EXHIBIT NO. 99.5
EARNOUT GUARANTY
This Earnout Guaranty (this "Guaranty") is made this 8th day of October,
2003, by ESTEIN & ASSOCIATES USA, LTD. a Florida limited partnership
("Guarantor") to and for the benefit of PRIME GROUP REALTY, L.P., a Delaware
limited partnership ("PGRLP") and its successors and assigns.
PREAMBLES
A. PGRLP and XXXX CHICAGO, L.C., a Florida limited liability company
("XXXX") have entered into that certain Contribution Agreement, dated as of
August 4, 2003, as amended by that certain First Amendment to Contribution
Agreement, dated as of August 18, 2003, as amended by that certain Second
Amendment to Contribution Agreement, dated as of August 29, 2003, and as further
amended by that certain Third Amendment to Contribution Agreement, dated as of
October 8, 2003 (as amended, the "Agreement"), whereby UST (as defined below)
will obtain a membership interest (the "Membership Interest") in Dearborn
Center, L.L.C., a Delaware limited liability company ("Dearborn Center").
B. Pursuant to the Agreement, in addition to other funds as consideration
for the Membership Interest, UST shall contribute funds to Dearborn Center in
the amount of $9,800,000 (the "UST Earnout") upon such time as the Leasing
Condition (as defined in the Agreement) is met.
C. PGRLP and UST XI Dearborn, Ltd., a Florida limited partnership ("UST"),
an affiliate of XXXX, will enter into that certain Amended and Restated
Operating Agreement of Dearborn Center (the "Operating Agreement"), pursuant to
which Section 4.3(b) requires the contribution of the UST Earnout as Invested
Capital (as defined in the Contribution Agreement).
D. PGRLP is requiring that Guarantor guarantees the payment of the UST
Earnout as described herein.
E. Guarantor desires to give such guaranty to PGRLP in order to induce
PGRLP to cause a Membership Interest in Dearborn Center to be issued to UST.
F. All capitalized terms used herein which are not otherwise defined shall
have the meaning ascribed to such term in the Agreement.
NOW, THEREFORE, in consideration of the promises contained herein and for
the purpose of inducing PGRLP to cause Dearborn Center to issue the the
Membership Interest to UST, Guarantor agrees as follows:
1. Guarantor unconditionally, absolutely and irrevocably guarantees the due
and punctual payment of the UST Earnout, and any interest thereon, and any other
monies due or which may become due thereon, whether according to the Agreement
or the Operating Agreement, or pursuant to any change or changes in the terms,
covenants and conditions thereof now or at any time hereafter made or granted.
The obligations referred to in this Paragraph 1 are referred to herein as the
"Guaranteed Obligations." This is an absolute, irrevocable guaranty of payment
and not of collection and PGRLP shall not be required to take any action against
XXXX and/or UST or resort to any other security given for the Guaranteed
Obligations as a precondition to Guarantor's obligations hereunder.
2. Guarantor hereby waives demand for payment, extension of time of
payments, notice of acceptance of this Guaranty, and indulgences and notices of
every kind with respect to the payment of the UST Earnout. Guarantor further
consents to any and all forbearances and extensions of the time of payment of
the UST Earnout, and to any and all changes in the terms, covenants and
conditions of the Agreement and Operating Agreement, as applicable, hereafter
made or granted and to the release or agreement not to xxx without reservation
of rights of anyone liable in any way for repayment of the UST Earnout,
including, without limitation, XXXX and/or UST.
3. Guarantor waives any defense based upon an election of remedies by PGRLP
which destroys or otherwise impairs any subrogation rights of Guarantor or the
right of Guarantor to proceed against XXXX and/or UST for reimbursement.
4. Guarantor agrees that this Guaranty shall be a continuing Guaranty, and
shall not be discharged, impaired or affected by the following, whether or not
Guarantor has notice or knowledge of, or consents or agrees thereto: (i) the
existence or continuance of any obligation on the part of XXXX and/or UST under
or with respect to the UST Earnout except as set forth below; (ii) the power or
authority or lack of power or authority of XXXX and/or UST to agree to pay the
UST Earnout, or to execute, acknowledge or deliver the Agreement or the
Operating Agreement, as applicable; (iii) the validity or invalidity of the
Agreement or the Operating Agreement (unless such invalidity results in the
Membership Interest not being vested in UST); (iv) any limitation or exculpation
of liability of XXXX and/or UST that may be expressed in the Agreement or the
Operating Agreement, as applicable; (v) the transfer by UST of all or any part
of the Membership Interest; (vi) the existence or non-existence of XXXX and/or
UST as a legal entity; (vii) any right or claim whatsoever which Guarantor may
have against XXXX and/or UST; (viii) any defense, other than that of
performance, that Guarantor may or might have as to its undertakings,
liabilities and obligations hereunder, each and every such defense being hereby
expressly waived by Guarantor, other than defenses due to the absence of any
default by XXXX and/or UST under the Agreement or the Operating Agreement, as
applicable, or the absence of any Guaranteed Obligation; and (ix) the acceptance
by PGRLP of any, all or part of the UST Earnout.
