EXHIBIT NO. 10.12
GUARANTY OF
INTEREST AND OPERATING COSTS
This GUARANTY OF INTEREST AND OPERATING COSTS (this "Guaranty"), dated as
of the 19th day of March, 2003, is made by PRIME GROUP REALTY, L.P., a Delaware
limited partnership, having an address at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000 ("Guarantor"), in favor of LNR EASTERN LENDING, LLC, a
Georgia limited liability company (the "Lender"), having an address c/o LNR
Property Corporation,0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxx
00000.
W I T N E S S E T H:
WHEREAS, Prime/Xxxxxxx Development Company, L.L.C. ("Borrower") and the
Lender have entered into that certain Mezzanine Loan Agreement, dated as of the
date hereof, as same has been amended by that Omnibus First Modification to
Mezzanine Loan Documents, that Omnibus Second Modification to Mezzanine Loan
Documents and that Omnibus Third Modification to Mezzanine Loan Documents, all
dated as of the date hereof (such agreement, as amended and as same may
hereafter be amended, modified, supplemented or restated from time to time, is
hereinafter referred to as the "Loan Agreement"; capitalized terms used but not
otherwise defined in this Guaranty but defined in the Loan Agreement shall have
the meanings set forth for such terms in the Loan Agreement);
WHEREAS, pursuant to and in accordance with the Loan Agreement, Borrower
has agreed to cause its Subsidiary, Dearborn Center, L.L.C. (the "Property
Owner"), to undertake and complete construction of the Improvements;
WHEREAS, the Loan shall be secured by the Loan Documents;
WHEREAS, it is a condition precedent to the making of the Advance that
Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, Guarantor is a member of Borrower and shall derive substantial
benefit from the construction and completion of the Improvements and from the
making of the Loan to Borrower.
NOW, THEREFORE, in consideration of Xxxxxx's execution of the Loan
Agreement and in order to induce the Lender to make the Loan and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby covenants and agrees as follows:
SECTION 1. Guarantied Obligations. Subject only to the specific limitations
contained in this Section 1, Guarantor hereby unconditionally, absolutely and
irrevocably, as a primary obligor and not merely as a surety, guaranties to the
Lender the punctual and complete payment when due, whether at or after maturity,
upon acceleration or otherwise of (and indemnifies and holds the Lender harmless
against any loss resulting from the failure of such complete and punctual
payment when due to occur): (i) Operating Expenses for the Mortgaged Property;
(ii) any Holdover Damages (as such term is defined in Section 1(B)(ii) of that
certain Lease Agreement, dated July 13, 2000, between the Property Owner, as
landlord, and Holland & Knight, LLP, as tenant) [TO BE DELETED UPON REVIEW OF H
& k ESTOPPEL]; (iii) any amounts which are payable pursuant to Section 37(d)(ii)
of the Bank One Lease; (iv) any Make-Whole Amount, IRR Amount, Exit Fee and
Breakage Fee payable under the Loan Documents and (v) all interest payable under
the Loan Documents, including, without limitation, all interest accruing after
maturity, acceleration or the realization upon any collateral, including,
without limitation, interest that would otherwise be owed by Borrower under the
Loan Documents but the payment of which is unenforceable or not allowable due to
the existence or a bankruptcy, reorganization or similar proceeding involving
Borrower or the Property Owner, at the rate or rates, including the applicable
Default Rate, set forth in the Loan Agreement, and any late charges, fees or
other amounts due by reason of any late payment of interest (all obligations
under clauses (i) through (v) of this Section 1(a), without duplication of and
except for any amounts paid by Guarantor pursuant to that certain Guaranty of
Interest and Operating Costs by and between Guarantor and the Senior Lender, the
"Guarantied Obligations"); provided, however, that Guarantor shall not be liable
(but Borrower shall remain liable) for any (A) interest payable under the Loan
Documents that first accrues (but without relieving Guarantor of its
responsibility for any such interest theretofore accrued) after the earlier to
occur of (1) the date of transfer to the Lender or any third party of title to
the Collateral pursuant to a transfer in lieu of foreclosure thereof and (2) the
date that is six (6) months after the transfer to the Lender or any Affiliate of
the Lender of title to the Collateral pursuant to a foreclosure or UCC sale
thereof (provided, however, that Guarantor's unsatisfied obligations under each
of the other Guaranties and the Environmental Indemnity shall continue to accrue
interest to the extent provided in such other documents until satisfied) and (B)
Operating Expenses for the Mortgaged Property that accrue after the earliest to
occur of (1) the date of transfer to the Lender or any third party of title to
the Collateral pursuant to a transfer in lieu of foreclosure thereof, (2) the
date that is six (6) months after the transfer to the Lender or any Affiliate of
the Lender of title to the Collateral, pursuant to a foreclosure or UCC sale
thereof and (3) the date that the Lender or any Affiliate of the Lender sells or
conveys the Collateral to a third party after obtaining title to the Collateral
pursuant to the completion of a foreclosure or UCC sale thereof.
