EXHIBIT 10.2
OMNIBUS SECOND MODIFICATION TO SENIOR LOAN DOCUMENTS
THIS OMNIBUS SECOND MODIFICATION TO SENIOR LOAN DOCUMENTS (this
"Agreement") is made and dated as of March 27, 2002, by and among DEARBORN
CENTER, L.L.C., a Delaware limited liability company (the "Borrower"),
BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH ("Agent"), a banking
corporation organized under the laws of the Federal Republic of Germany, as a
lender and as agent for the lenders from time to time party to the Credit
Agreement, as hereinafter defined (each, a "Lender" and, collectively, the
"Lenders"), and PRIME GROUP REALTY, L.P., a Delaware limited partnership
("PGRLP"). All capitalized terms used herein but not defined herein shall have
the meanings set forth in the Credit Agreement (as hereinafter defined).
W I T N E S S E T H:
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WHEREAS, Borrower and Agent, as a lender and as the agent for the Lenders,
executed and delivered that certain Credit Agreement, dated as of January 5,
2001, as amended by that certain Omnibus First Modification to Senior Loan
Documents, dated as of March 12, 2001 and that certain Amendment to Omnibus
First Modification to Senior Loan Documents, dated as of January 2, 2002 (said
Credit Agreement, as it has been so amended and may hereafter be amended,
modified or supplemented, from time to time, being the "Credit Agreement");
WHEREAS, the Borrower and the Guarantor have requested that the Lenders
modify certain financial covenants contained in the Guaranties;
WHEREAS, the Borrower and the Guarantor have further requested that the
Lenders grant a waiver of certain breaches of financial covenants contained in
the Guaranties;
WHEREAS, as an inducement to the Lenders to modify and waive certain
financial covenants, the Borrower and PGRLP have agreed to escrow certain funds
and otherwise take the actions described herein; and
WHEREAS, the Lenders are willing to modify and waive the financial
covenants on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the modification and waiver of certain
financial covenants contained in the Guaranties and the covenants, agreements,
representations and warranties set forth in this Agreement, the parties hereto
hereby covenant, agree, represent and warrant as follows:
Section 1. TIF Financing.
The Borrower has requested that Agent approve a Redevelopment Agreement
between the Borrower and the City of Chicago, through its Department of Planning
and Development (the "City") and the transactions contemplated therein (the "TIF
Financing") and has provided the Agent with a draft copy of such Redevelopment
Agreement. Upon the final approval of the Redevelopment Agreement and the TIF
Financing by Agent, the Borrower hereby agrees as follows:
(i) to pledge the promissory note delivered by the City to the
Borrower pursuant to the Redevelopment Agreement (the "TIF Note") to the
Agent (on behalf of the Lenders) as additional collateral for the Loan;
(ii) to deposit into interest-bearing escrow all payments of any kind
made under the TIF Note, including the proceeds thereof, with Agent (until
the Loan has been paid in full); and
(iii) to enter into reasonable documentation acceptable to Agent to
evidence the foregoing agreements.
Section 2. Waiver.
(a) Section 6(d) of the Interest Guaranty, Section 6(d) of the Payment
Guaranty and Section 8(d) of the Completion Guaranty require that, as of the end
of each fiscal quarter during the term of the Loan: (i) the amount of
Unrestricted Cash owned and held by PGRLP and all of its Subsidiaries be at
least Twenty Million Dollars ($20,000,000.00); and (ii) the sum of (A)
Unrestricted Cash in respect of such fiscal quarter and (B) Funds From
Operations in respect of the same fiscal quarter, be at least Twenty-Five
Million Dollars ($25,000,000.00) (collectively, the "Liquidity Covenant"). For
the purposes of this Agreement, "Unrestricted Cash" and "Funds From Operations"
shall have the meanings ascribed to them in the Guaranties.
(b) PGRLP does not expect to be able to comply with the Liquidity Covenant
as of March 31, 2002.
(c) Agent, on behalf of the Lenders, hereby waives, for all purposes under
the Guaranties, the Credit Agreement and the other Loan Documents, the
requirement that PGRLP comply with the Liquidity Covenant for the fiscal quarter
ending March 31, 2002 (the "Waived Requirement"). PGRLP's request relates solely
to the Waived Requirement and not to the Liquidity Covenant in respect of any
other time period and to no other right, power, remedy, condition, term,
provision or requirement of the Credit Agreement, Guaranties or other Loan
Documents.
