EXHIBIT 10.4
OMNIBUS SECOND MODIFICATION TO MEZZANINE LOAN DOCUMENTS
THIS SECOND MODIFICATION TO MEZZANINE LOAN DOCUMENTS (this
"Agreement") is made and dated as of March 26, 2002 by and among PRIME/XXXXXXX
DEVELOPMENT COMPANY, L.L.C., a Delaware limited liability company ("Borrower"),
BANKERS TRUST COMPANY ("Agent"), a New York banking corporation, as a lender and
as agent for VORNADO REALTY TRUST, a Maryland real estate investment trust, MMBC
DEBT HOLDINGS I, LLC, a Massachusetts limited liability company, NEW YORK LIFE
INSURANCE COMPANY, a mutual insurance company organized under the laws of New
York State, and the other lenders from time to time party to the Loan Agreement
(as hereinafter defined) (each, a "Lender" and, collectively, "Lenders"),
DEARBORN CENTER, L.L.C., a Delaware limited liability company ("Property Owner")
and PRIME GROUP REALTY, L.P., a Delaware limited partnership ("PGLP").
W I T N E S S E T H:
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WHEREAS, Agent, the Lenders and Borrower are party to that certain
Mezzanine Construction Loan Agreement, dated as of January 5, 2001, as the same
was amended pursuant to that certain Omnibus First Modification to Mezzanine
Loan Documents dated as of March 12, 2001 (as so amended, the "Loan Agreement")
(all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Loan Agreement);
WHEREAS, Property Owner and Bayerische Hypo- Und Vereinsbank AG, New
York Branch (the "Senior Agent") are party to that certain Credit Agreement,
dated as of January 5, 2001, as the same has been amended pursuant to that
certain Omnibus First Modification to Senior Loan Documents dated as of March
12, 2001, and as the same has been further amended pursuant to that certain
Omnibus Second Modification to Senior Loan Documents (the "Second Senior
Modification") of even date herewith (as so amended, the "Senior Loan
Agreement");
WHEREAS, the Borrower and the Guarantors have requested that the
Lenders modify certain financial covenants contained in the Guaranties;
WHEREAS, the Borrower and the Guarantors have further requested that
the Lenders grant a waiver of certain breaches of financial covenants contained
in the Guaranties;
WHEREAS, as an inducement to the Lenders to modify and waive certain
financial covenants, the Borrower, PGLP and the Property Owner have agreed to
escrow certain funds and otherwise take the actions described below; and
WHEREAS, the Lenders are willing to modify and waive the
financial covenants on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the modification and waiver of
certain financial covenants contained in the Guaranties and the covenants,
agreements, representations and warranties set forth in this Agreement, the
parties hereto hereby covenant, agree, represent and warrant as follows:
Section 1. TIF Financing.
The Borrower has requested that Agent approve a Redevelopment
Agreement between the Property Owner and the City of Chicago, through its
department of Planning and Development (the "City") and the transactions
contemplated therein (the "TIF Financing") and has provided the Agent with a
draft copy of such Redevelopment Agreement. Upon the final approval of the
Redevelopment Agreement and the TIF Financing by the Agent and the Senior Agent,
the Property Owner and the Borrower hereby agree as follows:
(i) to pledge the promissory note delivered by the City to the
Property Owner pursuant to the Redevelopment Agreement (the "TIF Note") to
the Senior Agent and, on a subordinate basis, to the Agent as additional
collateral for the Senior Loan and the Loan, respectively,
(ii) to deposit into an interest bearing escrow account all payments
of any kind made or to be made under the TIF Note (the "TIF Payments"),
including the proceeds thereof, with the Senior Agent (until the Senior
Loan has been paid in full) or the Agent (after the Senior Loan has been
paid in full);
(iii) that without the consent of the Senior Agent and the Agent
neither of them shall be entitled to receive any TIF Payments at any time
while the Senior Loan or the Loan is outstanding; and
(iv) to enter into documentation reasonably acceptable to the Senior
Agent and the Agent to evidence the foregoing agreements.
Section 2. Waiver.
(a) Section 6(d) of the Interest Guaranty and Section 8(d) of the
Completion Guaranty require that, as of the end of each fiscal quarter during
the term of the Loan, the amount of Unrestricted Cash owned and held by PGLP and
all of its Subsidiaries be at least Twenty Million Dollars ($20,000,000.00) (the
"Liquidity Covenant").
(b) PGLP has advised the Agent that it was unable to comply with the
Liquidity Covenant as of December 31, 2001 and that it does not expect to be
able to comply with the Liquidity Covenant as of March 31, 2002.
(c) At the request of PGLP and the Borrower, and subject to the full
and continuing satisfaction of all of the conditions set forth in this
Agreement, the Lenders hereby waive, for all purposes under the Loan Documents,
any default under the Loan Documents resulting from the failure of PGLP to
satisfy the Liquidity Covenant as of December 31, 2001 and March 31, 2002.