SECTION 2. Nature of Guaranty. Guarantor hereby reaffirms that this Guaranty is
a guaranty of payment and not of collection, is continuing in nature and applies
to all Guarantied Obligations, whether existing now or in the future, including
Guarantied Obligations arising or accruing after the bankruptcy of Borrower, the
Property Owner or any member of Borrower ("Loan Party") or any sale or other
disposition of any security for this Guaranty or for the obligations of Borrower
or any other Loan Party under the Loan Documents (any such security, the
"Security"). This Guaranty and any Security for this Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time any payment or
performance of any Guarantied Obligations is rescinded or must otherwise be
returned by the Lender or any other party upon the bankruptcy, insolvency or
reorganization of any Loan Party or Guarantor or otherwise, all as though such
payment or performance had not occurred.
SECTION 3. Waiver. To the extent permitted by applicable Laws and Regulations,
Guarantor hereby waives protest, promptness, diligence, notice of acceptance,
demand for payment and notice of default or non-payment in respect of the Note,
the Loan Agreement and the other Loan Documents. Guarantor hereby waives any
requirement that the Lender protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against Borrower, or against any other guarantor or any other person,
entity or any Security. Guarantor hereby waives, to the fullest extent permitted
by applicable law, the benefit of any statute of limitations which may affect
its liability hereunder or the enforcement hereof. Any payment by Borrower or
other circumstance that operates to toll any statute of limitations as to
Borrower shall operate to toll the statute of limitations as to Guarantor.
SECTION 4. Remedies. The Lender shall not be required, as a condition precedent
to making a demand upon Guarantor under this Guaranty, to make demand upon
Borrower, Guarantor under any other guaranty, any other guarantor, or anyone
else, or to exhaust its remedies against Borrower, Guarantor under any other
guaranty, any other guarantor, or anyone else, or to proceed against any
Security. Any failure by the Lender to make any demand or to collect any
payments hereunder or under any other Loan Document shall not relieve Guarantor
of its obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies of the Lenders against Guarantor hereunder. The obligations
and duties of Guarantor hereunder are independent of the obligations and duties
of Borrower under the Loan Documents and a separate action or actions may be
brought and prosecuted against Guarantor hereunder, whether or not an action is
brought against Borrower under the Loan Documents or Guarantor under any other
guaranty or any other person or entity under any other Loan Document, whether or
not Borrower or Guarantor or any other person or entity be joined in any such
action or actions, and whether or not an action or actions may be brought
against Guarantor or any other person or entity in connection with any other
guaranty. The liability of Guarantor hereunder shall not be affected by or
limited by (a) any direction or application of payment by Borrower or by any
other party, (b) any other guaranty of any other party as to Borrower's
obligations under the Loan Documents or as to the completion of the Improvements
or (c) any payment to the Lender of Borrower's obligations that the Lender
repays pursuant to the order or direction of a court of competent jurisdiction
in connection with any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and Guarantor hereby waives any right to the
deferral, modification or limitation of its obligations and duties hereunder by
reason of any such proceeding.
SECTION 5. Representations and Warranties. The Guarantor represents and warrants
that, as of the date hereof:
(a) Guarantor has full power, authority and legal right to execute and deliver
this Guaranty and to perform fully and completely all of its obligations
hereunder.
(b) The execution, delivery and performance of this Guaranty by Guarantor will
not violate any provision of any law, regulation, order or decree of any
governmental authority, bureau or agency or of any court which is binding on
Guarantor, or any provision of any contract, undertaking or agreement to which
Guarantor is a party or which is binding upon Guarantor or any of its property
or assets, and will not result in the imposition or creation of any lien, charge
or encumbrance on, or security interest in, any of its property or assets
pursuant to the provisions of any of the foregoing in any case which would have
a Material Adverse Effect on the ability of Guarantor to perform its obligations
hereunder.
