Exhibit 4
LOAN AGREEMENT
BETWEEN
PRIME GROUP VI, L.P.,
an Illinois limited partnership
AND
LASALLE NATIONAL BANK,
a national banking association
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND DETERMINATIONS. . . . . . . . . . . . . . . . . . . . . 1
1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 TIME PERIODS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.3 ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . 7
1.4 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.5 LENDER'S DISCRETION. . . . . . . . . . . . . . . . . . . . . . . 7
1.6 BORROWER'S KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . 7
1.7 MARKET PRICE ADJUSTMENTS.. . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2
LOAN AND TERMS OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 REVOLVING LOAN . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.1 AMOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.2 PROCEDURE FOR BORROWING. . . . . . . . . . . . . . . . . . . . . 8
2.2 DISBURSEMENT OF LOAN ON CLOSING DATE . . . . . . . . . . . . . . 8
2.3 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.1 INTEREST RATE. . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.2 INTEREST PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.3 INTEREST COMPUTATION . . . . . . . . . . . . . . . . . . . . . . 9
2.3.4 MAXIMUM INTEREST . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 PRINCIPAL PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5.1 VOLUNTARY PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . 9
2.5.2 MANDATORY PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . 10
2.6 LIBOR OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6.1 OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6.2 NOTICE PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6.3 NOTICE IRREVOCABLE . . . . . . . . . . . . . . . . . . . . . . . 11
2.6.4 FAILURE TO PROVIDE NOTICE OF CONTINUATION. . . . . . . . . . . . 11
2.7 INTEREST PERIODS . . . . . . . . . . . . . . . . . . . . . . . . 11
2.8 SPECIAL PROVISIONS GOVERNING LIBOR LOANS . . . . . . . . . . . . 11
2.8.1 DETERMINATION OF INTEREST RATE . . . . . . . . . . . . . . . . . 11
2.8.2 INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. . . . . . . 12
2.9 ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.10 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 LIBOR RATE TAXES . . . . . . . . . . . . . . . . . . . . . . . . 13
2.11.1 ADDITIONAL PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . 13
2.11.2 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 DEFAULT RATE . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 METHOD OF PAYMENT; GOOD FUNDS. . . . . . . . . . . . . . . . . . 13
2.14 DEPOSIT TO BORROWER'S ACCOUNT. . . . . . . . . . . . . . . . . . 13
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ARTICLE 3
NOTE AND SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 4
CONDITIONS OF FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 INITIAL ADVANCE. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 ALL REVOLVER ADVANCES. . . . . . . . . . . . . . . . . . . . . . 16
4.2.1 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 16
4.2.2 PERFORMANCE; NO DEFAULT. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 5
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . 16
5.1 BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 PARTNERS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . 16
5.3 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 NECESSARY ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 BINDING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 BORROWER'S SECURITIES. . . . . . . . . . . . . . . . . . . . . . 17
5.7 TITLE TO PROPERTY; LIENS . . . . . . . . . . . . . . . . . . . . 17
5.8 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . 17
5.9 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.10 CONFLICTING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 17
5.11 COMPLIANCE WITH APPLICABLE LAWS. . . . . . . . . . . . . . . . . 18
5.12 APPLICATION OF CERTAIN LAWS AND REGULATIONS. . . . . . . . . . . 18
5.12.1 INVESTMENT COMPANY ACT . . . . . . . . . . . . . . . . . . . . . 18
5.12.2 HOLDING COMPANY ACT. . . . . . . . . . . . . . . . . . . . . . . 18
5.13 MARGIN REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 NO MISREPRESENTATION . . . . . . . . . . . . . . . . . . . . . . 18
5.15 NO AFFILIATION . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.16 REGISTRATION EFFECTIVE . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 6
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 LEGAL EXISTENCE; GOOD STANDING . . . . . . . . . . . . . . . . . 19
6.2 INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 FINANCIAL STATEMENTS AND OTHER INFORMATION OF BORROWER . . . . . 19
6.3.1 ANNUAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . 19
6.3.2 NOTICE OF DEFAULTS; LOSS . . . . . . . . . . . . . . . . . . . . 20
6.3.3 NOTICE OF SUITS, ADVERSE EVENTS. . . . . . . . . . . . . . . . . 20
6.3.4 COVENANT COMPLIANCE CERTIFICATE; BORROWING BASE CERTIFICATE. . . 20
6.3.5 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 FINANCIAL INFORMATION OF PRIME RETAIL, INC. AND PGRT . . . . . . 21
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6.5 REPORTS TO GOVERNMENTAL BODIES AND OTHER PERSONS . . . . . . . . 21
6.6 GENERAL PARTNER. . . . . . . . . . . . . . . . . . . . . . . . . 21
6.7 FINANCIAL STATEMENTS OF GUARANTOR. . . . . . . . . . . . . . . . 22
ARTICLE 7
NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 8
DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 22
8.1.1 DEFAULT IN PAYMENT . . . . . . . . . . . . . . . . . . . . . . . 22
8.1.2 BREACH OF COVENANTS AND CERTAIN OTHER PROVISIONS . . . . . . . . 23
8.1.3 BREACH OF WARRANTY . . . . . . . . . . . . . . . . . . . . . . . 23
8.1.4 ACCELERATION OF ANY INDEBTEDNESS . . . . . . . . . . . . . . . . 23
8.1.5 BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1.6 JUDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1.7 NON-PERFORMANCE OF GUARANTY, ETC.. . . . . . . . . . . . . . . . 24
8.1.8 INVALIDITY OF PLEDGE AGREEMENT, ETC. . . . . . . . . . . . . . . 24
8.2 ACCELERATION OF BORROWER'S OBLIGATIONS . . . . . . . . . . . . . 25
8.3 REMEDIES ON DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 25
8.3.1 ENFORCEMENT OF SECURITY INTERESTS. . . . . . . . . . . . . . . . 25
8.3.2 OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 APPLICATION OF FUNDS . . . . . . . . . . . . . . . . . . . . . . 25
8.4.1 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4.2 BORROWER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 26
8.4.3 SURPLUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 9
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 10
EXPENSES AND INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 CLOSING FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 ATTORNEY'S FEES AND OTHER FEES AND EXPENSES. . . . . . . . . . . 26
10.2.1 FEES AND EXPENSES FOR PREPARATION OF LOAN DOCUMENTS. . . . . . . 26
10.2.2 FEES AND EXPENSES IN ENFORCEMENT OF RIGHTS OR DEFENSE OF LOAN
DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.3 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3.1 BROKERAGE FEES . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3.2 OPERATION OF COLLATERAL; JOINT VENTURERS . . . . . . . . . . . . 27
ARTICLE 11
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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11.2 SURVIVAL OF LOAN AGREEMENT . . . . . . . . . . . . . . . . . . . 28
11.3 FURTHER ASSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 28
11.4 TAXES AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.5 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.6 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.7 MODIFICATION OF LOAN DOCUMENTS . . . . . . . . . . . . . . . . . 29
11.8 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.9 SALE OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . 29
11.10 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . 29
11.11 REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . 29
11.12 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 30
11.13 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.14 JURISDICTION AND VENUE . . . . . . . . . . . . . . . . . . . . . 30
11.15 WAIVER OF RIGHT TO JURY TRIAL. . . . . . . . . . . . . . . . . . 30
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LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of December 18, 1998, by and between
PRIME GROUP VI, L.P., an Illinois limited partnership ("Borrower"), and
LASALLE NATIONAL BANK, a national banking association ("Lender").
R E C I T A L S:
A. Borrower desires to obtain a revolving line of credit from
Lender in the maximum principal amount of $25,000,000 (the "Loan") to
refinance certain indebtedness and for working capital purposes for Borrower
and its affiliates. The Loan is to be secured by a lien on certain securities
owned by Borrower and is to be guaranteed by a limited partner of Borrower.
B. Lender is willing to furnish such revolving line of credit
subject to the terms and conditions set forth herein.
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1
DEFINITIONS AND DETERMINATIONS
1.1 DEFINITIONS. As used in this Loan Agreement and in the other
Loan Documents, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally both to the singular and plural terms defined):
ACCOUNTANTS: Ernst & Young LLP or such other independent certified
public accounting firm selected by Borrower and reasonably satisfactory
to Lender.
AIMCO: Apartment Investment and Management Company, a Maryland
corporation that qualifies as a real estate investment trust.
AIMCO SHARES: The common stock, $0.01 par value per share, of
AIMCO.
AVAILABLE BORROWING BASE: the lesser of (i) $25,000,000 and
(ii) 50% of the Fair Market Value of the Collateral.
BORROWER'S OBLIGATIONS: (i) any and all Indebtedness due or to
become due, now existing or howsoever arising of Borrower to Lender
pursuant to the terms of this Loan Agreement or pursuant to any other
Loan Document, and (ii) the performance of the covenants of Borrower
contained in the Loan Documents.
BORROWER'S SECURITIES: See Section 5.6.
BREAK COSTS: See Section 2.10.
BROOKDALE: Brookdale Living Communities, Inc., a Delaware
corporation.
BROOKDALE SHARES: the shares of common stock, $0.01 par value per
share, of Brookdale.
