LOAN AGREEMENT
among
PRIMESTONE INVESTMENT PARTNERS L.P.,
THE PRIME GROUP, INC.,
XXXXXXX X. XXXXXXX
and
VORNADO PS, L.L.C.
Dated as of September 26, 2000
TABLE OF CONTENTS
SECTION PAGE
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1. DEFINITIONS..........................................................1
2. THE LOAN............................................................14
3. THE NOTE; INTEREST..................................................15
4. MATURITY; MANDATORY REPAYMENT; OPTIONS TO EXTEND....................15
5. FEES................................................................19
6. USE OF FUNDS........................................................20
7. VOLUNTARY PREPAYMENT................................................20
8. PAYMENTS............................................................21
9. ADDITIONAL COSTS; EXPENSES; INDEMNITY; ETC..........................21
10. COLLATERAL..........................................................24
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS..........................25
12. CONDITIONS OF LENDING...............................................36
13. AFFIRMATIVE COVENANTS...............................................40
14. NEGATIVE COVENANTS..................................................47
15. EVENTS OF DEFAULT...................................................53
16. USURY...............................................................56
17. MISCELLANEOUS.......................................................58
Exhibit A Form of Borrowing Request
Exhibit B Form of Note
Exhibit C Form of Guarantee
Exhibit D Permitted Liens
Exhibit E Form of Pledge and Security Agreement
Exhibit F Form of Agreement in Respect of Pledged Units
Exhibit G Form of Mutual Release
Exhibit H-A and H-B Form of Consents and Agreements of the REIT and
Prime L.P.
Exhibit I-A, I-B and I-C Form of Opinions of Borrower's and the REIT's Counsel
Exhibit J Form of Intercreditor Agreement
Exhibit K Form of Securities Account Agreement and Form of
Securities Account Control Agreement
Exhibit L Certain adjustments to per share prices; etc.
Exhibit M Form of Letter Agreement from Prime Group Realty
Trust with respect to provision of certain
information
Exhibit N Form of Amended and Restated Partnership Agreement of
the Borrower
Exhibit O Form of Letter Agreement of Xxxxxxx Xxxxxxx and
Xxxxxxx Xxxxx
Exhibit P Form of Deposit Account Agreement
Exhibit Q Special Purpose Entity Provisions
LOAN AGREEMENT
LOAN AGREEMENT, dated as of September 26, 2000, among Primestone
Investment Partners L.P., a Delaware limited partnership ("Borrower"), The
Prime Group, Inc., an Illinois corporation ("PGI"), Prime Group Limited
Partnership, an Illinois limited partnership, PGLP, Inc., an Illinois
corporation, Prime Group II, L.P., an Illinois limited partnership, and Prime
International, Inc., an Illinois corporation (each a "Member of the Guarantor
Group" and collectively, the "Guarantor"), Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and
Vornado PS, L.L.C. (the "Lender").
WHEREAS, the Borrower has requested that the Lender lend to the
Borrower up to $62,000,000 in a term loan for purposes of financing its
obligation to repurchase the interest of BRE/Primestone Investment Management
L.L.C., a Delaware limited liability company, and BRE/Primestone Investment
L.L.C., a Delaware limited liability company (collectively, "Blackstone") in
the Borrower; and
WHEREAS, the parties intend that the Loan be, and the parties will
treat the Loan as, a loan for all purposes, including all purposes under the
Code.
WHEREAS, the Lender is willing to make such loan on the terms and
conditions provided herein;
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
(a) TERMS GENERALLY. The definitions ascribed to terms in this
Agreement apply equally to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun shall be deemed to include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be interpreted as if followed by the phrase
"without limitation". The phrase "individually or in the aggregate" shall be
deemed general in scope and not to refer to any specific Section or clause of
this Agreement. All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. The table of contents, headings and captions herein shall not be
given effect in interpreting or construing the provisions of this Agreement.
Except as otherwise expressly provided herein, all references to "dollars" or
"$" shall be deemed references to the lawful money of the United States of
America.
(b) ACCOUNTING TERMS. Except as otherwise expressly provided
herein, the term "consolidated" and all other terms of an accounting nature
shall be interpreted and construed in accordance with GAAP, as in effect from
time to time.
(c) OTHER TERMS. The following terms have the meanings
ascribed to them below or in the Sections of this Agreement indicated below:
"AFFILIATE" means, with respect to any Person, any other Person that
controls, is controlled by, or is under common control with, such Person.
"AGREEMENT" means this loan agreement, as it may be amended, modified
or supplemented from time to time.
"ALTERNATIVE TRANSACTION" shall have the meaning given to such term in
Section 14(d).
"ASSIGNED AGREEMENTS" shall have the meaning given to such term in
Section 10.
"BLACKSTONE" shall have the meaning assigned to such term in the
preamble.
"BORROWER" shall have the meaning assigned to such term in the
preamble.
"BORROWER PARTNERSHIP AGREEMENT" means the Agreement of Limited
Partnership of the Borrower, dated as of November 14, 1997, as amended, as
it may from time to time be amended, modified or supplemented.
"BORROWING DATE" means, with respect to the Loan, the Business Day set
forth in the relevant Borrowing Request as the date upon which the Borrower
desires to borrow such Loan.
"BORROWING REQUEST" means a request by the Borrower for the Loan,
which shall specify (i) the requested Borrowing Date and (ii) the aggregate
amount of such Loan.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized by law
to close.
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under any lease with
respect to any property (whether real, personal or mixed) acquired or
leased by such Person that is required to be accounted for as a liability
on a consolidated balance sheet of such Person.
"CHANGE IN CONTROL" shall mean, with respect to any Person, including
the Borrower, any Member of the Guarantor Group, the REIT or Prime L.P.,
(i) any merger, consolidation, liquidation, dissolution, sale of all or
substantially all of the assets of, or similar transaction involving, such
Person; (ii) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended, but excluding,
with respect to the REIT or Prime L.P., the Borrower and, with respect to
the Members of the Guarantor Group, Xxxxxxx or Xxxxxx X. Xxxx) shall have
become (after giving effect to any securities already beneficially owned by
such person or group of persons) the beneficial owner (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under
said Act) of 35% or more of the outstanding shares of common stock or of
the equity interests in, such Person, or Xxxxxxx shall directly or
indirectly own less than at least 40% of the outstanding equity interests
in any Member of the Guarantor Group; or (iii) during any period of 24
consecutive calendar months, individuals who, on the first day of such
period, were directors or trustees of the REIT (or in the case of a Person
that is a limited partnership, the general partner of such Person) (or, if
applicable, successors to any such directors or trustees whose nomination
and election as directors or trustees were recommended by a majority of
such individuals) shall cease to constitute a majority of the board of
directors or trustees, as applicable, of such
Person (it being understood and agreed that the merger of a Member of the
Guarantor Group with another Member of the Guarantor Group permitted by
Section 14(c)(1) shall not constitute a Change in Control).
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" shall have the meaning given to such term in Section 10.
"COMMITMENT LETTER" means the Commitment Letter dated September 12,
2000, by and among Lender, Borrower, PGI, Xxxxxxx and Xxxxx.
"CREDIT DOCUMENTS" means this Agreement, the Note, if and when issued
in accordance with Section 3, the Guarantee, the Pledge and Security
Agreement, the Securities Account Agreement, the Securities Account Control
Agreement, the Deposit Account Agreement, the Intercreditor Agreement, the
documents required to be delivered pursuant to Section 12 and the other
documents executed pursuant to, or in connection with, this Agreement.
"XXXXX" means Xxxxxxx X. Xxxxx.
"DEFAULT" means any event or circumstance which, with the giving of
notice or the passage of time, or both, would be an Event of Default.
"DEPOSIT ACCOUNT" shall have the meaning given to such term in Section
2(b).
"ENVIRONMENTAL LAW" means any federal, state, local or foreign statute
or common law, regulation, order, decree, opinion or agency requirement as
now in effect or hereinafter adopted relating to (i) the handling, use,
presence, disposal or release of any Hazardous Substance or (ii) the
protection, preservation or restoration of the environment, natural
resources or human health or safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA GROUP" means the Borrower and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a
single employer under Section 414 of the Code or are considered to be one
employer under Section 4001 of ERISA and the REIT and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the REIT, are
treated as a single employer under Section 414 of the Code or are
considered to be one employer under Section 4001 of ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such term in Section
15.
"EXCESS DIVIDEND AMOUNT" shall have the meaning given to such term in
Section 4(c).
"EXCLUDED TAXES" means all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges
imposed on or measured by the overall net income of the Lender or any
franchise taxes, taxes on doing business or taxes measured by capital or
net worth imposed on the Lender, in each case imposed by the United States
of America or any political subdivision or taxing authority thereof or
therein.
"EXIT FEE" shall have the meaning given to such term in Section 5(b).
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System (or any successor Governmental Authority).
"FISCAL QUARTER" means each three-month period ending on March 31,
June 30, September 30 or December 31 of any calendar year.
"GAAP" means generally accepted accounting principles, as set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entities as may be approved by a significant
segment of the accounting profession of the United States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTEE" means a guarantee of each of the Members of the Guarantor
Group in the form of EXHIBIT C hereto.
"GUARANTOR" shall have the meaning assigned to such term in the
preamble.
"GUARANTY" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or
to advance or supply funds for the purchase of) any security for the
payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such Indebtedness of the
payment of such Indebtedness or (iii) to maintain working capital, equity
capital or the financial condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness. The terms
"GUARANTEED", "GUARANTEEING" and "GUARANTOR" shall have corresponding
meanings.
"HAZARDOUS SUBSTANCE" means any substance that is: (A) listed,
classified or regulated pursuant to any Environmental Law; (B) any
petroleum product of by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyl, radioactive
material or radon; and (C) any other substance which may be the subject or
regulatory action by any Governmental Authority in connection with any
Environmental Law.
"INDEBTEDNESS" means, with respect to any Person, (i) all obligations
of such Person for borrowed money or for the deferred purchase price of
property or services (including all obligations, contingent or otherwise,
of such Person in connection with letters of credit, bankers' acceptances,
Interest Rate Protection Agreements or other similar instruments, including
currency swaps) other than indebtedness to trade creditors and service
providers incurred in the ordinary course of business and payable on usual
and customary terms, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the remedies available to the seller or lender under such agreement
are limited to repossession or sale of such property), (iv) all Capital
Lease Obligations of such Person, (v) all obligations of the types
described in clauses (i), (ii), (iii) or (iv) above secured by (or for
which the obligee has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in any property (including accounts, contract
rights and other intangibles) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness, (vi)
all preferred stock issued by such Person which is redeemable, prior to
full satisfaction of the Borrower's obligations under the Credit Documents
(including repayment in full of the Loan and all interest accrued thereon),
other than at the option of such Person, valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (vii) all Indebtedness of others Guaranteed by such Person and
(viii) all Indebtedness of any partnership of which such Person is a
general partner.
"INDEMNITEE" has the meaning assigned to such term in Section 9(d).
"INITIAL FEE" has the meaning given to such term in Section 5(a).
"INITIAL RESERVE DEPOSIT" shall have the meaning given to such term in
Section 2(b).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement,
substantially in the form of EXHIBIT J, among Borrower, Lender and
Prudential to be executed on the Borrowing Date.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement or similar hedging arrangement used
by a Person to fix or cap a floating rate of interest on Indebtedness to a
negotiated maximum rate or amount.
"LENDER" has the meaning assigned to such term in the preamble.
"LIEN" means, with respect to any asset of a Person, (i) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or
on such asset, (ii) the interest of a vendor or lessor under any
conditional sale agreement, capital lease or title retention agreement
relating to such asset, and (iii) in the case of securities, any purchase
option, call or similar right of any other Person with respect to such
securities.
"LOAN" has the meaning given to such term in Section 2.
"MAKE WHOLE PREMIUM" shall mean, with respect to a prepayment of the
Loan in whole or in part (including, without limitation, as a result of an
acceleration of the Loan) prior to October 25, 2001 (or in the event the
maturity of the Loan is extended pursuant to Section 4(b) hereof, prior to
September 26, 2002), a payment due to the Lender in an amount equal to the
product of (i) the principal amount of the Loan then being repaid, (ii) the
excess, if any, of (x) 16% over (y) the rate of interest under the
Revolving Credit Agreement, dated as of March 21, 2000, among Vornado
Realty L.P., as Borrower, Vornado Realty Trust, as General Partner, UBS AG,
Stamford Branch, as Bank, and the other banks and agents party thereto, on
the date of such repayment and (iii) the quotient obtained by dividing the
number of days from the date of such repayment through October 25, 2001 (or
in the event the maturity of the Loan is extended pursuant to Section 4(b)
hereof, prior to September 26, 2002) by 360.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, any
material and adverse effect on (i) the consolidated business, properties,
condition (financial or otherwise) or operations, present or prospective,
of such Person, (ii) the ability of the Borrower or the Guarantor timely to
perform any of its respective material obligations, or of the Lender to
exercise any remedy, under any Credit Document or (iii) the legality,
validity, binding nature or enforceability of any Credit Document.
"MEMBER OF THE GUARANTOR GROUP" shall have the meaning given to such
term in the preamble.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any member of the ERISA Group is making or
accruing an obligation to make contributions or has within the preceding
five plan years made or accrued contributions.
"NOTE" has the meaning given to such term in Section 3(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor Governmental Authority).
"PENSION PLAN" means a Plan that (i) is an employee pension benefit
plan, as defined in Section 3(3) of ERISA (other than a Multiemployer Plan)
and (ii) is subject to the provisions of Title IV of ERISA or is subject to
the minimum funding standards under Section 412 of the Code.
"PERMITTED DEBT" means the Indebtedness outstanding on the date hereof
under the Prudential Loan.
"PERMITTED LIENS" means Liens securing the Borrower's obligations
under the Prudential Loan set forth in EXHIBIT D.
"PERSON" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether Federal, state, county, city,
municipal or otherwise, including any instrumentality, division, agency,
body or department thereof).
"PGI" shall have the meaning given to such term in the preamble.
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA (other than a Multiemployer Plan) which is maintained or contributed
to by the Borrower or any member of the ERISA Group.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement, dated the Closing Date, substantially in the form of EXHIBIT E,
as it may from time to time be amended, modified or supplemented.
"PRIME L.P." means Prime Realty, L.P., a Delaware limited partnership.
