EXHIBIT NO. 10.10
MEZZANINE NOTE
$75,000,000.00 March 19, 2003
FOR VALUE RECEIVED, PRIME/XXXXXXX DEVELOPMENT COMPANY, L.L.C., a Delaware
limited liability company (the "Borrower"), whose address for notice is 00 Xxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 (Attn: Xxxxx Xxxxxxxx and
Xxxxx Xxxxxxx, Esq.), promises to pay to the order of LNR EASTERN LENDING, LLC,
a Georgia limited liability company, having an office c/o LNR Property
Corporation. 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxx 00000 (the
"Holder"), or at such other place as Holder may from time to time in writing
designate, in lawful money of the United States of America, the principal sum of
SEVENTY-FIVE MILLION AND NO/100 DOLLARS ($75,000,000.00) or so much thereof as
shall have been advanced pursuant to the Mezzanine Loan Agreement (as defined
below), together with interest thereon and all other amounts payable to the
Holder under the Loan Documents (as defined below).
1. Definitions. As used herein, the terms "Borrower" and "Holder" have the
meanings assigned in the preceding paragraph and the following terms have the
following meanings (any other capitalized terms used but not defined herein but
defined in the Mezzanine Loan Agreement shall have the meanings ascribed to such
terms in the Mezzanine Loan Agreement):
"Extended Maturity Date" shall mean the earlier to occur of (i)
January 5, 2005, or (ii) the date on which the outstanding principal
amount evidenced by this Note and all accrued interest thereon shall be
paid or be required to be paid in full, whether by prepayment,
acceleration or otherwise.
"Initial Maturity Date" shall mean the earlier to occur of (i)
January 5, 2004, or (ii) the date on which the outstanding principal
amount evidenced by this Note and all accrued interest thereon shall be
paid or be required to be paid in full, whether by prepayment,
acceleration or otherwise; provided, however, that in the event the term
of this Note is extended in accordance with the terms and conditions set
forth in the Mezzanine Loan Agreement, the maturity date shall be the
Extended Maturity Date.
"Maximum Rate" shall mean the maximum interest rate allowed by
applicable Illinois law, as amended from time to time, in effect on the
date for which a determination of interest accrued hereunder is made.
"Mezzanine Loan Agreement" shall mean that certain Mezzanine Loan
Agreement of even date herewith among the Borrower, as borrower, and the
Holder, as a Lender, as the same has been amended by that Omnibus First
Modification to Mezzanine Loan Documents, that Omnibus Second Modification
to Mezzanine Loan Documents and that Omnibus Third Modification to
Mezzanine Loan Documents, and as same may hereafter be amended from time
to time.
"Pledge Agreement" shall mean that certain Pledge and Security
Agreement of even date herewith executed by the Borrower and Prime Group
Realty, L.P. in favor of the Holder, as the same may be amended from time
to time.
"Principal Balance" shall mean an amount outstanding from time to
time equal to: (i) the Advance made under the Mezzanine Loan Agreement,
plus (ii) any other sums advanced under the Mezzanine Loan Agreement and
the other Loan Documents, less (iii) any principal reduction made in
accordance with the terms of this Note, the Mezzanine Loan Agreement or
the other Loan Documents.
2. Interest Rate. From the Closing Date to and including the Initial Maturity
Date or the Extended Maturity Date (as applicable), the Principal Balance shall
bear interest as set forth in the Mezzanine Loan Agreement at the Applicable
Interest Rate from time to time in effect.
3. Payment of Principal and Interest. From the date hereof, the Principal
Balance and interest thereon shall be due and shall be payable as set forth in
the Mezzanine Loan Agreement.
4. Application of Payments. Each payment made by the Borrower with respect to
the Loan shall be applied: first: to the payment of the Exit Fee, if any, then
due and payable pursuant to the Mezzanine Loan Agreement; second: to the payment
of any late charges due and payable under the Mezzanine Loan Agreement or
hereunder; third: to the repayment of any amounts advanced in accordance with
the Mezzanine Loan Agreement or the other Loan Documents for insurance premiums,
taxes, assessments or for preservation or protection of the collateral covered
by the Loan Documents and to the payment of all reasonable out of pocket costs
and expenses incurred in connection with the collection of the Loan (including,
without limitation, all reasonable attorneys' fees payable in connection
therewith); Fourth: to the payment of any IRR Amount or Make-Whole Amount, if
any, then due and payable pursuant to the Mezzanine Loan Agreement; fifth to the
payment of accrued and unpaid interest; sixth: to fund any reserves or escrows
required and held in accordance with the terms of the Mezzanine Loan Agreement
or the other Loan Documents, and seventh: to reduction of the Principal Balance.
