Exhibit 10.1
LOAN AGREEMENT
Between
000 X. XXXXXX XXXXXX, L.L.C
having an address at
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
("BORROWER")
-and-
WESTDEUTSCHE IMMOBILIENBANK
having an address at
Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx 00,
00000 Xxxxx
Xxxxxxx Xxxxxxxx of Germany
("AGENT" or "LENDER")
-and-
Xxxxxxx Xxxxx Mortgage Capital Inc.
having an address at
World Financial Center,
North Tower,
10th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
("LENDER")
(each Lender together with Agent "LENDERS")
Dated: as of December 13, 1999
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions ....................................................1
ARTICLE 2
THE LOAN
Section 2.1 Loan ..........................................................18
Section 2.2 Conditions Precedent ..........................................18
Section 2.3 Interest ......................................................22
Section 2.4 The Note ......................................................23
Section 2.5 The Mortgage and Collateral ...................................23
Section 2.6 Default Rate ..................................................24
Section 2.7 Repayment of Loan .............................................24
Section 2.8 Prepayments ...................................................25
Section 2.9 Funding Loss ..................................................26
Section 2.10 Taxes .........................................................27
Section 2.11 Payments ......................................................28
Section 2.12 Distribution to Lenders .......................................28
Section 2.13 Increased Costs; Overriding Events ............................29
Section 2.14 Commitment Fee ................................................31
Section 2.15 Arrangement Fee ...............................................31
Section 2.17 Lending Office ................................................31
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Good Standing of Borrower and its Managing Members ............31
Section 3.2 Authority of Borrower .........................................32
Section 3.3 Authorizations ................................................32
Section 3.4 Binding Agreement .............................................32
Section 3.5 Litigation ....................................................32
Section 3.6 No Conflicts ..................................................33
Section 3.7 Financial Conditions ..........................................33
Section 3.8 Employee Benefit Plans ........................................33
Section 3.9 Governmental Plan .............................................33
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Section 3.10 Investment Company ............................................33
Section 3.11 Hazardous Materials ...........................................34
Section 3.12 Solvency ......................................................34
Section 3.13 Borrower's Address ............................................34
Section 3.14 Foreign Person ................................................34
Section 3.15 Bankruptcy ....................................................35
Section 3.16 Compliance with Laws ..........................................35
Section 3.17 Utility Service ...............................................35
Section 3.18 Access ........................................................35
Section 3.19 Insurance .....................................................35
Section 3.20 Rent Roll .....................................................36
Section 3.21 No Reliance on Agent or Lenders ...............................36
ARTICLE 4
AFFIRMATIVE AND NEGATIVE COVENANTS
Section 4.1 Affirmative Covenants .........................................36
Section 4.2 Negative Covenants ............................................43
ARTICLE 5
DEFAULT
Section 5.1 Events of Default .............................................47
Section 5.2 Remedies ......................................................49
Section 5.3 Remedies Cumulative and Concurrent ............................49
Section 5.4 Waiver, Delay or Omission .....................................49
Section 5.5 Indemnity .....................................................49
ARTICLE 6
LIMITED RECOURSE OBLIGATIONS
Section 6.1 Limited Recourse ..............................................52
ARTICLE 7
THE AGENT
Section 7.1 Performance by Agent ..........................................55
Section 7.2 Actions .......................................................56
Section 7.3 Nonliability of Agent and Lenders .............................56
Section 7.4 Authorization and Action ......................................57
Section 7.5 Withholding Exemption Certificates ............................59
iii
Section 7.6 Agent's Reliance, Etc .........................................59
Section 7.8 Ratable Sharing ...............................................61
ARTICLE 8
MISCELLANEOUS
Section 8.1 Fees and Expenses .............................................62
Section 8.2 Cumulative Rights and No Waiver ...............................62
Section 8.3 Notices .......................................................62
Section 8.4 Severability ..................................................62
Section 8.5 Binding Effect ................................................63
Section 8.6 Execution in Counterparts .....................................63
Section 8.7 Time of the Essence ...........................................63
Section 8.8 Immunity ......................................................63
Section 8.9 Governmental Regulation of Lender .............................63
Section 8.10 Modification, Waiver, Consent .................................63
Section 8.11 Entire Agreement ..............................................64
Section 8.12 Assignment ....................................................64
Section 8.13 Applicable Law ................................................65
Section 8.14 Usury .........................................................65
Section 8.15 Consent to Jurisdiction .......................................65
Section 8.16 Monies ........................................................66
Section 8.17 Jury Trial ....................................................66
EXHIBIT A Description of Land
EXHIBIT B Leases
EXHIBIT C Principal Repayment Schedule
LOAN AGREEMENT
This Loan Agreement (this "AGREEMENT") is made and entered
into as of this 13th day of December 1999, by and between 000 X. XXXXXX XXXXXX,
L.L.C., a limited liability company organized and existing under the laws of the
State of Delaware ("BORROWER"), and WESTDEUTSCHE IMMOBILIENBANK, a banking
institution organized under the laws of the Federal Republic of Germany, having
an address at Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx 00, 00000 Xxxxx, Xxxxxxx Xxxxxxxx
of Germany, individually and as agent (including any of its successors and
assigns, "AGENT") for Xxxxxxx Xxxxx Mortgage Capital Inc., a Delaware
corporation, and such other co-lenders as may exist from time to time
(collectively with Agent, "LENDERS" and each individually, "LENDER").
