ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated December 26, 1996 by and
among NEWSWEB CORPORATION, an Illinois corporation ("Newsweb"),
CDCT ACQUISITION TRUST, an Illinois business trust ("Newsweb Sub"),
CITYFRONT CENTER, L.L.C., a Delaware limited liability company
("Cityfront") and CITYFRONT ACQUISITION TRUST, an Illinois business
trust ("Cityfront Sub").
WHEREAS, Newsweb and Newsweb Sub (collectively, the "Newsweb
Entities") and The Chicago Dock and Canal Trust, an Illinois
business trust (the "Trust") are parties to an Acquisition and
Merger Agreement dated as of September 27, 1996 (the "Newsweb
Merger Agreement");
WHEREAS, Cityfront and Cityfront Sub (collectively, the "Cityfront
Entities") have, subsequent to the execution of the Newsweb Merger
Agreement, made certain proposals to the Trust regarding the
Cityfront Entities' acquisition of the Trust;
WHEREAS, the parties hereto are, along with the Trust and certain
other persons, parties to certain litigation in the Xxxx County
Circuit Court, Chancery Division (the Court"), entitled Newsweb
Corporation et al. vs. Cityfront Center, L.L.C. et al, (No. 96 CH
13306) relating to, among other things, the Newsweb Merger
Agreement and the Cityfront proposals (the "Litigation");
WHEREAS, the Cityfront Entities have presented the Trust with a
proposal, dated December 21, 1996 (the "Cityfront Proposal") to
acquire all of the outstanding shares of the Trust for $25.00 per
share, such proposal embodied in an Acquisition and Merger
Agreement proposed to be executed by the Cityfront Entities and the
Trust (the "Draft Cityfront Merger Agreement")
WHEREAS, the Trust has advised Newsweb that the Cityfront Proposal
constitutes a "Superior Proposal" as defined under the Newsweb
Merger Agreement;
WHEREAS, the parties hereto desire to agree upon the sale of
certain assets of the Trust to Newsweb should the Cityfront
Proposal be accepted, the settlement of the Litigation and other
disputes between the parties, and certain other matters;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein, and intending to be bound hereby,
the parties agree as follows:
ARTICLE I
Purchase and Sale of Assets
Section 1.01. Agreement of Purchase and Sale. Subject to the
terms and conditions hereinafter set forth, Cityfront agrees to
sell and convey and Newsweb agrees to purchase the following:
(a) marketable title to the lessor's reversionary interest in the
real estate described on Exhibit 1.01 attached hereto as the
Sheraton Parcel together with lessor's interest (as it exists on
the date hereof) in the ground lease of such real estate;
(b) marketable fee simple title to Parcel P-7 described on Exhibit
1.01 attached hereto and made a part hereof;
(c) marketable fee simple title to Parcel P-8 described on Exhibit
1.01 attached hereto and made a part hereof;
(d) marketable fee simple title to the Xxxxx Plaza Fee Parcel as
described in Exhibit 1.01 attached hereto and made a part hereof,
together with good title to the leasehold interest (as it exists on
the date hereof) of CDCT Plaza Corporation in the property
described in Exhibit 1.01 attached hereto as the Xxxxx Plaza
Leasehold Parcel together with Cityfront's interest in and to that
license with the City of Chicago to use a portion of Columbus
Drive, together with marketable title to the landlord's interest in
the lease to General Parking Corporation;
(e) good title to the interest (as it exists on the date hereof)
of the Trust in and to that certain Agreement of Sale and Purchase
between the Trust and Chicago Dance Theater, Inc. dated as of
August 31, 1994, as amended to the date hereof together with the
entire interest of Chicago Dock in and to the land described in
that agreement (the "MAD Parcel");
(f) 100% of the issued and outstanding stock in CDCT Plaza
Corporation; and
(g) 100% of the issued and outstanding stock in CDCT Residence
Corp.
(h) good title to the Xxxxx Xxxxxx sculpture known as "8 curved
chairs".
The items listed in (a) through (d) above are collectively called
the "Real Estate". The items listed in (d) through (h) above are
collectively called the "Personalty". The items listed in (a)
through (h) above are collectively called the "Assets".
Section 1.02. Permitted Exceptions. Cityfront shall convey, or
cause the Trust or its successor to convey the Real Estate by
trustee's deed subject only to the matters listed on Exhibit 1.02
attached hereto (herein referred to collectively as the "Permitted
Exceptions"). Good title to all other assets shall be transferred
by appropriate instrument(s) warranting only that the transferor
has not previously transferred the item and holds it free of any
claims of third parties.
Section 1.03. Purchase Price. Cityfront is to sell and Newsweb is
to purchase the Assets for a total of $24,000,000 (the "Purchase
Price"). In addition, if, within one (1) year following the
Closing Date, Newsweb reacquires the MAD Parcel, it shall pay, as
additional consideration and in the manner provided in Section
1.04, an additional $500,000 to Cityfront.
Section 1.04. Payment of Purchase Price. The Purchase Price, as
increased or decreased by prorations and adjustments as herein
provided, shall be payable in full at Closing in cash by wire
transfer of immediately available federal funds to a bank account
designated by Cityfront in writing to Newsweb prior to the Closing.