(c) This Guaranty has been duly executed and delivered by Guarantor and
constitutes a legal, valid and binding obligation of Guarantor, enforceable
against it in accordance with its terms, subject to any applicable Debtor Relief
Laws and general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
(d) All necessary resolutions, consents, licenses, approvals and authorizations
of any person or entity required in connection with the execution, delivery and
performance of this Guaranty have been duly obtained and are in full force and
effect.
(e) There are no conditions precedent to the effectiveness of this Guaranty that
have not been either satisfied or waived.
(f) Guarantor has, independently and without reliance upon the Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Guaranty.
(g) The applicable balance sheets of Guarantor and PGRT and statements of income
and cash flows of PGRT (the "Financial Statements") heretofore delivered by
Guarantor to the Lender are true and correct in all material respects and have
been prepared in accordance with GAAP and fairly present, in all material
respects, the financial condition of Guarantor as of the dates thereof and no
material adverse change has occurred in Guarantor's financial condition
reflected therein since the dates thereof.
(h) There are no actions, suits or proceedings pending, or, to the Knowledge of
Guarantor, threatened against or affecting Guarantor, which if adversely
determined would have a Material Adverse Effect on the ability of Guarantor to
perform its obligations under this Guaranty, and Guarantor is not in default
with respect to any order, writ, injunction, decree or demand of any court,
arbitration body or governmental authority, which default would materially
adversely affect the ability of Guarantor to perform its obligations hereunder.
SECTION 6. Covenants.
(a) Annual Financial Statements. Guarantor shall furnish to Lender, within one
hundred twenty (120) days following the end of each calendar year, a copy
of the audited annual Financial Statements of each of Guarantor and of
Prime Group Realty Trust and its successors and assigns ("PGRT"). Such
annual Financial Statements shall be accompanied by (i) an Officer's
Certificate from PGRT certifying that such annual Financial Statements are
true, correct, accurate and complete in all material respects and present
fairly, in all material respects, the financial condition and results of
operation of each of Guarantor and of PGRT and have been prepared in
accordance with GAAP and (ii) an Officer's Certificate from PGRT
certifying as of the date thereof whether, to such Person's Knowledge,
there exists a Default or Event of Default, and if such Default or Event
of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same.
(b) Quarterly Financial Statements. Guarantor shall furnish to Lender on or
before the forty-fifth (45th) day after the end of each of the first three
(3) fiscal quarters of each calendar year, the following items,
accompanied by an Officer's Certificate of PGRT, certifying that such
items are true, correct, accurate and complete in all material respects
and fairly present, in all material respects, the financial condition and
results of the operations of such Person in a manner consistent with GAAP
(subject to normal year-end adjustment), to the extent applicable:
(i) quarterly and year-to-date unaudited Financial Statements with respect to
each of the Guarantor and PGRT, including the applicable balance sheets of
Guarantor and PGRT, and statements of income and cash flows of PGRT for
such quarter; and
(ii) an Officer's Certificate from PGRT certifying as of the date thereof
whether to such Person's Knowledge, there exists a Default or an Event of
Default, and if such Default or Event of Default exists, the nature
thereof, the period of time it has existed and the action being taken to
remedy the same.
(c) Consolidated Net Worth. As of the end of the fiscal quarter immediately
preceding the Advance (and as of the end of any fiscal quarter
thereafter), the Consolidated Net Worth of Guarantor shall not at any time
that the Loan is outstanding be less than the sum of (i) Three Hundred
Fifty Million and No/100 Dollars ($350,000,000.00) and (ii) seventy-five
percent (75%) of any the aggregate, initial value of any operating
partnership units issued by Guarantor from and after the date hereof.
(d) Liquidity. As of the end of the fiscal quarter immediately preceding the
Advance (and as of the end of any fiscal quarter thereafter), the amount
of Unrestricted Cash shall at no time be less than Twenty Million and
No/100 Dollars ($20,000,000.00). "Unrestricted Cash" shall mean, for any
period the aggregate amount of unrestricted Cash and Cash Equivalents
(valued at fair market value in accordance with GAAP) then actually owned
and held by Guarantor and all of its Subsidiaries (excluding, without
limitation, until forfeited or otherwise entitled to be retained by
Guarantor or any of its Subsidiaries, as applicable, tenant security and
other restricted deposits); it being agreed that as used in this
definition, "unrestricted" means the specified asset is not subject to any
Liens, claims, security interests or restrictions of any kind in favor of
any Person.
