EXHIBIT 99.2
PURCHASE AGREEMENT
THIS AGREEMENT (herein referred to as this "Agreement") is made and
entered into this 2nd day of August, 2004, by and between CENTERPOINT PROPERTIES
TRUST, a Maryland real estate investment trust (herein referred to as
"Purchaser") and PRIME GROUP REALTY, L.P., a Delaware limited partnership
(herein referred to as "Seller").
RECITALS:
A. Seller owns interests in and controls the limited liability companies
and limited partnerships (herein referred to individually as an "Owner" and
collectively as the "Owners") listed on the Property Schedule (as hereinafter
defined).
B. Each Owner is the owner of the fee simple title to the Project
(hereinafter defined) identified on the Property Schedule next to each such
Owner's name.
C. Seller desires to cause each Owner to sell, and Purchaser desires to
purchase, the Project owned by such Owner, upon and subject to the terms and
conditions herein set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, agreements, covenants and conditions
herein contained, and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged by the parties, Seller
and Purchaser hereby agree as follows:
1. Definitions. The following terms, as used in this Agreement, including all
Exhibits, are defined in the following Sections of this Agreement:
Definition Agreement Section
"Act" Section 29
"Additional Purchaser Equity" Section 3E
"Affiliate" Section 36
"Agreement" Introduction
"Alternate Credit Facility Opinion" Section 3C
"Assessment" Section 7B
"Assumed Contracts" Section 5A(v)
"Basic Project Information" Section 5A
"Basic Project Inspection" Section 7A
"Bond Consent" Section 3C
"Bond Costs" Section ▇▇
"▇▇▇▇ ▇▇▇▇▇▇▇▇▇" ▇▇▇▇▇▇▇ ▇▇(▇▇)
"▇▇▇▇ Release" Section ▇▇
"▇▇▇▇▇" ▇▇▇▇▇▇▇ ▇▇
"▇▇▇▇▇▇▇▇(▇)" Section 2A(iii)
"Building Lease(s)" Section 2A(iv)
"Building T Parcel" Section 6D
"CERCLA" Section 9A(xxii)
"CIBC" Section 3E
"CIBC Consent" Section 3E
"CIBC Costs" Section 3E
"CIBC Debt" Section 3E
"CIBC Debt Assumption Approvals" Section 3E
"CIBC Documents" Section 5A(vii)
"CIBC Release" Section 3E
"Closing" Section 4A
"Closing Date" Section 4A
"Closing Escrow" Section 4C
"Closing Statement" Section 8D(ii)
"Correction Notice" Section 9D
"Deemed Permitted Exceptions" Section 6A(ii)(b)
"Delinquent Rental" Section 12E
"Department" Section 29
"▇▇▇▇▇▇▇ Money" Section 3B
"Escrowee" Section 3B
"Exceptions Schedule" Section 9A
"False Representation" Section 9D
"Farm Lease(s)" Section 2A(iv)
"Fee Parcel(s)" Section 2A(i)
"Financial Statements" Section 5A(ix)
"Ford Tenant Improvement Costs" Section 12H
"Hazardous Materials" Section 9A(xxii)
"Hazardous Material Laws" Section 9A(xxii)
"Household Finance Lease" Section 12H
"Illinois Bond Projects" Section 3D
"Illinois Bonds" Section 3D
"Inspection Period" Section 7A
"Intangible Property" Section 2A(vi)
"LaSalle" Section 3C
"Laws" Section 6G(iv)
"Lease Schedule" Section 2A(iv)
"Lease(s)" Section 2A(iv)
"Leasing Costs" Section 12H
"Loan Assumption Requests" Section 3E
"Major Tenants" Section 8B(vi)
"Mandatory Cure Items" Section 6A(i)
"New Contract Matter" Section 14B
"New Lease Matter" Section 14A
"New Lease Matter Leasing Costs" Section 12H
"Non-Assumed Debt" Section 3F
"Non-Assumed Debt Projects" Section 3F
"Owner(s)" Recital A "Parcel(s)" Section 2A(ii)
"Parcel 12" Section 6J
"Permitted Exceptions" Section 6E
"Personal Property" Section 2A(v)
"Prime Indemnification Agreement" Section 7D
"Project Contracts" Section 5A(v
"Project Purchase Price" Section 3A
"Project(s)" Section 2B
"Property Schedule" Section 2A(iii)
"Proration Date" Section 12A
"Purchase Price" Section 3A
"Purchaser" Introduction
"Purchaser Parties" Section 7A
"Rating Agency Evidence" Section 3C
"RCRA" Section 9A(xxii)
"Relevant Period" Section 30
"Representations" Section 9C
"▇▇▇▇" Section 9A(xxii)
"Seller" Introduction
"Seller Estoppel Certificate(s)" Section 8B(vi)
"Seller Group" Section 7C
"Seller's Rentals" Section 12E
"Seller's Share" Section 12F
"SEC" Section 30
"Superceded Mortgages" Section 6A(i)(a)
"Survey" Section 6B(iii)
"Tenant Letters" Section 8B(vi)
"Tenant(s)" Section 2A(iv)
"Title Commitment" Section 6B(i)
"Title Company" Section 6B(i)
"Title Defect(s)" Section 6D
"Title Defect Notice Section 6D
"Title Exception Documents" Section 6B(ii)
"Title Policy" Section 6B(i)
"Undelivered Title Items" Section 6B(i)
"Unpermitted Exceptions" Section ▇▇
"▇▇▇▇▇▇ ▇▇▇▇▇▇(▇)" Section 2A(ii)
2. Agreement to Purchase.
A. Seller agrees to cause each Owner to sell, convey and assign to
Purchaser or Purchaser's nominee(s), and Purchaser agrees to purchase and accept
under the terms and conditions and for the purchase price set forth hereinbelow,
all of the following:
(i) Fee title to those certain parcels of land legally
described on Exhibit A-1 through Exhibit A-31, inclusive, together with
all privileges, rights, easements, hereditaments, and appurtenances
thereunto belonging, if any, and all right, title and interest, if any,
of each Owner owning same in and to all streets, alleys, passages and
other rights of way included therein or adjacent thereto (before or
after the vacation thereof), and all streets, water courses or water
bodies adjacent to, abutting or serving such parcels (all of said
parcels being herein collectively referred to as the "Fee Parcels" and
individually as a "Fee Parcel").
(ii) Fee title to those certain parcels of land legally
described on Exhibit A 32 through Exhibit A-34, inclusive, together
with all privileges, rights, easements, hereditaments, and
appurtenances thereunto belonging, if any, and all right, title and
interest, if any, of each Owner owning same in and to all streets,
alleys, passages and other rights of way included therein or adjacent
thereto (before or after the vacation thereof), and all streets, water
courses or water bodies adjacent to, abutting or serving such parcels
(all of said parcels being herein collectively referred to as the
"Vacant Parcels" and individually as a "Vacant Parcel"; the Vacant
Parcels and the Fee Parcels are collectively referred to herein as the
"Parcels" and individually as a "Parcel"). The Vacant Parcels contain
no improvements.
(iii) All of Owner's right, title and interest in and to those
certain buildings containing, in the aggregate, approximately 3,805,108
square feet of net rentable area located on certain of the Parcels,
which buildings are generally described on Exhibit B attached hereto
and by this reference incorporated herein (herein referred to as the
"Property Schedule") and, to the extent owned by the Owners, all other
improvements and structures of any kind or nature whatsoever now or
hereafter located on the Parcels (said buildings are herein referred to
collectively as the "Buildings" and individually as a "Building").
(iv) All of Owners' right, title and interest as landlord
under (a) any leases, licenses and concession agreements, if any,
including all amendments thereto of any portions of the Buildings
(herein referred to as the "Building Leases"), and (b) any leases,
including all amendments thereto, of any portions of the Vacant Parcels
(herein referred to as the "Farm Leases"; the Building Leases and the
Farm Leases are collectively referred to as the "Leases" and
individually as a "Lease"). A schedule identifying the Leases and
listing the tenants thereunder (herein referred to as "Tenants") and
identifying certain of the terms thereof is attached as Exhibit C and
incorporated herein by reference (herein referred to as the "Lease
Schedule").
(v) To the extent of Owners' right, title and interest
therein, and to the extent freely transferable and assignable, all
fixtures, equipment, apparatus, cranes, signs, site plans, surveys,
soil and substrata studies, architectural renderings, plans and
specifications, engineering plans and studies, floor plans and other
plans or studies of any kind, tenant data sheets and other personal and
tangible property owned by Owners and used in connection with the
operation and ownership of the Projects (herein referred to as the
"Personal Property"). A schedule identifying the Personal Property for
the Projects is attached as Exhibit D and incorporated herein by
reference.
(vi) To the extent of Owners' right, title and interest
therein, and to the extent freely transferable and assignable, all
intangible property now or hereafter owned or held by Owners between
the date hereof and the Closing, solely in connection with the
Projects, including, but not limited to, (1) all guaranties, warranties
(including guaranties and warranties pertaining to construction of the
Buildings); (2) all air rights, excess floor area rights and other
development rights relating or appurtenant to the Projects; (3) all
rights to obtain utility service in connection with the Projects; (4)
assignable licenses and other governmental permits and permissions
relating to the Projects and the operation thereof; and (5) all
assignable contracts and contract rights (all of the foregoing are
herein referred to collectively as the "Intangible Property").
B. Each Parcel, the Building thereon, if any, and the Leases, Personal
Property, and Intangible Property associated therewith, if any, are herein
referred to collectively as the "Projects" and individually as a "Project". Each
specific Project identified on the Property Schedule may be referred to as the
Project identified with corresponding location set forth on the Property
Schedule.
3. Purchase Price.
A. The parties hereto agree that in connection with the transactions
herein contemplated the allocated portion of the purchase price of each of the
Projects shall be the amount specified for each Project as set forth on Exhibit
T attached hereto and made a part hereof (each such purchase price being herein
referred to individually as a "Project Purchase Price", and the aggregate of all
Project Purchase Prices in the amount of $125,100,000.00 is herein referred to
collectively as the "Purchase Price"). The Purchase Price shall be paid as set
forth in Sections 3B, 3C and 3D below.
B. Purchaser shall deliver to Chicago Title and Trust Company (herein
referred to as the "Escrowee") the sum of Four Million and No/100 Dollars
($4,000,000.00) as ▇▇▇▇▇▇▇ money (said money, including any and all interest
accrued thereon, is herein referred to collectively as the "▇▇▇▇▇▇▇ Money")
within two (2) business days after the full execution and delivery of this
Agreement. The ▇▇▇▇▇▇▇ Money shall be held in a joint order escrow to be entered
into between Seller and Purchaser with Escrowee in the form of Exhibit E
attached hereto and made a part hereof, and shall be invested in an interest
bearing investment acceptable to Seller and Purchaser, and all income earned
thereon shall be paid to the party to whom the principal portion of the ▇▇▇▇▇▇▇
Money is paid pursuant to the terms of this Agreement. The ▇▇▇▇▇▇▇ Money shall
be applied toward the Purchase Price at Closing. Notwithstanding the foregoing,
Purchaser may, in lieu of a cash deposit, deposit an irrevocable letter of
credit in the amount of the ▇▇▇▇▇▇▇ Money, provided the form of the irrevocable
letter of credit is reasonably acceptable to Seller and provided further that
the letter of credit is issued by Bank One, N.A., LaSalle Bank National
Association or such other financial institution as may be reasonably acceptable
to Seller.
C. Those Projects identified on Exhibit F attached hereto and by this
reference incorporated herein are encumbered by mortgages which secure letter of
credit obligations which in turn serve as credit enhancement for the industrial
revenue bonds identified on Exhibit F attached hereto and by this reference
incorporated herein (collectively, the "Bonds"). Purchaser shall use
commercially reasonable efforts to obtain, prior to Closing, at Purchaser's sole
cost and expense (including, without limitation, all legal fees and costs of the
remarketing agent and trustee with respect to the Bonds (the "Bond Costs")), (i)
written evidence from each Rating Agency (as said term is defined in the Bond
Documents) that the rating on the Bonds will not be reduced or withdrawn as a
result of the delivery of the Alternate Credit Facility (as said term is defined
in the Bond Documents) (it being understood by Seller and Purchaser that,
pursuant to the Bond Documents, said evidence must be presented to the Trustee
(as said term is defined in the Bond Documents) no less than 35 days prior to
the delivery of the Alternate Credit Facility); (said written evidence is
hereinafter collectively referred to as the "Rating Agency Evidence"); (ii) the
consent of LaSalle Bank National Association ("LaSalle"), as the holder of the
mortgage debt and the issuer of the letters of credit securing the Bonds, to the
substitution of Purchaser's credit to support the existing letters of credit
(the "Bond Consent") (it being understood by Purchaser and Seller that in
connection with the Bond Consent, LaSalle will be asked to provide an Alternate
Credit Facility); and (iii) the unconditional, irrevocable release by LaSalle of
Seller and its affiliates from any and all liability under the Bond Documents,
except as may relate to environmental and other carve-out liability that would
otherwise survive payment in full of the Bonds (the "Bond Release"). Purchaser
and Seller acknowledge that, in connection with the delivery of the Alternate
Credit Facility to the Trustee, Purchaser shall use commercially reasonable
efforts to cause to be delivered to the Trustee the following opinions: (i) an
opinion of counsel selected by Purchaser stating that delivery of the Alternate
Credit Facility is authorized under the Bond Documents and complies with the
terms of the Bond Documents, (ii) an opinion of counsel to LaSalle (or such
other bank that shall agree to deliver an Alternate Credit Facility) stating
that the Alternate Credit Facility is a legal, valid, binding and enforceable
obligation of LaSalle in accordance with its terms (subject only to usual
exceptions relating to bankruptcy and similar matters) and (iii) an opinion of
Bond Counsel (as said term is defined in the Bond Documents) to the effect that
the Alternate Credit Facility will not adversely affect the exclusion from gross
income of interest on the Bonds (said opinions are hereinafter collectively
referred to as the "Alternate Credit Facility Opinions"). Purchaser shall,
within five (5) days after written request therefor, provide any information
and/or materials regarding Purchaser and/or any of its affiliates reasonably
requested or required by LaSalle, the remarketing agent, the Bond trustee and/or
any holder of the Bonds in connection with the foregoing. Seller agrees to
cooperate and assist Purchaser in its efforts to obtain the Rating Agency
Evidence, the Bond Consent, the Bond Release and the Alternate Credit Facility
Opinions. Purchaser shall receive a credit against the Purchase Price for the
aggregate amount of the Bonds and other amounts due in connection therewith
(other than the Bond Costs), including without limitation accrued interest, less
any reserves and escrows that will continue to be maintained in connection
therewith for the benefit of the borrower or guarantor thereunder after the
assumption of the Bonds by Purchaser, all as set forth in said Exhibit F (as may
be adjusted between the date hereof and the Closing Date). Notwithstanding the
foregoing or anything else in this Agreement to the contrary, if Purchaser fails
to obtain either the Rating Agency Evidence, the Bond Consent, the Bond Release
and the Alternate Credit Facility Opinions, or any of them, as provided
aforesaid, despite reasonable efforts to do so, Purchaser shall not be in
default hereunder and shall be permitted to terminate this Agreement upon
written notice given to Seller prior to the Closing Date and obtain a return of
all ▇▇▇▇▇▇▇ Money theretofore paid, it being acknowledged and understood that
obtaining the Rating Agency Evidence, the Bond Consent, the Bond Release and the
Alternate Credit Facility Opinions are conditions of Closing and will not
subject Purchaser to default for failing to obtain the same, provided Purchaser
has used diligent and commercially reasonable efforts to obtain the same. Seller
will reasonably cooperate with Purchaser in connection with Purchaser's
assumption of Seller's (or its affiliate's) obligations with respect to the
Bonds and will execute and deliver any certificates or documents reasonably and
customarily requested to effectuate such assumption and assignment, provided
such documents are in form and substance reasonably acceptable to Seller. At
Purchaser's option, upon notice to Seller given not less than sixty (60) days
prior to the Closing Date, Purchaser may elect to purchase one or more of the
Projects encumbered by the Bonds free and clear of the Bonds which currently
encumber such Projects, in which case Seller shall redeem such Bond(s) as of the
Closing Date. Notwithstanding the foregoing provisions of this Section 3C, so
long as the value of the Bonds and Illinois Bonds (as defined below) assumed by
Purchaser equals or exceeds $24.9 million in the aggregate (less, if applicable,
the outstanding principal amount of any Bonds Purchaser elects to cause Seller
to redeem), Purchaser shall not be entitled to terminate this Agreement pursuant
to this Section 3C as a result of any such redemption or Purchaser's failure to
obtain any of the approvals or consents required with respect to the Bonds.
D. In addition to the Bonds, Prime IRB Holdings II LLC is the holder of
those certain industrial revenue bonds identified on Exhibit G attached hereto
and by this reference incorporated herein (collectively, the "Illinois Bonds").
At Purchaser's option, upon notice to Seller given not less than forty-five (45)
days prior to the Closing Date, Purchaser shall elect to (i) purchase the
Projects identified on Exhibit G (the "Illinois Bond Projects") free and clear
of the Illinois Bonds, in which case Seller shall redeem the Illinois Bonds, or
(ii) purchase the Illinois Bond Projects subject to the Illinois Bonds, in which
case Seller agrees to (1) reasonably cooperate with Purchaser in connection with
Purchaser's assumption of Seller's obligations with respect to the Illinois
Bonds; (2) execute and deliver any certificates or documents reasonably and
customarily requested to effectuate such assumption and assignment, provided
such documents are in form and substance reasonably acceptable to Seller; and
(3) shall use reasonable commercial efforts to deliver to Purchaser copies of
all Adjustable Rate Reset Certificates issued with respect to the Illinois
Bonds. Notwithstanding anything to the contrary contained in this paragraph,
provided that Seller has been reasonably cooperating with Purchaser in
connection with Purchaser's assumption of Seller's obligations with respect to
the Illinois Bonds, Closing shall not be delayed in the event that Purchaser is
unable to assume Seller's obligations under the Illinois Bonds on the Closing
Date. Notwithstanding anything to the contrary contained in this Agreement, in
no event shall Purchaser be entitled to any credits against the Purchase Price
in connection with the assumption of the Illinois Bonds.
E. The parties further acknowledge that Purchaser intends to assume
Seller's obligations under the existing debt (the "CIBC Debt") originally held
by CIBC Inc. ("CIBC"), which CIBC Debt is secured by those Projects identified
on Exhibit H attached hereto and made a part hereof. Seller agrees to use
commercially reasonable efforts to obtain the approval of all requisite entities
to the assumption by Purchaser of the CIBC Debt, including, but not limited to,
sending out requests for loan assumption packages (the "Loan Assumption
Requests") to the servicer of the CIBC Debt (said approvals are hereinafter
collectively referred to as the "CIBC Debt Assumption Approvals"). Purchaser
agrees that, in connection with the efforts of Purchaser and Seller to obtain
the CIBC Debt Assumption Approvals, Purchaser or an affiliate acceptable to such
servicer shall agree in written documentation reasonably acceptable to the
servicer to fund additional amounts of equity (the "Additional Purchaser
Equity") for leasing and other costs relating to the Projects encumbered by the
CIBC Debt. It shall be a condition to Seller's obligations hereunder that Seller
shall obtain from the servicer of the CIBC Debt (i) a written consent and
amendments to the loan documents relating to the CIBC Debt evidencing the
assumption of the CIBC Debt by Purchaser (the "CIBC Consent"), (ii) the
unconditional, irrevocable release of Seller and its affiliates from any and all
liability under the CIBC Debt, except as may relate to environmental and other
carve-out liability that would otherwise survive payment in full of the CIBC
Debt (the "CIBC Release"), and (iii) an estoppel certificate substantially in
the servicer's standard form. Purchaser agrees to cooperate and assist Seller in
its efforts to obtain the CIBC Debt Assumption Approvals, including, but not
limited to, providing the servicer of the CIBC Debt with any reasonable and
customarily provided financial information it shall request in connection
therewith. At Closing, Seller and Purchaser will sign such documents and
agreements as are reasonable and customarily required by the servicer in
connection with Purchaser's assumption of the CIBC Debt and funding of the
Additional Purchaser Equity. Purchaser shall pay (or reimburse Seller for) all
application fees, assumption fees, and any other costs and expenses (including
up to $25,000 for Seller's legal fees and the full amount of lender's legal fees
and costs (the "CIBC Costs")) incurred by Seller in connection with Purchaser's
assumption of or defeasance of the CIBC Debt. Purchaser shall receive a credit
against the Purchase Price in the amount of the existing outstanding principal
balance and accrued and unpaid interest of the CIBC Debt and all other amounts
accrued and unpaid with respect to any period of time prior to Closing (other
than the CIBC Costs), less any reserves and escrows maintained in connection
therewith for the benefit of the borrower or guarantor thereunder, all as set
forth in said Exhibit H (as may be adjusted between the date hereof and the
Closing Date). Notwithstanding anything to the contrary contained in this
Section 3D, obtaining the CIBC Debt Assumption Approvals shall not be a
condition precedent to Closing, and if the CIBC Debt Assumption Approvals are
not received within sixty (60) days after the Loan Assumption Requests have been
properly submitted by Seller in accordance with the CIBC Documents, Purchaser
shall be required to proceed with the defeasance of the CIBC Debt in accordance
with the provisions of the CIBC Documents. All fees, costs, and expenses
(including up to $25,000 for Seller's legal fees and the full amount of lender's
legal fees and costs) incurred by Seller in connection with Purchaser's
defeasance of the CIBC Debt shall be paid by Purchaser.
F. All Projects not encumbered by the CIBC Debt or mortgages securing
the Bonds (the "Non-Assumed Debt Projects") are subject to certain mortgage
liens securing obligations (the "Non-Assumed Debt") described on Exhibit H,
which Non-Assumed Debt shall be paid off at Closing by Seller and which will not
be assumed by Purchaser. Purchaser shall pay all yield maintenance costs and
related prepayment costs incurred by Seller in connection with the prepayment of
the Non-Assumed Debt up to a maximum of $151,000. Any costs in excess of
$151,000, if any, relating to the prepayment of the Non-Assumed Debt shall be
paid by Seller.
G. The balance of the Purchase Price shall be paid at the Closing, plus
or minus prorations, by wire transfer of federal funds into the Closing Escrow
for disbursement to Seller upon full compliance with the provisions hereof and
thereof.
4. Time of Closing.
A. Subject to the satisfaction or waiver of the conditions precedent
contained in this Agreement, and subsequent to the expiration of the Inspection
Period without Purchaser having terminated as provided in Section 7A hereof, the
consummation of the sale of the Projects (herein referred to as the "Closing")
shall occur on the forty-sixth (46th) day following the date of this Agreement
(herein referred to as the "Closing Date"). Notwithstanding the foregoing,
either Purchaser or Seller may extend the Closing Date for up to two (2)
additional fifteen (15) day periods (in the aggregate for both Seller and
Purchaser) to allow such party to fulfill the conditions precedent set forth in
Sections 10A(vi) and 10B(ii) of this Agreement, to obtain the Tenant Letters
required by Section 8B(x) of this Agreement, to cure Title Defects as set forth
in Section 6, or to redeem any of the Bonds or Illinois Bonds which Purchaser
elects to redeem pursuant to Section 3C or 3D. The right to extend the Closing
Date shall be exercised, if at all, by written notice to the other party given
not later than the two (2) business days prior to the Closing Date (as extended,
if applicable). The Closing shall take place at the downtown Chicago offices of
the Title Company, or such other place as the parties may agree.