Section 1.05. Inspections. Cityfront shall use commercially
reasonable efforts to cause Chicago Dock to permit Newsweb to enter
upon the Real Estate to make inspections and tests, to do surveys
and other engineering studies of the Real Estate and Cityfront
shall cause Chicago Dock to operate the properties as such
properties have been operated to the date hereof.
Section 1.06. Planned Development. The Property is subject to the
residential-business planned development number 368 (the "PD")
under the Chicago Zoning Ordinance approved by the City Council of
Chicago on November 6, 1985 and published in the Journal of
Proceedings of the City Council for the Regular Meeting of the
Council held November 6, 1985 (pages 21788-21800), with corrections
published in the said Journal of Proceedings for the Regular
Meeting held November 13, 1985 (pages 22214-22216) and the Design
Standards established pursuant thereto. Cityfront and Newsweb
acknowledge and agree that: (i) each of Newsweb and Cityfront
shall have complete discretion to change the Design Standards of
the PD with respect to property owned by it without approval of the
other party; (ii) Newsweb and Cityfront shall each have complete
discretion to seek administrative changes and interpretations of
the PD with respect to property owned by it without consent of the
other party; (iii) Cityfront shall, if necessary, provide its
consent and use reasonable commercial efforts to obtain the consent
of The Equitable Life Assurance Society of the United States, if
required in connection with clauses (i) and (ii) above. Except as
set forth above, neither Cityfront nor Newsweb shall consent to any
amendment of the PD without the consent of the other party hereto,
provided neither party shall unreasonably withhold or delay any
such consent. Each of Newsweb and Cityfront shall, to the extent
reasonably practicable, cooperate in seeking changes to the PD
requested by the other party.
Section 1.07. Land Use. At Closing Cityfront shall execute an
instrument in recordable form: (i) assigning to Newsweb the right
to construct the maximum square feet of improvements permitted
under the PD on Parcel P-7, Parcel P-8 and the MAD Parcel, (ii)
assigning to Newsweb the right to utilize 60,000 square feet of
retail area within Parcel X-0, Xxxxxx X-0 and the MAD Parcel, and
(iii) assigning to Newsweb the right to utilize the balance of
hotel rooms allocated to Sub Areas B and C under the PD as of the
date hereof within Parcel X-0, Xxxxxx X-0 and the MAD Parcel.
ARTICLE II
Agreements With Respect To the Cityfront Proposal
Section 2.01. Cityfront Merger Agreement. Cityfront agrees to use
its best efforts to enter into a merger agreement with the Trust on
substantially the same terms and conditions as the Draft Cityfront
Merger Agreement (as executed, the "Cityfront Merger Agreement")
not later than December 27, 1996.
Section 2.02. Compliance; Best Efforts. Cityfront agrees to use
its best efforts to (i) comply in full with all of its obligations
under the Cityfront Merger Agreement; (ii) satisfy all of the
conditions to closing under the Cityfront Merger Agreement; (iii)
enforce its rights under the Cityfront Merger Agreement against the
Trust; and (iv) effect a closing under the Cityfront Merger
Agreement as soon as practicable.
Section 2.03. Effect of Delay in Effective Time. Cityfront agrees
that, should the Effective Date of the merger provided in the
Cityfront Merger Agreement (the "Cityfront Merger") not occur on or
prior to that date which is (i) February 19, 1997 plus (ii) the
number of days between the filing with the SEC of preliminary proxy
materials for the Cityfront Merger and the receipt of SEC clearance
of such proxy materials, then Cityfront will offer to increase the
Merger Consideration thereunder by an amount equal to .75% of the
Merger Consideration for each month, or part thereof, that the
Effective Date is delayed after such date, less the amount of cash
dividends by the Trust after such date.
Section 2.04. Voting of Newsweb Shares. Following the execution
of the Cityfront Merger Agreement and the termination of the
Newsweb Merger Agreement (including the payment to Newsweb of the
Termination Fee and Expenses provided for therein), and for so long
as Cityfront is in compliance the Cityfront Merger Agreement and
with this Agreement, (a) Newsweb agrees to vote all shares of the
Trust owned by it or its affiliates in favor of the Cityfront
Merger Agreement and the transactions contemplated therein; and (b)
Newsweb agrees to take such other steps as reasonably requested by
Cityfront, consistent with this Agreement, to support the Cityfront
Merger Agreement and the transactions contemplated thereby.
Section 2.05. Right of Substitution. Cityfront agrees that, as of
the earlier of (i) April 30, 1997 and (ii) ten (10) days following
the shareholder vote approving the Cityfront Merger, should
Cityfront fail to perform and discharge its obligations under the
Cityfront Merger Agreement in a timely fashion or become unable to
so perform and discharge such obligations, then Newsweb shall have
the right, privilege and option, at Newsweb's sole discretion, to
cause the Cityfront Entities to assign to the Newsweb Entities all
of the Cityfront Entities' rights under the Cityfront Merger
Agreement, including the right to performance thereunder.
Cityfront acknowledges and agrees that the foregoing is in addition
to, and not in lieu of, any rights and remedies available to
Newsweb under this Agreement or at law or equity, including any
rights provided in Section 10.08.