(d) The foregoing waiver is expressly conditioned upon: (i) the
simultaneous waiver by the Mezzanine Lenders of any defaults relating to
failures to satisfy financial covenants under the Mezzanine Loan Documents; (ii)
the agreement of the Borrower to escrow all TIF Payments in accordance with
Section 1 above; (iii) the establishment and funding of the Senior Additional
Reserve Account (as defined below) and the pledging of all amounts in the Senior
Additional Reserve Account to Agent (for the benefit of the Lenders) in a
written agreement that is in a form and substance acceptable to Agent; and (iv)
the execution and delivery of a written agreement by and between Agent (on
behalf of the Lenders) and the Mezzanine Lenders with respect to disbursements
from the Senior Additional Reserve Account.
(e) The foregoing waiver shall be immediately and automatically revoked
without the need for notice to any party or further action upon any default by
PGRLP or the Borrower under the terms of this Agreement (including, without
limitation, Section 1 hereof).
Section 3. Additional Reserve Account.
As an express condition precedent to the waiver granted in Section 2 and
the modifications made in Section 4 hereof, PGRLP hereby agrees to deposit One
Million Five Hundred Thousand Dollars ($1,500,000) into an account maintained by
Agent (the "Senior Additional Reserve Account") as follows:
(a) $375,000 on or prior to the date of this Agreement;
(b) $281,250 on or prior to April 30, 2002;
(c) $281,250 on or prior to May 31, 2002;
(d) $281,250 on or prior to June 28, 2002; and
(e) $281,250 on or prior to July 31, 2002.
Such funds (including all interest thereon) shall be held by Agent subject
to the same terms and conditions of the agreements described in Sections
2(d)(iii) and 2(d)(iv) hereof.
Section 4. Amendments to the Guaranties.
(a) Section 8(d) of the Completion Guaranty is hereby amended by (i)
deleting therefrom the text "Twenty Million and No/100 Dollars ($20,000,000.00)"
and replacing it with "Seventeen Million Five Hundred Thousand and No/100
Dollars ($17,500,000)", and (ii) deleting therefrom the text "Twenty-Five
Million and No/100 Dollars ($25,000,000.00)" and replacing it with the following
"Twenty Two Million Five Hundred Thousand and No/100 Dollars ($22,500,000)".
(b) Section 6(d) of the Interest and Operating Costs Guaranty is hereby
amended by (i) deleting therefrom the text "Twenty Million and No/100 Dollars
($20,000,000.00)" and replacing it with "Seventeen Million Five Hundred Thousand
and No/100 Dollars ($17,500,000)", and (ii) deleting therefrom the text
"Twenty-Five Million and No/100 Dollars ($25,000,000.00)" and replacing it with
"Twenty Two Million Five Hundred Thousand and No/100 Dollars ($22,500,000)".
(c) Section 6(d) of the Payment Guaranty is hereby amended by (i) deleting
therefrom the text "Twenty Million and No/100 Dollars ($20,000,000.00)" and
replacing it with "Seventeen Million Five Hundred Thousand and No/100 Dollars
($17,500,000)", and (ii) deleting therefrom the text "Twenty-Five Million and
No/100 Dollars ($25,000,000.00)" and replacing it with "Twenty Two Million Five
Hundred Thousand and No/100 Dollars ($22,500,000)".
Section 5. Miscellaneous.
(a) Governing Law. The terms and provisions hereof and the rights and
obligations of the parties hereunder shall in all respects be governed by, and
construed and enforced in accordance with, the internal laws of the State of New
York.
(b) Full Force. The Credit Agreement, the Guaranties and each of the other
Loan Documents, except to the extent of the waiver and amendments specifically
provided above, are and shall continue to be in full force and effect and are
hereby in all respects ratified and confirmed. The execution, delivery and
effectiveness of this Agreement shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender or Agent under
the Credit Agreement, the Guaranties or any of the other Loan Documents, nor
constitute a waiver of any provision of the Credit Agreement, the Guaranties or
any of the other Loan Documents. Without limiting the generality of the
foregoing, PGRLP hereby confirms and agrees that notwithstanding the
effectiveness of this Agreement, the Guaranties are, and shall continue to be,
in full force and effect and are hereby ratified and confirmed in all respects.
(c) Binding; No Amendment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be modified orally, but only by a
writing executed by all of the parties hereto.
(d) Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
(Signatures on next page)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the date and
year first above written.
DEARBORN CENTER, L.L.C.
By: Prime/Xxxxxxx Development Company,
L.L.C., its sole member
By: Xxxxx Xxxxxxx L.L.C.,
its managing member
By: /s/ X.X. Xxxxxxxxx
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X.X. Xxxxxxxxx
Member
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Managing Director
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Director
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust,
its managing general partner
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Co-President