Payments shall be deemed made when good funds are received by the Holder.
THE BORROWER UNDERSTANDS THAT THIS NOTE IS NOT SELF-AMORTIZING AND THAT A
SUBSTANTIAL BALLOON PAYMENT WILL BE DUE ON THE INITIAL MATURITY DATE (OR THE
EXTENDED MATURITY DATE, AS APPLICABLE).
5. Extension. The Borrower shall have the right to extend the Initial Maturity
Date for one (1) twelve (12) month period provided that the Borrower complies
with all of conditions precedent set forth in Section 2.8 of the Mezzanine Loan
Agreement at the time of such election and pays any reasonable, out of pocket
third-party expenses incurred by the Lender in connection with such extension.
If the Initial Maturity Date is extended, all of the terms and conditions of
this Note, the Mezzanine Loan Agreement and the other Loan Documents shall
continue to apply, except that the Borrower shall have no further option to
extend the Extended Maturity Date beyond January 5, 2005.
6. Prepayment. This Note may be prepaid in accordance with the terms of Section
2.4 of the Mezzanine Loan Agreement.
7. Maximum Rate of Interest. Notwithstanding any provision of this Note or the
Mezzanine Loan Agreement, the total liability for payments of interest and
payments in the nature of interest, including, without limitation, all charges,
fees, or other sums which may at any time be deemed to be interest, shall not
exceed the limit imposed by the applicable laws of the State of Illinois. In the
event the total liability for payments of interest and payments in the nature of
interest, including, without limitation, all charges, fees, or other sums which
may at any time be deemed to be interest under this Note or any of the other
Loan Documents, shall, for any reason whatsoever, result in an effective rate of
interest, which for any month or other interest payment period exceeds the limit
imposed by the applicable laws of the State of Illinois, all sums in excess of
those lawfully collectible as interest for the period in question (based upon
the reduced interest rate and monthly payment) shall, without further notice to
any party hereto, be applied to the reduction of the Principal Balance
immediately upon receipt of such sums by Holder (without prepayment premium or
penalty including the Make-Whole Amount, the IRR Amount and/or the Exit Fee),
with the same force and effect as though the Borrower had specifically
designated such excess sums to be so applied to the reduction of the Principal
Balance; provided, however, that Holder may, at any time and from time to time,
elect, by notice in writing to the Borrower, to waive, reduce, or limit the
collection of any sums (or refund to the Borrower any sums collected) in excess
of those lawfully collectible as interest rather than accept such sums as
prepayment of the Principal Balance.
8. Security. Payment of this Note is secured by the Pledge Agreement and the
other Loan Documents. All of the agreements, conditions, covenants, provisions
and stipulations contained in the Mezzanine Loan Agreement, the Pledge Agreement
and the Loan Documents which are to be kept and performed by the Borrower are
hereby made a part of this Note to the same extent and with the same force and
effect as if they were fully set forth herein, and the Borrower covenants and
agrees to keep and perform them, or cause them to be kept and performed, in
accordance with their terms.
9. Late Charges. Late charges, if any, shall be due in accordance with Section
2.2.4 of the Mezzanine Loan Agreement.
10. Default. Upon the occurrence of any uncured Event of Default, at the option
of Holder without any advance notice, any amounts then unpaid under this Note,
the Mezzanine Loan Agreement, and any other Loan Documents shall bear interest
at the Default Rate for so long as the Event of Default shall remain uncured,
payable monthly on the same day of each month that monthly payments of interest
and/or principal are due under the Mezzanine Loan Agreement. In addition, upon
the occurrence of any uncured Event of Default, Holder, at its option and
without further notice, demand or presentment for payment to the Borrower or
others (except to the extent required by applicable law), may declare
immediately due and payable the unpaid Principal Balance and interest accrued
thereon (including, without limitation, the applicable IRR Amount, the
applicable Make-Whole Amount and the Exit Fee) together with all other sums owed
by Borrower under this Note, the Mezzanine Loan Agreement and the other Loan
Documents (including, but not limited to reasonable attorneys' fees as provided
in Section 12), anything in this Note, the Mezzanine Loan Agreement and the
other Loan Documents to the contrary notwithstanding. Payment of such sums may
be enforced and recovered in whole or in part at any time by one or more of the
remedies provided to Holder in this Note, the Mezzanine Loan Agreement or the
other Loan Documents.