W I T N E S S E T H:
WHEREAS, Borrower owns fee title to the Premises and the
Improvements (as defined below) located on the Leasehold Premises (as defined
below) and a leasehold interest in the Leasehold (as defined below);
WHEREAS, Borrower and Lenders have agreed, among other things,
for the Lenders to make a loan to Borrower in the aggregate original principal
amount of One Hundred Sixty Million Dollars ($160,000,000) (the "LOAN")
evidenced by the certain Promissory Note from Borrower to Lenders dated as of
the date hereof, in the amount of One Hundred Sixty Million Dollars
($160,000,000) (the "NOTE") subject to the terms and conditions hereinafter set
forth; and
WHEREAS, Agent has agreed to fund $60,000,000 of the Loan and
Xxxxxxx Xxxxx Mortgage Capital Inc. has agreed to fund $100,000,000 of the Loan.
NOW THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and each Lender agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS.
The following terms used in this Agreement shall have the
respective meanings ascribed to them below:
"77WWLP" means 77 West Xxxxxx Limited Partnership, a limited
partnership organized under the laws of the State of Illinois.
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"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person.
"AGENTS REGISTER" has the meaning set forth in SECTION
8.12(b)(y).
"ANNUAL INSTALLMENT PAYMENT" has the meaning set forth in
SECTION 2.7 hereof.
"APPLICABLE MARGIN" shall be 1.7%.
"APPRAISAL" means an M.A.I. appraisal, reasonably satisfactory
in form and scope to Agent, prepared by an appraiser selected by Borrower and
reasonably satisfactory to Agent.
"ASBESTOS" means any hydrated mineral silicate separable into
commercially usable fibers, including, but not limited to, chrysolite
(serpentine), amosite (cummingtonite-grunerite), crocidolite (riebecktite),
tremolite, anthophylite and actinolite.
"ASBESTOS-CONTAINING MATERIAL" means any material which
contains 1% or more Asbestos by weight.
"ASSIGNMENT OF CONTRACTS AND AUTHORIZATIONS" means that
certain Assignment of Contracts and Authorizations between Borrower and Lenders
executed on the Closing Date.
"ASSIGNMENT OF LEASES AND RENTS" means that certain Assignment
of Leases and Rents between Borrower and Lenders executed on the Closing Date.
"BORROWER'S ADDRESS" means:
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxx
with a copy to
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
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"BUSINESS DAY" means any day other than a Saturday or Sunday
on which commercial banks are open for domestic and international business
(including dealings in dollar deposits) in New York City, USA, Chicago,
Illinois, USA, and Mainz, Federal Republic of Germany.
"CASH COLLATERAL ACCOUNT" means the interest-bearing, U.S.
Dollar depository account maintained by Borrower with LaSalle National Bank (or
a comparable account at another bank that is reasonably acceptable to Agent),
for the purpose of holding certain cash deposits made by Borrower pursuant to
SECTION 4.1(G) hereof, which cash deposits shall be pledged to Agent as
collateral for the Loan pursuant to the Cash Collateral Agreement.
"CASH COLLATERAL AGREEMENT" means that certain Cash Collateral
Agreement between Agent and Borrower executed on the Closing Date.