B. In the event Purchaser is required to effect a defeasance of the
CIBC Debt in accordance with Section 3E and such defeasance cannot reasonably be
accomplished prior to the Closing Date, as it may have been extended pursuant to
Section 4A, provided Purchaser proceeds diligently to effect the defeasance of
the CIBC Debt, the Closing shall occur five (5) business days after the date on
which such defeasance occurs, provided, however, if such defeasance has not been
accomplished by December 2, 2004, either party shall have the right to terminate
this Agreement at any time thereafter upon five (5) days written notice to the
other party , provided that if the defeasance occurs within such five (5) day
period, the notice of termination shall be null and void and the parties shall
close the transaction as contemplated herein.
C. The Closing shall be consummated through a "New York"-style escrow
closing (herein referred to as the "Closing Escrow") with the Escrowee on the
Closing Date.
5. Due Diligence Documents to be Delivered by Seller.
A. To the extent not previously provided, Seller shall deliver or make
available (subject to Section 5B) to Purchaser within two (2) days after the
date of this Agreement, the following items to the extent same exist and are in
each Owner's possession, relating to each of the Projects (collectively, the
"Basic Project Information"):
(i) Copies of all certificates of occupancy and other
necessary governmental licenses or approvals relating to the Buildings
and the Tenants.
(ii) True, correct and complete copies of "as-built" plans and
specifications relating to the Buildings and any modifications or
amendments thereto, if available, and copies of any reports or studies
(including engineering, soil boring and physical inspection reports of
employees, principals, consultants, governmental authorities or
insurance carriers) in respect of the physical condition or operation
of the Building.
(iii) Copies of the bills issued for the three (3) most recent
years for which bills have been issued (or for such shorter period that
the Owners owned the applicable Project) for all real estate taxes and
a copy of any and all notices pertaining to real estate taxes or
assessments. Seller shall promptly deliver or make available (subject
to the provisions of Section 5B) to Purchaser copies of any such bills
or notices received by Seller after the date hereof but prior to the
Closing. In the event that any taxes or assessments for said years have
been appealed or are in the process of being appealed, Seller shall
provide Purchaser with copies of all petitions for appeal and evidence
of fee agreements or of full payment of the cost of any such appeals
including the full payment of attorneys' fees, as applicable, and
Purchaser shall reimburse Seller for a portion of such fees to the
effect that (1) such fee reductions benefit a period of time from and
after the Closing, (2) Purchaser received a proration at Closing
relating to such taxes, or (3) Tenants reimburse Purchaser for such
fees under the Leases.
(iv) A schedule of all claims and settlements on insurance
policies within the past three (3) years (or for such shorter period
that the Owners owned the applicable Project) and true and correct
copies of any such claim or settlement upon Purchaser's request.
(v) True, correct and complete copies of all service and
maintenance contracts, management agreements, leasing agreements and
other written agreements of any kind, and all amendments and
modifications thereto, which Seller, Owner or its agents and affiliates
have entered into in connection with the construction, development,
maintenance, ownership and operation of the Projects which might
survive the Closing and a schedule listing all such contracts and
agreements (such contracts and agreements being herein collectively
referred to as the "Project Contracts"). If no such Project Contracts
exist as to any Project, the applicable Owner shall deliver to
Purchaser its written certification thereof. All Project Contracts
described on Exhibit I attached hereto and made a part hereof (herein
referred to as the "Assumed Contracts") will be assigned to Purchaser
at Closing. Seller shall be responsible for all amounts due under all
Project Contracts other than Assumed Contracts.
(vi) True, correct and complete copies of all documents
evidencing and securing, and otherwise relating to, the Bonds and the
Illinois Bonds and Seller's and its affiliates reimbursement
obligations related thereto (herein referred to collectively as the
"Bond Documents").
(vii) True, correct and complete copies of all documents
evidencing and securing, and otherwise relating to, the CIBC Debt and
Seller's and its affiliates obligations related thereto (herein
referred to collectively as the "CIBC Documents").
(viii) True, correct and complete copies of the Leases.
(ix) Statements of operations (herein referred to as the
"Financial Statements") for 2003 (or for such period that the Owners
owned the applicable Project), as well as operating statements for the
months of January through April, inclusive, of 2004.
(x) Copies of existing title policies and surveys.
(xi) True, correct and complete copies of all financial
statements and insurance certificates (or policies) received from
Tenants and correspondence files of such Tenants.
(xii) All other material studies, reports, maps, and documents
related to the Projects, including without limitation engineering
reports, surveys, environmental reports, traffic circulation, flood
control and drainage plans, design renderings, shop drawings,
feasibility studies and all correspondence with governmental agencies
and their personnel concerning the same, but excluding market analyses
and any materials designated privileged under the attorney-client
privilege in connection with existing environmental litigation.
B. Seller or its agent shall copy any of the Basic Project Information
upon the reasonable request of Purchaser, to the extent same can be readily
copied and if same cannot be readily copied, Seller shall make such Basic
Project Information available for review by Purchaser.
C. To the extent not previously provided, Seller shall deliver or make
available to Purchaser within five (5) business days after the date on which a
detailed request is made, any documents reasonably requested by Purchaser in
connection with Purchaser's diligence with respect to whether the interest on
the Bonds is exempt from federal income taxation to the extent such documents
exist and are in Seller's possession or control.
6. Title and Survey.
A. As used herein, the following definitions shall apply:
(i) "Mandatory Cure Items" shall mean:
(a) superceded mortgages on the CIBC Debt Projects and
those mortgages that were intended to be
superceded mortgages relating to the CIBC Debt
("Superceded Mortgages");
(b) mortgages and other related liens on the Non
Assumed Debt Projects;
(c) mechanic lien claims or other liens or
encumbrances of a definite or ascertainable
amount that can be removed by the payment of a
definite sum of money at the Closing provided
the same may be bonded or insured over at
Seller's expense and provided further that
Seller shall not in any event be required to
expend more than $2,000,000.00 in the aggregate
to cure any Mandatory Cure items (excluding
mortgages and related liens);
(d) judgments against Seller or any Owner provided the
same may be bonded or insured over at Seller's
expense and provided further that Seller shall not
in any event be required to expend more than
$2,000,000.00 in the aggregate to cure the
Mandatory Cure items (excluding mortgages and
related liens); and
(d) requirements relating to the ownership documents
of Seller or any Owner.
(ii) "Deemed Permitted Exceptions" shall mean:
(a) mortgages and other related liens relating to the
Bonds and the CIBC Debt, other than the Superceded
Mortgages;
(b) the rights of Tenants under the Leases as
tenants only with no rights to purchase except
for the rights of the tenants set forth on
Exhibit J attached hereto and by this reference
incorporated herein to purchase the Project in
which they are located; provided, however,
Seller shall disclose such rights to the Title
Company and cause the Title Company to provide
affirmative title coverage insuring that those
tenants have no right to purchase any of the
Projects as a result of the transaction
contemplated by this Agreement;
(c) for each Project, those matters set forth for such
Project on Exhibit K attached hereto and made a
part hereof;
(d) acts of the Purchaser and those claiming by,
through, and under Purchaser; and
(e) real estate taxes and assessments not due and
payable as of the Closing.
B. Seller has delivered, and Purchaser acknowledges receipt of the
following with respect to each Project, excepting only those items listed on
Exhibit L (the "Undelivered Title Items"):
(i) an updated title commitment (dated after May 1, 2004) for
each Project (herein referred to as a "Title Commitment") issued by the
Chicago Title Insurance Company (herein referred to as the "Title
Company") to issue an ALTA Form B (1992) Owner's Title Insurance Policy
(herein referred to as a "Title Policy") in the amount of the
applicable Project Purchase Price (irrevocable for at least six (6)
months) showing title to the applicable Project in the applicable
Owner, naming Purchaser as the proposed insured and showing the current
status of title as to such Project;
(ii) copies of all documents referenced in Schedule B to such
Title Commitments (the "Title Exception Documents"); and
(iii) an existing survey and a current as-built survey dated
after June 1, 2004 (each such survey is herein referred to as a
"Survey"), prepared by a surveyor licensed by the State of Illinois or
Indiana, as applicable, and reasonably acceptable to Purchaser,
certified to Purchaser and the Title Company by such surveyor as being
true, accurate and having been prepared in accordance with the minimum
requirements for a Land Title Survey adopted by the American Title
Association (now known as the American Land Title Association) and the
American Congress on Survey and Mapping in 1992, meeting the
requirements of a Class A Urban Survey, and setting forth items 1, 2,
3, 4, 6, 7(a), 7(b), 7(c), 8, 9, 10, 11, and 15 shown on Table A
thereof.
C. With the sole exception of the Undelivered Title Items, Purchaser
has reviewed all of the Title Commitments, Surveys, and Title Exception
Documents related to each of the Projects. All matters (the "Unpermitted
Exceptions"), other than Deemed Permitted Exceptions set forth in the Title
Commitments, Surveys and Title Exception Documents other than the Permitted
Exceptions are unacceptable to Purchaser. Seller shall cure all Mandatory Cure
Items to the extent required pursuant to Section 6A(i) and shall, subject to the
terms and provisions of this Section 6, use commercially reasonable efforts to
have the Unpermitted Exceptions deleted or insured over prior to the Closing,
and, if required, the Closing may be extended in accordance with the provisions
of Section 4A for up to two (2) additional fifteen (15) day periods until said
items have been deleted or insured over.
D. Seller shall deliver the Undelivered Title Items as soon as is
reasonably practicable, but in no event later than the thirtieth (30th) day
following the date of this Agreement, provided, however, in no event shall
Seller be in default hereunder for a failure to correct minor clean-up items and
corrections within said thirty-day period if the Undelivered Title Items
delivered were otherwise in conformance with the provisions of this Agreement
within said thirty-day period. Purchaser shall have seven (7) business days
after the delivery of all Undelivered Title Items for each Project to review the
same. If an Undelivered Title Item shall disclose any matters (other than Deemed
Permitted Exceptions or Mandatory Cure Items) which were not raised or shown in
the previously delivered Title Commitments, Title Exception Documents or the
Surveys previously delivered by Seller to Purchaser, if any, and which are
unacceptable to Purchaser for any reason (subject to any obligations imposed
upon Purchaser by law to act in good faith), including, but not limited to, the
unwillingness of the Title Company to issue extended coverage or the
endorsements described in Section 6G below, then Purchaser shall have the right
to object to any such matters (each a "Title Defect" and collectively, "Title
Defects") by delivering to Seller, prior to the expiration of the aforementioned
seven (7) business day period, written notice (the "Title Defect Notice") of
such Title Defects. Purchaser's failure to deliver the Title Defect Notice as
aforesaid, or failure to raise in the Title Defect Notice any such matters,
shall be deemed Purchaser's disapproval of such matters disclosed in such
Undelivered Title Item and any such matters shall be deemed Title Defects.
Within five (5) business days after receipt of a Title Defect Notice or
expiration of said five (5) business day period, Seller shall advise Purchaser
as to which Title Defects will be deleted or insured over and, if applicable,
which of such Title Defects will not be so deleted or insured over. If required,
Seller shall have the right to extend the Closing in accordance with the
provisions of Section 4A for up to two (2) additional fifteen (15) day periods
until said items have been deleted or insured over. Seller's failure to advise
Purchaser within said five (5) business day period shall be deemed Seller's
election to not cause such Title Defects to be deleted or insured over. To the
extent there is an agreement between Seller and Purchaser as to the Title
Defects to be deleted or insured over, all other matters referenced in the
Undelivered Title Item so delivered, other than Mandatory Cure Items, shall be
Permitted Exceptions hereunder as to the applicable Project. If, however, Seller
elects or is deemed to elect not to cause a Title Defect to be deleted or
insured over, then Purchaser shall have the right to terminate this Agreement by
written notice given not later than five (5) business days after Purchaser's
receipt of Seller's notice as to Title Defects or, if applicable, the expiration
of the five (5) business day period in which Seller was to deliver such notice.
Purchaser's failure to deliver to Seller notice of Purchaser's termination of
this Agreement within the aforesaid five (5) business day period shall be deemed
Purchaser's election to terminate this Agreement. In the event that Purchaser
elects or is deemed to have elected to terminate this Agreement as a result of a
Title Defect affecting that certain Parcel located at East Chicago Enterprise
Center on which the building commonly referred to as Building T is located (the
"Building T Parcel"), Seller may, at Seller's sole option, by written notice
given not later than seven (7) business days after Purchaser's election or
deemed election to terminate this Agreement, deem such election to be a
termination of the Agreement solely with respect to the Building T Parcel and
this Agreement shall continue in full force and effect as to the balance of the
Projects with no adjustment to the Purchase Price. Seller's failure to deliver
to Purchaser notice of Seller's election within the aforesaid seven (7) business
day period shall be deemed Seller's election to terminate this Agreement only
with respect to the Building T Parcel, in which event this Agreement shall
continue in full force and effect as to the balance of the Projects with no
adjustment to the Purchase Price.
E. At the Closing, the Projects shall be conveyed (directly or
indirectly) to Purchaser or Purchaser's nominee(s) by special warranty deeds,
subject only to Deemed Permitted Exceptions; and other matters agreed or deemed
to be Permitted Exceptions as provided in this Section 6 (collectively, the
"Permitted Exceptions").
F. At the Closing, the Title Commitments shall be updated and furnished
to Purchaser, showing title being subject only to Permitted Exceptions. If such
updated Title Commitments disclose any matters not previously disclosed in the
Title Commitments originally delivered to Purchaser, other than Permitted
Exceptions, Purchaser and Seller shall thereafter follow the same procedure as
set forth in Section 6D for the determination of Permitted Exceptions, Title
Defects, regulations thereto, and rights of termination. In such event, Closing
may be delayed by either Purchaser or Seller for up to 30 days as may be
necessary to accomplish the foregoing.
G. During the Inspection Period, Purchaser shall determine whether or
not it can obtain the agreement of the Title Company that the Title Policy,
which will be issued pursuant to the title commitment at the Closing, will
provide full extended coverage insurance which shall result in the deletion of
the general exceptions and confirm that the Title Policy for each Project shall
contain the following affirmative endorsements (all on the Title Company's
standard form):
(i) An endorsement insuring Purchaser that except for
Permitted Exceptions, there are no violations of any restrictive
covenants, conditions or restrictions affecting the Project, that there
are no encroachments by the Building onto any easements or any building
lines or setbacks affecting the Project, or onto any adjacent property,
or any encroachments onto the Parcel of existing improvements located
on adjoining land.
(ii) An access endorsement insuring that the streets and roads
adjacent to the Project (or adjacent to easements benefiting such
Projects) are public streets and that there is direct and unencumbered
access to the same from the Project.
(iii) A survey endorsement insuring that all the property
insured is legally described on a specifically mentioned Survey and
foundations in place as of the date of such policy are within the lot
lines and applicable setback lines, that the Building does not encroach
onto adjoining land or onto any easements, and that there are no
encroachments of improvements from adjoining land onto the Project or
any part thereof, except for Permitted Exceptions.
(iv) An ALTA 3.1 zoning endorsement insuring that the Project
is zoned for the present and contemplated building and business thereon
and insuring against loss or damage arising due to a prohibition of
said use or requiring removal of the Buildings due to a violation of
any applicable laws, codes, ordinances, statutes, regulation (all such
laws, codes, ordinances, statutes and regulations are herein referred
to collectively as "Laws"), including but not limited to Laws relating
to area of the Project, floor area of the Building, setbacks, height
and number of parking spaces.
(v) A contiguity endorsement insuring that all parcels
comprising each Project, to the extent applicable, are contiguous.
(vi) An endorsement insuring that all of the Project is
covered by one (1) or more permanent index numbers which do not cover
other property.
(vii) An endorsement deleting the creditors' rights exception.
(viii) A utility facility endorsement.
(ix) Restriction and/or encroachment endorsement, if
applicable.
Purchaser and Seller shall proceed diligently and cooperate with each
other to obtain the written commitment of the Title Company to issue all of the
endorsements referenced above. Seller shall execute those documents listed on
Exhibit M attached hereto in form and substance reasonably required by the Title
Company in order to issue the endorsements referenced above and shall provide
all additional documentation reasonably and customarily required by the Title
Company in order to issue the extended coverage and all of the endorsements. In
the event that Purchaser determines that it cannot obtain extended coverage or
any of the foregoing endorsements, Purchaser may terminate this Agreement upon
written notice to Seller given not later than 5:00 p.m., Chicago time, on the
last day of the Inspection Period.
H. With respect to the ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Project and the ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Projects, Purchaser acknowledges and agrees that the forms of the pro
forma policies distributed 7/27/04, including, without limitation, the access
endorsements attached thereto, are acceptable in form and substance to Purchaser
and, provided the Title Company delivers Title Policies in substantially the
same form as the 7/27/04 pro formas, such Title Policies will be accepted by
Purchaser as meeting the requirements contained herein for such Title Policies.
I. Purchaser acknowledges and agrees that Purchaser has received and
reviewed copies of the settlement agreements with USX Corporation (the "USX
Settlement Agreement") and Signode Corporation, a Division of Illinois Tool
Works, Inc. (the "Signode Settlement Agreement") relating to the litigation
entitled Enterprise Center VII, L.P., Enterprise Center VIII, L.P., Enterprise
Center IX, L.P., Enterprise Center X, L.P. and ▇▇▇▇▇▇/Prime Industrial Partners
v. USX Corporation v. The Prime Group, Inc., Case No. 96C 5283, filed on August
22, 1996, in the United States District Court for the Northern District of
Illinois, Eastern Division, and that certain provisions of the Settlement
Agreements, including, but not limited to, release provisions, are binding upon
and/or benefit Purchaser, as a successor in interest to Seller and the Owners of
the Chicago Enterprise Center Project. Purchaser further acknowledges and agrees
that Seller is required pursuant to the USX Settlement Agreement and the Signode
Settlement Agreement to record the Memorandum of Settlement re USX Corporation
and the Memorandum of Settlement re Signode Corporation (collectively, the
"Memoranda of Settlement Agreements") against those Parcels which are part of
the Chicago Enterprise Center Project, and that the recordation of such
documents shall in no event cause a default by Seller under this Agreement.
Unless and until the Title Company includes the Memoranda of Settlement
Agreements as exceptions on the relevant Title Policy(ies), such documents shall
not constitute Permitted Exceptions hereunder. Notwithstanding the foregoing,
Purchaser and Seller each acknowledge and agree that the Memoranda of Settlement
Agreements are documents recorded in the records of ▇▇▇▇ County, Illinois
against those Parcels comprising the Chicago Enterprise Center Project and that
under no circumstances shall Seller's failure to include the Memoranda of
Settlement Agreements as Permitted Exceptions in the Special Warranty Deeds to
be delivered at Closing create any liability whatsoever on the part of Seller
and/or its successors and assigns to Purchaser and/or its successors and
assigns. The provisions of this Section 6I shall survive the Closing.
J. As of the date of this Agreement, Seller has been unable to secure
the Title Company's agreement to issue an access endorsement with respect to
that portion of the Parcel comprising the 4440-4635 Railroad, East Chicago, IN
Project lying immediately west of the Indiana Harbor Canal ("Parcel 12"). Prior
to the Closing, Seller shall use commercially reasonable efforts to obtain an
access endorsement with respect to Parcel 12 from the Title Company. In the
event the Title Company does not agree to issue such access endorsement on or
before September 1, 2004, Seller shall use commercially reasonable efforts to
obtain an access easement across the Indiana Harbor Belt Railroad tracks
adjacent to Parcel 12 for the benefit of Parcel 12, including the payment of any
commercially reasonable fee not to exceed One Hundred Thousand Dollars
($100,000) in connection therewith. Notwithstanding anything to the contrary
contained in this Agreement, Seller's failure to obtain either the access
endorsement or the access easement shall in no event be a Title Defect hereunder
and Purchaser shall be obligated to close the transactions contemplated by this
Agreement without an access endorsement or access easement with respect to
Parcel 12. In the event Seller does not obtain an access endorsement or access
easement prior to Closing but Purchaser is able to negotiate an access easement
within the six (6) month period after the Closing Date, Seller shall pay any
commercially reasonable fee paid in connection therewith up to a maximum of One
Hundred Thousand Dollars ($100,000).
7. Inspection Period.
A. At all times prior to Closing, including times following the
"Inspection Period" (which Inspection Period is herein defined to be the period
which commenced as of May 4, 2004 and expired as of the date and time on which
this Agreement is executed by the parties), Purchaser, its agents and
representatives (the "Purchaser Parties") shall be entitled to conduct an
inspection (herein referred to as "Basic Project Inspection"), which will
include the rights to (subject to the provisions of this Section 7): (i) upon
reasonable prior notice (which shall be at least one (1) business day), enter
upon the Projects at reasonable times during business hours to perform
inspections and tests of the Projects, including, but not limited to,
inspection, evaluation and testing of the heating, ventilation and
air-conditioning systems and all components thereof, the roof of the Buildings,
the parking lots, all structural and mechanical systems within the Buildings,
including, but not limited to, sprinkler systems, power lines and panels, air
lines and compressors, automatic doors, tanks, pumps and plumbing, and all
equipment, vehicles, and Personal Property, provided Seller shall have the right
to have a representative present during any visits to or inspections of any
Project; (ii) examine and copy any and all books, records, tax returns,
correspondence, financial data, leases, and all other contracts, agreements,
documents in the possession of Seller, Owners or their agents, relating to
receipts and expenditures pertaining to the Projects for the three (3) most
recent full calendar years (or such shorter period of time as Owners may have
owned the Projects) and the current calendar year; (iii) make investigations
with regard to zoning, environmental (as provided in Section 7B below), building
code and other legal requirements including, but not limited to, an
environmental "Assessment" as specified in Section 7B below including (but not
limited to) an analysis of the presence of any asbestos, chlordane, formaldehyde
or other Hazardous Material (as hereinafter defined) in, under or upon the
Project; (iv) make or obtain market studies and real estate tax analyses; (v)
interview any Tenant at the Project with respect to its current and prospective
occupancy at the Project (provided, however, that neither Purchaser nor any of
the Purchaser Parties shall contact or attempt to contact any Tenant of any
Project for any reason whatsoever without Seller's prior written consent, which
may be granted or withheld in Seller's reasonable discretion, and Seller shall
have the right to have a representative present during any meetings or
discussions with any Tenant); (vi) review the Basic Project Information; (vii)
analyze the financial feasibility of ownership of the Projects; and (viii)
analyze the tax-exempt status of the Bonds and the Illinois Bonds. If Purchaser,
in its sole and absolute discretion, determines that the results of any
inspection, test or examination do not meet Purchaser's (or its underwriters',
investment committees', board of directors', investment bankers', lenders',
ratings agencies' or investors') criteria for the purchase, financing or
operation of any of the Projects in the manner contemplated by Purchaser, or if
the information disclosed does not otherwise meet Purchaser's investment
criteria or underwriting for any reason whatsoever, or if Purchaser, in its sole
discretion, otherwise determines that any of the Projects are unsatisfactory to
it, then, subject to ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Purchaser may terminate this Agreement
with respect to all (but not less than all) of the Projects by written notice to
Seller, with a copy to Escrowee, given not later than 5:00 p.m., Chicago time,
on the last day of the Inspection Period. Upon such termination, the ▇▇▇▇▇▇▇
Money, together with all interest thereon, shall be returned immediately to
Purchaser and neither party shall have any further liability to the other
hereunder (except for obligations that, pursuant to the terms of this Agreement,
survive the termination of this Agreement). Purchaser's failure to terminate
this Agreement prior to the expiration of the Inspection Period shall be deemed
Purchaser's waiver to terminate this Agreement pursuant to this Section 7A.
