pipeline as of the date hereof (the "Pipeline
Statement"), and Mr. Heigl shall then review the Pipeline Statement for
accuracy and completeness, to the best of his knowledge, and advise the
CEO of any corrections required to the Pipeline Statement. Mr. Heigl's
receipt of any amount hereunder shall be conditioned on his either
acknowledging, in writing, the accuracy and completeness of the Pipeline
Statement, or advising the CEO, in writing, of any corrections or
revisions required to the Pipeline Statement in order to make it
accurate and complete, to the best of Mr. Heigl's knowledge. The
restrictions concerning any one individual investment opportunity in the
Pipeline shall continue until the first to occur of (i) expiration of
the Extended Restrictive Period; or (ii) Mr. Heigl's receipt from FR of
written notice that FR has abandoned such investment opportunity, such
notice not to affect the restrictions on all other investment
opportunities contained in the Pipeline Statement during the remainder
of the Extended Restrictive Period. An investment opportunity shall be
considered in the "Pipeline" if, as of the date hereof, the investment
opportunity is pending (for example, is the subject of a letter of
intent) or proposed (for example, has been presented to, or been bid on
by, FR in writing or otherwise) or under consideration by FR, whether at
the PACC, IC, staff level(s) or otherwise, and relates to any of the
following potential forms of transaction: (A) an acquisition for cash;
(B) an UPREIT transaction; (C) a transaction under the "First Exchange"
program; (D) a development project or venture; (E) a joint venture
partnership or other cooperative relationship, whether through a
DOWNREIT relationship or otherwise; (F) an "Opportunity Fund" or other
private investment in or co-investment with FR; (G) any debt placement
opportunity by or in FR; (H) any service or other fee-generating
opportunity by FR; or (I) any other investment by FR or an affiliate of
FR, in or with any party or by any party in FR or an affiliate of FR.
(c) Consideration for Non-Competition Agreements. Mr. Heigl acknowledges
and agrees that the consideration paid for his agreements set forth in
subsections 6(a) and (b) shall be Two Hundred and Fifty Thousand Dollars
($250,000.00), which shall be paid by FR, by federal wire transfer, within five
(5) business days following the Effective Date.
7. Mutual Non-Disparagement. Each party hereto agrees to refrain from
publicly making any disparaging or other negative statements about the other, it
being the intention of this Settlement Agreement that neither party be blamed or
disparaged or characterized as being culpable with respect to either or both of
Mr. Heigl's rendition of employment services and/or his separation from
employment with FR.
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8. Confidentiality. The parties hereto agree to keep the existence and
terms of this Settlement Agreement confidential, except for Mr. Heigl's spouse
and the parties' respective legal or tax advisors in connection with services
related hereto, and except as may be required by law or in connection with the
preparation of tax returns; provided, however, further that FR shall be entitled
to make requisite and appropriate public disclosure of the terms of this
Settlement Agreement, without Mr. Heigl's consent or approval, as required under
applicable statutes, and the rules and regulations of the Securities and
Exchange Commission, the New York Stock Exchange and other governmental agencies
and bodies having jurisdiction over FR, and FR shall provide Mr. Heigl, upon his
written request, with a copy of any disclosure made pursuant to the immediately
preceding clause.
9. Securities Compliance. For so long as Mr. Heigl is required to file
statements indicating his ownership of any equity securities of FR, pursuant to
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder by the U.S. Securities and Exchange Commission, Mr. Heigl
shall: (a) promptly (and in any case within five (5) business days) report to
the Chief Financial Officer of FR, any transaction by him in, or other change in
his beneficial ownership of, such securities; (b) timely and properly execute
and file any such required statements utilizing forms prepared on his behalf by
the Chief Financial Officer of FR; and (c) neither execute nor file any such
forms except as may be prepared on his behalf by the Chief Financial Officer of
FR (or his designees), except to the extent necessary to timely comply with his
legal obligations.