11. Remedies Cumulative. The remedies of the Holder, as provided in this Note,
the Mezzanine Loan Agreement and the other Loan Documents, shall be cumulative
and concurrent and may be pursued singly, successively or together, at the sole
discretion of Holder, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof.
12. Attorneys' Fees. In the event that suit be brought hereon, or an attorney be
employed or expenses be incurred to compel payment of the Loan, or to defend the
priority of and the security interests granted under the Pledge Agreement or as
otherwise provided in the Mezzanine Loan Agreement, the Borrower promises to pay
all such reasonable attorneys' fees, costs and expenses (including reasonable
attorneys' fees incurred in collecting attorneys' fees), all as actually
incurred by Holder as a result thereof and including, without limitation, (a)
reasonable attorneys' fees, costs and expenses incurred in appellate proceedings
or in any action or participation in, or in connection with, any case or
proceeding under Chapters 7 or 11 of the Bankruptcy Code or any successor
thereto, and (b) reasonable attorneys' fees, costs and expenses incurred as a
result of Xxxxxx's exercising its rights to cure any Event of Default by the
Borrower under this Note, the Mezzanine Loan Agreement or any other Loan
Documents, or as a result of the foreclosure of the Pledge Agreement.
Additionally, the Borrower agrees to pay all reasonable attorneys' fees, costs
and expenses attributable to any subsequent modification or restructuring of the
Loan except as limited by the terms of Section 19 below.
13. WAIVER OF NOTICE BY XXXXXXXX. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
BORROWER WAIVES DILIGENCE, PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF DEMAND,
NOTICE OF NONPAYMENT OR DISHONOR, NOTICE OF INTENTION TO ACCELERATE, NOTICE OF
ACCELERATION, PROTEST AND NOTICE OF PROTEST OF THIS NOTE, AND ALL OTHER NOTICES
IN CONNECTION WITH THE DELIVERY, ACCEPTANCE, PERFORMANCE, DEFAULT, OR
ENFORCEMENT OF THE PAYMENT OF THIS NOTE, EXCEPT SUCH NOTICES AS ARE EXPRESSLY
REQUIRED UNDER THE MEZZANINE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14. No Waiver by Xxxxxx. Holder shall not be deemed, by any act of omission or
commission, to have waived any of its rights or remedies hereunder unless such
waiver is in writing and signed by Xxxxxx, and then only to the extent
specifically set forth in the writing. The acceptance by Holder of any payment
hereunder which is less than payment in full of all amounts due and payable at
the time of such payment shall not constitute a waiver of the right to exercise
any of the foregoing options at that time or at any subsequent time or nullify
any prior exercise of any such option without the express consent of Holder,
except as and to the extent otherwise provided by law. A waiver with reference
to one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
15. GOVERNING LAW AND VENUE. EXCEPT AS OTHERWISE PROVIDED IN THE MEZZANINE LOAN
AGREEMENT, THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED AND CONSTRUED ACCORDING TO THE LAWS OF THE UNITED STATES OF
AMERICA AND THE INTERNAL LAWS OF THE STATE OF FLORIDA. VENUE FOR ANY ACTION TO
COLLECT OR ENFORCE THE TERMS OF THIS NOTE, THE MEZZANINE LOAN AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS SHALL LIE IN THE CIRCUIT COURT OF THE STATE OF
FLORIDA, COUNTY OF MIAMI-DADE, OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF FLORIDA.
16. Construction of Certain Terms. Whenever used, the singular number shall
include the plural, the plural shall include the singular, and the words
"Holder" and "Borrower" shall be deemed to include their respective heirs,
administrators, executors, successors and assigns.
17. Notice. All notices which may be required or permitted to give hereunder
shall be made in the same manner as set forth in Section 11.5 of the Mezzanine
Loan Agreement.