The parties hereto acknowledge that Purchaser will expend material sums
of money in reliance on Seller's obligations under this Agreement, in connection
with negotiating and executing this Agreement, furnishing the ▇▇▇▇▇▇▇ Money,
conducting the inspections contemplated by this Section 7 and preparing for
Closing, and that Purchaser would not have entered into this Agreement without
the availability of an Inspection Period. The parties therefore agree that
adequate consideration exists to support Seller's obligations hereunder, even
before expiration of the Inspection Period. Seller and Purchaser acknowledge
that Purchaser has performed various due diligence activities and inspections
with respect to the Projects prior to the date of this Agreement. Seller and
Purchaser agree that the terms and provisions of this Section 7 apply to and
govern such prior activities and inspections.
B. During the Inspection Period, Purchaser or Purchaser's agent(s)
shall have the right to perform or cause to be performed or complete a so-called
"Phase I" environmental inspection and assessment (herein referred to as the
"Assessment") of the Projects, and Seller acknowledges and consents to such
Assessment; provided, however, that no invasive testing (i.e., so-called "Phase
II" environmental inspections) shall be performed without the written consent of
Seller, which consent may be withheld or delayed in Seller's reasonable
discretion. Purchaser and its consultants shall also have the right to undertake
or complete a technical review of all documentation, reports, plans, studies and
information in possession of Seller, or its past or present environmental
consultants, concerning or in any way related to the environmental condition of
the Projects, excepting any documents classified as privileged under the
attorney-client privilege in connection with pending environmental litigation.
In order to facilitate the Assessment and technical review, Seller shall extend
its reasonable cooperation (but without third party expense to Seller) to
Purchaser and its environmental consultants, including, without limitation,
providing access to all files and answering all reasonable questions. The
Assessment shall evaluate the present and past uses of the Projects, and the
presence on, in or under the Land (and on, in or under land sufficiently
proximate to any of the Projects) of any Hazardous Materials. Purchaser agrees
to engage ▇▇▇▇▇▇▇ Environmental to perform the assessment of the Projects.
C. Purchaser hereby covenants and agrees that it shall cause all
studies, investigations and inspections (including, but not limited to, the
Assessment), performed at the Projects pursuant to this Section 7 to be
performed in a manner that does not unreasonably disturb or disrupt the
tenancies or business operations of the Tenants or the operation of any of the
Projects. In the event that, as a result of Purchaser's exercise of its rights
under Section 7A and 7B, any damage occurs to the Projects, then Purchaser shall
promptly repair such damage, at Purchaser's sole cost and expense, so as to
return the Projects to substantially the same condition as existed prior to such
damage being incurred. Seller shall have the right, but not the obligation, to
have a representative of Seller present at all times that Purchaser and the
Purchaser Parties perform and conduct any tests, studies or other due diligence
activities in, at, on, under or about the Projects, including, without
limitation, a representative present at any and all conversations and/or
interviews of Tenants of the Projects. If Purchaser exercises its termination
right pursuant to Section 7A hereof, and upon payment for same by Seller to
Purchaser at Purchaser's cost therefor, Purchaser shall deliver to Seller
promptly upon receipt by Purchaser a true and complete copy of each inspection
report or summary, survey, engineering or architectural study, soil test report,
environmental report or other written result of any such inspection,
investigation, study or test conducted by, on behalf of, or for the benefit and
use of Purchaser. Purchaser agrees that it and all of the Purchaser Parties
shall keep and maintain any and all studies, tests, reports, summaries and other
information relating to the Projects strictly confidential. Prior to entry onto
any Project to conduct or perform any studies, tests, investigations, surveys,
conversations, or any other due diligence activities, Purchaser and the
Purchaser Parties (or each contractor performing such services for Purchaser the
and Purchaser Parties) shall deliver a certificate of insurance (showing
evidence that such party has general liability and other insurance required by
Seller) to Seller naming Seller, Owners, and any other parties designated by
Seller from time to time as additional insureds or loss payees, as applicable,
in amounts, types and form reasonably acceptable to Seller. Such certificate of
insurance shall provide that the insurance evidenced thereby may not be
modified, cancelled or terminated without at least fifteen (15) days prior
written notice to Seller. Purchaser hereby assumes sole and entire
responsibility for any and all loss of life, injury to persons and damage to
property (wherever such property may be located) that may be sustained, suffered
or incurred directly or indirectly due to or on account of any tests, studies,
reviews, inspections and other activities of Purchaser and/or the Purchaser
Parties in, on, at, under and about the Projects or any portion thereof.
Purchaser, for itself and for the Purchaser Parties, hereby releases Seller, the
Owners and their respective affiliates, members, officers, directors, partners,
employees, agents, mortgagees, licensees, tenants, contractors, guests and
invitees (and their respective affiliates, members, officers, directors,
partners, employees, agents, mortgagees, licensees, contractors, guests and
invitees or any tier) (all of the foregoing to be hereinafter sometimes referred
to collectively as the "Seller Group") from any and all (a) liability, loss,
claim, demand, lien, damage, penalty, fine, interest, cost and expense
(including, without limitation, court costs and reasonable attorneys' fees), and
(b) damage, destruction or theft of property, that may arise from, in connection
with or during the performance of, any and all tests, studies, reviews,
inspections and other activities of Purchaser and/or any of the Purchaser
Parties in, on, at, under and about the Projects or any portion thereof;
provided, however, that the foregoing release shall not apply with respect to
any of the foregoing caused solely and directly by the acts of Seller or the
Seller Group or any representative thereof. Purchaser hereby indemnifies,
protects, defends and holds Seller and the Seller Group harmless from and
against any and all losses, damages, claims, causes of action, judgments, costs
and expenses (including, without limitation, court costs and reasonable
attorneys' fees) that Seller and/or the Seller Group actually suffers or incurs
during the course of, or as a result of, or in any way arising out of, any or
all of the studies, investigations, inspections and other activities (including,
but not limited to, the Assessment), that Purchaser or any of the Purchaser
Parties elects to perform (or causes to be performed) pursuant to this Section
7; provided, however, that the foregoing indemnity shall not apply with respect
to any of the foregoing caused solely and directly by the acts of Seller or the
Seller Group or any representative thereof. All of Purchaser's and the Purchaser
Parties' obligations and indemnities under this Section 7 shall survive the
Closing or the termination of this Agreement, whichever shall occur.
D. Purchaser hereby acknowledges receipt of a copy of that certain
Environmental Remediation and Indemnification Agreement ("Prime Indemnification
Agreement") dated as of November 17, 1997 by and between Seller, as indemnitee,
and The Prime Group, Inc., as indemnitor, as amended by that certain First
Amendment to Environmental Remediation and Indemnity Agreement dated as of March
20, 2003 and that certain Second Amendment to Environmental Remediation and
Indemnity Agreement dated as of August 28, 2003. Seller shall not assign and
Purchaser shall not accept an assignment of or assume any obligations under the
Prime Indemnification Agreement. Seller and Purchaser shall execute and deliver
the Environmental Escrow Agreement attached hereto and made a part hereof as
Exhibit N with respect to environmental remediation required in connection with
the Chicago, East Chicago and ▇▇▇▇▇▇▇ Enterprise Center Projects.
8. Closing Escrow.
A. The Closing shall be consummated through one or more Closing Escrows
on the Closing Date.
B. At or prior to the Closing, Seller shall deliver to Purchaser or
deposit into the Closing Escrow the following as to each Project, as applicable,
all in form and substance reasonably satisfactory to Purchaser:
(i) A special warranty deed to Purchaser or Purchaser's
nominee in recordable form, conveying good and marketable title to the
Real Property in fee simple, subject only to the applicable Permitted
Exceptions.
(ii) A ▇▇▇▇ of sale executed by Seller assigning, conveying
and warranting to the Purchaser title to the applicable Personal
Property and the applicable Intangible Property, free and clear of all
encumbrances except for Permitted Exceptions, as applicable, and as
otherwise permitted hereby.
(iii) An assignment of the Leases executed by [(i) the
applicable landlords under the Leases to the Seller or applicable Owner
and] (ii) Seller or the applicable Owner to Purchaser.
(iv) All original executed Leases (or, if originals are not
available, certified copies thereof).
(v) An Assignment of all Assumed Contracts, if any, executed
by Seller or the applicable Owner to Purchaser.
(vi) Estoppel letters (herein referred to as "Tenant Letters")
from all Tenants under the Building Leases, including, but not limited
to, the following Tenants: (1) Dynamic Manufacturing; (2) Semblex
Corporation; (3) Windy City Wire & Cable; (4) ▇▇▇▇▇▇▇▇ Furniture; (5)
▇▇▇▇▇▇ Salt; (6) Boston Coach; (7) Standard Motor Products; (8)
Associated Material Handling; (9) Spraying Systems; (10) Kristel Corp;
(11) Household Credit Services, Inc., (12) ▇▇▇▇▇▇▇ Packaging, (13) T
Mobile, (14) Illiana Steel, (15) Electric Coating Technologies, (16)
A.M. Castle, (17) Bar Processing, (18) HECO Equipment Manufacturers,
(19) ▇▇▇▇▇▇ Steel, (20) Gerdau Ameristeel, (21) Alpha Processing, (22)
Macsteel Service Centers USA, and (23) Amurol (herein collectively
referred to as the "Major Tenants"). Seller shall use commercially
reasonable efforts to obtain Tenant Letters from all Tenants under the
Building Leases. All Tenant Letters shall be addressed to Purchaser or
its nominee or assignee, substantially in the form required under the
applicable Building Lease (with such changes thereto as are reasonably
requested by a Tenant or are required to make a statement factually
correct subject to the provisions of Section 10), or if no form is so
required, then substantially in the form of Exhibit O-1 attached hereto
and by this reference incorporated herein. Seller shall submit the form
of Tenant Letter attached as Exhibit O-1 to each Tenant unless such
Tenant's Lease provides for a different form that does not provide for
"other matters reasonably acceptable" to the Landlord, or other similar
language, in which event Seller shall submit the form required under
the Building Lease, except that notwithstanding the foregoing, Landlord
shall include paragraph 17 of Exhibit O-1 in all Tenant Letters
requested. Notwithstanding the foregoing, if Seller has not obtained
Tenant Letters from all Tenants under the Building Leases, but has
obtained Tenant Letters from Tenants occupying at least 85% of the
aggregate square footage of the Buildings occupied by Tenants as set
forth in the Lease Schedule (excluding the space occupied by
Multigraphics, LLC), then Seller shall execute and deliver to Purchaser
a Seller Estoppel Certificate (each, a "Seller Estoppel Certificate",
and collectively, the "Seller Estoppel Certificates") substantially in
the form of Exhibit O-2 (with such changes as are required to make the
same factually correct, subject to the provisions of Section 10) with
respect to Building Leases with the remaining Tenants. If Seller shall
deliver to Purchaser Seller Estoppel Certificates and Tenant Letters
necessary to satisfy the aforesaid Tenant Letter threshold, then the
Tenant Letter threshold shall be deemed satisfied, and Purchaser shall
have no right to terminate this Agreement on account of the failure to
deliver the required threshold of Tenant Letters. Furthermore,
Purchaser acknowledges and agrees that (1) the limitations on liability
set forth in Section 17C below shall apply to any and all
representations, certifications, assertions and statements made by
Seller in any Seller Estoppel Certificate and (2) any liability of
Seller under any Seller Estoppel Certificate automatically shall fully
expire and terminate upon the earlier to occur of (x) Seller's delivery
to Purchaser of an executed Tenant Letter in the form required above,
and (y) the one (1) year anniversary of the Closing Date. Any claim
that Purchaser may have which is not so asserted within the
aforementioned one (1) year period shall not be valid or effective and
Seller shall have no liability with respect thereto. All Tenant Letters
must be signed and dated no more than forty-five (45) days prior to the
date of Closing. All Seller Estoppel Certificates must be signed and
dated no more than five (5) days prior to the date of the Closing.
Notwithstanding the foregoing, in no event shall Seller be required to
deliver Tenant Letters or Seller Estoppel Certificates from or on
behalf of the Tenants under the Farm Leases nor shall Seller be
required to deliver any such documents for the Multigraphics Lease if
Multigraphics LLC has rejected its Lease. Purchaser acknowledges and
agrees that unless and until Multigraphics, LLC assumes its Lease
pursuant to its bankruptcy proceedings, any Tenant Letter or Seller
Estoppel Certificate delivered or obtained with respect to the
Multigraphics Lease may reflect that Multigraphics is in bankruptcy and
is in default and delinquent in the payment of rent under its Lease,
and Purchaser acknowledges and agrees that the disclosure of such facts
in the Tenant Letter or Seller Estoppel Certificate shall in no event
constitute a default by Seller or failure of a condition under this
Agreement.
(vii) A letter or letters executed by each Owner to all the
Tenants under the Leases relating to such Owner's Project directing the
payment of all rental and other payments to Purchaser or its nominee.
(viii)To the extent not previously delivered, all
architectural drawings, record drawings, plans, specifications,
surveys, building permits, occupancy permits or other similar items in
Seller's possession (or copies thereof) at its corporate offices which
Seller has created, used or relied upon for the construction and
maintenance of the Project.
(ix) All keys (if any) in Seller's possession used in
connection with the Projects and the combinations known to Seller to
all combination locks included in the Projects.
(x) A non-foreign certificate in accordance with the
provisions of Section 20 hereof.
(xi) An updated Lease Schedule prepared as of the Closing
Date, certified by Seller to be, with respect to the matters shown
thereon, true and correct, in all material respects, as of the Closing
Date.
(xii) A certificate from Seller stating that its
representations and warranties set forth in Section 9 hereof are true
and correct in all material respects as of the Closing Date, with such
modifications to and containing such representations and warranties as
are required to make the same true and correct in all material respects
as of the Closing Date, subject to Section 17 and Section 9D hereof.
(xiii)Any documents or agreements reasonably required by the
Title Company to issue the Title Policy on the Closing Date, including
without limitation an extended coverage owner's policy statement and a
GAP undertaking.
(xiv) With respect to the Bonds, originals of any Bond
Documents (to the extent not previously delivered), and any and all
documents and instruments reasonably required of Seller or its
affiliates in connection with the Bond Consent and the Bond Release.
(xv) With respect to the CIBC Debt, originals of any CIBC
Documents (to the extent not previously delivered), any and all
documents and instruments reasonably required of Seller or its
affiliates in connection with the CIBC Consent and the CIBC Release.
(xvi) All records of account and such other material data and
documents in Seller's possession and control as may be reasonably
necessary for Purchaser to continue the operation and maintenance of
the Project.
(xvii) A Rent Subsidy Agreement in the form of Exhibit P
attached hereto.
(xviii) All original Project Contracts (or true and correct
certified copies of same if originals are unavailable).
(xix) Certificates of Insurance for Tenants verifying
compliance with their respective Leases.
(xx) An assignment of intangible property executed by Seller
of the applicable Owner to Purchaser.
(xxi) Proof of authority of Seller and/or the Owners relating
to the execution of the Closing documents.
(xxii)Such documentation as may be required to obtain any
local transfer taxes required in connection with the transactions
contemplated by this Agreement.
(xxiii) Such other documents as Purchaser may reasonably
request to enable Purchaser to consummate each applicable Project
purchase.
C. At or prior to the Closing, Purchaser shall deliver to Seller or
deposit into the Closing Escrow the following as to any Project that is the
subject of such Closing, all in form and substance reasonably satisfactory to
Seller:
(i) The balance of the Purchase Price, plus or minus prorations.
(ii) Duly executed counterparts of any applicable instruments of
conveyance requiring acceptance by Purchaser.
(iii) Any documents or agreements reasonably required by the Title
Company to issue the Title Policy on such Closing Date, including without
limitation an extended coverage owner's policy (ALTA) statement.
(iv) With respect to the Bonds (to the extent not previously delivered)
any and all documents and instruments reasonably required in connection with any
new guarantees or collateral required to secure the letters of credit and/or the
release of Seller and its affiliates from all liability thereunder, including
without limitation, the Bond Consent and the Bond Release.
(v) A certificate from Purchaser stating that its representations and
warranties set forth in Section 11 hereof are true and correct in all material
respects as of the Closing Date, , with such modifications to such
representations and warranties as are required to make the same true and correct
in all material respects as of the Closing Date, subject to Section 17 hereof.
(vi) With respect to the CIBC Debt (to the extent not previously
delivered) any and all documents and instruments reasonably required in
connection with assumption of the CIBC Debt and an estoppel certificate
substantially in the servicer's standard form.
(vii) Rent Subsidy Agreement.
(viii)Such other documents as Seller may reasonably request to
consummate the applicable Project sale.
D. At or prior to the Closing, Purchaser and Seller shall jointly
deliver to each other or deposit into the Closing Escrow the following:
(i) Executed state, county and municipal transfer declarations.
(ii) A closing statement containing calculations of prorations (the
"Closing Statement").
E. Purchaser and Seller each agree to execute all of the documents
contemplated by this Agreement to be executed by them to complete the Closing
hereunder and such further documents and instruments and to deliver to each
other such further materials in their possession at the Closing (or thereafter
if forgotten at the Closing or if the need did not become apparent until after
the Closing) as may be reasonably necessary or appropriate to accomplish the
purpose and intent hereof. Additionally, all closing documents to be furnished
by the parties pursuant hereto shall be in form and substance reasonably
satisfactory to Seller, Purchaser and their respective counsels. The parties
hereto shall use reasonable efforts to agree upon the forms of the closing
documents promptly after execution of this Agreement, provided that any failure
to agree upon such documents shall in no event relieve either party of their
obligations under this Agreement. The foregoing obligations shall survive for
one (1) year from the Closing.
9. Representations and Warranties of Seller.
A. In order to induce Purchaser to enter into this Agreement, and
subject to the terms, provisions and limitations set forth in Section 9C,
Section 9D and Section 17, and except as set forth in the Exceptions Schedule
attached hereto as Exhibit Q and by this reference incorporated herein (herein
referred to as the "Exceptions Schedule"), Seller represents and warrants to
Purchaser that, as of the date of this Agreement, to Seller's knowledge (except
for items (i), (ii), (vii), (xi), (xxi), (xxiii), and (xxiv) through (xxix)
which shall not be to Seller's knowledge except as otherwise expressly set forth
in such items):
(i) At the execution hereof and at all times thereafter
through the time of the Closing, each Owner will own its Project free
and clear of all liens, claims, encumbrances and rights of others,
except for the Permitted Exceptions and liens, encumbrances and rights
of others which Seller agrees will be released or bonded or insured
over at the Closing and any matters entered into in accordance with the
terms of this Agreement or otherwise permitted by the terms of this
Agreement. No Owner is a party to any contract, agreement or commitment
to sell, convey, assign, transfer, provide rights of first refusal or
other similar rights, or otherwise dispose of any portion or portions
of any Project. Neither the Owners nor any person or entity claiming
by, through or under Owners has or will have, at any time or times
prior to the Closing, done or suffered anything whereby any lien,
encumbrance, claim, or right of others has been or will be created on
or against the applicable Project or any part thereof or interest
therein except for the Permitted Exceptions and liens, encumbrances and
rights of others which Seller agrees will be released at the Closing
and any other matters entered into in accordance with, or permitted by,
the terms of this Agreement.
(ii) This Agreement has been duly authorized and executed on
behalf of Seller and constitutes a valid and binding agreement,
enforceable in accordance with its terms, subject however, to (1)
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and (2) the
exercise of judicial discretion in accordance with general principals
of equity. Seller has obtained all consents, releases and permissions
and given all required notifications relating to the transactions
herein contemplated and required under any covenant, agreement,
encumbrance, law or regulation to which Seller is a party or by which
Seller is bound, except for the obtaining of consents and approvals of
the servicers and/or holders of the Bonds.
(iii) (1) each Project has adequate water supply, storm and
sanitary sewage facilities, telephone, gas, electricity and fire
protection capacity sufficient to service the applicable Project; (2)
the aforementioned utility services are fully hooked up and operable
with respect to each Project; and (3) all necessary and appropriate
approvals for such utility services have been obtained.
(iv) (1) the Projects, and each Owner's use and operation
thereof, are in compliance, in all material respects, with all
applicable municipal and other governmental laws, ordinances,
regulations, codes, licenses, permits, and authorizations; and (2)
there are presently and validly in effect all licenses, permits, and
other authorizations necessary for each Owner's use, occupancy, and
operation of the Projects as it is presently being operated.
(v) (1) all building permits, certificates of occupancy,
business licenses and, without limitation, all other notices, licenses,
permits, certificates and authority required in connection with the
construction, use or occupancy of the Projects have been obtained and
are in effect and good standing; and (2) the leasing, operation and use
of the Projects are in compliance, in all material respects, with such
notices, licenses, permits, certificates and authority.
(vi) there are no unsatisfied written requests for repairs,
restorations or improvements from any person, entity or authority,
including, but not limited to, any Tenant, lender, insurance carrier or
government authority, with reference to any Project, and Seller has not
received any written notice of any claims of any governmental agency to
the effect that the construction, operation or use of any Project is
currently in violation of any applicable Law or that any such claim or
any investigation with respect thereto is under consideration.
(vii) Except as otherwise set forth in the Lease Schedule or
in the Leases, the information in which is true, correct, and complete
in all material respects: (1) each Lease is in effect and the term of
the same and the obligation to pay rent thereunder has commenced and
the Tenant thereunder is in full possession thereof and all tenant
improvements required under the provisions thereof to be constructed by
the landlord are completed; (2) no Tenant under any Lease has prepaid
any rent or other charges for more than one (1) month; (3) to Seller's
knowledge, each Lease is free from default by the landlord; (4) to
Seller's knowledge, no Tenant is in default under any Lease; (5) no
Tenant is entitled to any rebate, rental concession, free rent period
or set off under any Lease and to Seller's knowledge, no Tenant is
making any claim against Seller, the Owners, or any Project under any
Lease; (6) all brokers' commissions with respect to Leases of Projects
have been paid in full and there are no commissions with respect to
renewals or extensions of any Lease; (7) neither Seller nor any agent
of Seller has executed any exclusive brokerage agencies with respect to
any Project; (8) there are no unsatisfied obligations wherein rent and
other obligations of any Tenant in other buildings have been assumed by
the landlord or obligations imposed upon the landlord to take back,
sublease or relet such Tenant's space or any portion thereof in any
Project; (9) no security deposit has been applied toward the payment of
any rent or other charge under any Lease; and (10) none of the Leases
contains any option to purchase or grants the Tenant any right of first
refusal or option to purchase. Each Lease provides for payment of real
estate taxes on an "accrual" or "cash" basis, as applicable, with
Tenants making or not making monthly deposits for same, all as set
forth in the Lease. As used herein, "accrual basis" means payment by a
Tenant of real estate taxes attributed to its period of its Lease or
occupancy, regardless of when such taxes are due and payable, and "cash
basis" means payment by a Tenant of real estate taxes that came due and
are payable during the term of its Lease or occupancy. The Tenants
under the Leases for the Projects commonly known as 555 ▇▇▇▇, 11045
Gage and 1301 Tower are the only Tenants who pay taxes on a cash basis;
the Tenants under all other Leases pay real estate taxes on an accrual
basis.