10. Releases.
(a) Mr. Heigl, and his affiliates and all parties claiming by, through
or under him, and his and their respective heirs, personal representatives,
predecessors, successors and assigns (collectively the "Heigl Releasors"), do
hereby fully release, remise, acquit and forever discharge FR, its parent,
subsidiaries and affiliates, and its and their past, present and future
officers, directors, employees, servants, attorneys, representatives and
managers, and all of the heirs, personal representatives, predecessors,
successors and assigns of each of the foregoing (collectively, the "FR
Releasees") of and from any and all claims, demands, rights, causes or causes of
action, manners of action, suits, obligations, debts, sums of money, accounts,
bills, covenants, undertakings, damages, executions, judgments, costs and
expenses whatsoever, whether known or unknown, matured, unmatured or contingent,
potential or direct, at law or in equity, whether arising by statute, common law
or otherwise, from the beginning of time to the Effective Date set out in
Section 11, that the Heigl Releasors had, may now have, or may have in the
future (collectively, the "Heigl Released Claims"), including, without
limitation, any such claims: (i) arising out of, or relating to, either or both
of Mr. Heigl's employment with, and separation from, FR or any of its
affiliates; (ii) arising under or relating to FR's or any of its affiliates'
policies and procedures, whether formal or informal; the United States
Constitution or any state constitution; Title VII of the Civil Rights Act of
1964, as amended; the Civil Rights Act of 1991; the Illinois Human Rights Act,
as amended; the Employee Retirement Income Security Act of 1974, as amended; the
Age Discrimination in Employment Act, as amended; the Americans With
Disabilities Act, as amended; and any other federal, state or local statute,
ordinance or regulation with respect to
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employment; and/or (iii) arising out of or relating to any other thing or matter
whatsoever; provided, however, that, notwithstanding the foregoing, it is agreed
and understood that nothing contained in this subsection (a) shall release any
of the FR Releasees from, and the Heigl Released Claims do not include any
claim, undertaking, duty, obligation or liability: (w) assumed by FR under this
Settlement Agreement; (x) for indemnification under FR's articles of
incorporation, by-laws or other indemnification agreement under which Mr. Heigl
was covered during his employment; (y) for coverage under any director and
officer liability insurance under which Mr. Heigl was covered during his
employment; and (z) for benefits under FR's 401(k) plan or group insurance plans
in which Mr. Heigl participated during his employment.
(b) FR, on behalf of itself and its affiliates and subsidiaries, all
parties claiming by, through or under any of the foregoing, and any and all of
their respective heirs, personal representatives, predecessors, successors and
assigns (collectively, the "FR Releasors"), does hereby fully release, remise,
acquit and forever discharge Mr. Heigl, his agents, servants, attorneys, and
personal representatives, and all of their respective heirs, personal
representatives, predecessors, successors and assigns (collectively, the "Heigl
Releasees") of and from any and all claims, demands, rights, causes or causes of
action, manners of action, suits, obligations, debts, sums of money, accounts,
bills, covenants, undertakings, damages, executions, judgments, costs and
expenses, whatsoever, whether known or unknown, matured, unmatured or
contingent, potential or direct, at law or in equity, whether arising by
statute, common law or otherwise, from the beginning of time to the Effective
Date set forth in Section 11, that the FR Releasors had, may now have, or may
have in the future (collectively, the "FR Released Claims"), including without
limitation any such claims: (i) arising out of, or relating to, either or both
of Mr. Heigl's employment by and separation from FR and its affiliates and
subsidiaries; and/or (ii) arising out of or relating to any other thing or
matter whatsoever; provided, however, that notwithstanding the foregoing (i) and
(ii), it is agreed and understood that nothing contained in this subsection (b)
shall release any of the Heigl Releasees from, and the FR Released Claims do not
include: (y) any claim, undertaking, duty, obligation or liability under this
Settlement Agreement; and (z) any acts of criminal wrongdoing or fraud by Mr.
Heigl in connection with his employment at, or prior relationships with, any or
all of FR and its affiliates and subsidiaries.