Section 2.06. Rights in Light of Other Proposals. The parties
agree that, should the Cityfront Merger Agreement not be
consummated for any reason, but Cityfront or any of its affiliates
or its equity investors or their affiliates shall at any time
acquire a substantial portion of the Trust or its assets, then the
obligations of the parties with respect to the purchase and sale of
the Assets shall remain in full force and effect. Such obligations
shall be in addition to, and not in lieu of, any rights and
remedies available to Newsweb under this Agreement or at law or
equity.
ARTICLE III
Settlement of Litigation
Section 3.01. Resolution Of Litigation. The parties to this
Agreement presently are some of the parties to the Litigation. In
the Litigation, by an order of December 20, 1996, Judge Schiller
refused injunctive relief requested by the Newsweb Entities. The
parties agree that if: (a) the Cityfront Merger is timely
consummated, (b) the Assets are timely conveyed, and (c) the Trust
agrees to abide by the terms of this Section 3.01, then within five
(5) business days after the later of (a) and (b), all of the
parties to the Litigation shall sign and file with the Court
documents sufficient to release and waive all claims that were
raised in the Litigation or that could have been raised in the
Litigation, and to dismiss the Litigation with prejudice as to all
claims, each party to bear its own attorneys' fees and expenses.
Section 3.02. Standstill. If the Trust signs the Cityfront
Merger Agreement, and if the Trust agrees in writing to abide by
the terms of Sections 3.01 and 3.02 hereof, then from that time
until the occurrence of (a), (b), and (c), the parties (including
the Trust) agree that the Litigation shall be put in a standstill
mode and they will not take further action in the Litigation except
to report to the Court as required by the Court; provided, however,
that the Newsweb Entities shall be permitted to file a notice of
appeal, civil docketing statement, obtain and file a record, and
other related ministerial papers reasonably necessary to perfect an
appeal from the trial court's order of December 20, 1996 or any
other related orders the Court may enter. The parties expect that
fulfillment of the (a), (b), and (c) conditions set forth above
will occur prior to such time as any of the parties would be
obligated to file a brief. Recognizing, however, the possibility
of different circumstances, the parties agree to as reasonably
necessary move for and stipulate to extensions of time so that
briefs will not be necessary. If, however, such motions and
stipulations are not successful, then the parties may file briefs
as required to support their respective positions.
Until such time as the Trust agrees to abide by the terms of
Sections 3.01 and 3.02, the Newsweb Entities and the Cityfront
Entities agree not to further pursue the Litigation as against each
other except to report to the Court as required by the Court;
provided, however, that the Newsweb Entities shall be permitted (1)
to file a notice of appeal, civil docketing statement, obtain and
file a record, and other related ministerial papers reasonably
necessary to perfect an appeal from the trial court's order of
December 20, 1996 or any other related orders the Court may enter,
and (2) to respond as they deem necessary to any further actions by
the Trust in the Litigation. The Newsweb Entities, however, agree
not to themselves initiate further action against the Trust in the
Litigation for so long as the Trust and the Cityfront Entities take
no further action.
ARTICLE IV
Representations and Warranties of Cityfront and Cityfront Sub
Cityfront and Cityfront Sub represent and warrant to the Newsweb
Entities as follows:
Section 4.01. Organization. Cityfront is a limited liability
company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has all
requisite limited liability company power and authority to carry on
its business as now being conducted. Cityfront Sub is a business
trust duly organized, validly existing and in good standing under
the laws of the State of Illinois and has all requisite trust power
and authority to carry on its business as now conducted.
Section 4.02. Authority. Cityfront and Cityfront Sub have
requisite corporate or trust power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate or trust action on the part of Cityfront and Cityfront
Sub (including approval of this Agreement by the board of directors
of Cityfront) and no other limited liability company or trust
proceedings on the part of Cityfront and Cityfront Sub are
necessary to authorize this Agreement or to consummate such
transactions. No vote of Cityfront's members is required to
approve this Agreement or the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Cityfront
and Cityfront Sub and, assuming this Agreement constitutes a valid
and binding obligation of the Newsweb Entities, constitutes a valid
and binding obligation of each of Cityfront and Cityfront Sub
enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors; rights generally and to general principles
of equity.
Section 4.03. Consents and Approvals; No Violations. Neither the
execution, delivery or performance of this Agreement by Cityfront
and Cityfront Sub nor the consummation of Cityfront and Cityfront
Sub of the transactions contemplated hereby will: conflict with or
result in any breach of any provision of the respective certificate
of incorporation or declaration of trust or bylaws of Cityfront and
Cityfront Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any governmental entity
(except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not be
reasonably expected to prevent or materially delay the consummation
of the transactions contemplated hereby); (iii) result in a
violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any loan or credit
agreement, notice, bond, mortgage, indenture, permit, concession,
franchise, license, lease, contract, agreement or other instrument
or obligation to which Cityfront or any of its subsidiaries is a
party or by which any of them or any of their properties or assets
may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Cityfront, any of its
subsidiaries or any of their properties or assets, except in the
case of clauses (iii) and (iv) for violations, breaches or defaults
which would not, individually or in the aggregate, be reasonably
expected to prevent or materially delay the consummation of the
transactions contemplated hereby.
Section 4.04. Merger Agreement Representations. Cityfront and
Cityfront Sub hereby restate, represent and warrant to the Newsweb
Entities each of the representations and warranties made by
Cityfront and Cityfront Sub to the Trust in the Cityfront Merger
Agreement.
