Exhibit 99.3
AGREEMENT TO DEVELOP AND LEASE
THIS AGREEMENT TO DEVELOP AND LEASE
(this “ Agreement ”) is made and
entered into as of December 15, 2004 (the “ Effective Date ”), by and
between DUPAGE AIRPORT AUTHORITY, an Illinois municipal corporation
(“ Owner
”), and CENTERPOINT PROPERTIES TRUST, a Maryland real estate
investment trust (“ CPT ”).
Recitals
A.
Owner is the owner of an approximately 800 acre tract of land
located in DuPage County, Illinois, legally described on
Exhibit A attached hereto and made a part hereof (the
“ Gross
Property ”).
B.
The Gross Property contains approximately 413.4 acres of land that
is suitable for development as a technology park (said developable
land is depicted on the Concept Plan, as hereinafter defined, and
is referred to as the “ Property ”).
C.
Owner desires to grant to CPT and to one or more of its Affiliates
or Designees (as such terms are hereinafter defined; CPT and said
Affiliates and Designees are hereinafter individually and
collectively referred to as the “ Developer ”), the option to
lease all or a portion of the Property in multiple phases under one
or more long term ground leases in order for Developer to construct
on the Property a multi-phased technology park development, as more
particularly described in that certain concept plan attached hereto
as Exhibit B and made a part hereof (said concept plan
is referred to as the “ Concept Plan ”, and said
Property, as developed from time to time, is referred to as the
“ Project
”), all in accordance with the terms and conditions
hereinafter set forth.
D.
Developer desires to accept said right to lease all or a portion of
the Property and to develop the Project, and CPT desires to pay to
Owner the amounts specified herein, all in accordance with the
terms and conditions hereinafter set forth.
Agreements
NOW, THEREFORE, in consideration of the
mutual promises, representations, warranties, agreements, covenants
and conditions set forth below, and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto herein agree as
follows:
1.
Option to Lease . Owner hereby grants to Developer the
exclusive option to lease all or a portion of the Property in
multiple phases under one or more long term ground leases in order
for Developer to construct on the Property a multi-phased
development (sometimes referred to as the “ DuPage Technology Park ”),
all subject to and in accordance with the terms and provisions of
this Agreement, including the following:
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(a)
Lease Notice . Developer shall have the right, at any
time during the Term (as hereinafter defined), to exercise its
option to lease all or a portion of the Property, upon written
notice to Owner (the “ Lease Notice ”) designating
(i) that portion of the Property Developer desires to lease (said
portion of the Property is referred to as the “
Ground Lease
Property ”), and (ii) the proposed use of a Ground
Lease Property, which shall conform in all material respects to the
Concept Plan and other use restrictions applicable to the Property
from time to time. A parcel of Ground Lease Property need not
be contiguous to other Ground Lease Property, but Developer’s
designation and selection of Ground Lease Property shall be done
from time to time in a manner that (i) maintains the economic
integrity and viability of the Remaining Property (as hereinafter
defined), (ii) does not render any portion of the Remaining
Property insufficiently sized or located so as to prevent
reasonable development of such portion in accordance with the
Concept Plan, and (iii) comports with the over all site engineering
for the Property, including storm water management criteria (the
foregoing are referred to as “ Site Selection Criteria
”). Subject to the provisions of this Agreement, on
each Closing Date (as hereinafter defined), Owner and Developer
shall enter into a lease for the Ground Lease Property (hereinafter
referred to as the “ Ground Lease ”). That
portion of the Property that from time to time is not subject to a
Ground Lease or a Lease Notice is referred to as the “
Remaining Property
”.
(b)
Form Ground Lease . The Ground Lease shall, subject to
the provisions of Section 6(c), conform in all material respects to
that certain DuPage Technology Park Ground Lease Agreement attached
hereto as Exhibit C and made a part hereof (the “
Form Ground Lease
”). From and after the Effective Date, Owner and CPT
shall use good faith efforts to agree upon the final form of the
Form Ground Lease. The parties shall endeavor to complete the
final form of the Form Ground Lease on or before the expiration of
the Inspection Period (as hereinafter defined). In the event
that the parties agree on any modifications to the Form Ground
Lease, the parties agree to amend this Agreement by attaching a
revised Exhibit C , which revised Exhibit C
shall include all such agreed upon modifications to the Form Ground
Lease. In the event the parties are unable to agree upon the
final form of the Form Ground Lease before the end of the
Inspection Period, either party may terminate this Agreement by
written notice to the other given within 15 days after the
expiration of the Inspection Period. Upon such termination,
neither party shall have any further liability to the other
hereunder (except for indemnity obligations). In the absence
of such termination, the parties shall continue to use good faith
efforts to agree upon the final form of the Form Ground Lease.
(c)
Basic Lease Terms . Each Ground Lease shall include,
inter alia , the
following basic terms and provisions:
(i)
Term . 50 years, with three consecutive ten-year
options.