"CASH EXPENDITURES" means the aggregate costs paid by Borrower
in the ordinary course of maintaining and operating the Premises, the Leasehold
Premises and the Improvements located thereon (determined in accordance with the
cash method of accounting), including, without limitation, (a) installments of
principal and interest payable by Borrower to Agent or Lenders pursuant to the
terms of the Loan Documents, (b) Operating Expenses, (c) Income Taxes, (d)
repayments of Qualified Loans, (e) all costs and expenses incurred by Borrower
for capital improvements to the Premises, other than Tenant Improvement/Leasing
Commission Costs made in accordance with the Loan Documents, (f) Tenant
Improvement/Leasing Commission Costs, (g) deposits in the Cash Collateral
Account and (h) amounts with respect to any of the items set forth in clauses
(b) - (f) above which, in Borrower's reasonable judgment, are of a magnitude
that merits the establishment of reserves for the payment thereof over a period
of no less than two months.
"CASH RECEIPTS" means all income of any kind received by, or
on behalf of, Borrower from the Premises, the Leasehold Premises and the
Improvements located thereon (determined in accordance with the cash method of
accounting), including all fixed rent, percentage rent, escalation payments,
storage income, tenant work order income, cost recoveries and similar operating
income items whether or not derived from the Leases.
"CASH MANAGEMENT SYSTEM" means a system established by Manager
for the effective management and investment of cash of its Affiliates and
pursuant to which:
(i) Borrower's lease receivables are paid by the lessees
to a lockbox account in the name of Borrower and
maintained by a recognized financial institution
("Depository");
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(ii) Borrower's lockbox receipts are deposited daily into
a deposit and disbursement account ("Operating
Account") maintained in the name of Borrower with
Depository and transferred daily to a concentration
account maintained by Manager for its Affiliates with
Depository ("Concentration Account");
(iii) Each transfer of Borrower's funds to the
Concentration Account is reflected as an advance to
Manager on Borrower's books (collectively, the
"Intercompany Advance");
(iv) Borrower pays its obligations by issuing checks or
other payment instructions against its Operating
Account;
(v) Borrower's checks or other payment instructions are
paid by transfer of funds from the Concentration
Account to its Operating Account, and the
Intercompany Advance contemporaneously is reduced by
the amount of such transfers; and
(vi) Borrower and Manager at no time will permit
Borrower's Intercompany Advance to be less than zero
(0).
"CLOSING" means the time of the execution and delivery hereof
by Borrower and Lenders and the funding of the Loan.
"CLOSING DATE" means the date hereof.
"CODE" means the Internal Revenue Code of 1986, as amended,
and any successor thereto.
"COLLATERAL" means (a) subject to SECTION 2.5(b) hereof, the
Mortgaged Property (as defined in the Mortgage) and (b) any collateral delivered
to Agent in accordance with SECTION 4.1(g) hereof.
"CONTROL" (including the terms "CONTROLLING", "CONTROLLED BY"
and "UNDER COMMON CONTROL with") of a Person means the possession, direct or
indirect, of the power to vote 50% or more of the outstanding equity securities
or other ownership interests of such Person or to direct or cause the direction
of the management and policies of such Person, whether through the ownership of
the outstanding equity securities or other ownership interests, by contract or
otherwise.
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"DEBT SERVICE" shall mean, with respect to any period, any and
all interest and scheduled payments of principal required to be made under the
Loan Documents during such period; PROVIDED, HOWEVER, that for the purpose of
calculating the Debt Service Coverage Ratio payments of principal required shall
be deemed to be on the basis of a thirty (30) year amortization schedule in lieu
of the actual amortization schedule required under the Loan Documents.
"DEBT SERVICE COVERAGE RATIO" or "DSCR" shall mean with
respect to any twelve (12) month period ending on December 31 (or with respect
to the calendar year in which the Loan is made, such shorter period ending on
December 31, 1999), the ratio of Net Operating Income (excluding tenant
improvement costs and leasing commissions) for such twelve (12) month period to
Debt Service for such twelve (12) month period as evidenced in the financial
statements to be provided to Agent by Borrower pursuant to SECTIONS 4.1(a)(i)
through 4.1(a)(iv). If applicable, at any time that Agent is in possession of
collateral that has been delivered to it by or on behalf of Borrower in
accordance with SECTION 4.1(g) hereof, the "Debt Service Coverage Ratio" shall
be calculated as if the amount of Net Operating Income for the period in
question included the value of the collateral so delivered to Agent.