18. Severability of Provisions. In the event any one or more of the provisions
hereof shall be invalid, illegal or unenforceable in any respect, the validity
of the remaining provisions hereof shall be in no way affected, prejudiced or
disturbed thereby.
19. Sale of Interest. The Borrower acknowledges that Holder may, in its sole
discretion but subject to the provisions of the Mezzanine Loan Agreement
(including without limitation Section 11.23 thereof), sell all or any part of
its interest in the Loan without the consent of or cost to Borrower. Any such
sale may be at a discount or premium, subject to a brokerage fee or involve a
servicing agreement. In that connection, Holder may share and disclose all
documents and information it now or hereafter may have relating to the Loan and
the Borrower. All of the foregoing described in this Section 19 shall be at no
cost or expense to the Borrower and such items shall not increase the Borrower's
or Guarantors' obligations and liabilities or decrease such parties' rights
under the Loan, this Note, the Mezzanine Loan Agreement or the other Loan
Documents.
20. Headings. The section captions are inserted for convenience of reference
only and shall in no way alter or modify the text of such sections.
21. Further Agreements. The Borrower hereby acknowledges, with respect to this
Note, the Mezzanine Loan Agreement and the other Loan Documents, that:
1. THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND HOLDER SHALL BE
DETERMINED SOLELY FROM THE WRITTEN LOAN DOCUMENTS AND ANY PRIOR ORAL
AGREEMENTS BETWEEN HOLDER AND THE BORROWER ARE SUPERSEDED BY AND MERGED
INTO THE LOAN DOCUMENTS.
2. THE LOAN DOCUMENTS MAY NOT BE VARIED BY ANY ORAL AGREEMENTS OR
DISCUSSIONS THAT OCCUR BEFORE, CONTEMPORANEOUSLY WITH, OR SUBSEQUENT TO
THE EXECUTION OF SUCH LOAN DOCUMENTS.
3. THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
22. Recourse. The Loan shall be fully recourse to the Borrower, but not to its
members, officers, directors or owners except to the extent and as specifically
set forth in the Guaranties. Section 11.25 of the Mezzanine Loan Agreement is
hereby incorporated by reference and the terms thereof shall have the same force
and effect as if fully set forth herein.
23. WAIVER OF JURY TRIAL. THE BORROWER AND HOLDER MUTUALLY, EXPRESSLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY FOR ANY PROCEEDINGS ARISING
OUT OF OR IN CONNECTION WITH THE LOAN, THIS NOTE, THE MEZZANINE LOAN AGREEMENT,
OR ANY OTHER LOAN DOCUMENT CONNECTED WITH THIS TRANSACTION, IN THE INTEREST OF
AVOIDING DELAYS AND EXPENSES ASSOCIATED WITH JURY TRIALS.
24. Business Loan. The Borrower hereby represents that: (a) the proceeds of the
Loan will be used for business purposes as set forth in Illinois Interest Act,
815 ILCS 205 and (b) the proceeds of the purchase of this Note will not be used
for the purchase of registered equity securities within the purview of
Regulation "U" issued by the Board of Governors of the Federal Reserve System.
25. Note Register; Ownership of Note. The ownership of an interest in this Note
shall be registered on a record of ownership maintained by Lender or its agent.
Notwithstanding anything else in this Note to the contrary, the right to the
principal of, and stated interest on, this Note may be transferred only if the
transfer is registered on such record of ownership and the transferee is
identified as the owner of an interest in the obligation. Borrower shall be
entitled to treat the registered owner of in this Note (as recorded on such
record of ownership) as the owner in fact for all purposes and shall not be
bound to recognize any equitable or other claim to, or interest in this Note on
the part of any other person or entity.
(Balance of page intentionally left blank.)
IN WITNESS WHEREOF, the Borrower, intending to be legally bound hereby,
has duly executed this Note under seal the day and year first above written.
PRIME/XXXXXXX DEVELOPMENT COMPANY,
L.L.C., a Delaware limited liability
company
By: Prime Group Realty, L.P., a
Delaware limited partnership, its
sole member
By: Prime Group Realty Trust, a
Maryland real estate
investment trust, its
managing general partner
By:/s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Its: Co- President
