EXHIBIT 10.13
FORM OF
OPTION AGREEMENT
by and between
PRIME GROUP REALTY, L.P.,
a Delaware limited partnership
and
000 XXXXX XXXXXXX L.L.C.,
an Illinois limited liability company
Dated as of: November _____, 1997
OPTION AGREEMENT
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THIS OPTION AGREEMENT is made as of the _____ day of November, 1997, by and
between 000 XXXXX XXXXXXX L.L.C., an Illinois liability company ("Seller") and
PRIME GROUP REALTY, L.P., a Delaware limited partnership ("Purchaser").
WITNESSETH:
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WHEREAS, Seller is the fee owner of the Parcel (as hereinafter defined)
consisting of approximately 58,000 square feet of land located at 000 Xxxxx
XxXxxxx Xxxxxx in Chicago, Illinois; and
WHEREAS, Purchaser is in the process of purchasing certain developments and
other parcels of land from the Seller;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Certain Definitions. When used herein, the following terms shall
have the respective meanings set forth opposite each such term:
"Agreement" means this Option Agreement, including the Exhibits attached
hereto, which are by this reference incorporated herein and made a part hereof.
"Closing" means the closing of the sale and purchase of the Parcel as
evidenced by the delivery of the Deed thereto by Seller to Purchaser and the
payment of the Purchase Price to Seller. The Closing shall occur concurrently
with the execution and delivery of this Agreement.
"Deed" means a deed to be delivered by Seller to Purchaser at the Closing,
conveying the Parcel to Purchaser subject only to the Permitted Title Exceptions
relating to the property being conveyed.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, orders, directions and requirements of all governments and
governmental authorities (including any local Board of Fire Underwriters) having
jurisdiction of or over the Parcel or the operation thereof.
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"Option" shall mean the Purchaser's option to purchase the Parcel pursuant
to the terms of this Agreement.
"Option Price" means a sum equal to 95.0% of the fair market value of the
Parcel at the time of the exercise of the Option.
"Parcel" means the real property containing approximately 58,000 square
feet of land which is legally described on Exhibit A attached hereto, together
with all improvements thereon and therein and all privileges, rights, easements,
hereditaments and appurtenances thereto belonging.
"Permitted Title Exceptions" means the matters listed and described on
Exhibit B attached hereto.
"Title Commitment" means a commitment for an ALTA Form B Owner's Title
Insurance Policy for the Parcel issued by the Title Insurer in the amount of
___________ Dollars ($______), covering title to the Parcel showing Seller as
owner of the Parcel in fee simple, subject only to the permitted Title
Exceptions and other exceptions pertaining to liens or encumbrances of a
definite or ascertainable amount with respect to the Parcel which may be removed
by the payment of money at the Closing for the Parcel and which Seller shall so
remove, and providing for full extended coverage over all general title
exceptions contained in such policies and special endorsements mutually and
reasonably agreed upon by Seller and Purchaser. In the event the Title
Commitment discloses exceptions to title other than the Permitted Title
Exceptions, Seller shall have the right to cause the Title Insurer to insure
over such exceptions so long as the manner thereof is reasonably acceptable to
Purchaser.
"Title Insurer" means _________________________________.
"Title Policy" means the title policies to be issued for the Parcel
pursuant to Title Commitment, in the amount of the Purchase Price, insuring fee
simple title to the Parcel in Purchaser as of the Closing applicable to the
Parcel, subject only to the Permitted Title Exceptions applicable thereto.
1.02 Additional Definitions. The definitions of certain other terms are
contained in the text of this Agreement.
ARTICLE II
PURCHASE AND SALE; OPTION; PURCHASE PRICE
2.01 Purchase and Sale. Upon the exercise of the Option by the Purchaser,
subject to the conditions and on the terms contained in this Agreement, Seller
agrees to sell and convey and Purchaser agrees to purchase and acquire from
Seller the Parcel, subject to the Permitted Title Exceptions applicable thereto.
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2.02 The Option. Purchaser shall have the right to exercise the Option at
any time commencing on or after the date of the Closing and ending on November
______, 2007. Upon Purchaser's exercise of the Option, Purchaser shall have the
right to select the date of the Closing, which date shall be reasonably
acceptable to Seller and shall be no earlier than the date which is ninety (90)
days after Purchaser's exercise of the Option and no later than November
________, 2007.
2.03 Method of Exercise. Purchaser shall exercise the Option by giving
Seller written notice of its election to exercise such Option at any time during
the applicable time periods described in Sections 2.02, in the manner provided
in Section 9.08 for the giving of notices.
2.04 Purchase Price. At the Closing, Purchaser shall pay to Seller the
Purchase Price in cash, by wire transfer of immediately available funds to a
bank account designated by Seller.