"DEFAULT RATE" has the meaning set forth in SECTION 2.6
hereof.
"DEFAULTING LENDER" has the meaning set forth in SECTION
7.7(b) hereof.
"DEFERRED MAINTENANCE REPORT" means the portions of that
certain Property Condition Assessment Report dated as of July 15, 1998 prepared
by De Stefano & Partners, and that certain property condition letter update
dated as of November 24, 1999 (copies of which are attached hereto as Exhibit E)
addressing deferred maintenance of the Leasehold Premises and Improvements
located on the Leasehold Premises.
"DETERMINATION DATE" has the meaning set forth in the
definition of LIBOR.
"EARLY PAYMENT PREMIUM" has the meaning set forth in SECTION
2.8(b) hereof.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means that certain
Environmental Indemnity Agreement between Borrower and Lenders executed on the
Closing Date.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or mandatory agency interpretation, policy or
guidance relating to pollution or protection of the environment, health, safety
or natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials applicable to the Premises.
6
"ENVIRONMENTAL SITE ASSESSMENT" means that certain Phase I
Environmental Site Assessment for 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx,
prepared by Xxxxxxx Environmental, Inc., dated August 18, 1998, and that certain
letter update prepared by Xxxxxxx Environmental, Inc., dated November 19, 1999.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ESTOPPEL CERTIFICATE" means an estoppel certificate in form
and substance acceptable to Agent which is dated not more than (a) forty-five
(45) days prior to the Closing Date with respect to the Major Tenants, and (b)
sixty (60) days prior to the Closing Date with respect to the balance of the
Estoppel Certificates.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EVENT(S) OF DEFAULT" has the meaning set forth in SECTION 5.1
hereof.
"EXTENSION PERIOD" means the First Extension Period and/or the
Second Extension Period, as applicable.
"FIRST EXTENSION PERIOD" means the period from and after the
day after the Maturity Date until and including the First Extension Period
Termination Date.
"FIRST EXTENSION PERIOD OPTION" has the meaning set forth in
SECTION 2.7(b).
"FIRST EXTENSION PERIOD TERMINATION DATE" means December 13,
2003.
"FISCAL YEAR" means a fiscal year of Borrower ending on
December 31 in any calendar year or such other fiscal year as Borrower may
select from time to time in accordance with the terms of this Agreement.
"FIXTURES" means all property and equipment now owned or
hereafter acquired by Borrower and now or hereafter located under, on or above
the Premises or the Leasehold Premises and owned by Borrower, whether or not
permanently affixed, which to the fullest extent permitted by applicable law in
effect from time to time shall be deemed fixtures and a part of the Premises or
the Leasehold Premises.
"FLOATING RATE" means, for any LIBOR Interest Period, at
Borrower's election, indicated by telephonic notice, followed by written
confirmation, given by Borrower to Agent no later than 11:00 a.m. New York City
time, at least three (3) LIBO Business Days prior to the
7
commencement date of the first or next succeeding LIBOR Interest Period, LIBOR
plus the Applicable Margin.
"FOREIGN PERSON" has the meaning set forth in SECTION 3.14
hereof.
"GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall
mean accounting principles as generally accepted in the United States and as set
forth in statements of the Financial Accounting Standards Board and/or in the
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants, or such other accounting principles as may be
mutually agreed by Lender and Borrower.
"GOVERNMENTAL AUTHORITY(IES)" means any (federal, state,
county, municipal or other government) governmental department, commission,
board, bureau, court, agency or any instrumentality of any of them having
jurisdiction over Borrower the Premises and/or the Leasehold.
"GOVERNMENTAL REQUIREMENT" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, writ, injunction,
franchise, permit, certificate, license, authorization, or other mandatory
direction or requirement of any Governmental Authority now existing or hereafter
enacted, adopted, promulgated, entered, or issued applicable to the Premises,
the Leasehold Premises or Borrower.
"GROUND LEASE" has the meaning set forth in the definition of
LEASEHOLD.
"GUARANTY" means that certain Guaranty, made by Prime in favor
of Agent, executed on the Closing Date.