BUSINESS: the business of directly or indirectly acquiring,
developing, operating, managing and financing real estate or interests
therein, or investing in, or holding securities of, entities engaged in
such business.
BUSINESS DAY: any day other than a Saturday, Sunday or other day
on which banks in Chicago, Illinois, or London, England, are closed.
CLOSING: as defined in Article 9.
CLOSING DATE: as defined in Article 9.
CODE: the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, and the rules and regulations issued
thereunder, as in effect from time to time.
COLLATERAL: the securities, cash and other property in which
Lender is granted the Security Interests pursuant to the Pledge
Agreement.
COMMITMENT: $25,000,000.
DEFAULT: any event or condition which, with the giving of notice
or the lapse of time, or both, would become an Event of Default.
DEFAULT RATE: 3% plus the Floating Rate applicable from time to
time to the outstanding principal balance of the Loan.
DEFAULT PERIOD: a period of time commencing on the date that an
Event of Default has occurred and ending on the date that such Event of
Default is cured or waived.
EVENT OF DEFAULT: any of the Events of Default set forth in
Section 8.1.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended.
FAIR MARKET VALUE OF THE COLLATERAL: as of any date the same is
to be calculated, (i) as to the Prime Retail Partnership Units, the
product of the Market Price of Prime Retail,
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Inc. Shares for such date multiplied by the number of Prime Retail
Inc. Shares into which the Prime Retail Partnership Units may be
converted, (ii) as to the Prime Group Realty Partnership Units, the
product of the Market Price of PGRT Shares for such date multiplied by
the number of PGRT Shares into which the Prime Group Realty
Partnership Units may be converted, (iii) as to the Brookdale Shares,
the Market Price of the Brookdale Shares multiplied by the number of
Brookdale Shares, and (iv) as to the AIMCO Shares, the Market Price of
the AIMCO Shares multiplied by the number of AIMCO Shares.
FIXED RATE: for any Interest Period, a fixed interest rate per
annum, which rate shall be equal to the LIBOR Rate applicable to such
Interest Period plus 2.50%.
FLOATING RATE: 1/2% + the Prime Rate in effect from time to time.
The Floating Rate shall change automatically and immediately as and when
the Prime Rate shall change, without notice to Borrower.
GAAP: generally accepted accounting principles as in effect from
time to time, which shall include the official interpretations thereof by
the Financial Accounting Standards Board, consistently applied.
GOOD FUNDS: United States Dollars available to Lender in federal
funds at or before 1:00 p.m. Chicago time on a Business Day.
GOVERNMENTAL BODY: any foreign, federal, state, municipal or
other government, or any department, commission, board, bureau, agency,
public authority or instrumentality thereof or any court or arbitrator.
GUARANTOR: The Prime Group.
GUARANTY: the Continuing Unconditional Guaranty, substantially in
the form of Exhibit A, issued by Guarantor.
INDEBTEDNESS: all liabilities, obligations and reserves,
contingent or otherwise, which, in accordance with GAAP, would be
reflected as a liability on a balance sheet, including, without
duplication: (i) all Indebtedness for Borrowed Money, (ii) all
obligations under conditional sales or other title retention agreements,
(iii) all obligations secured by any Lien upon Property, (iv) all
guaranties and other contingent obligations, including, without
limitation, letters of credit, and (v) all obligations under operating
leases.
INDEBTEDNESS FOR BORROWED MONEY: without duplication, all
Indebtedness (i) in respect of money borrowed, (ii) evidenced by a note,
debenture or other like written obligation to pay money, including,
without limitation, all of Borrower's Obligations,
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(iii) in respect of rent or hire of Property under capitalized leases
or for the deferred purchase price of Property or (iv) in respect of
obligations under conditional sales or other title retention
agreements, and all guaranties of any and all of the foregoing.
INTEREST PERIOD: as defined in Section 2.7.
INTEREST RATE DETERMINATION DATE: the date on which Lender
determines the Fixed Rate applicable to a requested LIBOR Loan or the
continuation thereof, which shall be the second Business Day prior to the
first day of the Interest Period applicable to such LIBOR Loan.
LIBOR LOAN: each portion of the Loan that is bearing interest at
an applicable Fixed Rate.
LIBOR RATE: with respect to any LIBOR Loan for the applicable
Interest Period, the per annum rate of interest equal to the quotient
obtained by dividing (i) the average per annum interest rate at which
deposits in United States dollars are generally offered in the London
Interbank Market at 11:00 a.m. London, England time, on the Interest Rate
Determination Date, for a period equal to such Interest Period and in the
amount of such LIBOR Loan, by (ii) the difference between 100% and any
applicable reserve requirements (rounded upward to the nearest whole
multiple of 1/100th of one percent per annum) including, without
limitation, any applicable maximum reserve requirements for "Eurocurrency
Liabilities" under Regulation D of the Board of Governors of the Federal
Reserve System (or any similar reserves under any successor regulations).
LIBOR RATE TAXES: as defined in Section 2.11.1.
LIEN: any mortgage, pledge, assignment, lien, charge, encumbrance
or security interest of any kind, or the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease, or other title
retention agreement.
LOAN: the revolving loan in the maximum principal amount of
$25,000,000 to be made by Lender from time to time to Borrower in
accordance with the terms set forth in Section 2.2.
LOAN AGREEMENT: this Loan Agreement and any amendments or
supplements hereto.
LOAN DOCUMENTS: (i) Loan Agreement, (ii) Note, (iii) Pledge
Agreement, (iv) Guaranty, (v) appropriate Uniform Commercial Code
financing statements, and (vi) such other instruments and documents as
Lender may require to evidence and perfect the Security Interests granted
pursuant to the Pledge Agreement.
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MARKET PRICE: for any date shall be deemed to be (i) so long as
the Prime Shares, the AIMCO Shares and the Brookdale Shares are quoted on
a national securities exchange or the National Association of Securities
Dealers Automated Quotations ("NASDAQ") National Market System, the
reported closing sales price per share for such security on such date as
reported on such national securities exchange or NASDAQ, or, if there
were no reported sales transactions on that date, the reported closing
sales price per share for such security for the most recent Business Day
(within the previous ten Business Days) on which sales transactions are
reported, or (ii) if there were no reported transactions on a national
securities exchange or on NASDAQ on that date or within the previous ten
Business Days or if the Prime Shares and/or AIMCO Shares and/or Brookdale
Shares are no longer being quoted on a national securities exchange or on
NASDAQ, then as to those securities, zero.
MATERIAL ADVERSE EFFECT: any changes or effects, as the case may
be, that individually or in the aggregate are or can reasonably be
expected to be materially adverse to (i) the ability of Borrower or
Guarantor, or either of them, as the case may be, to fulfill any
covenants or to perform any of their respective obligations under this
Loan Agreement or the other Loan Documents, or (ii) the Lender's rights
to foreclose on the Collateral or convert any of the Partnership Units
into any Prime Shares.
MATURITY DATE: December 31, 2000 or such earlier date on which
the Commitment is reduced to zero or otherwise terminated pursuant to the
terms of this Loan Agreement.
NOTE: the Revolving Note, substantially in the form of Exhibit B,
executed by Borrower to evidence the maximum amount of the Loan.
PARTNERSHIP UNITS: collectively, Prime Retail Partnership Units
and the Prime Group Realty Partnership Units.
PERSON: any individual, firm, corporation, limited liability
company, business enterprise, trust, association, joint venture,
partnership, governmental body or other entity, whether acting in an
individual, fiduciary or other capacity.
PGLP, INC.: PGLP, Inc., a Illinois corporation.
PGRT: Prime Group Realty Trust, a Maryland real estate investment
trust.
PGRT SHARES: shares of common stock, $0.01 par value per share,
of PGRT.
PLEDGE AGREEMENT: the Pledge Agreement, in the form of Exhibit C,
by and between Borrower and Lender.
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PRIME GROUP REALTY OPERATING PARTNERSHIP: Prime Group Realty,
L.P., a Delaware limited partnership.
PRIME GROUP REALTY PARTNERSHIP UNITS: units of partnership
interest in the Prime Group Realty Operating Partnership.
PRIME GROUP REALTY REGISTRATION RIGHTS AGREEMENT: that certain
Registration Rights Agreement, dated November 17, 1997, by and among
PGRT, Prime Group Realty Operating Partnership, Prime Group Limited
Partnership, Primestone Investment Partners, L.P., a Delaware limited
partnership, and the other investors named therein.
PRIME LOAN: each portion of the Loan that is bearing interest at
the Floating Rate.
PRIME RATE: the per annum rate of interest announced or published
publicly from time to time by Lender at its principal place of business
in Chicago, Illinois, as its prime or equivalent rate of interest, which
rate is not necessarily the lowest rate of interest charged by Lender
with respect to commercial loans.
PRIME RETAIL, INC.: Prime Retail, Inc., a Maryland corporation
that has qualified for treatment as a real estate investment trust.
PRIME RETAIL, INC. REGISTRATION STATEMENT: that certain
registration statement number 333-65617, relating to 8,505,472 Prime
Retail Inc. Shares.
PRIME RETAIL, INC. SHARES: shares of common stock, $0.01 par
value per share, of Prime Retail, Inc.