(ii)
Base Rent . Base rent under a Ground Lease (defined as
“ Base Rent
” under the Form Ground Lease) for the first year will be
$.31 per square foot, based upon the total square footage of the
applicable Ground Lease Property as calculated by the Updated
Survey (as hereinafter defined), for the applicable Ground Lease
Property for any Ground Lease entered into on or before the end of
the first year of the Initial Payment Term (as hereinafter
defined). Base Rent for the first year for Ground Leases
entered into subsequent to the first year of the Initial Payment
Term shall be as set forth for the applicable year of the Term in
the Base Rent Per Square Foot Schedule attached as
Exhibit D hereto. Base Rent shall increase
two
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percent per year for ensuing 24 lease years;
Base Rent for lease year 26 shall be “ Market Rent ” (as defined in
the Form Ground Lease), with two percent annual increases for the
ensuing 24 lease years; and Base Rent for the first year of any
option term shall be Market Rent, with two percent annual increases
for the ensuing nine lease years.
(iii)
Percentage Rent . One percent of Gross Lease Revenues
(as defined in the Form Ground Lease).
(iv)
Guaranty . CPT will guaranty (the “
CPT Guaranty
”) the rents due under a Ground Lease until a certificate of
occupancy is issued for the Ground Lease Property Improvements (as
hereinafter defined).
(d)
DuPage Technology Park . The parties recognize that
the mission of the DuPage Technology Park is to provide a location
in which researchers and businesses operate in close proximity in
an environment that fosters the collaboration and innovation
necessary to promote the development, transfer and
commercialization of technology through a public-private
partnership. In recognition of this mission, the Concept Plan
will include land uses necessary for successful technology park
development. These uses will be primarily research or
technology oriented or will be of a such nature that they will grow
businesses and create jobs to enhance the local area and assist the
State of Illinois in competing regionally, nationally and
internationally. Category of uses are anticipated to be as
follows:
•
Commercial/Technology Support
•
Commercial/Office/Technology Support
•
Commercial/Light Industry/Technology Applications
•
Light Industry/Technology Applications
Activities that comport with the foregoing are
anticipated to include the following:
•
The conduct of activities which are considered
“research”;
•
The conduct of activities which are “product
development”;
•
The conduct of activities which are “high technology”
oriented;
•
The conduct of activities to commercialize, market and distribute
products;
•
The conduct of activities which use technology in the development
and distribution of a product or service;
•
The conduct of prototype manufacturing;
•
The conduct of assembly of components or technical
manufacturing;
•
The conduct of auxiliary activities required to serve the needs of
employees and businesses within the DuPage Technology Park;
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•
Offices of high quality companies or agencies whose location in the
Technology Park is deemed beneficial to the purposes of the
Technology Park;
•
The conduct of office, service and administrative functions;
and
•
Activities having an educational orientation.
The
parties will use their best efforts at obtaining tenants for the
DuPage Technology Park whose activities are associated with the
fields of nano-technology and bio-technology. The terms
“research”, “product development” and
“high technology” shall include not only the definition
of these terms as they are commonly and currently defined today,
but as they may hereafter become defined in future
years.
(e)
Development of Project . Any portion of the Project
that Developer elects to develop shall be developed in accordance
with this Agreement, the Concept Plan, the Design Standards (as
hereinafter defined), the Site Selection Criteria, the Development
Plans (as hereinafter defined), the IGA (as hereinafter defined),
and Legal Requirements (as hereinafter defined) (the foregoing
development criteria are referred to collectively as the “
Development Criteria
”).
(f)
Not a Lease . This Agreement is an option to lease,
and (i) is not a lease, license or agreement for use or
occupancy for any portion of the Property, (ii) does not and
shall not grant CPT or Developer any right to use or occupy any
portion of the Property (and CPT and Developer hereby waive any
such rights), and (iii) does not and shall not create a
landlord/tenant or licensor/licensee relationship between Owner and
CPT or Developer.
(g)
Rights Reserved to Owner . Notwithstanding anything to
the contrary contained in this Agreement, Developer acknowledges
that its exclusive right to lease the Property and develop the
Project is subject to the rights reserved to Owner herein, as
provided in Section 17 below, and as may be provided in a Ground
Lease or the CCRs (as hereinafter defined.
2.
Term; Guaranteed Payments .
(a)
Term; Initial Payment Term . The term of this
Agreement (the “Term”) shall commence on the Effective
Date and shall expire eight years after the Payment Commencement
Date (as hereinafter defined), subject to extension or earlier
termination as provided herein. The portion of the Term that
begins on the Payment Commencement Date and expires (subject to
extension as provided herein) eight years after the Payment
Commencement Date is referred to as the “ Initial Payment Term, ” and
the last day of the Initial Payment Term is referred to as the
“ Initial Termination
Date .”
(b)
Subsequent Payment Term . CPT shall have the right to
extend the Term (the “ Extension Option ”) for an
additional eight year period commencing on the first day after the
Initial Termination Date (as the same may be extended as provided
herein, the “ Subsequent
Payment Term ”), subject to the following
conditions: (i) CPT shall have paid Owner all amounts due hereunder
during the Initial Payment Term, (ii) no Developer Default (as
hereinafter defined) exists at the time of exercise or on the
commencement date of the Subsequent Payment
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Term, (iii) Developer shall have executed
Ground Leases for at least 125 acres of the Property during the
Initial Payment Term; and (iv) CPT shall exercise the Extension
Option by written notice to Owner no later than six months prior to
the Initial Termination Date. The last day of the Subsequent
Payment Term is referred to as the “ Subsequent Termination Date.