(e) Ratio of Liabilities to Assets. As of the end of the fiscal quarter
immediately preceding the Advance (and as of the end of each fiscal
quarter thereafter), at no time that the Loan is outstanding shall the
ratio (stated as a percent) of (i) Total Liabilities to (ii) Total Assets,
be greater than 67%. "Total Liabilities" shall mean, for Guarantor and all
of its Subsidiaries, at any time, the sum (without duplication) of the
following (A) all liabilities, consolidated and determined in accordance
with GAAP, (B) all Indebtedness, whether or not so classified, and (C) the
balance available for drawing under letters of credit issued for the
account of Guarantor and all of its Subsidiaries but excluding all
Indebtedness related to the Project, including, without limitation, the
Debt and the Senior Loan (collectively, the "Project Liabilities"). "Total
Assets" shall mean, for Guarantor and all of its Subsidiaries, at any
time, the aggregate book value of all assets, consolidated and determined
in accordance with GAAP, plus accumulated depreciation and amortization
related to those fixed and tangible properties (the "Real Estate Assets")
consisting of land, buildings and/or other improvements, and/or interests
therein and/or interests in mortgage loans, owned by Guarantor or any of
its Subsidiaries (but excluding (a) all leaseholds other than leaseholds
under ground leases having unexpired terms of at least 30 years and (b)
any assets that constitute investments in the Project that are paid for by
the Advance or advances made under the Senior Loan (the assets described
in this clause (b), collectively, the "Project Assets")).
(f) Maximum Distribution. As of the end of the fiscal quarter immediately
preceding the Advance (and as of the end of each fiscal quarter
thereafter), at no time that the Loan is outstanding shall Guarantor's and
PGRT's aggregate maximum distribution for the most recent four (4) full
fiscal quarters prior to the date of determination to their common
shareholders and unit holders, as applicable, exceed 90% of PGRT's Funds
From Operations. "Funds From Operations", for any period, shall be
determined in accordance with the definition for such term promulgated by
the National Association of Real Estate Investment Trusts in effect as of
the Closing Date (as adjusted for any straight-lining of rent and any
write down in the value of land or loss on the sale of land), as published
in The White Paper on Funds From Operations, dated October 1999.
(g) Ratio of Consolidated EBITDA to Consolidated Total Interest Expense. As of
the end of the fiscal quarter immediately preceding the Advance (and as of
the end of each fiscal quarter thereafter), at no time that the Loan is
outstanding, shall the ratio (stated as a percent), in respect of any
period, of (i) Consolidated EBITDA to (ii) Consolidated Total Interest
Expense, be less than 165%. "Consolidated EBITDA" shall mean, in respect
of Guarantor and all of its Subsidiaries, for any period (A) net income or
loss (before minority interests and as adjusted for any straight-lining of
rent), as determined in accordance with GAAP, plus (B) to the extent
deducted in computing such net income or loss, (1) Consolidated Total
Interest Expense and (2) depreciation and amortization, and (C) minus all
gains or plus all losses attributable to the sale or disposition of assets
or debt restructuring as well as any other extraordinary, non-recurring
sources of revenues, in each case adjusted to include only the funds
actually received in cash by the Guarantor and its Subsidiaries from any
Partially Owned Entities. "Consolidated Total Interest Expense" shall
mean, in respect of Guarantor and all of its Subsidiaries, for any period,
(x) the amount of interest required to be paid or accrued in accordance
with GAAP on (A) all Indebtedness of Guarantor, and all of its
Subsidiaries and (B) all amounts available for borrowing or for drawing
under letters of credit, if any, issued for the account of Guarantor and
all of its Subsidiaries, but only if such interest was or is required to
be reflected as an item of expense in accordance with GAAP plus (y)
capitalized interest to be paid or accrued in accordance with GAAP (but
excluding that portion of capitalized interest funded from the interest
reserve proceeds of any construction loan). "Partially Owned Entities"
shall mean any of the partnerships, associations, corporations, limited
liability companies, trusts, joint ventures or other business entities in
which Guarantor, directly or indirectly through its full or partial
ownership of another entity, owns an equity interest, but which is not
required in accordance with GAAP to be consolidated with Guarantor for
financial reporting purposes.