"PRIME OP UNITS" shall mean units representing common limited
partnership interests in Prime L.P. issued by Prime L.P. pursuant to the
Amended and Restated Agreement of Limited Partnership of Prime L.P., as
amended.
"PRUDENTIAL" means P-B Finance Ltd., an Affiliate of Prudential
Securities Group, Inc.
"PRIMESTONE PARTNER" means PG/Primestone, L.L.C., a Delaware limited
liability company.
"PRUDENTIAL LOAN" shall mean the loan to the Borrower from Prudential
made pursuant to the Credit Agreement, dated as of November 17, 1997,
between Borrower and Prudential, as the same may be amended, restated,
modified or supplemented from time to time as permitted in this Agreement.
"REGISTRATION RIGHTS AGREEMENT" shall have the meaning given to such
term in Section 10.
"REIT" means Prime Group Realty Trust, a Maryland real estate
investment trust.
"REIT SHARES" shall mean common shares of beneficial interest in the
REIT.
"REQUIRED DEPOSIT AMOUNT" shall have the meaning given to such term in
Section 13(a)(13).
"REQUIRED PRUDENTIAL RELEASE PAYMENTS" shall mean an amount required
to be paid to Prudential pursuant to the Prudential Loan in connection with
a transaction giving rise to the obligation of the Borrower to make
Required Release Payments.
"REQUIRED RELEASE PAYMENTS" shall mean an amount equal to the sum of
(a) an amount (the "Required Principal Amount") equal to the product of
$13.50 (as such amount may be adjusted as set forth on EXHIBIT L)
multiplied by the number of REIT Shares or Prime OP Units sold by the
Borrower in a transaction giving rise to the obligation of the Borrower to
make Required Release Payments,(b) all accrued and unpaid interest on such
amount and (c) all Exit Fees, other fees or other amounts payable in
connection with the repayment being made.
"XXXXXXX" shall have the meaning assigned to such term in the
preamble.
"RESERVE DEFICIT" shall have the meaning given to such term in Section
13(a)(13).
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief financial officer, chief accounting officer, treasurer or any vice
president, senior vice president or executive vice president or
authorized representative of the Borrower or of the general partner of the
Borrower or of the administrative member of the general partner of the
Borrower.
"SECOND FEE" has the meaning given to such term in Section 5(a).
"SECURITIES ACCOUNT" shall have the meaning given to such term in
Section 4(c).
"SECURITIES ACCOUNT AGREEMENT" shall have the meaning given to such
term in Section 4(c).
"SECURITIES ACCOUNT CONTROL AGREEMENT" shall mean the Securities
Account Control Agreement, dated the Borrowing Date, among Borrower,
Prudential and Lender in substantially the form of EXHIBIT K.
"SINGLE PURPOSE ENTITY" shall mean a Person, other than an individual,
which (i) is formed or exists solely for the purpose of directly holding,
financing, refinancing or selling the Collateral, (ii) does not engage in
any business unrelated to the activities set forth in clause (i) hereof,
(iii) does not and will not have any assets other than those related to its
interest in the Collateral or the ownership and financing thereof or any
indebtedness other than Indebtedness hereunder and the Permitted Debt, (iv)
maintains and will maintain its own separate books and records and its own
accounts, in each case which are separate and apart from the books and
records and accounts of any other Person, (v) holds itself out and will
hold itself out as being a Person, separate and apart from any other
Person, (vi) does not and will not commingle its funds or assets with those
of any other Person, (vii) conducts and will conduct its own business in
its own name; (viii) maintains and will maintain separate financial
statements, (ix) pays and will pay its own liabilities out of its own
funds, (x) observes and will observe all partnership, corporate or limited
liability company formalities, as applicable, (xi) maintains and will
maintain an arm's-length relationship with its Affiliates, (xii) pays and
will pay the salaries of its own employees, if any, and maintains a
sufficient number of employees, if any, in light of its contemplated
business operations, (xiii) does not guarantee or will not guarantee or
otherwise obligate itself with respect to the debts of any other Person or
hold out its credit as being available to satisfy the obligations of any
other Person, (xiv) does not acquire and will not acquire obligations or
securities of its partners, members or shareholders, (xv) allocates and
will allocate fairly and reasonably shared expenses, including, without
limitation, any overhead for shared office space, if any, (xvi) does not
and will not pledge its assets for the benefit of any other Person or make
any loans or advances to any other Person, (xvii) does and will correct any
known misunderstanding regarding its separate identity, (xviii) maintains
adequate capital in light of its contemplated business operations, and
(xix) has and will continue to have a partnership or limited liability
company agreement, certificate of incorporation, articles of organization
or other organizational document which includes the provisions set forth in
EXHIBIT Q and which otherwise has been approved by Lender.
"SOLVENT" means, with respect to a Person and a specified date of
determination, that at such date:
(a) the present fair saleable value of such Person's assets is in
excess of the total amount of such Person's probable liabilities on
its existing debts and obligations (including contingent liabilities)
as they become absolute and matured;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry
on such Person's business as theretofore operated and all businesses
in which such Person then is about to engage.
"STOCKHOLDERS' EQUITY" means, as of any date of determination, the
total consolidated stockholders' equity (determined without duplication and
in accordance with GAAP) of the REIT at such date.
"SUBSIDIARY" means, at any time and with respect to any Person, any
other Person the shares of stock or other ownership interests of which
having ordinary voting power to elect a majority of the board of directors
(or similar governing body) or other matters of such Person are at the time
owned, or the management or policies of which is otherwise at the time
controlled, directly or indirectly through one or
more intermediaries (including other Subsidiaries) or both, by such first
Person. Unless otherwise qualified or the context indicates clearly to the
contrary, all references to a "Subsidiary" or "Subsidiaries" in this
Agreement refer to a Subsidiary or Subsidiaries of the Borrower.
"TAXES" has the meaning assigned to such term in Section 9(a).
"THIRD FEE" has the meaning given to such term in Section 5(a).
"TRANSFER" shall mean assign, pledge, hypothecate, grant a security
interest in, sell, lease or otherwise dispose of, whether by sale, merger,
consolidation, liquidation, dissolution, abandonment or otherwise.
"UPFRONT FEE" shall have the meaning given to such term in Section
5(a).
2. THE LOAN. (a) The Borrower agrees to borrow from the Lender, and the
Lender agrees to lend to the Borrower, on the terms and subject to the
conditions set forth herein, up to an aggregate amount of Sixty-Two Million
Dollars ($62,000,000) in a single advance on the date on which the closing of
the repurchase of the interest of Blackstone in the Borrower occurs (the
"Loan"). In order to borrow the Loan, the Borrower shall give a Borrowing
Request to the Lender, by telephone or telecopy or in writing, not later than
12:00 noon (if not in writing, to be so confirmed in substantially the form of
EXHIBIT A not later than 3:00 P.M., New York time, on the same day), on the
first Business Day before the Borrowing Date for the Loan. Subject to
satisfaction, or waiver by the Lender, of each of the applicable conditions
precedent contained in Section 12, on the Borrowing Date the Lender shall make
available, in immediately available funds, to the Borrower the amount of the
Loan. In the event the Borrower does not deliver a Borrowing Request on or
before September 26, 2000 with a Borrowing Date no later than September 28, 2000
or in the event the Borrower does not borrow the Loan on or prior to September
28, 2000, the Lender shall have no further obligation to make the Loan
contemplated hereby and in such event the Lender shall be entitled to retain any
Upfront Fees previously paid by Borrower to Lender (except as expressly provided
in Section 5), and the Borrower shall remain liable for its obligations to pay
all amounts owing pursuant to Section 5 and Section 9 hereof.
(b) Prior to or on the Borrowing Date, Borrower shall establish and
maintain with LaSalle Bank National Association, a deposit account in the name
of the Lender (the "Deposit Account") which shall be subject to the sole
dominion and control of the Lender pursuant to the terms and conditions of the
Deposit Account Agreement, and Borrower shall have no rights to make withdrawals
from the Deposit Account. On the Borrowing Date, Lender will fund, out of the
total proceeds of the Loan, an amount equal to $1,100,000 to the Deposit Account
(the "Initial Reserve Deposit"). On or prior to the earlier to occur of (1)
October 31, 2000 or (2) the third Business Day following the receipt of the
first dividend or distribution received in respect of the Collateral after the
date hereof, the entire balance remaining in the Securities Account after the
making of interest payments due in respect of the Prudential Loan and the Loan
on or prior to such date shall be deposited into the Deposit Account. In the
event that the amount so deposited to the Deposit Account on such date is less
than $2,649,000, PGI or Primestone Partner shall, no later than the Business Day
following the date on which such deposit was required to have been made, make a
capital contribution to Borrower in the amount by which such balance is less
than $2,649,000, and Borrower shall deposit the amount of such capital
contribution into the Deposit Account.
3. THE NOTE; INTEREST. The obligation to repay the Loan shall be evidenced
by a promissory note (the "Note") in substantially the form of EXHIBIT B hereto
attached, dated the date of the advance of funds, payable to the order of the
Lender upon maturity as provided in Section 4 hereof. The Note shall bear
interest from the date of the Note until maturity, payable upon maturity, at a
rate per annum (based on the actual number of days elapsed in a 360-day year)
equal to 16% to maturity, and after maturity, whether by acceleration or
otherwise, at a rate per annum (based on the actual number of days elapsed in a
360-day year) equal to 20%, compounded quarterly. Interest shall be payable in
each January, April, July and October until maturity, commencing October, 2000,
on the date in each such month that is the earlier to occur of (a) the next
Business Day after the receipt by the Borrower of a distribution from Prime L.P.
in respect of the Prime OP Units or a dividend from the REIT in respect of the
REIT Shares and (b) the last day of such month. All overdue amounts (including
principal, interest, fees and reimbursable expenses) hereunder, and, during the
continuance of any Event of Default that shall have occurred, all amounts
owing under the Loan, shall bear interest, payable on demand, at a rate per
annum equal to 20% compounded quarterly (based on the actual number of days
elapsed in a 360-day year).
4. MATURITY; MANDATORY REPAYMENT; OPTIONS TO EXTEND. (a) In addition to the
mandatory repayment obligations described in this Section 4, the Note shall
mature upon the earlier of: (i) October 25, 2001 or (ii) the occurrence of a
Change in Control with respect to the REIT, Prime L.P., the Borrower or any
Member of the Guarantor Group.
(b) The Borrower will have the option to extend the maturity date of the
Note until the earlier of (i) September 26, 2002 and (ii) the occurrence of a
Change in Control with respect to the REIT, Prime L.P., the Borrower or any
Member of the Guarantor Group by delivering written notice of such election to
the Lender in the manner and at the address indicated herein between July 1,
2001 and September 1, 2001; provided that it shall be a condition to the
effectiveness of such election and to the obligation of the Lender to extend the
maturity of the Note that (i) no Default or Event of Default shall have occurred
on or prior to the date such notice is given or on the date on which such
extension of maturity is to become effective, (ii) the average of the closing
trading prices per REIT Share on the New York Stock Exchange (or other national
securities exchange or listing service upon which such REIT Shares are then
listed or quoted) during the ten trading days immediately prior to the date on
which such notice is given and the date on which such extension of maturity is
to become effective shall be not less than $15.00 (as such price may be adjusted
as provided in EXHIBIT L), (iii) the Borrower shall have paid to the Lender an
extension fee in an amount equal to 0.91667% of the aggregate principal amount
of the Loan then outstanding, (iv) the representations and warranties contained
in Section 11 (other than the representation and warranty set forth in Section
11(g)) shall be true and correct on the date such notice is given and on the
date on which such extension of maturity is to become effective as if such
representations and warranties were given on, and as of, such dates (and the
Borrower and each Member of the Guarantor Group shall be deemed to have made
such representations and warranties to Lender as of such dates); (v) the
representations and warranties contained in Section 11(g) shall be true and
correct on the date such notice is given and on the date on which such extension
of maturity is to become effective (except to the extent of the occurrence of
events or financial results occurring after the dates of such financial
statements that do not reflect, or that have not and are not reasonably likely
to result in, a Material Adverse Effect on the Borrower, any Member of the
Guarantor Group, the REIT or Prime L.P., as applicable) as if such
representations and warranties were given on, and as of, such dates (and the
Borrower and each Member of the Guarantor Group shall be deemed to have made
such representations and warranties to Lender as of such dates); (vi) the Lender
shall have received the financial statements required to be delivered pursuant
to this Agreement and the other Credit Documents within the time periods
specified therein; (vii) without limitation of the foregoing, the Lender shall
have received, no later than June 1, 2001 (or such later date to which the
Lender may agree for purposes of this Section 4(b)) the respective consolidated
balance sheet of the Borrower, each Member of the Guarantor Group and the REIT
as of December 31, 2000, together with consolidated statements of income,
retained earnings, paid-in capital and surplus and cash flows for the fiscal
year then ended, reported upon by Ernst & Young L.L.P., and, no later than
August 15, 2001 (or such later date to which the Lender may agree for purposes
of this Section 4(b)), the consolidated balance sheet of the Borrower, each
Member of the Guarantor Group and the REIT as of June 30, 2001, together with
consolidated statements of income and cash flows for the six months then ended
and such financial statements do not reflect any changes since the date of the
financial statements referred to in Section 11(g) that, individually or in the
aggregate, have had, or that are reasonably likely to result in, a Material
Adverse Effect on the Borrower, any Member of the Guarantor Group, the REIT or
Prime L.P., as applicable; (viii) Prudential shall have extended the maturity of
the Prudential Loan to not earlier than September 26, 2002 on terms
substantially similar to (and in no event any less favorable to the Borrower
than) the terms of the Prudential Loan or another institutional lender
reasonably acceptable to Lender shall have made a bona fide loan to the Borrower
refinancing the Prudential Loan (provided that such refinancing loan has a
principal amount no greater than the lesser of (a) $40,000,000 and (b) the
principal amount outstanding under the Prudential Loan at the time of such
refinancing, a maturity date no earlier than September 26, 2002 and other terms
substantially similar to (and in no event any less favorable to the Borrower
than) the terms of the Prudential Loan); (ix) Prudential (or the lender in any
such refinancing loan satisfying the requirements of clause (viii)) shall have
executed and delivered an intercreditor agreement (or an amendment to the
existing Intercreditor Agreement) containing terms and conditions substantially
similar to (and in no event less favorable to the Lender than) the terms of the
Intercreditor Agreement which intercreditor agreement, by its terms, will remain
effective through the extended maturity date of the Loan; and (x) the balance in
the Deposit Account shall be not less than an amount equal to the projected
Reserve Deficits (calculated as provided in Section 13(a)(13)) for each of the
remaining interest payment dates (including at maturity)
during the remaining term of the Loan (as such term may be extended pursuant to
the provisions of this Section 4(b)).