"HAZARDOUS MATERIAL" means any flammable explosives,
radioactive materials, Asbestos, and any chemical, petroleum products, or other
man-made materials with hazardous or carcinogenic toxic characteristics,
including, without limitation, any substances defined as or included in the
definition of "hazardous substances", "hazardous waste", "hazardous materials",
"toxic substances", "contaminants", or other similar terms, by any federal,
state or local environmental statute, regulation or ordinance presently or
hereafter in effect, as such statute, regulation or ordinance may be amended
from time to time.
"IMPOSITIONS" means all (a) real estate and personal property
taxes and other taxes and assessments, public or private; utility rates and
charges including those for water and sewer; all other governmental and
non-governmental charges and any interest or costs or penalties with respect to
any of the foregoing; and charges for any public improvement, general and
special, ordinary and extraordinary, foreseen and unforeseen, of any kind and
nature whatsoever that at any time prior to or after the execution of the Loan
Documents may be assessed against Borrower
8
and levied or imposed upon the Premises and the Leasehold Premises or the rents
or income received therefrom, or any use or occupancy thereof which become due
and payable during the term of the Loan, (b) other taxes, assessments, fees and
governmental and non-governmental charges levied imposed or assessed upon or
against Borrower which become due and payable during the term of the Loan and
(c) taxes levied or assessed upon the Mortgage and the Note which become due and
payable during the term of the Loan (other than (i) income, gross receipts,
franchise, gift, inheritance and similar taxes imposed upon Lenders or any tax
imposed in lieu of or as a direct substitute for any such income, gross receipts
and similar taxes, (ii) any taxes levied or assessed in connection with a
Lender's transfer of all or any part of its interest in the Loan, except any
transfer taxes imposed on the initial transfer of interests in the Loan by Agent
within twelve (12) months of the Closing Date by any federal, state or local
government in the United States of America and (iii) taxes imposed by the
Federal Republic of Germany).
"IMPROVEMENTS" has the meaning specified in the Mortgage.
"INCOME TAXES" means all federal, state and local income taxes
payable (including installment and estimated payments in respect thereof),
directly or pursuant to a tax allocation agreement or successor agreement, by
Borrower or its direct and indirect partners with respect to the taxable income
derived or received from the Premises and the Leasehold Premises.
"INDEMNIFIED PARTY" has the meaning set forth in Section 5.5.
"INSTITUTION" means (a) a commercial bank organized under the
laws of the United States, or any State thereof, or a commercial bank organized
under the laws of another country, in any case having a net worth in excess of
$500,000,000, any holding company thereof and any affiliate having a net worth
in excess of $500,000,000 of any such holding company, (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having a net worth in excess of $250,000,000, any holding
company thereof and any affiliate having a net worth in excess of $250,000,000
of any such holding company, and (c) any insurance company, pension fund or
investment fund having a net worth in excess of $500,000,000. Nothing in clauses
(a) through (c) of the immediately preceding sentence to the contrary, each
Lender shall be deemed an "Institution".
"LAND" means the real property more particularly described in
EXHIBIT B attached hereto and by this reference made a part hereof.
"LAWS" means all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
determinations, awards and court orders of any federal, state, municipal or
local government, Governmental Authority, regulatory agency or authority
applicable to Borrower, the Leasehold Premises and/or the Premises.
9
"LEASEHOLD" means Borrower's leasehold interest in that
certain premises (the "LEASEHOLD PREMISES") located at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, pursuant to that certain Lease (the "GROUND LEASE"), dated
December 20, 1968, by and between Xxxxxx Xxxxxxxxx Xxxx and Xxxxxx X. Xxxxx, as
trustees et al., as landlord, and International Business Machines Corporation,
as tenant, as amended, tenant's leasehold interest having been assigned to
Borrower on or before the date hereof. The parties hereto acknowledge and agree
that after such assignment Borrower does not and will not own a fee interest in
the Leasehold Premises (but will own a fee interest in the Improvements located
on the Leasehold Premises) and is not and will not be subject to or obligated in
any way with respect to such fee interest, except as otherwise set forth in the
Ground Lease.
"LEASES" means any and all leases, subleases, licenses,
concessions or grants of other possessory interest now or hereafter in force,
oral or written, entered into by or assigned to Borrower and covering or
affecting the Premises or the Leasehold Premises, or any part thereof,
including, without limitation, the leases set forth on EXHIBIT B hereto (true
and complete copies of which, to the best of Borrower's knowledge, have been
delivered to the Agent prior to the date hereof).