ARTICLE III
CONDITIONS PRECEDENT TO CLOSING
3.01 The obligation of Purchaser to purchase the Parcel is subject to the
condition that Seller shall perform each and every obligation of Seller under
this Agreement to be performed by Seller on or before the date of the Closing.
ARTICLE IV
CLOSING MATTERS
4.01 Possession, Closing Adjustments and Expenses.
(a) Sole and exclusive possession of the Parcel, subject to the
Permitted Title Exceptions applicable thereto shall be delivered to Purchaser
concurrently with the Closing.
(b) Following the Closing, Purchaser shall pay to Seller all rents
which Purchaser shall collect with respect to the Parcel being purchased which
are attributable to periods preceding the Closing, except that all such rents
collected by Purchaser shall first be applied to satisfy all current rents due
Purchaser; and Seller shall pay to Purchaser all rents received by Seller from
any tenant with respect to the Parcel after the Closing which are attributable
to periods succeeding the Closing.
(c) All costs for the documents delivered by Seller to Purchaser
prior to the Closing, all title charges and premiums, all state, county and
municipal transfer taxes and all fees and other charges imposed in connection
with the transaction contemplated hereby shall be paid by Purchaser. The parties
shall each be solely responsible for the fees and disbursements of their
respective counsel and other professional advisers.
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4.02 Closing.
(a) On or before the Closing, Seller shall deliver to Purchaser the
following:
(i) the original Deed for the Parcel, executed by Seller;
(ii) an original affidavit executed by Seller, sufficient to
exempt the transactions contemplated hereby from the
withholding tax requirement imposed by Section 1445A of
the Internal Revenue Code;
(iii) an updated Title Commitment with respect thereto dated not
earlier than fifteen (15) days prior to the Closing
showing title to the Parcel in Seller, subject only to the
Permitted Title Exemptions applicable to the Parcel; and
(iv) such other documents, instruments, certifications and
confirmations as may be reasonably required and designated
by Purchaser or the Title Insurer to fully effect and
consummate the transactions contemplated hereby.
(b) On or before the Closing, Purchaser shall deliver to Seller the
following:
(i) the Purchase Price;
(ii) an original assumption agreement executed by Purchaser,
pursuant to which Purchaser agrees to assume Seller's
obligations, from and after the Closing Date, with respect
to the Parcel, except to the extent otherwise specified by
Purchaser and Seller; and
(iii) such other documents, instruments, certifications and
confirmations as may be reasonably required and designated
by Seller or the Title Insurer to fully effect and
consummate the transactions contemplated hereby.
(c) Seller and Purchaser shall cooperate to provide original,
executed certificates complying with the provisions of state, county and local
law applicable to the determination of documentary and transfer taxes.
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
5.01 Covenants of Seller.
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(a) On the Closing, Seller shall tender possession of the Parcel to
Purchaser in the same condition the Parcel was in when last inspected by
Purchaser or its agents or contractors prior to the date of this Agreement,
except for ordinary wear and tear or changes resulting from actions taken by or
on behalf of Purchaser.
(b) Seller has previously delivered or made available to Purchaser at
Seller's sole cost and expense true, correct and complete copies of the
following:
(i) the Title Commitment, disclosing no exceptions to title other
than the Permitted Title Exceptions (and liens and encumbrances
which will be removed at the Closing) or, if disclosing
exceptions to title other than the Permitted Title Exceptions
(and liens and encumbrances which will be removed at the
Closing), evidence of title insurance reasonably satisfactory to
Purchaser;
(ii) the most recent real estate tax bills pertaining to the Parcel;
and
(iii) an environmental report relating to the Parcel, in form and
content reasonably acceptable to Purchaser.
5.02 Representations and Warranties of Seller. Purchaser hereby
acknowledges that Seller has made no representations or warranties whatsoever to
Purchaser with respect to the subject matter of this Agreement or in connection
with the execution and delivery hereof.
5.03 Representations and Warranties of Purchaser. Seller hereby
acknowledges that Purchaser has made no representations or warranties whatsoever
to Seller with respect to the subject matter of this Agreement or in connection
with the execution and delivery hereof.
ARTICLE VI
INDEMNIFICATION
6.01 Seller's Indemnity. As acknowledged by Purchaser in Section 5.02
above, Seller has made no representations or warranties to Purchaser with
respect to the subject matter of this Agreement or in connection with the
execution and delivery hereof. Accordingly, Purchaser shall have no rights or
remedies against Seller by reason of any alleged inaccuracy of any such alleged
representation or warranty, and Seller shall have no indemnification obligations
hereunder with respect thereto.