(viii) Seller has received no written notice that any of the
Project Contracts currently violates in any material respect any Laws
or Permitted Exceptions.
(ix) no Owner is or will, at the Closing, be in default in
respect of any of its material obligations or liabilities pertaining to
such Project (including, but not limited to, such obligations and
liabilities under the Permitted Exceptions, Project Contracts, or
Leases).
(x) Except as set forth on the Exceptions Schedule, there is
no litigation pending or threatened, against Seller, any Owner, or any
Project which, if adversely determined, would have a material, adverse
effect on the use and operation of the applicable Project, except for
claims and other matters anticipated to be covered by insurance.
(xi) Except as set forth on the Exceptions Schedule, no one is
employed by any Owner in connection with any Project to whom any
regular wages, overtime pay, vacation pay, accrued sick leave,
severance pay, payroll taxes, withholdings or deposits will be required
to be made or paid, or with respect to whom any W-2 or other forms will
be required to be provided, by such Owner at any time on or after any
Closing.
(xii) there are no material physical or mechanical defects in
the condition of any completed Buildings, including, but not limited
to, the roofs, exterior walls or structural components of the completed
Buildings and the heating, air conditioning, plumbing, ventilating,
elevator, utility, sprinkler and other mechanical and electrical
systems, apparatus and appliances located in the Buildings.
(xiii) the Basic Project Information and other information
with respect to Seller and each Project supplied to Purchaser in
connection with and as an inducement to entering into this Agreement,
including the Financial Statements, as of their respective dates, do
not and did not contain any untrue statement of a material fact or omit
to state a fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
materially misleading.
(xiv) Seller has received no written notice of any special
assessments of any nature with respect to any Project or any part
thereof, nor has Seller received any written notice of any special
assessments being contemplated.
(xv) all required federal, state, county and municipal tax
returns with respect to each Project have been filed and all taxes due
thereunder have been paid.
(xvi) Seller has received no written notice from any
governmental or regulatory agency of any installation in, or
production, disposal or storage on, any Project of any hazardous waste
or other toxic substances, including, without limitation, asbestos, by
Seller, the Owners, and by any Tenant or previous owner or tenant, and
there is no proceeding or inquiry by any governmental authority or
agency with respect thereto.
(xvii) Seller has not received any written notice from any
insurance carrier of material defects or inadequacies in any Project
which if not corrected would result in termination of insurance
coverage, increase its cost or otherwise affect the insurability of
such Project.
(xviii) Seller has received no written notice that any tenant
improvements constructed by Seller with respect to the Projects are not
in accordance with Lease requirements, or are not free of defects in
design, materials or workmanship or deviation from such requests.
(xix) Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will violate any
restriction, court order or agreement to which Seller or any Owner or
Project is subject.
(xx) No attachments, execution proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or
other proceedings are pending or threatened against any Owner, nor are
any such proceedings contemplated by any Owner. Except as otherwise
disclosed to Purchaser during the Inspection Period, no attachments,
execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings are pending
or threatened against any Tenant.
(xxi) Seller has not, and, to Seller's knowledge, no previous
owner of any Project has, sold, transferred, conveyed or entered into
any agreement regarding "air rights," "excess floor area ratio" or
other development rights or restrictions relating to any Project,
except as may be disclosed in the Permitted Exceptions.
(xxii) Except as disclosed in the environmental assessments,
reports and other documents listed on Exhibit R attached hereto and
incorporated herein, complete copies of which have heretofore been
delivered to Seller, correspondence or other documents delivered or
made available to Purchaser as part of the Basic Project Information:
(1) no substances, including without limitation, asbestos or any
substance containing more than one-tenth of one percent (0.1%)
asbestos, the group of compounds known as polychlorinated biphenyls,
flammable explosives, radioactive materials, oil, petroleum or any
refined petroleum product, chemicals known to cause cancer or
reproductive toxicity, pollutants, effluent, contaminants, emissions,
or related materials and any items included in the definition of
hazardous or toxic waste, materials or substances (all of the forgoing
are herein collectively referred to as "Hazardous Materials" and any
mixture of a Hazardous Material with other materials shall be
considered a Hazardous Material) in an amount actionable under any
applicable law relating to environmental conditions and industrial
hygiene, except in accordance with applicable legal requirements,
including without limitation, the Resource Conservation and Recovery
Act of 1976 (herein referred to as "RCRA"), 42 U.S.C.ss.ss.6901 et
seq., the Comprehensive -- ---- Environmental Response, Compensation
and Liability Act of 1980 (herein referred to as "CERCLA"), 42
U.S.C.ss.ss.9601 et seq., as -- ---- amended by the Superfund
Amendments and Reauthorization Act of 1986 (herein referred to as
"▇▇▇▇"), the Hazardous Materials Transportation Act, 49
U.S.C.ss.ss.1801, et seq., the Federal Water -- ---- Pollution Control
Act, 33 U.S.C.ss.ss.1251 et seq., the Clean Air -- ---- Act, 42
U.S.C.ss.ss.7401 et seq., the Toxic Substances Control Act, -- ---- 15
U.S.C.ss.ss.2601-2629, the Safe Drinking Water Act, 42 ▇.▇.▇.▇▇.▇▇.
300f et seq., and the similar federal, state and local -- ----
environmental statutes, ordinances and the regulations, orders, decrees
now or hereafter promulgated thereunder (such laws are herein
collectively referred to as the "Hazardous Material Laws"), have been
installed, used, generated, manufactured, treated, handled, refined,
produced, processed or stored or otherwise exists in or on any Project
or any portion thereof or have been disposed of or discharged by Seller
or from any Project or any portion thereof; (2) no activity has been
undertaken on any Project which would cause: (a) any Project or any
portion thereof to become a hazardous waste treatment, storage or
disposal facility within the meaning of, or otherwise bring such
Project or any portion thereof within the ambit of, RCRA or any other
Hazardous Material Law; (b) a release or threatened release of
Hazardous Material from such Project within the meaning of, or
otherwise bring such Project or any portion thereof within the ambit
of, CERCLA, ▇▇▇▇, or any other Hazardous Material Law, or (c) the
discharge of Hazardous Material into any watercourse, body of surface
or subsurface water or wetland, or the discharge into the atmosphere of
any Hazardous Material which would require a permit under any Hazardous
Material Law; (3) no activity has been undertaken with respect to any
Project or any portion thereof which would cause a violation or support
a claim under RCRA, CERCLA, ▇▇▇▇, or any other Hazardous Material Law;
(4) no underground storage tanks or underground Hazardous Material
deposits are or were located on any Project or any portion thereof and
subsequently removed or filled; (5) no investigation, administrative
order, litigation or settlement with respect to any Hazardous Materials
is threatened or in existence with respect to any Project or any
portion thereof; (6) no Project has ever been used as a landfill or a
waste dump; and (7) no written notice which remains unresolved has been
served on Seller or any Owner from any entity, governmental body or
individual claiming any violation of any Hazardous Material Law,
requiring compliance with any Hazardous Material Law or demanding
payment or contribution for environmental damage or injury to natural
resources.
(xxiii) None of the employees at the Projects are employed
pursuant to a written agreement, and all employees will be terminated
at Closing. None of the employees at the Projects are union employees.
No Owner is a party to, and the Projects are not subject to, any
collective bargaining or other agreement or understanding with any
labor union, and is not privy to or involved in any labor or union
controversy or other interaction of any kind.
(xxiv) To the Seller's knowledge, no default or event of
default now exists under the Indenture of Trust and Financing
Agreements with respect to the Bonds, nor does any condition or event
now exist which, with the giving of notice or the passage of time, or
both, would constitute a default or an event of default under such
documents. The Bonds are rated by a Rating Agency (as said term is
defined in the Bond Documents) and bear interest at the Weekly Rate (as
said term is defined in the Bond Documents). There is no Take-out
Lender (as said term is defined in the Bond Documents).
(xxv) To the Seller's knowledge, no default or event of
default now exists under the CIBC Documents, nor does any condition or
event now exist which, with the giving of notice or the passage of
time, or both, would constitute a default or an event of default under
the CIBC Documents. Exhibit H contains a list of all CIBC Documents
currently in effect, and Seller has delivered to Purchaser true and
correct copies of all of the CIBC Documents.
(xxvi) The certifications contained in those certain
Borrower's Closing Certificates dated as of June 30, 1992 delivered
with respect to the issuance of the Bonds and the Illinois Bonds
(collectively, the "Bond Certificates") are, except as otherwise set
forth in this Section 9A(xxvi), true and correct as of the date hereof;
provided, however, (i) the certifications set forth in Sections 1.2(a),
4.2, 4.3, 4.4, 4.5, and 4.6 of each of the Bond Certificates are true
and correct to the best of Seller's knowledge; (ii) with respect to the
certification set forth in Section 1.4(d) of each of the Bond
Certificates, Prime Group Realty Trust became the sole owner of all of
the outstanding equity interests in each Borrower in December of 1997;
(iii) with respect to the certifications set forth in Section 4.1 and
4.2 of each Borrower Certificate, although certain Projects experienced
a change in the identity of the "principal user" or "related person"
subsequent to the date of issuance of the Bonds and the Illinois Bonds,
no such change in principal user or related person caused a violation
of the $10 million or $40 million limits contained in Section 144 of
the Code and (iv) the Project owned by Enterprise Center I, L.P. was
destroyed by fire in 1994 and is held as an unimproved site, available
as a "build to suit" for a manufacturing tenant.
(xxvii) The certifications of the respective Owner contained
in (i) those Tax Regulatory Agreements dated June 30, 1992, by and
among the City of Chicago, the respective Owner and ▇▇▇▇ ▇▇▇▇▇▇ Bank,
as trustee, delivered with respect to the issuance of the Illinois
Bonds, and (ii) those Tax Regulatory Agreements dated June 30, 1992, by
and among the Indiana Development Finance Authority, the respective
Owner and NBD ▇▇▇▇▇▇, as trustee, delivered with respect to the
issuance of the Bonds, are true and correct as of the date hereof and
each Owner has complied with their respective covenants contained
therein, provided, however, that the certifications relating to the
actions or omissions of parties other than the respective Owner of the
applicable Project are given to the best of our knowledge.
(xxviii) At all times from the date of issuance of each issue
of Bonds and the Illinois Bonds, the interest on each issue of Bonds
and the Illinois Bonds has been determined based on a Weekly Rate, a
Monthly Rate or an Adjustable Rate for a Rate Period of no greater than
six (6) months. The Borrowers have not taken any action which would
cause any of the Bonds or the Illinois Bonds to be deemed to have been
retired and "reissued" pursuant to Internal Revenue Service Advance
Notice 88-130. All defined terms used but not defined in this paragraph
shall have the same meaning as in the Indenture of Trust, dated as of
June 15, 1992, executed in connection with the issuance of each
respective issue of Bonds and the Illinois Bonds.
(xxix) There were no 1992 financial statements prepared for
the partnerships owning the Bond Projects or the Illinois Bond
Projects.
B. References to the "knowledge" of Seller, and words of similar
import, shall refer only to the actual knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, without inquiry or due
diligence, and shall not be construed, by imputation or otherwise (whether or
not contained in the Basic Project Information), to refer to the knowledge of
Seller, Owners, or any affiliate of Seller or Owners, any property manager, or
any other officer, agent, manager, representative or employee of Seller, Owners,
or any affiliate thereof or to impose upon the foregoing individual(s) any duty
to investigate the matter to which such actual knowledge, or the absence
thereof, pertains. Purchaser acknowledges and agrees that the individuals named
above are 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 such individuals to Purchaser or any affiliate,
related party, employee, agent or representative of Purchaser. Purchaser
covenants and agrees that it will bring no action of any nature whatsoever
against any of the aforementioned individuals, or any member, partner, affiliate
or shareholder of Seller related to or arising out of the representations and
warranties contained in this Agreement. Seller shall have no duty to conduct any
further inquiry in making any such representations and warranties.
C. Purchaser acknowledges that (i) Seller has expended significant time
and effort to make available to Purchaser in the due diligence room at Winston &
▇▇▇▇▇▇ LLP the Basic Project Information, and (ii) Purchaser is in the process
of reviewing all of the Basic Project Information. In preparing the Exceptions
Schedule to Seller's representations and warranties in this Section 9 and
elsewhere in this Agreement (the "Representations"), Seller has listed those
items from the Basic Project Information that Seller in its good faith
discretion, and based on its Knowledge, deems material to Purchaser's decision
to purchase the Projects. Purchaser acknowledges that it would not be
practicable for Seller to list on the Exceptions Schedule every non-material
item contained in the Basic Project Information which may be pertinent to the
Representations and that there may be other information in the Basic Project
Information which may also be non-material exceptions to the Representations.
Purchaser agrees to use commercially reasonable efforts to review and make
itself familiar with all of the Basic Project Information. It shall not be a
breach by Seller of a Representation if Seller fails to list information from
the Basic Project Information which (a) is not material to any of the Projects
or (b) which Purchaser becomes aware during its review of the Basic Project
Information and nevertheless consummates the transaction contemplated by this
Agreement.
D. As soon as reasonably practicable after Seller obtains actual
knowledge, but in any event within five (5) business days thereafter, Seller
shall notify Purchaser in writing (a "Correction Notice") of any material
inaccuracy of any of the Representations (each such inaccuracy, a "False
Representation") and whether Seller commits to remedy such False Representation
by Closing. If Purchaser receives any Correction Notice which Seller does not
commit to remedy by Closing, Purchaser shall have a period of five (5) business
days after receipt of such Correction Notice during which, in Purchaser's sole
discretion, Purchaser may terminate this Agreement by written notice to Seller,
whereupon all ▇▇▇▇▇▇▇ Money and accrued interest thereon shall promptly be
returned to Purchaser. In the event that any False Representation consists of a
misstatement by Seller when made, or becomes false because of the subsequent act
or omission of Seller, the foregoing right of Purchaser to terminate the
Agreement shall be without limitation to any other rights or remedies Purchaser
may have under this Agreement. In the event the representation and warranty
became a False Representation due to any reason other than the actions or
omissions of Seller, the foregoing right of Purchaser to terminate this
Agreement shall be Purchaser's sole and exclusive remedy under this Agreement,
at law and in equity. Notwithstanding the foregoing, Purchaser shall not have
the foregoing right to terminate this Agreement for any False Representation
that Purchaser discovers during the Inspection Period if Purchaser does not
terminate this Agreement within the Inspection Period as provided in Section 7
herein. Notwithstanding anything in this Agreement to the contrary, Seller's
representations and warranties shall not be rendered untrue or deemed a False
Representation because of (i) the occurrence of a casualty, condemnation or
similar occurrence beyond the reasonable control of Seller, (ii) any change in
applicable law, ordinance, rule or regulation within any municipal, County,
State or other governmental unit, or (iii) any matter which becomes untrue as a
result of any act or omission of the Purchaser. If and when Purchaser discovers
a False Representation, then Purchaser shall have the affirmative duty to notify
Seller of such discovery. In the event that Purchaser fails to so notify Seller
of the discovery of such False Representation within a commercially reasonable
time thereafter, Seller may assert such action or inaction by Purchaser as a
defense thereto.
E. SELLER AND PURCHASER EACH HEREBY ACKNOWLEDGE AND AGREE THAT THE
PROJECTS ARE BEING AND SHALL BE SOLD, TRANSFERRED, ASSIGNED AND CONVEYED TO
PURCHASER, AND THAT PURCHASER SHALL ACQUIRE AND ACCEPT TITLE TO THE PROJECTS, IN
AS-IS WHERE-IS CONDITION, WITHOUT (EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT) ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR
NATURE, EXPRESS OR IMPLIED, ORAL OR WRITTEN, MADE BY SELLER, ANY OWNER, OR ANY
AGENT, ATTORNEY, EMPLOYEE, MEMBER OR REPRESENTATIVE OF SELLER OR ANY OWNER WITH
RESPECT TO THE PHYSICAL, ENVIRONMENTAL, FINANCIAL OR OTHER CONDITION OF THE
PROJECTS, OR WITH RESPECT TO THE CONSTRUCTION OF ANY IMPROVEMENTS, OR WITH
RESPECT TO THE EXISTENCE OF HAZARDOUS, DANGEROUS OR TOXIC SUBSTANCES, MATERIALS
OR WASTES OR STORAGE TANKS AT, IN, NEAR, UPON OR UNDER ANY OF THE PROJECTS.
PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT EXPRESSLY
PROVIDED IN THIS AGREEMENT, NEITHER SELLER OR ANY OWNER, NOR ANY AGENT,
ATTORNEY, EMPLOYEE, MEMBER OR REPRESENTATIVE OF SELLER OR ANY OWNER HAS MADE
ANY, AND HEREBY MAKES NO, WARRANTY OR REPRESENTATION OF ANY KIND, CHARACTER OR
NATURE WHATSOEVER, EXPRESS OR IMPLIED, AND HEREBY DISCLAIMS ANY IMPLIED WARRANTY
REGARDING THE FITNESS FOR PARTICULAR PURPOSE, QUALITY OR MERCHANTABILITY OF THE
PROJECTS, AND THAT, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT,
NO RESPONSIBILITY HAS BEEN OR IS ASSUMED BY SELLER, ANY OWNER, OR ANY PARTY
ACTING ON BEHALF OF SELLER OR ANY OWNER AS TO THE CONDITION OR REPAIR OF ANY OF
THE PROJECTS, OR THE VALUE OF THE PROJECTS, THE EXPENSE OF OPERATION OF THE
PROJECTS, OR THE INCOME POTENTIAL OF THE PROJECTS, OR AS TO ANY OTHER FACT OR
CONDITION WHICH HAS OR MIGHT AFFECT THE PROJECTS, OR THE CONDITION, REPAIR,
VALUE, EXPENSE OF OPERATION OR INCOME POTENTIAL THEREOF. PURCHASER HEREBY
ACKNOWLEDGES AND STATES THAT PURCHASER HAS CONDUCTED OR, PRIOR TO THE CLOSING,
WILL HAVE HAD THE OPPORTUNITY TO CONDUCT, ITS OWN INSPECTION AND INVESTIGATION
OF THE PROJECTS, INCLUDING, WITHOUT LIMITATION, PHYSICAL AND ENVIRONMENTAL
INSPECTIONS, TESTS AND STUDIES. FROM AND AFTER THE DATE OF CLOSING OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, PURCHASER AGREES TO ASSUME ALL
RESPONSIBILITY, LIABILITY AND OBLIGATION FOR THE PHYSICAL, ENVIRONMENTAL,
FINANCIAL AND OTHER CONDITION OF THE PROJECTS, EXCEPT TO THE EXTENT OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT. PURCHASER REPRESENTS AND WARRANTS THAT IT
IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF THE PROJECTS, AND
IT IS RELYING SOLELY ON (A) SELLER'S REPRESENTATIONS AND WARRANTIES EXPRESSLY
SET FORTH IN THIS AGREEMENT AND (B) PURCHASER'S OWN EXPERTISE AND THAT OF ITS
CONSULTANTS IN PURCHASING THE PROJECTS. PURCHASER ACKNOWLEDGES THAT ALL
INFORMATION OBTAINED BY PURCHASER WILL BE OBTAINED FROM A VARIETY OF SOURCES AND
THAT, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER WILL NOT
BE DEEMED TO HAVE REPRESENTED OR WARRANTED THE TRUTH OR ACCURACY OF ANY OF
MATERIALS OR DUE DILIGENCE ITEMS OR OTHER INFORMATION PREPARED BY THIRD PARTIES
AND NOT ANY MEMBER OF THE SELLER GROUP AND HERETOFORE OR HEREAFTER FURNISHED TO
PURCHASER. THE TERMS, PROVISIONS, COVENANTS, OBLIGATIONS, AND AGREEMENTS OF
PURCHASER SET FORTH IN THIS SECTION 9E SHALL SURVIVE THE CLOSING OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT.
F. Seller's capacity as sole administrative member of Owners shall not
affect its personal liability hereunder and Seller shall be liable as principal
and not as agent for any defaults or breaches of Seller or the Owners hereunder.
G. Subject to the provisions of this Section 9 and Section 17, except
as otherwise provided in this Agreement, Seller's covenants, agreements,
representations and warranties contained in this Agreement shall survive the
Closing with respect to such Project for only twelve (12) months after the
Closing Date, and thereafter automatically shall terminate.
10. Conditions Precedent to Closing.
A. In addition to any conditions provided in other provisions of this
Agreement, Purchaser's obligation to purchase the Projects is and shall be
conditioned on the following:
(i) that as of Closing, the Tenant Letters and Seller Estoppel
Certificates will not indicate any obligations on the part of the
landlord other than (a) obligations for which Seller has a reasonable
basis for not having performed and provided such obligations would not
cost in excess of $100,000.00 in the aggregate under all of the Leases
to resolve, remedy or cure, as the case may be; (b) costs relating to
Tenant Leases otherwise disclosed by Seller on the Exceptions Schedule;
(c) the tenant allowance for the Household Finance Lease specified in
Section 12H; (d) the Ford Tenant Improvement Costs as specified in
Section 12H; (e) the claims relating to the ▇▇▇▇▇▇▇▇ Furniture Lease
specified in Section 12J; and (f) the leasing commission payable in
connection with the Multigraphics Lease as specified in Section 12K;
(ii) subject to Section 10 E, that at no time prior to any
Closing shall any of the following have been done by or against or with
respect to Seller or any Major Tenant and be pending at the time of the
Closing: (1) a proceeding under Title 11 of the United States Code, as
now constituted or hereafter amended, or under any other applicable
federal or state bankruptcy law or other similar law; (2) the
appointment of a trustee or receiver of any property interest; or (3)
an assignment for the benefit of creditors;
(iii) subject to Section 10 E, that as of the Closing, each
Lease shall be in effect and free from monetary or other material
non-monetary default other than (a) defaults disclosed by Seller on the
Exceptions Schedule; (b) monetary defaults by AIM, LLC and
Multigraphics LLC; and (c) any monetary defaults where the applicable
rent payment is less than ten (10) days past due;
(iv) that this Agreement has not been terminated by Purchaser
pursuant to the terms of Sections 14, 15 or 16 below;
(v) the Title Company shall issue the Title Policy, or a
marked commitment therefore, in the form required by this Agreement;
(vi) in the event the CIBC Debt is being assumed, Purchaser
has received an estoppel certificate with respect to the CIBC Debt
substantially in the debt servicer's standard form and reasonably
acceptable to Purchaser;
(vii) Purchaser shall have received any and all third-party
consents expressly contemplated by this Agreement, including without
limitation the Bonds and the CIBC Debt (to the extent required
hereunder);
(viii)Purchaser shall have received access endorsements in
form reasonably acceptable to Purchaser with respect to the ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Project and the ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Project; and
(ix) Seller shall have completed to the reasonable
satisfaction of Purchaser all of the repairs specified in the Open Item
List attached hereto and made a part hereof as Exhibit S.
B. In addition to any conditions provided in other provisions of this
Agreement, Seller's obligation to sell and transfer, or cause to be sold and
transferred, the Projects is and shall be conditioned on the following:
(i) Purchaser shall have performed, with respect to the
Projects, all of its material covenants, obligations and agreements
hereunder to be performed at or prior to the Closing;
(ii) by the Closing Date, the servicers and/or lenders
relating to the Bonds and the CIBC Debt, in the event that the CIBC
Debt is being assumed, shall have consented to the transfers to
Purchaser contemplated under this Agreement. Seller shall have received
the Bond Release, the CIBC Release (if applicable) and any third-party
consents to the transactions contemplated hereby as may be required by
any agreement or encumbrance to which the applicable Project or Owner
is subject; and
(iii) on the Closing Date, there shall not then be pending any
litigation, administrative proceeding, investigation or other form of
governmental enforcement, or executive or legislative proceeding which,
if determined adversely, would restrain the consummation of any of the
transactions herein contemplated or declare illegal, invalid or
non-binding any of the covenants or obligations of the parties herein.