(c) In the event that, in any Fiscal Quarter, the Borrower or the Guarantor
receives any dividend, distribution, amount paid in redemption or repurchase or
similar payment in respect of any portion of the Collateral and such dividend,
distribution or other amount, together with all dividends, distributions or
other amounts received by the Borrower or the Guarantor with respect to all or
any portion of the Collateral exceeds, in such Fiscal Quarter, an amount in
excess of the amount necessary to pay all interest due on the next succeeding
interest payment dates under the Prudential Loan and the Loan, Borrower shall
pay such excess (the "EXCESS DIVIDEND AMOUNT") less any portion of such Excess
Dividend Amount required to be paid to Prudential pursuant to the terms of the
Prudential Loan and the Intercreditor Agreement to the Lender within one
Business Day following receipt by the Borrower or the Guarantor of such
dividend, distribution or other amount, such payments being applied (i) first,
to the payment of interest or late charges on the principal amount being repaid
pursuant to clause (iii) through the date of such payment, together with any
interest owing thereon, (ii) second, in payment of the Exit Fee or other fees
payable in respect of the principal amount being repaid or the repayment thereof
and (iii) third, to the principal amount of the Loan being repaid. Prior to or
on the Borrowing Date, Borrower shall establish and maintain with Prudential a
securities account (the "Securities Account") which shall be subject to the
terms and conditions of the Securities Account Control Agreement. Borrower shall
have no rights to make withdrawals from the Securities Account except as
provided in the Securities Account Control Agreement. By its execution hereof,
Borrower hereby irrevocably instructs Prime L.P. and the REIT to pay any
distributions made in respect of the Collateral (or any interests into which
they may be converted) to the Securities Account. No amounts other than any such
dividends and distributions will be deposited in the Securities Account. No
disbursements from the Securities Account shall be made except as provided in
the Securities Account Agreement.
(d) In the event that the Borrower or any Member of the Guarantor Group
sells any portion of the Collateral as permitted hereunder, the Borrower shall,
on the date of consummation of such sale and as a condition to the release of
the Lien on such portion of the Collateral, make a payment in respect of the
Loan in an amount equal to the excess, if any, of (x) the aggregate proceeds
from the sale of such portion of the Collateral over (y) the Required Prudential
Release Payments; PROVIDED, HOWEVER, that (i) the aggregate amount of payments
made to Prudential pursuant to the Prudential Loan and the payments made to the
Lender pursuant to the Loan as a result of such sale of a portion of the
Collateral must equal or exceed the Required Release Payments required to be
paid in connection with such sale and (ii) the Borrower must pay to the Lender,
in connection with such sale, an amount equal to at least the excess, if any, of
the Required Release Payments required to be made in connection with such sale
over the amount of the Required Prudential Release Payments required to be made
in connection with such sale (or such greater amount as may be determined
pursuant to the foregoing provisions of this clause (d)), any such payments
being applied (i) first, to the payment of interest or late charges on the
principal amount being repaid through the date of such payment or any interest
owing thereon, (ii) second, in payment of the Exit Fee or other fees payable in
respect of the principal amount being repaid or the repayment thereof and (iii)
third, to the principal amount of the Loan being repaid.
5. FEES. (a) On September 12, 2000, Borrower paid to Lender, pursuant
to the Commitment Letter, a $150,000 fee (the "Initial Fee"), and on the date
hereof the Borrower will pay to Lender a second $150,000 fee (the "Second
Fee"). The Borrower agrees to pay to the Lender, on the Borrowing Date, a fee
(the "Third Fee", and together with the Initial Fee and the Second Fee", the
"Upfront Fee") equal to the excess of (i) 1.08333% of the principal amount of
the Loan funded on the Borrowing Date over (ii) the aggregate amount of the
Initial Fee and the Second Fee previously paid by the Borrower to the Lender.
The Initial Fee shall be refundable to Borrower only in the event of a
default by Lender under its obligations under this Agreement. The Second Fee
shall be refundable to Borrower in the event the Loan does not close;
PROVIDED, HOWEVER that in the event the Loan does not close and the Borrower
is obligated to pay a Break Up Fee pursuant to Section 13(a)(11) hereof, the
Second Fee shall not be refundable.
(b) The Borrower agrees to pay to the Lender, on each date on which the
Loan, or any portion thereof, shall be repaid (including any repayment at
maturity), a fee (the "Exit Fee") equal to the sum of (x) 1% of the principal
amount of the Loan being repaid on such date and (y) the percentage of the
principal amount of the Loan being repaid on such date specified on Schedule 5
hereto.
6. USE OF FUNDS. Proceeds from the advance of funds by the Lender shall
be used in their entirety to pay amounts owing to Blackstone under the terms
of the Borrower Partnership Agreement and to make the deposit to the Deposit
Account contemplated by Section 2(b).
7. VOLUNTARY PREPAYMENT. The Borrower shall have the right on not less
than five Business Days' prior written notice to the Lender to prepay the
Note, in whole or in part, at any time. Each such prepayment shall be in an
aggregate principal amount of $1,000,000 or an integral multiple of $100,000
in excess thereof (or if the aggregate amount of the outstanding Loan is less
than $1,000,000, then all of such lesser amount), together with accrued
interest on the principal being prepaid to the date of prepayment, all Exit
Fees and other fees payable by the Borrower in connection with such payment
and, with respect to prepayments made prior to October 25, 2001, an amount
equal to the Make Whole Premium PROVIDED, HOWEVER, that (i) no Make Whole
Premium shall be payable in the event the Loan becomes due as a result of a
Change in Control transaction in which the Lender or an affiliate of the
Lender acquires the stock, equity interest or representation on the board of
trustees of the REIT that constitutes such Change in Control transaction
(other than as a result of, or following, the foreclosure by Lender of all or
a portion of the Collateral) and (ii) no Make Whole Premium shall be payable
in connection with the initial $2,000,000 of voluntary prepayments made by
the Borrower pursuant to this Section 7 from the proceeds of a capital
contribution to the Borrower. Any prepaid amount of the Loan may not be
reborrowed. Notwithstanding anything to the contrary contained herein, in no
event may the Borrower prepay any amounts under the Loan unless all amounts
under the Prudential Loan have been paid in full or the terms of the
Prudential Loan and the Intercreditor Agreement permit such repayment of
amounts owing under the Loan.
8. PAYMENTS.
(a) All payments by the Borrower hereunder shall be made without setoff or
counterclaim to the Lender in dollars and in immediately available funds at the
office of the Lender theretofore designated in writing to the Borrower not later
than 12:00 noon, New York time (or not later than 2:00 p.m. New York time
provided that the Lender receives such amounts by wire transfer of immediately
available funds to an account designated by Lender on or prior to such time), on
the date when due or, in the case of payments pursuant to Section 9 or payments
otherwise specified as payable upon demand, forthwith within two (2) Business
Days following receipt of written demand therefor.
(b) Whenever any payment from the Borrower shall be due on a day that is
not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.
9. ADDITIONAL COSTS; EXPENSES; INDEMNITY; ETC.
(a) All payments under this Agreement and under the Note (including
payments of principal, interest and fees) shall be payable to the Lender free
and clear of any and all present and future taxes, levies, imposts, duties,
deductions, withholdings, fees, liabilities and similar charges other than
Excluded Taxes (collectively, "Taxes"). If any Taxes are required to be withheld
or deducted from any amount payable under this Agreement, then the amount
payable under this Agreement shall be increased to the amount which, after
deduction from such increased amount of all Taxes required to be withheld or
deducted therefrom, will yield to the Lender the amount stated to be payable
under this Agreement. The Borrower shall also hold the Lender harmless and
indemnify it for any stamp or other taxes with respect to the preparation,
execution, delivery, recording, performance or enforcement of the Credit
Documents (all of which shall be included within "Taxes"). If any of the Taxes
specified in this Section 9(a) are paid by the Lender, the Borrower shall,
within two (2) Business Days following receipt of written demand of the Lender,
reimburse the Lender for such payments, together with any interest, penalties
and expenses incurred in connection therewith. The Borrower shall deliver to the
Lender certificates or other valid vouchers for all Taxes or other charges
deducted from or paid with respect to payments made by the Borrower hereunder.
(b) If requested by the Borrower, in connection with any demand for payment
pursuant to this Section 9, the Lender shall provide to the Borrower a
certificate setting forth in reasonable detail the basis for such demand, the
amount required to be paid by the Borrower to the Lender, the computations made
by the Lender
to determine such amount. In the absence of manifest error, the certificate
referred to above shall be conclusive as to the amount required to be paid.
(c) The Borrower, each Member of the Guarantor Group and Xxxxxxx hereby
jointly and severally agree to pay or reimburse the Lender for all out-of-pocket
costs and expenses incurred in connection with the preparation and execution of,
and any amendment, supplement or modification to, this Agreement, any other
Credit Documents and any other related documents, and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
fees and disbursements of Xxxxxxxx & Xxxxxxxx, special counsel to the Lender,
the cost of the Lender's due diligence investigation and similar costs and
expenses; provided that Xxxxxxx shall not be liable to pay or reimburse Lender's
expenses incurred in connection with the preparation and execution of any
amendments, supplements or modification to this Agreement or any of the other
Credit Documents. The Borrower, each Member of the Guarantor Group and Xxxxxxx
hereby further jointly and severally agree to pay or reimburse the Lender for
all costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, any other Credit Documents, and
any such other documents, including, without limitation, the fees and
disbursements of counsel to the Lender, provided that Xxxxxxx shall be liable to
pay such costs and expenses only in the event that he has become liable to pay
amounts pursuant to Section 17(i) of this Agreement. The Borrower also agrees to
indemnify the Lender against any transfer taxes, documentary taxes, assessments
or charges made by any Governmental Authority by reason of the execution and
delivery of any Credit Document. In furtherance of the foregoing, on the date
hereof, the Borrower agrees to pay the Lender $400,000 (by wire transfer of
immediately available funds), as partial reimbursement for the fees and expenses
of the Lender's counsel in connection with the preparation of this Agreement and
any other document related to this Agreement. Notwithstanding the foregoing, (i)
in the event the Loan fails to close for any reason whatsoever (other than in a
circumstance in which the Borrower is obligated to pay the "Break Up Fee"
pursuant to Section 13(a)(11)), Borrower, each Member of the Guarantor Group and
Xxxxxxx shall be jointly and severally responsible to pay or reimburse the
Lender for the costs and expenses specified in clause (i) above only to the
extent that such costs and expenses exceed the amount of the Initial Fee
previously paid to Lender and not refunded or refundable by Lender; provided,
however, that in the event the Loan fails to close and the Borrower is obligated
to pay the "Break Up Fee" pursuant to Section 13(a)(11), Borrower, each Member
of the Guarantor Group and Xxxxxxx shall be jointly and severally responsible to
pay all such costs and expenses specified in clause (i) above in addition to
both the amount of the Upfront Fee that has previously been paid to Lender and
the amount of the Break Up Fee (and Borrower, each Member of the Guarantor Group
and Xxxxxxx shall continue to be jointly and severally liable for any portion of
the Upfront Fee that has become payable but that remains unpaid).
(d) The Borrower agrees to indemnify the Lender and the Lender's respective
directors, officers, employees, agents and Affiliates (for purposes of this
paragraph, each an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all claims, liabilities, damages, losses, costs, charges and
expenses (including fees and expenses of counsel) incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of any Credit Document or any agreement or
instrument contemplated by any Credit Document, the performance by the parties
thereto of their respective obligations under any Credit Document or the
consummation of the transactions and the other transactions contemplated by any
Credit Document, (ii) the use of the proceeds of the Loan or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; PROVIDED that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee.
(e) All amounts due under this Section 9 shall be payable in immediately
available funds within two (2) Business Days following receipt of written demand
therefor.
(f) The provisions of this Section 9 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of the Loan,
the invalidity or unenforceability of any term or provision of any Credit
Document, or any investigation made by or on behalf of the Lender.
10. COLLATERAL. The Note will be secured by (i) perfected security
interests on 7,944,893 Prime OP Units and all REIT Shares issued by the REIT
in exchange for such Prime OP Units, subject only to the Permitted Liens
securing the Prudential Loan in an aggregate principal amount not to exceed
$40,000,000, together with all payments due or to become due to the Borrower
arising out of, as a result of or in connection with such Prime OP Units or
such REIT Shares, whether as distributions of cash or property or otherwise
and all of Borrower's rights arising out of, as a result of or in connection
with such Prime OP Units or such REIT Shares, whether now existing or
hereafter arising or acquired, to exercise all voting, consensual and other
powers of ownership pertaining to the Collateral (including, without
limitation, to make determinations, to exercise any election (including,
without limitation, election of remedies) or option, to give or receive any
notice, consent, amendment, waiver or approval), together with full power and
authority to demand, receive, enforce, collect or give receipt for any of the
foregoing, to enforce or execute any checks or other instruments or orders,
to file any claims and to take any action which, in the opinion of the
Lender, may be necessary or advisable in connection with any of the
foregoing; (ii) subject to the provisions of the Pledge and Security
Agreement, a collateral assignment of Borrower's interests and rights under
(a) that certain Registration Rights Agreement dated as of November 17, 1997
(as the same may from time to time be amended, supplemented, restated or
modified, the "Registration Rights Agreement") among the REIT, Prime OP, The
Prime Group, Inc., the Borrower and the other investors named therein and (b)
the Prime L.P. Partnership Agreement, (the "Prime L.P. Partnership Agreement"
together with the Registration Rights Agreement collectively, the "Assigned
Agreements"), including, without limitation, (1) all rights of the Borrower
to receive moneys due and to become due under or pursuant to the Assigned
Agreements, (2) all rights of the Borrower to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (3) claims of the Borrower for damages arising out of or for
breach of or default under the Assigned Agreements, (4) the right of the
Borrower to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder and (5) the
right of the Borrower to exchange Prime OP Units into REIT Shares, including,
without limitation, all income, cash, dividends or other distributions
received therefrom; (iii) the Securities Account Agreement and Securities
Account Control Agreement, and (iv) the Deposit Account Agreement. The Liens
referred to in clause (i) above, the Guarantee, the Assigned Agreements, the
Securities Account Agreement, the Securities Account Control Agreement and
the Deposit Account Agreement, together with all proceeds and replacements of
any of the foregoing, are collectively referred to herein as the "Collateral".