”
(c)
Guaranteed Payments . In consideration for the option
to lease the Property and develop the Project and other rights
granted to CPT and other Developers herein, this Agreement requires
CPT to pay Owner certain amounts, whether or not Developer delivers
any Lease Notice and enters into any Ground Lease for any Ground
Lease Property, but subject to CPT’s right to terminate this
Agreement as provided in Section 3(a). The payments
approximate the Base Rents that would be payable under Ground
Leases if a portion of the Property was leased each year (25 acres
per year during the Initial Payment Term and 28 acres per year
during the Subsequent Payment Term, subject to a deferral during
the second year of the Initial Payment Term and the extensions and
deferrals provided below). Accordingly, CPT hereby agrees to
pay Owner the following amounts (“ Guaranteed Payment(s) ”) at
the times and in the manner set forth below.
(i)
Initial Payment Term . Commencing on the first day of
the first calendar month following the expiration of the later to
expire of (A) the Inspection Period and (B) the Design Standards
Approval Period (as such terms are hereinafter defined; said first
day is referred to as the “ Payment Commencement Date ”)
and continuing on the first day of each calendar month thereafter
during the Initial Payment Term, CPT shall pay to Owner the monthly
portion of the Guaranteed Payment in the amount indicated for such
year of the Initial Payment Term set forth on Exhibit E
attached hereto and made a part hereof (the “ Initial Guaranteed Payment Schedule
”).
(ii)
Subsequent Payment Term . In the event that CPT has
exercised the Extension Option, then commencing on the first day of
the Subsequent Payment Term and continuing on the first day of each
calendar month thereafter during the Subsequent Payment Term, CPT
shall pay to Owner the monthly portion of the Guaranteed Payment in
the amount indicated for such year of the Subsequent Payment Term
set forth on Exhibit F attached hereto and made a part
hereof (the “ Subsequent
Guaranteed Payment Schedule ” and, together with
the Initial Guaranteed Payment Schedule, the “
Guaranteed Payment
Schedule ”).
(d)
Deferrals of Increases in Guaranteed Payments . Each
Guaranteed Payment Schedule provides for certain annual increases
in the amount of the Guaranteed Payment.(1) For example, the
Initial Guaranteed Payment Schedule provides for increases on the
second through seventh anniversaries of the Payment Commencement
Date. CPT shall have the right to defer such annual
increases, and extend the Initial Payment Term and/or Subsequent
Payment Term, as applicable, and the Term, as follows:
(1)
An annual increase results from one or both of the following: (a)
an annual two percent across the board increase in the Guaranteed
Payments, and (b) an increase based upon an assumed rate of Ground
Lease activity ( i.e
., an additional 25 acres per year will be leased during the
Initial Payment Term (except during the second year) and an
additional 28 acres per year will be leased during the Subsequent
Payment Term). An increase in the Guaranteed Payments
described in clause (b) is referred to as a “Takedown
Increase.”
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(i)
During the Initial Payment Term, CPT shall have the right to defer
for one year each any two of the annual Takedown Increases that are
scheduled after the fifth year of the Initial Payment Term and
extend the Initial Payment Term and the Term accordingly (each, an
“ Initial Payment Term
Deferral and Extension ”). Each request (a
“ Initial Term Deferral
and Extension Request ”) for an Initial Payment
Term Deferral and Extension shall be in writing and shall be
delivered at least 120 days prior to the scheduled increase to be
deferred. So long as no Developer Default exists at the time
of exercise or as of the date the scheduled increase would have
taken effect, each Initial Term Deferral and Extension Request
shall have the effect of deferring each scheduled Takedown Increase
for one year and shall extend the Initial Payment Term for one
year, and CPT shall continue to pay Guaranteed Payments in the
amount in effect prior to the scheduled Takedown Increase, but
subject to the annual two percent increase.
For
example, and not by way of limitation, if the annual Guaranteed
Payment for the fifth year of the Initial Payment Term is
$1,461,673, and is scheduled to increase to $1,863,633 for the
sixth year of the Initial Payment Term, and CPT elects to defer the
Takedown Increase for the sixth year, upon a proper exercise of a
Initial Payment Term Deferral and Extension (A) the Takedown
Increase for the sixth year would be deferred until the seventh
year, (B) the Guaranteed Payment for the sixth year would be
$1,490,907 (which reflects only the two percent annual increase),
and (C) the Initial Payment Term would be extended from eight to
nine years.
No
Initial Payment Term Deferral and Extension shall extend the term
of any Ground Lease theretofore entered into or affect the amount
of rent payable thereunder.
Notwithstanding any of the foregoing to the
contrary, CPT may not exercise the second Initial Payment Term
Deferral and Extension, and any previous exercise shall be
ineffective, if at the time of such exercise or at the commencement
of the applicable year of the Initial Payment Term 175 acres of the
Property are then subject to Ground Lease(s). In such event,
CPT may nonetheless defer for one year the applicable Takedown
Increase and extend the Initial Payment Term and the Term by
converting the applicable Initial Term Deferral and Extension
Request to one of the two permitted Payment Extension Requests by
paying the amount described in Section 2(d)(iii) below.