"LENDER DEFAULT OBLIGATION" has the meaning set forth in
SECTION 7.7(b) hereof.
"LENDING OFFICE" shall mean:
For Agent, in its capacity as Lender:
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx 00
00000 Xxxxx
Xxxxxxx Xxxxxxxx of Germany
Attention: Xx. Xxxxx-Jurgen Cohausz or Mr. Armin Gemmerich
For Xxxxxxx Xxxxx Capital Inc.:
World Financial Center
North Tower, 10th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxx
or such other office as each of the above mentioned Lenders, on any other
Lender, shall designate from time to time by written notice to Borrower and
Agent given at least three (3) Business Days prior to the effective date of such
notice.
10
"LIBO BUSINESS DAY" means a day other than (a) Saturday, (b)
Sunday, or (c) a day on which commercial banks in New York City, United States
of America, Chicago, Illinois, U.S., London, England or Mainz, Germany are
required by law to close.
"LIBO RESERVE PERCENTAGE" means the percentage representing
the reserve requirement applicable to Eurocurrency Liabilities pursuant to
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor thereto). In determining the LIBO Reserve Percentage, Agent shall take
into account any transitional adjustment or phase-in provisions of the reserve
requirements otherwise applicable to Eurocurrency Liabilities during the
applicable LIBOR Interest Period, and, in the event of any change or variation
in the reserve requirements during the applicable LIBOR Interest Period, Agent
may use any reasonable averaging or attribution methods which it deems
appropriate. The determination by Agent of any applicable LIBO Reserve
Percentage shall be conclusive, absent manifest error. Failure by Agent to take
into account the LIBO Reserve Percentage when calculating interest due with
respect to the outstanding indebtedness of the Loan shall not constitute,
whether by course of dealing or otherwise, a waiver by Agent of its right to
collect such amounts for any future period.
"LIBOR" means, as to the outstanding indebtedness owed
hereunder with respect to the applicable LIBOR Interest Period, (a) the rate per
annum equal to the offered rate for deposits in United States dollars for the
applicable LIBOR Interest Period and for the amount comparable to the then
outstanding indebtedness of the Loan, which appears on Dow Xxxxx Markets Service
(formerly known as Telerate) display page 3750 as of 11:00 a.m. (London time)
two (2) LIBO Business Days prior to the first day of such LIBOR Interest Period
(the "DETERMINATION DATE") divided by (b) one minus the LIBO Reserve Percentage.
"Dow Xxxxx Markets Service display page 3750" means the display designated as
"page 3750" on the Dow Xxxxx Markets Service (or such other page as may replace
page 3750 on that service or such other service as may be nominated by the
British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits). If such rate does not appear on Dow Xxxxx Markets Service page
3750 as of approximately 11:00 a.m. (London time) on the Determination Date, the
LIBOR for the LIBOR Interest Period will be reasonably determined by Agent in
good faith on a customary commercial basis on the basis of the offered rates for
deposits in U.S. Dollars for an amount comparable to the then outstanding
indebtedness of the Loan for the same period of time as such
11
LIBOR Interest Period that are offered by four (4) major banks in the London
interbank market at approximately 11:00 a.m. (London time) on the Determination
Date. Agent will request that the principal London office of each of the four
(4) major banks provide a quotation of its U.S. Dollar deposit offered rate. If
at least two (2) such quotations are provided, the LIBOR will be the arithmetic
mean of the quotations. If fewer than two (2) quotations are provided as
requested, the LIBOR will be reasonably determined by Agent in good faith on a
customary commercial basis on the basis of the rates quoted for loans in U.S.
Dollars to leading European banks for amounts comparable to the then outstanding
indebtedness of the Loan for the same period of time as such LIBOR Interest
Period offered by major banks in New York City at approximately 11:00 a.m. (New
York time) on the Determination Date. If at least two (2) such rates are so
provided, the LIBOR will be the arithmetic mean of the quotations. If fewer than
two (2) rates are provided, the LIBOR which was used to determine the last LIBOR
in effect shall be deemed to be the LIBOR.
