EXHIBIT 10.1
180 NORTH LASALLE
PURCHASE AND SALE AGREEMENT
BETWEEN
180 N. LASALLE II, L.L.C.,
a Delaware limited liability company
AS SELLER
AND
180 N. LASALLE REALTY LLC,
a Delaware limited liability company
AS BUYER
As of February 22, 2010

 

 

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TABLE OF CONTENTS

              Page  
 
         
ARTICLE I DEFINITIONS
    1  
1.1 Definitions
    1  
1.2 References: Exhibits and Schedules
    9  
ARTICLE II AGREEMENT OF PURCHASE AND SALE
    9  
2.1 Agreement
    9  
2.2 Indivisible Economic Package
    9  
ARTICLE III CONSIDERATION
    10  
3.1 Purchase Price
    10  
3.2 Assumption of Obligations
    10  
3.3 Method of Payment of Purchase Price
    10  
ARTICLE IV EARNEST MONEY
    11  
4.1 Earnest Money
    11  
4.2 Designation of Certifying Person
    11  
ARTICLE V INSPECTION OF PROPERTY
    12  
5.1 Evaluation of the Property
    12  
5.2 Document Review
    12  
5.3 Entry and Inspection Obligations; Termination of Agreement
    14  
5.4 Estoppel Certificates
    15  
5.5 SALE “AS IS”
    17  
5.6 SNDAs
    18  
ARTICLE VI TITLE AND SURVEY MATTERS
    18  
6.1 Survey and Title Commitment
    18  
6.2 Title Policy
    18  
ARTICLE VII INTERIM OPERATING COVENANTS
    19  
7.1 Interim Operating Covenants
    19  
7.2 Management Agreements
    21  
ARTICLE VIII REPRESENTATIONS AND WARRANTIES
    21  
8.1 General Seller’s Representations and Warranties
    21  
8.2 Representations and Warranties of the Seller as to the Property
    23  
8.3 Buyer’s Representations and Warranties
    25  
8.4 Limitations on Liability and Representations and Warranties
    26  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
         
ARTICLE IX CONDITIONS PRECEDENT TO CLOSING
    28  
9.1 Conditions Precedent to Obligation of Buyer
    28  
9.2 Conditions Precedent to Obligation of Seller
    29  
9.3 Failure of Condition
    29  
ARTICLE X CLOSING
    30  
10.1 Closing
    30  
10.2 Seller’s Closing Obligations
    31  
10.3 Buyer’s Closing Obligations
    32  
10.4 Prorations
    33  
10.5 Closing Costs
    36  
ARTICLE XI CONDEMNATION AND CASUALTY
    37  
11.1 Casualty
    37  
11.2 Condemnation of Property
    37  
ARTICLE XII CONFIDENTIALITY
    38  
12.1 Confidentiality
    38  
12.2 Tax Related Disclosures
    38  
ARTICLE XIII REMEDIES
    39  
13.1 Notice and Cure
    39  
13.2 Default by Seller
    39  
13.3 Default by Buyer
    40  
ARTICLE XIV NOTICES
    40  
14.1 Notices
    40  
ARTICLE XV ASSIGNMENT
    42  
15.1 Assignment
    42  
15.2 Permitted Assignee
    43  
15.3 Assignments Following Defeasance Notice
    43  
ARTICLE XVI BROKERAGE
    43  
16.1 Brokers
    43  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
         
ARTICLE XVII ASSUMPTION OF EXISTING LOAN
    43  
17.1 Financing Consents
    43  
17.2 Buyer Obligations
    44  
17.3 Seller’s Cooperation
    46  
17.4 Loan Terms
    46  
17.5 Closing Credits
    47  
17.6 Option to Defease
    47  
ARTICLE XVIII MISCELLANEOUS
    47  
18.1 Waivers
    47  
18.2 TIME OF THE ESSENCE
    48  
18.3 Recovery of Certain Fees
    48  
18.4 Construction
    48  
18.5 Counterparts
    48  
18.6 Severability
    48  
18.7 Entire Agreement
    49  
18.8 Governing Law
    49  
18.9 No Recording
    49  
18.10 Further Actions
    49  
18.11 Exhibits
    49  
18.12 No Partnership
    50  
18.13 Limitations on Benefits
    50  
18.14 Board Approval
    50  
18.15 Union Matters
    50  
18.16 Limitation of Liability
    51  

 