(ii)
During the Subsequent Payment Term, CPT shall likewise have the
right to defer for one year each any two of the annual Takedown
Increases in the Guaranteed Payment that are scheduled after the
fifth year of the Subsequent Payment Term and extend the Subsequent
Payment Term and the Term accordingly (each, an “
Subsequent Payment Term
Deferral and Extension ”). Each request (a
“ Subsequent Term
Deferral and Extension Request ”) for an
Subsequent Payment Term Deferral and Extension shall be in writing
and shall be delivered at least 120 days prior to the scheduled
increase to be deferred. So long as no Developer Default
exists at the time of exercise or as of the date the scheduled
increase would have taken effect, each Subsequent Term Deferral and
Extension Request shall have the effect of deferring each scheduled
Takedown Increase for one year and shall extend the Subsequent
Payment Term for one year, and CPT shall continue to pay Guaranteed
Payments in the amount in effect prior to the scheduled Takedown
Increase, but subject to the annual two percent increase.
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No
Subsequent Payment Term Deferral and Extension shall extend the
term of any Ground Lease theretofore entered into or affect the
amount of rent payable thereunder.
(iii)
During the Initial Payment Term, CPT shall have an additional right
to defer for one year each any two of the annual Takedown Increases
that are scheduled after the fifth year of the Initial Payment Term
and extend the Initial Payment Term and the Term accordingly (each,
a “ Payment
Extension ”), subject to the following conditions:
(A) CPT requests such extension in writing (each request, a “
Payment Extension
Request ”) at least 120 days prior to the
scheduled increase to be deferred, (B) no Developer Default exists
at the time of exercise or as of the date the scheduled increase
would have taken effect, (C) CPT pays to Owner an amount equal to
the product of 272,250(2) times R, where R equals the amount set
forth opposite the year to which the Takedown Increase is being
deferred on the Rent Per Square Foot Schedule (example provided
below), (D) CPT continues to pay Guaranteed Payments in effect
prior to the scheduled Takedown Increase, but subject to the annual
two percent increase, and (E) any Initial Term Deferral and
Extension Option that has not theretofore been exercised shall
terminate once any Payment Extension is exercised during the
Initial Payment Term.
For
example, and not by way of limitation, if both Initial Payment Term
Deferrals and Extensions were exercised in succession after the
fifth year of the Initial Payment Term set forth in subparagraph
2(d)(i) above (and consequently the Initial Payment Term is now 10
years), and if the annual Guaranteed Payment for the seventh year
of the Initial Payment Term is $1,520,725, and is scheduled to
increase to $1,938,420 for the eighth year of the Initial Payment
Term, and CPT elects to defer the Takedown Increase for the eighth
year pursuant to a Payment Extension, upon a proper exercise of a
Payment Extension, CPT would pay Owner, in addition to other
amounts due, a fee equal to $96,921 (272,250 x $0.356), and (A) the
Takedown Increase for the eighth year would be deferred until the
ninth year, (B) the Guaranteed Payment for the eighth year would be
$1,551,139 (which reflects only the two percent annual increase),
and (C) the Initial Payment Term would be extended from ten to
eleven years.
No
Payment Extension shall extend the term of any Ground Lease
theretofore entered into or affect the amount of rent payable
thereunder.
(iv)
During the Subsequent Payment Term, CPT shall likewise have two
Payment Extensions, which may be exercised to defer for one year
each any two of the annual Takedown Increases that are scheduled
after the fifth year of the Subsequent Payment Term and extend the
Subsequent Payment Term and the Term accordingly, subject to the
following conditions: (A) CPT delivers a Payment Extension Request
at least 120 days prior to the scheduled increase to be deferred,
(B) no Developer Default exists at the time of exercise or as of
the date the scheduled increase would have taken effect, (C) CPT
pays to Owner an amount equal to the product of 304,920(3) times R,
where R equals the amount set forth opposite the year
(2)
272,250 is 25 percent of the number of square feet in a presumed 25
acre Ground Lease Property takedown (.25 x 25 x 43,560).
(3)
304,920 is 25 percent of the number of square feet in a presumed 28
acre Ground Lease Property takedown (.25 x 28 x 43,560).
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to
which the Takedown Increase is being deferred on the Rent Per
Square Foot Schedule, (D) CPT continues to pay Guaranteed Payments
in effect prior to the scheduled Takedown Increase, but subject to
the annual two percent increase, and (E) any Subsequent Term
Deferral and Extension Option that has not theretofore been
exercised shall terminate once any Payment Extension is exercised
during the Subsequent Payment Term.
(e)
Initial Payment Term Extension for Infrastructure Delay
. In addition to the deferral and extension rights granted
pursuant to subparagraph 2(d) above, in the event the
Infrastructure Improvements (as hereinafter defined) are not
substantially completed in accordance with the Infrastructure
Improvements Scope and Schedule (as hereinafter defined), the
Initial Payment Term may be extended by the number of days of such
delay (said extensions are hereinafter collectively referred to as
the “ Infrastructure
Delay Extensions ”) as provided in this
subsection. If the Infrastructure Improvements are not
substantially completed in accordance with the Infrastructure
Improvements Scope and Schedule and CPT in good faith determines
that such delay will have a material adverse effect of
Developer’s ability to develop the Project, then it shall
notify Owner of same (the “ Infrastructure Delay Notice
”). The Infrastructure Delay Notice shall be in writing
and shall specify in reasonable detail the reason why CPT is
entitled to the extension and the length of the extension.