PRIME RETAIL OPERATING PARTNERSHIP.: Prime Retail, L.P., a
Delaware limited partnership.
PRIME RETAIL PARTNERSHIP UNITS: units of partnership interest in
the Prime Retail Operating Partnership.
PRIME RETAIL REGISTRATION RIGHTS AGREEMENT: that certain
Registration Rights Agreement, dated June 15, 1998, by and among Prime
Retail, Inc., Prime Retail, L.P. and the other investors named therein.
PRIME SHARES: collectively, Prime Retail, Inc. Shares and PGRT
Shares.
PRINCIPAL BALANCE: the unpaid principal balance of the Loan
outstanding from time to time.
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PROPERTY: as to any Person, all types of real, personal or mixed
property and all types of tangible or intangible property owned by such
Person.
REVOLVER ADVANCE: any advance of the Loan made in accordance with
the terms set forth in Section 2.1.
SEC: the U.S. Securities and Exchange Commission.
SECURITY INTERESTS: the Liens in the Collateral granted to Lender
pursuant to the Pledge Agreement.
THE PRIME GROUP: The Prime Group, Inc., an Illinois corporation.
1.2 TIME PERIODS. In this Loan Agreement and the other Loan
Documents, in the computation of periods of time from a specified date to a
later specified date (i) the word "from" means "from and including", (ii) the
words "to" and "until" each mean "to, but excluding" and (iii) the words
"through", "end of" and "expiration" each mean "through and including". All
references in this Loan Agreement and the other Loan Documents to "month",
"quarter" or "year" shall be deemed to refer to a calendar month, quarter or
year.
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed, all accounting determinations hereunder shall be made
and all financial statements required to be delivered pursuant hereto shall be
prepared in accordance with GAAP.
1.4 REFERENCES. All references in this Loan Agreement to "Article",
"Section", "subsection", "subparagraph", "clause" or "Exhibit", unless otherwise
indicated, shall be deemed to refer to an Article, Section, subsection,
subparagraph, clause or Exhibit, as applicable, of this Loan Agreement.
1.5 LENDER'S DISCRETION. Whenever the terms "satisfactory to Lender",
"determined by Lender", "acceptable to Lender", "Lender shall elect", "Lender
shall request" or similar terms are used in this Loan Agreement, except as
otherwise specifically provided in this Loan Agreement, such terms shall mean
satisfactory to, at the election of, determined by, acceptable to or requested
by, as applicable, Lender in its sole and absolute discretion.
1.6 BORROWER'S KNOWLEDGE. Any statements, representations or
warranties which are based upon the knowledge of Borrower shall be deemed to
have been limited to the knowledge, made after due inquiry by Xxxxxxx X.
Xxxxxxx, President of PGLP, Inc., the managing general partner of Borrower, and
President, Chairman and Chief Executive Officer of The Prime Group, Inc., and
Xxxx X. Xxxxxx, Vice President and Treasurer of PGLP, Inc., the managing general
partner of Borrower and the Senior Vice President and Chief Financial Officer of
The Prime Group, or, if such persons are not then serving Borrower in their
present capacities, their successors., with respect to the matter in question.
7
1.7 MARKET PRICE ADJUSTMENTS. In the event of a stock dividend, stock
split or combination or other reduction in the number of issued and outstanding
Brookdale shares, AIMCO shares and/or Prime Shares, as to such affected
securities, any applicable Market Price per share specified in this Loan
Agreement shall be proportionately and appropriately adjusted to reflect such
dividend, split or combination or other reduction.
ARTICLE 2
LOAN AND TERMS OF PAYMENT
2.1 REVOLVING LOAN.
2.1.1 AMOUNT. The Loan is a revolving loan which shall be made
available to Borrower by Lender from time to time on and after the
Closing Date in the maximum amount outstanding at any one time in the
amount of the Commitment; provided, however, that the aggregate principal
amount of the Loan which shall be outstanding hereunder at any time shall
not exceed the Available Borrowing Base. Subject to the limitations set
forth in this Article 2, from the Closing Date through the Maturity Date,
Borrower may reborrow all or any Revolver Advance which is repaid or
prepaid.
2.1.2 PROCEDURE FOR BORROWING. Each Revolver Advance shall be
made on any Business Day by Lender after Borrower has made an irrevocable
written or telephonic request to Lender for a Revolver Advance, provided,
however, if such request is received by Lender after 12:00 p.m., Chicago
time, on a Business Day, such request shall be deemed to have been made
on the next Business Day. If such Revolver Advance is to bear interest
at the Floating Rate, then such Revolver Advance shall be made on the
same Business Day as the date such request is made or deemed to have been
made; if such Revolver Advance is to bear interest at the Fixed Rate in
accordance with the terms of Sections 2.6 and 2.7 below, then such
Revolver Advance shall be made on the third Business Day following the
date such request is made or deemed to have been made. The amount of
such Revolver Advance shall not be less than $100,000, subject to the
additional restrictions set forth in Section 2.1.1 and Section 2.6.1.
Each request for a Revolver Advance shall be deemed a certification by
Borrower that no Default or Event of Default exists or will be created if
the requested Revolver Advance is made. Lender shall not be obligated to
make any Revolver Advance if (i) a Default or Event of Default exists or
will be created if the requested Revolver Advance is made, or (ii) after
making such Revolver Advance, the outstanding aggregate principal amount
of the Loan will exceed the Available Borrowing Base at such time.
2.2 DISBURSEMENT OF LOAN ON CLOSING DATE. Provided (i) no Default or
Event of Default shall be in existence on the Closing Date and (ii) all of the
terms and conditions set forth in Article IV below shall have been satisfied, on
the Closing Date and subject to the provisions
8
of Section 2.1.1 above, Lender shall advance to Borrower such amount of the
Loan as Borrower shall request.
2.3 INTEREST. Borrower's Obligations shall bear interest computed and
payable as follows:
2.3.1 INTEREST RATE. The principal balance of the Loan
outstanding from time to time shall bear interest at a per annum rate
equal to the Floating Rate in effect from time to time, subject to the
LIBOR option in Section 2.6.
2.3.2 INTEREST PAYMENTS. Accrued and unpaid interest on the
Principal Balance of the Loan shall be due and payable monthly in arrears
on the first Business Day of each month, commencing February 1, 1999;
provided, however, that accrued and unpaid interest on each LIBOR Loan
shall also be due and payable in arrears on the last day of the Interest
Period applicable to such LIBOR Loan.
2.3.3 INTEREST COMPUTATION. Interest shall be: (a) computed on
the basis of a year consisting of 360 days and (b) payable for the actual
number of days during the period for which interest is being charged.
2.3.4 MAXIMUM INTEREST. Notwithstanding any provision to the
contrary herein contained, Lender shall not collect a rate of interest on
any obligation or liability due and owing by Borrower to Lender in excess
of the maximum contract rate of interest permitted by applicable law.
Lender and Borrower have agreed that the interest laws of the State of
Illinois shall govern the relationship between them, but in the event of
a final adjudication to the contrary, Borrower shall be obligated to pay
to Lender only such interest as then shall be permitted by the laws of
the state found to govern the contract relationship between Lender and
Borrower. All interest found in excess of that rate of interest allowed
and collected by Lender shall be applied to the Principal Balance in such
manner as to prevent the payment and collection of interest in excess of
the rate permitted by applicable law.
2.4 PRINCIPAL PAYMENTS. The outstanding Principal Balance of the Loan
shall be paid in full not later than the Maturity Date.
2.5 PREPAYMENT.
2.5.1 VOLUNTARY PREPAYMENT. All or a portion of the Principal
Balance of the Loan may be prepaid at any time without premium or
penalty, PROVIDED that Borrower shall also pay, with such prepayment, all
Break Costs incurred by Lender, if any. All prepayments of the Loan
pursuant to this subsection 2.5.1 shall be accompanied by the payment of
any accrued and unpaid interest on the portion of the Principal Balance
being
9
prepaid to the date on which Lender is in receipt of Good Funds, and
any other sums which are due and payable pursuant to the terms of the
Loan Documents.
2.5.2 MANDATORY PREPAYMENT. If, as of 3:30 p.m., Chicago time, on
any Business Day, the outstanding Principal Balance of the Loan exceeds
the amount of the Available Borrowing Base on such Business Day then, not
later than 3:00 p.m., Chicago time, on the next Business Day, Borrower
shall either (i) repay the amount of such excess without notice or demand
or (ii) pledge to the Lender collateral, cash or cash equivalents
(acceptable to the Lender) in such amount sufficient to eliminate such
excess. Any payment made pursuant to this subsection 2.5.2 shall be
accompanied by accrued interest on the amount paid through the date on
which Lender is in receipt of Good Funds and in the case of LIBOR Loans,
all Break Costs. Such payment shall first be applied to the Floating
Loan and then to the LIBOR Loans.