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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of the 22nd day
of February, 2010, by and between 180 N. LASALLE II, L.L.C., a Delaware limited
liability company (“Seller”), and 180 N. LASALLE REALTY LLC, a Delaware limited
liability company (“Buyer”).
BACKGROUND:
A. Seller is the owner of the land, buildings and other improvements commonly
known as 180 North LaSalle Street, in the City of Chicago, Illinois, and more
particularly described on Exhibit A attached hereto and made a part hereof (the
“Land”).
B. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
the Property on the terms and conditions hereinafter set forth.
C. Buyer has requested that Seller permit Buyer to assume the existing financing
encumbering the Land (the “Existing Loan”), and Seller is willing to accommodate
Buyer’s request subject to the terms and conditions contained herein.
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following capitalized terms
have the meanings set forth in this Section 1.1:
“Acceptable Estoppel” has the meaning ascribed to such term in Section 5.4(a).
“Additional Assumption Information” has the meaning ascribed to such term in
Section 17.2.
“Approved Form” has the meaning ascribed to such term in Section 5.4(a).
“Anti-Money Laundering and Anti-Terrorism Laws” has the meaning ascribed to such
term in Section 8.3(f).
“AR Report” has the meaning ascribed to such term in Section 8.2(b).
“Assignment of Contracts” has the meaning ascribed to such term in
Section 10.2(d).
“Assignment of Leases” has the meaning ascribed to such term in Section 10.2(c).
“Assumed Guarantees” means, collectively, the Exceptions to Non-Recourse
Guaranty, and the Environmental Indemnity Agreement, all under the Existing Loan
Documents.
“Assumption Approval” has the meaning ascribed to such term in Section 10.1(a).
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“Authorities” means the various federal, state and local governmental and
quasi-governmental bodies or agencies having jurisdiction over the Real Property
and Improvements, or any portion thereof.
“Bill of Sale” has the meaning ascribed to such term in Section 10.2(b).
“Board Approval Date” has the meaning ascribed to such term in Section 18.14.
“BOMA” has the meaning ascribed to such term in Section 18.15.
“BOMA Agreements” has the meaning ascribed to such term in Section 18.15.
“Business Day” means any day other than a Saturday, Sunday, the first two
(2) days of Passover and the last two (2) days of Passover (which for 2010 are
March 29, March 30, April 4 and April 5)or a day on which national banking
associations are authorized or required to close in Chicago, Illinois.
“Buyer’s Affiliates” means any past, present or future: (i) shareholder,
partner, member, manager or owner of Buyer; (ii) entity that, directly or
indirectly, controls, is controlled by or is under common control with Buyer;
and (iii) the heirs, executors, administrators, personal or legal
representatives, successors and assigns of any or all of the foregoing.
“Buyer’s Costs” has the meaning ascribed to such term in Section 3.3.
“Buyer’s Leasing Agent” has the meaning ascribed to such term in
Section 7.1(b)(ii).
“Certificate as to Foreign Status” has the meaning ascribed to such term in
Section 10.2(g).
“Certifying Person” has the meaning ascribed to such term in Section 4.2(a).
“Closing” means the consummation of the purchase and sale of the Property
contemplated by this Agreement, as provided for in Article X.
“Closing Date” means the date on which the Closing of the transaction
contemplated hereby actually occurs.
“Closing Statement” has the meaning ascribed to such term in Section 10.4(a).
“Closing Surviving Obligations” means the rights, liabilities and obligations
set forth in Sections 3.2, 5.3, 5.5, 8.3, 8.4, 10.4, 11.1, 11.2, 16.1, 17.4,
18.3, and 18.15 and Articles XII and XVI, and any other provisions which
pursuant to their terms survive the Closing hereunder.
“Code” has the meaning ascribed to such term in Section 4.2.
“Confidentiality Agreement” means that certain Confidentiality Agreement dated
June 28, 2008, entered into by the parties with respect to the transaction
contemplated by this Agreement.
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“Conforming New Lease Agreement” has the meaning ascribed to such term in
Section 7.1(b)(i).
“Consent” means any approval, consent or similar authorization.
“Deed” has the meaning ascribed to such term in Section 10.2(a).
“Defeasance Notice” has the meaning ascribed to such term in Section 17.6.
“Delinquent” has the meaning ascribed to such term in Section 10.4(b).
“Diligence Website” has the meaning ascribed to such term in Section 5.2(a).
“Documents” has the meaning ascribed to such term in Section 5.2(a).
“Earnest Money” has the meaning ascribed to such term in Section 4.1.
“Effective Date” shall mean the date indicated on the signature page hereto
which is the date that both Seller and Buyer have executed this Agreement and a
fully executed copy of this Agreement (which may be by facsimile or email) has
been delivered to both parties.
“Environmental Laws” means each and every federal, state, county and municipal
statute, ordinance, rule, regulation, code, order, requirement, directive,
binding written interpretation and binding written policy pertaining to
Hazardous Substances issued by any Authorities and in effect as of the date of
this Agreement with respect to or which otherwise pertains to or affects the
Real Property or the Improvements, or any portion thereof, the use, ownership,
occupancy or operation of the Real Property or the Improvements, or any portion
thereof, or Buyer, and as same have been amended, modified or supplemented from
time to time prior to the Effective Date, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. § 9601 et seq.), the Hazardous Substances Transportation Act (49 U.S.C. §
1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), as amended by the Hazardous and Solid Wastes Amendments of 1984, the
Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking Water
Act (42 U.S.C. § 300f et seq.), the Clean Water Act (33 U.S.C. § 1321 et seq.),
the Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal Act (42
U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
§ 11001 et seq.), the Radon Gas and Indoor Air Quality Research Act of 1986 (42
U.S.C. § 7401 et seq.), the National Environmental Policy Act (42 U.S.C. § 4321
et seq.), the Superfund Amendment Reauthorization Act of 1986 (42 U.S.C. § 9601
et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), and
any and all rules and regulations which have become effective prior to the date
of this Agreement under such statutes.
“Escrow Agent” means First American Title Insurance Company, having an address
at 30 North LaSalle Street, Suite 310, Chicago, Illinois 60602.
“Estoppel Delivery Date” has the meaning ascribed to such term in Section 5.4(a)
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“Executive Order” has the meaning ascribed to such term in Section 8.3(f).
“Existing Guarantors” means Prime Group Realty, L.P. and Seller.
“Existing Lease Expenses” has the meaning ascribed to such term in
Section 10.4(g).
“Existing Loan” has the meaning ascribed to such term in the Recitals hereto.
“Existing Loan Documents” shall mean the documents evidencing, securing or
otherwise governing the Existing Loan, as listed on Exhibit B attached hereto
and made a part hereof.
“Existing Survey” has the meaning ascribed to such term in Section 6.1(a).
“Extension Period” has the meaning ascribed to such term in Section 10.1(b).
“Final Organizational Structure” has the meaning ascribed to such term in
Section 17.4.
“Final Submission Date” has the meaning ascribed to such term in
Section 17.2(b).
“Financing Consents” means the Consents with respect to the Existing Loan that
are required in order to (i) permit the Buyer to assume the Existing Loan,
(ii) cause Seller and the Existing Guarantors to be released from any and all
liability under the Existing Loan Documents and the Assumed Guarantees except to
the extent accruing or arising from or related to events occurring prior to the
Closing, including but not limited to the obligation to repay the Existing Loan
at maturity, and (iii) to have Buyer substituted as the borrower under the
Existing Loan Documents and to have New Guarantor substituted as the guarantor
under the Assumed Guaranties.
“Financing Consent Costs” means all costs, fees or other expenses, that are
required to be paid to third parties by Seller or Buyer in connection with the
Financing Consents, including, without limitation, any loan application fees and
costs, loan assumption fees and costs and the legal fees of any Lender, rating
agencies and other third parties in connection with the Existing Loan (but
excluding Seller’s legal fees).
“Government List” shall mean any of (i) the two lists maintained by the United
States Department of Commerce (Denied Persons and Entities), (ii) the list
maintained by the United States Department of Treasury (Specially Designated
Nationals and Blocked Persons), and (iii) the two lists maintained by the United
States Department of State (Terrorist Organizations and Debarred Parties).
“Governmental Regulations” means all statutes, ordinances, rules and regulations
of the Authorities applicable to Seller or the use or operation of the Real
Property or the Improvements or any portion thereof.
“Hazardous Substances” means (a) asbestos, radon gas and urea formaldehyde foam
insulation, (b) any solid, liquid, gaseous or thermal contaminant, including
smoke vapor, soot, fumes, acids, alkalis, chemicals, petroleum products or
byproducts, polychlorinated biphenyls, phosphates, lead or other heavy metals
and chlorine, (c) any solid or liquid waste (including, without limitation,
hazardous waste), hazardous air pollutant, hazardous substance, hazardous
chemical substance and mixture, toxic substance, pollutant, pollution, regulated
substance and contaminant, and (d) any other chemical, material or substance,
the use or presence of which, or exposure to the use or presence of which, is
prohibited, limited or regulated by any Environmental Laws.
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“Improvements” means all buildings, structures, fixtures, parking areas and
other improvements located on the Real Property.
“Land” has the meaning ascribed to such term in the Recitals hereto.
“Lease Option Exercise” has the meaning ascribed to such term in
Section 7.1(b)(i).
“Leases” means all of the leases, licenses for occupancy of space, and other
agreements entered into by Seller (or a predecessor-in-interest) as landlord
with respect to the use and occupancy of the Property, together with all
amendments, renewals and modifications thereof, if any, all guaranties thereof,
if any, and any new leases, lease amendments and lease guaranties entered into
after the Effective Date in accordance with the terms of this Agreement.
“Lender” means any lender and/or servicer under the Existing Loan Documents.
“Licensee Parties” has the meaning ascribed to such term in Section 5.1.
“Licenses and Permits” means, collectively, all of Seller’s right, title and
interest, to the extent assignable, in and to licenses, permits, certificates of
occupancy, approvals, dedications, subdivision maps and entitlements now or
hereafter issued, approved or granted by the Authorities exclusively in
connection with the Real Property and the Improvements, together with all
renewals and modifications thereof.
“Major Tenants” means, collectively, (i) Accenture, (ii) VivaKi, Inc. (formerly
known as MarketForward), (iii) ABM Janitorial, (iv) Cramer Kopon, (v) Pugh
Jones, (vi) Miller Shakman, and (vii) Chicago Equity Partners.
“Managing Member” means the individual acting as the managing member of 180 N.
LaSalle Member LLC, which is the sole member of 180 N. LaSalle Owner LLC, which
is the sole member of Buyer.
“Minimum Standards” has the meaning ascribed to such term in Section 17.4.
“New Guarantor” means the individual who will replace the Existing Guarantors
under the Existing Loan Documents in the event the Existing Loan is assumed by
Buyer.
“New Lease Agreement” has the meaning ascribed to such term in
Section 7.1(b)(i).
“New Lease Guidelines” the guidelines attached hereto as Exhibit N and made a
part hereof.
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“Operating Expenses” has the meaning ascribed to such term in Section 10.4(c).
“Other Intangibles” has the meaning ascribed to such term in Section 2.1(h).
“Outside Date” means the date that is one hundred five (105) days after the
Board Approval Date.
“Owner’s Affidavit” has the meaning ascribed to such term in Section 6.2.
“Party Representatives” has the meaning ascribed to such term in Section 12.2.
“Pending Leases” has the meaning ascribed to such term in Section 7.1(b).
“Permitted Assignee” has the meaning ascribed to such term in Section 15.2.
“Permitted Exceptions” shall mean: (a) any exception arising out of an act of
Buyer or its representatives, agents, employees or independent contractors;
(b) zoning and subdivision ordinances and regulations; (c) real estate taxes and
assessments not yet due and payable; (d) the standard pre-printed exclusions
from coverage set forth in the Title Policy that Seller is not required to
remove as provided herein; (e) the rights of Tenants under the Leases as tenants
only; (f) any matters deemed to constitute Permitted Exceptions in this
Agreement; (g) if the Existing Loan is assumed, documents evidencing or securing
the Existing Loan as listed on Exhibit B; and (h) the matters listed on
Exhibit O attached hereto and made a part hereof.
“Permitted Outside Parties” has the meaning ascribed to such term in
Section 5.2(b).
“Person” shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated association, corporation, limited liability
company, entity or government (whether federal, state, county, city or
otherwise, including, but not limited to, any instrumentality, division, agency
or department thereof).
“Personal Property” means all of Seller’s right, title and interest in and to
all equipment, appliances, tools, supplies, machinery, artwork, furnishings and
other tangible personal property attached to, appurtenant to, located in and
used exclusively in connection with the ownership or operation of the
Improvements and situated at the Property on the Effective Date (provided that
Seller shall have the right to remove items of Personal Property so long as the
removed item is replaced by an article that is of equivalent suitability and not
materially less value). Notwithstanding the preceding sentence, “Personal
Property” shall not include (a) any proprietary or confidential materials,
(b) any property that serves or is used in connection with any property other
than the Property, (c) any property owned by Tenants or others, (d) any property
leased by Seller, and (e) the files or data within any computer which is
included as Personal Property (since the hard drives of such computers will be
erased), but to the extent reasonably practicable, property files for the
Property located on such computers will be provided to Buyer on CDs.
“Posting Deadline” has the meaning ascribed to such term in Section 8.1.
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“Preliminary Submission Date” has the meaning ascribed to such term in
Section 17.2(a).
“Property” has the meaning ascribed to such term in Section 2.1.
“Property Employees” has the meaning ascribed to such term in Section 7.2.
“Property Manager” shall mean those individuals or entities which manage the
Property.
“Proprietary Information” has the meaning ascribed to such term in
Section 5.2(a).
“Proration Items” has the meaning ascribed to such term in Section 10.4(a).
“Proration Time” has the meaning ascribed to such term in Section 10.4(a).
“Purchase Price” has the meaning ascribed to such term in Section 3.1.
“Real Property” means fee simple title to the Land, together with all of
Seller’s right, title and interest, if any, in and to the appurtenances
pertaining thereto, including but not limited to Seller’s right, title and
interest in and to the adjacent streets, alleys and right-of-ways, and any
easement rights, air rights, subsurface development rights and water rights.
“Rejection Notice” has the meaning ascribed to such term in Section 5.4(b).
“Rental” has the meaning ascribed to such term in Section 10.4(b), and same are
“Delinquent” in accordance with the meaning ascribed to such term in
Section 10.4(b).
“Rent Roll” has the meaning ascribed to such term in Section 8.2(b).
“Required Changes” has the meaning ascribed to such term in Section 17.4.
“Required Items Checklist” means the checklist attached hereto as Exhibit P and
made a part hereof.
“Required Percentage” has the meaning ascribed to such term in Section 5.4(a).
“Revenue Departments” has the meaning ascribed to such term in Section 10.2(o).
“Scheduled Closing Date” has the meaning ascribed to such term in
Section 10.1(a).
“Security Deposits” means all security deposits to the extent paid to and
required to be held by Seller under the Leases, as landlord, whether cash or
non-cash (such as a letter of credit) to the extent attributable to the Property
or a portion thereof (together with any interest which has accrued thereon, but
only to the extent such interest has accrued for the account of the Tenant),
less all amounts applied by Seller to Tenant obligations in accordance with the
terms of this Agreement.
“Seller Parties” has the meaning ascribed to such term in Section 5.3(b).
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“Seller’s Affiliates” means any past, present or future: (i) shareholder,
partner, member, manager or owner of Seller; (ii) entity in which Seller or any
past, present or future shareholder, partner, member, manager or owner of Seller
has or had an interest; (iii) entity that, directly or indirectly, controls, is
controlled by or is under common control with Seller; and (iv) the successors
and assigns of any or all of the foregoing.
“Seller’s Broker” has the meaning ascribed to such term in Section 16.1.
“Seller’s Share” has the meaning ascribed to such term in Section 17.1.
“Service Contracts” means all of Seller’s right, title and interest, to the
extent assignable, in all service agreements, maintenance contracts, equipment
leasing agreements, warranties, guarantees, bonds, open purchase orders and
other contracts for the provision of labor, services, materials or supplies
relating solely to the Real Property, Improvements or Personal Property and
under which Seller is currently paying for services rendered in connection with
the Property, together with all renewals, supplements, amendments and
modifications thereof, and any new such agreements entered into after the
Effective Date, to the extent permitted by Section 7.1, but excluding any
leasing and/or management agreements with the Property Manager.
“Service Contract Notice Letters” has the meaning ascribed to such term in
Section 10.2(n).
“Significant Portion” means, for purposes of the casualty and condemnation
provisions set forth in Article XI hereof, damage by fire or other casualty to
the Real Property and the Improvements or a portion thereof, the cost of which
to repair would exceed $2,500,000 in the aggregate.
“SNDA” has the meaning ascribed to such term in Section 5.6.
“Tax Declarations” has the meaning ascribed to such term in Section 10.2(i).
“Tenant Notice Letters” has the meaning ascribed to such term in
Section 10.2(e).
“Tenants” means the tenants or users of all or any portion of the Property
claiming rights pursuant to Leases.
“Termination Surviving Obligations” means the rights, liabilities and
obligations set forth in Sections 5.2, 5.3, 5.5, 11.2, 16.1 and 18.3, 18.14, and
Articles XII and XIII, and any other provisions which pursuant to their terms
survive any termination of this Agreement without limitation.
“Title Commitment” has the meaning ascribed to such term in Section 6.1.
“Title Company” means First American Title Insurance Company, having an address
at 30 North LaSalle Street, Suite 310, Chicago, Illinois 60602.
“Title Policy” has the meaning ascribed to such term in Section 6.2.
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“Transaction” has the meaning ascribed to such term in Section 12.2.
“Union Personnel” has the meaning ascribed to such term in Section 18.15.
1.2 References: Exhibits and Schedules. Except as otherwise specifically
indicated, all references in this Agreement to Articles or Sections refer to
Articles or Sections of this Agreement, and all references to Exhibits or
Schedules refer to Exhibits or Schedules attached hereto, all of which Exhibits
and Schedules are incorporated into, and made a part of, this Agreement by
reference. The words “herein,” “hereof,” “hereinafter” and words and phrases of
similar import refer to this Agreement as a whole and not to any particular
Section or Article.
ARTICLE II
AGREEMENT OF PURCHASE AND SALE
2.1 Agreement. Seller hereby agrees to sell, convey and assign to Buyer, and
Buyer hereby agrees to purchase and accept from Seller, on the Closing Date and
subject to the terms and conditions of this Agreement, all of the following
(collectively, the “Property”):
(a) the Real Property;
(b) the Improvements;
(c) the Personal Property;
(d) all of Seller’s right, title and interest as lessor in and to the Leases
and, subject to the terms of the respective applicable Leases, the Security
Deposits;
(e) to the extent assignable, the Service Contracts;
(f) to the extent assignable, the Licenses and Permits;
(g) all of Seller’s right, title and interest in and to any leasing commission
agreements affecting the Property; and
(h) all of Seller’s right, title and interest, to the extent assignable or
transferable, in and to all other intangible rights, titles, interests,
privileges and appurtenances owned by Seller and related to or used exclusively
in connection with the ownership, use or operation of the Real Property or the
Improvements (collectively, the “Other Intangibles”), but specifically excluding
any proprietary or confidential materials and any property to the extent that it
serves or is used in connection with any property other than the Property.
2.2 Indivisible Economic Package. Buyer has no right to purchase, and Seller has
no obligation to sell, less than all of the Property, it being the express
agreement and understanding of Buyer and Seller that, as a material inducement
to Seller and Buyer to enter into this Agreement, Buyer has agreed to purchase,
and Seller has agreed to sell, all of the Property, subject to and in accordance
with the terms and conditions hereof.
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ARTICLE III
CONSIDERATION
3.1 Purchase Price. The purchase price for the Property (the “Purchase Price”)
shall be SEVENTY-TWO MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($72,250,000.00) in lawful currency of the United States of America, payable as
provided in Section 3.3, subject to adjustment for all credits, prorations and
closing costs provided for in this Agreement, including a credit for the
outstanding principal balance and accrued and unpaid interest of the Existing
Loan. Notwithstanding the foregoing, if Buyer delivers the Defeasance Notice as
provided in Section 17.6 below, there shall be no credit for the outstanding
principal balance and the accrued and unpaid interest of the Existing Loan shall
be adjusted at Closing, and Buyer shall pay the entirety of the Purchase Price,
subject to adjustment for all credits, prorations and closing costs provided for
in this Agreement, on an all cash basis. No portion of the Purchase Price shall
be allocated to the Personal Property.
3.2 Assumption of Obligations. As additional consideration for the purchase and
sale of the Property, at Closing Buyer will (a) assume and perform (i) all of
the covenants and obligations of Seller pursuant to the Leases (including
covenants and obligations relating to any Security Deposits which are credited
or delivered to Buyer) that arise and accrue (x) on or after the Closing Date,
or (y) to the extent Seller credits Buyer at Closing with the costs of
performing such covenants and obligations, before the Closing Date, and (ii) all
obligations under the Leases relating to the physical and environmental
condition of the Property regardless of whether such obligations arise before,
on or after the Closing Date (provided that notice of such obligations is first
given after the Closing Date, or, if notice was given prior to the Closing Date,
except to the extent that any action shall have been or was required to be taken
with respect to any such obligations prior to the Closing Date); and (b) assume
and agree to discharge, perform and comply with each and every liability, duty,
covenant, debt or obligation of Seller resulting from, arising out of, or in any
way related to any Service Contracts, Licenses and Permits or Other Intangibles
assigned or transferred to Buyer that arises and accrues (x) on or after the
Closing Date, or (y) to the extent Seller credits Buyer at Closing with the
agreed upon costs of performing such covenants and obligations, before the
Closing Date. The provisions of this Section 3.2 shall survive Closing without
limitation.
3.3 Method of Payment of Purchase Price. No later than 1:00 p.m. Central Time on
the Closing Date, Buyer shall deliver to Escrow Agent for payment to Seller in
accordance with the terms of this Agreement, the Purchase Price as adjusted as
herein provided (less the Earnest Money), together with all other costs and
amounts to be paid by Buyer to Seller at the Closing pursuant to the terms of
this Agreement (“Buyer’s Costs”), by Federal Reserve wire transfer of
immediately available funds to the account of Escrow Agent. Escrow Agent,
following authorization and instruction by the parties at Closing, shall (a) pay
to Seller by Federal Reserve wire transfer of immediately available funds to an
account or accounts designated by Seller, the Purchase Price, less any costs or
other amounts to be paid by Seller at Closing pursuant to the terms of this
Agreement, (b) pay to the appropriate payees out of the proceeds of Closing
payable to Seller all costs and amounts to be paid by Seller at Closing pursuant
to the terms of this Agreement, and (c) pay Buyer’s Costs to the appropriate
payees at Closing pursuant to the terms of this Agreement.
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ARTICLE IV
EARNEST MONEY
4.1 Earnest Money. On or before 5:00 p.m. Central time on the first Business Day
following the Effective Date, Buyer shall deposit with Escrow Agent the sum of
$4,000,000.00 (the “Earnest Money”) in good funds, either by certified bank or
cashier’s check or by federal wire transfer. The Escrow Agent shall hold the
Earnest Money in escrow in an interest-bearing account of the type generally
used by Escrow Agent pursuant to standard strict joint order escrow instructions
to be executed by Seller and Buyer. All interest accruing on such sums shall
become a part of the Earnest Money and shall be distributed as Earnest Money in
accordance with the terms of this Agreement. Time is of the essence for the
delivery of Earnest Money under this Agreement.
4.2 Designation of Certifying Person. In order to assure compliance with the
requirements of Section 6045 of the Internal Revenue Code of 1986, as amended
(the “Code”), and any related reporting requirements of the Code, the parties
hereto agree as follows:
(a) The Escrow Agent agrees to assume all responsibilities for information
reporting required under Section 6045(e) of the Code, and Seller and Buyer
hereby designate the Escrow Agent as the person to be responsible for all
information reporting under Section 6045(e) of the Code (the “Certifying
Person”).
(b) Seller and Buyer each hereby agree:
(i) to provide to the Certifying Person all information and certifications
regarding such party, as reasonably requested by the Certifying Person or
otherwise required to be provided by a party to the transaction described herein
under Section 6045 of the Code; and
(ii) to provide to the Certifying Person such party’s taxpayer identification
number and a statement in such form as may be requested by the Certifying
Person, signed under penalties of perjury, stating that the taxpayer
identification number supplied by such party to the Certifying Person is
correct.
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ARTICLE V
INSPECTION OF PROPERTY
5.1 Evaluation of the Property. Prior to the Effective Date, Buyer and its
authorized agents and representatives (for purposes of this Article V, the
“Licensee Parties”) had the opportunity, subject to the rights of any Tenants,
to enter upon the Real Property at all reasonable times during normal business
hours to perform an inspection of the Property. As a courtesy to Buyer, Seller
shall permit Buyer and the Licensee Parties to have the continued right, from
the Effective Date until the Closing or earlier termination of this Agreement,
to enter upon the Real Property to perform any additional inspections of the
Property that Buyer may desire, subject to and in compliance with the provisions
of this Article V, but in no event shall Buyer have the right to terminate this
Agreement as a result of any such additional inspections. Buyer will provide to
Seller notice of the intention of Buyer or the other Licensee Parties to enter
the Real Property at least one full Business Day (or such shorter period of time
as may be agreed to by Seller) prior to such intended entry and specify the
intended purpose therefor and the inspections and examinations contemplated to
be made and with whom any Licensee Party will communicate. Buyer shall not
communicate with or contact Lender, any of the Tenants or any of the Authorities
without the prior written consent of Seller, which consent shall not be
unreasonably withheld or delayed. At Seller’s option, Seller may be present for
any such entry, inspection examination or communication. Notwithstanding
anything to the contrary contained herein, no physical testing or sampling shall
be conducted during any such entry by Buyer or any Licensee Party upon the Real