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The Borrower and each
Member of the Guarantor Group jointly and severally represent and warrant to,
and agree with, as of the date hereof and as of the Borrowing Date, the
Lender that:
(a) GOOD STANDING AND POWER. Each of the Borrower and each Member of
the Guarantor Group, is duly organized and existing, in good standing,
under the laws of its jurisdiction of organization, has the power to own
its property and to carry on its business as now being conducted and as
proposed in the future and is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties
owned or leased by it therein or in which the transaction of its business
makes such qualification necessary except, with respect to the Members of
the Guarantor Group, where the failure to be so qualified would not result
in a Material Adverse Effect on any Member of the Guarantor Group.
(b) AUTHORITY. Each of the Borrower, each Member of the Guarantor
Group, the REIT and Prime L.P., and Xxxxxxx has full power and authority to
enter into this Agreement and each Credit Document to which he or it is a
party and to incur and perform his or its obligations under this Agreement
and each Credit Document to which he or it is a party, all of which have
been duly authorized by all proper and necessary action. No consent or
approval of any person or of any Governmental Authority is required as a
condition to the validity of this Agreement or any Credit Document or the
performance by the Borrower, any Member of the Guarantor Group, the REIT,
Prime L.P., or Xxxxxxx of his or its obligations under this Agreement or
any other Credit Document, other than the filing of UCC-1 financing
statements in connection with the liens granting the Lender a security
interest in the Collateral. The Borrower has full power and authority to
make the borrowing and to execute and deliver the Note and to incur and
perform the obligations provided for in the Note, all of which have been
duly authorized by all proper and necessary action. No consent or approval
of any person or of any Governmental Authority is required as a condition
to (i) the validity of this Agreement, the Note or any other Credit
Document or the performance by the Borrower of its obligations under this
Agreement, the Note and each other Credit Document, (ii) the validity of
the Guarantee or the performance by each Member of the Guarantor Group of
its obligations
under the Guarantee, (iii) the validity of Xxxxxxx'x obligations under this
Agreement or the performance by Xxxxxxx of such obligations or (iv) the
validity of the obligations of the REIT or Prime L.P. under the Credit
Documents or the performance by the REIT or Prime L.P. of such obligations.
(c) BINDING AGREEMENT. This Agreement and the other Credit Documents
have been, and the Note, when issued and delivered pursuant hereto for
value received, will be, duly authorized, executed and delivered by the
Borrower, each Member of the Guarantor Group, the REIT, Prime L.P., or
Xxxxxxx, as applicable, and will constitute the valid and legally binding
obligations of the Borrower, each Member of the Guarantor Group, the REIT,
Prime L.P., or Xxxxxxx, as applicable, enforceable against the Borrower,
each Member of the Guarantor Group, the REIT, Prime L.P., or Xxxxxxx, as
applicable, in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(d) LIENS. The Borrower owns the Collateral in which it has granted a
security interest and Lien in favor of the Lender pursuant to the Credit
Documents, free and clear of any Lien, security interest charge or
encumbrance, except for Permitted. All financing statements and filings
required to be filed, and all related required fees and taxes, have been
delivered to the Lender for filing and recording, and all other steps
required to be taken have been taken, so that upon proper filing and
recording in the proper offices Lender shall have a valid, perfected
continuing and enforceable security interest in and Lien on the Collateral
(subject only to the Permitted Liens) and such Lien ranks prior to any
other security interest in or Lien upon the Collateral other than the
Permitted Liens. The information contained in SCHEDULE I to the Pledge and
Security Agreement accurately and completely describes all of the
Borrower's interests in the REIT and Prime L.P., and the capitalization of
the REIT and Prime L.P. is as set forth on such SCHEDULE I to the Pledge
and Security Agreement; there are no other security interests, liens,
claims or encumbrances with respect to any of the Pledgors' partnership or
other entity interests in the REIT and Prime L.P., other than the Permitted
Liens; and the liens granting the Lender a security interest in the
Collateral constitute perfected security interests, subject only to the
Liens set forth in SCHEDULE I to the Pledge and Security Agreement. Except
for the exchange rights in the partnership agreement of Prime L.P., and
except as set forth on Schedule 11(d) there are no (x) outstanding
subscriptions, warrants, options, convertible securities, or other rights
(contingent or other), or commitments therefor, to subscribe for, purchase
or acquire any securities of the Borrower, any Member of the Guarantor
Group, Prime L.P. or the REIT, (y) agreements to pay any dividends on any
such securities, or (z) agreements to distribute to any holders of such
securities any properties or assets of the Borrower, any Member of the
Guarantor Group, Prime L.P. or the REIT. The Borrower has no Subsidiaries.
The Borrower is not a partner in, nor does the Borrower hold any interest
in, any partnership, joint venture or other similar entity (other than the
Collateral). Attached hereto as ANNEXES A, B, C, and D are complete and
accurate copies of the partnership or operating agreements or other
organizational documents of each of the Borrower, each Member of the
Guarantor Group, the REIT and Prime L.P.
(e) LITIGATION. There are no proceedings or investigations pending or,
to the best knowledge of the Borrower, each Member of the Guarantor Group
or Xxxxxxx, threatened before any court or arbitrator or before or by any
governmental authority which, in any one case or in the aggregate, if
determined adversely to the interests of the Borrower, any Member of the
Guarantor Group, the REIT, Prime L.P. or Xxxxxxx, would have a Material
Adverse Effect on the Borrower, any Member of the Guarantor Group, the
REIT, Prime L.P. or Xxxxxxx.
(f) NO CONFLICTS. There is no statute, regulation, rule, order or
judgment, and no provision of any agreement or instrument binding on the
Borrower, any Member of the Guarantor Group, Xxxxxxx, the REIT or Prime
L.P. or affecting any of their respective property, which would prohibit,
conflict with or in any way prevent the execution, delivery, or carrying
out of the terms of this Agreement, the Note or the other Credit Documents.
(g) FINANCIAL CONDITION. (i) The respective consolidated balance sheet
of the Borrower, each Member of the Guarantor Group and the REIT as of
December 31, 1999, together with consolidated statements of income,
retained earnings, paid-in capital and surplus and cash flows for the
fiscal year then ended, and the consolidated balance sheet of the Borrower,
each Member of the Guarantor Group and the
REIT as of June 30, 2000, together with consolidated statements of income
and cash flows for the six months then ended, heretofore delivered to the
Lender, fairly present the respective consolidated financial condition,
consolidated results of operations and transactions in surplus accounts of
the Borrower, each Member of the Guarantor Group and the REIT as of the
dates and for the periods referred to and have been prepared in accordance
with GAAP consistently applied throughout the period involved. There are no
material liabilities (whether known or unknown, direct or indirect, fixed
or contingent, and of any nature whatsoever) of the Borrower, each Member
of the Guarantor Group or the REIT, or any of their respective
Subsidiaries, as of the date of such balance sheet that are not reflected
therein or in the notes thereto. As of the date hereof and as of the
Borrowing Date, the aggregate amount of Indebtedness outstanding under the
Prudential Loan does not exceed $40,000,000.
(ii) There has been no material adverse change in the business,
properties, condition (financial or otherwise) or operations, present or
prospective, of the Borrower, any Member of the Guarantor Group, the REIT
or Prime L.P. since the date of the applicable balance sheet dated December
31, 1999 referred to in Section 11(g)(i). Since December 31, 1999, except
as may be disclosed in the June 30, 2000 financial statements of the REIT
and Prime L.P. referred to in Section 11(g)(i), there has not occurred or
arisen any event, condition or circumstance that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Borrower, any Member of the Guarantor Group, the REIT
or Prime L.P.
(iii) None of Borrower, any Member of the Guarantor Group, Xxxxxxx,
the REIT or Prime L.P. is in default (as defined in the applicable
agreement or obligation) in any respect in the payment or performance (i)
of any of its obligations for the payment of money, or (ii) under any
franchise, license, loan agreement, indenture, partnership agreement, or
other organizational document or agreement, leasehold interest or other
material agreement and no default has occurred and is continuing, except,
in each case, for defaults that would not have a Material Adverse Effect
with respect to any Member of the Guarantor Group, the REIT, Prime L.P. or
Xxxxxxx. The Borrower is not in default in any respect in the payment or
performance of any of its obligations under the Prudential Loan or the
agreements securing such Prudential Loan. The Prudential Loan, as amended
and restated, is in full force and effect and enforceable against the
Borrower in accordance with its terms. There are no overdue amounts
(including any amount of overdue interest) currently owning under the
Prudential Loan.
(iv) The financial statements of Xxxxxxx previously delivered to
Lender are true and correct and fairly present the financial condition of
Xxxxxxx as of the dates and for the periods referred to therein and such
financial statements accurately include all Indebtedness and contingent
liabilities for which Xxxxxxx is or may become liable. All assets shown on
such financial statements are actually and solely owned by Xxxxxxx (except
as stated thereon). There has been no material adverse change in the
financial condition of Xxxxxxx since the date of such financial statements.
(h) TAXES. Each of the Borrower, each Member of the Guarantor Group
and, Xxxxxxx, has filed or caused to be filed all tax returns that are
required to be filed and paid all taxes that are required to be shown to be
due and payable on said returns or on any assessment made against it or him
or any of its or his property and all other taxes, assessments, fees,
liabilities, penalties or other charges imposed on it or him or any of its
or his property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges which are being
contested in good faith and (unless the amount thereof is not material to
the respective consolidated financial condition of the Borrower or any
Member of the Guarantor Group, as applicable) for which adequate reserves
have been established in accordance with GAAP.
(i) MARGIN REGULATIONS. The making of the Loan and the use of the
proceeds thereof as contemplated by the Credit Documents will not violate
or be inconsistent with any of the provisions of Regulation U, T or X (or
any successor regulations) of the Federal Reserve Board. None of the
obligations or liabilities of the Borrower under the Credit Documents are
secured, directly or indirectly, by "margin stock" or "margin securities",
and no part of the proceeds of any extension of credit hereunder will be
used for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying "margin stock" or "margin securities".
(j) COMPLIANCE WITH ERISA; LABOR RELATIONS. Each member of the ERISA
Group is in compliance with the applicable provisions of ERISA and the Code
with respect to each Plan, except for any failure so to comply that,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect on any Member of the ERISA Group. No member of
the ERISA Group has (i) an accumulated funding deficiency under Section 412
of the Code in respect of any Pension Plan, whether or not waived, (ii)
failed to make any contribution or payment to any Pension Plan, or made any
amendment to any Pension Plan, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security under
Section 302(f) of ERISA or Section 401(a)(29) of the Code, (iii) incurred
any liability under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA, all of which have been paid or
(iv) engaged in a transaction with respect to a Plan, which (assuming the
taxable period of such transaction, within the meaning of Section
4975(f)(2) of the Code, to have expired as of the date hereof) has resulted
or could reasonably be expected to result in such member being subject to a
material tax or penalty imposed by Section 4975 of the Code or Section 502
of ERISA. As of the last day of the most recent plan year ended prior to
the date hereof, the actuarially determined present value of all benefit
liabilities (as determined on the basis of the actuarial assumptions
contained in the most recent actuarial valuation) did not exceed the then
fair market value of the assets of any Pension Plan by more than
$1,000,000, and there has been no material change in the financial
condition of any Pension Plan since the last day of the most recent plan
year. The Borrower has not incurred any withdrawal liability under Part I
of Subtitle E of Title IV of ERISA with respect to a Multiemployer Plan in
an amount in excess of $1,000,000, nor has the Borrower received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated
where such reorganization or termination has had or could reasonably be
expected to have, through increases in the contributions required to be
made or otherwise, a Material Adverse Effect on any Member of the ERISA
Group. The Borrower is not party to any collective bargaining agreement.
(k) NOT AN INVESTMENT COMPANY. Neither the Borrower nor any Member of
the Guarantor Group is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or (ii) subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power
Act, each as amended, or any foreign, federal, state or local statute or
regulation limiting its ability to incur indebtedness for money borrowed as
contemplated hereby.
(l) PROPERTIES. The Borrower has good and marketable title to, or
valid leasehold interests in, all of its properties and assets that are
reflected on the consolidated balance sheet of the Borrower as of June 30,
2000, referred to in Section 11(h), except for such immaterial properties
and assets as have been disposed of in the ordinary course of business and
except for minor defects in title that do not interfere with the ability of
the Borrower to conduct its business as now conducted. All such assets and
properties are so owned or held free and clear of all Liens, except
Permitted Liens. Each Member of the Guarantor Group has good and marketable
title to, or valid leasehold interests in, all of its properties and assets
that are reflected on the consolidated balance sheet of such Member of the
Guarantor Group, as of June 30, 2000, referred to in Section 11(h), except
for such immaterial properties and assets as have been disposed of in the
ordinary course of business and except for minor defects in title that
would not reasonably be expected to result in a Material Adverse Effect on
any Member of the Guarantor Group.
(m) COMPLIANCE WITH LAWS AND CHARTER DOCUMENTS.
(i) None of the Borrower, any Member of the Guarantor Group or Xxxxxxx
is, and as a result of performing any of their respective obligations under
the Credit Documents, none will be, in violation of (a) any law, statute,
rule, regulation or order of any Governmental Authority (including
Environmental Laws) applicable to it or its properties or assets or (b) its
certificate of incorporation, by-laws or any similar document except to the
extent, with respect to any Member of the Guarantor Group, that any such
violations, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect on such Member of the
Guarantor Group.
(ii) Each of the Borrower and each Member of the Guarantor Group, has
all authorizations, consents, approvals, registrations, franchises,
licenses and permits, with or from Governmental Authorities and other
Persons, as are necessary for it to own its properties and conduct its
business as now conducted and the absence of which could reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect on any Member of the Guarantor Group.