2.6 LIBOR OPTION.
2.6.1 OPTION. Subject to the provisions of Sections 2.7 and 2.8,
Borrower shall have the option (i) to request that a Revolver Advance be
made at the Fixed Rate rather than the Floating Rate, (ii) to convert at
any time the interest rate charged on all or any part of the Principal
Balance of the Loan from the Floating Rate to a Fixed Rate; or (iii) upon
the expiration of any Interest Period applicable to a LIBOR Loan, to
continue all or any portion of the same as a LIBOR Loan, and the
succeeding Interest Period of such continued LIBOR Loan shall commence on
the expiration date of the Interest Period applicable thereto; PROVIDED,
that no portion of the outstanding Loan may be continued as, or be
converted into, a LIBOR Loan when any Event of Default or Default has
occurred and is continuing. Any Revolver Advance to be made at a Fixed
Rate and any partial conversion of the Loan to a Fixed Rate or
continuation of the Loan at a Fixed Rate under this Section shall be in a
minimum amount of $100,000, and in integral multiples of $100,000 in
excess of that amount.
2.6.2 NOTICE PROCEDURE. If Borrower requests that a Revolver
Advance bear interest at the Fixed Rate or if Borrower desires to convert
all or a portion of the Loan to a LIBOR Loan or to continue all or any
portion of a LIBOR Loan as a LIBOR Loan, Borrower shall notify Lender no
later than 12:00 p.m. (Chicago time) on the third Business Day prior to
the aforementioned request or the proposed conversion or continuation
date. Each notice shall specify (i) the proposed Revolver Advance
disbursement date or the conversion or continuation date (which shall be
a Business Day), as applicable, (ii) the principal amount of the
applicable Revolver Advance or the principal amount of the Loan to be
converted to or continued as a LIBOR Loan, as applicable, and (iii) the
requested Interest Period. In lieu of delivering the above-described
notice, Borrower may give Lender telephonic notice of any proposed LIBOR
Loan or the conversion or continuation of a LIBOR Loan by the time
required under this Section; PROVIDED, that such notice is confirmed in
writing by delivery or fax to Lender of
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such notice in no event later than 4:00 p.m. (Chicago time) on the
date of such telephonic notice.
2.6.3 NOTICE IRREVOCABLE. Notice of any proposed LIBOR Loan or of
conversion to a LIBOR Loan or continuation of a LIBOR Loan (or telephonic
notice in lieu thereof) shall be irrevocable and Borrower shall be bound
in accordance with the terms of such notice.
2.6.4 FAILURE TO PROVIDE NOTICE OF CONTINUATION. If notice of the
continuation of a LIBOR Loan is not delivered by Borrower in a timely
manner, the amount of such LIBOR Loan shall bear interest at the Floating
Rate as of the termination date of the applicable Interest Period and
shall no longer bear interest at the Fixed Rate unless it is thereafter
converted to a new LIBOR Loan in the manner described above.
2.7 INTEREST PERIODS. By giving notice as required hereunder,
Borrower shall have the option, subject to the other provisions of this Section,
to specify a one-, two-, three-, four-, five- or six-month interest period (each
an "Interest Period") during which all or a portion of the Loan shall bear (or,
if already a LIBOR Loan, continue to bear) interest at the LIBOR Rate. The
determination of Interest Periods shall be subject to the following provisions:
(a) In the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the
immediately preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on a day which
is not a Business Day, the Interest Period shall be extended to expire on
the next succeeding Business Day (unless the next succeeding Business Day
is in the next calendar month, in which event the Interest Period shall
expire on the immediately preceding Business Day);
(c) Borrower may not select an Interest Period which terminates
later than the Maturity Date;
(d) There shall be no more than four (4) Interest Periods with
respect to the Loan in effect at any one time.
2.8 SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
2.8.1 DETERMINATION OF INTEREST RATE. On the Interest Rate
Determination Date, Lender shall determine (which determination shall,
absent manifest error, be presumptively correct) the Fixed Rate that
shall apply to the subject LIBOR Loan and shall promptly give notice
thereof to Borrower. If on any Interest Rate Determination Date Lender
is unable to obtain the applicable LIBOR Rate quotations, Lender shall
give
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Borrower prompt notice thereof and such requested LIBOR Loan shall
automatically become a Prime Loan and shall bear interest at the
Floating Rate.
2.8.2 INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. If,
with respect to any Interest Period, (i) any change occurs in any
applicable law or governmental rule, regulation or order (or any
interpretation thereof and including the introduction of any new law or
governmental rule, legislation or order) affecting the interbank
Eurodollar market for such Interest Period, or (ii) other circumstances
affecting the interbank Eurodollar market for such Interest Period
results in the then applicable Fixed Rates not adequately reflecting the
cost to Lender of making or funding the LIBOR Loans, Lender shall give
notice thereof to Borrower, whereupon until Lender has determined that
the circumstances giving rise to such inadequacy no longer exist, (A) the
right of Borrower to elect to have any portion of the Loan bear interest
based upon the Fixed Rate shall be suspended for such Interest Period,
and (B) each outstanding LIBOR Loan shall bear interest at the Floating
Rate commencing on the last day of the then current Interest Period
therefor, notwithstanding any prior election by Borrower to the contrary.
2.9 ILLEGALITY. In the event that on any date Lender shall have
reasonably determined that the making or continuation of any LIBOR Loan has
become unlawful by compliance by Lender in good faith with any law, governmental
rule, regulation or order of any Governmental Body, then Lender shall promptly
give notice to Borrower of that determination. Upon the giving of such notice,
Borrower's right to request of Lender and Lender's obligation to make LIBOR
Loans shall be immediately suspended to the extent specified in such notice, and
if any LIBOR Loans are then outstanding, each such LIBOR Loan shall immediately
become a Prime Loan and shall commence bearing interest at the Floating Rate.
If Lender determines at any time following its giving of the aforementioned
notice that Lender may lawfully make LIBOR Loans of the type(s) referred to in
such notice, Lender shall promptly give notice to Borrower of such
determination, whereupon Borrower's right to request of Lender and Lender's
obligation to make LIBOR Loans of such type shall be restored.
2.10 COMPENSATION. Borrower shall indemnify Lender, within five (5)
Business Days following Borrower's receipt of the written statement described
below, for all losses, expenses and liabilities (including, without limitation,
any loss or expense incurred by reason of liquidation or reemployment of
deposits or other funds acquired by Lender to fund or maintain Lender's LIBOR
Loans to Borrower) which Lender may sustain (i) if such LIBOR Loans are not made
when requested due to Borrower's actions or inactions, (ii) if any prepayment of
any LIBOR Loan occurs for any reason on a date which is not the last day of the
applicable Interest Period, or (iii) as a consequence of any required conversion
of the interest rate applicable to a LIBOR Loan to a Floating Rate, (such
losses, expenses and liabilities being collectively referred to as "Break
Costs"). Lender shall promptly deliver to Borrower a written statement as to
such Break Costs, which statement shall be rebuttably presumed correct. The
maximum amount of any indemnification under this Section 2.10 shall not exceed
the interest which would have been payable for the balance of the applicable
Interest Period for the aforesaid LIBOR Loans.
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2.11 LIBOR RATE TAXES. Borrower agrees that:
2.11.1 ADDITIONAL PAYMENTS. Borrower shall pay, prior to the date
on which penalties attach thereto, all present and future stamp and other
taxes, levies, or costs and charges whatsoever imposed, assessed, levied
or collected on or in respect of the Loan solely as a result of the
interest rate being determined by reference to the LIBOR Rate or any
payments of principal, interest or other amounts made on or in respect of
a Loan made to Borrower when the interest rate is determined by reference
to the LIBOR Rate (all such taxes, levies, costs and charges being herein
collectively called "LIBOR Rate Taxes"); PROVIDED HOWEVER, that LIBOR
Rate Taxes shall not include income or franchise taxes imposed by any
jurisdiction (except that Borrower shall be liable for the payment of the
amount of any additional net income or franchise taxes attributable to
payments made by Borrower pursuant to this Section).
2.11.2 INDEMNITY. Borrower shall indemnify Lender against, and
reimburse Lender within five (5) days after Lender's written demand for,
any LIBOR Rate Taxes paid by Lender. Lender shall provide Borrower with
appropriate receipts for any payments or reimbursements made by Borrower
pursuant to this Section as a result of the Loan.
2.12 DEFAULT RATE. During a Default Period, the Principal Balance
shall bear interest at the Default Rate.
2.13 METHOD OF PAYMENT; GOOD FUNDS. All payments to be made by
Borrower pursuant to the Loan Documents shall be delivered to Lender at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or to such other address as
Lender shall notify Borrower. Payment shall not be deemed to have been received
by Lender until Lender is in receipt of Good Funds.
2.14 DEPOSIT TO BORROWER'S ACCOUNT. Lender may, at its option, deposit
the proceeds of the Loan into a working capital account maintained by Borrower
with Lender and shall have the right to debit such account (or any other account
or deposit maintained or made by Borrower with Lender) from time to time for any
of Borrower's Obligations that are due and payable.
ARTICLE 3
NOTE AND SECURITY
3.1 NOTE. The Loan shall be evidenced by the Note.
3.2 SECURITY. All Borrower's Obligations shall be secured by the
Pledge Agreement.