Property without Seller’s specific prior written consent. Seller agrees that its
consent shall not be unreasonably withheld with respect to (i) non-invasive
physical testing or sampling of the type customarily required for a Phase I
environmental audit, and (ii) invasive physical testing or sampling if the need
for such testing is established by a Phase I audit.
5.2 Document Review.
(a) Seller has previously made available to Buyer, via an internet due diligence
website (the “Diligence Website”), copies of the following (collectively, the
“Documents”): (i) a rent roll statement with respect to the Property prepared by
Seller, in the form and containing such information as customarily maintained by
Seller from time to time, together with copies of all Leases referenced on such
rent roll and copies of any subleases or amendments relating thereto and Tenant
correspondence in Seller’s possession (which may be reviewed at the Property);
(ii) the Existing Surveys; (iii) all Service Contracts; (iv) the Existing Loan
Documents; (v) Seller’s existing policies of title insurance; and (vi) any of
the following items pertaining to the Property to the extent they exist and are
in Seller’s possession: copies of real estate tax bills for the current year and
the immediately preceding calendar year; monthly cash flow reports for the
current year to date; copies of the most recent engineering studies and
environmental audits prepared for Seller in connection with the Property; the
Licenses and Permits; and any lists of Personal Property and such other
documents reasonably requested by Buyer, to the extent in Seller’s possession.
Notwithstanding anything to the contrary contained herein, Buyer shall not have
the right to review or inspect materials not directly related to the leasing,
maintenance and/or management of the Property, including, without limitation,
all of Seller’s internal memoranda, financial projections, budgets (provided,
however, that Seller has or will deliver copies of the 2009 and 2010 budget and
2009 operating statements for the Property), information regarding tax and
operating escalations, tenant accounts, appraisals, proposals for work not
actually undertaken, accounting and tax records (other than real estate taxes)
and similar proprietary, elective or confidential information (the “Proprietary
Information”).
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(b) Buyer acknowledges the Documents are proprietary and confidential in nature
and have been provided to Buyer solely to assist Buyer in determining the
desirability of purchasing the Property. Subject only to the provisions of
Article XII, prior to Closing, Buyer agrees not to disclose the contents of the
Documents or any of the provisions, terms or conditions contained therein to any
party outside of Buyer’s organization other than its attorneys, partners,
accountants, engineers, consultants, proposed lenders or proposed investors
(collectively, the “Permitted Outside Parties”). Buyer further agrees that
within its organization, or as to the Permitted Outside Parties, prior to
Closing, the Documents will be disclosed and exhibited only to those persons
within Buyer’s organization or to those Permitted Outside Parties who are
responsible for determining the desirability of Buyer’s acquisition of the
Property and/or their investment therein, and Buyer shall be responsible for
ensuring that such persons and Permitted Outside Parties maintain the
confidentiality of such Documents as required by this Agreement and the
Confidentiality Agreement. Buyer further acknowledges that the Documents and
other information relating to the leasing arrangements between Seller and
Tenants are proprietary and confidential in nature. Buyer agrees not to divulge
the contents of such Documents and other information except in strict accordance
with the confidentiality standards set forth in this Section 5.2 and
Article XII. In permitting Buyer and the Permitted Outside Parties to review the
Documents and other information to assist Buyer, Seller has not waived any
privilege or claim of confidentiality with respect thereto, and no third party
benefits or relationships of any kind, either express or implied, have been
offered, intended or created by Seller, and any such claims are expressly
rejected by Seller and waived by Buyer, and Buyer shall be responsible for
ensuring that the Permitted Outside Parties also agree to such waiver.
(c) Buyer acknowledges that some of the Documents may have been prepared by
third parties, including the property manager, and may have been prepared prior
to Seller’s ownership of the Property. Buyer hereby acknowledges that Seller has
not made and does not make any representation or warranty regarding the truth,
accuracy or completeness of the Documents or the sources thereof except as
otherwise specifically set forth in this Agreement. Seller has not undertaken
any independent investigation as to the truth, accuracy or completeness of the
Documents and is providing the Documents solely as an accommodation to Buyer,
but Seller has no knowledge that any of the Documents is false or misleading in
any material way as and when such Documents were prepared.
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5.3 Entry and Inspection Obligations; Termination of Agreement.
(a) Buyer agrees that in entering upon the Real Property and inspecting the
Property, Buyer and the other Licensee Parties will use commercially reasonable
efforts to not disturb the Tenants or interfere with the use of the Property in
a manner that violates the terms of the Leases; unreasonably interfere with the
operation and maintenance of the Real Property or Improvements; damage any part
of the Property or any personal property owned or held by Tenants or any other
person or entity; injure or otherwise cause bodily harm to Seller or any Tenant,
or to any of their respective agents, guests, invitees, contractors and
employees, or to any other person or entity; permit any liens to attach to the
Real Property by reason of the exercise of Buyer’s rights under this Article V;
or reveal or disclose any information obtained concerning the Property and the
Documents to anyone outside Buyer’s organization, except in accordance with the
confidentiality standards set forth in Section 5.2(b) and Article XII. Buyer
will, and shall cause its contractors who perform physical testing at the Real
Property or Improvements to, maintain commercial general liability
(occurrence) insurance on terms and in amounts reasonably satisfactory to Seller
and Workers’ Compensation insurance in statutory limits, and, if Buyer or any
Licensee Party performs any physical inspection or sampling at the Real Property
or Improvements, in accordance with Section 5.1, Buyer shall maintain (if
applicable), and shall cause the relevant Licensee Parties to maintain, errors
and omissions insurance and contractor’s pollution liability insurance on terms
and in amounts acceptable to Seller. In each case (other than with respect to
Worker’s Compensation insurance), such policies shall insure Seller, Buyer, and
such other parties as Seller shall reasonably request, and Buyer shall deliver
to Seller evidence of insurance verifying such coverage prior to entry upon the
Real Property or Improvements to perform testing. Buyer shall also (i) promptly
pay when due the costs of all entry and inspections and examinations done with
regard to the Property; (ii) cause any inspection to be conducted in accordance
with standards customarily employed in the industry and in compliance with all
Governmental Regulations; (iii) in the event this Agreement is terminated, at
Seller’s request, furnish to Seller copies of any third-party studies, reports
or test results received by Buyer regarding the Property; and (iv) restore the
Real Property and Improvements to substantially the same condition in which the
same were found before any such entry upon the Real Property and inspection or
examination was undertaken.
(b) Buyer hereby indemnifies, defends and holds Seller, Seller’s Affiliates, and
the agents, directors, partners, members, officers, employees, successors and
assigns of each of them (collectively, the “Seller Parties”) harmless from and
against any and all liens, claims, causes of action, damages, liabilities,
demands, suits, and obligations to third parties, together with all losses,
penalties, costs and expenses relating to any of the foregoing (including but
not limited to court costs and reasonable attorneys’ fees), arising out of any
inspections, investigations, examinations, samplings or tests conducted by Buyer
or any of the Licensee Parties, whether prior to or after the date hereof, with
respect to the Property or any violation of the provisions of this Article V,
except to the extent that such losses are attributable to the negligence or
willful misconduct of Seller or the Seller Parties; provided, however, that
Buyer will not be liable to Seller Parties solely as a result of the discovery
by Buyer of a pre-existing condition on the Property except to the extent the
activities of Buyer or any of the Licensee Parties exacerbate the condition,
with Buyer’s liability, if any, limited to the extent of any exacerbation caused
by Buyer or the Licensee Parties.
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(c) Buyer acknowledges that it has completed its inspection of the Documents,
Real Property and Improvements, and that Buyer has accepted the same. Buyer
further acknowledges and agrees that there shall be no reduction of or credits
against the Purchase Price as a result of any matters disclosed by such
inspections, all of which matters are hereby accepted by Buyer.
5.4 Estoppel Certificates.
(a) As a condition to Buyer’s obligation to close the transaction contemplated
by this Agreement, Seller shall, on or before four (4) Business Days prior to
the Closing Date (the “Estoppel Delivery Date”), obtain Acceptable Estoppels (as
hereinafter defined) dated no earlier than April 1, 2010, from those Tenants
whose Leases will continue after Closing and which represent at least eighty
percent (80%) of the occupied square footage of the Improvements (the “Required
Percentage”), provided, however, that all Major Tenants shall be included as
part of the Required Percentage. Seller shall deliver a proposed estoppel
certificate to each Tenant whose Lease will continue after Closing. Such
estoppel certificates shall be substantially in the form of Exhibit C-1 attached
hereto (the “Approved Form”); provided, however, that if any Tenant is required
or permitted under the terms of its Lease to provide a different form of
estoppel, provide less information or to otherwise make different statements in
a certification of such nature than are set forth on the Approved Form, then
Buyer shall accept any such alternate form. An executed estoppel certificate in
the form described in this Section 5.4, provided no material default or other
material qualification is raised therein, is hereinafter referred to as an
“Acceptable Estoppel”. For purposes of this Section 5.4, defaults or
qualifications shall be deemed to be material to the extent they exceed
$100,000.00 in the aggregate for all executed estoppel certificates.
(b) A copy of each executed estoppel certificate received by Seller from a
Tenant shall be delivered by Seller to Buyer promptly after Seller receives such
estoppel certificate from the applicable Tenant. If Buyer reasonably believes
that an estoppel certificate received from a Tenant is not an Acceptable
Estoppel, Buyer shall notify Seller in writing (a “Rejection Notice”) within
four (4) business days of receipt of such estoppel certificate from Seller (and
in any event prior to Closing). Failure to so timely notify Seller shall result
in such estoppel certificate being deemed to constitute an Acceptable Estoppel.
If Buyer timely delivers a Rejection Notice, Seller may, at its option but
without any obligation, elect to cure such estoppel deficiencies prior to
Closing (including, but not limited to, giving Buyer a credit against the
Purchase Price or providing Buyer an indemnity relating to any such deficiency).
Notwithstanding anything to the contrary set forth herein, Buyer
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agrees that it shall not be reasonable to object to any estoppel which is
substantially in the Approved Form, which is consistent with the Leases, the
Rent Roll and the AR Report, and which does not allege any “material” defaults
or claims (as defined in Section 5.4(a) above, when aggregated with all other
executed estoppels). Further, in no event shall (i) the insertion by a Tenant of
“knowledge” and similar qualifiers, or (ii) the deletion or modification of
paragraph 9 of the Approved Form, be grounds for Buyer to reject said estoppel
as not being an Acceptable Estoppel in compliance with this Section 5.4. Buyer
acknowledges that Seller has provided Buyer with copies of recent estoppel
certificates obtained by Seller from the Tenants, and Buyer agrees that an
estoppel certificate from a given Tenant which is in substantially the same
format as the most recent estoppel delivered by such Tenant (and modified to
reflect updated facts that have changed since the date of the prior estoppels)
shall also be an Acceptable Estoppel.
(c) If Seller has not delivered the Required Percentage of Acceptable Estoppels
on or prior to the Estoppel Delivery Date, Seller shall have the right, but not
the obligation, exercisable in its sole discretion, to provide Buyer with a
certificate in the form of Exhibit C-2 attached hereto, on or prior to the
Closing Date, for Tenants occupying, in the aggregate, no more than five percent
(5%) of the occupied square footage of the Improvements, and such Seller’s
certificates shall apply against the Required Percentage; provided, however,
that Seller may not substitute a Seller’s certificate for an estoppel from a
Major Tenant or for a Tenant which has previously delivered an estoppel in
connection with this transaction. In such event, Seller shall have the right, on
a post-Closing basis, to continue to obtain estoppel certificates from Tenants
to reach the Required Percentage. Seller’s liability under such Seller’s
certificate(s) (i) shall expire and be of no further force and effect as of the
earlier of (A) twelve (12) months following the Closing Date, and (B) with
respect to each statement covered by such Sellers’ certificate, the date that
Buyer receives an Acceptable Estoppel from such Tenant.
(d) In no event shall Seller incur any liability in connection with failing to
obtain the Required Percentage of estoppel certificates by the Estoppel Delivery
Date, provided that Seller delivered the estoppel certificate forms to the
Tenants, requested in good faith that the Tenants promptly return them, and made
at least one additional written request to the Tenants requesting the return of
the estoppel certificates. If Seller has been unable to obtain the Required
Percentage of estoppel certificates by the Estoppel Delivery Date, then Buyer’s
sole remedy is that Buyer may, by giving Seller and Escrow Agent written notice
by the Closing Date (as extended, if applicable), terminate this Agreement in
which event the Earnest Money shall be returned to Buyer and neither Buyer nor
Seller shall have any further liability or obligation hereunder except for the
Termination Surviving Obligations.
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5.5 SALE “AS IS”. Except as otherwise expressly set forth in this Agreement or
Seller’s closing documents, neither Seller nor any of Seller’s Affiliates nor
any other person is making, and Seller specifically disclaims, any
representation, warranty or assurance whatsoever to Buyer, either express or
implied, with respect to the status of title to or the maintenance, repair,
condition, design or marketability of the Property, or any portion thereof,
including but not limited to (a) any implied or express warranty of
merchantability, (b) any implied or express warranty of fitness for a particular
purpose, (c) any implied or express warranty of conformity to models or samples
of materials, (d) any rights of Buyer under appropriate statutes to claim
diminution of consideration, (e) any claim by Buyer for damages because of
defects, whether known or unknown, with respect to the Improvements or the
Personal Property, (f) the financial condition or prospects of the Property and
(g) the compliance or lack thereof of the Real Property or the Improvements with
Governmental Regulations, including without limitation Environmental Laws, now
existing or hereafter enacted or promulgated, it being the express intention of
Seller and Buyer that, except as expressly set forth in this Agreement or
Seller’s closing documents, the Property will be conveyed and transferred to
Buyer in its present condition and state of repair, “AS IS, WHERE IS, WITH ALL
FAULTS.”
(a) Buyer represents that it is a knowledgeable, experienced and sophisticated
buyer of real estate, and that it is relying solely on its own expertise and
that of Buyer’s consultants in purchasing the Property. Buyer has been given a
sufficient opportunity to conduct and has conducted or will conduct such
inspections, investigations and other independent examinations of the Property
and related matters as Buyer deems necessary, including but not limited to the
physical and environmental conditions thereof, and will rely upon same and not
upon any statements of Seller (excluding the matters represented by Seller in
Sections 8.1 and 8.2 hereof or Seller’s closing documents) nor of any officer,
director, employee, agent or attorney of Seller. Upon Closing, Buyer will assume
the risk that adverse matters, including, but not limited to, adverse physical
and environmental conditions, may not have been revealed by Buyer’s inspections
and investigations. Seller is not liable or bound in any manner by any oral or
written statements, representations or information pertaining to the Property
furnished by any real estate broker, agent, employee or other person, unless the
same are specifically set forth or referred to herein. Buyer acknowledges that
the Purchase Price reflects the “AS IS, WHERE IS” nature of this sale and any
faults, liabilities, defects or other adverse matters that may be associated
with the Property. Buyer, with Buyer’s counsel, has fully reviewed the
disclaimers and waivers set forth in this Agreement and understands the
significance of each and agrees that the disclaimers and other agreements set
forth herein are an integral part of this Agreement, and that Seller would not
have agreed to sell the Property to Buyer for the Purchase Price without the
disclaimers and other agreements set forth in this Agreement.
(b) Buyer and Buyer’s Affiliates further covenant and agree not to sue Seller
and the Seller Parties and release Seller and the Seller Parties of and from and
waive any claim or cause of action, including without limitation any strict
liability claim or cause of action, that Buyer or Buyer’s Affiliates may have
against Seller or the Seller Parties under any Environmental Law, now existing
or hereafter enacted or promulgated, relating to environmental matters or
environmental conditions in, on, under, about or migrating from or onto the
Property, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, or by virtue of any common law right,
now existing or hereafter created, related to environmental conditions or
environmental matters in, on, under, about or migrating from or onto the
Property. The terms and conditions of this Section 5.5 will expressly survive
the termination of this Agreement or the Closing, as the case may be and will
not merge with the provisions of any Closing documents.
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5.6 SNDAs. Upon the written request of Buyer, Seller agrees to forward, at no
cost to Seller and solely as an accommodation to Buyer, Buyer’s lender’s form of
Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) (with the
appropriate blanks completed for each Tenant by Buyer or Buyer’s lender) to the
Major Tenants and to each additional Tenant (i) for which a memorandum of lease
may have been recorded, (ii) whose Lease requires that an SNDA be delivered, or
(iii) whose Lease does not provide for automatic subordination. However, it is
expressly understood and agreed that the receipt of one or more SNDAs in any
form executed by any Tenant shall not be a condition to Buyer’s obligation to
proceed with the Closing under this Agreement. Provided that Buyer coordinates
any such communication through Seller, Buyer shall have the right to communicate
with the Tenants to negotiate any comments to the SNDAs that such Tenants may
have. Seller reserves the right to participate in any such discussions with the
Tenants.
ARTICLE VI
TITLE AND SURVEY MATTERS
6.1 Survey and Title Commitment. Seller has previously delivered to Buyer, via
the Diligence Website, a copy of the existing survey of the Real Property (the
“Existing Survey”) and a preliminary title commitment from the Title Company to
issue an ALTA owner’s policy of title insurance with respect to the Real
Property (collectively, the “Title Commitment”). On or before Closing, Seller
shall deliver to Buyer and the Title Company a copy of the Existing Survey dated
after the Effective Date and certified to Buyer.
6.2 Title Policy. At Closing, the Title Company shall issue to Buyer or be
irrevocably committed to issue to Buyer an extended coverage ALTA owner’s form
title policy or policies (collectively, the “Title Policy”), in the amount of
the Purchase Price, insuring that fee simple title to the Real Property is
vested in Buyer subject only to the Permitted Exceptions. Buyer shall be
entitled to request that the Title Company provide such endorsements (other than
an extended coverage endorsement) to the Title Policy as Buyer may reasonably
require, provided that (a) such endorsements shall be at no cost to, and shall
impose no additional liability on, Seller, (b) Buyer’s obligations under this
Agreement shall not be conditioned upon Buyer’s ability to obtain such
endorsements and, if Buyer is unable to obtain such endorsements, Buyer shall
nevertheless be obligated to proceed to close the transaction contemplated by
this Agreement without reduction of or set off against the Purchase Price, and
(c) the Closing shall not be delayed as a result of Buyer’s request. Seller
shall have no obligation to provide any affidavits, personal undertakings or
title indemnities to the Title Insurer respecting the issuance of the Title
Policy or any endorsements to the Title Policy; provided, that Seller will
provide the Title Insurer with a customary ALTA statement, personal undertaking
or owner’s affidavit (collectively, an “Owner’s Affidavit”), in form and
substance reasonably acceptable to Seller and containing such statements as are
customarily required by the Title Insurer, which will permit the Title Insurer
to remove the standard parties in possession, “mechanics lien”, brokers’ lien
and “GAP” exceptions. Seller shall also cause the Property Manager to deliver at
Closing a customary form of property manager’s lien waiver.
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ARTICLE VII
INTERIM OPERATING COVENANTS
7.1 Interim Operating Covenants. Seller covenants to Buyer that Seller will:
(a) Operations. From the Effective Date until Closing or earlier termination of
this Agreement, continue to operate, manage and maintain the Improvements in the
ordinary course of Seller’s business and substantially in accordance with
Seller’s present practice, subject to ordinary wear and tear and further subject
to Article XI of this Agreement.
(b) Leases. Seller will keep Buyer apprised of leasing activities involving the
Property. Seller has notified Buyer of the pending New Lease Agreements listed
on Exhibit T attached hereto and made a part hereof (collectively, the “Pending
Leases”), and Buyer has approved such Pending Leases.
(i) From the Effective Date through the Closing Date or earlier termination of
this Agreement, Seller shall notify Buyer in writing prior to entering into any
new Leases and amendments to existing Leases (including, but not limited to, any
renewals or expansions of existing Leases pursuant to existing options exercised
after the Effective Date (a “Lease Option Exercise”)) (any of the foregoing, a
“New Lease Agreement”) relating to the Property. Any New Lease Agreement that is
on Seller’s standard form (with such reasonable negotiated changes as Seller and
the proposed tenant may mutually agree) and that contains terms consistent with
the New Lease Guidelines is hereinafter referred to as a “Conforming New Lease
Agreement”. Buyer shall have five (5) Business Days after receipt of any New
Lease Agreement (which shall be accompanied by copies of the most recent credit
reports and financial statements, if any, for the proposed tenant as may be in
Seller’s possession) within which to notify Seller in writing as to (A) whether
Buyer disputes, in its reasonable discretion, that such New Lease Agreement is a
Conforming New Lease Agreement, (B) to approve or disapprove in its reasonable
discretion a New Lease Agreement that is not a Conforming New Lease Agreement,
or (C) to approve or disapprove in its reasonable discretion the credit of the
proposed tenant, whether or not the New Lease Agreement is a Conforming New
Lease Agreement. Buyer shall have no right to disapprove any Lease Option
Exercise; provided, however, that Buyer shall have the right to approve or
disapprove, in its reasonable discretion, Seller’s determination of the fair
market rental rate if applicable to any such Lease Option Exercise to the extent
Seller’s determination is inconsistent with the New Lease Guidelines. Until
Closing or earlier termination of this Agreement, subject to clause (C) above,
Seller shall not enter into any New Lease Agreement other than Conforming New
Lease Agreements without the prior written consent of Buyer, which shall not be
unreasonably withheld, conditioned or delayed. If Buyer fails to notify Seller
of its disapproval of any New Lease Agreement within five (5) Business Days
after Buyer receives a copy thereof, Buyer shall be deemed to have approved such
New Lease Agreement.
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(ii) Notwithstanding anything to the contrary contained herein, on the Effective
Date, Seller shall permit Buyer’s approved leasing agent (“Buyer’s Leasing
Agent”) to show the available space in the Building to prospective tenants on
terms consistent with the New Lease Guidelines, but any commissions due to
Buyer’s Leasing Agent shall be the sole responsibility of Buyer. Buyer shall
first notify Seller as to the identity of Buyer’s proposed leasing agent for
Seller’s approval, which shall not be unreasonably withheld. Any proposed new
leases of space shall be subject to Seller’s approval, not to be unreasonably
withheld or delayed, provided however it shall be reasonable for Seller to
withhold its consent to new leases which do not meet the New Lease Guidelines.
Any such proposed new leases shall be on Seller’s standard form (with such
reasonable negotiated changes as Seller, Buyer and the proposed tenant may
mutually agree and with all negotiations being led by Seller). If Seller
approves a new Lease prior to the Closing Date, Buyer shall deposit with the
Escrow Agent the amount of any commission payable to Buyer’s Leasing Agent to be
disbursed to pay for any amounts payable by Seller to Buyer’s Leasing Agent
prior to the Closing Date relating to such new Lease, other than commissions, if
any, due to Seller’s Property Manager which shall be paid by Seller. At Closing,
any unused portion of such funds deposited by Buyer hereunder shall be released
to Buyer. If Closing does not occur for any reason, any unused portion of such
funds deposited by Buyer hereunder shall be released to Seller. In addition,
Buyer shall reimburse Seller at Closing for any other costs incurred by Seller
associated with such new Lease (including, without limitation, any tenant
improvement allowances and Seller’s attorney’s fees and costs),
(c) Compliance with Governmental Regulations. From the Effective Date until
Closing or earlier termination of this Agreement, not knowingly take any action
that would result in a failure to comply in all material respects with all
Governmental Regulations applicable to the Property, it being understood and
agreed that prior to Closing, Seller will have the right to contest any such
Governmental Regulations.
(d) Service Contracts. From the Effective Date until Closing or earlier
termination of this Agreement, Seller shall not enter into any new Service
Contracts or amend any existing Service Contracts without Buyer’s prior written
consent, which shall not be unreasonably withheld, delayed or conditioned and
shall be deemed to have been given if Buyer fails to notify Seller of any
objections thereto within five (5) Business Days after Buyer receives a copy of
such new Service Contract or amendment; provided, however, that if such new
Service Contracts or Service Contracts that are being amended will be fully
performed by Seller on or before the Closing Date or are terminable on 30 days
notice without penalty, Buyer’s consent shall not be required.
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(e) Notices. To the extent received by Seller, from the Effective Date until
Closing or earlier termination of this Agreement, promptly deliver to Buyer
copies of written default notices, notices of lawsuits and notices of violations
affecting the Property and the filing of bankruptcy or insolvency proceedings by
or against any Tenant of which Seller has knowledge.
(f) Preservation of the Existing Loan. Seller shall, from and after the
Effective Date up to and including the Closing Date, perform and discharge in
all material respects all of the duties and obligations required to be performed
by it, as mortgagor under the Existing Loan prior to Closing and shall otherwise
comply with every material covenant and agreement of the mortgagor under the
Existing Loan, in the manner and within the time limits required thereunder.