11. Acknowledgments. Mr. Heigl warrants that he is legally competent to
execute this Settlement Agreement; that FR and its counsel has made no
representations in connection with this matter; that he has not relied on any
statements or explanations made by FR or its counsel; that he has conducted his
own investigation with respect to the subject matter hereof; and that he is not
relying on FR or its counsel for any input, advice or other information or
comfort with respect to this Settlement Agreement. Mr. Heigl hereby waives any
claim that FR is or may be obligated to provide him with any information,
concerning FR or otherwise. Moreover, Mr. Heigl hereby acknowledges that he has
been advised by his own legal counsel regarding the terms of this Settlement
Agreement, including the release of all claims and waiver of rights set forth in
Section 10. Mr. Heigl acknowledges that he has been offered at least twenty-one
(21) days to consider this Settlement Agreement. After having been so advised,
and without coercion of any kind, Mr. Heigl freely, knowingly, and voluntarily
enters into this
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Settlement Agreement. Mr. Heigl further acknowledges that he may revoke this
Settlement Agreement within seven (7) days after the execution hereof, and
further understands that this Settlement Agreement shall not become effective or
enforceable until seven (7) days after execution (the "Effective Date"). Any
revocation must be effectuated in writing and directed, via fax and Federal
Express delivery, to First Industrial Realty Trust, Inc., 311 South Wacker
Drive, Suite 4000, Chicago, Illinois 60606, Attention: Mr. John Clayton.
12. Withholding. Each of FIRST INDUSTRIAL and FR shall have the right to
withhold, from all amounts paid to Mr. Heigl under this Settlement Agreement,
any and all applicable federal and state taxes, as required by law.
13. Successors. This Settlement Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, successors,
representatives and assigns.
14. Entire Agreement. This Settlement Agreement constitutes the entire
agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral, except with respect to continuing
rights of FIRST INDUSTRIAL and FR, and obligations of Mr. Heigl, herein
specifically reserved. This Settlement Agreement may not be amended or modified
except by a written agreement signed by Mr. Heigl, FIRST INDUSTRIAL and FR. Only
the Chief Executive Officer of FR may execute any such amendment or modification
on behalf of FR.
15. Governing Law. This Settlement Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to the law regarding conflicts of law.
16. Notices. All notices given pursuant to this Settlement Agreement shall
be given in writing and shall be deemed given when received. Notices may be
personally delivered, or delivered by overnight courier service or by facsimile.
Notices to FR shall be addressed to the principal headquarters of FR (Facsimile
No. (312) 344-4325), to the attention of the Chief Executive Officer, with
copies to John Clayton, Esq., First Industrial Realty Trust, Inc., 311 South
Wacker Drive, Suite 4000, Chicago, IL 60606 (Facsimile No. (312) 922-9851) and
to FR's counsel, Barack Ferrazzano Kirschbaum Perlman & Nagelberg, 333 West
Wacker Drive, Suite 2700, Chicago, Illinois 60606 [Facsimile No. (312)
984-3150], Attention: Lynne D. Mapes-Riordan, Esq. Notices to Mr. Heigl shall be
sent to the address set forth below Mr. Heigl's signature on this Settlement
Agreement, with a copy to his counsel, Mark F. Mehlman, Esq., Sonnenschein, Nath
and Rosenthal, Suite 8000, Sears Tower, 233 South Wacker Drive, Chicago,
Illinois 60606. Any party may change its notice address by notice given as above
provided to the other party.
17. Counterparts. This Settlement Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Settlement
Agreement as of the day and year first above written.
FIRST INDUSTRIAL, L.P.,
a Delaware limited partnership
By: First Industrial Realty Trust, Inc.,
its general partner
By: /s/ Michael W. Brennan
-------------------------------
Michael W. Brennan
Chief Executive Officer
FIRST INDUSTRIAL REALTY TRUST, INC.,
a Maryland corporation
By: /s/ Michael W. Brennan
----------------------------
Michael W. Brennan
Chief Executive Officer
/s/ Gary H. Heigl
----------------------------
GARY H. HEIGL
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