13
ARTICLE 4
CONDITIONS OF FUNDING
Lender's obligation to make any Revolver Advance shall be subject to the
satisfaction of all of the following conditions in a manner, form and substance
reasonably satisfactory to Lender:
4.1 INITIAL ADVANCE. The obligation of the Lender to make the initial
Revolver Advance is, in addition to the conditions precedent specified in
Section 4.2, subject to the following being delivered to Lender, each duly
authorized and executed:
(a) the Loan Documents;
(b) a certificate of the general partner of Borrower,
certifying on the Closing Date:
(i) the certificate of limited partnership of Borrower,
certified by the Secretary of State of the state of organization
of Borrower, as of a date within the month in which the Closing
Date occurs; and
(ii) the agreement of limited partnership of Borrower;
(c) a certificate of the general partner of each of Prime Group
Operating Partnership and Prime Group Realty Operating Partnership,
certifying on the Closing Date:
(i) the certificate of limited partnership of such
partnership, certified by the Secretary of State of the state of
organization of such partnership, as of a date within the month in
which the Closing Date occurs; and
(ii) the agreement of limited partnership of such
partnership;
(d) a certificate of the Secretary or Assistant Secretary of
PGLP, Inc. and The Prime Group, certifying on the Closing Date:
(i) the certificate or articles of incorporation, and all
amendments thereto, of such Person, certified by the Secretary of
State of the state of organization of such Person, as of a date
within the month in which the Closing Date occurs;
(ii) the by-laws, and all amendments thereto, of such
Person;
14
(iii) Copies of the resolutions of such Person approving
and authorizing the execution, delivery and performance by such
Person (as to PGLP, Inc., in its own capacity or in its capacity
as managing general partner of Borrower) of the Loan Documents to
be executed or delivered by it (or, as to PGLP, Inc., by Borrower)
hereunder; and
(iv) the names and true signatures of the officers of such
Person authorized to execute, deliver and perform, as applicable,
the Loan Documents to be executed or delivered by it hereunder;
(e) a certificate of existence, as of a date within the month
in which the Closing Date occurs, from the Secretary of State of the
state of organization for each of (i) Borrower, (ii) Prime Retail
Operating Partnership, and (iii) Prime Group Realty Operating
Partnership;
(f) a good standing certificate, as of a date within the month
in which the Closing Date occurs, from the Secretary of State of the
state of incorporation for each of (i) PGLP, Inc. and (ii) The Prime
Group;
(g) opinions of counsel for Borrower and Guarantor, in form and
substance satisfactory to Lender;
(h) a borrowing base certificate (as described in
Section 6.3.4);
(i) all filings of Uniform Commercial Code Financing Statements
and all other recordings and actions necessary to perfect and maintain
the Security Interests as first, valid and perfected liens and security
interests in the Collateral shall have been filed or taken and
confirmation thereof received;
(j) all necessary consents under each of (i) the agreement
of limited partnership for the Prime Retail Operating Partnership and
the Prime Group Realty Operating Partnership (the "Partnership
Agreements"), and (ii) the Prime Group Realty Registration Rights
Agreement and the Prime Retail Registration Rights Agreement approving
(1) the transactions contemplated by the Loan Documents, including,
but not limited to, the pledge of the Partnership Units under the
Pledge Agreement; (2) the exercise of Lender's rights hereunder and
under the Pledge Agreement upon the occurrence of any Event of
Default; (3) the admission of Lender as a limited partner of the Prime
Retail Operating Partnership and the Prime Group Realty Operating
Partnership upon foreclosure of the Collateral; (4) the exchange of
the Prime Retail Partnership Units for Prime Retail, Inc. Shares, (5)
the exchange of the Prime Group Realty Partnership Units for PGRT
Shares, (6) the registration of such PGRT Shares with the SEC as
provided under the Prime Group Realty Registration Rights Agreement,
(7) the registration of the Prime Retail, Inc. Shares with the SEC as
provided under the Prime
15
Retail Registration Rights Agreement, and (8) the ability of Lender to
become a party to the Prime Retail, Inc. Registration Rights Agreement;
(k) payment of all amounts for fees and expenses owning to
Lender under this Loan Agreement; and
(l) such other instruments, documents, certificates, consents,
waivers and opinions necessary to consummate the transactions
contemplated in this Loan Agreement and in the other Loan Documents, or
as Lender may reasonably request.
4.2 ALL REVOLVER ADVANCES. The obligation of Lender to make any
Revolver Advance is subject to the following further conditions precedent that:
4.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Borrower and Guarantor, as the case may be, set forth in
this Loan Agreement and the other Loan Documents shall be true and
correct in all material respects as of the date such Revolver Advance is
made, except for any representation or warranty limited by its terms to a
specific date and taking into account any disclosures made in writing
pursuant to the terms of this Loan Agreement.
4.2.2 PERFORMANCE; NO DEFAULT. Borrower shall have performed and
complied with all agreements and conditions contained in the Loan
Documents to be performed by or complied with prior to such Revolver
Advance and no Event of Default of Default then exists.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as follows:
5.1 BORROWER. Borrower is a limited partnership duly formed and
validly existing under the laws of the State of Illinois. The Borrower is duly
qualified in each jurisdiction in which the failure to so qualify could have a
Material Adverse Effect on Borrower. The Borrower has full power and authority
to execute and deliver the Loan Documents and to perform its obligations
hereunder and thereunder. The agreement of limited partnership of Borrower, as
amended, a copy of which has been furnished to Lender, is true, correct and
complete.
5.2 PARTNERS OF BORROWER. The managing general partner of Borrower is
PGLP, Inc. and the limited partners of Borrower are Prime Group II, L.P., an
Illinois limited partnership, Prime Group Limited Partnership, an Illinois
limited partnership, The Prime Group, and Prime International, Inc., an Illinois
corporation. PGLP, Inc. is a duly formed corporation, validly
16
existing and in good standing in the State of Illinois and qualified to do
business in each jurisdiction in which failure to do so would have a Material
Adverse Effect on PGLP, Inc.
5.3 AUTHORITY. No consent or approval of, or other action by, any
partner, Governmental Body or any other Person, which has not already been
obtained, is required to be obtained by Borrower to authorize, or is required to
be obtained by Borrower in connection with the execution, delivery and
performance of, the Loan Documents, or is required as a condition to the
validity or, subject to the terms of the Partnership Agreements, enforceability
of the Security Interests or any of the Loan Documents.
5.4 NECESSARY ASSETS. Borrower owns all of the assets necessary to
operate and maintain the operations of the Business.
5.5 BINDING AGREEMENTS. This Loan Agreement and the other Loan
Documents, when executed and delivered, will constitute the valid and legally
binding obligations of Borrower, and will be enforceable against Borrower in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
equitable principles.
5.6 BORROWER'S SECURITIES. As of the Closing Date, Borrower owns
3,576,933 Brookdale Shares, 104,632 Prime Retail Partnership Units, 115,000
AIMCO Shares, and 47,525 Prime Group Realty Partnership Units (collectively, the
"Borrower's Securities").
5.7 TITLE TO PROPERTY; LIENS. Borrower shall have good and marketable
title to all of the Collateral free and clear of all Liens. The applicable Loan
Documents create a valid and perfected Lien in the Collateral described therein.
5.8 FINANCIAL STATEMENTS. The financial statements previously
delivered to Lender present fairly the financial condition and the results of
the operations of Borrower and Guarantor as of the dates and for the periods
indicated therein.
5.9 LITIGATION. To the knowledge of Borrower, there are no actions,
suits, arbitration proceedings or claims pending or threatened at law or in
equity or before any Governmental Body which, if adversely determined, could
have a Material Adverse Effect on Borrower or Guarantor. As of the Closing
Date, to the knowledge of Borrower, there are no proceedings pending or
threatened which call into question the validity or enforceability of any of
this Loan Agreement or the other Loan Documents or any of the transactions
contemplated hereby or thereby.
5.10 CONFLICTING AGREEMENTS. Borrower is not in default under any
agreement to which it is a party or by which Borrower or any of its Property is
bound, the effect of which default has resulted in the termination of such
agreement and such termination will have a Material Adverse
17
Effect on Borrower. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Body which has not been obtained,
given or made by Borrower is required for the due execution, delivery and
performance by Borrower of any of the Loan Documents. No provision of any
mortgage, indenture, contract or agreement to which Borrower is a party
conflicts with, or requires any consent which has not already been obtained
or is anticipated to be obtained as described above, or in any way would
prevent the execution, delivery or performance of the terms of, any of the
Loan Documents. Neither the execution, delivery, or carrying out of the
terms of the Loan Documents will constitute a default under, or result in the
creation or imposition of, or obligation to create, any Lien upon the
Property of Borrower pursuant to the terms of any such mortgage, indenture,
contract or agreement. Neither the execution and deliver by Borrower of the
Loan Documents, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on Borrower, except where such violation could not reasonably be
expected to have a Material Adverse Effect.
5.11 COMPLIANCE WITH APPLICABLE LAWS. Borrower is not in default in
respect of any judgment, order, writ, injunction, decree or decision of any
Governmental Body, which default would have a Material Adverse Effect on
Borrower. Borrower is in compliance in all material respects with all
applicable statutes and regulations of all Governmental Bodies, a violation of
which would have a Material Adverse Effect on Borrower.