(g) Reports. From the Effective Date through the Closing Date or earlier
termination of this Agreement, at Buyer’s request, Seller shall deliver to
Buyer, on or before the fifteenth day of each month (i) a monthly GAAP basis
operating statement for the immediately preceding month setting forth all
revenues and expenses with respect to the Property, and (ii) a current, updated
Rent Roll and AR Report.
(h) Insurance. From the Effective Date until Closing or earlier termination of
this Agreement, Seller shall maintain fire and extended coverage insurance on
the Land and Improvements in amounts and with coverages reasonably selected by
Seller so long as such amounts meet the requirements of the Existing Loan
Documents (with such waivers thereof as the Lender may have approved).
7.2 Management Agreements. Seller shall terminate any leasing and/or management
agreements with the Property Manager effective as of the Closing Date and pay
any and all costs and expenses of termination thereof. Upon the consummation of
the transactions contemplated herein, all on-site employees of Seller or the
Property Manager who decide to remain at the Property and who Buyer elects to
retain (collectively, the “Property Employees”) shall become employees at will
of Buyer or its property manager (other than the Union Personnel who shall be
employed by Buyer or its new property manager in accordance with the BOMA
Agreements as provided in Section 18.15 below). The accrued vacation, sick time
and benefit contributions of the Property Employees will be pro rated at Closing
and carried over to their new employer. A list of the Property Employees is
attached hereto as Exhibit Q and made a part hereof.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 General Seller’s Representations and Warranties. Subject to the information
disclosed in the Documents on the Diligence Website as of February 18, 2010 (the
“Posting Deadline”), and to the limitations set forth in Section 8.4 of this
Agreement, Seller hereby represents and warrants to the Buyer, as of the date
hereof and, except as otherwise limited in, and/or updated pursuant to the
terms, this Agreement (including, but not limited to, Section 8.4 below), as of
the Closing Date, as follows:
(a) Organization. Seller is a limited liability company, duly organized and
validly existing under the laws of the State of Delaware and duly registered as
a foreign limited liability company in the State of Illinois.
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(b) Authority. The execution and delivery of this Agreement and the performance
of Seller’s obligations hereunder have been or will be duly authorized by all
necessary action on the part of Seller, and this Agreement constitutes the
legal, valid and binding obligation of Seller.
(c) Non-Contravention. The execution and delivery of this Agreement by Seller
and the consummation by Seller of the transactions contemplated hereby do not
violate any judgment, order, injunction, decree, regulation or ruling of any
court or Authority or conflict with, result in a breach of, or constitute a
default under the organizational documents of Seller, and, subject to receipt of
the Financing Consents, any note or other evidence of indebtedness, any
mortgage, deed of trust or indenture, or any lease or other material agreement
or instrument to which Seller is a party or by which it is bound.
(d) Non-Foreign Entity. Seller is not a “foreign person” or “foreign
corporation” as those terms are defined in the Code.
(e) Consents. Other than the Financing Consents, no consent, waiver, approval or
authorization is required from any person or entity (that has not already been
obtained or made) in connection with the execution and delivery of this
Agreement by Seller or the performance by Seller of the transactions
contemplated hereby which, if not obtained or made, would reasonably be expected
to prevent or delay in any material respect the consummation of this Agreement
or any of the transactions contemplated by this Agreement or in the documents
contemplated to be executed hereunder, or otherwise prevent Seller from
performing its obligations hereunder in any material respect.
(f) Bankruptcy. Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary in bankruptcy or suffered the filing of any
involuntary petition by the Seller’s creditors (iii) suffered the appointment of
a receiver to take possession of all, or substantially all, of the Seller’s
assets, which remains pending, or (iv) suffered the attachment or other judicial
seizure of all, substantially all of the Seller’s assets, which remains pending.
(g) Anti-Terrorism Law. Seller is not acting, directly or indirectly for, or on
behalf of, any person, group, entity or nation named by any Executive Order of
the President of the United States of America (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury
Department, as a terrorist, “Specially Designated National and Blocked Person,”
or other banned or blocked person, entity, or nation pursuant to any law that is
enforced or administered by the United States Office of Foreign Assets Control,
and is not engaging in this transaction, directly or indirectly, on behalf of,
or instigating or facilitating this transaction, directly or indirectly, on
behalf of, any such person, group, entity or nation.
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8.2 Representations and Warranties of the Seller as to the Property. Subject to
the information disclosed in the Documents and matters of public record relating
to or in connection with the Property and subject to the limitations set forth
in Section 8.4 of this Agreement, Seller hereby represents and warrants to the
Buyer, as of the date hereof and as of the Closing Date, as follows:
(a) Service Contracts. The Service Contracts listed on Exhibit D are the only
Service Contracts related to the Property. A true, correct and complete copy of
each of the Service Contracts has been or will be delivered or made available to
Buyer. Seller has received no written claim of default under a Service Contract,
and to Seller’s Knowledge, none of the other parties to any Service Contracts is
in default thereunder.
(b) The tenant rent roll attached hereto as Exhibit E, which includes the
default schedule, accounts receivable detail, list of brokerage agreements and
list of security deposits. (the “Rent Roll”) is true, correct and complete in
all material respects as of the Effective Date with respect to the Leases in
effect at the Property. Seller has entered into no agreements with the Tenants
other than the Leases. True and complete copies of all Leases and all amendments
and guarantees have been made available to Buyer on the Diligence Website as of
the Posting Deadline (and not including lease correspondence customarily kept in
the lease files). Except as set forth on the Rent Roll or the accounts
receivable aging report (the “AR Report”), as of the Effective Date, no Tenant
is in monetary default, and to Seller’s knowledge, (i) no Tenant is in
non-monetary default under the Leases beyond the expiration of applicable notice
and cure periods thereunder, and (ii) Seller is not in default under the Leases
beyond the expiration of applicable notice and cure periods thereunder. To
Seller’s knowledge, except as disclosed on the Rent Roll, no action or
proceeding, voluntary or involuntary, is pending or threatened against any
Tenant under any section or sections of any bankruptcy or insolvency act.
(c) Existing Lease Expenses. The Existing Lease Expenses as of the date of this
Agreement are as listed on Exhibit K attached hereto and made a part hereof.
(d) Brokerage Commissions. There are no unpaid brokerage commissions or finders’
fees payable by the landlord with respect to the current or any renewal term of
any of the Leases other than those set forth in the agreement described on
Exhibit E attached hereto, and Seller has no agreement with any broker with
respect to any renewal or extension term or expansion of any Lease except as set
forth on Exhibit E.
(e) Condemnation. Seller has not received any written condemnation notice from
any Authority with respect to all or part of the Property, and to Seller’s
knowledge, no such action is threatened.
(f) Litigation. Except as set forth on Exhibit M, there are no legal actions,
suits or similar proceedings pending and served, or, to Seller’s knowledge,
threatened against Seller or the Property which (i) are not adequately covered
by existing insurance, subject to applicable deductibles, or (ii) if adversely
determined, would adversely affect the value of the Property, the continued
operations thereof, or Seller’s ability to consummate the transactions
contemplated hereby.
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(g) Environmental Matters. Except as may be disclosed in the Documents, Seller
has received no written notice and has no knowledge of existing violations of
applicable Environmental Laws with respect to the ownership, use, condition, or
operation of the Property by Seller.
(h) Employees. Seller has no employees with respect to the Property. Other than
the Property Employees listed on Exhibit Q, there will be no other employees on
the Closing Date except for new Property Employees, if any, hired (at the same
or lower pay grade ) to replace existing Property Employees who are no longer
on-site employees of Seller or the Property Manager. Seller has received no
written notice of any pending grievances or similar type claims made by any of
the Property Employees.
(i) Union Contracts. There are no union contracts relating to employees of the
Property Manager other than the BOMA Agreements. Seller has received no written
claim of default under the BOMA Agreements, and to Seller’s Knowledge, none of
the other parties to the BOMA Agreements is in default thereunder. To Seller’s
knowledge, Seller has made all employment benefit contributions due under the
BOMA Agreements for which it has been billed.
(j) Existing Loan. Seller has delivered or will deliver true and correct copies
of the Existing Loan Documents and all other instruments and documents in
Seller’s possession evidencing, securing and/or perfecting the Existing Loan to
Buyer. To Seller’s knowledge, (i) no event of default exists and Seller has
received no written notice of an event of default under any of the Existing Loan
Documents, and (ii) there is no state of facts which, with notice or lapse of
time, or both, would constitute a default under any of the Existing Loan
Documents. The total unpaid principal balance of the indebtedness secured
thereby is $61,053,599.00 as of the date of this Agreement
(k) Notices. Other than as disclosed to Buyer in writing prior to the Effective
Date, Seller has not received any written notice from any Authority of any
zoning, building, fire, water, use, health, environmental or other statute,
ordinance, code or regulatory violations issued in respect of the Property.
(l) Insurance. Seller has not received any written notice from any insurance
carrier of defects or inadequacies in the Property which if not corrected would
result in termination of insurance coverage or materially increase the cost
thereof.
(m) Right to Purchase. Other than this Agreement, Seller is not a party to any
contract, agreement or commitment to sell, convey, assign or transfer the
Property, or to provide rights of first refusal, option rights or any other
similar rights relating to the purchase of the Property by third parties.
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(n) Tax Assessment Proceedings. Except as set forth on Exhibit R attached hereto
and made a part hereof, Seller is not a party to any proceeding seeking to
reduce the real estate tax assessment applicable to the Property.
(o) Pugh Jones. Seller has not been informed in writing or orally that Pugh
Jones intends to exercise the early termination right contained in its Lease.
8.3 Buyer’s Representations and Warranties. Buyer represents and warrants to
Seller, as of the date hereof and as of the Closing Date, the following:
(a) Organization. Buyer is a limited liability company, duly organized and
validly existing under the laws of the State of Delaware.
(b) Authority. The execution and delivery of this Agreement and the performance
of Buyer’s obligations hereunder have been or will be duly authorized by all
necessary action on the part of Buyer, and this Agreement constitutes the legal,
valid and binding obligation of Buyer.
(c) Non-Contravention. The execution and delivery of this Agreement by Buyer and
the consummation by Buyer of the transactions contemplated hereby will not
violate any judgment, order, injunction, decree, regulation or ruling of any
court or Authority or conflict with, result in a breach of or constitute a
default under the organizational documents of Buyer, any note or other evidence
of indebtedness, any mortgage, deed of trust or indenture, or any lease or other
material agreement or instrument to which Buyer is a party or by which it is
bound.
(d) Consents. No consent, waiver, approval or authorization is required from any
person or entity (that has not already been obtained) in connection with the
execution and delivery of this Agreement by Buyer or the performance by Buyer of
the transactions contemplated hereby.
(e) Bankruptcy. Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary in bankruptcy or suffered the filing of any
involuntary petition by the Buyer’s creditors (iii) suffered the appointment of
a receiver to take possession of all, or substantially all, of the Buyer’s
assets, which remains pending or (iv) suffered the attachment or other judicial
seizure of all, substantially all of the Buyer’s assets, which remains pending.
(f) Anti-Terrorism Law.
(i) None of Buyer or, to Buyer’s knowledge, Buyer’s Affiliates, is in violation
of Executive Order No. 13224 (Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit, or Support Terrorism) (the
“Executive Order”) and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Action of 2001,
Public Law 107-56 (collectively, the “Anti-Money Laundering and Anti-Terrorism
Laws”).
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(ii) None of Buyer or, to Buyer’s knowledge, Buyer’s Affiliates, is acting,
directly or indirectly, on behalf of terrorists, terrorist organizations or
narcotics traffickers, including those persons or entities that appear on the
Annex to the Executive Order, or are included on any relevant lists maintained
by the Office of Foreign Assets Control of U.S. Department of Treasury, U.S.
Department of State, or other U.S. government agencies, all as may be amended
from time to time.
(iii) None of Buyer or, to Buyer’s knowledge, Buyer’s Affiliates or, without
inquiry, any of its brokers or other agents, in any capacity in connection with
the purchase of the Property (A) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person included in the lists set forth in the preceding paragraph, (B) deals
in, or otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order, or (C) engages in
or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Money Laundering and Anti-Terrorism Laws.
(iv) Buyer understands and acknowledges that Seller may become subject to
further anti-money laundering regulations, and agrees to execute instruments,
provide information, or perform any other acts as may reasonably be requested by
Seller, for the purpose of: (A) carrying out due diligence as may be required by
applicable law to establish Buyer’s identity and source of funds;
(B) maintaining records of such identities and sources of funds, or
verifications or certifications as to the same; and (C) taking any other actions
as may be required to comply with and remain in compliance with anti-money
laundering regulations applicable to Buyer.
(v) Neither Buyer, nor any person controlling or controlled by Buyer, is a
country, territory, individual or entity named on a Government List, and the
monies used in connection with this Agreement and amounts committed with respect
thereto, were not and are not derived from any activities that contravene any
applicable anti-money laundering or anti-bribery laws and regulations (including
funds being derived from any person, entity, country or territory on a
Government List or engaged in any unlawful activity defined under Title 18 of
the United States Code, Section 1956(c)(7)).
8.4 Limitations on Liability and Representations and Warranties.
(a) The representations and warranties of Seller set forth in Sections 8.1 and
8.2, together with Seller’s liability for any breach before Closing of any of
Seller’s interim operating covenants under Article VII, will survive the Closing
for a period of twelve (12) months. The Closing Surviving Obligations will
survive Closing for twelve (12) months unless a different period is otherwise
provided in this Agreement. All other representations, warranties, covenants and
agreements made or undertaken by Seller under this Agreement, unless otherwise
specifically provided herein, will not survive the Closing Date but will be
merged into the Deed and other Closing documents delivered at the Closing.
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(b) Buyer will not have any right to bring any action against Seller as a result
of any untruth or inaccuracy of such representations and warranties, or any such
breach, unless and until the aggregate amount of all liability and losses
arising out of any such untruth or inaccuracy, or any such breach, exceeds
$100,000.00 In addition, in no event will Seller’s liability for all such
breaches exceed, in the aggregate, $2,000,000.00.
(c) Notwithstanding anything to the contrary contained in this Agreement, (i) if
at the time of its execution of this Agreement, Buyer has knowledge that there
exists any specific breach of or inaccuracy of any representation or warranty
made by Seller in this Agreement, then Seller shall have no liability hereunder
by reason of that specific breach or inaccuracy, and that representation or
warranty will be considered modified for the purposes of this Agreement to
reflect the facts or circumstances that constitute or give rise to that specific
breach or inaccuracy, and (ii) Seller shall have no liability with respect to
any of its representations, warranties and covenants herein if, prior to the
Closing, Buyer has actual knowledge of any breach of a representation, warranty
or covenant of Seller herein, or Buyer obtains knowledge (from whatever source,
including, without limitation, any tenant estoppel certificates or any of the
Documents, as a result of Buyer’s due diligence, the inclusion of any
information in or written disclosure by Seller or Seller’s agents and employees)
that contradicts any of Seller’s representations and warranties herein, and
Buyer nevertheless consummates the transaction contemplated by this Agreement.
(d) For purposes of this Agreement and any document delivered at Closing,
whenever the phrase “to Seller’s knowledge,” or the “knowledge” of Seller or
words of similar import are used, they shall be deemed to refer to facts within
the actual knowledge only of Jeffrey A. Patterson, Paul Del Vecchio, Dennis
Lambert and Christina Hale, and no others, at the times indicated only, without
duty of inquiry whatsoever. Seller represents and warrants that the
aforementioned individuals have operational knowledge of and familiarity with
the Property and the management thereof. Buyer acknowledges 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 Buyer. Buyer covenants that
it will bring no action of any kind against such individuals, any shareholder,
partner or member of Seller, as applicable, or related to or arising out of
these representations and warranties.
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(e) All representations and warranties of Seller contained herein shall be
remade at the time of the Closing pursuant to Seller’s certificate as identified
in Section 10.2(k), except to the extent Seller discloses in such certificate
that any such representations and warranties are not true. In no event shall
Seller be liable to Buyer for, or be deemed to be in default hereunder by reason
of, any breach of representation or warranty which results from any change that
(i) occurs between the Effective Date and the date of Closing and (ii) is
expressly permitted under the terms of this Agreement or is beyond the
reasonable control of Seller to prevent; provided, however, and subject to
Section 8.4(f) below, that the occurrence of a change which is not permitted
hereunder and is beyond the reasonable control of Seller to prevent shall, if
materially adverse to Buyer, constitute the non-fulfillment of the condition set
forth in Section 9.1(b). For purposes of this Section 8.4(e), a change having an
adverse effect in excess of $100,000 in the aggregate shall be deemed to be
materially adverse to Buyer. If, despite changes or other matters described in
the certificate delivered pursuant to Section 10.2(j), the Closing occurs,
Seller’s representations and warranties set forth in this Agreement shall be
deemed to have been modified by all statements made in such certificate.
(f) If the representations or warranties relating to the Leases set forth in
Section 8.2(b) or the Service Contracts set forth on Exhibit D and the status of
the Tenants or other parties thereunder contained herein were true in all
material respects as of the Effective Date, then, except with respect to
Accenture and VivaKi, Inc., no change in circumstances or status of the Tenants
or other parties (e.g., defaults, bankruptcies, below-market status or other
adverse matters relating to such Tenant or other party) occurring after the
Effective Date, shall permit Buyer to terminate this Agreement or constitute
grounds for Buyer’s failure to close.
ARTICLE IX
CONDITIONS PRECEDENT TO CLOSING
9.1 Conditions Precedent to Obligation of Buyer. The obligation of Buyer to
consummate the transaction hereunder shall be subject to the fulfillment on or
before the Closing Date of all of the following conditions, any or all of which
may be waived by Buyer in its sole discretion:
(a) Seller shall have delivered to Escrow Agent all of the items required to be
delivered to Buyer pursuant to the terms of this Agreement, including but not
limited to, those provided for in Section 10.2.
(b) All of the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects as of the date of
Closing as updated pursuant to the Seller’s certificate identified in
Section 10.2(k) and subject to the terms of Sections 8.4(e) and 8.4(f) above.
(c) Seller shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by
Seller as of the Closing Date.
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(d) As of the Closing Date, the Title Company shall be prepared to deliver to
Buyer an initialed mark-up of the Title Commitment consistent with the
requirements for the Title Policy.
(e) The estoppel contingency set forth in Section 5.4 shall have been satisfied.
(f) If Buyer assumes the Existing Loan, Buyer shall have obtained the Financing
Consents as provided in Article XVII.
9.2 Conditions Precedent to Obligation of Seller. The obligation of Seller to
consummate the transaction hereunder shall be subject to the fulfillment on or
before the date of Closing (or as otherwise provided) of all of the following
conditions, any or all of which may be waived by Seller in its sole discretion:
(a) Escrow Agent shall have received the Purchase Price as adjusted pursuant to,
and payable in the manner provided for, in this Agreement, and Buyer shall have
provided written authority to Escrow Agent to release such amount to Seller.
(b) Buyer shall have delivered to Seller all of the items required to be
delivered to Seller pursuant to the terms of this Agreement, including but not
limited to, those provided for in Section 10.3.
(c) All of the representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects as of the date of
Closing (with appropriate modifications permitted under this Agreement or not
materially adverse to Seller).
(d) Buyer shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by Buyer
as of the Closing Date.
(e) If Buyer assumes the Existing Loan, Buyer shall have obtained the Financing
Consents, and such Financing Consents shall provide that Seller and the Existing
Guarantors are released from all obligations under the Existing Loan Documents
arising from and after the Closing Date.
9.3 Failure of Condition. Subject to the provisions of Sections 8.4(e) and
8.4(f), if any condition set forth in Section 9.1 or Section 9.2 is not
satisfied or waived on or before the Closing, then the party to this Agreement
whose obligations are conditioned upon the satisfaction of such condition, so
long as such party has acted in good faith and with due diligence in performing
its obligations hereunder and cooperating with the other party in its
performance hereunder, may (a) if such failure of condition constitutes a
default under this Agreement, pursue its remedies under Article XIII, or (b) if
such failure of condition does not constitute a default under this Agreement,
terminate this Agreement by written notice delivered at or prior to the
Scheduled Closing Date, in which event the Earnest Money shall be paid to Buyer
by Escrow Agent. Upon termination of this Agreement pursuant to this
Section 9.3, except with respect to the Termination Surviving Obligations, this
Agreement shall be null and void and the parties shall have no further
obligation to each other.
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ARTICLE X
CLOSING
10.1 Closing.
(a) Subject to the extension option described in Section 10.1(b) below, the
consummation of the transaction contemplated by this Agreement by delivery of
documents and payments of money shall take place through escrow at the offices
of the Escrow Agent on the date (the “Scheduled Closing Date”) that is ten
(10) Business Days after the Lender approves Buyer’s assumption of the Existing
Loan (the “Assumption Approval”), but in no event earlier than seventy-five
(75) days after the Board Approval Date; provided, however, that if Buyer has
not obtained such Assumption Approval by the Outside Date (subject to the
extension option described in Section 10(b) below), notwithstanding Buyer’s
diligent and good faith, commercially reasonable efforts to obtain the same,
this Agreement shall terminate, the Earnest Money shall be returned to Buyer,
and the parties shall have no further obligation to each other except with
respect to the Termination Surviving Obligations. At Closing, the events set
forth in this Article X will occur, it being understood that the performance or
tender of performance of all matters set forth in this Article X are mutually
concurrent conditions which may be waived by the party for whose benefit they
are intended. The acceptance of the Deed by Buyer shall be deemed to be full
performance and discharge of each and every agreement and obligation on the part
of Seller to be performed hereunder other than the Closing Surviving
Obligations, unless otherwise specifically provided herein.
(b) Notwithstanding anything to the contrary contained herein, each of Seller
and Buyer shall have the right, at its option, to extend the Scheduled Closing
Date for fifteen (15) days (the “Extension Period”) in order to obtain the
Assumption Approval by giving the other party written notice thereof no later
than three (3) Business Days prior to the original Scheduled Closing Date. If
either Seller or Buyer exercises its right to extend the Scheduled Closing Date
for the Extension Period as provided herein, then all references herein to the
“Scheduled Closing Date” shall mean the Scheduled Closing Date as so extended.
(c) Notwithstanding anything to the contrary contained herein, if Buyer delivers
the Defeasance Notice pursuant to Section 17.6 below (or if Buyer is deemed to
have delivered the Defeasance Notice pursuant to Section 17.2(c) below), the
Scheduled Closing Date shall be the Outside Date.
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10.2 Seller’s Closing Obligations. At the Closing, Seller will deliver to Buyer
the following documents:
(a) A special warranty deed in the form attached hereto as Exhibit F, duly
executed and acknowledged by Seller (the “Deed”), conveying to Buyer the Real
Property and the Improvements located thereon, subject only to the Permitted
Exceptions;
(b) A blanket assignment and bill of sale in the form attached hereto as
Exhibit G (the “Bill of Sale”), duly executed by Seller, assigning and conveying
to Buyer, without representation or warranty, title to the Personal Property;
(c) A counterpart original of an assignment and assumption of Seller’s interest,
as lessor, in the Leases and Security Deposits in the form attached hereto as
Exhibit H (the “Assignment of Leases”), duly executed by Seller, conveying and
assigning to Buyer all of Seller’s right, title and interest, as lessor, in the
Leases and Security Deposits;
(d) A counterpart original of an assignment and assumption of Seller’s interest
in the Service Contracts, any leasing commission agreements affecting the
Property and the Licenses and Permits in the form attached hereto as Exhibit I
(the “Assignment of Contracts”), duly executed by Seller, conveying and
assigning to Buyer all of Seller’s right, title, and interest, if any, in the
Service Contracts, the leasing commission agreements and the Licenses and
Permits;
(e) Written notices executed by Seller (to be countersigned by Buyer) and to be
addressed and mailed to the Tenants on the Closing Date by Buyer,
(i) acknowledging the sale of the Property to Buyer, (ii) acknowledging that
Buyer has received and that Buyer is responsible for the Security Deposit to the
extent credited to or received by Buyer, and (iii) indicating that rent should
thereafter be paid to Buyer and giving instructions therefor (the “Tenant Notice
Letters”);
(f) Evidence reasonably satisfactory to Buyer and Title Company that the person
executing the documents delivered by Seller pursuant to this Section 10.2 on
behalf of Seller has full right, power, and authority to do so;
(g) A certificate in the form attached hereto as Exhibit J (“Certificate as to
Foreign Status”) certifying that Seller is not a “foreign person” as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended;