C. Either party may at any time or times, at its election, waive any of
the conditions to its obligations hereunder, but any such waiver shall be
effective only if contained in a writing signed by such party. Except as
otherwise expressly provided in this Agreement or as provided in any such
waiver, no such waiver shall reduce the rights or remedies of a party by reason
of any breach by the other party (but if a condition is waived, the party
waiving the same may not rescind this Agreement on the basis of the failure of
such waived condition). Except as otherwise expressly provided in this
Agreement, in the event that for any reason any item required to be delivered to
a party by the other party hereunder shall not be delivered when required, then
such other party shall nevertheless remain obligated to deliver the same to the
first party, and nothing (including, but not limited to, the closing of the
transaction hereunder) shall be deemed a waiver by the first party of any such
requirement. The failure of any of the aforesaid conditions set forth in
subsection A above shall entitle Purchaser, at its option, by delivering written
notice to Seller on or before the Closing Date, to cancel and terminate this
Agreement without liability and upon which the ▇▇▇▇▇▇▇ Money shall be returned
to Purchaser and neither party hereto shall have any further obligations
hereunder (except for obligations that, pursuant to the terms of this Agreement,
survive the termination of this Agreement), this Agreement shall be null and
void.
If any of Seller's conditions precedent set forth in subsection B above
shall not be satisfied on or before the Closing Date, then Seller shall have the
right, by delivering written notice to Purchaser on or before the Closing Date,
to either (a) terminate this Agreement, in which event Seller and Purchaser
shall have no further obligations under this Agreement, except for those
obligations that, pursuant to the terms of this Agreement, survive the
termination of this Agreement, or (b) waive the requirement that such condition
precedent be satisfied and proceed to close pursuant to the terms of this
Agreement. If this Agreement is terminated on account of the failure of a
condition precedent set forth in subsection B(i) above, then the ▇▇▇▇▇▇▇ Money
shall be paid to Seller.
D. Seller and Purchaser agree to reasonably cooperate with each other
and with any third parties from whom consent to and approval of the transactions
contemplated by this Agreement is requested to obtain such consents and
approvals. Seller and Purchaser agree to reasonably cooperate with each other
and with any third parties relating obtaining the Alternate Credit Facility and
taking an assignment of the CIBC Debt. Seller and Purchaser shall, each at its
respective cost and expense (except as otherwise provided in this Agreement),
deliver, within five (5) days after request, to any third parties from whom
consents and approvals are requested, any and all information and materials
regarding Purchaser and any affiliates of Purchaser reasonably requested by such
third parties. Seller and Purchaser agree to execute any and all documents
reasonably requested by LaSalle, any servicers and/or holders of the Bonds to
effectuate the replacement of Seller and its affiliates under such documents
with Purchaser and/or its affiliates that are acceptable to LaSalle and such
servicers and/or holders. Seller and Purchaser agree to execute any and all
documents reasonably requested by CIBC and/or servicers of the CIBC Debt to
obtain the CIBC Consent and CIBC Release.
E. Notwithstanding anything to the contrary in Sections 10A(ii) or
10A(iii), in the event of the occurrence of any of such events relating to
Tenants whose annual gross rent in the aggregate does not exceed $100,000.00,
Purchaser shall not be entitled to terminate this Agreement and Seller shall
deposit in an interest-bearing escrow (with interest paid to Seller from time to
time, but not more frequently than monthly) with the Escrowee at the Closing an
amount equal to one year's gross rent under the applicable Lease, to be paid to
Purchaser, as successor landlord under such Lease, for such rents not paid by or
collected from any such Tenant during such one (1)-year period. To the extent,
as and when such Tenant pays such amounts due under its Lease, Purchaser shall
direct the Escrowee to pay such amounts out of said escrow to Seller or
Purchaser shall reimburse Seller for such amounts if Purchaser previously
received any such amounts from the escrow. Purchaser and Seller (and/or the
applicable Owner) shall retain the right to ▇▇▇ any such Tenant for any such
delinquent rent, although Seller (and/or the applicable Owner) shall not have
the ability to terminate or attempt to terminate any Lease or the Tenant's
rights of possession thereunder in attempting to collect such amounts due. If
aggregate delinquent gross rents exceed $100,000.00, but Purchaser nevertheless
closes the transaction, Seller shall escrow the sum of $100,000.00 at Closing,
to be disbursed as provided aforesaid, but Seller shall have no further
liability for such delinquent rents.
F. Notwithstanding anything to the contrary in Sections 10A(ii) or
10A(iii), and in addition to the provisions of Section 10E, if any of the events
described in Sections 10A(ii) or 10A(iii) occurs with respect to any Tenant(s)
and the aggregate of (i) in the event of monetary default, the aggregate gross
rents due and payable over the remaining term(s) of such Tenants' Leases; and
(ii) in the event of a material non-monetary default, the estimated dollar
amount reasonably required to cure such material default, does not exceed
$500,000.00, Seller, at its sole option and in its sole discretion, either (a)
with respect to any monetary defaults, guaranty the payment and performance of
such Tenant's obligations under its Lease for the full remaining term of any
such Lease, or (b) with respect to any material non-monetary obligation, pay an
amount equal to the estimated dollar amount reasonably required to cure such
material non-monetary default, in which event Purchaser shall not be entitled to
terminate this Agreement as a result of any such disclosures. Notwithstanding
the foregoing, (1) Purchaser shall use commercially reasonable efforts to
enforce the terms and provisions of any such Tenant's Lease and to collect from
such Tenant any amounts paid by Seller to Purchaser hereunder and (2) in the
event Purchaser terminates any Lease that Seller guaranteed, Purchaser shall use
commercially reasonable efforts to lease such space. In the event Purchaser does
lease such space, Seller shall be entitled to offset any rental income received
by Purchaser during the term of the original Tenant's Lease (less an amount
equal to the costs incurred by Purchaser in connection with leasing such space
multiplied by a fraction, the numerator of which shall be that portion of the
term of the new lease (excluding any period during which the tenant is not
paying rent) which occurs prior to the expiration of the original Lease
guaranteed by Seller and the denominator of which shall be the entire term of
the new lease (excluding any period during which the tenant is not paying rent))
against amounts payable by Seller hereunder. If and to the extent Purchaser
collects from any Tenant delinquent rent paid by Seller, or recovers all or any
portion of the expenses paid by Seller for any material non-monetary default,
Purchaser shall promptly remit such amounts to Seller.
11. Representations of Purchaser. In order to induce Seller to enter
into this Agreement, Purchaser covenants and represents, as the case may be, to
Seller that:
A. Purchaser is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the state of its organization
described at the beginning of this Agreement, and has the requisite power to
carry on its business as it is now being conducted.
B. Purchaser has full power and authority to enter into and perform
this Agreement. The execution, delivery and performance by Purchaser of this
Agreement has been duly authorized and approved by all requisite action on the
part of Purchaser.
C. This Agreement constitutes a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms subject to
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance and similar laws affecting creditors' rights generally from time to
time and to general principles of equity.
D. Except as required in connection with the Bond Release and Bond
Consent and the CIBC Release and CIBC Consent, no consent or approval is
required from any person in connection with the execution, delivery and
performance by Purchaser of this Agreement. The execution, delivery and
performance by Purchaser of this Agreement will not cause Purchaser to violate
any provisions of its bylaws or trust agreement or charter or other
organizational documents.
E. The individuals signing this Agreement and all other documents
executed or to be executed pursuant hereto on behalf of Purchaser are and shall
be duly authorized to sign the same on Purchaser's behalf and to bind Purchaser
thereto. Neither the execution and delivery of this Agreement by Purchaser, the
consummation of the transaction contemplated by this Agreement, nor the
compliance by Purchaser with any of the terms, provisions, covenants and
conditions contained in this Agreement will violate any order, decree, writ,
injunction, statute, rule or regulation to which Purchaser or any of its assets
are bound. No consent or approval by, notice to, or registration with, any
person, entity, regulatory body, administrative agency or other governmental
authority is required on Purchaser's part in connection with its execution,
delivery, and performance of this Agreement.
F. There is no claim, action, litigation, proceeding or other
governmental investigation pending or, to Purchaser's knowledge, threatened or
contemplated against Purchaser with respect to the transactions contemplated by
this Agreement or that could adversely affect Purchaser's ability to comply with
the terms, provisions, covenants and conditions contained in this Agreement.
12. Adjustments.
A. General. Proration of rentals, revenues and other income, if any,
from the Project and real estate taxes, assessments, and other expenses, if any,
affecting the Property shall be prorated, without duplication, as of 11:59 p.m.
on the day prior to the Closing Date (herein referred to as the "Proration
Date"). It is agreed that the Closing Date shall be an income and expense date
for Purchaser. There shall be no proration of any insurance premiums with
respect to the Project, nor any assumption of insurance coverage by Purchaser.
B. Rentals. The term "rentals", as used herein, includes fixed monthly
rentals, additional rentals, escalation rentals, operating cost pass-throughs
and other sums and charges payable by Tenants under the Leases. Purchaser shall
receive all rentals accruing on and after the Closing Date and Seller shall
receive all rentals accruing prior to the Closing Date, and, at Closing,
Purchaser shall receive a credit on the Closing Statement of all rentals
collected by Seller and attributable to any period following the Closing.
C. Taxes. Seller shall pay all real estate taxes and assessments on the
Projects due and payable as of the Closing. Seller represents that three (3) of
the Tenants, as noted on the Lease Schedule, pay taxes on a "cash basis" without
making monthly deposits, while the balance of the Tenants pay taxes on an
accrual basis and make monthly estimated deposits. Accordingly, real estate
taxes shall be prorated as follows:
(i) with respect to Tenants paying taxes on an accrual basis
and paying monthly deposits, Purchaser shall receive a credit for the
deposits held by Seller at the Closing for unpaid taxes for the
calendar years 2003 and 2004, and there shall be no further proration;
(ii) with respect to Tenants paying taxes on a cash basis,
there shall be no proration for real estate taxes, however, Purchaser
shall receive a credit for the deposits, if any, held by Seller for
calendar years 2003 and 2004 for the Tenant at the 200 South ▇▇▇▇▇▇▇▇
Project and any other Tenant who, notwithstanding the provisions of the
applicable Lease, is making tax payments on an accrual basis.
(iii) with respect to the Vacant Parcels and any space in any
Project which was vacant during all or any portion of 2003 or 2004,
Purchaser shall receive a credit for accrued but unpaid taxes with
respect to such Vacant Parcels and vacant space based upon the actual
bills for such taxes, or if the actual amounts are not available, based
upon 102% of the most recent ascertainable taxes, prorated, in the case
of vacant space, for the period of time such space was vacant.
There shall be no reproration of taxes.
D. Prepaid Rentals. Prepaid rentals, including Tenants' payments to
Seller for Tenants' shares of real property taxes and assessments, insurance
premiums, common area maintenance and operation and utilities received by Seller
which are unexpended as of the Closing Date shall be credited to Purchaser as of
the Closing Date.
E. Delinquent Rentals. For purposes of this Agreement, any rentals
(whether base rent or "pass-throughs") shall be deemed delinquent when payment
thereof is due prior to the Closing Date, but has not been made as of the
Proration Date (herein referred to as "Delinquent Rentals"). Delinquent Rentals
shall not be prorated until collected pursuant to this Section 12E. To the
extent either Seller or Purchaser collects any Delinquent Rentals after the
Closing Date, such Delinquent Rentals shall be first applied to any accrued but
unpaid rental obligations of the tenants at the applicable Project for the
period after the Closing Date and the balance, if any, shall be paid to Seller
and credited against any Delinquent Rentals relating to the period prior to the
Closing Date (herein referred to collectively as "Seller's Rentals"); provided,
however, notwithstanding any of the foregoing, to the extent any rentals due for
the calendar month in which Closing occurs are received by Seller or Purchaser
after the Closing Date but prior to the first (1st) day of the calendar month
following the calendar month in which Closing occurs, the parties hereby agree
the party who received said rentals shall prorate the same and remit to the
other party, within one (1) business day thereafter, said party's prorated
portion. Purchaser shall, and shall only be required to, ▇▇▇▇ Tenants to collect
Delinquent Rentals. Seller shall have the right to pursue and take any action
against any Tenants owing Delinquent Rentals relating to the period prior to the
Closing Date; provided, however, Seller agrees to take no action which would
cause a termination of said tenant's Lease or affect said tenant's right to
quiet possession of its premises and Purchaser agrees to cooperate with Seller,
at no cost to Purchaser, in Seller's attempt to collect any of Seller's Rentals.
F. Tenant Contributions. At the conclusion of each fiscal year relating
to periods for which Seller owned the Projects for all or a portion of such
fiscal year, Seller's applicable share of common area maintenance charges, taxes
and similar expense reimbursements pursuant to the Leases shall be determined by
multiplying the payments due from or owed to tenants after reconciliation of
estimated payments by a fraction, the numerator of which is the number of
calendar days during said fiscal year in which Seller owned the Projects and the
denominator of which is the total number of calendar days in such fiscal year
(in either case, herein referred to as the "Seller's Share"). Purchaser shall
remit to Seller or Seller shall remit to Purchaser, as applicable, from time to
time, Seller's Share within thirty (30) days after Purchaser has actually
collected Seller's Share or any portion thereof or Purchaser has notified
Seller, in writing that Seller owes any tenant's under any of the Leases
Seller's Share (it being acknowledged by Seller, Purchaser shall have no
obligation to remit to Seller's Share if the same is not collected from the
applicable tenants and any monies collected by tenants with respect to Seller's
Share shall first be applied by Purchaser to any accrued but unpaid obligations
of the tenant's thereof accruing from and after the Closing Date).
G. Operating Expenses. All utility services charges for electricity,
heat and air conditioning service, other utilities, common area maintenance,
taxes other than real estate taxes such as rental taxes, and all expenses
incurred in operating the Project that an Owner pays as opposed to Tenant and
any other costs incurred in the ordinary course of business or the management
and operation of the Project, shall be prorated based on actual charges when
final meter readings have been obtained or actual expenses determined. Seller
shall pay all such expenses that accrue prior to the Closing Date and Purchaser
shall pay all such expenses accruing on and after the Closing Date. To the
extent possible, Seller and Purchaser shall obtain ▇▇▇▇▇▇▇▇ and meter readings
as of the Closing Date to aid in such prorations.
H. Leasing Commissions and Tenant Finish. Except as otherwise set forth
herein, Purchaser shall receive a credit against the Purchase Price for all
unpaid leasing commissions and the costs of all tenant finish work and tenant
allowances and other capital improvement items which are the obligation of
Seller with respect to the Leases executed prior to the date of this Agreement,
whether now due or to become due prior to, on or after the Closing Date (the
"Leasing Costs"), Purchaser agrees to pay, and shall indemnify and hold Seller
harmless from and against, any and all claims for any Leasing Costs for which
Purchaser receives a credit at Closing. Notwithstanding the foregoing, (i)
Seller shall give Purchaser a credit in an amount equal to the outstanding
tenant allowance owed in connection with the Household Finance lease for space
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ as of the Closing Date (the "Household Finance
Lease")(together with evidence reasonably satisfactory to Purchaser as to the
amount of such tenant allowance); and (ii) with respect to the Ford Motor
Leases, Purchaser shall give Seller a credit at Closing for a portion of the
tenant finish work and other capital improvement items paid for by Seller with
respect to the Ford Motor Leases (the "Ford Tenant Improvement Costs"). The
credit shall be in an amount equal to the Ford Tenant Improvement Costs,
multiplied by a fraction, the numerator of which shall be the unexpired term of
the applicable Ford Motor Lease (as extended, if applicable) and the denominator
of which shall be the entire term of the applicable Ford Motor Lease (as
extended, if applicable). In the event that Seller has not paid for the tenant
finish work and other capital improvement items with respect to the Ford Motor
Leases at Closing, Seller shall give Purchaser a credit in an amount equal to
the Ford Tenant Improvement Costs, multiplied by a fraction, the numerator of
which shall be the expired term of the applicable Ford Motor Lease (as extended,
if applicable) and the denominator of which shall be the entire term of the
applicable Ford Motor Lease (as extended, if applicable).
If Seller and/or any Owner shall pay any Leasing Costs prior to the
Closing Date relating to any New Lease Matter approved or deemed approved by
Purchaser as provided herein executed after the date of this Agreement (the "New
Lease Matter Leasing Costs"), Purchaser shall give Seller a credit at Closing in
an amount equal to the New Lease Matter Leasing Costs, provided, however, that
in the event Seller received any rental income from the Tenant under such New
Lease Matter prior to the Closing Date, such credit shall be adjusted to equal
the New Lease Matter Leasing Costs multiplied by a fraction, the numerator of
which shall be the unexpired term of the applicable New Lease Matter, and the
denominator of which shall be the entire term of the applicable New Lease Matter
less any period of time during which rent is abated under such New Lease. In the
event that Seller has received rental income with respect to any New Lease
Matter but has not paid for the tenant finish work and other capital improvement
items with respect to such New Lease Matter, Seller shall give Purchaser a
credit equal to the New Lease Matter Leasing Costs multiplied by a fraction, the
numerator of which shall be the that portion of the term during which Seller
collected rent with respect to such New Lease Matter and the denominator of
which shall be the entire term of the applicable New Lease Matter less any
period of time during which rent is abated under such New Lease.
I. Tenant Security Deposits. Purchaser shall be credited and Seller
shall be debited with an amount equal to all tenant security deposits being held
(and not applied) by Seller or any other person under any of the Leases and any
interest, if any, required to be paid on account thereof, and other deposits as
described in Section 12. If any security deposit(s) is in the form of a
letter(s) of credit, the original letter(s) of credit shall be delivered to
Purchaser at Closing in accordance with the terms and provisions hereof. Prior
to Closing, Seller shall arrange for the transfer or assignment of the letter(s)
of credit to the applicable transferee of each applicable Project. Seller shall
arrange for any and all consents required by the issuing bank(s) for the
transfer of the letter(s) of credit to be obtained prior to Closing. Any and all
fees imposed by such issuing bank(s) in connection with such transfer(s) which
are not the obligation of the applicable tenant to pay shall be paid by Seller.
In the event that any such letter(s) of credit is not transferred or assigned as
set forth above prior to Closing, Seller shall give Purchaser a credit against
the Purchase Price in the amount of the applicable letter(s) of credit. If the
letter(s) of credit is subsequently transferred or assigned to Purchaser,
Purchaser shall promptly refund the amount of the credit to Seller.
▇. ▇▇▇▇▇▇▇▇ Furniture. ▇▇▇▇▇▇▇▇ Furniture issued a letter in February,
2004 requesting compensation for one (1) month's rent for the inconvenience
suffered during the roof replacement project at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. In the
event that the Tenant Letter from ▇▇▇▇▇▇▇▇ Furniture makes reference to the fact
that it is entitled to compensation of one (1) month's rent for such
inconvenience, or in the event ▇▇▇▇▇▇▇▇ Furniture does not deliver a Tenant
Letter, Seller shall give Purchaser a credit at Closing in the amount equal to
one (1) month's rent under the ▇▇▇▇▇▇▇▇ Furniture lease.
K. Multigraphics LLC Lease. If Multigraphics LLC (f/k/a AM
International, Inc.) (or its assignee) has not assumed its Lease prior to the
Closing Date and is delinquent in the payment of any amounts due and payable
under its Lease for any month or portion thereof after the Closing Date
(excluding any amounts which were delinquent on the Closing Date), Seller shall
pay to Purchaser, within ten (10) days of its receipt of notice from Purchaser
that any such monetary default has occurred, the amount then due and payable
(excluding any amounts which were delinquent on the Closing Date and any
interest or penalties owed as a result of such default, provided Seller shall be
responsible for the applicable interest and penalties on Seller's late payment
in the event Seller does not make such payment within said ten (10) day period)
under the Multigraphics Lease. Notwithstanding the foregoing, any payments by
Seller shall be offset by any amounts collected by Purchaser as a creditor under
the bankruptcy proceedings. In the event that Multigraphics LLC (or its
assignee) assumes its Lease, from and after such date Seller shall have no
further obligations under this Section 12K and, if and to the extent Purchaser
collects from Multigraphics LLC monies in excess of the then current rent
payment, any funds for delinquent amounts previously paid by Seller under this
subsection K or owed to Seller as of the Closing Date, Purchaser shall, within
ten (10) days of its receipt of any such funds, remit such funds to Seller(less,
if applicable, Purchaser's pro rata share of rent for the month in which the
Closing occurs). Any amounts collected by Purchaser as a creditor under the
bankruptcy proceedings shall first be applied to the amounts owed to Purchaser
and then to the amounts due Seller, with any balance to be retained by
Purchaser. In addition to the foregoing, in the event of an assumption of the
Multigraphics LLC Lease, Seller shall, within ten (10) days of any such
assumption, pay to Purchaser an amount equal to the outstanding leasing
commission, if any, due relating to the Multigraphics LLC Lease. In the event
Multigraphics LLC rejects its Lease, (i) Seller represents and warrants that no
commission will be due under the Multigraphics LLC Lease, and (ii) Purchaser
shall use commercially reasonable efforts to lease such space and Seller's
payments pursuant to this Section 12K shall be offset by any rentals received by
Purchaser (less any costs of reletting) with respect to such space during the
original term of the Multigraphics LLC Lease. The obligations of Seller and
Purchaser set forth in this Section 12K shall survive the Closing for a period
of eighteen (18) months.
L. AIM, LLC. If AIM, LLC is more than ninety-five (95) days delinquent
in the payment of any amounts due and payable under its Lease as of the Closing
Date (excluding de minimis operating and similar expenses), Seller shall
guaranty the payment of base rent and additional rent due and payable by AIM,
LLC under its Lease during the six (6) month period commencing on the Closing
Date and terminating on the date six (6) months after the Closing Date. In such
event, Purchaser shall notify Seller if and when AIM, LLC fails to pay when due
any base or additional rent due and payable under its Lease for any month or
portion thereof after the Closing Date but prior to the date six (6) months
after the Closing Date (excluding any amounts which were delinquent on the
Closing Date), and Seller shall pay such rent (excluding any interest or
penalties) to Purchaser within ten (10) days of its receipt of such notice. If
and to the extent Purchaser collects from AIM, LLC monies in excess of current
rent payments attributable to all or any portion of the rent paid by Seller
pursuant to this Section 12L or owed to Seller as of the Closing Date, Purchaser
shall, within ten (10) days of its receipt of any such funds, promptly remit
such amounts to Seller. All funds collected from AIM, LLC by Purchaser shall
first be applied to amounts owed to Purchaser and then to the amounts due
Seller, with any remaining balance to be retained by Purchaser. Seller's
obligations under this Section 12L shall commence, if at all, on the Closing
Date and shall terminate on the date six (6) months after the Closing Date. The
obligations of Seller and Purchaser set forth in this Section 12L shall survive
the Closing for a period of one (1) year.
M. Other Prorations. Such additional adjustments as are normally made
in connection with a purchase and sale of the type contemplated hereunder.