(n) INSURANCE. All of the properties and operations of the Borrower
and each Member of the Guarantor Group of a character usually insured by
companies of established reputation engaged in the same or a similar
business similarly situated are adequately insured, by financially sound
and reputable insurers, against loss or damage of the kinds and in amounts
customarily insured against by such Persons, and the Borrower and each
Member of the Guarantor Group, as applicable, carries, with such insurers
in customary amounts, such other insurance, including larceny, embezzlement
or other criminal misappropriation insurance and business interruption
insurance, as is usually carried by companies of established reputation
engaged in the same or a similar business similarly situated.
(o) ADVERSE CONTRACTS. None of the Borrower, any Member of the
Guarantor Group, Xxxxxxx, the REIT or Prime L.P. is a party to, nor is the
Borrower, the Guarantor, the REIT or Prime L.P. or any of their respective
property subject to or bound by, any agreement or instrument which
materially restricts their respective ability to conduct their business, or
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on any such Person.
(p) SOLVENCY. The Borrower and each Member of the Guarantor Group is
and, after giving effect to the Loan and the other transactions
contemplated hereby, and after payment of all estimated legal, accounting
and other fees related thereto, the Borrower and each Member of the
Guarantor Group will be, Solvent.
(q) DISCLOSURE. All information relating to the Borrower, any Member
of the Guarantor Group, Xxxxxxx, the REIT and Prime L.P. delivered to the
Lender pursuant to the due diligence list attached as an exhibit to the
Commitment Letter or delivered to Lender after the date of the Commitment
Letter is true and complete in all material respects. There is no material
fact of which the Borrower, any Member of the Guarantor Group or Xxxxxxx is
aware which, individually or in the aggregate, would reasonably be expected
adversely to influence the Lender's credit analysis relating to the
Borrower or any Member of the Guarantor Group which has not been disclosed
to the Lender in writing.
(r) SURVIVAL. All representations and warranties made by the Borrower
and the Members of the Guarantor Group in this Agreement, and in the
certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement, shall (i) be considered to have been relied
upon by the Lender, (ii) survive the making of the Loan regardless of any
investigation made by, or on behalf of, the Lender, and (iii) continue in
full force and effect, so long as the Loan, fee or other amount payable
under any Credit Document remains unpaid.
(s) USE OF FUNDS. The Borrower will use any funds advanced pursuant to
this Agreement only as set forth in Section 6 hereof.
(t) EXCHANGE OF PRIME OP UNITS. On the date hereof and as of the
Borrowing Date, each Prime OP Unit is exchangeable into exactly one REIT
Share.
(u) REIT MATTERS. The REIT (i) for all taxable years commencing with
its initial taxable year through December 31, 1999 has been properly
subject to taxation as a real estate investment trust (a "REIT") within the
meaning of Section 856 of the Code and has qualified as a REIT for such
years, (ii) has operated since December 31, 1999, and will continue to
operate to the Closing, in such a manner as to qualify as a REIT for the
taxable year beginning January 1, 2000 determined as if the taxable year of
the REIT ended as of the Closing and (iii) has not taken or omitted to take
any action which would reasonably be expected to result in a challenge to
its status as a REIT, and no such challenge is pending or threatened. Each
Subsidiary of the REIT which is a partnership, joint venture or limited
liability company (i) has been since its formation and continues to be
treated for federal income tax purposes as a partnership or
disregarded as a separate entity, as the case may be, and has not been
treated for federal income tax purposes as a corporation or an association
taxable as a corporation and (ii) has not since the later of its formation
or the acquisition by the REIT of a direct or indirect interest therein
owned any assets (including, without limitation, securities) that would
cause the REIT to violate Section 856(c)(4) of the Code. The nature of the
assets of the REIT and the Subsidiaries of the REIT is such that the sale
of all of the assets owned by them would not cause the REIT to be
disqualified as a REIT under Code Section 856(c)(2) or 856(c)(3) or
otherwise. The REIT has not elected and will not elect to pay Tax on any
capital gain recognized on or after January 1, 1999. Each Subsidiary of the
REIT which is a corporation has been since its formation a qualified REIT
subsidiary under Section 856(i) of the Code. PRIME LP is not a publicly
traded partnership within the meaning of Section 7704 of the Code, and the
interests in PRIME LP are not considered to be (i) traded on an established
securities market or (ii) readily tradable on a secondary market or the
substantial equivalent thereof under either Internal Revenue Service Notice
88-75 or Treasury Regulations Section 1.7704-1. In the case of a partner of
PRIME LP that is a Flow-Through Entity (as defined below), no Person owning
an interest in such Flow-Through Entity (directly or through another
Flow-Through Entity) is treated as a partner of PRIME LP under either
Internal Revenue Service Notice 88-75 or Treasury Regulation Section
1.7704-1(h)(3). For purposes of this Section 2.14(b), "Flow-Through Entity"
means an entity classified as a partnership, a grantor trust or an S
corporation for federal income tax purposes.
12. CONDITIONS OF LENDING. The obligation of the Lender to advance
funds is subject to the following conditions precedent:
(a) THIS AGREEMENT, THE NOTE AND THE OTHER CREDIT DOCUMENTS. The
Lender shall have received this Agreement duly executed and delivered by
Borrower, each Member of the Guarantor Group and Xxxxxxx and the Note and
each of the other Credit Documents (including, without limitation, the
Guarantee in the form of EXHIBIT C hereto) duly executed and delivered by
each of the parties thereto.
(b) NO INJUNCTION. No law or regulation shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been
issued, and no litigation shall be pending or threatened, which in the good
faith judgment of Lender would enjoin, prohibit or restrain, or impose or
result in the imposition of any material adverse condition upon, the making
or repayment of the Loan or the consummation of the transactions hereby or
by the other Credit Documents.
(c) COMPLIANCE. At the time of the Loan (i) the Borrower shall have
complied and shall then be in compliance with all the terms, covenants and
conditions of this Agreement which are binding upon it (including, without
limitation, the payment by the Borrower of all fees, cost and expense
payments or reimbursements and other amounts owing by Borrower under this
Agreement that have become payable as of the Borrowing Date), (ii) there
shall have occurred no Event of Default as defined in Section 15 and no
event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, (iii) the representations and
warranties contained in Section 11 shall be true and correct with the same
effect as though such representations and warranties were being made at the
time of such advance, and (iv) the Lender shall have received a certificate
dated the date of the advance of funds and signed by the Borrower to the
foregoing effect.
(d) EVIDENCE OF AUTHORIZING ACTIONS. EVIDENCE OF CORPORATE ACTION. The
Lender shall have received the following:
(i) a copy of the Certificate of Limited Partnership of the
Borrower, and a copy of the Certificate of Incorporation or
Certificate of Limited Partnership, as applicable, of each Member of
the Guarantor Group, in each case as in effect on the Borrowing Date,
certified by the Secretary of State of Delaware or the Secretary of
State of Illinois, as applicable, and a certificate from such
Secretary of State as to the good standing of the Borrower and each
Member of the Guarantor Group, in each case as of a date reasonably
close to the Borrowing Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of
the Borrower or the general partner of the Borrower or the
administrative member of the general partner of the Borrower and
of each Member of the Guarantor Group, dated the Borrowing Date, and
stating (A) that attached thereto is a true and complete copy of the
Limited Partnership Agreement and other applicable governing
instrument of the Borrower and of the By-laws or other applicable
governing instrument of each Member of the Guarantor Group, in each
case as in effect on such date and at all times since the date of the
resolutions described in clause (B) below, (B) that attached thereto
is a true and complete copy of resolutions duly adopted by the General
Partner of the Borrower and the Board of Directors or General Partner
of each Member of the Guarantor Group authorizing the execution,
delivery and performance of this Agreement, and that such resolutions
have not been modified, rescinded or amended and are in full force and
effect, (C) that the Certificate of Limited Partnership of the
Borrower and the Articles of Incorporation or Certificate of Limited
Partnership of each Member of the Guarantor Group have not been
amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
and (D) as to the incumbency and signature of each officer or
authorized representative executing this Agreement or any document
delivered in connection herewith on behalf of the Borrower and each
Member of the Guarantor Group. The Lender shall have received copies
of all documents evidencing actions taken by or on behalf of the
Borrower and each Member of the Guarantor Group to authorize this
Agreement, each other Credit Document to which it is a party, the Note
and each borrowing hereunder, as applicable, certified to be accurate
by the Secretary or other appropriate officer or representative of
such entity as of the date of the advance of funds, and such other
papers as the Lender shall reasonably require.
(e) PLEDGE AND SECURITY AGREEMENT. The Borrower shall have duly
authorized, executed and delivered a Pledge and Security Agreement
substantially in the form of EXHIBIT E and all actions shall have been
taken to make the Liens constitute perfected security interests in favor of
the Lender, subject only to the Lien securing the Prudential Loan described
on SCHEDULE I to the Pledge and Security Agreement.
(f) AGREEMENT IN RESPECT OF PLEDGED UNITS. The REIT shall have
executed and delivered the Agreement in Respect of Pledged Units
substantially in the form of EXHIBIT F.
(g) MUTUAL RELEASE. Vornado Realty, L.P. and PGI shall have executed
and delivered a Mutual Release substantially in the form of EXHIBIT G.
(h) CONSENTS AND AGREEMENTS. The REIT and Prime L.P. shall have
executed and delivered to the Lender the Consents and Agreements
substantially in the forms of EXHIBIT H-A and H-B.
(i) SATISFACTION OF OBLIGATIONS TO BLACKSTONE. At closing, Borrower
shall have satisfied in full all its obligations to Blackstone under the
Borrower Partnership Agreement, including, without limitation, the
repurchase of all of Blackstone's interests in the Borrower. Blackstone
shall have no further interest in the Borrower or claims with respect to
its interests in the Borrower or under the Borrower Partnership Agreement,
and Blackstone shall have executed a redemption agreement and other
documentation to the foregoing effect in form and substance reasonably
satisfactory to Lender.
(j) OPINIONS OF BORROWER'S AND THE REIT'S COUNSEL. The Lender shall
have received the favorable written opinions of Winston & Xxxxxx, dated the
date the advance of funds, in substantially the form of the opinion
attached as EXHIBIT I-A and EXHIBIT I-B and the opinion of Miles &
Stockbridge dated the date of the advance of funds in substantially the
form of the opinion attached as EXHIBIT I-C.
(k) XXXXXXX AND XXXXX. Each of Xxxxxxx and Xxxxx shall have executed
and delivered to the Borrower an agreement in the form of EXHIBIT O.
(l) USE OF FUNDS. The Lender shall have received a certificate signed
by the Borrower certifying that the funds advanced will be used in
accordance with Section 6 hereof.
(m) CONSENTS. All other required consents shall have been obtained in
writing and otherwise in a form and manner reasonably satisfactory to the
Lender.
(n) CERTAIN AGREEMENTS OF THE REIT AND PRIME L.P. Each of the REIT and
Prime L.P. shall have executed and delivered to Lender, an agreement, in
the form of EXHIBIT M, acknowledging that the REIT and Prime L.P. will make
available to Lender and its counsel and advisors such information as Lender
may request in order to confirm that the status of Vornado Realty Trust as
a "real estate investment trust" under the Code will not be adversely
affected by the pledge of the Collateral or if it became the owner of the
Collateral or of REIT shares issuable upon exchange of the partnership
units of Prime L.P.
(o) FINANCING STATEMENTS. The Lender shall have received such UCC
financing statements executed by Borrower as debtor (the "Financing
Statements") as shall be reasonably requested by the Lender in connection
with the transactions contemplated by this Agreement, the Note and the
other Credit Documents.
(p) INTERCREDITOR AGREEMENT. Each of Prudential and Borrower shall
have executed and delivered to the Lender the Intercreditor Agreement in
substantially the form of EXHIBIT J.
(q) PRUDENTIAL LOAN. Prudential and Borrower shall have executed and
delivered an amended and restated loan agreement and amended and restated
pledge and security agreement relating to the Prudential Loan, each in form
and substance reasonably satisfactory to Lender. Prudential shall have
delivered to Borrower a certification, in form and substance satisfactory
to Lender, stating that the aggregate principal amount of Indebtedness
outstanding under the Prudential Loan as of the Borrowing Date does not
exceed $40,000,000, that there is no overdue interest owing under the
Prudential Loan and that the Borrower is not in default under the
Prudential Loan.
(r) BROKER'S FEE. All amounts owing to any brokers, financial
advisors, agents, and finders, including without limitation, a $400,000 fee
owing to Manolis and Company, who may have a claim to payment in connection
with the transactions contemplated by this Agreement and the other Credit
Documents shall have been paid in full.
(s) BORROWER'S PARTNERSHIP AGREEMENT. The Borrower's Partnership
Agreement shall have been amended and restated in the form of EXHIBIT N.
(t) PRIMESTONE PARTNER LLC AGREEMENT. The Limited Liability Company
Agreement of Primestone Partner shall have been amended to include the
provisions set forth in EXHIBIT Q.
(u) OTHER DOCUMENTS. The Lender shall have received such other
certificates, opinions and other documents as the Lender reasonably may
require.
13. AFFIRMATIVE COVENANTS. (a) Until payment in full of the Loan and
performance of all other obligations of the Borrower, each Member of the
Guarantor Group and Xxxxxxx hereunder and under the other Credit Documents, each
of the Borrower and each Member of the Guarantor Group hereby agrees that it
will:
(1) TAXES. Pay and discharge all taxes, assessments and governmental
charges upon it, its income and its properties prior to the date on which
penalties are attached thereto, unless, and then only and to the extent
that, such taxes, assessments and governmental charges shall be contested
in good faith and by appropriate proceedings by it.
(2) INSURANCE. Maintain insurance with responsible insurance companies
against such risks, on such properties and in such amounts as is
customarily maintained by similar businesses; and file with the Lender upon
its request a detailed list of the insurance then in effect and stating the
names of the insurance companies, the amounts and rates of the insurance,
the dates of the expiration thereof and the properties and risks covered
thereby.
(3) EXISTENCE. Maintain its limited partnership or corporate
existence, as applicable, in good standing, and qualify and remain
qualified to do business as a foreign limited partnership or corporation,
as the case may be, in each jurisdiction in which the character of the
properties owned or leased by it therein or in which the transaction of
its business makes such qualification necessary except, with respect to a
Member of the Guarantor Group, when the failure to be so qualified would
not have a Material Adverse Effect on such Member of the Guarantor Group.
