EXHIBIT 99.5
Rent Subsidy Escrow Agreement
THIS ESCROW AGREEMENT ("Escrow Agreement") is made effective as of
October 8, 2004 (the "Effective Date"), by and among CENTERPOINT PROPERTIES
TRUST, a Maryland real estate investment trust (herein referred to as
"Purchaser") and PRIME GROUP REALTY, L.P., a Delaware limited partnership
(herein referred to as "Seller"), and CHICAGO TITLE AND TRUST COMPANY (the
"Escrow Agent").
RECITALS:
A. Seller and Purchaser entered into that certain Purchase Agreement
dated as of August 2, 2004 (as amended from time to time, the "Agreement"),
which provides for the sale and purchase of, among other things, that certain
real property commonly known as 0000 Xxxxxxx Xxxxx xx Xxxxxx, Xxxxxxxx (the
"1455 Sequoia Project") and that certain real property commonly known as the
Arlington Heights Enterprise Center, 000 X. Xxxxxxxxx Xxxx, Xxxxxxxxx Xxxxxxx,
Xxxxxxxx (the "Arlington Heights Project").
B. Seller has agreed to deposit $641,418.42 in escrow with the Escrow
Agent ("Escrowed Funds"), who has agreed to act as escrow agent with respect to
the Escrowed Funds pursuant to the terms set forth herein. The Escrowed Funds
represent rental income or operating expenses for the vacant space in the 1455
Sequoia Project and the Arlington Heights Project as of the date hereof (the
"Vacant Space") calculated as depicted on Exhibit A.
C. The parties desire to appoint the Escrow Agent to act on their behalf
with respect to the matters contained in this Escrow Agreement.
AGREEMENTS:
NOW, THEREFORE, IN CONSIDERATION of the Recitals, which are hereby
incorporated herein, and further in consideration of the mutual covenants set
forth herein, the parties agree as follows:
1. Escrowed Funds.
a. Appointment and Acceptance of the Escrow Agent. The Escrow Agent is hereby
appointed by the Purchaser and the Seller as escrow agent to act in
accordance with the instructions set forth herein. The Escrow Agent hereby
accepts such appointment.
b. Term of Escrow. This Escrow Agreement shall terminate on the date all of
the funds in the Escrowed Funds have been disbursed as provided herein.
c. Duty to Hold Escrowed Funds. Escrow Agent shall hold the Escrowed Funds
and all earnings thereon and shall disburse such funds only in accordance
with this Agreement.
d. Investment. Escrow Agent is authorized and directed to invest the Escrowed
Funds deposited pursuant hereto on the joint written direction of the
parties. Each taxpayer's identification number and investment forms as
required shall be provided prior to any such investment. Escrow Agent is
not to be held responsible for any loss of principal or interest which may
be incurred as a result of making the investments or redeeming said
investments as provided herein, including, but not limited to, any loss
occasioned by reason of the fact that the selected investment may not be
insured by the Federal Deposit Insurance Corporation. Escrow Agent shall
not be held responsible for failure to invest funds for which it has not
received written instructions, completed investment forms, bank credit
advise of receipt of funds or for delays in wire transfer of funds not
caused by its own negligence.
2. Disposition of Escrowed Funds.
a. Joint Direction. Except as otherwise provided in this Section 2, the
Escrow Agent is authorized to disburse the Escrow Deposit only in
accordance with instructions set forth in any written letter of direction
executed by both Purchaser and Seller.
b. Rental Subsidy. On October 8, 2004, and on the first day of each month
thereafter up to and including October 1, 2005, Purchaser shall submit to
Seller and Escrow Agent a certification (the "Leasing Certification") in
the form attached hereto as Exhibit A which specifies the amount of rental
income for the current month (or portion thereof) attributable to the
Vacant Space and such backup information as is reasonably required to
verify such rental income. In the event such Leasing Certification
reflects no rental income attributable to the Vacant Space for the
then-current month (or portion thereof), Escrow Agent shall, upon its
receipt of such Leasing Certification, release to Purchaser an amount
equal to (a) $70,720.08 through December, 2004, and (b) $48,180.08 from
and after January 1, 2005 (the "Monthly Escrow Payment") from the Escrowed
Funds (prorated for any partial month). In the event that the Leasing
Certification reflects rental income attributable to the Vacant Space for
the then-current month, Escrow Agent shall, within five (5) days after its
receipt of such Leasing Certification, (1) release to Purchaser an amount
equal to the Monthly Escrow Payment less the amount of any rental income
set forth in such Leasing Certification, and (2) release to Seller an
amount equal to the rental income shown on the Leasing Certification.