N. Method of Proration. Except as expressly provided herein, all
apportionments shall be made in accordance with customary practice in ▇▇▇▇
County, Illinois. The parties agree to cause a schedule of tentative adjustments
to be prepared prior to the Closing Date. Such adjustments, if and to the extent
known and agreed upon as of the Closing Date, shall be paid by Purchaser to
Seller (if the prorations result in a net credit to the Seller) or by Seller to
Purchaser (if the prorations result in a net credit to Purchaser), by increasing
or reducing the amount to be paid by Purchaser at Closing. Purchaser and Seller
agree the intent of this provision is to allocate the income and expenses
attributable to the Project in a fair, just and equitable manner, and the
parties agree in the event of special circumstances not specifically covered
herein, such equitable principles shall guide the parties in reaching a fair
resolution. All prorations hereunder shall be final, unless otherwise expressly
provided hereunder. Any post-closing payment/proration obligations of Seller and
Purchaser set forth in this Section 12 shall survive the Closing for one (1)
year.
▇. ▇▇▇▇ Adjustments. At the Closing, Seller shall receive a credit
(i.e., addition to) against the Purchase Price, an amount equal to any and all
reserves and escrows maintained pursuant to the Bond Documents. Purchaser shall
receive a credit (i.e., reduction of) against the Purchase Price in the amount
of the Bond Debt, including all accrued interest and other amounts accrued and
unpaid under the Bond Documents.
P. CIBC Adjustments. In the event that the CIBC Debt is assumed, at the
Closing, Seller shall receive a credit (i.e., addition to) against the Purchase
Price, an amount equal to any and all reserves and escrows maintained pursuant
to the CIBC Documents and Purchaser shall receive a credit (i.e., reduction of)
against purchase price in the amount of the CIBC Debt, including all accrued
interest and other amounts accrued under the CIBC Documents other than costs
Purchaser has agreed to pay under this Agreement. In the event that the CIBC
Debt is defeased, Purchaser shall receive a credit (i.e., reduction of) against
purchase price in the amount of the CIBC Debt, including all accrued interest
and other amounts accrued under the CIBC Documents, other than costs Purchaser
has agreed to pay under this Agreement, including, but not limited to, any costs
associated with the defeasance of the CIBC Debt.
13. Closing Costs. Except to the extent set forth below as a Purchaser
cost, Seller shall pay all title charges and expenses of or relating to the
Title Policies herein provided for including commitment fees, any endorsements
(up to $500.00 per Project) and endorsements over unpermitted title exceptions,
and title insurance premiums, Survey fees, one-half (1/2) of all Closing Escrow
fees, State and County documentary or transfer taxes, municipal transfer taxes
imposed by ordinance on Seller, any sales or transaction tax payable by reason
of the transaction herein described, and all other closing costs and expenses
(other than the expenses to be paid by Purchaser as hereinafter provided)
customarily paid by sellers of property in the Chicagoland area. The expense of
Purchaser's attorneys and consultants, one-half (1/2) of the Closing Escrow
fees, all fees and costs relating to obtaining the Bond Consent, the Bond
Release, the CIBC Consent and the CIBC Release, all fees and costs relating to
the prepayment of all Non-Assumed Debt, all due diligence costs and expenses,
the costs of any endorsements requested by Purchaser (in excess of $500.00 per
Project and other than those relating to unpermitted title exceptions) to the
Title Policy, fees for recording deeds, and any municipal transfer taxes imposed
by ordinance on Purchaser, all costs related to lenders title insurance policies
and all other costs customarily paid by purchasers of property in the
Chicagoland area shall be paid by Purchaser. [At Closing or upon termination of
this Agreement, Purchaser shall reimburse Seller for the costs of the sprinkler,
backflow and alarm tests requested by Purchaser in connection with its due
diligence (to the extent such expenses cannot be passed through to the Tenants
of the applicable Project).
14. Covenants of Seller. Seller hereby covenants with Purchaser as
follows:
A. From the full execution hereof until the Closing Date or the date
that this Agreement is terminated, whichever shall occur, Seller shall neither
amend any Lease, execute any new lease, license, or other agreement affecting
the ownership or operation of the Projects or for personal property, equipment,
or vehicles (as applicable, a "New Lease Matter") without Purchaser's prior
written approval (which approval shall not be unreasonably withheld or delayed
and shall be deemed given if not disapproved in writing within five (5) business
days following Seller's written request for approval). Purchaser may not object
to the Seller's entry into any New Lease Matter that is commercially reasonable.
For purposes of this Agreement, the Ford Motor Company Lease dated as of June
23, 2004, and the Ford Motor Lease dated as of June 30, 2004 (collectively, the
"Ford Leases") shall each be deemed to be a New Lease Matter approved by
Purchaser.
B. From the full execution hereof until the Closing Date or the date
that this Agreement is terminated, whichever shall occur, Seller shall not enter
into any contract with respect to the ownership and operation of the Projects
that will survive the Closing, or that would otherwise affect the use,
operation, or enjoyment of any of the Projects after the Closing Date (as
applicable, a "New Contract Matter"), without Purchaser's prior written consent
(which shall not be unreasonably withheld or delayed), except for service
contracts entered into in the ordinary course of business which are terminable
without penalty on not less than thirty (30) days' notice. If Purchaser's
approval of any contract is requested, such approval shall be deemed given if
not disapproved in writing within five (5) business days following Seller's
request for approval. Purchaser may not object to the Seller's entry into any
New Contract Matter that is commercially reasonable.
C. Seller shall, from and after the full execution hereof until the
Closing Date or the date that this Agreement is terminated, whichever shall
occur: (i) cause the Projects to be operated and managed in substantially the
manner currently being operated, maintaining present services (including, but
not limited to, pest control), and shall cause the Projects to be maintained
substantially in the same condition as exists as of the date of this Agreement,
normal wear and tear, fire and other casualty excepted; (ii) keep on hand
sufficient materials, supplies, equipment and other personal property for the
efficient operation and management of the Projects as currently being managed;
(iii) cause to be performed, when due, all of the Owners' material obligations
under the Leases, Project Contracts, and other agreements relating to any of the
Projects and otherwise in accordance in all material respects with applicable
laws, ordinances, rules and regulations affecting any of the Projects; and (iv)
cause compliance with the Bond Documents and CIBC Documents and maintain full
replacement cost casualty insurance on all of the Buildings. Except as otherwise
specifically provided herein, the Projects shall be delivered at Closing in
substantially the same condition as exists on the date hereof, reasonable wear
and tear, fire and other casualty excepted. None of the Personal Property,
fixtures or inventory essential to the use and operation of the Projects shall
be removed from the Projects, unless replaced by personal property, fixtures or
inventory of equal or greater utility and value.
D. Upon obtaining knowledge thereof, Seller shall promptly notify
Purchaser of any material change in any physical condition with respect to the
Projects or of the occurrence of any event or circumstance that makes any
representation or warranty of Seller to Purchaser under this Agreement untrue or
misleading in any material respects, or any material covenant of Purchaser under
this Agreement incapable or less likely of being performed.
E. Seller shall cause the Owners to continue to make all payments under
and otherwise comply with all of the provisions of the Bond Documents and the
Non-Assumed Debt, and shall deliver to Purchaser copies of any material notices
received thereunder by Seller or any Owner.
15. Damage or Destruction to Any Project. In the event that between the
date of this Agreement and the Closing Date, all or any portion of any Project
is damaged or destroyed by fire or other casualty, and no Tenant that leases
more than 15,000 square feet of space with respect to such Project has the right
to terminate its Lease as a result thereof, then Purchaser shall consummate the
transaction contemplated hereby. In such event, Seller (and/or the applicable
Owner) shall credit or pay to Purchaser the reasonable and customary restoration
costs for the Project. In such event, Seller shall be entitled to receive all
insurance proceeds payable with respect to such damage or destruction, whether
or not such proceeds are paid prior to Closing. If a Tenant that leases more
than 15,000 square feet of space has the right to terminate its lease on account
of such damage or destruction, then Purchaser may elect, by delivering notice
thereof to Seller within ten (10) days after Seller delivers to Purchaser notice
of such damage (and if the Closing Date is scheduled to occur prior to the
expiration of such ten (10) day period, then the Closing Date shall be extended
until the expiration of such ten (10) day period), to terminate this Agreement,
in which event the ▇▇▇▇▇▇▇ Money shall be returned to Purchaser and neither
Seller nor Purchaser shall have any further rights or obligations under this
Agreement (except for those obligations that, pursuant to the terms of this
Agreement, survive the termination of this Agreement). Purchaser's failure to
deliver a termination notice as provided above shall be deemed Purchaser's
election to waive its termination rights under this Section 15A with respect to
the applicable damage or destruction, and Seller (and the applicable Owner)
shall, at Closing, credit or pay to Purchaser the restoration costs for the
Project. Seller in no event shall have any obligation to repair or restore any
damage to any Project caused by fire or any other casualty.
16. Condemnation. In the event that between the date of this Agreement
and the Closing Date any condemnation or eminent domain proceedings are
initiated which would result in the taking of any Project or portion thereof
which would allow a Tenant leasing in excess of 15,000 square feet with respect
to such Project to terminate its Lease, Purchaser, at its sole option, may elect
to terminate this Agreement by delivering notice of such termination to Seller
within ten (10) days after Seller's delivery to Purchaser of notice of such
condemnation or eminent domain proceedings, in which event the ▇▇▇▇▇▇▇ Money
shall be returned to Purchaser and neither Seller nor Purchaser shall have any
further rights or obligations hereunder (except for obligations that, pursuant
to the terms of this Agreement survive the termination of this Agreement). In
the event that Purchaser is not entitled to terminate this Agreement as
aforesaid or elects not to so terminate this Agreement, Purchaser shall
consummate the transaction contemplated by this Agreement and Seller shall
assign to Purchaser at Closing all of Seller's title and interest in and to any
award pertaining to the applicable Project made in connection with such
condemnation or eminent domain proceedings. If Purchaser fails to notify Seller
of its election within said 10-day period, such failure shall constitute an
election to waive its termination rights under this Section 16 with respect to
such condemnation or eminent domain proceeding.
17. Remedies.
A. Purchaser Remedies. In the event Seller defaults in any of its
obligations under this Agreement and fails to cure such default within fifteen
(15) days after written notice of such default from Purchaser, then Purchaser
may, as its sole and exclusive remedies, either (i) enforce specific performance
of this Agreement against Seller, (ii) terminate this Agreement by written
notice to Seller and the Title Company, in which event the ▇▇▇▇▇▇▇ Money and all
interest accrued thereon shall be returned to Purchaser, or (iii) if specific
performance is not available, or if Seller has intentionally caused a breach of
a representation or warranty as set forth in ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ may ▇▇▇ for
damages, subject to Section 17D hereof. If Purchaser fails to file suit for
specific performance against Seller, or to file suit for damages if clause (iii)
of the preceding sentence is applicable, in a court having jurisdiction on or
before ninety (90) days following the date upon which Closing was to have
occurred, then Purchaser shall be deemed to have elected to terminate this
Agreement and receive back the ▇▇▇▇▇▇▇ Money and all interest accrued thereon.
B. Post-Closing Purchaser Remedies. If after Closing Purchaser
discovers that any of Sellers' representations or warranties were not true or
correct in any material respect, or that Seller breached or defaulted with
respect to any other covenant to be performed by Seller hereunder, then
Purchaser shall have the right to ▇▇▇ Seller for damages, subject to Section 17D
hereof.
C. Seller Remedies. In the event Purchaser defaults in any of its
obligations under this Agreement and fails to cure such default within fifteen
(15) days after written notice of such default from Seller, then Seller's sole
and exclusive remedy shall be to cause the Escrowee to deliver the ▇▇▇▇▇▇▇
Money, together with all interest earned thereon, to Seller, the amount thereof
being fixed and liquidated damages, it being understood that Seller's actual
damages in the event of such default are difficult to ascertain and that such
proceeds represent the parties' best current estimate of such damages.
Notwithstanding the foregoing, the other provisions of this Agreement shall in
no manner limit or restrict Purchaser's indemnity obligations and liabilities
under this Agreement, including, without limitation, its obligations under
Sections 7, 11H, 17G, 18 and 29 hereof.
D. Limitations on Purchaser Remedies. Purchaser agrees that if it at
any time discovers that any of Seller's representations or warranties contained
in this Agreement have been violated or breached, or that Seller has breached
any other of the material covenants and conditions herein to be performed by
Seller, then Purchaser immediately shall notify Seller of same. Notwithstanding
anything to the contrary contained in this Section 17 or elsewhere in this
Agreement, Purchaser acknowledges and agrees that Seller's liability for any and
all damages, losses, costs, expenses and/or injuries sustained, suffered or
incurred by Purchaser or any affiliate thereof or related person or party
thereto as a result of any violation, breach or default by Seller of any of the
terms, provisions, covenants, agreements, representations or warranties of
Seller set forth in this Agreement, and any claim that Purchaser may have at any
time against Seller for any such violation, breach or default shall be subject
to and limited by the following:
(i) Seller shall have no liability to Purchaser or any party
acquiring any of the Projects pursuant to this Agreement unless and
until Seller shall have received from Purchaser written notice
specifying (1) in detail, a violation, breach, or default of any of the
covenants, representations or warranties of Seller set forth in this
Agreement, and (2) either (a) documentation reflecting the amount of
actual, out-of-pocket loss, cost, expense, damage, and/or injury
claimed to have been sustained, suffered. or incurred by Purchaser
and/or such other party as a direct result of such violation, breach,
or default or, if applicable, (b) as to any damages or losses that in
Purchaser's reasonable opinion cannot be actually incurred until more
than one (1) year from the Closing or the time of discovery after the
Closing, if applicable, a written contractor's estimate of the costs
necessary to cure such violation, breach, or default, which written
notice and estimate must be received by Seller on or prior to the date
that is twelve (12) months after the Closing Date of the applicable
Project or the time of discovery after the Closing, if applicable. If
Seller disputes such estimate, Seller shall obtain its contractor's own
estimate and, if the two (2) estimates differ by 10% or less, the
average of the two (2) shall be deemed approved. If the two (2)
estimates differ by more than 10%, than the estimating parties (i.e.,
Seller's and Purchaser's contractors) shall agree on a third party,
whose estimate shall be binding, and shall take into account, among
other items, both Seller's and Purchaser's contractors' estimates. Once
the estimate has been approved or deemed approved, and Purchaser has
submitted documentation reflecting its actual loss, cost, expense,
damage, and/or injury, Seller shall pay to Purchaser the amount thereof
within five (5) business days, and Seller shall be fully, forever, and
irrevocably released of any and all liability, cost, expense, damage,
etc., with respect to the applicable matter (and Purchaser agrees to
execute a release agreement).
(ii) Seller shall have no liability to Purchaser or any party
acquiring any of the Projects pursuant to this Agreement unless the
actual, out-of-pocket damages, losses, costs, expenses, or injuries
incurred or estimated to be incurred are in excess (in the aggregate
with respect to all of the Projects) of $125,000.00 (and in such event
Seller only shall be liable for the portion of such actual,
out-of-pocket damages, losses, costs, expenses and injuries in excess
of $125,000.00), subject, however, to the other limitations set forth
herein;
(iii) Seller in no event shall be liable to Purchaser or any
party acquiring any of the Projects pursuant to this Agreement for any
punitive or consequential losses or damages;
(iv) Seller shall have no liability to Purchaser or any party
acquiring any of the Projects pursuant to this Agreement for any
damages, losses, costs, expenses or injuries sustained, suffered or
incurred by Purchaser and/or such other party in excess (in the
aggregate with respect to all of the Projects) of $6,000,000;
(v) if, at any time prior to the Closing, Purchaser or any of
its employees discovers that any representation or warranty made by
Seller in this Agreement, or any other information delivered by Seller
to Purchaser in respect to any such Projects, is inaccurate, untrue or
incorrect in any manner or respect when made, or that Seller has
violated any of its covenants or agreements in this Agreement, but
Purchaser nevertheless closes the transaction contemplated by this
Agreement, then only in the event Purchaser fails to notify Seller of
same prior to the Closing, Purchaser and any party acquiring any
Project pursuant to this Agreement shall be deemed to have waived any
and all rights, remedies, claims, or suits against Seller related to
and released Seller from any and all loss, damage, injury, liability,
cost, and/or expense sustained, suffered, or incurred by Purchaser
and/or such other party on account of any such inaccurate, untrue, or
incorrect representation, warranty, or information, or violation of
such covenant or agreement, in the event that Purchaser or any of its
agents, employees, representatives, consultants, or any other parties
notifies Seller as provided above of the specific details regarding
such breach or violation, no rights, remedies, claims, or suits shall
be waived or released; and
The terms, provisions and limitations set forth in this Section 17D shall
survive the Closing without limitation.
E. Litigation Costs. In the event of litigation between the parties
with respect to the Projects, this Agreement, the performance of their
respective obligations hereunder or the effect of a termination under this
Agreement, the losing party shall pay all costs and expenses incurred by the
prevailing party in connection with such litigation, including, but not limited
to, reasonable attorneys' fees of counsel selected by the prevailing party. For
the purposes of this subsection E, the "prevailing party" shall be deemed to be
the party that, in an adversarial proceeding, is awarded damages or other relief
substantially equal to the relief sought by such party, or that successfully
defends such proceeding, or that dismisses an action for recovery under this
Agreement in exchange for payment of the sums allegedly due, performance of
covenants allegedly breached or consideration substantially equal to the relief
sought in the action. Notwithstanding any provision of this Agreement to the
contrary, the obligations of the parties under this Section 17 shall survive the
termination of this Agreement.
F. Time to File Suit. Notwithstanding anything to the contrary in this
Section 17, if Purchaser fails to file suit for specific performance against
Seller or to file suit for damages in a court having jurisdiction, as provided
aforesaid, on or before ninety (90) days following the date upon which Closing
was to have occurred, then Purchaser shall be deemed to have elected to
terminate this Agreement and receive back the ▇▇▇▇▇▇▇ Money and all interest
accrued thereon.
18. Brokers. The parties mutually warrant and represent to the other
that neither has authorized any broker to act on its behalf in respect of the
transactions contemplated hereby, and that neither has dealt with a broker in
connection therewith. Each of the parties shall indemnify and save the other
party harmless from any claim by any broker or other person for commissions or
other compensation for bringing about the transactions contemplated hereby where
such claim is based on the purported employment or authorization of such broker
or other person by such indemnifying party.
19. Entire Agreement. It is understood and agreed that all
understandings and agreements heretofore had between the parties hereto are
merged in this Agreement, the exhibits annexed hereto and the instruments and
documents referred to herein, which alone fully and completely express their
agreements, and that neither party is relying upon any statement or
representation not embodied in this Agreement made by the other. Each party
expressly acknowledges that, except as expressly provided in this Agreement, the
other party and the agents and representatives of the other party have not made,
and the other party is not liable for or bound in any manner by, any express or
implied warranties, guaranties, promises, statements, inducements,
representations or information pertaining to the transactions contemplated
hereby. The preparation of this Agreement has been a joint effort of the parties
hereto and the resulting documents shall not, solely as a matter of judicial
construction, be construed more severely against one of the parties than the
other.
20. Non-Foreign Certificate. Seller shall provide Purchaser, on or
before the Closing Date, with a non-foreign certificate sufficient in form and
substance to relieve Purchaser of any and all withholding obligations under
federal law, which certificate shall be reasonably satisfactory to Purchaser and
the Title Company.
21. Modifications. No modification, amendment, discharge or change of
this Agreement, except as otherwise provided herein, shall be valid unless the
same is in writing and signed by the party against which the enforcement of such
modification, amendment, discharge or change is sought.
22. Notices. All notices, demands, requests and other communications
under this Agreement shall be in writing and shall be deemed properly served (i)
when received (or refusal of receipt) if delivered by hand or expedited
messenger service with proof of receipt to the party to whose attention it is
directed or (ii) one (1) business day after deposit with an overnight courier
service if sent by recognized overnight courier service, addressed as follows:
If intended for Seller: c/o Prime Group Realty Trust
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to: c/o Prime Group Realty Trust
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If intended for Purchaser: CenterPoint Properties Trust
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ Richmond LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or such other address or to such other party which any party entitled to receive
notice hereunder designates to the others in writing by a notice duly given
hereunder.
23. Governing Law and Interpretation. The validity, meaning and effect
of this Agreement shall be determined in accordance with the laws of the State
of Illinois applicable to contracts made and to be performed in that state. The
terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms
shall refer to this Agreement, and the term "hereafter" shall mean after, and
the term "heretofore" shall mean before, the date of this Agreement. Words of
the masculine, feminine or neuter gender shall mean and include the correlative
words of other genders, and the words importing the singular number shall mean
and include the plural number and vice versa. Words importing persons shall
include firms, associations, partnerships (including limited partnerships),
trusts, corporations and other legal entities, including public bodies, as well
as natural persons. The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "without being limited to".
24. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
25. Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement of any of the provisions thereof.
26. Binding Effect. Subject to the terms and restrictions of Section 35
below, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
27. Partial Invalidity. Seller and Purchaser intend and believe that
each provision in this Agreement comports with all applicable local, state and
federal laws and judicial decisions. However, if any provision or provisions in
this Agreement which is or are not materially related to the liability of the
parties hereto or to the conditions to Purchaser's and/or Seller's obligations
to consummate the transaction contemplated herein is found by a court of law to
be in violation of any applicable local, state or federal ordinance, statute,
law, administrative or judicial decision, or public policy, and if such court
should declare such portion, provision or provisions of this Agreement to be
illegal, invalid, unlawful, void or unenforceable as written, then it is the
intent both of Seller and Purchaser that such portion, provision or provisions
shall be given force to the fullest possible extent that they are legal, valid
and enforceable, that the remainder of this Agreement shall be construed as if
such illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained therein, and that the rights, obligations and
interest of Purchaser and Seller under the remainder of this Agreement shall
continue in full force and effect. If any provision or provisions which is or
are material as set forth above are found to be illegal, invalid, unlawful, void
or unenforceable as written, this Agreement may, at the option of either party,
be terminated without further obligation to either party.
28. Time for Performance. Time is of the essence of this Agreement.
Whenever under the terms of this Agreement the time for performance falls on a
Saturday, Sunday or Legal Holiday, as defined in 205 ILCS 630/17 as amended,
such time for performance shall be on the next day that is not a Saturday,
Sunday or Legal Holiday. In computing any period of time pursuant to this
Agreement, the day of the act or event from which the designated period of time
begins to run will not be included and the last day of such period will be
included.
29. Illinois Income Tax Withholding. At least five (5) days prior to
the Closing, Seller shall deliver to Purchaser evidence that the sale of the
Project to Purchaser hereunder is not subject to, and does not subject Purchaser
to liability under, 35 ILCS 5/902 (d) or 35 ILCS 120/5j ("Act") and that at
least fifteen (15) days prior to the Closing, Seller shall have notified the
Illinois Department of Revenue (herein referred to as the "Department") of the
intended sale and requested the Department to make a determination as to whether
the Seller has an assessed, but unpaid, amount of tax, penalties, or interest
under the Act. In the event any amounts are indicated as being unpaid, Seller
shall deliver to Purchaser a personal indemnification executed by Prime Group
Realty, L.P. indemnifying and holding Purchaser harmless from any loss, cost or
damage resulting from any Illinois tax due, or claimed to be due, from Seller.