"LIBOR INTEREST PERIOD" means, for any outstanding
indebtedness of the Loan, the time during which the applicable Floating Rate is
in effect with respect to such amount and shall mean the period commencing, (a)
in the case of the first LIBOR Interest Period on the Closing Date, and (b) with
respect to any subsequent LIBOR Interest Periods, on the last day of the
immediately preceding LIBOR Interest Period, and ending, in each case, at the
option of Borrower, as provided below, thirty (30), sixty (60), ninety (90) or
one hundred and eighty (180) days thereafter; PROVIDED, HOWEVER, that whenever
the last day of any LIBOR Interest Period would otherwise occur on a day other
than a LIBO Business Day, the last day of such LIBOR Interest Period shall be
extended to occur on the next succeeding LIBO Business Day, PROVIDED FURTHER
that if such extension would cause the last day of such LIBOR Interest Period to
occur in the next following calendar month, the last day of such LIBOR Interest
Period shall occur on the immediately preceding LIBO Business Day.
"LIEN" means, for purposes of this Agreement and with respect
to any asset, any mortgage, deed of trust, lien, pledge, charge, security
interest or other encumbrance of any kind in respect of such asset, including
without limitation any right or arrangement with any creditor to have its claim
satisfied out of such asset, or the proceeds therefrom, prior to the general
creditors of the owner thereof.
"LOAN DOCUMENTS" means all instruments and agreements executed
and delivered, or to be executed and delivered by Borrower, to Agent and/or
Lenders in connection with the Loan, each in form and substance acceptable to
Agent in its reasonable discretion. By way of example, but not limitation, such
documents shall include (a) the Note, (b) the Mortgage, (c) this Agreement, (d)
the Environmental Indemnity Agreement, (e) the Cash Collateral Agreement and (f)
all such other instruments as Agent in its reasonable discretion shall require.
"MAJOR TENANTS" mean Jenner & Block, Xxxxxx Xxxxxxxx LLP,
International Business Machines Corporation, Xxxxx & Lardner and ST Holdings,
Inc.
"MAJORITY LENDERS" means, at any time, Lenders owed more than
sixty-six and two-thirds percent (66 %) of the then aggregate unpaid principal
amount of the Loan.
"MANAGEMENT AGREEMENT" means the Management Agreement, dated
as of the Closing Date, between Borrower and Manager.
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"MANAGER" means Prime Group Realty, L.P., or another Affiliate
of Borrower or any other Person retained by Borrower as its property manager and
approved by Agent with respect to the Premises and the Leasehold Premises in
accordance with the terms of the Loan Documents.
"MATURITY DATE" means December 13, 2002.
"MORTGAGE" means the Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing dated as of the date hereof by Borrower in
favor of Lenders.
"MORTGAGE INSURANCE POLICY" means a final, marked commitment
of title insurance containing such coverages as Agent reasonably deems
necessary, with all general survey exceptions deleted, on forms of, and issued
by, Title Company and/or such other title insurance companies as may be
reasonably acceptable to Agent insuring the priority of the Lien on the Land and
the improvements created by the Mortgage.
"NET CASH FLOW" means, for any period, the excess of Cash
Receipts over Cash Expenditures.
"NET OPERATING INCOME" shall include the Operating Income
accrued by Borrower for the applicable period less all Operating Expenses in
connection with the operation of the Premises, the Leasehold Premises and all
Improvements, all the foregoing being in accordance with Generally Accepted
Accounting Principles.
"OPERATING ACCOUNT AGREEMENT" means that certain Operating
Account Agreement between Agent and Borrower executed on the Closing Date.
"OPERATING EXPENSES" means, with respect to any period, all
operating expenses of the Premises, the Leasehold Premises and all Improvements,
including costs incurred for utilities, repairs, maintenance, security,
cleaning, salaries and payroll, administrative, marketing, legal and other
professional services, management fees payable to Manager, real estate taxes and
insurance premiums and such other expenses as are determined in accordance with
Generally Accepted Accounting Principles consistently applied, except
depreciation associated with the Premises.
"OPERATING INCOME" means, with respect to any period, all of
the Rents (as hereinafter defined), revenues and income under the Leases (but
specifically excluding security deposits unless and to the extent same are used
to cure defaults) and/or arising from the use or enjoyment of all or any portion
of the Premises, the Leasehold Premises and all Improvements, and all other
amounts received which, in accordance with Generally Accepted Accounting
13
Principles, are required to be included in Borrower's financial statement as
operating income of the Premises, the Leasehold Premises and all Improvements.
"OPINION OF BORROWER'S COUNSEL" means an opinion of counsel of
Borrower, Winston & Xxxxxx, in form and substance reasonably satisfactory to
Agent and Agent's counsel.