(4) INFORMATION. Provide the Lender with (i) all information and
correspondence provided to its lenders and members or stockholders
simultaneously with the provision of such information to such Persons, (ii)
updated balance sheets and statements of operations, partners' deficit (or
equivalent) and cash flows promptly after they are prepared, (iii) updated
budgets and operating budgets promptly after they are prepared and (iv) all
information received by it or its Affiliates relating to the REIT or Prime
L.P. or their investment therein in its capacity as a stockholder or
partner in the REIT or Prime L.P., including, without limitation all
information distributed by the REIT or Prime L.P. to all of their partners
or stockholders, as applicable.
(5) APPLICATION OF PROCEEDS. Apply any Loan proceeds received by it in
accordance with the provisions of this Agreement and, not later than the
next Business Day following the receipt thereof, apply any dividends or
distributions received from the REIT or Prime L.P. to payments required to
be made hereunder.
(6) MAINTENANCE OF STATUS AS A SINGLE PURPOSE ENTITY; CONDUCT OF
BUSINESS. Each of Borrower and Primestone Partner shall at all times be a
Single Purpose Entity. Without limitation of the foregoing, Primestone
Partner shall have no assets other than its ownership interest in the
Borrower and no liabilities other than those resulting solely from the
ownership of such interests. Borrower shall comply with all applicable
laws, orders, rules and regulations of all Governmental Authorities the
failure with which so to comply, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on the Borrower.
Except for its interest in the Collateral, Borrower shall at no time have
any interest in any Subsidiary or other entity or be a partner or member in
any partnership, limited liability company or similar entity or venture.
(7) AUTHORIZATIONS. Obtain, make and keep in full force and effect
all authorizations from and registrations with Governmental Authorities
required for the validity or enforceability of the Credit Documents.
(8) NOTICE OF DEFAULTS AND ADVERSE DEVELOPMENTS. Promptly notify the
Lender upon the discovery by the Borrower or any Member of the Guarantor
Group or any officer or member thereof of the occurrence of (i) any Default
or Event of Default; (ii) any event, development or circumstance whereby
the financial statements most recently furnished to the Lender fail in any
material respect to present fairly, in accordance with GAAP, the financial
condition and operating results of the Borrower as of the date of such
financial statements; (iii) any material litigation or proceedings that are
instituted or threatened (to the knowledge of the Borrower or any Member of
the Guarantor Group) against the Borrower or any Member of the Guarantor
Group or any of its respective assets; (iv) any event, development or
circumstance which, individually or in the aggregate, could reasonably be
expected to result in a default or an event of default (or, with the giving
of notice or lapse of time or both, an event of default) under any
Indebtedness (or, with respect to the Members of the Guarantor Group, taken
as a whole but without duplication of any item of Indebtedness,
Indebtedness in excess of $500,000) and the amount thereof; and (v) any
other development in the business or affairs of the Borrower or any Member
of the Guarantor Group if the effect thereof would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on any
such Persons; in each case describing the nature thereof and the action the
Borrower or such Member of the Guarantor Group proposes to take with
respect thereto.
(9) PROTECTION OF COLLATERAL. Until repayment in full of all amounts
owing under the Loan, warrant and defend the validity and priority of the
Liens, rights, titles and security interests created or evidenced by the
Credit Documents against the claims of all persons whomsoever. If the
validity or priority of this Agreement or any of the Liens, rights, titles
or security interests created and/or evidenced by the Credit Documents
shall be challenged or attacked, or if any legal proceedings are instituted
with respect thereto, Borrower shall give prompt written notice thereof to
the Lender and, at Borrower's sole cost and expense, diligently defend such
Liens, rights, titles and security interests.
(10) INSPECTION; AUDIT. Permit any authorized representative
designated by the Lender, upon reasonable advance notice, to visit,
inspect and audit its properties and condition, including its books and
records (and to make copies thereof), and to discuss its affairs, finances
and accounts with it officers, general partners, managers, members or
directors, employees, auditors, legal counsel and agents at such
reasonable times and as often as may be reasonably requested by the
Lender, which visit, inspection and audit shall be at the expense of the
Lender unless a Default or Event of Default shall have occurred and not
been cured at the time of the commencement of such visit, inspection or
audit, in which case such visit, inspection and audit shall be at the
expense of the Borrower.
(11) BREAK UP FEE. In the event the Borrower, any Member of the
Guarantor Group or Xxxxxxx or any of their Affiliates that has an interest
in the Collateral signs an agreement with respect to, or consummates, an
Alternative Transaction on or before September 28, 2000 (or any such later
date to which the obligation of Borrower or any partner in Borrower to
purchase or redeem the interests of Blackstone in the Borrower pursuant to
the terms of the Borrower Partnership Agreement may have been extended)
(other than the signing of an agreement with respect to, or the
consummation of, an Alternative Transaction which follows a default by
Lender under this Agreement), the Borrower, each Member of the Guarantor
Group and Xxxxxxx shall, on a joint and several basis, pay to the Lender,
in addition to all or any portion of Upfront Fee previous paid to Lender,
an amount equal to $300,000 (such amount shall be in addition to the
amounts required to be paid pursuant to Section 9 and any portion of the
Upfront Fee which Borrower has failed to pay to Lender when due (and
Borrower, each Member of the Guarantor Group and Xxxxxxx shall continue to
be jointly and severally obligated to pay such amounts).
(12) ERISA. Comply in all material respects with the applicable
provisions of ERISA and the Code with respect to each Plan, and furnish to
Lender:
(i) within ten days after a Responsible Officer learns that any
"reportable event" (as defined in Section 4043(c) of ERISA), other
than a reportable event for which the 30-day notice requirement has
been waived by the PBGC, has occurred with respect to a Pension Plan,
a statement setting forth details as to such reportable event and the
action proposed to be taken with respect thereto;
(ii) promptly, but in no event later than five days after receipt
thereof, a copy of any notice that any member of the ERISA Group may
receive from the PBGC relating to the intention of the PBGC to
terminate any Pension Plan or to appoint a trustee to administer any
Plan;
(iii) promptly, but in no event later than five days after filing
with any affected party (as such term is defined in Section 4001 of
ERISA) of a notice of intent to terminate a Pension Plan, a copy of
such notice and a statement setting forth the details of such
termination, including the amount of liability, if any, of any member
of the ERISA Group under Title IV of ERISA;
(iv) within 30 days after withdrawal from a Pension Plan during a
plan year for which any member of the ERISA Group could be subject to
liability under Section 4063 or 4064 of ERISA, a statement setting
forth the details thereof, including the amount of such liability;
(v) within 30 days after cessation of operations by any member of
the ERISA Group at a facility under the circumstances described in
Section 4062(e) of ERISA, a statement setting forth the details
thereof, including the amount of liability of the Borrower or a member
of the ERISA Group under Title IV of ERISA;
(vi) within ten days after adoption of an amendment to a Pension
Plan which would require security to be given to the Pension Plan
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, a
statement setting forth the details thereof, including the amount of
such security;
(vii) within ten days after failure by any member of the ERISA
Group to make payment to a Pension Plan which would give rise to a
lien in favor of the Plan under Section 302(f) of ERISA, a statement
setting forth the details thereof, including the amount of such lien;
(viii) within ten days after the due date for filing with the
PBGC, pursuant to Section 412(n) of the Code, of a notice of failure
to make a required installment or other payment with respect to a
Pension Plan, a statement setting forth details as to such failure and
the action proposed to be taken with respect thereto; and
(ix) within 30 days after receipt thereof by any member of the
ERISA Group from the sponsor of a Multiemployer Plan, a copy of each
notice concerning the imposition of withdrawal liability or the
termination or reorganization of a Multiemployer Plan.
(13) In the event that, at any time after October 10, 2000, the
dividend payable in respect of REIT Shares is less than 81.5% of the
dividend in respect of the REIT Shares on the date hereof (as such dividend
amount may be adjusted pursuant to EXHIBIT L) and the sum of (i) the
balance in the Deposit Account and (ii) the aggregate amount of
distributions on the Prime OP Units comprising the Collateral expected to
be received on all future quarterly distribution dates through the maturity
date of the Loan (it being understood and agreed that, for purposes of the
calculations required to be made under this clause 13, in no event shall
the amount of each such expected quarterly distribution exceed the lesser
of (x) the lowest quarterly distribution received (or in the event of an
announcement of a reduction in the dividend payments by the REIT, the
amount of the announced dividend that would be received) in respect of the
Prime OP Units comprising the Collateral in any Fiscal Quarter in which the
Loan is outstanding and (y) $2,681,401) is less than the sum (such sum, the
"Required Deposit Amount") of the aggregate amount of interest, fees and
other amounts that will become payable through the stated maturity date of
the Loan (as such stated maturity date may be extended pursuant to Section
4(b)) in respect of (a) the Prudential Loan or, if applicable, any loan
incurred in connection with a refinancing of the Prudential Loan permitted
by this Agreement (assuming that the stated maturity date of the Prudential
Loan or such other loan were October 26, 2001), as the Prudential Loan or
such other loan may be extended, and (b) the Loan, as it may be extended
pursuant to Section 4(b) (any such deficit, the "Reserve Deficit"), then
Guarantor shall, within five (5) Business Days of the earlier to occur of
the receipt of a dividend that results in the existence of such Reserve
Deficit or the announcement of a reduction in the dividend to be paid by
the REIT from one Fiscal Quarter to another Fiscal Quarter, deposit, or
cause to be deposited, out of funds other than any funds of the Borrower,
an amount equal to such Reserve Deficit.
(14) OWNERSHIP OF BORROWER. Primestone Partner will at all times be
the sole general partner of Borrower and own not less than 51% of the
outstanding partnership interests in Borrower, and PGI or an entity
controlled by PGI will at all times own the remainder of the partnership
interests in Borrower.
(b) For each taxable year of the Borrower during which the Loan is
outstanding at any time, the Borrower and each Member of the Guarantor
Group hereby agree:
(1) at least 75% of the Borrower's gross income will be described in
Section 856(c)(3) of the Internal Revenue Code of 1986 (as amended, the
"Code");
(2) at least 95% of the Borrower's gross income will be described in
Section 856(c)(2) of the Code;
(3) the Borrower will be treated as a partnership for federal income
tax purposes and not as a corporation; and
(4) the REIT will maintain its status as a REIT under the Code.
For purposes of this Section 13(b), the assets and gross income of the
Borrower will be determined as if the Borrower were a REIT except that the
Borrower will not be treated as a REIT for purposes of determining
whether a subsidiary of the Borrower is a qualified REIT subsidiary within
the meaning of Section 856(i) of the Code.
14. NEGATIVE COVENANTS. (a) Until payment in full of the Loan and
performance of all other obligations of the Borrower, each Member of the
Guarantor Group and Xxxxxxx hereunder and under the other Credit Documents, the
Borrower, will not, without the prior written consent of the Lender, which
consent shall be in the Lender's sole discretion:
(1) BORROWING. Create, incur, assume or suffer to exist any
Indebtedness except (i) Indebtedness to the Lender and (ii) Indebtedness
outstanding on the date hereof to Prudential under the Prudential Loan or
enter into any Interest Rate Protection Agreement or any other option, swap
or other hedging arrangement. Borrower will not incur any additional
Indebtedness under the Prudential Loan. Notwithstanding the foregoing, the
Borrower may incur bona fide Indebtedness to refinance the Prudential Loan;
PROVIDED that (A) the principal amount of Indebtedness under such
refinanced loan does not exceed the lesser of (x) $40,000,000 and (y) the
principal amount of indebtedness outstanding under the Prudential Loan at
the time of such financing, (B) the lender of such refinancing Indebtedness
is an institutional lender reasonably acceptable to Lender, (C) the terms
of such Indebtedness are substantially similar to (and in no event less
favorable to the Borrower than) the terms of the Prudential Loan and (D)
such lender enters into an intercreditor agreement with the Lender
containing terms substantially similar to, and in no event less favorable
to the Lender than, the terms of the Intercreditor Agreement.
(2) LOAN DOCUMENTS. Amend, change or otherwise alter any provision of
the security or loan documents to which the Borrower is a party, including,
without limitation, the Prudential Loan, the security documents relating to
the Prudential Loan and related documents.
(3) PARTNERSHIP AND OPERATING AGREEMENTS. Amend, change or otherwise
alter any provision of its respective partnership or other operating
agreement, issue any partnership or equity interests or permit the transfer
or encumbrance of any partnership or other equity interest therein. The
Borrower will not, without the consent of the Lender, consent to, or vote
to approve, any amendment to the Prime LP Partnership Agreement.
(4) LIENS. Create, incur, assume or suffer to exist any Liens upon,
or any security interest in, any of its property or assets (including,
without limitation, the Collateral), whether now owned or hereafter
acquired, except Liens securing the Prudential Loan set forth on SCHEDULE I
to the Pledge and Security Agreement and the Liens securing the Loan.
(5) MERGER, ACQUISITION OR SALE OF ASSETS. Enter into any merger,
consolidation or contract for the sale of all or substantially all of its
assets.
(6) LOANS. Make loans or advances to any person, firm, joint venture,
corporation or other entity.
(7) CONTINGENT LIABILITIES. Assume, guarantee, endorse, contingently
agree to purchase or otherwise become liable upon the obligation of any
person, firm, joint venture, corporation or other entity except by the
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business.
(8 INVESTMENTS. Purchase or acquire the obligations or stock of, or
any other interest in, any person, firm, joint venture, corporation or
other entity, except (i) direct obligations of the United States of
America, (ii) certificates of time deposit issued by a commercial bank
having a combined capital and surplus of at least $50,000,000 and chartered
under the laws of the United States or one of the States thereof and (iii)
interests in the REIT or Prime L.P. (all of which interests shall be
pledged to Lender pursuant to the Pledge and Security Agreement).
(9) EXPENDITURES. Incur any individual expense, obligation or
liability of any kind of more than $100,000 (other than payment of amounts
due under the Prudential Loan and the Loan).
(10) DISPOSITION OF COLLATERAL. The Borrower shall not Transfer any of
the Collateral except and only upon payment in full of all amounts owing
under Section 4(d) as a result of any such permitted Transfer.