(h) All original estoppel certificates in Seller’s possession (or copies where
originals are not available) to the extent not previously delivered to Buyer;
(i) Original copies of the state, county and city real estate transfer tax
declarations executed by Seller (the “Tax Declarations”);
(j) The Owner’s Affidavit referred to in Section 6.2 above;
(k) A certificate, dated as of the date of Closing confirming that the
representations and warranties of Seller contained in this Agreement are true
and correct in all material respects as of the date of Closing (with appropriate
modifications to reflect any changes therein including without limitation any
changes described in Section 8.4 hereof) or identifying any representation or
warranty which is not, or no longer is, true and correct and explaining the
state of facts giving rise to the change;
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(l) A “full payment certificate” from the City of Chicago Department of Water
Management;
(m) All keys to the Property and original Leases, lease files located in the
Property Manager’s office, Licenses and Permits, the Service Contracts and any
leasing commission agreements affecting the Property in Seller’s possession (or
copies where originals are not available), all of which may remain on site at
the Property and need not be delivered to the location of the Closing;
(n) Written notices executed by Seller (to be countersigned by Buyer) and to be
addressed and mailed to the vendors under the Service Contracts on the Closing
Date by Buyer, acknowledging the sale of the Property to Buyer and that the
applicable Service Contract has been assigned to Buyer (the “Service Contract
Notice Letters”);
(o) A certificate issued by the Illinois Department of Revenue stating that no
withholding of the proceeds from the sale is required in connection with the
“bulk sales” provisions of the Illinois Income Tax Act (35 ILCS 5/902(d)) and
the Retailers Occupation Tax Act (35 ILCS 120/5j) and a certificate issued by
the Chicago Department of Revenue (collectively with the Illinois Department of
Revenue, the “Revenue Departments”) stating that no withholding of the proceeds
from the sale is required in connection with the Chicago bulk sales ordinance,
or, if such certificates are not available as of the Closing Date, Seller shall
continue to pursue such certificates from the Revenue Departments on a
post-closing basis and shall deliver to Buyer at Closing a certificate issued by
Seller whereby Seller agrees to indemnify, protect, and hold Buyer harmless
against and from any and all damages, losses, liabilities, obligations,
penalties, claims, litigation, demands, defenses, judgments, proceedings, costs,
disbursements, or expenses which may be imposed upon or incurred by or asserted
against Buyer and arising from or out of any demand for unpaid taxes or a claim
for lien issued by either of the Revenue Departments pursuant to the Illinois
law against Seller related to the sale of the Property, which indemnity shall
survive the Closing; and
(p) Such other documents and instruments as may be required by any other
provision of this Agreement or as may reasonably be required to carry out the
terms and intent of this Agreement.
10.3 Buyer’s Closing Obligations. On the Closing Date, Buyer, at its sole cost
and expense, will deliver the following items to Seller at Closing as provided
herein:
(a) The Purchase Price, after all adjustments are made as herein provided, by
Federal Reserve wire transfer of immediately available funds, in accordance with
the timing and other requirements of Section 3.3;
(b) A counterpart original of the Assignment of Leases, duly executed by Buyer;
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(c) A counterpart original of the Assignment, duly executed by Buyer;
(d) The Tenant Notice Letters, duly executed by Buyer;
(e) The Service Contract Notice Letters, duly executed by Buyer;
(f) Counterpart originals of the Tax Declarations, duly executed by Buyer;
(g) A counterpart original of the Closing Statement, duly executed by Buyer; and
(h) Such other documents as may be reasonably necessary or appropriate to effect
the consummation of the transaction which is the subject of this Agreement,
including, without limitation, unless Buyer has delivered the Defeasance Notice
(or is deemed to have delivered the Defeasance Notice), documents required to
obtain the Financing Consent and to substitute the New Guarantor for the
Existing Guarantor under the Assumed Guarantees and to obtain the release of
Existing Guarantors from any and all liability under the Assumed Guarantees as
provided in Section 17.2.
10.4 Prorations.
(a) Seller and Buyer agree to adjust, as of 11:59 p.m. Central Time on the day
preceding the Closing Date (the “Proration Time”), the following (collectively,
the “Proration Items”):
(i) Rentals, in accordance with Section 10.4(b) below;
(ii) Any prepaid rents;
(iii) Amounts payable under the assigned Service Contracts;
(iv) Pre-paid expenses, if any; and
(v) All ad valorem real estate taxes. Ad valorem real estate taxes with respect
to the Property shall be prorated as of the Proration Time on a cash basis for
the calendar year in which the Closing occurs, regardless of the year for which
such taxes are assessed. Seller and Buyer acknowledge that real estate taxes in
Illinois are payable a year in arrears. Accordingly, for avoidance of doubt, if
the Closing occurs in calendar year 2010, the real estate taxes that shall be
prorated at Closing are the 2009 real estate taxes that are payable in 2010, and
there will be no proration with respect to the 2010 taxes that will not be
payable until 2011. An example of the methodology for the real estate tax
proration is attached as Exhibit L.
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Seller will be charged and credited for the amounts of all of the Proration
Items relating to the period up to and including the Proration Time, and Buyer
will be charged and credited for all of the Proration Items relating to the
period after the Proration Time. The estimated Closing prorations shall be set
forth on a preliminary closing statement to be prepared by Seller and submitted
to Buyer prior to the Closing Date (the “Closing Statement”). The Closing
Statement shall be signed by Buyer and Seller at Closing. The proration shall be
paid at Closing by Buyer to Seller (if the prorations result in a net credit to
Seller) or by Seller to Buyer (if the prorations result in a net credit to
Buyer) by increasing or reducing the cash to be delivered by Buyer in payment of
the Purchase Price at the Closing. If the actual amounts of any of the Proration
Items are not known as of the Closing Date, the prorations will be made at
Closing on the basis of the best evidence then available; thereafter, when
actual figures are received, re-prorations will be made on the basis of the
actual figures, and a final cash settlement will be made between Seller and
Buyer. No prorations will be made in relation to insurance premiums, and
Seller’s insurance policies will not be assigned to Buyer. The parties will use
reasonable efforts to obtain final readings and final billings for utilities as
of the Closing Date, in which event no proration will be made at the Closing
with respect to utility bills; if final readings are not obtained, prorations
shall be based on the utility charges for the immediately preceding month.
Seller will be entitled to all deposits presently in effect with the utility
providers, and Buyer will be obligated to make its own arrangements for any
deposits with the utility providers. The provisions of this Section 10.4(a) will
survive the Closing for twelve (12) months.
(b) Buyer will receive a credit on the Closing Statement for the prorated amount
(as of the Proration Time) of all Rental previously paid to or collected by
Seller and attributable to any period following the Proration Time. After the
Closing, Seller will cause to be paid or turned over to Buyer all Rental, if
any, received by Seller after Closing and attributable to any period following
the Proration Time. “Rental” as used herein includes fixed monthly rentals,
additional rentals, escalation rentals (which include each Tenant’s prorata
share of building operation and maintenance costs and expenses as provided for
under the Lease, to the extent the same exceeds any expense stop specified in
such Lease), retroactive rentals, all administrative charges, utility charges,
tenant or real property association dues, storage rentals, special event
proceeds, temporary rents, telephone receipts, locker rentals, vending machine
receipts and other sums and charges payable by Tenants under the Leases or from
other occupants or users of the Property. Rental is “Delinquent” when it was due
prior to the Closing Date, and payment thereof has not been made on or before
the Proration Time. Delinquent Rental will not be prorated. With respect to
Tenants still in occupancy, Buyer agrees to use commercially reasonable efforts
with respect to the collection of any Delinquent Rental, but Buyer will have no
liability for the failure to collect any such amounts and will not be required
to pursue legal action to enforce collection of any such amounts owed to Seller
by any Tenant. Seller reserves the right to pursue the collection of Delinquent
Rental; provided, however, that so long as Buyer is using commercially
reasonable efforts to collect Delinquent Rental from Tenants still in occupancy,
Seller shall refrain from taking any action to pursue the collection of
Delinquent Rental from such Tenants for a period of twelve (12) months after
Closing (except that Seller may continue to pursue litigation to collect
Delinquent Rental from those Tenants against whom Seller filed suit prior to the
Closing Date, but Seller shall have no right to terminate any such Tenant’s
Lease). All sums collected by Buyer from and after Closing from each Tenant
(excluding tenant specific billings for tenant work orders and other specific
services as described in and governed by Section 10.4(d) below) will be applied,
unless designated otherwise by such Tenant, first to current amounts due to
Buyer, and then to delinquencies owed by such Tenant to Seller. Buyer will
promptly remit to Seller any sums due Seller. Notwithstanding anything to the
contrary contained in this Agreement, any additional rentals based upon a
percentage of the Tenant’s business during a specified annual or other period
(sometimes referred to as “percentage rent”) shall be prorated as of the Closing
Date on an if, as and when collected basis.
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(c) At the Closing, Seller shall deliver to Buyer a list of additional rent,
however characterized, under each Lease, including without limitation, real
estate taxes, electrical charges, utility costs and operating expenses
(collectively, “Operating Expenses”) billed to Tenants for the calendar year in
which the Closing occurs (both on a monthly basis and in the aggregate), the
basis on which the monthly amounts are being billed and the amounts incurred by
Seller on account of the components of Operating Expenses for such calendar
year. Upon the reconciliation by Buyer of the Operating Expenses billed to
Tenants, and the amounts actually incurred for such calendar year, Seller and
Buyer shall be liable for overpayments of Operating Expenses, and shall be
entitled to payments from Tenants with respect to underpayments of Operating
Expenses, as the case may be, on a pro-rata basis based upon each party’s period
of ownership during such calendar year. Such reconciliation between Buyer and
Seller shall occur no later than one hundred twenty (120) days after the end of
such calendar year. Prior to Closing, Seller shall send the Tenants billing
statements reflecting Landlord’s determination of 2009 Operating Expenses.
(d) With respect to specific tenant billings for work orders, special items
performed or provided at the request of a Tenant or other specific services,
which are collected by Buyer after the Closing Date but relate to the foregoing
specific services rendered by Seller prior to the Proration Time, then
notwithstanding anything to the contrary contained herein, Buyer shall cause the
amounts so designated and collected from such Tenant to be paid to Seller on
account thereof.
(e) Buyer will receive a credit on the Closing Statement for the cash Security
Deposits (as opposed to those in the form of a letter of credit), less those
that are returned to Tenants upon the expiration of Leases. The originals of any
Security Deposits in form other than cash (including letters of credit) shall be
delivered to Buyer at Closing, together with appropriate instruments of transfer
or assignment executed by Seller. Any applicable fees and charges imposed by the
issuer(s) to effect a transfer of any non-cash Security Deposits shall be paid
by Seller, to the extent not the obligation of the subject Tenant under its
Lease, as a credit on the Closing Statement. Seller and Buyer shall reasonably
cooperate with each other following the Closing so as to complete the transfer
of the Letters of Credit and cause Buyer to be the beneficiary thereunder. Until
Buyer is a named beneficiary thereunder, Buyer may, upon notice to Seller,
deliver a Letter of Credit to Seller, who shall, to the extent permitted under
the terms of the relevant Lease and such Letter of Credit, request a draw upon
the same and deliver to Buyer proceeds received thereon. Buyer hereby
indemnifies and holds Seller harmless from any and all losses, costs, damages,
liens, claims, counterclaims. liabilities and expenses (including, but not
limited to, reasonable attorneys’ fees, court costs and disbursements) incurred
by Seller as the result of Seller taking any steps pursuant to a request of
Buyer, including drawing, or seeking to draw, on any Tenant’s Security Deposit.
Notwithstanding anything to the contrary contained herein, Seller shall have the
right to apply the cash Security Deposits against lease obligations of
defaulting Tenants prior to Closing, and, in such event, Buyer shall receive a
credit on the Closing Statement for the amount so applied by Seller.
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(f) If Buyer assumes the Existing Loan, at Closing, Buyer will pay Seller the
amount of all escrows held by the Lender under the Existing Loan as provided in
Section 17.4, and Seller will assign to Buyer the funds being held in such
escrows. Alternatively, at Seller’s option, Buyer will deposit with Lender
amounts equal to the amounts being held in such escrows, and Lender will release
the existing escrows directly to Seller. Attached hereto as Exhibit S is a list
of the escrows being held by Lender, together with amounts held therein as of
the Effective Date.
(g) Notwithstanding any provision of this Section 10.4 to the contrary, Buyer
shall be responsible for all leasing commissions, tenant improvement costs,
legal costs and other expenditures whether incurred by Seller before Closing or
due after Closing with respect to the Pending Leases (but only to the extent
such costs are indicated as Buyer’s responsibility on Exhibit T) and any New
Lease Agreements entered into after the Effective Date in accordance with the
provisions of Section 7.1(b). Buyer shall receive a credit at Closing for the
unpaid leasing commissions, tenant improvement costs, rent abatements and other
similar obligations due with respect to any existing Leases (but not with
respect to any New Lease Agreements) as listed on Exhibit K attached hereto and
made a part hereof (the “Existing Lease Expenses”).
10.5 Closing Costs. Costs of the Title Company and other costs incurred in
connection with the Closing will be allocated as follows:
(a) Seller shall pay (i) Seller’s attorney’s fees; (ii) one-half (1/2) of escrow
fees, if any; (iii) 100% of the State of Illinois and Cook County real estate
transfer taxes; (iii) the premium for the Title Policy (but excluding the cost
of any endorsements and the cost of any re-insurance that may be required or
desired by Buyer or any lender of Buyer); and (iv) Seller’s Share of the loan
assumption fee.
(b) Buyer shall pay (i) all costs of any additional coverage under the Title
Policy or endorsements or deletions to the Title Policy that are desired by
Buyer and the cost of any re-insurance required or desired by Buyer or any
Lender; (ii) all premiums and other costs for any mortgagee policy of title
insurance, if any, including but not limited to any endorsements or deletions;
(iii) the costs of recording the Deed to the Property; (iv) 100% of the City of
Chicago real estate transfer taxes; (v) the cost of the Updated Survey;
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(vi) Buyer’s attorney’s fees; (vii) one-half (1/2) of escrow fees, if any; and
(viii) all Financing Consent Costs other than Seller’s Share of the loan
assumption fee, if applicable.
(c) Any other costs and expenses of Closing not provided for in this
Section 10.5 shall be allocated between Buyer and Seller in accordance with the
custom in the area in which the Property is located.
ARTICLE XI
CONDEMNATION AND CASUALTY
11.1 Casualty. If, prior to the Closing Date, all or a Significant Portion of
any of the Real Property and Improvements is destroyed or damaged by fire or
other casualty, Seller will notify Buyer in writing of such casualty. Buyer will
have the option to terminate this Agreement upon advance written notice to
Seller given not later than fifteen (15) days after receipt of Seller’s notice.
If this Agreement is terminated, the Earnest Money and all interest accrued
thereon will be returned to Buyer and thereafter neither Seller nor Buyer will
have any further rights or obligations to the other hereunder except with
respect to the Termination Surviving Obligations. If Buyer does not elect to
terminate this Agreement, or less than a Significant Portion of the Real
Property and Improvements is destroyed or damaged as aforesaid, Seller will not
be obligated to repair such damage or destruction but (a) Seller will assign and
turn over to Buyer the insurance proceeds for the repair of such damage or
destruction net of any sums expended by Seller toward the restoration or repair
of the Property and reasonable collection costs (or if such have not been
awarded, all of its right, title and interest therein) payable with respect to
such fire or other casualty up to the amount of the Purchase Price and (b) the
parties will proceed to Closing pursuant to the terms hereof without abatement
of the Purchase Price, except that Buyer will receive a credit for any insurance
deductible amount. In the event Seller elects to perform any repairs as a result
of a casualty, Seller will be entitled to deduct its costs and expenses from any
amount to which Buyer is entitled under this Section 11.1, which right shall
survive the Closing.
11.2 Condemnation of Property. In the event of (a) any condemnation or sale in
lieu of condemnation of all of the Property; or b) any condemnation or sale in
lieu of condemnation of any Significant Portion of any of the Real Property and
Improvements; or (c) any condemnation which would permit any Major Tenant to
terminate its lease and such Major Tenant does in fact terminate its Lease,
Buyer will have the option, to be exercised within fifteen (15) days after
receipt of notice of such condemnation or sale, of terminating Buyer’s
obligations under this Agreement, or electing to have this Agreement remain in
full force and effect. In the event that either (i) any condemnation or sale in
lieu of condemnation of the Property is not a Significant Portion of any of the
Real Property and Improvements, or (ii) Buyer does not terminate this Agreement
pursuant to the preceding sentence, Seller will assign to Buyer any and all
claims for the proceeds of such condemnation or sale to the extent the same are
applicable to the Property, net of any sums expended by Seller toward the
restoration or repair of the Property, and Buyer will take title to the Property
with the assignment of such proceeds and subject to such condemnation and
without reduction of the Purchase Price. Should Buyer elect to terminate Buyer’s
obligations under this Agreement under the provisions of this Section 11.2, the
Earnest Money and any interest thereon will be returned to Buyer and neither
Seller nor Buyer will have any further obligation under this Agreement, except
for the Termination Surviving Obligations.
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ARTICLE XII
CONFIDENTIALITY
12.1 Confidentiality. Except as hereinafter permitted, Seller and Buyer each
expressly acknowledge and agree that the transactions contemplated by this
Agreement and the terms, conditions, and negotiations concerning the same will
be held in the strictest confidence by each of them and will not be disclosed by
either of them except to their respective Party Representatives and other
Licensee Parties, and except and only to the extent that such disclosure may be
necessary for their respective performances hereunder. Except as expressly
provided in this Agreement, Buyer further acknowledges and agrees that, unless
and until the Closing occurs, all information obtained by Buyer in connection
with the Property will not be disclosed by Buyer to any third persons without
the prior written consent of Seller. Nothing contained in this Article XII will
preclude or limit either party to this Agreement from issuing a press release or
making other disclosures with respect to any information otherwise deemed
confidential under this Article XII (a) in response to lawful process or
subpoena or other valid or enforceable order of a court of competent
jurisdiction (provided that the party receiving any such subpoena shall promptly
notify the other party and cooperate with the other party in good faith and to
the extent permitted by law in any attempt such other party may desire to make
to contest such subpoena or to obtain a protective order), (b) required by law
or (c) required by rule or regulation of the Securities and Exchange Commission
or the New York Stock Exchange, including without limitation in any filings
required by any Authorities; provided, however, that in the event of any such
required disclosure, the disclosing party shall to the extent practicable, use
good faith efforts to provide the other party with copies of the material being
disclosed in advance of such disclosure and in good faith consider any comments
the other party may have on such disclosure. In determining whether a disclosure
contemplated in the preceding sentence is required by law or by rule or
regulation of the Securities and Exchange Commission or the New York Stock
Exchange, the disclosing party is entitled to rely upon the written advice of
counsel. The provisions of this Article XII will survive the termination of this
Agreement. Notwithstanding anything in this Article XII to the contrary, after
Closing, Seller and Buyer shall be permitted to issue press releases as to the
occurrence of the transaction and the parties involved, provided that the form
and content of such press release shall be subject to the approval of the other
party, not to be unreasonably withheld or delayed.
12.2 Tax Related Disclosures. Notwithstanding anything set forth in this
Agreement to the contrary or in any other agreement to which Buyer, the Seller
Parties or their respective legal counsel, accountants, consultants, officers,
partners, member, directors, shareholders, brokers, lenders, consultants or
other Licensee Parties (collectively the “Party Representatives”) are bound,
each of the foregoing parties is expressly authorized to disclose the “tax
treatment” and “tax structure” (as those terms are defined in Treas. Reg. §§
1.6011-4(c)(8) and (9), respectively) of the transaction contemplated by this
Agreement (the “Transaction”) and all materials of any kind (including opinions
or other tax analysis) relating to such “tax treatment” or “tax structure” of
the Transaction; provided, however, (i) the foregoing authorization applies only
to the extent necessary to prevent the Transaction from constituting a
“confidential transaction” within the meaning of Treas. Reg. § 1.6011-4(b)(3),
and (ii) in no event will the names or identities of the Party Representatives,
or any amounts invested by any of the foregoing in the Transaction, be
disclosed.
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ARTICLE XIII
REMEDIES
13.1 Notice and Cure. No party shall be deemed to be in default hereunder unless
such party fails to cure an alleged default within five (5) Business Days after
receipt from the other party of written notice of the alleged default; provided,
however, that if such alleged default is not susceptible of being cured within
said five (5) Business Day period, such party shall not be deemed in default
hereunder so long as such party commences to cure the alleged default within
said five (5) Business Day period and diligently prosecutes the same to
completion within twenty (20) days. Notwithstanding the foregoing, the failure
of Buyer to deposit the Purchase Price in accordance with the timing and other
requirements of Section 3.3, the failure of Buyer to deliver the items on the
Required Items Checklist or any Additional Assumption Information in accordance
with the timing requirements of Section 17.2, or the willful failure by a party
to timely submit its respective closing documents pursuant to Article X shall be
an immediate default that shall not be subject to the foregoing notice and cure
periods.
13.2 Default by Seller. In the event the Closing and the transactions
contemplated hereby do not occur as herein provided by reason of any default of
Seller, Buyer may, as Buyer’s sole and exclusive remedy under this Agreement, at
law and in equity, elect by notice to Seller within thirty (30) days following
the Scheduled Closing Date, either of the following: (a) to terminate this
Agreement, in which event Buyer will receive from the Escrow Agent the Earnest
Money, together with all interest accrued thereon, and Seller shall reimburse
Buyer for all application costs paid to the Lender in connection with the
Financing Consents, whereupon Seller and Buyer will have no further rights or
obligations under this Agreement, except with respect to the Termination
Surviving Obligations, or (b) to seek to enforce specific performance of
Seller’s obligation to execute the documents required to convey the Property to
Buyer as contemplated herein, it being understood and agreed that the remedy of
specific performance shall not be available to enforce any other obligation of
Seller hereunder. Notwithstanding anything contained herein to the contrary, if
Seller shall have intentionally taken an action which precludes the ability of
Buyer to maintain an action for specific performance, then, in addition to
receiving a return of Earnest Money pursuant to clause (a) above, Buyer shall be
entitled to seek damages for Seller’s default, which damages shall not to exceed
Four Million and No/100 Dollars ($4,000,000.00). Except as set forth above,
Buyer expressly waives its rights to seek damages in the event of Seller’s
default hereunder. Buyer shall be deemed to have elected to terminate this
Agreement and receive back the Earnest Money if Buyer fails to file suit for
specific performance against Seller in a court having jurisdiction in the county
and state in which the Property is located on or before thirty (30) Business
Days following the Scheduled Closing Date. Notwithstanding the foregoing,
nothing contained herein (other than Section 8.4 hereof) will limit Buyer’s
remedies at law, in equity or as herein provided in the event of a breach by
Seller of any of the Termination Surviving Obligations.
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13.3 Default by Buyer. In the event the Closing and the consummation of the
transactions contemplated herein do not occur as provided herein by reason of
any default of Buyer, Buyer and Seller agree it would be impractical and
extremely difficult to fix the damages which Seller may suffer. Buyer and Seller
hereby agree that (a) an amount equal to the Earnest Money, together with all
interest accrued thereon, is a reasonable estimate of the total net detriment
Seller would suffer in the event Buyer defaults and fails to complete the
purchase of the Property, and (b) such amount will be the full, agreed and
liquidated damages for Buyer’s default and failure to complete the purchase of
the Property, and will be Seller’s sole and exclusive remedy (whether at law or
in equity) for any default of Buyer resulting in the failure of consummation of
the Closing, whereupon this Agreement will terminate, and Seller expressly
waives its rights to seek damages in the event of Buyer’s default except as
otherwise provided hereunder. In such event, at Seller’s request, Buyer shall
immediately direct the Escrow Agent to release the Earnest Money to Seller.
Buyer will have no further rights or obligations hereunder, except with respect
to the Termination Surviving Obligations. The payment of such amount as
liquidated damages is not intended as a forfeiture or penalty but is intended to
constitute liquidated damages to Seller. Notwithstanding the foregoing, nothing
contained herein will limit Seller’s remedies at law, in equity or as herein
provided in the event of a breach by Buyer of any of the Termination Surviving
Obligations.
ARTICLE XIV
NOTICES
14.1 Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be given by any nationally recognized
overnight delivery service with proof of delivery, or by facsimile or email
transmission (provided that such facsimile or email is confirmed on the same day
by the sender sending such notice by expedited delivery service in the manner
previously described), sent to the intended addressee at the address set forth
below, or to such other address or to the attention of such other person as the
addressee will have designated by written notice sent in accordance herewith.
Unless changed in accordance with the preceding sentence, the addresses for
notices given pursuant to this Agreement will be as follows:

         
 
  If to Buyer:   180 N. LaSalle Realty LLC
 
      c/o Gerstein Strauss & Rinaldi, LLP
 
      57 West 38th Street
 
      New York, New York 10018
 
      Attn: Mr. Victor Gerstein
 
      Phone: 212-398-7900
 
      Fax: 212-575-2387
 
      email: vgerstein@gsrlaw.com

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  and to:   Mr. Michael Silberberg
 
      55 Old Nyack Turnpike
 
      Suite 210
 
      Nanuet, New York 10954
 
      Phone: 845-623-5290
 
      Fax: 845-623-5291
 
      email: ms@berkleyllc.com
 
       
 
  with a copy to:   Levy Holm Pellegrino & Drath LLP
 
      950 Third Avenue, Suite 3101
 
      New York, New York 10022
 
      Attn: Steven I. Holm, Esq.
 
      Phone: 212-980-4200
 
      Fax: 212-759-9390
 
      email: sholm@lhpdlaw.com
 
       
 
  If to Seller:   180 N. LaSalle II, L.L.C.
 
      c/o Prime Group Realty Trust
 
      330 North Wabash Avenue
 
      Suite 2800
 
      Chicago, Illinois 60611
 
      Attn.: Mr. Jeffrey A. Patterson
 
                President and Chief Executive Officer
 
      Phone: (312) 917-4230
 
      Fax: (312) 917-1597
 
      email: jpatterson@pgrt.com
 
       
 
  and to:   Prime Group Realty Trust
 
      330 North Wabash Avenue
 
      Suite 2800
 
      Chicago, Illinois 60611
 
      Attn.: James F. Hoffman, Esq.
 
      Phone: (312) 917-4237
 
      Fax: (312) 917-3937
 
      email: jhoffman@pgrt.com
 
       
 
  with a copy to:   Jones Day
 
      77 West Wacker
 
      Chicago, Illinois 60601-1692
 
      Attn: Susan I. Matejcak, Esq.
 
      Phone: (312) 782-3939
 
      Fax: (312) 782-8585
 
      email: simatejcak@jonesday.com

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  If to Escrow Agent or   First American Title Insurance Company
 
  Title Company:   30 North LaSalle Street, Suite 310
 
      Chicago, Illinois 60602
 
      Attn: Joyce Lance
 
      Phone: (312) 917-7238
 
      Fax: (866) 578-7587
 
      email: jlance@firstam.com

Notices given by (i) overnight delivery service as aforesaid shall be deemed
received and effective on the first Business Day following such dispatch and
(ii) facsimile or email transmission as aforesaid shall be deemed given at the
time and on the date of machine transmittal provided same is sent and
confirmation of receipt is received (or in the event of email a notification of
non-receipt is not received) by the sender prior to 5:00 p.m. Central Time on a
Business Day (if sent later, then notice shall be deemed given on the next
Business Day). Notices may be given by counsel for the parties described above,
and such notices shall be deemed given by said party, for all purposes
hereunder.
ARTICLE XV
ASSIGNMENT
15.1 Assignment. Subject to the provisions of Section 17.4 below, Buyer may not
assign its rights under this Agreement to anyone other than a Permitted Assignee
(as hereinafter defined) without first obtaining Seller’s written approval which
may be given or withheld in Seller’s sole discretion. The transfer (whether
direct or indirect) of all or a majority of the transfer of all or any managing
member’s interest in Buyer or the transfer of any other controlling interest in
Buyer, shall be considered an assignment of this Agreement. Subject to the
conditions set forth in this Article XV, Buyer may assign its rights under this
Agreement to a Permitted Assignee without the prior written consent of Seller.
In the event that Buyer desires to assign its rights under this Agreement to a
Permitted Assignee, Buyer shall send written notice to Seller at least five
(5) Business Days prior to the effective date of such assignment stating the
name and, if applicable, the constituent persons or entities of the Permitted
Assignee and providing the signature block of the Permitted Assignee. Such
assignment shall not become effective until such Permitted Assignee executes an
instrument reasonably satisfactory to Seller in form and substance whereby the
Permitted Assignee expressly assumes each of the obligations of Buyer under this
Agreement, including specifically, without limitation, all obligations
concerning the Earnest Money. No assignment shall release or otherwise relieve
Buyer from any obligations hereunder.
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15.2 Permitted Assignee. For purposes of this Article XV, the term “Permitted
Assignee” shall mean (a) a corporation in which Buyer owns or controls at least
51% of the stock entitled to vote for directors, (b) a general partnership in
which Buyer is a general partner owning at least 51% of the total partnership
interests therein, (c) a limited partnership in which Buyer is the sole general
partner owning at least 51% of the total partnership interests therein, or (d) a
limited liability company in which Buyer is the managing or sole member owning
at least 51% of the total membership interests therein. Notwithstanding anything
to the contrary contained herein, Buyer shall not have the right to assign this
Agreement to any assignee which, in the reasonable judgment of Seller, will
(i) cause the transaction contemplated hereby or any party thereto to violate
the requirements of ERISA or any other law, or (ii) re-start or delay the
process of obtaining the Financing Consents. In order to enable Seller to make
such determination, Buyer shall notify Seller in writing and cause to be
delivered to Seller prior to any such assignment such information as is
requested by Seller with respect to a proposed assignee and the constituent
persons or entities of any proposed assignee, including specifically, without
limitation, any pension or profit sharing plans related thereto.
15.3 Assignments Following Defeasance Notice. Notwithstanding anything to the
contrary contained herein, if Buyer has delivered the Defeasance Notice pursuant
to Section 17.6 below, then Buyer may assign its rights under this Agreement
without the need to obtain Seller’s consent so long as the Managing Member
(i) owns at least fifteen (15%) percent of the total membership interests in
Buyer, and (ii) maintains, directly or indirectly, the power to direct or cause
the direction of the management and policies of Buyer, whether through the
ownership of voting securities, by contract or otherwise. In order to enable
Seller to make the determination that the foregoing conditions will be
satisfied, Buyer shall notify Seller in writing and cause to be delivered to
Seller prior to any such assignment such information as is requested by Seller
with respect to a proposed assignee and the constituent persons or entities of
any proposed assignee.
ARTICLE XVI
BROKERAGE
16.1 Brokers. Seller agrees to pay to Holliday Fenoglio Fowler, L.P. (“Seller’s
Broker”) a brokerage commission pursuant to a separate agreement by and between
Seller and Seller’s Broker. Buyer and Seller represent that they have not dealt
with any brokers, finders or salesmen in connection with this transaction other
than the Seller’s Broker, and agree to indemnify, defend and hold each other
harmless from and against any and all loss, cost, damage, liability or expense,
including reasonable attorneys’ fees, which either party may sustain, incur or
be exposed to by reason of any claim for fees or commissions made through the
other party. The provisions of this Article XVI will survive any Closing or
termination of this Agreement.
ARTICLE XVII
ASSUMPTION OF EXISTING LOAN
17.1 Financing Consents. Buyer shall have the right and obligation, subject to
the terms of this Agreement, to diligently and in good faith pursue the
Financing Consents necessary to permit the Existing Loan to remain in place
after the Closing. The form and substance of the documents evidencing the
Financing Consents shall be reasonably satisfactory to Seller and Buyer. It
shall be a condition precedent to Buyer’s obligation to execute the documents
evidencing the Financing Consents that there shall be no uncured event of
default under the terms of the Existing Loan Documents and neither Buyer nor New
Guarantor shall either (A) be required to assume any obligations to the Lender
more onerous, (B) be subject to restrictions or conditions less favorable, in
either case, than those set forth in the Existing Loan Documents, or (C) be
obligated for or required to assume obligations that
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accrued and were due prior to the Closing Date (except to the extent Seller
credits Buyer at Closing with the cost of performing the same and subject to the
provisions of Section 5.5 hereof), it being understood that additional
obligations, restrictions or conditions (i) required to address Buyer’s
organizational structure (such as the need to provide additional formation
documents, qualification certificates or similar documents), or (ii) that are
customarily required by lenders in similar assumption transactions, shall not
cause the foregoing condition to be unsatisfied. Buyer shall be solely
responsible for all Financing Consent Costs; provided, however, that Seller
shall pay that portion of the 1% loan assumption fee (as set forth in
Section 11.3(vi) of the Loan Agreement (as defined on Exhibit B)) above
$450,000.00 (“Seller’s Share”), which $4500,000 shall be paid by Buyer, by
giving Buyer a credit against the Purchase Price in such amount at Closing.
Buyer shall not contact the Lender without the prior written approval of Seller,
not to be unreasonably withheld or delayed. At Seller’s option, Seller may be
present at any meetings and participate in any calls between Buyer and Lender.
17.2 Buyer Obligations. Buyer shall use diligent and good faith commercially
reasonable efforts to promptly take, or cause to be taken, all reasonable
actions, and to do, or cause to be done, all things reasonably necessary, proper
or advisable to obtain the Financing Consents on or before the Scheduled Closing
Date. In connection with such efforts, Buyer shall use good faith commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things reasonably necessary, proper or advisable to
(i) make its employees, officers, directors and other representatives available
when requested by Seller or Lender to meet with any of (1) the Lenders,
trustees, issuing agencies and holders of the Existing Loan, or (2) such other
parties necessary or desirable in connection obtaining such Financing Consents;
(ii) promptly provide to such parties (1) all assumption application materials
reasonably required by any of the Lenders, and (2) any and all information
required to be delivered in accordance with the Existing Loan Documents or as
may be reasonably required by the Lender, including, financial information,
management agreements, biographical or similar information regarding the
interest holders, owners, principals or senior management of Buyer and of New
Guarantor and the managers that Buyer will utilize after the Closing (including
information regarding experience in owning and managing real estate assets) (the
items in this clause (ii)(2) being referred to collectively as “Additional
Assumption Information”). Subject to the provisions of clauses (A), (B) and
(C) of Section 17.1 above, in connection with Buyer’s efforts to obtain the
Financing Consents, Buyer shall provide or deliver such documents as may be
reasonably required by the consenting Person or required to obtain the Financing
Consent, including but not limited to, substitute promissory note(s),
guarantees, environmental indemnity agreements, financial statements,
organizational documents, opinion(s) of counsel, and assumption agreement(s).
Buyer shall also substitute New Guarantor for the Existing Guarantors under the
Assumed Guarantees and obtain the release of Existing Guarantors from any and
all liability under the Assumed Guarantees. Buyer will keep Seller informed of
Buyer’s progress in obtaining the Financing Consents and shall advise Seller
promptly of any material communication received from any Lender regarding the
Financing Consents.
(a) Without limiting the generality of the foregoing, on or before March 5, 2010
(the “Preliminary Submission Date”), Buyer shall submit to Lender substantially
all of the materials required by the items listed on the Required Items
Checklist that are marked with an asterisk. Buyer shall also submit to Seller,
on or before the Preliminary Submission Date, the names and background
information of the Managing Member and the New Guarantor.
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(b) On or before March 15, 2010 (the “Final Submission Date”), Buyer shall
submit to Lender (i) the Final Organizational Structure, (ii) the Required
Changes, and (iii) all remaining items listed on the Required Items Checklist
(other than Items 22 and 24 thereof which shall be provided by Seller and
provided that any items which make reference to an “[enclosed form]” which Buyer
has not received shall be provided by Buyer on the later of (i) two (2) Business
Days after Lender has provided the referenced form), or (ii) the Final
Submission Date.
(c) If Buyer shall fail to submit the items described in Section 17.2(b) above
by the later of (i) two Business Days after Lender has provided the referenced
form, or (ii) the Final Submission Date, and if such failure continues for two
(2) Business Days after written notice from Seller (which may be via e-mail)
that any such items remains undelivered, then Buyer shall be deemed to have
irrevocably delivered the Defeasance Notice and the provisions of Section 17.6
below shall thereafter apply.
(d) From and after the Final Submission Date (unless Buyer has delivered, or is
deemed to have delivered, the Defeasance Notice), if Buyer fails to deliver to
Lender any Additional Assumption Information within three (3) Business Days
after written notice from Lender or from Seller (which may be via e-mail) that
any such Additional Assumption Information has been requested by Lender and
remains undelivered, and if such failure continues for one (1) Business Day
after a second notice from Seller (which may also be via e-mail) that such
Additional Assumption Information remains undelivered, Buyer shall be in default
hereunder.
(e) Buyer shall keep Seller apprised of its communications with and submissions
to the Lender and shall deliver to Seller, at the same time as Buyer makes any
submissions to the Lender, copies of all cover letters, emails and other
correspondence under which Buyer submits any deliveries to Lender pursuant to
this Agreement, which cover letters, emails and other correspondence shall
enumerate with reasonable specificity the items being submitted to the Lender
(with investor names redacted) so that Seller can confirm Buyer’s compliance
with the requirements of this Article XVII.
(f) Seller shall have the right to communicate with the Lender to, among other
things, work on the loan assumption, including, but not limited to, confirming
that the Lender has received Buyer’s submissions, ascertaining whether such
submissions are complete and ascertaining the Lender’s view on the timing and
likelihood of Buyer’s obtaining the Financing Consents. If the Lender notifies
Seller in writing (which may be via e-mail) that (i) based on Buyer’s
submissions, the Financing Consents are not likely to be obtained by the Outside
Date, (as the same may be extended pursuant to Section 10.1(b) hereof) or
(ii) that Buyer’s submissions are missing or incomplete and such missing or
incomplete submissions are not delivered to the Lender within three (3) Business
Days after written notice from Lender or from Seller (which may be via e-mail),
Seller shall have the right to terminate this Agreement by written notice to
Buyer; provided, however, that if Buyer shall, within three (3) Business Days
after such notice of termination, either (i) deliver the Defeasance Notice, or
(ii) elect to waive the receipt of the Financing Consents as a condition to
Closing, then this Agreement shall not be terminated. If this Agreement is
terminated by Seller as aforesaid, the Earnest Money shall be returned to Buyer
and thereafter neither party shall have any further liability to the other,
except the parties will continue to be liable for those obligations that
expressly survive cancellation or termination of this Agreement.
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17.3 Seller’s Cooperation. Subject to Buyer’s obligation to pay for all
Financing Consent Costs (other than Seller’s Share), Seller shall diligently and
reasonably cooperate with Buyer in Buyer’s efforts to obtain the Financing
Consents, including, without limitation, providing, upon request, current
Property information to the Lender on a timely basis. Under no circumstances
shall Seller or any of the Existing Guarantors be required to provide any new
guarantee(s) to the Lender or any other Person in connection with the Financing
Consents or otherwise assume or be required to perform any obligations after the
Closing Date with the exception of its continuing liability under the Existing
Loan Documents for events occurring prior to the Closing Date. From and after
the Closing Date, Seller agrees to cooperate with Buyer in providing to Buyer,
upon Buyer’s written request, information concerning Seller or the Property
which may be required under the Loan Documents to the extent such information
relates to Seller’s period of ownership of the Property.
17.4 Loan Terms. The parties acknowledge that Buyer’s proposed organizational
structure has not yet been finalized. Buyer acknowledges that rating agency
approval cannot be sought, and the Financing Consents obtained, until all of the
direct or indirect members or partners owning such percentage of the ownership
interests in Buyer as the Lender and the rating agencies may require have been
identified and that no changes to Buyer’s organizational structure can
thereafter be made without requiring new rating agency approvals. On or before
the Final Submission Date, Buyer shall provide to Seller, and Seller agrees to
submit to the Lender, an organizational and capital structure for Buyer, and all
other submissions required pursuant to Section 17.2, which Buyer reasonably
believes in good faith will be sufficient for the Lender to approve (the “Final
Organizational Structure”), together with (i) any changes required to the
transfer provisions contained in Section 11.2 of the Loan Agreement (as defined
on Exhibit B) due to the Final Organizational Structure of Buyer, and (ii) any
changes to the First Amendment of Loan Agreement (as defined on Exhibit B)
needed to omit provisions that are specific to Seller’s affiliates and the
“Fleet Mezzanine Loan” (collectively, the “Required Changes”). If the Lender
rejects the Final Organizational Structure and/or any of the Required Changes,
Seller may terminate this Agreement by written notice to Buyer; provided,
however, that if Buyer shall, within two (2) Business Days after such notice of
termination, either (A) deliver the Defeasance Notice, or (B) agree in writing
to withdraw such Required Change(s) or modify the Final Organizational Structure
in a way the Lender and rating agencies indicate they will accept, then this
Agreement shall not be terminated. If this Agreement is terminated by Seller as
aforesaid, the Earnest Money shall be returned to Buyer and thereafter neither
party shall have any further liability to the other, except the parties will
continue to be liable for those obligations that expressly survive cancellation
or termination of this Agreement. Buyer agrees that it will not modify the Final
Organizational Structure or the identity of the Managing Member or the New
Guarantor in any manner which will delay or interfere with obtaining the
Financing Consents.
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17.5 Closing Credits. If Buyer is successful in obtaining the Financing
Consents, then at Closing, Buyer shall receive a credit against the Purchase
Price in the amount of the existing outstanding principal balance and accrued
and unpaid interest of the Existing Loan and in the amount of Seller’s Share,
and Seller shall receive a credit for the amount of any escrow balances held by
the Lender.
17.6 Option to Defease. Notwithstanding anything to the contrary contained
herein, at any time prior to April 22, 2010, Buyer shall have the right, at
Buyer’s option, to elect to defease the Existing Loan in lieu of obtaining the
Financing Consent. If Buyer elects to exercise the right to defease the Existing
Loan, Buyer shall so notify Seller in writing (the Defeasance Notice”) on or
before April 22, 2010. If Buyer delivers the Defeasance Notice (or if Buyer is
deemed to have delivered the Defeasance Notice pursuant to Section 17.2(c)
above), then (i) Buyer and Seller shall cease all efforts to obtain the
Financing Consents, (ii) receipt of the Financing Consent shall no longer be a
condition to Closing, (iii) Seller shall promptly commence the defeasance
process under the Existing Loan Documents, (iv) the documents evidencing or
securing the Existing Loan will no longer constitute Permitted Exceptions, and
(v) the Scheduled Closing Date shall be on the Outside Date. In addition, Buyer
acknowledges that, if Buyer delivers the Defeasance Notice (or is deemed to have
delivered the Defeasance Notice pursuant to Section 17.2(c) above), then
notwithstanding the provisions of Section 3.3 or Section 10.3 hereof, Buyer
shall deliver the Purchase Price to Escrow Agent at least two (2) Business Days
prior to the Closing Date (or such fewer days as the Lender or defeasance agent
may permit without resulting in any additional liability to Seller) in order to
enable Seller to complete the defeasance of the Existing Loan; provided that
Seller shall have also delivered to Escrow Agent all of the documents executed
by Seller which are required to be delivered pursuant to Section 10.2 hereof
(subject to the right to update the Closing Statement and the certificate
described in Section 10.2(k) hereof). All costs associated with the defeasance
of the Existing Loan, including, but not limited to, the Lender’s attorneys’
fees and costs, shall be paid by Buyer (other than any outstanding principal
balance and accrued and unpaid interest through the Closing Date and Seller’s
attorneys’ fees associated with the defeasance which shall be paid by Seller).
ARTICLE XVIII
MISCELLANEOUS
18.1 Waivers. No waiver of any breach of any covenant or provisions contained
herein will be deemed a waiver of any preceding or succeeding breach thereof, or
of any other covenant or provision contained herein. No extension of time for
performance of any obligation or act will be deemed an extension of the time for
performance of any other obligation or act.
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18.2 TIME OF THE ESSENCE. TIME IS OF THE ESSENCE WITH RESPECT TO ALL TIME
PERIODS AND DATES FOR PERFORMANCE SET FORTH IN THIS AGREEMENT.
18.3 Recovery of Certain Fees. In the event a party hereto files any action or
suit against another party hereto by reason of any breach of any of the
covenants, agreements or provisions contained in this Agreement, then in that
event the prevailing party will be entitled to have and recover certain fees
from the other party including all reasonable attorneys’ fees and costs
resulting therefrom. The foregoing right to recover fees is in addition to any
other remedy of Seller herein, including, without limitation, the right to
retain the Earnest Money. For purposes of this Agreement, the term “attorneys’
fees” or “attorneys’ fees and costs” shall mean the fees and expenses of counsel
to the parties hereto, which may include printing, photocopying, duplicating and
other expenses, air freight charges, and fees billed for law clerks, paralegals
and other persons not admitted to the bar but performing services under the
supervision of an attorney, and the costs and fees incurred in connection with
the enforcement or collection of any judgment obtained in any such proceeding.
The provisions of this Section 18.3 shall survive the entry of any judgment, and
shall not merge, or be deemed to have merged, into any judgment.
18.4 Construction. Headings at the beginning of each Article and Section are
solely for the convenience of the parties and are not a part of this Agreement.
Whenever required by the context of this Agreement, the singular will include
the plural and the masculine will include the feminine and vice versa. This
Agreement will not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. All exhibits and
schedules referred to in this Agreement are attached and incorporated by this
reference, and any capitalized term used in any exhibit or schedule which is not
defined in such exhibit or schedule will have the meaning attributable to such
term in the body of this Agreement. In the event the date on which Buyer or
Seller are required to take any action under the terms of this Agreement is not
a Business Day, the action will be taken on the next succeeding Business Day.
18.5 Counterparts. This Agreement may be executed in multiple counterparts, each
of which, when assembled to include an original signature for each party
contemplated to sign this Agreement, will constitute a complete and fully
executed original. All such fully executed original counterparts will
collectively constitute a single agreement.
18.6 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any rule of law or public policy, all
of the other conditions and provisions of this Agreement will nevertheless
remain in full force and effect, so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any adverse manner to
either party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to reflect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
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18.7 Entire Agreement. This Agreement is the final expression of, and contains
the entire agreement between, the parties with respect to the subject matter
hereof, and supersedes all prior understandings with respect thereto. This
Agreement may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument, signed by the
party to be charged or by its agent duly authorized in writing, or as otherwise
expressly permitted herein.
18.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to a contract
executed and performed in the State of Illinois, without giving effect to the
conflicts of law principles thereof. Any action arising out of this Agreement
must be commenced by Buyer or Seller in the state courts of the State of
Illinois in Cook County or in United States District Court for the Northern
District of Illinois and each party hereby consents to the jurisdiction of such
courts in any such action and to the laying of venue therein. Any process in any
action will be duly served if sent by registered mail, postage prepaid, to the
applicable party at its respective address set forth in Section 14.1(a) hereof.
18.9 No Recording. The parties hereto agree that neither this Agreement nor any
affidavit or memorandum concerning it will be recorded and any recording of this
Agreement or any such affidavit or memorandum by Buyer will be deemed a default
by Buyer hereunder.
18.10 Further Actions. The parties agree to execute such instructions to the
Title Company and such other instruments and to do such further acts as may be
reasonably necessary to carry out the provisions of this Agreement.
18.11 Exhibits. The following sets forth a list of Exhibits to the Agreement:

     
Exhibit A
  Legal Description of the Land
Exhibit B
  List of Existing Loan Documents
Exhibit C-1
  Form of Estoppel Certificate
Exhibit C-2
  Form of Seller Estoppel
Exhibit D
  List of Service Contracts
Exhibit E
  Rent Roll
Exhibit F
  Form of Deed
Exhibit G
  Form of Bill of Sale
Exhibit H
  Form of Assignment of Leases
Exhibit I
  Form of Assignment of Contracts
Exhibit J
  Form of Certificate as to Foreign Status
Exhibit K
  Unpaid Commissions, Allowances and Concessions
Exhibit L
  Example of Real Estate Tax Proration Methodology
Exhibit M
  Litigation
Exhibit N
  New Lease Guidelines
Exhibit O
  Permitted Exceptions
Exhibit P
  Required Items Checklist
Exhibit Q
  Property Employees
Exhibit R
  Pending Tax Assessment Proceedings
Exhibit S
  Existing Loan Escrows
Exhibit T
  Pending Leases

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18.12 No Partnership. Notwithstanding anything to the contrary contained herein,
this Agreement shall not be deemed or construed to make the parties hereto
partners or joint venturers, it being the intention of the parties to merely
create the relationship of Seller and Buyer with respect to the Property to be
conveyed as contemplated hereby.
18.13 Limitations on Benefits. It is the explicit intention of Buyer and Seller
that no person or entity other than Buyer and Seller and their permitted
successors and assigns is or shall be entitled to bring any action to enforce
any provision of this Agreement against any of the parties hereto, and the
covenants, undertakings and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, Buyer and Seller or
their respective successors and assigns as permitted hereunder. Except as set
forth in this Section 18.13, nothing contained in this Agreement shall under any
circumstances whatsoever be deemed or construed, or be interpreted, as making
any third party (including, without limitation, Seller’s Broker) a beneficiary
of any term or provision of this Agreement or any instrument or document
delivered pursuant hereto, and Buyer and Seller expressly reject any such
intent, construction or interpretation of this Agreement.
18.14 Board Approval. Seller’s execution of this Agreement is contingent on
receipt of approval by the Board of Trustees of Prime Group Realty Trust by 5:00
Central Time on the date that is three (3) Business Days after the Effective
Date (the “Board Approval Date”). Seller will notify Buyer by email on, or
before 5:00 Central Time on the Board Approval Date, whether such board approval
has been obtained. If Seller notifies Buyer that such board approval has not
been obtained by the Board Approval Date, this Agreement shall be terminated,
the Earnest Money shall be paid to Buyer by Escrow Agent, and the parties shall
have no further obligation to each other except for Termination Surviving
Obligations.
18.15 Union Matters.
(a) Buyer acknowledges that certain of the employees of Seller’s Affiliates at
the Property (the “Union Personnel”) are covered by the terms of certain
agreements between the Building Owners and Managers Association of Chicago
(“BOMA”) and International Union of Operating Engineers Local 399, AFL-CIO
(collectively, the “BOMA Agreements”). Buyer acknowledges and agrees that upon
Closing, Buyer will, or will cause a successor manager to, assume and be
responsible for all of the obligations under the BOMA Agreements with respect to
the Union Personnel at the Property arising from and after the Closing Date, and
Buyer shall cause the Union Personnel to become employees of Buyer or Buyer’s
successor manager of the Property. Seller shall be responsible for any
obligations under the BOMA Agreements with respect to Union Personnel at the
Property arising prior to the Closing Date, except to the extent Buyer has
received a credit for such amounts at Closing.
Agreement of Sale and Purchase

 

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(b) As of the Closing Date, Buyer agrees to comply with any applicable
requirements of Cook County Ordinance 06-O, The Displaced Building Service
Workers Protection Ordinance.
(c) The provisions of this Section 18.15 shall survive the Closing.
18.16 Limitation of Liability. Notwithstanding anything to the contrary in this
Agreement or in any document delivered by Seller in connection with the
consummation of the transaction contemplated hereby, it is expressly understood
and agreed that Seller’s liability shall be, and is, limited to, and payable and
collectible only out of, the Property or the net cash proceeds of the Property
actually received by Seller in the event of a sale of the Property, and no other
property or asset of Seller or of any of Seller’s directors, officers,
employees, shareholders, members or partners shall be subject to any lien, levy,
execution, setoff, or other enforcement procedure for satisfaction of any right
or remedy of Buyer in connection with the transaction contemplated hereby.
[The remainder of this page is intentionally left blank.]
Agreement of Sale and Purchase

 

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IN WITNESS WHEREOF, Seller and Buyer have respectively executed this Agreement
as of the Effective Date.

                              BUYER:
 
                            180 N. LASALLE REALTY LLC,
a Delaware limited liability company
 
                            By:   /s/ Steven I. Holm                   Name:
Steven I. Holm         Title:   Authorized Signatory
 
                            SELLER:
 
                            180 N. LASALLE II, L.L.C.,
a Delaware limited liability company
 
                            By:   180 N. LaSalle Holdings, L.L.C.,
a Delaware limited liability company,
its sole member
 
                                By:   PGRT Equity II LLC, a Delaware limited
liability company, its administrative member
 
                                    By:   Prime Group Realty, L.P.,
a Delaware limited partnership,
its sole member
 
                                        By:   Prime Group Realty Trust, a
Maryland real estate investment
trust, its sole general partner
 
                       
 
                  By:   /s/ Jeffrey A. Patterson
 
                       
 
                      Name: Jeffrey A. Patterson
 
                      Title:   President and Chief Executive Officer

EFFECTIVE DATE: February 22, 2010
Agreement of Sale and Purchase

 

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EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
LOT 1 (EXCEPT THAT PART THEREOF LYING BETWEEN THE WEST LINE OF NORTH LASALLE
STREET AND A LINE 20 FEET WEST OF AND PARALLEL WITH THE WEST LINE OF NORTH
LASALLE STREET TAKEN FOR WIDENING NORTH LASALLE STREET), LOT 2 AND THE EAST HALF
OF LOT 3 IN BLOCK 33 IN ORIGINAL TOWN OF CHICAGO, IN SECTION 9, TOWNSHIP 39
NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.
Agreement of Sale and Purchase

 

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EXHIBIT B
LIST OF EXISTING LOAN DOCUMENTS

1.  
Loan and Security Agreement from Greenwich Capital Financial Products, Inc.
(“Lender”) to 180 N. LaSalle II, LLC (“Borrower”), dated January 15, 2004.

2.  
First Amendment of Loan Agreement between Borrower, Prime Group Realty, LP
(“Guarantor”), 180 N. LaSalle Holdings, LLC and Lender, dated April 15, 2004.

3.  
Promissory Note of Borrower to Lender, dated January 15, 2004.

4.  
Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing
by Borrower to Lender, dated January 15, 2004.

5.  
Assignment of Leases and Rents by Borrower to Lender, dated January 15, 2004.

6.  
UCC Financing Statement pertaining to the Mortgage, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, to be a filed in Cook County,
Illinois.

7.  
UCC Financing Statement pertaining to the Mortgage, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, to be a filed in Delaware
Secretary of State.

8.  
Environmental Indemnity Agreement between Borrower, Guarantor and Lender, dated
January 15, 2004.

9.  
Borrower’s Certificate, dated January 15, 2004.

10.  
Conditional Assignment of Management Agreement between Borrower and Lender with
Prime Group Realty, LP (“Agent”) acknowledging and consenting, dated January 15,
2004.

11.  
Exceptions to Non-Recourse Guaranty by Guarantor for the benefit of Lender,
dated January 15, 2004.

12.  
Central Account Agreement among LaSalle Bank National Association (“Central
Account Bank”), Borrower, and Lender, dated January 15, 2004.

13.  
[Indemnity Agreement by Guarantor for the benefit of Lender, dated January 15,
2004.]1

14.  
Side Letter regarding securitization cooperation and certain post-closing
obligations among Borrower, Guarantor, and Lender, dated January 15, 2004.

15.  
Conditional Assignment of Management Agreement by Borrower in favor of Lender,
acknowledged and consented to by Prime Group Realty, LP, dated January 15, 2004.

 

      1  
Not to be assumed by Buyer; litigation to which it relates was dismissed with
prejudice.

Agreement of Sale and Purchase

 

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EXHIBIT C-1
FORM OF ESTOPPEL CERTIFICATE

     
TO:
  180 N. LaSalle II, L.L.C. (“Landlord”) 
 
  [Address]  
 
  [Purchaser] (“Purchaser”)
 
  [Address]  
 
  [Lender] (“Lender”)
 
  [Address]

     
RE:
  180 North LaSalle Street, Chicago, IL (the “Property”)

THIS IS TO CERTIFY THAT:
1. The undersigned is the “Tenant” under that certain Lease, dated  _________,
 _____  (the “Lease”) between Tenant (or Tenant’s predecessor in interest) and
Landlord (or Landlord’s predecessor in interest), covering the premises
described above (the “Premises”). A true and correct copy of the Lease is
attached hereto as Exhibit A.
2. The Lease constitutes the entire agreement between Landlord and Tenant and
has not been modified, assigned, supplemented, or amended in any respect, except
as indicated below (insert dates of all modifications, assignments, supplements,
or amendments; if none, state “none”), and the Lease is valid and in full force
and effect on the date hereof. Tenant has not given Landlord any notice of
termination under the Lease.
 
 
3. Tenant has accepted and now occupies [modify as appropriate] the Premises.
The Lease term commenced on  _____,  _____  and is scheduled to expire on
 _____,  _____. Any improvements to be constructed on the Premises by Landlord
have been completed and accepted by Tenant and any tenant construction
allowances payable by Landlord have been paid, except, in each case, any
relating to future options for renewal or expansion of the Lease. Tenant has
 _____  options to renew the initial term of the Lease, each for a period of
 _____  years.
4. The base rent payable by Tenant presently is $___ per month. No such rent has
been paid more than one (1) month in advance of its due date except as follows
(if none, state “none”):  _____. Tenant’s security deposit is $_____. Tenant
pays monthly its pro rata share of excess operating expenses (including taxes
and insurance) in the current amount of $_____ [, based on an expense stop of
$_____]. [Revise as appropriate per the Lease] Tenant’s Proportionate Share is
 _____%. Tenant has paid in full all additional rent, Tenant’s proportionate
share of real estate taxes and insurance and all other sums or charges presently
due and payable under the Lease by Tenant. There are no free rent periods or
other concessions under the Lease except as described below (if none, state
“none”):
                                                                           
     
Agreement of Sale and Purchase

 

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5. No default exists on the part of Tenant under the Lease (and no facts or
circumstances exist that, with the passage of time or giving of notice, will or
could constitute a default under the Lease). No default by Landlord exists under
the Lease, and no facts or circumstances exist that, with the passage of time or
giving of notice, will or could constitute a default by Landlord under the
Lease. Tenant has made no claim against Landlord alleging Landlord’s default
under the Lease. Tenant has no offset, defense, deduction or claim against
Landlord.
6. Tenant has not assigned, sublet or transferred its interest in the Lease
and/or the Demised Premises, or any part thereof, except as follows (if none,
state none):                                                                   
                                                                          
                                                                            .
7. Tenant has no right or option whatsoever to purchase or otherwise acquire the
Premises or any portion thereof.
8. There are no voluntary actions, and to Tenant’s knowledge no involuntary
actions, pending against Tenant under the bankruptcy or insolvency laws of the
United States or of any state or territory of the United States.
9. We will deliver to Lender a copy of all notices we serve on or receive from
Landlord to Lender at the address on the first page of this Tenant Estoppel
Certificate.
The undersigned is authorized to execute this Tenant Estoppel Certificate on
behalf of Tenant. Tenant understands and acknowledges that this Estoppel
Certificate is delivered to, and shall be relied on by Landlord, Purchaser in
connection with its potential acquisition of the Property, and Lender in
connection with the origination, or assumption by Purchaser, of a loan financing
the Purchaser’s acquisition of the Property, and any lender making a loan
secured by the ownership interests in Purchaser (collectively with Lender, a
“Lender”) and may be relied upon by any and all past, current and/or future
landlords, purchasers and/or lenders of the Property.

                      «TENANT LEGAL NAME»    
 
               
 
  By:                          
 
      Name:        
 
      Title:  
 
   
 
         
 
   
Dated:                                         , 2010
               

Agreement of Sale and Purchase

 

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EXHIBIT C-2
FORM OF SELLER ESTOPPEL CERTIFICATE

     
TO:
  [Purchaser] (“Purchaser”)
 
  [Address]
 
 
 
  [Lender] (“Lender”)
 
  [Address]

     
RE:
  180 North LaSalle Street, Chicago, IL (the “Property”)

180 N. LaSalle II, L.L.C. (“Landlord”) hereby states the following, to its
actual knowledge:
1. The undersigned is the “Tenant” under that certain Lease, dated  _____,
 _____  (the “Lease”) between Tenant (or Tenant’s predecessor in interest) and
Landlord (or Landlord’s predecessor in interest), covering the premises
described above (the “Premises”).
2. The Lease constitutes the entire agreement between Landlord and Tenant and
has not been modified, assigned, supplemented, or amended in any respect, except
as indicated below (insert dates of all modifications, assignments, supplements,
or amendments; if none, state “none”), and the Lease is valid and in full force
and effect on the date hereof. Tenant has not given Landlord any notice of
termination under the Lease.
 
 
3. Tenant has accepted and now occupies [modify as appropriate] the Premises.
The Lease term commenced on  _____,  _____  and is scheduled to expire on
 _____,  _____. Any improvements to be constructed on the Premises by Landlord
have been completed and accepted by Tenant and any tenant construction
allowances payable by Landlord have been paid, except, in each case, any
relating to future options for renewal or expansion of the Lease. Tenant has
 _____  options to renew the initial term of the Lease, each for a period of
 _____  years.
4. The base rent payable by Tenant presently is $___ per month. No such rent has
been paid more than one (1) month in advance of its due date except as follows
(if none, state “none”):  _____. Tenant’s security deposit is $_____. Tenant
pays monthly its pro rata share of excess operating expenses (including taxes
and insurance) in the current amount of $_____ [, based on an expense stop of
$_____]. [Revise as appropriate per the Lease] Tenant’s Proportionate Share is
 _____%. Tenant has paid in full all additional rent, Tenant’s proportionate
share of real estate taxes and insurance and all other sums or charges presently
due and payable under the Lease by Tenant. There are no free rent periods or
other concessions under the Lease except as described below (if none, state
“none”):
                                                                           
     
Agreement of Sale and Purchase

 

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5. No default exists on the part of Tenant under the Lease (and no facts or
circumstances exist that, with the passage of time or giving of notice, will or
could constitute a default under the Lease). No default by Landlord exists under
the Lease, and no facts or circumstances exist that, with the passage of time or
giving of notice, will or could constitute a default by Landlord under the
Lease. Tenant has made no claim against Landlord alleging Landlord’s default
under the Lease. Tenant has no offset, defense, deduction or claim against
Landlord.
6. Tenant has not assigned, sublet or transferred its interest in the Lease
and/or the Demised Premises, or any part thereof, except as follows (if none,
state none):                                                                   
                                                                          
                                                                            .
7. Tenant has no right or option whatsoever to purchase or otherwise acquire the
Premises or any portion thereof.
8. There are no voluntary actions, and to Tenant’s knowledge no involuntary
actions, pending against Tenant under the bankruptcy or insolvency laws of the
United States or of any state or territory of the United States.
The undersigned is authorized to execute this Estoppel Certificate and
understands and acknowledges that this Estoppel Certificate is delivered to, and
shall be relied on by Purchaser in connection with its acquisition of the
Property, and Lender in connection with the origination or assumption by
Purchaser of a loan financing the Purchaser’s acquisition of the Property and
any lender making a loan secured by the ownership interests in Purchaser and
their respective successors and assigns.
Landlord’s liability under this Estoppel Certificate(s) (i) shall expire and be
of no further force and effect as of the earlier of (A) twelve (12) months
following the Closing Date (as defined in the Purchase Agreement), and (B) the
date that Buyer receives an Acceptable Estoppel (as defined in the Purchase
Agreement), and (ii) shall be limited by Section 8.4 of the Purchase Agreement.