ARTICLE V
Representations and Warranties of Newsweb and Newsweb Sub
Newsweb and Newsweb Sub represent and warrant to the Cityfront
Entities as follows:
Section 5.01. Organization. Newsweb is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction of its organization and has all requisite
corporate power and authority to carry on its business as now being
conducted. Newsweb Sub is a business trust duly organized, validly
existing and in good standing under the laws of the State of
Illinois and has all requisite trust power and authority to carry
on its business as now conducted.
Section 5.02. Authority. Newsweb and Newsweb Sub have requisite
corporate or trust power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate or trust action on the part
of Newsweb and Newsweb Sub (including approval of this Agreement by
the board of directors of Newsweb and no other corporate or trust
proceedings on the part of Newsweb and Newsweb Sub are necessary to
authorize this Agreement or to consummate such transactions. No
vote of Newsweb's shareholders is required to approve this
Agreement or the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Newsweb and Newsweb Sub
and, assuming this Agreement constitutes a valid and binding
obligation of the Cityfront Entities, constitutes a valid and
binding obligation of each of Newsweb and Newsweb Sub enforceable
against them in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating
to creditors; rights generally and to general principles of equity.
Section 5.03. Consents and Approvals; No Violations. Neither the
execution, delivery or performance of this Agreement by Newsweb and
Newsweb Sub nor the consummation of Newsweb and Newsweb Sub of the
transactions contemplated hereby will: conflict with or result in
any breach of any provision of the respective certificate of
incorporation or declaration of trust or bylaws of Newsweb and
Newsweb Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any governmental entity
(except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not be
reasonably expected to prevent or materially delay the consummation
of the transactions contemplated hereby); (iii) result in a
violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any loan or credit
agreement, notice, bond, mortgage, indenture, permit, concession,
franchise, license, lease, contract, agreement or other instrument
or obligation to which Newsweb or any of its subsidiaries is a
party or by which any of them or any of their properties or assets
may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Newsweb, any of its
subsidiaries or any of their properties or assets, except in the
case of clauses (iii) and (iv) for violations, breaches or defaults
which would not, individually or in the aggregate, be reasonably
expected to prevent or materially delay the consummation of the
transactions contemplated hereby.
ARTICLE VI
Covenants
Section 6.01. Covenants of the Cityfront Entities. From the date
hereof through the Closing Date, the Cityfront Entities will, in
addition to the other covenants and agreements set forth herein:
(a) Immediately advise Newsweb in writing (with copies thereof) of
any notices or other correspondence from the Trust regarding the
Assets.
(b) Not, without the express written consent of Newsweb, agree to
or permit the Trust to take any action not explicitly permitted by
the Cityfront Merger Agreement regarding the Assets.
(c) Not, without the express written consent of Newsweb, modify or
amend any provision of the Cityfront Merger Agreement or waive,
release or assign any rights or claims thereunder, in each case if
such action would affect the Assets, the price paid in the
Cityfront Merger or timing of the Cityfront Merger.
(d) Not consent to any action or forbearance requested by the Trust
under the Cityfront Merger Agreement and affecting the Assets,
Newsweb's rights hereunder, without the express written consent of
Newsweb.
(e) Use its best efforts, consistent with its business judgment
and in consultation and cooperation with Newsweb, to enforce all of
Cityfront's rights with respect to the representations and
warranties of the Trust in the Cityfront Merger Agreement that
relate, directly or indirectly, to the Assets or any of Newsweb's
rights under this Agreement, including the pursuit of all
appropriate remedies for the breach of such representations and
warranties.
Section 6.02. Consents. Each of the Cityfront Entities and the
Newsweb Entities will use their best efforts to obtain the consent
of all third parties necessary or advisable to consummate the
transactions contemplated herein.
ARTICLE VII
Conditions to Closing
Section 7.01. Conditions to the Newsweb Entities' Obligation to
Effect the Closing. The obligation of the Newsweb Entities to
effect the Asset Purchase and other transactions contemplated
hereby shall be subject to the satisfaction at or prior to the
Closing Date of the following additional conditions:
(a) Performance of Obligations; Representations and Warranties.
The Cityfront Entities shall have performed in all material
respects each of their obligations and complied in all material
respects with each of their agreements and covenants contained in
this Agreement required to be performed or complied with on or
prior to the Closing Date and each of the representations and
warranties of the Cityfront Entities contained in this Agreement
shall be true and correct on and as of the Closing Date as if made
on and as of such date.
(b) Officer's Certificate. Cityfront and Cityfront Sub shall have
furnished to Newsweb a certificate, dated the Closing Date, signed
on behalf of Cityfront by an appropriate officer of Cityfront,
certifying to the effect that the conditions set forth in this
Section 7.01, insofar as they relate to Cityfront and Cityfront
Sub, have been satisfied in full.
(c) Other Documents. Cityfront and Cityfront Sub shall have
furnished to Newsweb at the Closing such other customary documents,
certificates or instruments as Newsweb may reasonably request
evidencing compliance by Cityfront and Cityfront Sub with the terms
of this Agreement.
(d) No Material Adverse Change. No material adverse change shall
have occurred in the physical or financial condition of the Assets.