Notwithstanding the foregoing, in no event may the Borrower Transfer any of
the Collateral without the consent of the Lender if there has occurred (i)
a payment default described in Section 15(a) or 15(b), (ii) a default or
other circumstance that results in personal liability to Xxxxxxx under
Section 17(i), (iii) a material breach of any of the covenants set forth in
Section 13 or Section 14 hereof or (iv) a default described in Section
15(f) or Section 15(g) hereof; PROVIDED, HOWEVER, that in the event the
Lender so provides its consent to a Transfer, it shall be a condition to
the effectiveness of such consent that the Borrower shall pay in full all
amounts owing under Section 4(d) as a result of any such permitted
Transfer.
(11) DISTRIBUTIONS AND PURCHASE OF INTERESTS. Declare any
distributions on any class of equity interest in the Borrower, or apply any
of its property or assets to the purchase, redemption or other retirement
of, or set apart any sum for the payment of any distributions on, or for
the purchase, redemption or other retirement of, or make any other
distribution by reduction of capital or otherwise in respect of, any
shares of any class of interest in the Borrower.
(12) TRANSACTIONS WITH AFFILIATES. Borrower shall not enter into any
transaction (including, without limitation, the purchase, sale, or exchange
or property or debt or equity interests or the rendering of any service)
with the REIT, Prime L.P. or any entity controlled by the REIT or Prime
L.P.
(13) REGULATIONS T, U AND X. The Borrower shall not apply, directly
or indirectly, any part of the proceeds of the Loan for the purpose,
whether immediate, incidental or ultimate, or purchasing or carrying any
"margin security" as defined in Regulation G or for the purpose of
reducing or retiring any Indebtedness which was originally incurred for
any such purpose, in each case, in violation of Regulation T, U or X.
(b) For each taxable year of the Borrower during which the Loan is
outstanding at any time, the Borrower and each Member of the Guarantor
Group hereby agree:
(1) as of the end of the last day of each quarter of each of Lender's
taxable years, commencing with September 30, 2000, the Borrower will not
own (within the meaning of Section 856(c)(4) of the Code), directly or
indirectly, (a) securities possessing more than 10% of the total voting
power or (b) securities having a value of more than 10% of the total value
of the outstanding securities of a single issuer treated as a corporation
for federal income tax purposes;
(2) the Borrower will not hold, directly or indirectly (as determined
for purposes of Section 857(b)(7) of the Code) any (a) stock in trade or
other property of a kind which would properly be includable in inventory at
hand at the close of a taxable year or (b) property held primarily for sale
to customers in the ordinary course of a trade or business; and
(3) the Borrower will not hold, directly or indirectly (as determined
for purposes of Section 860E of the Code), any REMIC residual interests.
(c) Until payment in full of the Loan and performance of all other
obligations of the Borrower and each Member of the Guarantor Group hereunder and
under the other Credit Agreements, no Member of the Guarantor Group will,
without the prior written consent of the Lender, which consent shall be in the
Lender's sole discretion:
(1) MERGER, ACQUISITION OR SALE OF ASSETS. Enter into any merger,
consolidation or contract for the sale of all or substantially all of its
assets (PROVIDED that a Member of the Guarantor Group may merge with
another Member of the Guarantor Group provided that after giving effect to
such merger no Default, Event of Default or Material Adverse Effect shall
have occurred).
(2) DISTRIBUTIONS AND PURCHASE OF INTERESTS. Declare any distributions
on any class of equity interest in any Member of the Guarantor Group, or
make any loans to, or repay any principal portion of loans (or any payments
of interest accrued prior to January 1, 2000) owing to, any partners,
members or other holders of interests in any Member of the Guarantor Group,
pay any deferred compensation to any
employees, directors or officers of any Member of the Guarantor Group or
apply any of its property or assets to the purchase, redemption or other
retirement of, or set apart any sum for the payment of any distributions
on, or for the purchase, redemption or other retirement of, or make any
other distribution by reduction of capital or otherwise in respect of, any
shares of any class of interest in the any Member of the Guarantor Group
(it being understood that interest accrued after January 1, 2000 at
interest rates in effect on the date of this Agreement may be paid on a
current basis).
(3) TRANSACTIONS WITH AFFILIATES. Neither any Member of the Guarantor
Group nor Xxxxxxx shall, or shall permit any of their respective Affiliates
to, enter into any transaction (including, without limitation, the
purchase, sale, or exchange of property or debt or equity interests or the
rendering of any service) with the Borrower, the REIT or Prime L.P. or any
Person controlled by any of the foregoing, other than transactions in
effect on the date hereof and set forth on Schedule 14(c)(3) and other than
transactions with employees or directors of such Members of the Guarantor
Group in their capacity as employees or directors (and, with respect to
Xxxxxxx, transactions between Xxxxxxx and the REIT in his capacity as an
officer or trustee of the REIT in the ordinary course of business) that
occur in the ordinary course of business.
(d) NO SHOP. The Borrower, Xxxxxxx and each Member of the Guarantor Group
shall not, directly or indirectly, and they shall not authorize or permit their
officers, directors, employees or agents or representatives (including any
investment banker, attorney or accountant), to initiate, solicit or encourage
any inquiries or the making or implementation of any transaction involving the
acquisition (whether by purchase, merger or otherwise) of any securities of,
interests in, or assets of, or the making of a loan to (or of a loan guaranteed
by, or secured by the assets of), the Borrower, any Member of the Guarantor
Group or Xxxxxxx, or any of their Affiliates that has an interest in the
Collateral (an "Alternative Transaction") or engage in any negotiations
concerning or provide any confidential information or data to, or having any
discussions with, any person relating to an Alternative Transaction, or
otherwise facilitate any efforts to attempt to make or implement an Alternative
Transaction; PROVIDED, HOWEVER, that the foregoing shall not prevent
negotiations with (i) Xxxxxx Brothers with respect to a "backup" transaction
(provided that such transaction is no more favorable to the Borrower than the
transaction contemplated by the Commitment Letter) or (ii) Parkway Properties
with respect to the transaction previously committed to by Parkway Properties
prior to the date of the Commitment Letter (provided that such transaction is no
more favorable to the Borrower than the transaction contemplated by this
Commitment Letter).
15. EVENTS OF DEFAULT. If one or more of the following events (an "Event of
Default") shall occur:
(a) The Borrower shall fail duly to pay any principal of the Loan when due,
whether at maturity, by notice of intention to prepay or otherwise; or
(b) The Borrower shall fail duly to pay any interest, fee or any other
amount payable under the Credit Documents when the same shall be due; or
(c) (i) The Borrower, any Member of the Guarantor Group or Xxxxxxx shall
fail duly to observe or perform any term, covenant, or agreement contained in
Sections 13(a)(6), 14(a)(1), 14(a)(2), 14(a)(3), 14(a)(4), 14(a)(5), 14(a)(10),
14(a)(11), 14(a)(12), 14(c)(1), 14(c)(2) or 14(d) of this Agreement, (ii) there
shall occur a Reserve Deficit and the Members of the Guarantor Group shall fail
to make a capital contribution to Borrower and Borrower shall fail to deposit
such capital contribution, or Members of the Guarantor Group shall fail to cause
to be deposited, out of funds other than any funds of the Borrower, an amount
equal to such Reserve Deficit within five (5) Business Days of the earlier of
the announcement of a reduction in the dividend to be paid in regard to REIT
Shares by the REIT, or the receipt of a dividend in regard to REIT Shares from
the REIT, that results in the requirement to fund a Reserve Deficit, (iii) the
Borrower, any Member of the Guarantor Group or Xxxxxxx shall fail duly to
observe or perform any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than any such term, covenant or
agreement described in Section 15(a) or 15(b)), and such failure shall have
continued unremedied for a period of twenty (20) days, or (iv) the REIT or Prime
LP shall fail duly to observe or perform any term, covenant or agreement
contained in any Credit Document to which it is a party; or
(d) Any representation or warranty made or deemed made by the Borrower or
any Member of the Guarantor Group in a Credit Document, or any statement or
representation made in any certificate, report or opinion
delivered by or on behalf of the Borrower or any Member of the Guarantor Group
in connection with a Credit Document, shall prove to have been false or
misleading in any material respect when so made or deemed made or the Borrower,
any Member of the Guarantor Group or Xxxxxxx shall have committed any fraudulent
act or made any fraudulent statement in connection with this Agreement, the Loan
or the transactions contemplated hereby or thereby; or
(e) An event of default shall occur under the Prudential Loan (after the
delivery of all required notices and the expiration of all applicable cure
periods), the Guarantee or any of the other Credit Documents (after the delivery
of all required notices and the expiration of all applicable cure periods); or
(f) An involuntary case or other proceeding shall be commenced against the
Borrower, any Member of the Guarantor Group, Xxxxxxx, the REIT, Prime L.P. or
Primestone Partner seeking liquidation, reorganization or other relief with
respect to it or its debts under any applicable bankruptcy, insolvency,
reorganization or similar law or seeking the appointment of a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of it
or any substantial part of its property (or the consolidation of, or the filing
of a motion to consolidate, any of the Borrower, any Member of the Guarantor
Group, Xxxxxxx, the REIT, Prime L.P. or Primestone Partner in such a case or
proceeding of another Person), and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of more than 60 days; or an
order or decree approving or ordering any of the foregoing shall be entered and
continued unstayed and in effect; or
(g) The Borrower, any Member of the Guarantor Group, Xxxxxxx, the REIT,
Prime L.P. or Primestone Partner shall commence a voluntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or similar law or
any other case or proceeding to be adjudicated a bankrupt or insolvent (or the
consolidation, or the filing of a motion to consolidate, of any of the Borrower,
any Member of the Guarantor Group, Xxxxxxx, the REIT or Prime L.P. in such a
case or proceeding of another Person), or any of them shall consent to the entry
of a decree or order for relief in respect of the Borrower, any Member of the
Guarantor Group, Xxxxxxx, the REIT, Prime L.P. or Primestone Partner in an
involuntary case or proceeding (or in any such consolidation) under any
applicable bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against any of
them, or any of them shall file a petition or answer or consent seeking
reorganization or relief under any applicable law, or any of them shall consent
to the filing of such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Borrower, any Member of the Guarantor Group, Xxxxxxx, the REIT,
Prime L.P. or Primestone Partner or any substantial part of their respective
property, or any of them shall make an assignment for the benefit of creditors,
or any of them shall admit in writing its inability to pay its debts generally
as they become due, or the Borrower, any Member of the Guarantor Group, Xxxxxxx,
the REIT, Prime L.P. or Primestone Partner shall take corporate action in
furtherance of any such action; or
(h) One or more judgments against the Borrower or attachments against its
property, which in the aggregate exceed $250,000, or the operation or result of
which could be to interfere materially and adversely with the conduct of the
business of the Borrower remain unpaid, unstayed on appeal, undischarged,
unbonded, or undismissed for a period of more than 30 days; or one or more
judgments against the Members of the Guarantor Group, the REIT or Prime L.P., or
attachments against their respective property, which in the aggregate exceed
with respect to the Members of the Guarantor Group taken as a whole, $5,000,000,
and with respect to the REIT and/or Prime LP, $15,000,000, or the operation or
result of which could be to interfere materially and adversely with the conduct
of the business of the Members of the Guarantor Group taken as a whole, the REIT
or Prime L.P., as applicable, remain unpaid, unstayed on appeal, undischarged,
unbonded, or undismissed for a period of more than 30 days; or
(i) Any court or governmental or regulatory authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect on the Borrower or any Member of
the Guarantor Group, any of the transactions contemplated under the Credit
Documents; or
(j) The aggregate Stockholders' Equity of the REIT shall decrease by more
than $100,000,000 from the aggregate Stockholders' Equity reflected on the
financial statements of the REIT as of June 30, 2000, referred to in Section
11(g); or
(k) The Borrower, any Member of the Guarantor Group or Xxxxxxx makes any
statement to the effect or takes any action that indicates that this Agreement
or any other Credit Document is not enforceable in accordance with its terms or
is void or invalid or that the Liens in favor of the Lender are not perfected or
do not constitute perfected security interests subject only to the Lien securing
the Prudential Loan described on SCHEDULE I to the Pledge and Security
Agreement;
then, and at any time during the continuance of such Event of Default, the
Lender may, by written notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) declare the Loan then
outstanding to be due, whereupon the principal of the Loan, together with
accrued interest thereon, any unpaid amounts accrued under the Credit Documents,
and all fees, including without limitation, Exit Fees, payable under the Credit
Documents shall become forthwith due, without presentment, demand, protest or
any other notice of any kind (all of which are hereby expressly waived by the
Borrower); PROVIDED that, in the case of any Event of Default described in
Section 9(f) or 9(g) occurring with respect to the Borrower, the principal of
the Loan then outstanding, together with accrued interest thereon, any unpaid
amounts accrued under the Credit Documents and all fees, including without
limitation, Exit Fees, payable under the Credit Documents, shall automatically
and immediately become due without presentment, demand, protest or any other
notice of any kind (all of which are hereby expressly waived by the Borrower).
16. USURY. Each of the Borrower, each Member of the Guarantor Group and
Xxxxxxx covenants (to the extent that it or he may lawfully do so) that it or he
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement, the other Credit Documents or the Note;
and the Borrower, each Member of the Guarantor Group and Xxxxxxx (to the extent
that they may lawfully do so) hereby expressly waive all benefit or advantage of
any such law and covenant that they will not hinder, delay or impede the
execution of any power herein granted to the Lender, but will suffer and permit
the execution of every such power as though no such law had been enacted. It is
the intent of the Lender and the Borrower in the execution of the Note, this
Agreement and all other instruments now or hereafter securing the Note or
executed in connection therewith or under any other written or oral agreement by
the Borrower in favor of the Lender to contract in strict compliance with
applicable usury law. In furtherance thereof, the Lender and the Borrower
stipulate and agree that none of the terms and provisions contained in the Note,
this Agreement or any other instrument securing the Note or executed in
connection herewith, or in any other written or oral agreement by the Borrower
in favor of the Lender, shall ever be construed to create a contract to pay, for
the use, forbearance or detention of money, interest at a rate in excess of the
maximum interest rate permitted to be charged by applicable law. Neither
Borrower nor any guarantors, endorsers or other parties now or hereafter
becoming liable for payment of the Note shall ever be required to pay interest
on the Note or on indebtedness arising under any instrument securing the Note or
executed in connection therewith, or in any other written or oral agreement by
the Borrower in favor of the Lender, at a rate in excess of the maximum interest
that may be lawfully charged under applicable law, and the provisions of this
Section 16 shall control over all other provisions of the Note, this Agreement
and any other instruments now or hereafter securing the Note or executed in
connection herewith or any other oral or written agreements which may be in
apparent conflict herewith. The Lender expressly disavows any intention to
charge or collect excessive unearned interest or finance charges in the event
the maturity of the Note is accelerated. In the event that the Lender shall
collect monies and/or any other thing of value which are deemed to constitute
interest which would increase the effective interest rate on the Note to a rate
in excess of that permitted to be charged by applicable law, upon such
determination, at the option of the Lender, such amount shall be either
immediately returned to Borrower or credited against the principal balance of
the Note then outstanding, in which event any and all penalties of any kind
under applicable law as a result of such excess interest shall be inapplicable.