(h) Ratio of Consolidated EBITDA to Consolidated Total Fixed Charges.
(i) Ratio of Consolidated EBITDA to Consolidated Total Fixed Charges A. As
of the end of the calendar quarter immediately preceding the Advance
(and as of the end of each fiscal quarter thereafter), at no time that
the Loan is outstanding shall the ratio (stated as a percent), in
respect of any period, of (A) Consolidated EBITDA to (B) Consolidated
Total Fixed Charges A, be less than 145%. "Consolidated Total Fixed
Charges A" shall mean, for any period, the aggregate amount of (1)
Consolidated Total Interest Expense, plus (2) scheduled principal
payments of Indebtedness (excluding optional prepayments and balloon or
bullet payments at maturity).
(ii) Ratio of Consolidated EBIDTA to Consolidated Total Fixed Charges B. As of
the end of the calendar quarter immediately preceding the Advance (and as
of the end of each fiscal quarter thereafter), at no time that the Loan is
outstanding shall the ratio (stated as a percent), in respect of any
period, of (A) Consolidated EBITDA to (B) Consolidated Total Fixed Charges
B, be less than 125%. "Consolidated Total Fixed Charges B" shall mean, for
any period, the aggregate amount of (1) Consolidated Total Interest
Expense, plus (2) scheduled principal payments of Indebtedness (excluding
optional prepayments and balloon or bullet payments at maturity), plus (3)
dividends and distributions, if any, paid or required to be paid on
preferred stock, preferred partnership interests or other preferred equity
of PGRT.
(i) Loan Agreement Covenants. Guarantor shall perform and comply with each
obligation expressly stated in the Loan Agreement to be an obligation of
Guarantor.
(j) No Duplication. It is expressly acknowledged and agreed that in
calculating the values required for the foregoing financial covenants, it
is intended that each value, as applicable, be counted without
duplication.
SECTION 7. Recourse. The exculpation provisions contained in any of the other
Loan Documents relieving Borrower and any member of Borrower from personal
liability for payment of the Loan shall not in any manner reduce the liability
of Guarantor arising hereunder. Notwithstanding the foregoing, the Lender
acknowledges and agrees that PGRT has no liability (direct, indirect or
otherwise) under or pursuant to this Guaranty and that, accordingly, the
exculpation granted to Borrower or any member of Borrower from personal
liability for payment of the Loan under the exculpation provisions contained in
any of the other Loan Documents shall hereby be made applicable to PGRT.
SECTION 8. No Limitation of Liability. Guarantor's liability hereunder shall in
no way be limited or impaired by, and Guarantor hereby consents to and agrees to
be bound by, any amendment or modification of the provisions of the Loan
Agreement, the Note, the Pledge Agreement, or any other instrument made to or
with the Lender by Guarantor or Borrower. In addition, Guarantor's liability
hereunder shall in no way be limited or impaired by (a) any extensions of time
for performance required by any of said documents, (b) any sale, assignment or
foreclosure of the Note or the Pledge Agreement (or transfer in lieu thereof) or
any sale or transfer of all or part of the Improvements or the Collateral,
provided, however, that if the Debt shall be paid in full, Guarantor's
obligations and liability under this Guaranty shall cease and terminate and be
of no further force or effect, (c) the accuracy or inaccuracy of the
representations and warranties made by Borrower under the Loan Documents, (d)
the release of Borrower, the Property Owner, Guarantor or any other person from
performance or observance of any of the agreements (other than this Guaranty),
covenants, terms or conditions contained in any of said instruments by operation
of law, the Lender's voluntary act, or otherwise, (e) the release or
substitution in whole or in part of any Security, (f) the Lender's failure to
file the Financing Statements (or the Lender's improper recording or filing of
any thereof) or to otherwise perfect, protect, secure or insure any security
interest or Lien given as security for the Loan or (g) the invalidity,
irregularity or unenforceability, in whole or in part, of the Loan Documents, or
any other instrument or agreement executed or delivered to the Lenders in
connection with the Loan, and, in any such case, whether with or without notice
to Guarantor (except as may be required pursuant to applicable Laws and
Regulations) and with or without consideration.