30. Audit and Indemnification. In the event anytime within three (3)
years subsequent to the Closing Date Purchaser desires to have its independent
auditors audit the operating results of a Project for the period required under
then current Securities and Exchange Commission ("SEC") regulations (herein
referred to as the "Relevant Period"), Seller, at Purchaser's cost and expense,
agrees to provide to Purchaser's designated independent auditors (i) access to
the books and records of the Projects for the Relevant Period and (ii) a letter
stating only that said books and records were prepared by Seller in the ordinary
course of business for its internal purposes. Purchaser hereby agrees to forever
indemnify, defend and hold harmless Seller from and against any claim, damage,
loss, liability cost or expense (including reasonable attorneys' fees and court
costs) to which Seller is at anytime subjected by any party as a result of
Seller's compliance with the terms and conditions of this Section 30. Purchaser
further agrees that no information, books or records provided pursuant to this
Section 30 shall be the basis of any claim by Purchaser against Seller with
respect to the sale of a Project to Purchaser or any representation, warranty or
covenant given by Seller with respect to a Project.
31. Recording. Seller and Purchaser agree that neither this Agreement
nor any memorandum or summary of this Agreement shall be recorded without the
prior written consent of the other party, which consent may be granted or
withheld in such other party's sole and absolute discretion. If Purchaser causes
this Agreement or any notice or memorandum hereof to be recorded, then without
limitation of Seller's other remedies for such default, this entire Agreement
shall be null and void at the option of the Seller and Seller shall be entitled
to be paid the entire ▇▇▇▇▇▇▇ Money.
32. Confidentiality. Seller and Purchaser acknowledge and agree that
the transactions contemplated by this Agreement are of a highly sensitive and
confidential nature and, except to the extent disclosure is required by law or
is otherwise permitted by this Section 32, Purchaser and Seller agree that all
documents and information concerning the Projects, the subject matter of this
Agreement, and all negotiations with respect hereto and the subject matter
hereof shall remain confidential. Prior to and after the Closing, any release or
disclosure to the public of information with respect to the transaction so
closed, any matters set forth in this Agreement, or any of the terms and
provisions of this Agreement shall be made only in the form approved by
Purchaser and Seller and their respective counsels (which approval shall not be
unreasonably withheld or delayed, and shall be deemed to have been granted if
not expressly disapproved within one (1) business day after request for
approval). Notwithstanding the foregoing to the contrary, this Section 32 shall
not prevent (a) either party from disclosing any information with respect to the
transactions contemplated herein, any matters set forth in this Agreement, or
any of the terms and provisions of this Agreement if and to the extent that such
disclosure is reasonably determined by such party to be required by applicable
law or a court or other binding order or by applicable administrative rule or
regulation or order of any regulatory or supervisory agency or authority with
competent jurisdiction over such matter; (b) Seller or Purchaser from disclosing
any information with respect to the transactions contemplated herein, any
matters set forth in this Agreement, or any of the terms and provisions of this
Agreement to any of their respective current or prospective lenders, members,
officers, directors, trustees, employees, consultants, attorneys, accountants,
advisors, agents, representatives, partners ,and/or shareholders and/or any
parties whose consent is required (and any of the respective lenders, members,
officers, directors, trustees, employees, consultants, advisors, agents,
representatives, partners, and/or shareholders of any of such parties); provided
that all of the foregoing to whom disclosure is made are advised of the
confidential nature of such information, matters, terms and provisions; or (c)
the Owners, Seller, and/or its member, its member's members, and/or Prime Group
Realty Trust or Purchaser from making any public statement, filing, or other
disclosure which any of them reasonably believes to be required or desirable
under applicable securities laws or in connection with any securities offering
or registration by the Owners, Seller, and/or its member, its member's members
and/or Prime Group Realty Trust or Purchaser, or as may be requested or required
by the New York Stock Exchange or other securities market. The provisions of
this Section 32 shall survive the Closing or termination of this Agreement
(whichever shall occur) without restriction or limitation.
33. Further Assurances. Each party hereto agrees that it will without
further consideration execute and deliver such other documents and take such
other action, whether prior or subsequent to the Closing, as may be reasonably
requested by the other party to consummate more effectively the purposes or
subject matter of 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 Projects. The provisions of this Section 33 shall survive the
Closing or the termination of this Agreement (whichever shall occur) without
restriction or limitation.
34. Tax Allocations. Purchaser and Seller agree that the consideration
to be paid pursuant to this Agreement, together with any assumed liabilities,
shall be allocated among the assets as set forth on Exhibit T. attached hereto
and made a part hereof. Seller and Purchaser hereby agree that IRS Form 8594
will be timely filed based on such fair market values.
35. Tax-Deferred Exchange. If Seller, the Owners, any other party
transferring any of the Projects, or Purchaser desires to structure the
applicable transaction to effect a tax-deferred exchange under Section 1031 of
the United States Internal Revenue Code and the regulations promulgated
thereunder, as amended, then the other party or parties shall cooperate with the
structuring party in such effort provided (a) the structuring party pays all
reasonable third party, out-of-pocket costs and expenses incurred by the other
party in connection therewith, and (b) no other party incurs any potential
liabilities as a result thereof that would not otherwise have been incurred by
the other party (e.g., by having to make any warranties under a deed).
36. Assignment. Neither this Agreement nor Seller's or Purchaser's
rights and obligations hereunder, may be assigned by the other party, and any
such attempted assignment shall be null and void, ab initio, and shall
constitute a default by the assigning party of this Agreement. Notwithstanding
the foregoing, Purchaser may assign this Agreement, in whole or in part, to any
entity affiliated with or related to Purchaser (herein referred to as
"Affiliate") without Seller's consent, provided that Purchaser shall in no event
be released from any of its obligations or liabilities hereunder as a result of
any such assignment, provided that any such assignment shall not in any way
effect or delay Purchaser's ability to obtain the Bond Consent, Bond Release or
CIBC Consent. In the event that any Affiliate shall be designated as a
transferee or assignee hereunder, the Affiliate shall have the benefit of all of
the representations, warranties and other rights that would otherwise have run
in favor of Purchaser.
37. Termination of this Agreement. Seller and Purchaser acknowledge and
agree that if either party hereto has the right to terminate this Agreement
pursuant to the terms and provisions hereof, and desires to exercise such right,
then such party may exercise such right with respect to the entire of this
Agreement, it being the understanding and agreement of Seller and Purchaser that
it is their intent that Purchaser acquire all or none of the Projects.
38. Further Assurances. All action required pursuant to this Agreement
that is necessary to effectuate the transaction contemplated herein will be
taken promptly and in good faith by Seller and Purchaser, and each shall furnish
the other with such documents or further assurances as the other may reasonably
require to effectuate the transaction contemplated by this Agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
SELLER: PRIME GROUP REALTY, L.P., a Delaware
------
limited partnership, individually and in
its capacity as the sole administrative
member of the Owners
By: PRIME GROUP REALTY TRUST,
its Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: President
------------------------------------
PURCHASER: CENTERPOINT PROPERTIES TRUST, a Maryland
---------
real estate investment trust
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Chief Investment Officer
----------------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Title: Co-Chairman
----------------------------------
LIST OF EXHIBITS
Exhibit A-1 through A-34 Legal Descriptions of Parcels
Exhibit B Property Schedule
Exhibit C Lease Schedule
Exhibit D Personal Property Schedule
Exhibit E Joint Order Escrow - ▇▇▇▇▇▇▇ Money Escrow Agreement
Exhibit F List of Bond Documents
Exhibit G Description of the Illinois Bonds
Exhibit H Debt Schedule
Exhibit I Project Contracts Deemed to be Approved Contracts
Exhibit J Tenant Purchase Rights
Exhibit K Permitted Exceptions
Exhibit L Undelivered Title Items
Exhibit M Required Title Affidavits
Exhibit N Environmental Escrow Agreement
Exhibit O-1 Tenant Letter
Exhibit O-2 Seller Estoppel Certificate
Exhibit P Rent Subsidy Agreement
Exhibit Q Exceptions Schedule
Exhibit R Environmental Assessments and Reports
Exhibit S Open Item List
Exhibit T Allocation of Purchase Price
EXHIBIT A-1 THROUGH 1-32
Legal Descriptions of Parcels
[INTENTIONALLY DELETED]
EXHIBIT B
Property Schedule
Building Address Ownership Entity Building Number Location Total SF
---------------- ----------------- ---------------- --------- --------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 67,935
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 30,084
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 60,290
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 40,502
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 66,254
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 25,200
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇.▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 44,575
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 127,129
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 90,344
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 79,532
▇▇▇ ▇▇▇▇ ▇▇▇▇ 555 ▇▇▇▇ Road, L.L.C. Batavia, Illinois 62,400
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 257,600
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 50,400
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ 21,935
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ 136,600
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 17,265
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 43,930
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 152,200
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ I, L.P. Arlington Heights,
Illinois 304,506
East Chicago Enterprise Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Lot 1 Enterprise Center I, L.P. Vacant Land East Chicago, Indiana -
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ II, L.P. Building 2 East Chicago, Indiana 169,435
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III, L.P. ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 291,550
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ IV, L.P. Building 4 East Chicago, Indiana 87,484
East Chicago Enterprise Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. Limited Partnership Building T East Chicago, Indiana 14,070
Hammond Enterprise Center
4507 Columbia Avenue Enterprise Center V, L.P. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 196,475
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ VI, L.P. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 250,266
Hammond Enterprise Center Office Building and
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Limited Partnership part of ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 76,821
Chicago Enterprise Center
13535 A&D ▇. ▇▇▇▇▇▇▇▇ Avenue Enterprise Center VII, L.P. Buildings A and P Chicago, Illinois 462,670
13535 B ▇. ▇▇▇▇▇▇▇▇ Avenue Enterprise Center VIII, L.P. Building A.1 Chicago, Illinois 242,199
13535 E-G ▇. ▇▇▇▇▇▇▇▇ Avenue Enterprise Center IX, L.P. Buildings Q, R & S Chicago, Illinois 162,682
13535 C&H ▇. ▇▇▇▇▇▇▇▇ Avenue Enterprise Center X, L.P. Buildings C and T Chicago, Illinois 172,775
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇/Prime Industrial Partners Vacant Land Chicago, Illinois -
----------
Total Sq. Footage 3,805,108
----------
Land Parcels
------------
Acreage
-------
Prime Aurora, L.L.C. Prime ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇/▇ ▇▇▇▇▇▇, ▇▇ 19.97
Parcel 5 20.63
Parcel 9 11.78
Parcel 12, Pond 9.90
Parcel 13 10.87
-----
73.15
DeKalb Business Park, L.L.C. Prime DeKalb Business Park East of 1st, North side
of Gurler DeKalb, IL 36.33
Oak Brook Business Center,
L.L.C. Prime Batavia Business Park North side of ▇▇▇▇▇▇▇ Batavia, IL 9.24
South side of ▇▇▇▇▇▇▇ 9.52
----
18.76
EXHIBIT C
Lease Schedule
[INTENTIONALLY DELETED]
EXHIBIT E
Joint Order Escrow
[INTENTIONALLY DELETED]
EXHIBIT F
Description of the Bonds
[INTENTIONALLY DELETED]
EXHIBIT G
Description of the Illinois Bonds
[INTENTIONALLY DELETED]
EXHIBIT H
Debt Schedule
-------------
CIBC DEBT: POOL A
-----------------
Lender Portfolio or Property
------ ---------------------
CIBC, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
($14,933,000.00 Mortgage Loan) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇-▇▇▇▇ Madison Street, Hillside, IL
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ Gage Avenue, Franklin Park, IL
Current Loan Documents:
-----------------------
1. Amended and Restated Substitute Note A
2. Amended and Restated Substitute Mortgage A
3. Assignment of Leases and Rents
4. Guaranty of Payment
5. Indemnity and Guaranty Agreement
6. Hazardous Substance Indemnity Agreement
7. Assignment of Warranties and Other Contract Rights
8. Consent and Agreement of Manager
9. Cash Management Agreement
10. Certificate Regarding Loans to Related Parties
11. Certificate of Rent Roll
12. Certificate of Service Contracts
13. Certificate as to Independent Director
14. Certificate of Lease Form
CIBC DEBT: POOL B-1
-------------------
Lender Portfolio or Property
------ ---------------------
CIBC, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
($15,556,000.00 Mortgage Loan) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
Current Loan Documents:
-----------------------
1. Amended and Restated Substitute Note B-1
2. Amended and Restated Substitute Mortgage B-1
3. Assignment of Leases and Rents
4. Guaranty of Payment
5. Indemnity and Guaranty Agreement
6. Hazardous Substance Indemnity Agreement
7. Assignment of Warranties and Other Contract Rights
8. Consent and Agreement of Manager
9. Cash Management Agreement
10. Certificate Regarding Loans to Related Parties
11. Certificate of Rent Roll
12. Certificate of Service Contracts
13. Certificate as to Independent Director
14. Certificate of Lease Form
LIST OF NON-ASSUMED DEBT
------------------------
Lender Portfolio or Property
------ ---------------------
LaSalle Bank, N.A. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
($6 million construction loan)
Corus Bank, N.A. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
($4.235 million first mortgage loan)
LaSalle Bank, N.A. ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇, ▇▇
($2.5 million first mortgage loan) ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
EXHIBIT I
Project Contracts Deemed to be Approved Contracts
[INTENTIONALLY DELETED]
EXHIBIT J
Tenant Purchase Rights
[INTENTIONALLY DELETED]
EXHIBIT K
Permitted Exceptions
[INTENTIONALLY DELETED]
EXHIBIT L
Undelivered Title Items
[INTENTIONALLY DELETED]
EXHIBIT M
Required Title Affidavits
[INTENTIONALLY DELETED]
EXHIBIT N
Environmental Escrow Agreement
THIS ENVIRONMENTAL ESCROW AGREEMENT (the "Agreement") is made and
entered into this ____ day of ______, 2004, by and among PRIME GROUP REALTY,
L.P., a Delaware limited partnership ("Seller"); CENTERPOINT PROPERTIES TRUST, a
Maryland real estate investment trust ("Buyer"); and CHICAGO TITLE AND TRUST
COMPANY ("Escrow Agent").
W I T N E S S E T H:
A. Seller and Buyer have executed and delivered that certain Purchase
Agreement dated August 2, 2004, pursuant to which Seller agreed to convey
certain land and improvements to Buyer, all as more particularly described
therein. Such Purchase Agreement, as same may have been amended, is hereinafter
referred to as the "Disposition Agreement." Unless otherwise defined herein, all
initially capitalized terms shall have the respective meanings assigned thereto
in the Disposition Agreement.
B. In the course of its due diligence, Seller identified the following
Properties which require environmental remediation in order to obtain a No
Further Remediation Letter ("NFR Letter") from the Illinois Environmental
Protection Agency ("IEPA") or a Certificate of Completion ("Certificate of
Completion") issued by the Indiana Department of Environmental Management
("IDEM") and a Covenant Not to ▇▇▇ ("Covenant Not to ▇▇▇") issued by the
Governor of Indiana: Chicago Enterprise Center, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ("Chicago Enterprise Center"); Hammond Enterprise Center,
4507, 4531, and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Hammond Site"); and
East Chicago Enterprise Center, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the
"East Chicago Site") (collectively, the "Environmental Escrow Properties").
C. Seller has agreed to deposit into escrow the sums described herein
in order to pay for a portion of the remediation of the Environmental Escrow
Properties as provided below and to secure Buyer's delivery of an NFR Letter
issued by IEPA or Certificate of Completion issued by IDEM and Covenant Not to
▇▇▇ issued by the Governor of Indiana for each Environmental Escrow Property,
and the parties desire to enter into this Agreement for the purpose of holding
and disbursing such funds in accordance with the terms of this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing premises, the
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller, Buyer, and Escrow Agent do hereby covenant and agree as follows:
1. Environmental Escrow Properties. The following properties constitute
the Environmental Escrow Properties under the terms of this Agreement:
a. Chicago Enterprise Center. Seller, by and through its
consultant, ▇▇▇▇▇▇▇ Environmental, Inc. ("CEI"), discovered
contamination in the course of its due diligence for Seller, including
extensive hazardous lead and other lead contamination, the presence of
free product in three locations (between Building A-1 and C; the former
slip area; and the former underground storage tank ("UST") farm west of
Building C and south of Building A), and other contaminants of concern
(e.g., polychlorinated biphenyls ("PCBs"), arsenic and chlorinated
solvent analytes). CEI recommended obtaining an NFR Letter through the
Illinois Site Remediation Program. Seller has disclosed to Buyer a Risk
Assessment dated June 1999 and prepared by ▇▇▇▇ & ▇▇▇ ▇▇▇▇ for Chicago
Enterprise Center (hereinafter "Risk Assessment"). The Risk Assessment
provides for a clean-up objective for lead of nine hundred parts per
million ("900 ppm"). Seller agreed in the May 4, 2004 Letter of Intent,
by and between the Parties, to fund an escrow account with two million
nine hundred thousand dollars ($2,900,000.00) to fund Buyer's
remediation of the Chicago Enterprise Center and Buyer's reasonable
costs and expenses associated with obtaining an NFR Letter from the
IEPA with respect to all known contamination for Chicago Enterprise
Center. Buyer covenants and agrees (1) to remediate Chicago Enterprise
Center as required to obtain the NFR Letter from the IEPA with respect
to all known contamination, including, but not limited to, all
Hazardous Substances as defined by CERCLA and identified in Removal
Site Evaluation and Preliminary Assessment - Event Two Report - April,
1997 prepared by CEI with respect to Chicago Enterprise Center, (2) to
commence such remediation not later than May 21, 2006, (3) to
diligently pursue and complete such remediation within a reasonable
period of time, and (4) to use good faith efforts to add Prime Group
Realty, L.P., Prime Group Realty Trust, Enterprise Center VII, L.P.,
Enterprise Center VIII, L.P., Enterprise Center IX, L.P., Enterprise
Center X, L.P., ▇▇▇▇▇▇/Prime Industrial Partners, Illinois Tool Works
Inc., Signode Corporation and USX Corporation as additional recipients
of the NFR Letter and to cause the IEPA to furnish (or to furnish
itself) all such parties with copies of the NFR Letter when issued.
▇. ▇▇▇▇▇▇▇ Site. In the course of its due diligence, Seller,
by and through its consultant, Heritage Environmental Services LLC
("Heritage"), discovered contamination related to the presence of free
product, lead, semi-volatile organic compounds ("SVOCs") and the
presence of an underground storage tank ("UST"), among other issues.
Groundwater monitoring, due to the presence of historical free product,
is required to be conducted at the Hammond Site for one additional
quarter. Seller agreed in the May 4, 2004 Letter of Intent, by and
between the Parties, to fund an escrow account with up to one hundred
thousand dollars ($100,000.00)(less amounts spent by Seller after May
4, 2004 and prior to Closing in connection with said remediation at the
Hammond Site which amounts shall be subject to Buyer's review and
approval of detailed invoices from Seller's environmental consultant)
to fund Buyer's remediation of the Hammond Site and Buyer's reasonable
costs and expenses associated with obtaining a Certificate of
Completion issued by IDEM and Covenant Not to ▇▇▇ issued by the
Governor of Indiana for the Hammond Site.
c. East Chicago Site. In the course of its due diligence,
Seller, by and through its consultant, Heritage, discovered
contamination related to the presence of elevated levels of TPH and the
presence of an underground storage tank ("UST"), among other issues.
Groundwater monitoring, due to the presence of elevated levels of
petroleum products, is required to be conducted at the East Chicago
Site for one additional quarter. In addition, IDEM has not approved the
remedial action plan submitted by Heritage to address the elevated
levels of TPH in the soils within two areas of the site. Seller agreed
in the May 4, 2004 Letter of Intent, by and between the Parties, to
fund an escrow account with up to one hundred sixty four thousand
dollars ($164,000.00)(less amounts spent by Seller after May 4, 2004
and prior to Closing in connection with said remediation at the East
Chicago Site which amounts shall be subject to Buyer's review and
approval of detailed invoices from Seller's environmental consultant)
to fund Buyer's remediation of the East Chicago Site and Buyer's
reasonable costs and expenses associated with obtaining a Certificate
of Completion issued by IDEM and Covenant Not to ▇▇▇ issued by the
Governor of Indiana for the East Chicago Site. During the course of its
due diligence, Buyer identified free product at the East Chicago Site,
as well as TPH levels in excess of fifty thousand parts per million
(50,000 ppm). Buyer also identified the presence of PCBs, chlorinated
solvents, and chromium within the site soils. Further, Buyer detected
chrome in ground water beneath the Electro Coating Technologies tenant
space. Seller has agreed to fund an escrow account with one million two
hundred fifty thousand dollars ($1,250,000.00) to fund Buyer's
remediation of the East Chicago Site to the extent required in order
for Buyer to obtain a Certificate of Completion issued by IDEM and
Covenant Not to ▇▇▇ issued by the Governor of Indiana.
2. Escrowed Funds.
a. Seller has deposited with Escrow Agent an amount equal to THREE
MILLION ONE HUNDRED SIXTY-FOUR THOUSAND DOLLARS ($3,164,000.00) (the "Escrow
Amount") to pay for the remediation of the Environmental Escrow Properties to
applicable industrial/commercial or construction worker remedial objectives and
applicable groundwater standards as established under the applicable IEPA Tiered
Approach to Corrective Action Objectives ("TACO") or the IDEM Risk Based
Clean-Up Objectives (the "Remediation"), and the obtainment by Buyer of an NFR
Letter from IEPA, or a Certificate of Completion issued by IDEM and a Covenant
Not to ▇▇▇ issued by the Governor of Indiana for each respective Environmental
Escrow Property.
b. Seller has also deposited with Escrow Agent an amount equal to ONE
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($1,250,000.00) (the "East Chicago
Supplemental Escrow Amount") to pay for any Remediation of TPH, free product,
PCBs, chlorinated solvents and chromium if and to the extent required by IDEM at
the East Chicago Site in order to obtain a Certificate of Completion issued by
IDEM and a Covenant Not to ▇▇▇ issued by the Governor of Indiana, respectively.
The East Chicago Supplemental Escrow Amount shall only be used in connection
with the Remediation of TPH, free product, PCBs, chlorinated solvents and
chromium if and to the extent required by IDEM. If (i) IDEM does not require
Remediation of TPH, free product, PCBs, chlorinated solvents or chromium at the
East Chicago Site in order to issue a Certificate of Completion, and (ii) the
Governor of Indiana does not require Remediation of TPH, free product, PCBs,
chlorinated solvents or chromium at the East Chicago Site in order to issue a
Covenant Not to ▇▇▇, the East Chicago Supplemental Escrow Amount shall be
promptly released to Seller.
c. By its execution of this Agreement, Escrow Agent acknowledges
receipt of the funds in an amount equal to the Escrow Amount and East Chicago
Supplemental Escrow Amount (collectively, the "Escrowed Funds").
3. Use of Escrowed Funds.
a. Escrowed Funds. The Escrowed Funds shall be used by Buyer
to remediate the Environmental Escrow Properties and to obtain the Certificates
of Completion issued by IDEM and Covenants Not to ▇▇▇ issued by the Governor of
Indiana for the East Chicago Site and the Hammond Site and NFR Letter(s) from
IEPA for Chicago Enterprise Center. Buyer shall diligently obtain the
Certificates of Completion, Covenants Not to ▇▇▇ and NFR Letters for each
Environmental Escrow Property and shall diligently complete the Remediation at
the Environmental Escrow Properties. Subject to the provisions of this
Agreement, including, but not limited to, Section 1, the Remediation of the
Environmental Escrow Properties is at the sole direction of Buyer.
b. Environmental Escrow Properties - Seller's Liability. Buyer
agrees that Seller's liability to Buyer under this Agreement for the Remediation
of the Environmental Escrow Properties shall be limited to the Escrowed Funds.