5.12 APPLICATION OF CERTAIN LAWS AND REGULATIONS.
5.12.1 INVESTMENT COMPANY ACT. Borrower is not an "investment
company," or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as amended.
5.12.2 HOLDING COMPANY ACT. Borrower is not a "holding company,"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935,
as amended.
5.13 MARGIN REGULATIONS. None of the transactions contemplated by this
Loan Agreement or any of the other Loan Documents, including the use of proceeds
of the Loan, will violate or result in a violation of Section 7 of the Exchange
Act, or any regulations issued pursuant thereto, including, without limitation,
Regulations T, U and X.
5.14 NO MISREPRESENTATION. To Borrower's knowledge, no representation
or warranty contained herein and no certificate, information or report furnished
or to be furnished by Borrower in connection with any of the Loan Documents or
any of the transactions contemplated hereby or thereby contains or will contain
a misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements contained herein or
therein not misleading in the light of the circumstances under which such
statements were made.
18
To Borrower's knowledge, there is no fact which has not expressly been
disclosed to Lender in writing, or so far as Borrower reasonably can foresee,
that will have a Material Adverse Effect on Borrower or Guarantor.
5.15 NO AFFILIATION. Borrower and AIMCO are not "affiliates" as
that term is defined in the Securities Act of 1933, as amended.
5.16 REGISTRATION EFFECTIVE. The Prime Retail, Inc. Registration
Statement, with respect to the Prime Retail, Inc. Shares issuable upon
conversion of the Prime Retail Partnership Units, has been declared effective
under the Securities Act of 1933, as amended, and to Borrower's knowledge, no
"stop order" suspending the effectiveness of the Prime Retail, Inc.
Registration Statement has been issued, nor has any proceeding for the
issuance of such an order been initiated or threatened.
ARTICLE 6
AFFIRMATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full,
Borrower agrees:
6.1 LEGAL EXISTENCE; GOOD STANDING. Borrower shall maintain its
existence in its jurisdiction of organization and maintain its qualification
in any jurisdiction in which failure to be so qualified would have a Material
Adverse Effect. The Guarantor shall maintain its existence and remain in
good standing in its jurisdiction of incorporation and in any jurisdiction in
which failure to be so qualified would have a Material Adverse Effect.
6.2 INSPECTION. Borrower will permit representatives of Lender to
visit its offices to examine its books and records and Accountants' reports
relating thereto, and to make copies or extracts therefrom, and to discuss
its business and affairs with its employees, all at reasonable times, upon
reasonable prior notice, and, at all reasonable times and upon reasonable
prior notice, to examine and inspect its Property and to meet and discuss the
business and its affairs with the Accountants.
6.3 FINANCIAL STATEMENTS AND OTHER INFORMATION OF BORROWER.
Borrower will maintain a system of accounting in accordance with GAAP and
furnish to Lender:
6.3.1 ANNUAL STATEMENTS. As soon as available and in any event
within 120 days after the close of each fiscal year, a copy of (a) the
balance sheet of Borrower as of the end of such year, and (b) the
statements of income and cash flow of Borrower for such year, setting
forth in each case (beginning with the 1998 financial statements) in
comparative form the corresponding figures for the preceding year, all in
reasonable detail, and in each case audited by the Accountants. Such
annual statements shall be
19
accompanied by a report of the Accountants which states that in making
the audit of the financial statements of Borrower, nothing of a
financial or accounting nature came to the attention of the
Accountants that caused them to believe that Borrower was not in
compliance with the terms, covenants, provisions, or conditions of any
of the Loan Documents or that there shall have occurred a condition or
event that constitutes an Event of Default (or, if applicable,
specifying in such certificate the nature and status of any instances
of non-compliance or Events of Default), and which is otherwise in a
form reasonably satisfactory to Lender.
6.3.2 NOTICE OF DEFAULTS; LOSS. Immediate written notice if: (i)
any Indebtedness aggregating in excess of $3,000,000 of Borrower or
Guarantor is declared or shall become due and payable prior to its
declared or stated maturity (other than regularly scheduled payments), or
called and not paid when due, (ii) the holder of any note, or other
evidence of Indebtedness, certificate or security evidencing any such
Indebtedness aggregating in excess of $3,000,000 of Borrower or Guarantor
has the right to declare such Indebtedness due and payable prior to its
stated maturity, (iii) there shall occur and be continuing a Default or
Event of Default, accompanied by a certified statement of an authorized
officer of PGLP, Inc., as managing general partner of Borrower, or an
authorized officer of Guarantor setting forth what action Borrower or
Guarantor, as the case may be, proposes to take in respect thereof, or
(iv) any event shall occur causing loss or depreciation in the value of
assets having a Material Adverse Effect upon the business or operations
of Borrower or Guarantor, including the amount or the estimated amount of
any such loss or depreciation or adverse effect.
6.3.3 NOTICE OF SUITS, ADVERSE EVENTS. Prompt written notice of:
(i) any citation, summons, subpoena, order to show cause or other order
naming Borrower or Guarantor a party to any proceeding involving in
excess of $3,000,000 and include with such notice a copy of such
citation, summons, subpoena, order to show cause or other order, (ii) any
lapse or other termination of any material license, permit, franchise,
agreement or other authorization issued to Borrower or Guarantor by any
Governmental Body or any other Person, (iii) any refusal by any
Governmental Body or any other Person to renew or extend any such
material license, permit, franchise, agreement or other authorization and
(iv) any dispute between Borrower or Guarantor and any Governmental Body
or any other Person, which lapse, termination, refusal or dispute
referred to in clauses (ii) or (iii) above or in this clause (iv) may
have a material adverse effect on the financial condition, operations,
business, prospects or Property of Borrower or Guarantor.
6.3.4 COVENANT COMPLIANCE CERTIFICATE; BORROWING BASE
CERTIFICATE. On or before the 20th day after the end of each calendar
quarter, a compliance certificate in a form reasonably satisfactory to
Lender stating whether Borrower is in compliance with the terms,
covenants, provisions and conditions of the Loan Documents and
specifying any condition or event that constitutes an Event of Default
set forth in Article 8 hereof,
20
together with any supporting documentation reasonably requested by
Lender. On the date of each requested Revolver Advance, and on or
before the 5th day after the end of each month, a borrowing base
certificate in a form reasonably satisfactory to Lender setting forth
the calculation of the Available Borrowing Base as of the close of
business of the business day immediately preceding the date of such
Revolver Advance or as of the end of the preceding month, as
applicable.
6.3.5 OTHER INFORMATION. Such other information and reports
relating to the past, present or future financial condition, operations,
plans and projections of Borrower as Lender reasonably may request from
time to time.
6.4 FINANCIAL INFORMATION OF PRIME RETAIL, INC. AND PGRT. Borrower
shall furnish to the Bank:
6.4.1 as soon as available, but in no event more than five (5)
Business Days after request by Lender, a copy of each quarterly report on
Form 10-Q filed by Prime Retail, Inc., PGRT, Brookdale and AIMCO with the
SEC;
6.4.2 as soon as available, but in no event more than five (5)
Business Days after request by Lender, a copy of any annual report on
Form 10-K filed by Prime Retail, Inc., PGRT, Brookdale or AIMCO with the
SEC.
6.4.3 as soon as available, but in any event no more than five
(5) Business Days after request by Lender, any other report filed by
Prime Retail, Inc., PGRT, Brookdale or AIMCO with the SEC under
Section 13 of the Exchange Act, and any definitive proxy material filed
by such Person with the SEC under Section 14 of the Exchange Act.
6.5 REPORTS TO GOVERNMENTAL BODIES AND OTHER PERSONS. Borrower will
file, all on a timely basis, all reports, applications, documents, instruments
and information required to be filed pursuant to all rules, regulations or
requests of any Governmental Body or other Person having jurisdiction over the
operation of Borrower, including, but not limited to, such of the Loan Documents
as may be required to be filed with any such Governmental Body or other Person
pursuant to applicable rules and regulations promulgated by such Governmental
Body or other Person, unless the failure to file would not reasonably be
expected to have a Material Adverse Effect.
6.6 GENERAL PARTNER. PGLP, Inc. or a "Prime Group Entity" at all times
shall remain the general partner of Borrower. As used herein, a "Prime Group
Entity" shall mean (i) PGLP, Inc., (ii) The Prime Group, (iii) any person in
which The Prime Group or PGLP, Inc. has a beneficial ownership of 51% or more of
the voting interests in such person, (iv) any entity controlling, controlled by
or under common control with, The Prime Group or PGLP, Inc., or (v) any entity
in which The Prime Group or PGLP, Inc., or officers, directors and employees of
The Prime Group or PGLP, Inc. own, directly or indirectly, a controlling
interest.
21
6.7 FINANCIAL STATEMENTS OF GUARANTOR. Borrower will cause Guarantor
to furnish to Lender as soon as available and in any event within 180 days after
the close of each fiscal year, a copy of Guarantor's (a) balance sheet as of the
end of such year, and (b) statements of income and cash flow for such year,
setting forth in each case (beginning with the 1998 financial statements) in
comparative form the corresponding figures for the preceding year, all in
reasonable detail, and in each case audited by the Accountants.