By execution of this Agreement, the Borrower acknowledges that it believes the
Loan to be non-usurious and agrees that if, at any time, the Borrower should
have reason to believe, that the Loan is in fact usurious, it will give the
Lender notice of such condition and the Borrower agrees that the Lender shall
have ninety (90) days after receipt of such notice in which to make appropriate
refund or other adjustment in order to correct such condition if in fact such
exists. The term "applicable law" as used in this Section 16 shall mean the laws
of the State of New York or the laws of the
United States, whichever laws allow the greater rate of interest, as such laws
now exist or may be changed or amended or come into effect in the future.
17. MISCELLANEOUS.
(a) FURTHER ASSURANCES. (i) At any time and from time to time, upon the
request of the Lender, the Borrower shall execute, deliver and acknowledge, or
cause to be executed, delivered and acknowledged, such further documents and
instruments and do such other acts and things as the Lender may reasonably
request in order to effect fully the intent and purposes of this Agreement and
the Credit Documents, and any other agreements, instruments and documents
delivered pursuant hereto or in connection with the making of the Loan, in
proper form for recording and otherwise in form and substance reasonably
satisfactory to the Lender and its counsel.
(ii) The Borrower agrees that from time to time, at its expense, it shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or appropriate, or that the Lender may
reasonably request, in order to create, evidence, perfect or preserve any
security interest or Lien granted or purported to be granted hereby or by any
Credit Document or to enable the Lender to exercise and enforce its rights and
remedies hereunder or under any Credit Document with respect to any Collateral.
(b) CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted to the
Lender hereunder or under any other document delivered hereunder or in
connection herewith, or allowed it by law or equity, shall be cumulative and may
be exercised from time to time. No failure on the part of the Lender to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise by the Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. No advance of Loan proceeds under this Agreement shall constitute a
waiver of any of the conditions of the Lender's obligation to make further
advances nor, in the event the Borrower is unable to satisfy any such condition,
shall any such advance have the effect of precluding the Lender from thereafter
declaring such inability to be an event of default under this Agreement.
(c) NOTICES. Any notice, request, demand or other communication required or
permitted hereunder, or under the Note, or under any other instrument securing
payment of the Note (unless otherwise expressly provided therein), shall be
given in writing by (i) personal delivery, or (ii) overnight delivery service
with proof of delivery, or (iii) United States Mail, postage prepaid, registered
or certified mail, return receipt requested, or (iv) prepaid telegram, telex,
telecopy or facsimile sent to the intended addressee at the address indicated
below or to such different address as the addressee shall have designated by
written notice sent in accordance herewith, and shall be deemed to have been
given and received either at the time of personal delivery or, in the case of an
overnight delivery service or mail, as of the date of first attempted delivery
on a Business Day at the address and in the manner provided herein, or in the
case of telegram, telex, telecopy or facsimile, upon receipt:
If to the Borrower, at
c/o The Prime Group Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
and to
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
If to the Lender, at
Vornado PS, L.L.C.
c/o Vornado Realty Trust
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President,
Xxxxxx Xxxxxx, and Xxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Israel, Esq.
Tel.: (000) 000-0000
Fax: (000) 000-0000
(d) APPLICABLE LAW; WAIVER OF JURY TRIAL. EXCEPT AS EXPRESSLY PROVIDED IN
THE LAST SENTENCE OF SECTION 16, THIS AGREEMENT AND THE NOTE, AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
EACH OF THE BORROWER, EACH MEMBER OF THE GUARANTOR GROUP AND XXXXXXX HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK OR FEDERAL
COURT SITTING IN NEW YORK, NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY OF THIS AGREEMENT, THE NOTE OR THE OTHER CREDIT
DOCUMENTS, AND EACH OF THE BORROWER, EACH MEMBER OF THE GUARANTOR GROUP AND
XXXXXXX HEREBY AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE
OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN ANY NEW YORK OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO BORROWER AT THE ADDRESS INDICATED IN SECTION 17(c) AND SERVICE SO
MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
EACH OF THE LENDER, THE BORROWER, EACH MEMBER OF THE GUARANTOR GROUP AND
XXXXXXX WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES, THE
OTHER CREDIT DOCUMENTS OR THE RELATIONSHIPS ESTABLISHED HEREUNDER OR THEREUNDER.
(e) LENDER NOT A JOINT VENTURER. The Lender, by entering into this
Agreement or by any action taken pursuant hereto, shall not be deemed a partner
or joint venturer with the Borrower, and the Borrower agrees to indemnify and
hold the Lender harmless from any and all damages resulting from such a
construction of the parties and their relationship.
(f) SURVIVAL OF COVENANTS. All covenants of either party contained herein
shall continue and survive until the Loan has been fully paid and discharged.
(g) TIME IS OF THE ESSENCE. Time is of the essence of this Agreement.
(h) ENTIRE AGREEMENT; NO THIRD PARTIES BENEFITTED. This Agreement, the
Exhibits and Schedules hereto and the other Credit Documents constitute the
entire agreement and supersede all prior agreements and understanding, both
written and oral, among the parties (including, without limitation, the
Commitment Letter) with respect to the subject matter of this Agreement and such
other Credit Documents. This Agreement is made and entered into for the sole
protection and benefit of the parties hereto and their permitted successors and
assigns. No trust fund is created by this Agreement and no other persons or
entities shall have any right of action under this Agreement, the Note or the
other Credit Documents or any right to any funds available to be borrowed under
this Agreement.
(i) NON-RECOURSE OF PARTNERS OF THE BORROWER; EXCEPTIONS; NON-RECOURSE
CARVEOUT. It is expressly understood by the parties hereto that the Lender shall
have no recourse against any of the partners in the Borrower for any obligations
under this Agreement or the Note, other than the express rights granted to the
Lender against any such partner in the Borrower in this Agreement, the
Guarantee, the Pledge and Security Agreement and any other Credit Documents.
Notwithstanding anything contained herein to the contrary, the provisions of
this Section shall not relieve Xxxxxxx from any personal liability for, and by
executing this Agreement, Xxxxxxx agrees to be fully and personally liable for,
any liabilities, costs, losses, damages, expenses (including, without
limitation, attorneys' fees and disbursements, and court costs, if any), or
claims suffered or incurred by Lender (or any Indemnified Party) by reason of or
in connection with: (a) (i) the filing by Borrower, any Member of the Guarantor
Group, Xxxxxxx or Primestone Partner of a voluntary bankruptcy petition; (ii)
the filing of a motion by Borrower, any Member of the Guarantor Group, Xxxxxxx,
Primestone Partner or any of their Affiliates of a motion to consolidate any of
Borrower, any Member of the Guarantor Group, Xxxxxxx or Primestone Partner in
any bankruptcy case, proceeding or petition involving any other Person; (iii)
the filing of any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, against
any of Borrower, any Member of the Guarantor Group, Xxxxxxx or Primestone
Partner which is consented to or acquiesced in by any of Borrower, any Member of
the Guarantor Group, Xxxxxxx or Primestone Partner; (iv) the consent or
acquiescence by Borrower, any Member of the Guarantor Group, Xxxxxxx or
Primestone Partner to the consolidation of, or the filing of a motion to
consolidate, any of Borrower, any Member of the Guarantor Group, Xxxxxxx or
Primestone Partner in any bankruptcy case, proceeding or petition involving any
other Person; or (v) the collusion by any of Borrower, any Member of the
Guarantor Group, Xxxxxxx or Primestone Partner with creditors of any of
Borrower, any Member of the Guarantor Group, Xxxxxxx or Primestone Partner to
(i) the filing of any bankruptcy petition involving any of Borrower, any Member
of the Guarantor Group, Xxxxxxx or Primestone Partner or (ii) the consolidation
of, or the filing of a motion to consolidate any of, Borrower, any Member of the
Guarantor Group, Xxxxxxx or Primestone Partner in any bankruptcy case,
proceeding or petition of any other Person; (b) the assertion in writing or in
any legal proceeding of any kind that any provision of any of the Credit
Documents are in whole or in part unenforceable, invalid or not legally binding
or the challenge to, or other obstruction or attempted obstruction of, the
exercise of any rights or remedies under the Credit Documents; (c) gross
negligence, fraudulent acts or omissions or intentional misrepresentation (which
shall be determined based on the knowledge of Xxxxxxx) by the Borrower or any
Member of the Guarantor Group; (d) application of any proceeds of the Loan to
any purpose other than as provided in the Credit Documents; (e) application of
any dividends or distributions in respect of, or proceeds from the Transfer of,
the Collateral other than strictly in accordance with the Credit Documents; or
(f) breach of the covenants set forth in Section 13(a)(6) or clause (a)(1),
(a)(2), (a)(3), (a)(4), (a)(5), (a)(6), (a)(7), (a)(8), (a)(10), (a)(11),
(a)(12), (a)(14) or (c) of Section 14 of this Agreement.
(j) RIGHT OF FIRST OFFER. Prior to any Transfer of all or any portion of
the Collateral by Borrower, the Borrower shall give Lender written notice (a
"Notice of Sale"), which Notice of Sale shall state the Borrower's desire to
make such Transfer, the number and class of securities proposed to be
Transferred (the "Offered Interest") and the price and such other terms on
which the Borrower proposes to Transfer the Offered Interest (collectively,
the "Offer Terms"). Each Notice of Sale shall constitute an irrevocable offer
by the Borrower to sell to the Lender (or its designated Affiliates) the
Offered Interest on the Offer Terms. No Offer Terms in respect of an Offered
Interest may include any form of consideration other than cash (which may be
paid at closing, in installments or after any period of time (as set forth in
the Offer Terms).
The Lender may elect to purchase (or cause an Affiliate designated by the
Lender to purchase) all, but not less than all, the Offered Interest on the
Offer Terms by delivering to the Borrower, within five (5) Business Days
following the date the Notice of Sale is received by the Lender, a notice of
such election (a "Notice of Purchase").
If the Lender (or a designated Affiliate) does not commit to purchase the
entire Offered Interest within the time periods specified in this Section 17(j),
the Borrower may, within a period of 30 days from and after the date that is
five (5) Business Days from the date of the Notice of Sale, Transfer the portion
of the Offered Interest to one or more Persons at a price equal to or higher
than the price included in the Offer Terms and on terms otherwise no more
favorable to the Borrower than the Offer Terms. If the Borrower shall not have
consummated the Transfer of the Offered Interest to any Person or Persons prior
to the expiration of such thirty-day period, then the provisions of this Section
17(j) shall again apply.
The provisions of this Section 17(j) shall survive until the earlier to
occur of (i) the 31st day after the stated maturity date of the Loan (as such
stated maturity date may be extended in accordance with the terms hereof) and
(ii) the 31st day after repayment of the Loan by the Borrower or the Guarantor
using either the Borrower's or Guarantor's internally generated funds or the
proceeds of a refinancing transaction in which the lender is not affiliated with
Borrower, any Member of the Guarantor Group, Xxxxxxx, the REIT or Prime L.P. or
any of their Affiliates provided that no portion of the Collateral is sold or
otherwise transferred within 30 days of the closing of such refinancing
transaction to such lender in the refinancing transaction or a person or entity
that is affiliated with such lender or with the Borrower, any Member of the
Guarantor Group, Xxxxxxx, the REIT or Prime L.P. The right of first offer
described in this Section 17(j) shall not apply to a merger or consolidation of
the REIT or the sale of at least two-thirds of the outstanding capital stock of
the REIT to a single purchaser unaffiliated with any of Borrower, any Member of
the Guarantor Group, Xxxxxxx, the REIT or Prime L.P.
(k) SUCCESSORS AND ASSIGNS. The terms of this Agreement shall bind and
benefit the successors and assigns of the parties; PROVIDED, HOWEVER, that the
Borrower may not assign this Agreement or any funds borrowed under this
Agreement, or assign or delegate any of its rights or obligations hereunder,
except with the express written consent of the Lender.
(l) CONSENTS. Whenever the consent of the Lender is required under the
terms of this Agreement or any of the other Credit Documents (except where
otherwise expressly provided herein or therein), the Lender may grant or
withhold any such consent it its sole and absolute discretion.
(m) PUBLICITY. Except as otherwise required by applicable law or the rules
or regulations of any securities exchange on which the securities of such party
or any Affiliate of such party are listed or traded, no party hereto 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 each other party and in any event, each party agrees that it shall give each
other party reasonable opportunity to review and comment upon any such release
or announcement prior to publication of the same.
(n) AMENDMENTS. This Agreement may not be modified or amended except by a
written agreement signed by the parties.
(o) COUNTERPARTS. This Agreement may be executed in counterparts, and all
counterparts shall constitute one and the same document.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
PRIMESTONE INVESTMENT PARTNERS L.P.
By: PG/Primestone, L.L.C.,
Its General Partner
By: The Prime Group, Inc.,
Its Administrative Member
By:__________________________
Name:
Title:
THE PRIME GROUP, INC.
By:________________________________
Name:
Title:
PGLP, INC.
By:________________________________
Name:
Title:
PRIME GROUP II, L.P.
By: PGLP, Inc.
Its General Partner
By:________________________________
Name:
Title:
PRIME GROUP LIMITED PARTNERSHIP
By:______________________________,
Its Managing General Partner
PRIME INTERNATIONAL, INC.
By:________________________________
Name:
Title:
VORNADO PS, L.L.C.
By: Vornado Realty, L.P.,
Its Sole Member
By: Vornado Realty Trust,
Its General Partner
By:_______________________
Name:
Title:
For purposes of Sections hereof which
contain a specific reference to Xxxxxxx X.
Xxxxxxx or Xxxxxxx and Section 17:
-----------------------------------
Xxxxxxx X. Xxxxxxx