Notwithstanding the foregoing, this Section 3(b) shall in no manner limit or
restrict Seller's obligations under the Disposition Agreement (subject to the
terms and provisions contained therein).
c. Use of Escrowed Funds. Buyer agrees to use the Escrowed
Funds for the purposes set forth in Paragraph 3 (a)-(c) of this Agreement. Buyer
may use the Escrowed Funds for costs associated with, but not necessarily
limited to: filing, review, application, oversight and other fees and charges
payable to IEPA or IDEM; all fees and charges invoiced by the contractors
selected by Buyer and reasonably acceptable to Seller for services contemplated
under this Agreement; laboratory charges; charges for disposal of hazardous or
non-hazardous wastes in connection with such Remediation; and all reasonable
fees and costs incurred by Buyer's counsel in connection with monitoring the
Remediation or negotiating with IEPA or IDEM.
d. Release of Seller. Buyer, its parents, subsidiaries,
affiliates, divisions, shareholders, officers, directors, employees, agents,
insurers, trustees, attorneys, representatives, successors and assigns do hereby
fully and forever release, acquit and discharge Seller, Enterprise Center I,
L.P, Enterprise Center II, L.P., Enterprise Center III, L.P., Enterprise Center
IV, L.P. , East Chicago Enterprise Center Limited Partnership, Enterprise Center
V, L.P., Enterprise Center VI, L.P., ▇▇▇▇▇▇▇ Enterprise Center Limited
Partnership, Enterprise Center VII, L.P., Enterprise Center VIII, L.P.,
Enterprise Center IX, L.P., Enterprise Center X, L.P., ▇▇▇▇▇▇/Prime Industrial
Partners and each of their respective parents, subsidiaries, affiliates,
divisions, shareholders, officers, directors, employees, agents, insurers,
trustees, attorneys, representatives, successors and assigns (the "Seller
Released Parties"), of and from any and all common law and statutory claims,
demands, rights, liabilities, suits, set-offs, damages, actions or causes of
action, attorney fees, or related costs or expenses incurred by Buyer, or its
parent, subsidiaries, affiliates, divisions, shareholders, officers, directors,
employees, agents, insurers, trustees, attorneys, representatives, successors
and assigns, of whatsoever kind and nature, known or unknown, foreseen or
unforeseen, matured or unmatured, accrued or unaccrued which are or may be based
upon or related in any way to the investigation, assessment, presence or
remediation of any Hazardous Materials at any Environmental Escrow Property. For
purposes of this Agreement, "Hazardous Materials" shall mean any hazardous
substance, pollutant, contaminant, or waste regulated under any federal, state
or local statute, ordinance, regulation or rule relating to environmental
quality, health, safety, contamination and clean-up, asbestos and
asbestos-containing materials in any form; oil and petroleum products and
natural gas, natural gas liquids, liquefied natural gas and synthetic gas usable
for fuel; pesticides regulated under FIFRA; PCBs and other substances regulated
under TSCA; source material, special nuclear material, byproduct materials, and
any other radioactive materials or radioactive wastes however produced,
regulated under the Atomic Energy Act or the Nuclear-Waste Policy Act; chemicals
subject to the OSHA Hazard Communication Standard, 29 C.F.R. ss.1910.1200 et
seq.; and industrial process and pollution control wastes whether or not
hazardous within the meaning of RCRA. This release shall be contained in the
special warranty deeds to be delivered at closing or included in a separate
document and placed of record against the Environmental Escrow Properties.
Notwithstanding the foregoing, this Section 3(d) shall in no manner limit or
restrict Seller's obligations under the Disposition Agreement (subject to the
terms and provisions contained therein).
e. Release of Buyer. Upon Buyer's completion of its
obligations set forth in this Agreement, Seller, its parents, subsidiaries,
affiliates, divisions, shareholders, officers, directors, employees, agents,
insurers, trustees, attorneys, representatives, successors and assigns do hereby
fully and forever release, acquit and discharge Buyer and each of its respective
parents, subsidiaries, affiliates, divisions, shareholders, officers, directors,
employees, agents, insurers, trustees, attorneys, representatives, successors
and assigns (the "Buyer Released Parties"), of and from any and all common law
and statutory claims, demands, rights, liabilities, suits, set-offs, damages,
actions or causes of action, attorney fees, or related costs or expenses
incurred by Seller, or any other Seller Released Party, of whatsoever kind and
nature, known or unknown, foreseen or unforeseen, matured or unmatured, accrued
or unaccrued which are or may be based upon or related in any way to the
investigation, assessment, presence or remediation of any Hazardous Materials at
any Environmental Escrow Property. This release shall be contained in the
special warranty deeds to be delivered at closing or included in a separate
document and placed of record against the Environmental Escrow Properties.
Notwithstanding the foregoing, this Section 3(e) shall in no manner limit or
restrict Buyer's obligations under this Agreement or the Disposition Agreement
(subject to the terms and provisions contained herein and therein).
f. Buyer acknowledges and agrees that Buyer has received and
reviewed copies of the settlement agreements with USX Corporation (the "USX
Settlement Agreement") and Signode Corporation, a Division of Illinois Tool
Works, Inc. (the "Signode Settlement Agreement") relating to the litigation
entitled Enterprise Center VII, L.P., Enterprise Center VIII, L.P., Enterprise
Center IX, L.P., Enterprise Center X, L.P. and ▇▇▇▇▇▇/Prime Industrial Partners
v. USX Corporation v. The Prime Group, Inc., Case No. 96C 5283, filed on August
22, 1996, in the United States District Court for the Northern District of
Illinois, Eastern Division, and that certain provisions of the Settlement
Agreements, including, but not limited to, release provisions, are binding upon
and/or benefit Buyer, as a successor in interest to Seller and the Owners of
Chicago Enterprise Center.
4. Administration of Escrowed Funds. Escrow Agent hereby agrees to
hold, administer and disburse the Escrowed Funds pursuant to this Agreement in
accordance with written instructions given to it as provided herein. Escrow
Agent shall invest the Escrow Amount in accordance with written investment
instructions from Buyer, with interest on the Escrow Amount reported under the
United States Taxpayer Identification Number of Buyer. Escrow Agent shall invest
the East Chicago Supplemental Escrow Amount in an interest bearing account at a
bank reasonably acceptable to Buyer and Seller, with interest on the East
Chicago Supplemental Escrow Amount reported under the United States Taxpayer
Identification Number of Seller. All interest on the Escrowed Funds shall be
reinvested in the Escrowed Funds on the first day of each quarter until all
Escrowed Funds have been fully distributed in accordance with the terms of this
Agreement.
5. Disbursements by Escrow Agent.
a. Disbursements of the Escrowed Funds shall be pursuant to
written Requisitions submitted by Buyer. Each Requisition shall be signed by
Buyer and shall state with specificity (i) the amount being requisitioned out of
the Escrow, and whether such funds are payable from the Escrow Amount or the
East Chicago Supplemental Escrow Amount; (ii) an itemization of the costs and
expenses covered by the Requisition, including the names of the governmental
agencies, contractors, subcontractors or other vendors or payees for whose fees
or charges payment or reimbursement is being requisitioned; and (iii) shall
include Buyer's certification that all such Escrowed Funds requisitioned are
proper expenditures authorized by this Escrow.
b. Buyer shall submit the original of each Requisition to the
Escrow Agent with a copy to Seller. The Escrow Agent shall have absolutely no
duty or obligation to investigate or inquire into the accuracy or completeness
of any Requisition, except to confirm to its reasonable satisfaction that the
procedures herein have been followed, and the Requisition document itself and
the signature of Buyer on the Requisition are genuine. All disbursements shall
be made within one (1) business day after the Escrow Agent's receipt of the
corresponding Requisition (unless the Escrow Agent is not satisfied that the
procedures with respect to such Requisition have been followed). If wire
transfers of funds are required for any disbursement, the Escrow Agent's regular
charge or fee for such additional service shall be paid out of the Escrow.
Seller's inability to object to the disbursement of Escrowed Funds hereunder
shall not be deemed a waiver of any rights it may have against the Buyer under
this Escrow Agreement.
c. Upon completion of the remediation of the Environmental
Escrow Properties and receipt of the final NFR Letters for Chicago Enterprise
Center and final Certificates of Completion and Covenants Not to ▇▇▇ for the
▇▇▇▇▇▇▇ Site and the East Chicago Site, Buyer shall promptly provide written
notice (the "Closure Notice") to Seller and Escrow Agent, together with copies
of the NFR Letters, Certificates of Completion and Covenants Not to ▇▇▇. Upon
receipt of the Closure Notice, the Escrow Agent is hereby directed to
immediately disburse the remainder, if any, of the Escrow Amount to Buyer and
the remainder, if any, of the East Chicago Supplemental Escrow Amount to Seller.
d. Escrow Agent is released from all liability for disbursing
the Escrowed Funds to Buyer under this clause.
6. Escrow Agent. In the absence of bad faith on its part, Escrow Agent
may conclusively rely on a notice of instruction that is furnished to Escrow
Agent that conforms to the requirements of this Agreement. In performing any of
its duties hereunder, Escrow Agent shall not incur any liability to anyone for
any damages, losses or expenses except for willful default or breach of trust,
and it shall accordingly not incur any such liability with respect to any action
taken or omitted in reliance upon any instrument, including any written notice
or instruction provided for in this Agreement, not only as to its due execution
and the validity and effectiveness of its provisions, contained therein, but
which the Escrow Agent shall in good faith believe to be genuine, to have been
signed or presented by a proper person or persons and to conform with the
provisions of this Agreement. In the event any party disputes a proposed
disbursal by Escrow Agent and Escrow Agent is unable to resolve the dispute,
Escrow Agent may tender the Escrowed Funds into a court Escrow Agent deems to be
of competent jurisdiction which shall discharge Escrow Agent of all further
duties and liabilities hereunder or under this Agreement. Seller and Buyer
hereby agree to indemnify and hold harmless Escrow Agent against any and all
losses, claims, and counsel fees and disbursements which may be imposed upon
Escrow Agent or incurred by Escrow Agent hereunder and attributable to the acts
of such party, except those arising from willful default or breach of trust by
Escrow Agent or the performance of its duties hereunder, including any
litigation arising from this Agreement or involving the subject matter hereof.
Seller and Buyer have no obligation to indemnify Escrow Agent for the acts of
any other party. The total fees charged by Escrow Agent hereunder shall be paid
from the Escrow Amount. Such fees shall not exceed the investment fee normally
charged by Escrowee for invested client funds.
7. Term of Agreement. The term of this Agreement shall commence on the
date hereof and expire on the first to occur of (i) Seller's receipt of a
Closure Notice together with copies of all NFR Letters, Certificates of
Completion and Covenants Not to ▇▇▇ required to be delivered in connection
therewith, or (ii) the written agreement of the parties hereto.
8. Notices. Any notices pursuant to this Agreement shall be given in
writing by (a) personal delivery, or (b) reputable overnight delivery service
with proof of delivery, or (c) United States Mail, postage prepaid, registered
or certified mail, return receipt requested, or (d) legible facsimile
transmission sent to the intended addressee, in each case addressed as follows:
If intended for Seller: c/o Prime Group Realty Trust
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to: c/o Prime Group Realty Trust
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If intended for Purchaser: CenterPoint Properties Trust
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ Richmond LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If intended for Escrow Agent: Chicago Title and Trust Company
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Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
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,
and shall be deemed to have been given either at the time of personal delivery,
or, in the case of expedited delivery service or mail, as of the date of first
attempted delivery at the address and in the manner provided herein, or, in the
case of facsimile transmission, as of the date of the facsimile transmission
provided that an original of such facsimile is also sent to the intended
addressee by means described in clauses (a), (b) or (c) above. Any party, by
written notice to the others in the manner herein provided, may designate (A) an
address different from that set forth in this Agreement and (B) an additional
address (for example, without limitation) of a mortgagee.
9. Counterparts/Facsimile Execution. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original but together
shall constitute one and the same instrument. This Agreement may be executed by
facsimile and each party shall have the right to rely upon a facsimile
counterpart signed by any other party to the same extent as if such party had
received an original counterpart from the party signing such facsimile
counterpart.
10. Assignment. Buyer may assign the rights, duties and obligations
contained in this Agreement, in whole or in part, to any subsequent owner of any
of the Environmental Escrow Properties, provided that Buyer shall in no event be
released from any of its obligations or liabilities hereunder as a result of any
such assignment.
11. Miscellaneous. This Agreement shall be construed, enforced and
interpreted in accordance with the laws of the State of Illinois. The terms and
conditions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto, their successors, legal representatives and assigns. This
Agreement may not be amended or modified except by a written instrument executed
by all of the parties hereto. In the event that Buyer or Seller is required to
enforce the provisions of this Agreement, such party, if it prevails, shall be
entitled to receive from the other party all costs and expenses, including,
without limitation, reasonable attorneys' fees incurred. Time is of the essence
of this Agreement. If any time period by which any right, option or election
provided in this Agreement must be exercised, or by which any act must be
performed, expires on a Saturday, Sunday or legal holiday, then such time period
shall be extended through the close of business on the next business day (which,
for purposes hereof, shall be any day which is not a Saturday, Sunday or legal
holiday.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first written above.
BUYER: SELLER:
CENTERPOINT PROPERTIES TRUST, PRIME GROUP REALTY TRUST,
a Maryland real estate investment trust a Delaware limited partnership
By: By:
------------------------------------ --------------------------------
Name: Name:
Title: Title:
By:
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Name:
Title:
ESCROW AGENT:
CHICAGO TITLE AND TRUST COMPANY
By:
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Name:
Title:
EXHIBIT O-1
Tenant Letter
[INTENTIONALLY DELETED]
EXHIBIT O-2
FORM OF SELLER'S ESTOPPEL CERTIFICATE
[INTENTIONALLY DELETED]
EXHIBIT P
Rent Subsidy Escrow Agreement
THIS ESCROW AGREEMENT ("Escrow Agreement") is made effective as of ,
2004 (the "Effective Date"), by and among CENTERPOINT PROPERTIES TRUST, a
Maryland real estate investment trust (herein referred to as "Purchaser") and
PRIME GROUP REALTY, L.P., a Delaware limited partnership (herein referred to as
"Seller"), and CHICAGO TITLE AND TRUST COMPANY (the "Escrow Agent").
RECITALS:
A. Seller and Purchaser entered into that certain Purchase Agreement
dated as of August 2, 2004 (as amended from time to time, the "Agreement"),
which provides for the sale and purchase of, among other things, that certain
real property commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the
"1455 Sequoia Project") and that certain real property commonly known as the
Arlington Heights Enterprise Center, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (the "Arlington Heights Project").
B. Seller has agreed to deposit $848,641 in escrow with the Escrow
Agent ("Escrowed Funds"), who has agreed to act as escrow agent with respect to
the Escrowed Funds pursuant to the terms set forth herein. The Escrowed Funds
represent rental income or operating expenses for the vacant space in the 1455
Sequoia Project and the Arlington Heights Project as of the date hereof (the
"Vacant Space") calculated as depicted on Exhibit A.
C. The parties desire to appoint the Escrow Agent to act on their
behalf with respect to the matters contained in this Escrow Agreement.
AGREEMENTS:
NOW, THEREFORE, IN CONSIDERATION of the Recitals, which are hereby
incorporated herein, and further in consideration of the mutual covenants set
forth herein, the parties agree as follows:
1. Escrowed Funds.
a. Appointment and Acceptance of the Escrow Agent. The Escrow Agent is
hereby appointed by the Purchaser and the Seller as escrow agent to act
in accordance with the instructions set forth herein. The Escrow Agent
hereby accepts such appointment.
b. Term of Escrow. This Escrow Agreement shall terminate on the date all
of the funds in the Escrowed Funds have been disbursed as provided
herein.
c. Duty to Hold Escrowed Funds. Escrow Agent shall hold the Escrowed Funds
and all earnings thereon and shall disburse such funds only in
accordance with this Agreement.
d. Investment. Escrow Agent is authorized and directed to invest the
Escrowed Funds deposited pursuant hereto on the joint written direction
of the parties. Each taxpayer's identification number and investment
forms as required shall be provided prior to any such investment.
Escrow Agent is not to be held responsible for any loss of principal or
interest which may be incurred as a result of making the investments or
redeeming said investments as provided herein, including, but not
limited to, any loss occasioned by reason of the fact that the selected
investment may not be insured by the Federal Deposit Insurance
Corporation. Escrow Agent shall not be held responsible for failure to
invest funds for which it has not received written instructions,
completed investment forms, bank credit advise of receipt of funds or
for delays in wire transfer of funds not caused by its own negligence.
2. Disposition of Escrowed Funds.
a. Joint Direction. Except as otherwise provided in this Section 2, the
Escrow Agent is authorized to disburse the Escrow Deposit only in
accordance with instructions set forth in any written letter of
direction executed by both Purchaser and Seller.
b. Rental Subsidy. On [date of Closing] and on the first day of each month
thereafter up to and including [________, 2005], Purchaser shall submit
to Seller and Escrow Agent a certification (the "Leasing
Certification") in the form attached hereto as Exhibit A which
specifies the amount of rental income for the current month
attributable to the Vacant Space and such backup information as is
reasonably required to verify such rental income. In the event such
Leasing Certification reflects no rental income attributable to the
Vacant Space for the then-current month, Escrow Agent shall, upon its
receipt of such Leasing Certification, release to Purchaser an amount
equal to $70,720.08 (the "Monthly Escrow Payment") from the Escrowed
Funds (prorated for any partial month). In the event that the Leasing
Certification reflects rental income attributable to the Vacant Space
for the then-current month, Escrow Agent shall, within five (5) days
after its receipt of such Leasing Certification, (1) release to
Purchaser an amount equal to the Monthly Escrow Payment less the amount
of any rental income set forth in such Leasing Certification, and (2)
release to Seller an amount equal to the rental income shown on the
Leasing Certification. After payment of any amounts due and owing to
Purchaser based upon the Leasing Certification received from Purchaser
for the month of [ , 2005], Escrow Agent shall release the balance of
the Escrowed Funds, if any, to Seller. "Rental Income" shall include
any base-rent or additional rent payable during the current month by
any tenants or occupants of any portion of the Vacant Space, including
operating expenses and real estate tax payments.
c. Leasing. Purchaser shall retain a commercial leasing broker to attempt
to lease the Vacant Space, and the Monthly Escrow Payments shall be
offset by any Rental Income for new leases signed by Purchaser from any
tenants or occupants of the Vacant Space during such 12-month period.
Upon Seller's request, Purchaser shall promptly provide Seller with
copies of the pertinent provisions of any new leases and such other
information as Seller shall reasonably request to audit the information
contained in any Leasing Certification.
3. Limitations on Liability of Escrow Agent.
a. The duties and obligations of Escrow Agent shall be determined solely
by the provisions of this Escrow Agreement and no implied duties or
obligations shall be read into this Escrow Agreement against Escrow
Agent. Escrow Agent shall be under no obligation to refer to the
Agreement or any other documents between or among the parties related
in any way to this Escrow Agreement, except as specifically provided
herein.
b. Escrow Agent shall not be liable to anyone for any damages, losses or
expenses for any act done or step taken or omitted by Escrow Agent in
good faith; provided, however, that Escrow Agent shall be liable for
damages, losses and expenses arising out of its willful default or
gross negligence under this Escrow Agreement.
c. Escrow Agent shall be entitled to rely upon, and shall be protected in
acting in reasonable reliance upon, any writing furnished to Escrow
Agent by any party in accordance with the terms hereof, which the
Escrow Agent believes in good faith to be genuine and valid and to have
been signed by the proper party or parties.
d. Escrow Agent may, but shall not be required, to file an action of
interpleader in connection with any disagreement or dispute between the
parties to this Escrow Agreement. Escrow Agent shall be entitled to be
paid or reimbursed for all expenses, disbursements and advances,
including reasonable attorneys' fees, incurred or made by Escrow Agent
in connection with the carrying out of its duties hereunder. Escrow
Agent's fees (which shall be $_________) and all such expenses,
disbursements and advances shall be borne by Seller.
e. Any action claimed to be required to be taken by Escrow Agent hereunder
and not otherwise specifically set forth herein shall require the
agreement of Purchaser, Seller and Escrow Agent.
4. Resignation of Escrow Agent. If Escrow Agent desires to resign as
Escrow Agent, it shall provide thirty (30) days written notice (a
"Resignation Notice") of its intention to so resign to Purchaser and to
Seller. Upon receipt of a Resignation Notice, Purchaser and Seller
shall agree on a successor escrow agent mutually acceptable to
Purchaser and Seller, which successor shall agree in writing to be
bound by the terms hereof. If Seller and Purchaser cannot agree on a
successor escrow agent, Escrow Agent shall turn over the Escrowed Funds
to a court of competent jurisdiction in the State of Texas.
5. Amendments. No modification or amendment to this Escrow Agreement, or
waiver of compliance with any provision or condition hereof shall be
valid unless reduced to writing and signed by all of the parties
hereto.
6. Effect of this Escrow Agreement. This Escrow Agreement sets forth the
entire understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements, arrangements and
understandings relating to the subject matter hereof. This Escrow
Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and legal representatives. The
paragraph headings of this Escrow Agreement are for convenience of
reference only and do not form a part hereof and do not in any way
modify, interpret or construe the intentions of the parties. This
Escrow Agreement shall be governed by and construed in accordance with
the laws of the State of Texas without regard to its conflicts of laws
principles, and the state and federal courts of Texas shall have
exclusive jurisdiction over any controversy or claim arising out of or
relating to this Agreement.
7. Notices. All notices and demands hereunder shall be in writing, and
shall be delivered by courier, by registered or certified mail, return
receipt requested, or by facsimile transmission and shall be deemed
given two (2) business days after deposited in the United States Mail
with sufficient postage prepaid thereon to carry it to its addressed
destination, or when delivered by courier or facsimile transmission
(with hard copy sent no later than 24 hours following transmission),
and addressed as follows:
To Seller: c/o Prime Group Realty Trust
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Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to: c/o Prime Group Realty Trust
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Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
To Purchaser: CenterPoint Properties Trust
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Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
To Escrow Holder: Chicago Title and Trust Company
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Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Such addresses may be changed at any time and from time to time, by notice as
above provided.
8. Counterparts. This Escrow Agreement may be executed in two or more
counterparts, and by the different parties hereto on separate
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the
date first above written.
SELLER: PRIME GROUP REALTY, L.P., a Delaware limited
partnership, individually and in its capacity
as the sole administrative member of the Owners
By: Prime Group Realty Trust,
its Managing General Partner
By:
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Its:
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PURCHASER: CENTERPOINT PROPERTIES TRUST,
--------- a Maryland real estate investment trust
By:
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Its:
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By:
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Its:
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Accepted this ____ day of
July, 2004
Chicago Title and Trust Company
Escrow Holder
By:_______________________________
Name:_____________________________
Title:______________________________
EXHIBIT Q
Exceptions Schedule
[INTENTIONALLY DELETED]
EXHIBIT R
Environmental Assessments and Reports
[INTENTIONALLY DELETED]
EXHIBIT S
Open Items List
[INTENTIONALLY DELETED]
EXHIBIT T
Pricing Allocation
[INTENTIONALLY DELETED]