(d) The foregoing waiver is expressly conditioned upon (i) the
simultaneous waiver by the Senior Agent of any defaults relating to failures to
satisfy financial covenants under the Senior Loan Documents, (ii) the execution
and delivery of the Senior Modification in a form acceptable to the Agent, (iii)
the agreement of the Borrower and the Property Owner to escrow all TIF Payments
in accordance with Section 1 above, (iv) the establishment and funding of the
Senior Additional Reserve Account (as defined below) and (v) an acceptable
written agreement with the Senior Agent with respect to disbursements from the
Senior Additional Reserve Account.
(e) The foregoing waiver shall be immediately and automatically
revoked without the need for notice to any party or further action upon any
default by PGLP, the Property Owner or the Borrower under the terms of this
Agreement (including, without limitation, Section 1 above) or the Second Senior
Modification.
Section 3. Additional Reserve Account.
As an express condition to the waiver granted Section 2 and the
modifications made in Section 4, PGLP hereby agrees to deposit One Million Five
Hundred Thousand Dollars ($1,500,000) into an account maintained by the Senior
Agent (the "Senior Additional Reserve Account") in accordance with the Second
Senior Modification and Five Hundred Thousand Dollars ($500,000) into the
Restricted Securities Account as follows:
(i) $125,000 on the date of this Agreement;
(ii) $93,750 on April 30, 2002;
(iii) $93,750 on May 31, 2002;
(iv) $93,750 on June 28, 2002; and
(v) $93,750 on July 31, 2002.
Such funds shall be held by the Agent subject to the same terms and
conditions governing other amounts on deposit in the Restricted Securities
Account pursuant to the Loan Documents. After the payment in full of the Senior
Loan, any amounts then on deposit in the Senior Additional Reserve Account shall
be deposited into the Restricted Securities Account.
Section 4. Amendments to the Guaranties.
(a) Section 8(d) of the Completion Guaranty is hereby amended by
deleting therefrom the text "Twenty Million and No/100 Dollars ($20,000,000.00)"
and replacing it with the following:
"Seventeen Million Five Hundred Thousand and No/100 Dollars
($17,500,000)"
(b) Section 6(d) of the Interest and Operating Costs Guaranty is
hereby amended by deleting therefrom the text "Twenty Million and No/100 Dollars
($20,000,000.00)" and replacing it with the following:
"Seventeen Million Five Hundred Thousand and No/100 Dollars
($17,500,000)"
(c) Section 1(f)(B) of the Completion Guaranty (as previously
amended by the First Omnibus Amendment) is hereby further amended by deleting
therefrom the date "December 31, 2002" and replacing it with the following:
"March 31, 2003"
Section 5. Consent of the Lenders.
Each of the Lenders, by their execution of this Agreement, hereby
confirms that they have consented to and approved, to the extent required under
the Loan Documents, the terms and conditions of this Agreement and the Second
Senior Modification and agrees that the Senior Agent may rely upon this
Agreement to evidence such consents and approvals.
Section 6. Miscellaneous.
(a) Governing Law. The terms and provisions hereof and the rights
and obligations of the parties hereunder shall in all respects be governed by,
and construed and enforced in accordance with, the internal laws of the State of
New York.
(b) Full Force. Except as expressly set forth herein, the Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed in all respects.
(c) Binding; No Amendment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be modified orally, but only by a
writing executed by all of the parties hereto.
(d) Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized representatives, all as of the date
and year first above written.
PRIME/XXXXXXX DEVELOPMENT COMPANY, L.L.C.
By: Xxxxx Xxxxxxx L.L.C., its managing
member
By: /s/ X.X. Xxxxxxxxx
-------------------
X.X. Xxxxxxxxx
Member
DEARBORN CENTER, L.L.C.
By: Prime/Xxxxxxx Development Company,
L.L.C., its sole member
By: Xxxxx Xxxxxxx L.L.C., its
managing member
By: /s/ X.X. Xxxxxxxxx
------------------
X.X. Xxxxxxxxx
Member
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust, its
managing general partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
Co-President
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Director
VORNADO REALTY TRUST
By: /s/ Xxxxxx Xxxx
---------------
Xxxxxx Xxxx
Chairman & CEO
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Xxxx Xxxxxx
---------------
Xxxx Xxxxxx
Assistant Vice President
MMBC DEBT HOLDINGS I, LLC
By: MassMutual/Boston Capital
Mezzanine Partners, L.P., its
sole member
By: Boston Mass LLC,
its general partner
By: MassMutual Mortgage Finance,
LLC, its co-manager
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxx Xxxxxxxxx
Senior Executive
Director
By: Boston Capital Institutional
Advisors LLC, its co-manager
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Managing Director