6.02 Purchaser's Indemnity. Purchaser hereby agrees to indemnify, defend
and hold Seller, its partners, officers, shareholders, directors, employees and
agents harmless from and against any and all claims, losses, damages,
liabilities and expenses which arise out of, are with respect to, or are based
upon:
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(i) the inaccuracy in any material respect of any representation or
warranty, or a material breach of any covenant of Purchaser
contained herein or in any certificate or instrument furnished
to Seller by or on behalf of Purchaser;
(ii) any obligations, liabilities or charges of Seller that are
expressly assumed by Purchaser; or
(iii) the operation and management of any portion of the Parcel by
or for Purchaser after the Closing.
ARTICLE VII
ADDITIONAL PROVISIONS
7.01 Amendments and Waivers. This Agreement may not be amended, modified or
discharged nor may any of its terms be waived except by an instrument in writing
signed by the party to be bound thereby.
7.02 Further Assurances. The parties each agree to do, execute,
acknowledge and deliver all such further acts, instruments assurances and to
take all such further action after the Closing as shall be necessary or
desirable to fully carry out this Agreement and to fully consummate and effect
the transaction contemplated hereby.
7.03 Survival and Benefit. All agreements, obligations and indemnities of
Purchaser hereunder shall survive for a period of one (1) year from and after
the Closing, and the same shall inure to the benefit of Seller's successors and
assigns and be binding upon Purchaser's successors and assigns.
7.04 No Third Party Benefits. This Agreement is for the sole and exclusive
benefit of the parties hereof and their respective successors and assigns, and
no third party is intended to or shall have any rights hereunder.
7.05 Purchaser's Investigation and Inspections. Any investigation or
inspection conducted by Purchaser, or any agent or representative of Purchaser,
pursuant to this Agreement or the transaction contemplated hereby, in order to
verify independently Seller's satisfaction of any conditions precedent to
Purchaser's obligations hereunder or to determine whether Seller's warranties
are true and accurate, shall not affect, or constitute a waiver by Purchaser of,
any of Seller's obligations hereunder or Purchaser's reliance thereon.
7.06 Brokerage. Each party hereby represents and warrants to that it has
not dealt with any broker or finder with the transaction contemplated hereby,
and each party hereby agrees to indemnify the other for any claim for brokerage
commission or finder's fee asserted by a person, firm or corporation claiming to
have been engaged by the indemnifying party.
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7.07 Notices. Any notice, request, demand, instructions or other
document to be given or served hereunder or under any document or instrument
executed pursuant hereto shall be in writing and shall be delivered personally
or sent by United States registered or certified mail, return receipt requested,
or by overnight express courier guaranteeing next business day delivery, postage
prepaid and addressed to the parties at their respective addresses set forth
below, and the same shall be effective upon receipt if delivered personally or
three (3) business days after deposit in the mails or one (1) business day after
deposit with an overnight express courier. A party may change its address for
receipt of notices by service of a notice of such change in accordance herewith.
If to Purchaser: Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
With a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
If to Seller: c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
With a copy to: The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
7.08 Interpretation.
(a) The headings and captions herein are inserted for convenient
reference only and the same shall not limit or construe the Articles or Sections
to which they apply or otherwise affect the interpretation hereof.
(b) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), trusts, corporations and other
legal entities, including public bodies, as well as natural persons.
(c) The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "without being limited to".
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(d) This Agreement and any document or instrument executed pursuant
hereto may be executed in any number of counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
(e) Whenever under the terms of this Agreement the time for
performance of a covenant or condition falls upon a Saturday, Sunday or holiday,
such time for performance shall be extended to the next business day.
Otherwise, all references herein to "days" shall mean calendar days.
(f) This Agreement shall be governed by and construed by and construed
in accordance with the laws of the State of Illinois.
(g) Time is of the essence of this Agreement.
7.9 Defaults/Remedies. Except as otherwise provided in or limited by
Section 6.01, in the event of a breach or default by Seller of any of the terms
and provisions of this Agreement, Purchaser shall have all of its rights and
remedies available at law or in equity. In the event of a breach or default by
Purchaser of any of the terms and provisions of this Agreement, Seller shall
have all of its rights and remedies available at law or in equity.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
Seller and Purchaser each as of the date first hereinabove set forth.
PURCHASER:
PRIME GROUP REALTY, L.P.,
a Delaware limited partnership
By: PRIME GROUP REALTY TRUST,
a Maryland real estate investment trust,
its Managing General Partner
By: ______________________________
Name: ______________________________
Title:______________________________
SELLER:
000 XXXXX XXXXXXX L.L.C.,
an Illinois limited liability company
By: ____________________________________
Name:_______________________________
Title:______________________________
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