ARTICLE 7
NEGATIVE COVENANTS
Borrower shall not:
7.1 Engage in any business other than the Business or otherwise
materially change the nature of the Business of Borrower as it exists on the
Closing Date.
7.2 Amend, modify or waive any term or provision of Borrower's
certificate of limited partnership or agreement of limited partnership in a
manner that would have a Material Adverse Effect.
7.3 Sell, lease, assign, transfer, pledge, hypothecate or otherwise
dispose of or grant any security interest in any of Borrower's Securities
pledged as Collateral, except as permitted by Section 5.7.
7.4 Consent to any alteration or modification of any provision
affecting the Partnership Units, which alteration or modification would have a
Material Adverse Effect.
ARTICLE 8
DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default under the Loan Documents:
8.1.1 DEFAULT IN PAYMENT. If Borrower shall fail to pay all or
any portion of Borrower's Obligations on or before the fifth Business Day
following the date on which the same become due and payable.
22
8.1.2 BREACH OF COVENANTS AND CERTAIN OTHER PROVISIONS.
(a) If Borrower shall fail to observe or perform any covenant
or agreement made by Borrower contained in Article VI (except for
Sections 6.1 and 6.5) or in Article VII.
(b) If Borrower shall fail to observe or perform any covenant
or agreement (other than those referred to in subparagraph (a) above)
made by Borrower in any of the Loan Documents, and such failure shall
continue for a period of 30 days after the earlier of (i) the written
notice of such failure is given to Borrower by Lender or (ii) the date
Borrower shall have actual knowledge of such failure; PROVIDED, HOWEVER,
that if such default is of a nature that it cannot be cured within thirty
(30) days and Borrower commences and diligently proceeds to cure such
default, such cure period shall be extended for such period of time as
required to cure such default but in no event more than thirty (30)
additional days.
(c) Any alterations, modifications or amendments are made to
the certificate or articles of incorporation of either Prime Retail, Inc.
or PGRT or to any other agreement that would adversely alter in any
material manner the rights afforded to holders of Collateral consisting
of (i) Prime Retail Partnership Units in the Second Amended and Restated
Agreement of Limited Partnership of Prime Retail, L.P., as further
amended, or (ii) Prime Group Realty Partnership Units in the Amended and
Restated Agreement of Limited Partnership of Prime Group Realty, L.P., as
further amended, to convert such Partnership Units into Prime Shares.
8.1.3 BREACH OF WARRANTY. Any representation or warranty made by
Borrower or Guarantor in or pursuant to any of the Loan Documents to
which Borrower or Guarantor is a party or in any instrument or document
furnished in compliance with the Loan Documents shall prove to be false
or misleading in any material respect as of the date on which made.
8.1.4 ACCELERATION OF ANY INDEBTEDNESS. If Borrower or Guarantor
at any time shall be in default (as principal or guarantor or other
surety) in the payment of any principal of or premium or interest on any
Indebtedness for Borrowed Money in excess of $3,000,000 (other than
Borrower's Obligations) and in each case such default has resulted in an
acceleration of the maturity of such Indebtedness for Borrowed Money
which is not paid promptly upon acceleration.
8.1.5 BANKRUPTCY.
(a) If Borrower or Guarantor or, to the extent, and for so long
as, the shares or limited partnership units of such Person (or, in the
case of Prime Retail, Inc. and PGRT, shares of limited partnership units
that are exchangeable into shares of such Person) have
23
been pledged to Lender as security for the Loan, the Prime Retail
Operating Partnership, the Prime Group Realty Operating Partnership,
Prime Retail, Inc., PGRT, Brookdale or AIMCO shall (i) generally not
be paying, or admit in writing its inability to pay, its debts as they
become due, (ii) file, or consent, by answer or otherwise, to the
filing against any of such entities, of a petition for relief or
reorganization or arrangement or any other petition in bankruptcy or
insolvency under the laws of any jurisdiction, (iii) make an
assignment for the benefit of creditors, (iv) consent to the
appointment of a custodian, receiver, trustee or other officer with
similar powers for, or for any substantial part of the Property owned
by any of such entities, (v) be adjudicated insolvent, or (vi) take a
corporate action to authorize any of the foregoing.
(b) If any Governmental Body of competent jurisdiction shall
enter an order appointing, without consent of Borrower or Guarantor or,
to the extent, and for so long as, the shares or limited partnership
units of such Person (or, in the case of Prime Retail, Inc. and PGRT,
shares of limited partnership units that are exchangeable into shares of
such Person) have been pledged to Lender as security for the Loan, the
Prime Retail Operating Partnership, the Prime Group Realty Operating
Partnership, Prime Retail, Inc., PGRT, Brookdale or AIMCO, a custodian,
receiver, trustee or other officer with similar powers with respect to
any of such Persons, or with respect to any substantial part of the
Property belonging to Borrower or such Person, or if an order for relief
shall be entered in any case or proceeding for liquidation or
reorganization or otherwise to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of any of such entities, or if any petition for
any such relief shall be filed against any of such entities and such
order or petition shall not be dismissed within 90 days.
8.1.6 JUDGMENTS. If there shall exist final judgments against
Borrower or Guarantor which shall have been outstanding for any period
of 30 days or more from the date of the entry thereof and shall not have
been discharged in full or stayed pending appeal and if the aggregate
amount thereof exceeds $3,000,000.
8.1.7 NON-PERFORMANCE OF GUARANTY, ETC. Guarantor shall fail
(subject to any applicable notice, cure or grace period) to comply with
or to perform in any material respect any covenant set forth in the
Guaranty, Guarantor (or any Person by, through or on behalf of Guarantor)
shall contest in any manner the validity, binding nature or
enforceability of the Guaranty, or the Guaranty shall cease to be in full
force and effect.
8.1.8 INVALIDITY OF PLEDGE AGREEMENT, ETC. The Pledge Agreement
shall cease to be in full force and effect, any party thereto (other than
Lender) shall fail (subject to any applicable notice, cure or grace
period) to comply with or to perform in any material respect any
applicable provision of the Pledge Agreement promptly upon request of the
Lender (or, if such noncompliance or nonperformance would result in the
non-perfection of a material portion of the Collateral granted to the
Lender under the Pledge Agreement,
24
at any time regardless of whether the Lender has made any such
request), or any Person (other than the Lender) party to the Pledge
Agreement (or any Person by, through or on behalf of such Person party
thereto) shall contest in any manner the validity, binding nature of
enforceability of the Pledge Agreement, as applicable.
8.2 ACCELERATION OF BORROWER'S OBLIGATIONS. Upon the occurrence of:
(a) any Event of Default described in clauses (ii), (iii), (iv)
and (v) of subsection 8.1.5(a) or described in Section 8.1.5(b), all of
Borrower's Obligations at that time outstanding automatically shall
mature and become due and payable and Borrower's right to request
additional Revolver Advances shall immediately terminate, or
(b) any other Event of Default, Lender, at any time, (unless
such Event of Default shall have been cured by Borrower or waived by
Lender) at its option, may declare all of Borrower's Obligations due and
payable, whereupon Borrower's Obligations immediately shall mature and
become due and payable and Borrower's right to request additional
Revolver Advances shall immediately terminate,
all without presentment, demand, protest, or notice, all of which hereby are
waived.
8.3 REMEDIES ON DEFAULT. If any of Borrower's Obligations have been
accelerated pursuant to Section 8.2, Lender, at its option, may:
8.3.1 ENFORCEMENT OF SECURITY INTERESTS. Enforce its rights and
remedies under the Loan Documents in accordance with their respective
terms.
8.3.2 OTHER REMEDIES. Enforce any of the rights or remedies
granted to Lender under any other Loan Document and any other rights or
remedies accorded to Lender at equity or law, by virtue of statute or
otherwise.
8.4 APPLICATION OF FUNDS. Any funds received by Lender pursuant to
the exercise of any rights accorded to Lender pursuant to, or by the operation
of any of the terms of, any of the Loan Documents, including, without
limitation, insurance proceeds, condemnation proceeds or proceeds from the sale
of Collateral, shall be applied by Lender in the following order of priority:
8.4.1 EXPENSES. First, to the payment of (i) all fees and
expenses, including, without limitation, reasonable attorney's fees,
court costs, fees of appraisers, title charges, costs of maintaining and
preserving the Collateral, costs of sale, and all other costs incurred by
the Lender in exercising any rights accorded to the Lender pursuant to
the Loan Documents or by applicable law and (ii) all Liens superior to
the Liens of Lender, except such superior Liens subject to which any sale
of the Collateral may have been made;
25
8.4.2 BORROWER'S OBLIGATIONS. Next to the payment of Borrower's
Obligations in such order as Lender may determine; and
8.4.3 SURPLUS. Any surplus, to the Person or Persons entitled
thereto.
ARTICLE 9
CLOSING
The closing of the Loan (the "Closing") shall be on the date hereof (the
"Closing Date"), and the Closing shall take place on such date provided all
conditions for the Closing as set forth in this Loan Agreement have been
satisfied. The Closing shall occur at such place as the parties hereto shall
agree.