SECTION 9. Waiver of Claims. Guarantor (a) waives any right or claim of right to
cause a marshalling of Xxxxxxxx's assets or to cause the Lender to proceed
against any of the Security before proceeding against Guarantor or to proceed
against Guarantor in any particular order, and (b) agrees that any payments
required to be made by Guarantor hereunder shall become due on demand in
accordance with the terms hereof. Without limiting the generality of the
foregoing, until this Guaranty is released or the Loan is paid in full and the
Lender shall have no continuing obligations under the Loan Documents, Guarantor
hereby waives (1) all rights of subrogation or contribution Guarantor may have
against Borrower and/or the Property Owner whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Federal Bankruptcy Code) or otherwise by reason of any payment by Guarantor
pursuant to the provisions hereof and (2) all suretyship defenses Guarantor
would otherwise have under the laws of the jurisdiction in which the
Improvements are located or any other jurisdiction.
SECTION 10. Notices. All notices, consents, approvals and requests required or
permitted hereunder shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) certified or registered United States
mail, postage prepaid, (b) expedited overnight prepaid delivery service, either
commercial or United States Postal Service, with proof of attempted delivery or
(c) facsimile transmission provided confirmation of receipt is obtained by one
of the methods in clause (a) or (b) above, addressed as follows (or at such
other address and person as shall be designated from time to time by any party
hereto, as the case may be, in a written notice to the other parties hereto in
the manner provided for in this Section 10):
If to Lender:
LNR Eastern Lending, LLC
c/o LNR Property Corporation
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Bilzin Xxxxxxx Xxxxx Price & Xxxxxxx LLP
2500 First Union Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
If to Guarantor:
Prime Group Realty, L.P.
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Prime Group Realty, L.P.
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
A notice shall be deemed to have been given: in the case of hand delivery,
at the time of delivery; in the case of registered or certified mail, two (2)
Business Days after deposit in the United States mail; in the case of expedited
overnight prepaid delivery, upon the first attempted delivery on a Business Day;
or in the case of facsimile transmission, at the time of the confirmed receipt
thereof.
SECTION 11. No Waiver; Remedies. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. All remedies afforded to the Lender by reason of this Guaranty and all of
the other Loan Documents are separate and cumulative remedies and each one of
such remedies, whether exercised by the Lender or not, shall not be deemed to be
exclusive of any of the other remedies available to the Lender and shall not
limit or prejudice any other legal or equitable remedy which the Lender may have
under this Guaranty or under any other Loan Document.
SECTION 12. Right of Set-Off. Upon the occurrence and during the continuance of
any breach of any of Guarantor's covenants hereunder, the Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final, excepting only tenant security
deposits and similar escrow deposits) at any time held and other indebtedness at
any time held or owing by the Lender (including branches, agencies or Affiliates
of the Lender wherever located) to or for the credit or the account of Guarantor
against any and all of the obligations of Guarantor now or hereafter existing
under this Guaranty, irrespective of whether or not the Lender shall have made
any demand under this Guaranty and although such obligations, liabilities or
claims may be contingent and unmatured and any such set-off shall be deemed to
have been made immediately upon the occurrence of a default under this Guaranty
even though such charge is made or entered on the books of the Lender subsequent
thereto. The Lender agrees promptly to notify Guarantor after any such set-off
and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Lender under
this Section 12 are in addition to other rights and remedies (including, without
limitation, other rights of set-off), which the Lender may have under the Loan
Documents, at law or in equity.
SECTION 13. Continuing Guaranty. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time payment or any part thereof of
the Loan is rescinded or must otherwise be restored or returned by the Lender
upon the insolvency, bankruptcy, dissolution, liquidation or the reorganization
of Borrower or the Property Owner, or upon or as a result of the appointment of
a receiver, intervenor, custodian or conservator of, or trustee or similar
officer for, Borrower or the Property Owner or any substantial part of its
property, or otherwise, all as though such payments had not been made.
SECTION 14. Lender's Rights. Guarantor acknowledges and agrees that the Lender's
rights (and Guarantor's obligations) hereunder shall be in addition to all of
the Lender's rights (and all of Guarantor's obligations) under any other
agreement executed and delivered to the Lender by Guarantor in connection with
the Loan, and payments by Guarantor hereunder shall not reduce any of
Guarantor's obligations and liabilities under any such agreement.