(e) Consents, Estoppels. Newsweb shall have received the consents
and estoppels set forth on Exhibit 7.01(e); provided that Newsweb
shall be responsible for payment of any fees required for such
consents.
Section 7.02. Conditions to the Cityfront Entities' Obligations to
Effect the Closing. The obligations the Cityfront Entities to
effect the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing Date of the following
additional conditions:
(a) Performance of Obligations; Representations and Warranties.
The Newsweb Entities shall have performed in all material respects
each of its obligations and complied in all material respects with
each of its agreements and covenants contained in this Agreement
required to be performed or complied with on or prior to the
Closing Date and each of the representations and warranties of the
Newsweb Entities in this Agreement.
(b) Officer's Certificate. Newsweb shall have furnished to
Cityfront a certificate, dated the Closing Date, signed on behalf
of Newsweb by an appropriate officer of Newsweb, certifying to the
effect that the conditions set forth in this Section 7.02, insofar
as they relate to Newsweb and Newsweb Sub, have been satisfied.
(c) Other Documents. Newsweb shall have furnished to Cityfront at
the Closing such other customary documents, certificates or
instruments as Cityfront may reasonably request evidencing
compliance by Newsweb with the terms of this Agreement.
(d) Performance by the Trust. The Trust shall have performed in
all material respects its obligations under the Cityfront Merger
Agreement.
ARTICLE VIII
Indemnification
Section 8.01. Indemnification Obligations Of The Cityfront
Entities. The Cityfront Entities which will include, following the
consummation of the Cityfront Merger, the successor-in-interest to
the Trust, shall indemnify the Newsweb Entities for any Loss (as
hereinafter defined) with respect to any Claim (as hereinafter
defined) related in any way to the Cityfront Merger Agreement or
the assets, business and operations of the Trust, including the
lawsuit captioned as Irving Kas v. The Chicago Dock & Canal Trust,
Xx. 00 XX 00000 and any other lawsuits arising out of the potential
sale of the Trust (but excluding the Litigation. Notwithstanding
the foregoing, the Cityfront Entities shall not be obligated to
indemnify the Newsweb Entities for Claims described in Section
8.02.
Section 8.02. Indemnification Obligations Of The Newsweb Entities.
The Newsweb Entities shall indemnify the Cityfront Entities for any
Loss (as hereinafter defined) with respect to any Claim (as
hereinafter defined) arising solely from and related solely to the
Assets; provided, however, that this indemnification obligation
shall not apply to any Claims related to the purchase and sale of
the Assets pursuant to this Agreement.
Section 8.03. Permanence of Indemnification Obligations. The
obligations to indemnify set forth in this Agreement shall not be
transferable except upon the express written consent of the
indemnified party, and an entity responsible for indemnifying
another entity may not, for the three (3) year's following the
Closing Date, transfer more than 50% of its assets to another
entity, or dissolve or otherwise terminate its existence, without
the express written agreement of all entities to which it may be
liable for indemnification.
Section 8.04. Administration Of Indemnification Obligations.
(a) "Claim" means a request for compensation, whether asserted
through a lawsuit or other means short of a lawsuit.
(b) "Loss" means any loss, liability, claim, damage or expense
(including reasonable legal and consultants' fees and expenses)
suffered or incurred for or on account of, or arising from or in
connection with, directly or indirectly, any matter indemnified
against. Loss is further clarified and limited as follows:
(1) Loss shall not include internal costs and overhead of the
indemnitee or any of its affiliates including, but not limited to:
(i) wages, salaries and benefits of employees who would otherwise
be employed by the indemnitee or any of its affiliates notwith-
standing the matter which is subject to indemnification; or
(ii) expenses (internal or external) related to photocopying and
production or reproduction of documents and materials for the sole
use of the indemnitee and/or its affiliates or for purposes of
satisfying the indemnitee's or its affiliate's indemnity
administrative obligations;
(iii) expenses (internal or external) related to communications
by and between the indemnitee or its affiliates for the sole
benefits of the indemnitee and/or its affiliates or for purposes of
satisfying the indemnitee's or its affiliate's indemnity
administrative obligations; or
(iv) any costs or expenses that the indemnitee or its affiliates
may incur to monitor a matter that the indemnifying party is
managing.
(v) Loss shall include the cost of financial guarantees or
assurances only to the extent such guarantees or assurances relate
to otherwise indemnifiable matters; the indemnified party shall
utilize the least expensive form of guarantee or assurance
available, and the indemnifying party shall, unless prohibited by
law, have the right, at its discretion, to provide its own
guarantee or assurance in lieu of the guarantee or assurance
required from the indemnified party.
(c) Joint-Defense/Preservation Of Privileges. The parties agree
that information shared between them in defending against a Claim
shall be treated as confidential and for the sole purpose of
defending Claims or asserting joint rights against others. Such
disclosure of shared information shall not be deemed a waiver of
the attorney-client privilege, attorney work product privilege or
any other applicable privilege.