Either party may invoke the Dispute Resolution Procedure set forth
in Exhibit G to resolve any issues regarding whether CPT is
entitled to the extension and the length of the extension.
Agreed upon Infrastructure Delay Extensions shall have the effect
of deferring each scheduled increase in the amount of the
Guaranteed Payment by the applicable period and shall extend the
Initial Payment Term and the Term by the applicable period, and CPT
shall continue to pay Guaranteed Payments in the amount in effect
prior to the scheduled increase that is being deferred. If
requested by either party, the parties shall amend this Agreement
by attaching new Guaranteed Payment Schedules that have been
revised to reflect the effect of any Infrastructure Delay
Extensions.
No
Infrastructure Delay Extensions shall extend the term of any Ground
Lease theretofore entered into or affect the amount of rent payable
thereunder.
(f)
Roosevelt Road Reconfiguration . The Subsequent
Guaranteed Payment Schedule is based, in part, upon the
parties’ anticipation that the right of way for Roosevelt
Road will be reconfigured as set forth on Exhibit H
attached hereto and by this reference incorporated herein (the
reconfiguration is referred to as the “ Roosevelt Road Reconfiguration
”, and the portion of the Property falling within the
Roosevelt Road Reconfiguration, which consists of approximately
64.88 acres, is referred to as the “ Roosevelt Road Property
”). Accordingly, in the event that the Roosevelt Road
Reconfiguration has not been completed on or before the 13
th anniversary of the Payment Commencement Date, and, as
a result thereof, in CPT’s good faith judgment all or a
portion of the Roosevelt Road Property is unsuitable for
development, CPT shall have the right, to be exercised by written
notice to Owner (the “ Roosevelt Road Reduction Notice
”) delivered within 60 days after such 13 th
anniversary, to require a reduction in the Subsequent Guaranteed
Payment Schedule by an amount equal to the square footage of the
Roosevelt Road Property, as verified by the Survey (as hereinafter
defined), times R, where R equals the amount set forth opposite the
year in which CPT delivers the Roosevelt Road Reduction Notice on
the Rent Per Square Foot Schedule. If CPT so exercises this
right, (i) the Roosevelt Road Reduction Amount shall be applied
against amounts due in accordance with the Subsequent Guaranteed
Payment Schedule, on a dollar for dollar basis, in inverse order
of
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maturity, (ii) Developer shall have no further
right or option to lease the Roosevelt Road Property, (iii) Owner
shall be entitled to deal with the Roosevelt Road Property free and
clear of any rights of Developer, and (iv) this Agreement shall
otherwise remain in full force and effect.
If
the Roosevelt Road Reduction Notice is not delivered within said
60-day period, CPT shall be deemed to have waived this
right.
No
Roosevelt Road Reduction Amount shall extend the term of any Ground
Lease theretofore entered into or affect the amount of rent payable
thereunder.
(g)
Condemnation; Lease Notice Terminations . In the event
that, at any time prior to the Subsequent Termination Date, (i) any
portion of the Remaining Property is taken pursuant to a
condemnation or eminent domain proceeding, as further described
Section 13 below (a “ Condemnation ”), or (ii)
Developer elects to terminate a Lease Notice with respect to the
Ground Lease Property described therein pursuant to Section 3(e)
below or because of Updated Unpermitted Exceptions or New Survey
Defects, as further provided in Section 4 below, or (iii) either
party elects to terminate the transaction contemplated by a Lease
Notice for failure of a condition, as further provided in Section
10 below (the events described in clauses (ii) or (iii) being
referred to as a “ Lease
Notice Termination ”), the Subsequent Guaranteed
Payment Schedule shall be reduced by the Loss of Developable Land
Amount. As used herein, “ Loss of Developable Land
Amount” means an amount equal to the product of
the number of square feet of the Remaining Property taken by
Condemnation or that is subject to a Lease Notice Termination, as
the case may be, times R, where R equals the amount set forth
opposite the year in which the applicable Condemnation or Lease
Notice Termination occurs on the Rent Per Square Foot
Schedule. The Loss of Developable Land Amount shall be
applied against amounts due in accordance with the Subsequent
Guaranteed Payment Schedule, on a dollar for dollar basis, in
inverse order of maturity.
No
Loss of Developable Land Amount shall extend the term of any Ground
Lease theretofore entered into or affect the amount of rent payable
thereunder.