                      180 N. LASALLE II, L.L.C.    
 
               
 
  By:                          
 
      Name:        
 
      Title:  
 
   
 
         
 
   

Dated:                                                   , 2010
Agreement of Sale and Purchase

 

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EXHIBIT D
LIST OF SERVICE CONTRACTS
[Intentionally Omitted]
Agreement of Sale and Purchase

 

D-1

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EXHIBIT E
RENT ROLL
See attached.
[Intentionally Omitted]
Agreement of Sale and Purchase

 

E-1

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EXHIBIT F
FORM OF DEED
THIS DOCUMENT WAS PREPARED BY:
Susan I. Matejcak
Jones Day
77 W. Wacker Drive
Chicago, Illinois 60601-1692
UPON RECORDING RETURN TO:
SPECIAL WARRANTY DEED
THIS SPECIAL WARRANTY DEED is made as of  _____, 2010, by 180 N. LASALLE II,
L.L.C., a Delaware limited liability company having an address at c/o Prime
Group Realty Trust, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611
(“Grantor”) in favor of  _____  having an address at  _____  (“Grantee”).
W I T N E S S E T H:
That Grantor, for and in consideration of the sum of $10.00 and other good and
valuable considerations, the receipt of which is hereby acknowledged, does
hereby grant, bargain, sell, and convey unto Grantee and Grantee’s heirs,
successors and assigns, in and to the following described land (the “Land”) in
Cook County, Illinois:
See Exhibit A attached hereto and incorporated herein by reference for the
description of the Land conveyed herein.
TOGETHER with all the tenements, hereditaments, and appurtenances thereto.
TO HAVE AND TO HOLD the same unto Grantee and Grantee’s heirs, successors and
assigns in fee simple forever.
This conveyance is made subject to those matters described on Exhibit B attached
hereto and to applicable zoning ordinances, matters appearing on any recorded
plat of the Land, and taxes for the current year.
And Grantor does hereby covenant with Grantee that, except as noted above, title
to the Land is free from all encumbrances made by Grantor, and that Grantor will
warrant and defend the same against the lawful claims and demands of all persons
claiming by, through or under Grantor (except as noted above), but against none
other.
Agreement of Sale and Purchase

 

F-1

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IN WITNESS WHEREOF, Grantor has executed this deed the day and year first
above-written.

                                      180 N. LASALLE II, L.L.C.,         a
Delaware limited liability company    
 
                                    By:   180 N. LaSalle Holdings, L.L.C.,      
      a Delaware limited liability company,             its sole member    
 
                                        By:   PGRT Equity II LLC, a Delaware
limited                 liability company, its administrative member    
 
                                            By:   Prime Group Realty, L.P.,    
                a Delaware limited partnership,                     its sole
member    
 
                                                By:   Prime Group Realty Trust,
a                         Maryland real estate investment                      
  trust, its sole general partner    
 
                               
 
                  By:                                          
 
                      Name:        
 
                      Title:  
 
   
 
                         
 
   

     
STATE OF ILLINOIS
  }
 
  } SS.
COUNTY OF COOK
  }

I, the undersigned a Notary Public in and for the County and State aforesaid, DO
HEREBY CERTIFY, that the above named  _____, being the  _____  of  _____,
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such  _____, appeared before me this day in person and
acknowledged that he/she signed and delivered the said instrument as his/her own
free and voluntary act and as the free and voluntary act of said corporation for
the uses and purposes therein set forth.
Given under my hand and Notary Seal, this  _____  day of  _____, 2010.

     
 
Notary Public
   
My Commission Expires:
   
 
   
 
   

Agreement of Sale and Purchase

 

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EXHIBIT G
FORM OF BILL OF SALE
For good and valuable consideration, the receipt of which is hereby
acknowledged, 180 N. LASALLE II, L.L.C., a Delaware limited liability company
(“Seller”), does hereby sell, transfer, and convey to  _____, a(n)  _____ 
(“Buyer”) any and all Personal Property (as defined in the Purchase Agreement
(as hereinafter defined)).
Seller has executed this Bill of Sale and bargained, sold, transferred, conveyed
and assigned the Personal Property and Buyer has accepted this Bill of Sale and
purchased the Personal Property AS IS AND WHEREVER LOCATED, WITH ALL FAULTS and
without any representations or warranties or whatsoever nature, express,
implied, or statutory, except as expressly set forth in the Purchase and Sale
Agreement between Seller and Buyer, dated as of February  _____, 2010 (the
“Purchase Agreement”) and the warranties set forth herein, it being the
intention of Seller and Buyer to expressly negate and exclude all warranties
whatsoever, including but not limited to the implied warranties of
merchantability and fitness for any particular purpose, any implied or express
warranty of conformity to models or samples of materials, any rights of Buyer
under appropriate statutes to claim diminution of consideration, any claim by
Buyer for damages because of defects, whether known or unknown with respect to
the Personal Property, warranties created by affirmation of fact or promise and
any other warranties contained in or created by the Uniform Commercial Code as
now or hereafter in effect in the State in which the Personal Property is
located, or contained in or created by any other law.
Dated this _______ day of ____________________, 2010.

                                  SELLER:   180 N. LASALLE II, L.L.C.,         a
Delaware limited liability company    
 
                                    By:   180 N. LaSalle Holdings, L.L.C.,      
      a Delaware limited liability company,             its sole member    
 
                                        By:   PGRT Equity II LLC, a Delaware
limited                 liability company, its administrative member    
 
                                            By:   Prime Group Realty, L.P.,    
                a Delaware limited partnership,                     its sole
member    
 
                                                By:   Prime Group Realty Trust,
a                         Maryland real estate investment                      
  trust, its sole general partner    
 
                               
 
                  By:                                          
 
                      Name:        
 
                      Title:  
 
   
 
                         
 
   

Agreement of Sale and Purchase

 

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EXHIBIT H
FORM OF ASSIGNMENT OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is made as of
 _____, 2010, between 180 N. LASALLE II, L.L.C., a Delaware limited liability
company, having an address at c/o Prime Group Realty Trust, 330 North Wabash
Avenue, Suite 2800, Chicago, Illinois 60611 (“Assignor”), and  _____, a  _____,
having an address at  _____  (“Assignee”).
W I T N E S S E T H:
WHEREAS, the property commonly known as 180 North LaSalle Street, Chicago,
Illinois, more particularly described on Exhibit A attached hereto (the
“Property”), is affected by the leases listed on Exhibit B attached hereto
(collectively, the “Leases”);
WHEREAS, Assignor and Assignee have entered into that certain Purchase and Sale
Agreement dated as of February  _____, 2010 (the “Agreement”), wherein Assignor
has agreed to assign and transfer to Assignee all of Assignor’s right, title and
interest in and to the Leases and all Security Deposits;
WHEREAS, Assignor desires to assign to Assignee all of Assignor’s right, title
and interest in and to the Leases and the Security Deposits, and Assignee
desires to accept the assignment of such right, title and interest in and to the
Leases and the Security Deposits and to assume all of Assignor’s rights and
obligations under the Leases and with respect to the Security Deposits.
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained and for other good and valuable consideration, the parties, intending
to be legally bound, do hereby agree as follows:
1. Assignor hereby assigns, sells, transfers, sets over and conveys to Assignee,
its successors and assigns, all of Assignor’s right, title and interest in and
to the Leases and the Security Deposits. Assignee hereby accepts this assignment
and transfer and agrees to assume, fulfill, perform and discharge all of the
various commitments, obligations and liabilities of Assignor under and by virtue
of the Leases that arise and are to be performed (a) on and after the date
hereof, including the return of the Security Deposits in accordance with the
terms of the Leases, but only to the extent credited by Assignor to Assignee,
and (b) before the date hereof to the extent Assignor credited Assignee with the
cost of performing any such commitments, obligations and liabilities.
Notwithstanding anything to the contrary set forth above, Assignee hereby
assumes all obligations under the Leases relating to the physical and
environmental condition of the Property regardless of whether such obligations
arise before, on or after the date hereof (provided that notice of such
obligations is first given after the Closing Date, or, if notice was given prior
to the Closing Date, except to the extent that any action have been or was
required to be taken with respect to any such obligations prior to the Closing
Date) and without obligation of Assignor to have credited Assignee with the cost
of performing any such obligations.
Agreement of Sale and Purchase

 

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2. Notwithstanding anything in this Assignment to the contrary, Assignor’s
liability hereunder is subject to the limitations set forth in Section 8.4 of
the Agreement.
3. This Assignment is made without representation, warranty (express or implied)
or recourse of any kind, except as may be expressly provided herein or in the
Agreement.
4. This Assignment shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Assignment shall be
governed by, and construed under, the laws of the State of Illinois.
5. All capitalized terms used but not defined herein have the meaning assigned
to them in the Agreement.
6. This Assignment may be executed in one or more counterparts, each of which
shall be deemed to be an original Assignment, but all of which shall constitute
but one and the same Assignment.
[The remainder of this page is intentionally left blank.]
Agreement of Sale and Purchase

 

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IN WITNESS WHEREOF, Assignor and Assignee hereby execute and deliver this
Assignment to be effective as of the date first written above.

                                      ASSIGNOR:    
 
                                    180 N. LASALLE II, L.L.C.,         a
Delaware limited liability company    
 
                                    By:   180 N. LaSalle Holdings, L.L.C.,      
      a Delaware limited liability company,             its sole member    
 
                                        By:   PGRT Equity II LLC, a Delaware
limited                 liability company, its administrative member    
 
                                            By:   Prime Group Realty, L.P.,    
                a Delaware limited partnership,                     its sole
member    
 
                                                By:   Prime Group Realty Trust,
a                         Maryland real estate investment                      
  trust, its sole general partner    
 
                               
 
                  By:                                          
 
                      Name:        
 
                      Title:  
 
   
 
                         
 
            ASSIGNEE:    
 
                            ,                
 
      a(n)                                          
 
                               
 
      By:                                          
 
          Name:                                          
 
          Title:                                          

Agreement of Sale and Purchase

 

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EXHIBIT I
FORM OF ASSIGNMENT OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION (this “Assignment”) dated as of  _____, 2010, is
between 180 N. LASALLE II, L.L.C., a Delaware limited liability company
(“Assignor”), and  _____, a(n)  _____  (“Assignee”).
A. Assignor owns certain real property and certain improvements thereon known as
180 North LaSalle Street, Chicago, Illinois, and more particularly described in
Exhibit A attached hereto (the “Property”).
B. Assignor has entered into certain contracts which are more particularly
described in Schedule l attached hereto (the “Service Contracts”), which affect
the Property.
C. Assignor and Assignee entered into a Purchase and Sale Agreement dated as of
February  _____, 2010 (the “Purchase Agreement”), pursuant to which Assignee
agreed to purchase the Property from Assignor and Assignor agreed to sell the
Property to Assignee, on the terms and conditions contained therein.
D. Assignor desires to assign to Assignee its interest, if any, and to the
extent assignable, in (a) the Service Contracts, (b) certain warranties,
guaranties, and intangible personal property with respect to the Property, and
(c) all Licenses and Permits (as defined in the Purchase Agreement), and
Assignee desires to accept the assignment thereof, on the terms and conditions
below.
ACCORDINGLY, the parties hereby agree as follows:
1. Assignor hereby assigns to Assignee all of Assignor’s right, title, and
interest, if any, in and to the following, from and after the date hereof, to
the extent the same are assignable:
(a) the Service Contracts;
(b) any warranties and guaranties (“Warranties and Guaranties”) made by or
received from any third party with respect to any improvements owned by Assignor
on the Property; and
(d) the Licenses and Permits.
2. Assignee hereby accepts the foregoing assignment by Assignor and assumes all
of the Assignor’s obligations under the Contracts, the Warranties and Guaranties
and the Licenses and Permits arising on or after the date hereof.
3. Notwithstanding anything in this Assignment to the contrary, Assignor’s
liability hereunder is subject to the limitations set forth in Section 8.4 of
the Agreement.
Agreement of Sale and Purchase

 

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4. This Assignment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
5. This Assignment shall be governed and construed in accordance with the laws
of the State of Illinois.
6. This Assignment may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement the day
and year first above written.

                                  ASSIGNOR:   180 N. LASALLE II, L.L.C.,        
a Delaware limited liability company    
 
                                    By:   180 N. LaSalle Holdings, L.L.C.,      
      a Delaware limited liability company,             its sole member    
 
                                        By:   PGRT Equity II LLC, a Delaware
limited                 liability company, its administrative member    
 
                                            By:   Prime Group Realty, L.P.,    
                a Delaware limited partnership,                     its sole
member    
 
                                                By:   Prime Group Realty Trust,
a                         Maryland real estate investment
                        trust, its sole general partner    
 
                               
 
                  By:                                          
 
                      Name:        
 
                      Title:        
 
                         
 
                 
ASSIGNEE:
      a(n)                                          
 
                               
 
      By:                                          
 
          Name:                                          
 
          Title:        

Agreement of Sale and Purchase

 

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EXHIBIT J
FORM OF CERTIFICATE AS TO FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”),
provides that a transferee of a U.S. real property interest must withhold tax if
the transferor is a foreign person. To inform [          ] (“Transferee”) that
withholding of tax is not required upon disposition of a U.S. real property
interest by 180 N. LASALLE II, L.L.C., a Delaware limited liability company
(“Transferor”), the undersigned hereby certifies the following on behalf of
Transferor:
(a) Transferor is not a foreign corporation, foreign partnership, foreign trust
or foreign estate (as those terms are defined in the Code and Income Tax
Regulations);
(b) Transferor is not a disregarded entity as defined in Treasury Regulations
Section 1.14452(b)(2)(iii)(c). The U.S. employer identification number of
Transferor is 20-0587707;

         
 
  (c) Transferor has an address at:   c/o Prime Group Realty Trust
 
      330 North Wabash Avenue 
 
      Suite 2800
 
      Chicago, Illinois 60611

(d) The address of the subject property is 180 North LaSalle Street, Chicago,
Illinois.
Transferor understands that this Certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined this Certification
and to the best of my knowledge and belief it is true, correct and complete, and
I further declare that I have the authority to sign this document on behalf of
Transferor.
_______________ ___, 2010

     
 
  180 N. LASALLE II, L.L.C.,
 
  a Delaware limited liability company
 
   
 
  [Correct signature block to be inserted]

Agreement of Sale and Purchase

 

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EXHIBIT K
UNPAID COMMISSIONS, ALLOWANCES AND CONCESSIONS
[Intentionally Omitted]
Agreement of Sale and Purchase

 

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EXHIBIT L
EXAMPLE OF REAL ESTATE TAX PRORATION METHODOLOGY
[Intentionally Omitted]
Agreement of Sale and Purchase

 

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EXHIBIT M
LITIGATION
[Intentionally Omitted]
Agreement of Sale and Purchase

 

M-1

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EXHIBIT N
NEW LEASE GUIDELINES
[Intentionally Omitted]
Agreement of Sale and Purchase

 

N-1

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EXHIBIT O
PERMITTED EXCEPTIONS
[Intentionally Omitted]
Agreement of Sale and Purchase

 

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EXHIBIT P
REQUIRED ITEMS CHECKLIST

1.  
* Return of complete and signed ASSUMPTION APPLICATION.

2.  
Borrower Information Forms (enclosed) fully completed in accordance with the
instructions. New Borrower must be a legally formed entity satisfying Lender’s
current underwriting guidelines. Please refer to the enclosed section of the
Mortgage/Deed of Trust relating to borrower covenants for further information on
the nature and operation of the new borrowing entity including Single Purpose
Entity requirements, as applicable. Please note the following.

  A.  
If the current borrower is a Single Purpose Entity, then the New Borrower must
be a Single Purpose Entity.

  B.  
If the New Borrower is a single member entity, it must be formed in Delaware
whether or not the single member is a person or another business entity.

  C.  
If the new borrowing structure involves Tenants-In-Common (TIC), please note the
following requirements:

  •  
The maximum number of TICs is 3 for loans with an unpaid principal balance less
than or equal to $5 MM. The maximum number of TICs is 4 for loans with an unpaid
principal balance over $5MM;

  •  
Each TIC must be a Special Purpose Entity;

  •  
Each TIC must make a minimum equity contribution of $500,000;

  •  
Each TIC must provide an individual as the carve-out guarantor;

  •  
The sponsor of each TIC must otherwise qualify for the loan, based on lender’s
underwriting practice, on a “stand-alone” basis, independent of the other TICs;

  •  
Each TIC will provide non-consolidation opinions as may be required by Lender;

  •  
In most cases Lender will require a TIC “roll-up” into a single borrowing entity
within a specific time period as proscribed by Lender;

  •  
Lender may require additional conditions to compel the TIC roll-up, including
but not limited to deposits, springing recourse, and other conditions;

  •  
Each incremental TIC will be charged an additional $1,000 processing fee;

  •  
Legal retainers will be increased to accommodate the additional review and
structuring associated with a TIC borrowing entity.

  •  
Reverse 1031 exchanges are not permitted.

Agreement of Sale and Purchase

 

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3.  
Contact sheet [enclosed form] completed and returned with application.

4.  
* Copies of New Borrower’s formation documents, including all exhibits and
amendments.2

5.  
* An outline of New Borrower, including all members, partners, shareholders and
principals.3

6.  
If New Borrower consists of multiple entities, an organizational chart which
clearly identifies the relationship of the entities and the principals thereof,
including ownership percentages.

7.  
* A résumé for each of the Key Principals of New Borrower. [Key Principal is
defined as 1) for loans with an unpaid principal balance of $4.0MM or less, any
entity owning 50% or more in the New Borrower or any intermediate entity, the
proposed guarantor, any general partner of New Borrower or any intermediate
entity and any managing member of New Borrower or any intermediate entity and 2)
for loans with an unpaid principal balance over $4.0MM, any entity owning 20% or
more in the New Borrower or any intermediate entity, the proposed guarantor, any
general partner of New Borrower or any intermediate entity and any managing
member of New Borrower or any intermediate entity.]

8.  
* A list of all persons who are being proposed to sign as replacement guarantors
or indemnitors.

9.  
* A list of all principals who will control the management of New Borrower.

10.  
A copy of any management contract for the property and a resume of the manager.
If New Borrower does not plan to enter into a property management contract for
the property, New Borrower must provide WFB with a proposal for the management
of the property.

11.  
* A copy of the fully executed sales contract for the proposed sale of the
property, with all addendums and extensions attached and, if New Borrower is not
the entity that executed the sales contract as purchaser there under, evidence
of the assignment of the purchaser’s interest to New Borrower.

12.  
* A current preliminary title report for the Property with copies of any items
recorded after the original closing of the loan

13.  
A W-9 Tax Form for New Borrower [enclosed form].

 

      2  
Note: Copies of any operating agreements will be provided by the Final
Submission Date.
  3  
Note: Outline for Key Principals will be provided by the Preliminary Submission
Date; outline for all other members to be provided by the Final Submission Date.

Agreement of Sale and Purchase

 

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14.  
A copy of the 1031 Exchange documentation, that clearly states the 180-day
Exchange Completion Date. (See section D of this application). Please note:
Lender does not offer any tax advice or assume any responsibility for any
completion date deadlines for 1031 Exchanges. The federal, state and local tax
treatment of the loan assumption and any conditions related thereto are the sole
and complete responsibility of the Applicant.

15.  
Current (within three months) financial statements for New Borrower, all
intermediate legal entities, and all Key Principals. [Enclosed forms: Financial
Statement and Schedules].

16.  
Current bank and investment account statements for New Borrower, all
intermediate entities and all Key Principals for those accounts containing the
bulk of their liquid assets.

17.  
Schedule of Real Estate owned [enclosed form], fully completed for New Borrower,
all intermediate entities, all Key Principals and all their affiliates.

18.  
Most recent income tax returns, (last 3 years) with all schedules and
attachments, for New Borrower, all intermediate entities, and all Key
Principals.

19.  
Most recent fiscal year-end cash flow statements, (signed and dated),
identifying the actual recurring and non-recurring cash flow for each property
listed on the Schedule of Real Estate Owned. Also a year-to-date cash flow
statement should be provided.

20.  
Credit Check Authorizations [enclosed form], fully completed signed and dated by
Key Principals.

21.  
Return of three (3) Lender Reference Forms completed and signed by both the New
Borrower and Lender.

22.  
Cash flow statements and operating statements for the Property for the most
recent fiscal year-end and the current year to date. The cash flow statement
should be presented on a quarterly basis. An authorized principal of Borrower
must certify (sign and date) all cash flow and operating statements.

23.  
Twelve-month projected cash flow and operating statements for the Property.

24.  
A current rent roll listing all the tenants leasing space in the Property, the
square footage leased per tenant, monthly base rent, rent per square foot, lease
expiration for each lease, percentage of space leased, occupied and total
vacant.

25.  
Three recent sales transactions in the local area real estate market comparable
to the subject property.

26.  
Three recent leasing transactions in the local area real estate market
comparable to the subject property.

Agreement of Sale and Purchase

 

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EXHIBIT Q
PROPERTY EMPLOYEES
[Intentionally Omitted]

 

Q-1

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EXHIBIT R
PENDING TAX ASSESSMENT PROCEEDINGS
[Intentionally Omitted]

 

R-1

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EXHIBIT S
EXISTING LOAN ESCROWS
[Intentionally Omitted]

 

S-1

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EXHIBIT T
PENDING LEASES
[Intentionally Omitted]

 

T-1