(d) Procedures. The following procedures shall apply to the
administration of all matters for which indemnification is sought:
(i) As soon as practicable, but in any event within thirty (30)
days of the later of: (1) the party requesting indemnification
providing notice to the other party of a matter which may call for
indemnification by the other party; and (2) the party requesting
indemnification providing to the other party information and
documents reasonably available which may assist the other party in
understanding the basis for the claim, the party receiving the
request shall either accept or reject the matter as falling within
the scope of its indemnification obligation and shall state whether
or not it will assume the defense of the matter. In making this
determination, the party receiving the request shall assume the
truth of allegations made in the claim or complaint, and shall
accept the matter if the allegations fall within the provisions of
the indemnity obligation. Such acceptance, however, shall not
preclude a reservation of rights. Any rejection shall state the
grounds for the rejection in detail fairly sufficient to permit the
requesting party to respond. Unless otherwise agreed in a writing
signed by all parties, the party indemnifying the other shall
"manage" the matter, and the party receiving indemnification shall
"monitor" the matter.
(ii) The party "managing" a matter shall: (1) select counsel and
designate a competent, experienced person to coordinate with the
monitoring party, (2) defend any litigation, administrative or
other proceeding involved in the matter; (3) make tactical and
strategic decisions in the course of the matter; (4) pay all bills
and invoices, subject to indemnification where applicable; (5)
conduct all negotiations, discussions, correspondence or other
communications with claimants, governmental bodies or other third
parties; (6) consult with the monitoring party as appropriate and
in all respects accord to the monitoring party all rights to which
it is entitled under this Agreement as amended; (7) provides to the
monitoring party upon reasonable request all information and
documents known or reasonably available to the managing party
relating to the matter; and (8) keep the party monitoring the
matter apprised on an ongoing basis of the status and future
prospects of the matter.
(iii) The party monitoring a matter shall designate an
experienced, competent person to coordinate with the managing
party. If the party monitoring the matter is the indemnifying
party, then it shall automatically receive: (1) copies of all
correspondence between the managing party and the claimant, (2) all
non-privileged communications between the managing party and all of
its consultants or advisors, including lawyers, (3) all pleadings,
filings, submissions or other written communications between any
and all parties in any judicial or administrative matter and, (4)
upon the request of the monitoring/indemnifying party, all other
relevant, non-privileged documents or information. The monitoring
party shall provide to the managing party all relevant information
and documents known or reasonable available to it relating to the
matter, generally within twenty (20) days of the request. The
parties shall use their best efforts to resolve any disputes
concerning the withholding of documents or information under a
claim of privilege, and may jointly retain counsel to resolve any
potential privilege issues.
(iv) The indemnifying party shall make all reimbursement or
indemnification payments within forty-five (45) days of receipt of
the request and reasonable supporting documentation, such as
underlying invoices, contracts, purchase orders, or correspondence.
If the indemnifying party has requested further information as to
only a subset of the items in a request for reimbursement, the
indemnifying party shall pay the remainder within said forty-five
(45) days.
Section 8.05. No Settlement. An indemnified matter shall not be
settled or otherwise compromised without the written agreement of
both the indemnifying party and the indemnified party. The parties
agree to use reasonable commercial judgment with respect to whether
to settle a matter.
Section 8.06. Benefits Of Insurance Coverage. The parties to this
Agreement recognize that the Trust is or may be the owner or
beneficiary of insurance policies related to prior operations and
assets which will be transferred under the Cityfront Merger
Agreement and/or the transfer of the Assets (the "Policies"). In
view of this fact:
(a) The parties agree that the rights of the Cityfront Entities to
obtain indemnification from the Newsweb Entities shall not accrue
until after the Cityfront Entities have exhausted all reasonable
efforts (including trial court litigation and appeals) to obtain
insurance coverage for matters for which the Cityfront Entities
seek indemnity from the Newsweb Entities, and if insurance coverage
is obtained by the Cityfront Entities in whole or in part, then the
Newsweb Entities indemnification obligation shall be limited to
out-of-pocket expenses suffered by the Cityfront Entities which
were not reimbursed by insurance.
(b) The parties agree that liabilities related to or arising out
of the Assets should be paid by the Policies, rather than by the
Newsweb Entities, to the extent reasonably possible by the
Policies. The parties further agree that for any Claim asserted
against the Newsweb Entities related to or arising out of the
Assets, most, if not all, insurance coverage would need to be
pursued in the name of the Cityfront Entities or the insurance
rights must be assigned to the Newsweb Entities. The parties
accordingly agree that for any claims asserted against Newsweb
related to the Assets, the Cityfront Entities shall promptly assign
their rights under the Policies to the Newsweb Entities; provided,
however, that such assignment shall be limited to the extent
necessary to obtain coverage. If an assignment of rights (or a
direct action by the Newsweb Entities) reasonably appears not to be
enforceable, then the Cityfront Entities shall serve as plaintiff
in pursuing coverage and shall fully and actively cooperate in its
pursuit. The Newsweb Entities, however, shall bear the
responsibility for paying for counsel when utilized in pursuit of
coverage.
ARTICLE IX
CLOSING
Section 9.01. Time and Place. The consummation of the
transactions contemplated hereby ("Closing") shall be held at the
offices of Xxxxxx Xxxxxx & Xxxxx immediately following the
Effective Time of the Cityfront Merger. At Closing, Cityfront and
Newsweb shall perform the obligations set forth in, respectively,
Section 9.02 and Section 9.03, the performance of which obligations
shall be concurrent conditions.