SECTION 15. Delay. No delay on the Lender's part in exercising any right, power
or privilege hereunder or under the Loan Documents shall operate as a waiver of
any such privilege, power or right.
SECTION 16. Trial by Jury; Injunctive Relief; Counterclaim, Consolidation.
Guarantor hereby expressly and unconditionally waives, in connection with any
suit, action or proceeding brought by the Lender hereon, any and every right
Guarantor may have to (a) injunctive relief, (b) a trial by jury, (c) assert or
interpose any counterclaim, defense or offset (other than mandatory) therein and
(d) have the same consolidated with any other or separate suit, action or
proceeding. Nothing herein contained shall prevent or prohibit Guarantor from
instituting or maintaining a separate action against the Lender with respect to
any asserted claim.
SECTION 17. Governing Law. Except as otherwise provided in Section 11.2 of the
Loan Agreement, 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 laws of the State of Florida. Guarantor hereby
irrevocably submits to the non-exclusive jurisdiction of the courts of the State
of Florida or any Federal court sitting in the State of Florida over any suit,
action or proceeding arising hereunder, and Guarantor hereby agrees and consents
that, in addition to any methods of service of process provided for under
applicable law, all service of process in any such suit, action or proceeding in
the State of Florida or any Federal court sitting in the State of Florida may be
made by overnight courier or by certified or registered mail, return receipt
requested, directed to Guarantor at the addresses indicated above.
SECTION 18. Severability. Any provision in this Guaranty that is held to be
inoperative, unenforceable or invalid as to any party or in any jurisdiction
shall, as to that party or jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions or the operation,
enforceability or validity of that provision as to any other party or in any
other jurisdiction, and to this end the provisions of this Guaranty are declared
to be severable.
SECTION 19. Integration. This Guaranty, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof and may not be terminated, amended or modified, in any
manner unless by a writing signed by the Lender or its successors or assigns.
This Guaranty was drafted with the joint participation of Guarantor and the
Lender and shall be construed neither against nor in favor of any of them.
SECTION 20. Time of Essence. Time is of the essence with respect to Guarantor's
obligations under this Guaranty.
SECTION 21. Successors and Assigns. This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
transferees and permitted assigns, except that Guarantor may not delegate any of
its duties under this Guaranty without the prior written consent of the Lender.
SECTION 22. Subordination. In the event that Guarantor shall advance or become
obligated to pay any sums towards the completion of construction of the
Improvements or shall advance or become obligated to pay any sums to the Lender
pursuant to any other Loan Document, or in the event that Borrower is now or
shall hereafter become indebted to Guarantor, Guarantor agrees that the amount
of any such indebtedness and all interest thereon shall at all times be
subordinate as to lien, time of payment and in all other respects to all sums at
any time owing to the Lender under any of the Loan Documents, and that Guarantor
shall not be entitled to enforce or receive payments on account of such other
indebtedness from Borrower until all such obligations of Borrower to the Lender
shall have been paid and the Lender shall have no continuing obligations under
the Loan Documents.
SECTION 23. Modification. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall in any event
be effective unless the same shall be in writing and signed by the Lender, and
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 24. Counterparts. This instrument may be executed in one or more
counterparts, each of which when executed and delivered shall be deemed an
original and all of which when executed and delivered will be deemed to be one
and the same instrument.
SECTION 25. Joint and Several Liability. The liability hereunder of each Person
constituting Guarantor shall be joint and several.
SECTION 26. Consent to Construction Loan Agreement Provisions. Guarantor hereby
acknowledges and agrees to any waiver or consent specifically granted by the
Borrower Parties in Sections 11.11, 11.23 and 11.24 of the Loan Agreement.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Xxxxxxxxx has caused this Guaranty to be duly executed
and delivered as of the date first above written.
GUARANTOR:
PRIME GROUP REALTY, L.P., a Delaware
limited partnership
By: Prime Group Realty Trust, a
Maryland real estate investment
trust, its managing general partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxx
Title: Co-President
ACCEPTED BY THE LENDER:
LNR EASTERN LENDING, LLC, a Georgia
limited liability company
By: LNR PROPERTY CORPORATION
EASTERN REGION, a Georgia
corporation, its Member
By: /s/ Xxxxxx X. Xxxxx
--------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