(h)
Ground Lease Base Rents Credit Against Guaranteed Payments
. Notwithstanding anything to the contrary contained in this
Agreement,
(i)
during the Initial Payment Term, the Guaranteed Payment due on any
date shall be reduced by (A) Ground Lease Base Rents (as defined in
the Form Ground Lease) actually received by Owner on such date with
respect to Ground Leases for which the CPT Guaranty is still in
effect (it being the intent of the parties that CPT’s shall
act as a direct payment obligor hereunder and as a guarantor under
a Ground Lease until all certificates of occupancy have been issued
for all buildings constructed or to be constructed on a Ground
Lease Property), and (b) Ground Lease Base Rents payable on
such date with respect to Ground Leases for which the CPT Guaranty
has expired (said credited amounts are collectively referred to as
the “ Base Rent
Amounts ”); and
(ii)
during the Subsequent Payment Term, the Guaranteed Payment due on
any date shall be reduced by (A) Base Rent Amounts paid pursuant to
Ground Leases executed prior to the Initial Termination Date, to
the extent that said Base Rent Amounts are
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attributable to acreage in excess of 175 acres,
in the aggregate, and (B) Base Rent Amounts under Ground Leases
entered into after the Initial Termination Date.
(i)
Revised Guaranteed Payment Schedules . In the event
any provision of this Agreement provides for a change, extension or
deferral of a Guaranteed Payment set forth in a Guaranteed Payment
Schedule, either party may request that this Agreement be amended
by attaching a new Guaranteed Payment Schedule that has been
revised to reflect the effect of any such change, extension or
deferral.
By
way of example, the Initial Guaranteed Payment Schedule attached as
Exhibit E and the Subsequent Guaranteed Payment
Schedule attached as Exhibit F each include as an
example a second schedule that shows the effect of each Initial
Payment Term Deferral and Extension, Subsequent Payment Tern
Deferral and Extension and Payment Extension being exercised in
succession after the fifth year of the Initial Payment Term and
Subsequent Payment Term, as applicable.
3.
Due Diligence .
(a)
Inspection Period . For a period commencing on the
Effective Date and expiring 120 days thereafter (the “
Inspection
Period”), Developer, its agents and
representatives shall have the right to: (i) perform inspections
and tests of the Project, including, but not limited to, an
Environmental Assessment (as hereinafter defined); (ii) examine the
Property Documents (as hereinafter defined), as further provided
below; (iii) make investigations with regard to zoning,
environmental, building code and other legal requirements; (iv)
make or obtain market studies and real estate tax analyses; and (v)
analyze the financial feasibility of developing the Project (the
foregoing inspections, tests and reviews are collectively referred
to as the “ Property Due
Diligence ”).
If
CPT is not satisfied with the results of the Property Due Diligence
for any reason, then CPT may, by written notice to Owner, given not
later than the last day of the Inspection Period, terminate this
Agreement. Upon such termination, neither party shall have
any further liability to the other hereunder (except for indemnity
obligations).
(b)
Documents to be Made Available . During the Inspection
Period, Owner shall make available to Developer (upon reasonable
prior notice and during customary business hours) for inspection
and, with Owner’s reasonable consent, photocopying, at
Owner’s location, such of the following documents as are in
Owner’s possession (collectively, “ Property Documents ”):
(i)
Copies of all reports or studies (including engineering, soil
boring and physical inspection reports of employees, principals,
consultants, Governmental Authorities or insurance carriers) in
respect of the physical condition or operation of the Property or
recommended improvements thereto.
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(ii)
Copies of all documentation, reports, plans, studies and
information related to the environmental condition of the
Property.
(iii)
A copy of all bills issued for the three most recent years for
which bills have been issued for all real estate taxes and personal
property taxes, and a copy of any and all notices pertaining to
real estate taxes or assessments applicable to the Property.
In the event that any taxes or assessments for said years have been
appealed, Owner shall provide Developer with copies of all
petitions for appeal and evidence of full payment of the cost of
any such appeals, including the full payment of attorneys’
fees.
(iv)
All other studies, reports, maps and documents related to the
Property, including, without limitation, engineering reports,
surveys, environmental reports, traffic circulation, operating
methods, flood control and drainage plans, design renderings, shop
drawings, feasibility studies, documents relating to any special
use, conforming use or zoning variance, and all correspondence with
governmental agencies or their personnel concerning the same, but
excluding market analyses.
(c)
Environmental Site Assessments . Developer shall have
the right to employ one or more environmental consultants or other
professional(s) to perform or complete so-called “
Phase 1 ”
and/or “ Phase
1I ” environmental inspections and assessments
(herein referred to as the “ Environmental Assessment ”)
of the Property, and Owner acknowledges and consents to such
Environmental Assessment. In order to facilitate the
Environmental Assessment and technical review of relevant Property
Documents, Owner shall cooperate reasonably (but without third
party expense to Owner) with Developer and its environmental
consultants, including, without limitation, providing access to all
files and responding to all reasonable questions. The
Environmental Assessment may evaluate the present and past uses of
the Property, and the presence on, in or under the Property (and
on, in or under land sufficiently proximate to the Property) of any
Hazardous Materials.
Developer acknowledges certain conditions of
the Property that are disclosed on Schedule 16(b) attached
hereto.