ARTICLE 10
EXPENSES AND INDEMNITY
10.1 CLOSING FEE. The Borrower shall pay to Lender on the Closing Date
hereof the sum of $250,000, which may be paid out of Borrower's initial
borrowing under the Loan.
10.2 ATTORNEY'S FEES AND OTHER FEES AND EXPENSES. Whether or not any
of the transactions contemplated by this Loan Agreement shall be consummated,
Borrower agrees to pay to Lender on demand all fees paid or expenses incurred by
Lender in connection with the transactions contemplated hereby and in connection
with any amendments, modifications or waivers (whether or not the same become
effective) under or in respect of any of the Loan Documents, including, without
limitation:
10.2.1 FEES AND EXPENSES FOR PREPARATION OF LOAN DOCUMENTS. All
reasonable fees, expenses and disbursements (including without
limitation, charges for required lien searches, reproduction of
documents, long distance telephone calls and overnight express carriers)
of counsel retained by Lender in connection with the preparation and
negotiation of any of the Loan Documents or any amendments, modifications
or waivers hereto or thereto (whether or not the same become effective).
10.2.2 FEES AND EXPENSES IN ENFORCEMENT OF RIGHTS OR DEFENSE OF
LOAN DOCUMENTS. Any reasonable attorneys' fees and expenses or other
costs or expenses incurred by Lender in connection with the enforcement
or collection against Borrower or Guarantor of any provision of any of
the Loan Documents, and in connection with or arising out of any
litigation, investigation or proceeding instituted by any Governmental
Body or any other Person with respect to any of the Loan Documents,
whether or not suit is instituted, including, but not limited to, such
costs or expenses arising from the
26
enforcement or collection against Borrower, of any provision of any of
the Loan Documents in any state or federal bankruptcy or
reorganization proceeding.
10.3 INDEMNITY. Borrower hereby agrees to indemnify and save Lender
harmless from the following:
10.3.1 BROKERAGE FEES. The fees, if any, of brokers and finders
incurred by Borrower.
10.3.2 OPERATION OF COLLATERAL; JOINT VENTURERS. Any loss, cost,
liability, damage or expense (including reasonable attorneys' fees and
expenses) incurred in connection with the ownership, operation or
maintenance of the Collateral, the construction of Lender and Borrower as
having the relationship of joint venturers or partners or the
determination that Lender or Borrower has acted as agent for the other.
ARTICLE 11
MISCELLANEOUS
11.1 NOTICES. Any notices, communications and waivers under this Loan
Agreement shall be in writing and shall be (i) delivered in person, (ii) mailed,
postage prepaid, either by registered or certified mail, return receipt
requested, (iii) by overnight express carrier, or (iv) by facsimile
transmission, addressed in each case as follows:
To Lender: LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxx
Facsimile No.: (000)000-0000
With copy to: Schwartz, Cooper, Xxxxxxxxxxx & Xxxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
27
To Borrower: Prime Group VI, L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000 (Suite 4200 after
February 1, 1999)
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000)000-0000
With copies to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000)000-0000
And to: The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000)000-0000
or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this Section shall be deemed received (i) if personally
delivered, then on the date of delivery, (ii) if sent by overnight, express
carrier, then on the next federal banking day immediately following the day
sent, (iii) if sent by registered or certified mail, then on the earlier of the
third federal banking day following the day sent or when actually received, or
(iv) if sent by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received.
11.2 SURVIVAL OF LOAN AGREEMENT. All covenants, agreements,
representations and warranties made in this Loan Agreement and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loan and the execution and delivery to Lender of the Note and of all other Loan
Documents and shall continue in full force and effect so long as any of
Borrower's Obligations remain outstanding, unperformed or unpaid.
11.3 FURTHER ASSURANCE. From time to time, Borrower shall execute and
deliver to Lender such additional documents as Lender may require to carry out
the purposes of the Loan Documents and to protect Lender's rights thereunder.
11.4 TAXES AND FEES. Should any tax (other than taxes based upon the
net income of Lender), recording or filing fees become payable in respect of any
of the Loan Documents, or any amendment, modification or supplement thereto,
Borrower agrees to pay the same to Lender
28
promptly after demand, but in no event after 15 Business Days from the date
of demand, together with any interest or penalties thereon and agrees to hold
Lender harmless with respect thereto.
11.5 SEVERABILITY. In the event that any provision of this Loan
Agreement is deemed to be invalid by reason of the operation of law, or by
reason of the interpretation placed thereon by any administrative agency or any
court, this Loan Agreement shall be construed as not containing such provision,
and the invalidity of such provision shall not affect the validity of any other
provisions hereof, and any and all other provisions hereof which otherwise are
lawful and valid shall remain in full force and effect.
11.6 WAIVER. No delay on the part of Lender in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, and no single or
partial exercise of any right, power or privilege hereunder shall preclude other
or further exercise thereof, or be deemed to establish a custom or course of
dealing or performance between the parties hereto, or preclude the exercise of
any other right, power or privilege.
11.7 MODIFICATION OF LOAN DOCUMENTS. No modification or waiver of any
provision of any of the Loan Documents shall be effective unless the same shall
be in writing, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on Borrower in any case shall entitle Borrower to any other or further notice or
demand in the same, similar or other circumstances.
11.8 CAPTIONS. The headings in this Loan Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
11.9 SALE OF INTEREST. Borrower may not sell, assign or transfer
this Loan Agreement or any portion thereof, including, without limitation,
Borrower's right, title, interest, remedies, powers, and/or duties hereunder
or thereunder. Borrower hereby consents to Lender's sale, assignment,
transfer or other disposition of this Loan Agreement or of any portion hereof
or thereof, at any time or times after an Event of Default has occurred,
including, without limitation, Lender's right, title, interest, remedies,
powers, and/or duties hereunder or thereunder. Borrower hereby consents to
Lender's participation of this Loan Agreement at any time prior to an Event
of Default so long as Lender retains at least a 50% participating interest in
this Loan Agreement. Borrower acknowledges and agrees that any and all such
assignees or participants may be provided with information concerning
Borrower, its operations, business and financial condition and this Loan
Agreement which have been or would be provided to Lender.
11.10 SUCCESSORS AND ASSIGNS. This Loan Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
11.11 REMEDIES CUMULATIVE. All rights and remedies of Lender pursuant
to this Loan Agreement, any other Loan Documents or otherwise, shall be
cumulative and non-exclusive, and
29
may be exercised singularly or concurrently. One or more successive actions
may be brought against Borrower as often as Lender deems advisable, until all
of Borrower's Obligations are paid and performed in full.
11.12 ENTIRE AGREEMENT. This Loan Agreement and the other Loan
Documents executed prior or pursuant hereto constitute the entire agreement
between the parties hereto with respect to the transactions contemplated
hereby or thereby and supersede any prior agreements, whether written or
oral, relating to the subject matter hereof.
11.13 APPLICABLE LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF
ILLINOIS (OTHER THAN CHOICE OF LAW PROVISIONS), UNLESS OTHERWISE PROVIDED
THEREIN.
11.14 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR
INDIRECTLY OUT OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT COURT
OF XXXX COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS OR, IF LENDER INITIATES SUCH ACTION, ANY COURT
IN WHICH LENDER SHALL INITIATE SUCH ACTION, TO THE EXTENT SUCH COURT HAS
JURISDICTION. BORROWER HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF
SUCH COURTS. BORROWER WAIVES ANY CLAIM THAT CHICAGO, ILLINOIS OR THE
NORTHERN DISTRICT OF ILLINOIS IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM
BASED ON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET FORTH
IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY LENDER,
OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING, BY LENDER, OF ANY
ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION.
11.15 WAIVER OF RIGHT TO JURY TRIAL. LENDER AND BORROWER ACKNOWLEDGE
AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE LOAN
DOCUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES AND THEREFORE, THE PARTIES AGREE THAT
ANY COURT PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
11.16 NON-RECOURSE. Notwithstanding anything to the contrary
contained herein, Lender agrees that no limited partner, agent, director,
officer or employee of Borrower shall be
30
personally liable to Lender for the payment of the Loan or performance of any
of Borrower's Obligations or any other obligations hereunder, under the Note
or under any of the other Loan Documents, or with respect to the Loan, and
recourse hereunder, under the Note and under any other Loan Documents
(including, without limitation, with respect to the representations and
warranties contained herein or therein) shall be limited to the Collateral.
It is understood that the preceding sentence shall not (i) in the event of
any malfeasance, such as fraud, misappropriation of funds or intentional
misrepresentation, estop Lender from instituting or prosecuting a legal
action or proceeding or otherwise making a claim against the Person or
Persons committing such malfeasance, or (ii) constitute a waiver, release or
discharge of any of Borrower's Obligations, and the same shall continue until
paid or discharged in full.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
31
This Loan Agreement has been executed and delivered by each of the
parties hereto by a duly authorized officer of each such party on the date
first set forth above.
PRIME GROUP VI, L.P., an Illinois limited
partnership
By: PGLP, Inc., an Illinois corporation,
as managing general partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
LASALLE NATIONAL BANK, a national banking
association
By: /s/ Xxxx X. Xxxx
----------------------------
Name: Xxxx X. Xxxx
----------------------------
Title: First VP
----------------------------