Section 9.02. Cityfront's Obligations at Closing. At Closing,
Cityfront shall or shall cause the Trust to:
(a) deliver to Newsweb duly executed trustees' deeds (the "Deeds")
in recordable form, conveying the Real Estate, subject only to the
Permitted Exceptions;
(b) deliver to Newsweb a duly executed bills of sale or other
instruments of assignment conveying or transferring good title in
and to the other Assets warranting in such instruments only the
matters set forth in Section 1.02 above;
(c) join with Newsweb to execute a notice in form and content
reasonably satisfactory to Newsweb and Cityfront which Newsweb
shall send to each tenant under each of the leases informing such
tenant of the sale of the Real Estate and of the assignment to
Newsweb of Cityfront's interest in, and obligations under, the
leases (including, if applicable any security deposits) and
directing that all rent and other sums payable after the Closing
under each such lease shall be paid as set forth in the notice;
(d) deliver to Newsweb a certificate, dated as of the date of
Closing and executed on behalf of Cityfront by a duly authorized
officer thereof, stating that the representations and warranties of
Cityfront contained in this Agreement are true and correct in all
material respects as of the date of Closing 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;
(e) deliver to Newsweb such evidence as Newsweb's counsel and/or
the Title Company may reasonably require as to the authority of the
person or persons executing documents on behalf of Cityfront;
(f) deliver to Newsweb an affidavit duly executed by
Cityfront stating that Cityfront is not a "foreign person" as
defined in the Federal Foreign Investment in Real Property Tax
Act of 1980 and the 1984 Tax Reform Act;
(g) deliver to Newsweb the leases, operating agreements and
licenses and permits, if any, in the possession of Cityfront or
Cityfront's agents, together with such leasing and property files
and records which are material in connection with the continued
operation, leasing and maintenance of the Real Estate;
(h) deliver to Newsweb possession and occupancy of the Assets,
subject to the Permitted Exceptions;
(i) cause First American Title Insurance to deliver to Newsweb an
ALTA Owner's Policy(s) of title insurance (1970 Form B or
equivalent) in the amount of $24,000,000, plus the then unpaid
balance of the Mortgage encumbering the Sheraton Parcel, insuring
title to the Real Estate to be good and marketable in Newsweb
subject only to the permitted exceptions and containing such
endorsements as Newsweb may require; and
(j) deliver such additional documents as shall be reasonably
required to consummate the transactions contemplated by this
Agreement.
Section 9.03. Newsweb's Obligations at Closing. At Closing,
Newsweb shall:
(a) pay to Cityfront the full amount of the Purchase Price, as
increased or decreased by prorations and adjustments as herein
provided, in immediately available wire transferred funds pursuant
to Section 1.04 above; and
(b) deliver such additional documents as shall be reasonably
required to consummate the transaction contemplated by this
Agreement.
Section 9.04. Credits and Prorations.
(a) The following shall be apportioned with respect to the Assets
as of 12:01 a.m., on the day of Closing, as if Newsweb were vested
with title to the Assets during the entire day upon which Closing
occurs:
(i) rents, if any, as and when collected (the term "rents" as used
in this Agreement includes without limitation (i) all amounts paid
under parking agreements affecting the Assets and (ii) all other
payments due and payable by tenants under the Leases);
(ii) general real estate taxes and assessments levied against the
Real Estate (other than the Sheraton Parcel);
(iii) payments under any Operating Agreements;
(iv) gas, electricity and other utility charges for which Cityfront
is liable, if any, such charges to be apportioned at Closing on the
basis of the most recent meter reading occurring prior to Closing;
and
(v) any other operating expenses or other items pertaining to the
Assets which are customarily prorated between a purchaser and a
seller in the area in which the Assets is located.
(b) Notwithstanding anything contained in the foregoing
provisions:
(i) At Closing, Cityfront shall, at Cityfront's option, either
deliver to Newsweb any security deposits actually held by Cityfront
pursuant to the leases or credit to the account of Newsweb the
amount of such security deposits (to the extent such security
deposits are not applied against delinquent rents or otherwise as
provided in the leases).
(ii) Taxes and assessments (other than those related to the
Sheraton Parcel) for 1996 and the portion of 1997 prior to Closing
shall be prorated based on the last ascertainable taxes and
assessments.
(iii) As to gas, electricity and other utility charges referred to
in Section 9.04(a)(iv) above, Cityfront may on notice to Newsweb
elect to pay one or more of all of said items accrued to the date
hereinabove fixed for apportionment directly to the person or entity
entitled thereto, and to the extent Cityfront so elects, such item
shall not be apportioned hereunder, and Cityfront's obligation to
pay such item directly in such case shall survive the Closing.