(d)
Conduct of Inspections . Prior to Developer entering
the Property to conduct any Property Due Diligence, CPT shall give
Owner reasonable prior notice, and shall obtain and maintain, at
CPT’s sole cost and expense, and shall deliver to Owner
evidence of, the following insurance coverage, and shall cause each
of its agents and contractors to obtain and maintain, and, upon
request of Owner, shall deliver to Owner evidence of, the following
insurance coverage: general liability insurance, from an
insurer reasonably acceptable to Owner, in the amount of TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00) combined single limit
per occurrence (with a TEN MILLION DOLLAR ($10,000,000.00) umbrella
for any injury or damage (personal, property or otherwise), such
policy to name Owner and such other parties related to Owner as it
may reasonably designate as an additional insured party, which
insurance shall provide coverage against any claim arising in
connection with the acts, omissions or activities of Developer or
its agents, employees or contractors in connection with the
Property Due Diligence.
Developer shall cause all Property Due
Diligence to be performed in a manner that does not unreasonably
disturb or disrupt the tenancies or business operations of any user
of
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the
Property or Owner’s business operations at its airport (which
lies to the north of the Property) and that minimizes damage
(including crop damage) or change to the present character of the
Property. In the event that, as a result of any Property Due
Diligence, any damage occurs to the Property, then CPT shall
promptly repair such damage, at CPT’s sole cost and expense,
so as to return the Property to substantially the same condition as
it was in prior to such damage or change. CPT hereby
indemnifies, protects, defends and holds Owner harmless from and
against any and all losses, damages, causes of action, judgments,
damages, costs and expenses that Owner may suffer or incur in
connection with the acts, omissions or activities of Developer or
its agents, employees, or contractors in connection with the
Property Due Diligence.
(e)
Continuing Property Due Diligence . After the
Inspection Period, Developer may continue to conduct Property Due
Diligence in the manner and subject to the conditions provided for
herein, but shall have no further right to terminate this Agreement
as a result of any such inspection or dissatisfaction with the
results thereof. Notwithstanding the foregoing, in the event
Developer issues a Lease Notice, but within 60 days of its
issuance, Developer becomes unsatisfied with the results of the
Property Due Diligence with respect to the Ground Lease Property
referenced in such notice, Developer may, within said 60-day
period, terminate such Lease Notice by written notice thereof to
Owner. Upon such termination, Developer shall have no further
right or option to lease such Ground Lease Property, and Owner
shall be entitled to deal with such Ground Lease Property free and
clear of any rights of Developer, and this Agreement shall
otherwise remain in full force and effect. After the fifth
year of the Initial Payment Term, and no more than once every two
years thereafter, Owner may, acting reasonably, require CPT to
increase the coverage or the amount of coverage of the insurance to
be provided in Section 3(d) to reflect current insurance market
conditions or prudent risk management practices.
(f)
Copies of Reports . Developer shall deliver to Owner
copies of all studies and reports which are prepared for it by
third parties concerning the Property.
(g)
Confidentiality . Except as may be required by law or
lawful order of a court or agency of competent jurisdiction, or
except to the extent that Developer has express written
authorization from Owner, Developer shall keep secret and
confidential indefinitely all Property Documents and results of
Property Due Diligence and shall not to disclose the same, either
directly or indirectly, to any other person, firm, or business
entity, or to use it in any way. This provision shall survive
the termination of the Agreement.
4.
Title and Survey .
(a)
Property .
(i)
Title Commitment . No later than 30 days after the
Effective Date, Developer shall obtain, at its cost, (a) a
commitment (the “ Title
Commitment ”) for a Leasehold Policy of Title
Insurance issued by Title Company showing fee title to the Property
in Owner, (b) UCC, tax lien and judgment searches of Owner (for
Illinois and DuPage County) (collectively, the “
Searches ”),
and (c) legible copies of all documents cited, raised as exceptions
or noted in the Title Commitment (collectively, the “
Title Documents
”).
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(ii)
Survey . No later than 30 days after the Effective
Date, Developer shall obtain, at its cost, a survey of the Property
prepared by Christopher B. Burke Engineering, Ltd. (the “
Surveyor ”)
and certified to have been prepared in accordance with the most
recent ALTA Land Survey Standards for urban properties (and
containing Table A, Nos. 1, 2, 3, 4, 6, 7(a), 7(b), 7(c), 8, 9, 10,
11, 13, 14, 15, and 16 for the benefit of Developer,
Developer’s lender, if any, as identified by Developer, and
Title Company (“ Survey ”). The Survey
shall indicate whether there are any encroachments of buildings or
other improvements from adjoining properties, and the location of
all easements affecting the Property. Without limitation of
the foregoing, the Survey shall state the legal description of the
Property, the total square footage, and shall further state whether
the Property is located in an area designated by an agency of the
United States as being subject to flood hazards or flood risks.