5. Guarantor agrees that this Guaranty shall remain and continue in full
force and effect notwithstanding the institution by or against XXXX and/or UST,
or Guarantor, of bankruptcy, reorganization, readjustment, receivership or
insolvency proceedings of any nature. In the event any payment by or on behalf
of XXXX and/or UST to PGRLP is held to constitute a preference under the
bankruptcy laws, or if for any other reason PGRLP is required to refund such
payment or pay the amount thereof to any other party, such payment to PGRLP
shall not constitute a release of Guarantor from any liability hereunder.
6. Guarantor agrees that in the event this Guaranty is placed in the hands
of an attorney for enforcement, Guarantor will reimburse PGRLP for all expenses
incurred, including reasonable attorneys' fees.
7. Guarantor agrees that this Guaranty shall inure to the benefit of and
may be enforced by PGRLP and its successors and assigns, and shall be binding
upon and enforceable against Guarantor and its successors, assigns, executors,
administrators, and personal representatives.
8. Guarantor agrees that this Guaranty shall be governed by and construed
in accordance with the laws of the State of Illinois.
9. Guarantor agrees that in the event any one or more of the provisions
contained in this Guaranty shall for any reason be held to be invalid, illegal
or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Guaranty, and this Guaranty shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
10. This Guaranty may be assigned by PGRLP only (but only to a permitted
assignee of PGRLP's membership interest in Dearborn Center), but shall bind the
heirs, administrators, executors, successors and permitted assigns of the
parties hereto and shall inure to the benefit of any successors or assigns of
PGRLP.
11. To induce PGRLP to accept this Guaranty, Guarantor irrevocably agrees
that, subject to PGRLP's sole and absolute election, all actions or proceedings
any way arising out of or related to this Guaranty will be litigation in courts
having sites in Chicago, Illinois. Guarantor hereby consents and submits to the
jurisdiction of any court located within Chicago, Illinois, waives personal
service of process and agrees that all such service or process may be made by
registered mail directed to Guarantor at the address stated herein and service
so made will be deemed to be completed upon actual receipt.
12. Guarantor and PGRLP (by acceptance hereof), having been represented by
counsel, each knowingly and voluntarily waives any right to a trial by jury in
any action or proceeding to enforce or defend any rights under this Guaranty or
under any amendment, instrument, document or agreement delivered or which may in
the future be delivered in connection herewith and agrees that any such action
or proceeding will be tried before a court and not before a jury. Guarantor
agrees that it will not assert any claim against PGRLP on any theory or
liability for special, indirect, consequential, incidental or punitive damages.
13. Time is of the essence of the obligations and agreements of Guarantor
set forth herein.
14. All notices, requests, demands or other communications required or
permitted under this Agreement shall be in writing and delivered personally or
by facsimile transmission, or by overnight courier (such as Federal Express),
addressed as follows:
If to PGRLP: Prime Group Realty, L.P.
------------
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Fax: 312/000-0000
With a copy to: Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx, Xxxxxxxx 00000
Fax: 312/000-0000
And to: Jenner & Block, LLC
One IBM Plaza
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: 312/000-0000
If Estein & Associates USA, Ltd:
Estein & Associates USA, Ltd.
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Fax: 407/000-0000
With a copy to: Xxxxx Xxxxx Ciklin Xxxxxx
Martens XxXxxx & X'Xxxxxxx
000 Xxxxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx
Fax: 561/000-0000
[Signature Page Follows]
IN WITNESS WHEREOF, Guarantor has executed this instrument as of the day
and year first above written.
GUARANTOR:
Estein & Associates USA, Ltd., a
Florida limited partnership
By: X.X. Xxxxxx Corporation,
its general partner
By: /s/ Xxxxxx Xxxxxx
-----------------
Xxxxxx Xxxxxx
Its:President