(iv) Unpaid and delinquent rent collected by Cityfront and Newsweb
after the date of Closing shall be delivered as follows: (a) if
Cityfront collects any unpaid or delinquent rent for the Real
Estate, Cityfront shall, within fifteen (15) days after the receipt
thereof, deliver to Newsweb any such rent which Newsweb is entitled
to hereunder relating to the date of Closing and any period
thereafter, and (b) if Newsweb collects any unpaid or delinquent
rent from the Real Estate, Newsweb shall, within fifteen (15) days
after the receipt thereof, deliver to Cityfront any such rent which
Cityfront is entitled to hereunder relating to the period prior to
the date of Closing. Cityfront and Newsweb agree that all rent
received by Cityfront or Newsweb after the date of Closing shall be
applied first to current rentals and then to delinquent rentals, if
any, in inverse order of maturity. Newsweb will make a good faith
effort after Closing to collect all rents in the usual course of
Newsweb's operation of the Real Estate, but Newsweb will not be
obligated to institute any lawsuit or other collection procedures
to collect delinquent rents. In the event that there shall be any
rents or other charges under any leases which, although relating to
a period prior to Closing, do not become due and payable until
after Closing or are paid prior to Closing but are subject to
adjustment after Closing (such as year end common area expense
reimbursements and the like), then any rents or charges of such
type received by Newsweb or its agents or Cityfront or its agents
subsequent to Closing shall, to the extent applicable to a period
extending through the Closing, be prorated between Cityfront and
Newsweb as of Closing and Cityfront's portion thereof shall be
remitted promptly to Cityfront by Newsweb.
(c) Newsweb shall receive a credit against the Purchase Price at
Closing in an amount equal to the difference between Newsweb's
bills presented for, and any amounts received by Newsweb for,
"Expenses" pursuant to the Newsweb Merger Agreement; provided that
the total of all such expenses shall not exceed $750,000.
(d) The provisions of this Section 9.04 shall survive Closing.
Section 9.05. Closing Costs. Cityfront shall pay (a) the fees of
any counsel representing it in connection with this transaction;
(b) one-half (1/2) of any escrow fee which may be charged by the
Escrow Agent or Title Company; (c) the fee for the title
examination and the Title Commitment and the premium for the
Owner's Policy of Title Insurance to be issued to Newsweb by the
Title Company at Closing; and (d) the cost of any State and County
transfer taxes. Newsweb shall pay (x) the fees of any counsel
representing Newsweb in this transaction; (y) the City of Chicago
transfer tax; and (z) one-half (1/2) of any escrow fees charged by
the Escrow Agent or Title Company. All other costs and expenses
incident to this transaction and the closing thereof shall be paid
by the party incurring same.
ARTICLE X
Miscellaneous
Section 10.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed), sent by
overnight courier (providing proof of delivery) or mailed by
registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a
party as shall be specified by like notice:
(a) if to the Newsweb Entities, to
Newsweb Corporation
0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx Xxxxx
Telecopy No.: 312/975-1301
with a copy to:
Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: 312/902-1061
(b) if to the Cityfront Entities, to
Cityfront Center, L.L.C.
0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxx
Telecopy No.: 312/525/3823
with a copy to:
Xxxxxxxx & Xxxxxx, Ltd.
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telecopy No.: 312/207-6400
Section 10.02. Interpretation. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an
Article or a Section of this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this agreement,
they shall be deemed to be followed by the words "without
limitation."
Section 10.03. Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not
sign the same counterpart.
Section 10.04. Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the other documents and instruments
referred to herein) (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof,
and (b) are not intended to confer upon any person other than the
parties hereto and any rights or remedies hereunder.
Section 10.05. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Illinois
without regard to any applicable conflicts of law.
Section 10.06. Publicity. Except as otherwise required by law,
for so long as this Agreement is in effect, none of the parties
shall issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated
by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld.
Section 10.07. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, except that
Newsweb may assign, in its sole discretion, any or all of its
rights, interests and obligations hereunder to any affiliate of
Newsweb, provided Newsweb guarantees the obligation of such
assignees through the Closing Date. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective
successors and assigns.
Section 10.08. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in the Untied States
District Court for the Northern District of Illinois or in a
Illinois state court located in Xxxx County, Illinois, this being
in addition to any other remedy to which they are entitled at law
or in equity. In addition, each of the parties hereto (i) consents
to submit such party to the personal jurisdiction of the United
States District Court for the Northern District of Illinois or any
Illinois state court located in Xxxx County, Illinois in the event
any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party
will not bring any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than the United
States District Court for the Northern District of Illinois or a
Illinois state court located in Xxxx County, Illinois and (iv)
waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of
the transactions contemplated hereby.
Section 10.09. Further Assurances. Each of the parties will
execute all documents and take such other actions as the other
parties may reasonably request in order to consummate the
transactions provided in this Agreement and to accomplish the
purposes of this Agreement.
IN WITNESS WHEREOF, the parties have cause this Agreement to be
signed by their respective officers thereunto duly authorized as
of the date first written above.
NEWSWEB CORPORATION
By: /s/ XXXXXXX XXXXX XXXXX
-------------------------
Name: Xxxxxxx Xxxxx Xxxxx
Title: Chief Financial Officer
CDCT ACQUISITION TRUST
By: 000 Xxxx Xxxxx Xxxxxx Company L.L.C.
Its: Trustee
By: Newsweb Corporation
Its: Member
By: /s/ XXXXXXX XXXXX XXXXX
-------------------------
Name: Xxxxxxx Xxxxx Xxxxx
Title: Chief Financial Officer
CITYFRONT CENTER, L.L.C.
By: /s/ XXXXXX X. XxXXXX
------------------------
Name: Xxxxxx X. XxXxxx
Title: Manager
CITYFRONT ACQUISITION TRUST
By: Cityfront Center, L.L.C.
Its: Trustee
By: /s/ XXXXXX X. XxXXXX
-----------------------
Name: Xxxxxx X. XxXxxx
Title: Manager