(iii)
Title Approval . Developer shall have until the date
that is 45 days after the Effective Date (the “
Title Review Period
”) in which to review the Survey and the Title Documents and
deliver to Owner, at Developer’s election, in writing, such
objections as Developer may have to any matters contained in the
Title Documents or Survey (“ Developer’s Objection Notice)
. The objections listed in Developer’s Objection
Notice, if any, are referred to as the “ Objectionable Exceptions
”). Owner shall use commercially reasonable efforts,
prior to the expiration of the Inspection Period, to cure (e.g.,
cause the Title Company to remove or commit to insure over) any
Objectionable Exceptions and to agree with Developer as to any
Objectionable Exceptions which will be removed or insured over
after the Inspection Period, but prior to the first Closing Date
(“ Removable
Exceptions ”). In the event Owner, despite
commercially reasonable efforts, is unable to cure any of said
Objectionable Exceptions prior to the expiration of the Inspection
Period or fails to agree with Developer as to any Removable
Exceptions, Developer shall have the right to either (a) terminate
this Agreement by delivering written notice to Owner on or prior to
the expiration of the Inspection Period, in which event, each party
shall be released from further liability to the other (except for
indemnity obligations), or (b) Developer may consummate the
transaction contemplated by this Agreement in accordance with the
terms hereof, in which event, subject to the provisions of Section
4(a)(iv) below, all exceptions to title listed on Schedule B of the
Title Commitment as of the expiration of the Inspection Period, and
all matters contained in the Survey, shall conclusively be deemed
to constitute Permitted Exceptions (as hereinafter defined).
As
used herein, “ Permitted
Exceptions ” means (a) general taxes not yet due
or payable, (b) any matters listed on Exhibit I
attached (or to be attached) hereto from time to time, (c) matters
created by, through or under Developer, and (d) the standard
printed exceptions and (e) exceptions deemed to be permitted
exceptions under any other provision of this Agreement from time to
time. The parties agree to amend this Agreement promptly
after the expiration of the Inspection Period to attach to this
Agreement, as Exhibit I , the Permitted Exceptions
determined pursuant to this subsection.
(iv)
Unpermitted Exceptions . If an exception to title or
other title defect other than those on the then current list of
Permitted Exceptions is added to the Title Commitment subsequent to
the date that the Permitted Exceptions are attached to this
Agreement (other than those that are the result of the act or
omission of Developer or its agents or contractors), but prior to
the first Closing Date and such exception or defect would, in the
reasonable judgment of Developer, have a material adverse effect on
the proposed use and
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development of the applicable Ground Lease
Property in accordance with the Concept Plan and the Design
Standards (“ Unpermitted
Exceptions ”), then, prior to the first Closing
Date, Owner shall use commercially reasonable efforts to cure any
such Unpermitted Exceptions (and the first Closing Date shall be
extended for up to 30 days to allow Owner to cure same). In
the event that Owner, despite commercially reasonable efforts, is
unable to cure any of the Unpermitted Exceptions within said 30 day
period, Developer shall have the right to either (a) terminate this
Agreement by delivering written notice to Owner within 15 days
after the expiration of such 30 day period, in which event each
party shall be released from further liability to the other (except
for indemnity obligations), or (b) Developer may consummate the
transaction contemplated by this Agreement in accordance with the
terms hereof, in which event any such Unpermitted Exceptions shall
be conclusively deemed to constitute Permitted
Exceptions.
(b)
Ground Lease Property .
(i)
Updated Title Conditions . Developer shall, no more
than 30 days after the issuance of a Lease Notice, at its sole cost
and expense, obtain an update of the Title Commitment with respect
to the applicable Ground Lease Property, together with copies of
all underlying recorded title documents not previously delivered to
Developer (said updated Title Commitment, together with said
underlying recorded title documents, and all other updated Title
Commitments and underlying recorded title documents delivered to
Developer in accordance with this Agreement, are hereinafter
referred to as the “ Updated Title Documents
”). In the event that the Updated Title Documents
reveal exceptions to title or other title defects other than those
on the then current list of Permitted Exceptions and that have
arisen subsequent to a prior Closing Date (other than those that
are the result of the act or omission of Developer or its agents or
contractors) that would, in the reasonable judgment of Developer,
have a material adverse effect on the proposed use and development
of the applicable Ground Lease Property in accordance with the
Concept Plan and the Design Standards, Developer shall have a
period of seven days after its receipt of the Updated Title
Documents in which to object to any of the new exceptions, in
Developer’s sole discretion (said exceptions are herewith
collectively referred to as the “ Updated Unpermitted Exceptions
”) and so notify Owner thereof. Prior to the applicable
Closing Date, Owner shall use commercially reasonable efforts to
cure any such Updated Unpermitted Exceptions (and said Closing Date
shall be extended for up to 30 days to allow Owner to cure
same). In the event that Owner is unable to cure the Updated
Unpermitted Exceptions, (a) Developer may elect to terminate the
applicable Lease Notice by written notice thereof to Owner
delivered within 15 days after the expiration of such 30-day
period, or (b) Developer may consummate such Closing, in which
event such Updated Unpermitted Exceptions shall be conclusively
deemed to constitute Permitted Exceptions. Upon such a
termination of a Lease Notice, (x) the provisions of Section 2(g)
shall apply, and (y) Developer shall have no further right or
option to lease such Ground Lease Property, and Owner shall be
entitled to deal with such Ground Lease Property free and clear of
any rights of Developer, and this Agreement shall otherwise remain
in full force and effect.
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(ii)
Updated Survey Conditions . Developer shall, no more
than 30 days after the issuance of a Lease Notice, at its sole cost
and expense, obtain an update to the Survey with respect to the
Ground Lease Property (said updated survey, together with any other
updated surveys delivered to Developer in accordance with this
Agreement, are referred to as the “ Updated Survey ”). In
the event that the Updated Survey discloses a survey defect, such
as an encroachment, caused by Owner,
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