After payment of any amounts due and owing to Purchaser based upon the
Leasing Certification received from Purchaser for the month of October,
2005, Escrow Agent shall release the balance of the Escrowed Funds, if
any, to Seller. "Rental Income" shall include any base-rent or additional
rent payable during the current month by any tenants or occupants of any
portion of the Vacant Space, including operating expenses and real estate
tax payments.
c. Leasing. Purchaser shall retain a commercial leasing broker to attempt to
lease the Vacant Space, and the Monthly Escrow Payments shall be offset by
any Rental Income for new leases signed by Purchaser from any tenants or
occupants of the Vacant Space during such 12-month period. Upon Seller's
request, Purchaser shall promptly provide Seller with copies of the
pertinent provisions of any new leases and such other information as
Seller shall reasonably request to audit the information contained in any
Leasing Certification.
3. Limitations on Liability of Escrow Agent.
a. The duties and obligations of Escrow Agent shall be determined solely by
the provisions of this Escrow Agreement and no implied duties or
obligations shall be read into this Escrow Agreement against Escrow Agent.
Escrow Agent shall be under no obligation to refer to the Agreement or any
other documents between or among the parties related in any way to this
Escrow Agreement, except as specifically provided herein.
b. Escrow Agent shall not be liable to anyone for any damages, losses or
expenses for any act done or step taken or omitted by Escrow Agent in good
faith; provided, however, that Escrow Agent shall be liable for damages,
losses and expenses arising out of its willful default or gross negligence
under this Escrow Agreement.
c. Escrow Agent shall be entitled to rely upon, and shall be protected in
acting in reasonable reliance upon, any writing furnished to Escrow Agent
by any party in accordance with the terms hereof, which the Escrow Agent
believes in good faith to be genuine and valid and to have been signed by
the proper party or parties.
d. Escrow Agent may, but shall not be required, to file an action of
interpleader in connection with any disagreement or dispute between the
parties to this Escrow Agreement. Escrow Agent shall be entitled to be
paid or reimbursed for all expenses, disbursements and advances, including
reasonable attorneys' fees, incurred or made by Escrow Agent in connection
with the carrying out of its duties hereunder. Escrow Agent's fees (which
shall be $500.00) and all such expenses, disbursements and advances
shall be borne by Seller.
e. Any action claimed to be required to be taken by Escrow Agent hereunder
and not otherwise specifically set forth herein shall require the
agreement of Purchaser, Seller and Escrow Agent.
4. Resignation of Escrow Agent. If Escrow Agent desires to resign as Escrow
Agent, it shall provide thirty (30) days written notice (a "Resignation
Notice") of its intention to so resign to Purchaser and to Seller. Upon
receipt of a Resignation Notice, Purchaser and Seller shall agree on a
successor escrow agent mutually acceptable to Purchaser and Seller, which
successor shall agree in writing to be bound by the terms hereof. If Seller
and Purchaser cannot agree on a successor escrow agent, Escrow Agent shall
turn over the Escrowed Funds to a court of competent jurisdiction in the
State of Illinois.
5. Amendments. No modification or amendment to this Escrow Agreement, or waiver
of compliance with any provision or condition hereof shall be valid unless
reduced to writing and signed by all of the parties hereto.
6. Effect of this Escrow Agreement. This Escrow Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, arrangements and understandings
relating to the subject matter hereof. This Escrow Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors
and legal representatives. The paragraph headings of this Escrow Agreement
are for convenience of reference only and do not form a part hereof and do
not in any way modify, interpret or construe the intentions of the parties.
This Escrow Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois without regard to its conflicts of laws
principles, and the state and federal courts of Illinois shall have exclusive
jurisdiction over any controversy or claim arising out of or relating to this
Agreement.
7. Notices. All notices and demands hereunder shall be in writing, and shall be
delivered by courier, by registered or certified mail, return receipt
requested, or by facsimile transmission and shall be deemed given two (2)
business days after deposited in the United States Mail with sufficient
postage prepaid thereon to carry it to its addressed destination, or when
delivered by courier or facsimile transmission (with hard copy sent no later
than 24 hours following transmission), and addressed as follows:
To Seller: c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxxx
with a copy to: c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
To Purchaser: CenterPoint Properties Trust
0000 Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxx
To Escrow Holder: Chicago Title and Trust Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxx
Such addresses may be changed at any time and from time to time, by notice as
above provided.
8. Counterparts. This Escrow Agreement may be executed in two or more
counterparts, and by the different parties hereto on separate
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the
date first above written.
SELLER: PRIME GROUP REALTY, L.P., a Delaware limited
------ partnership, individually and in its capacity as
the sole administrative member of the Owners
By: Prime Group Realty Trust, its Managing
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Its: President & Chief Executive Officer
PURCHASER: CENTERPOINT PROPERTIES TRUST, a Maryland real
--------- estate investment trust
By: /s/ Xxxx X. Xxxxx
-----------------------------
Its: Chief Investment Officer
-----------------------------
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Its: Vice President Controller
-----------------------------
Accepted this 8th day of
---
October, 2004
Chicago Title and Trust Company
Escrow Holder
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Senior Vice President
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