"ORGANIZATIONAL DOCUMENTS" means (a) with respect to any
Person that is a corporation, the certificate of incorporation or charter and
by-laws of such Person, (b) with respect to any Person that is a partnership,
the partnership agreement and, if a limited partnership, certificate of limited
partnership of such Person, and (c) with respect to any Person that is a limited
liability company, the articles of organization and the operating agreement of
such Person.
"OTHER TAXES" mean any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from payment made hereunder or under the Note or from the execution,
delivery or recording of, or otherwise with respect to, this Agreement, the Note
or the Mortgage imposed by the United States or any state thereof (including any
political subdivision or taxing authority thereof), OTHER THAN (a) income, gross
receipts, franchise, inheritance, gift and similar taxes imposed upon Lenders or
any tax imposed in lieu of and as a direct substitute for any such income, gross
receipts, and similar taxes and (b) any taxes levied or assessed in connection
with a Lender's transfer of all or any part of its interest in the Loan, except
any transfer taxes imposed on the initial transfer of interests in the Loan by
Agent within twelve (12) months of the Closing Date by any federal, state or
local government in the United States of America.
"PERCENTAGES" shall mean (i) with respect to Agent 37.5%, and
(ii) with respect to Xxxxxxx Xxxxx Mortgage Capital Inc. 62.5%.
"PERMITTED ENCUMBRANCES" means all those certain encumbrances
set forth on Schedule B-2 to that certain title policy of Title Company dated as
of the date hereof, No. 007750482, in respect of 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx, to which the interest of Borrower in the Premises is
permitted to be subject.
"PERMITTED INVESTMENTS" means any investment selected by
Borrower and approved by Agent, including one or more of the following:
(i) obligations of, or obligations guaranteed as to
principal and interest by, the United States government or any
agency or instrumentality thereof, provided such obligations
are backed by the full faith and credit of the United States
of America;
(ii) Federal Housing Administration debentures;
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(iii) Federal Home Loan Mortgage Corp. Debt
obligations, Farm Credit System Consolidated system-wide bonds
and notes, Federal Home Loan Banks Consolidated Debt
obligations, Federal National Mortgage Association Debt
obligation, Student Loan Marketing Association Debt
obligations, Finance Corp. debt obligations and Resolution
Funding Corp. (REFCORP) Debt obligations;
(iv) federal funds, unsecured certificates of
deposit, time or demand deposits, banker's acceptances, and
repurchase agreements having maturities of not more than 365
days, of any bank, the short-term debt obligations of which
are rated A-1+ by S&P and P-1 by Moody's;
(v) deposits that are fully insured by the Federal
Deposit Insurance Corp (FDIC);
(vi) debt obligations maturing in 365 days or less
that are rated AAA or higher by S&P and Aaa or higher by
Moody's;
(vii) commercial paper rated A-1 by S&P and P-1 by
Moody's and maturing in 365 days or less;
(viii) investment in money market funds rated AAAm or
AAAm-G by S&P and Aaa by Moody's; or
(ix) principal-only strips and interest-only strips
of noncallable obligations issued by the U.S. Treasury, and
REFCORP securities stripped by Federal Reserve Bank of New
York.
"PERMITTED TRANSFEREE" means a Pension Fund or Insurance
Company.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"PERMITTED EXCEPTIONS" means (a) Liens in favor of Lender, (b)
Permitted Prior Exceptions, (c) Leases to which Lender has provided its consent
(or is otherwise deemed to have given) pursuant to SECTION 4.1(O) hereof and (d)
other matters expressly approved by Lender in writing which are subject and
subordinate to the Lien.
"PERMITTED PRIOR EXCEPTIONS" means (a) general ad valorem real
property taxes which are not delinquent, (b) Special Taxes which are not
delinquent, and (c) such other matters as Lender shall expressly approve in
writing as "PERMITTED PRIOR EXCEPTIONS" for purposes of this Agreement.
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"PERSONAL PROPERTY" means tangible personal property and
Fixtures, including building materials and supplies, furnishings, equipment and
other Goods (as defined in the Mortgage) owned by Borrower, but excluding
construction equipment of a type intended for use in connection with other
projects.
"PREMISES" means the Land together with all of the
improvements constructed thereon, Fixtures and equipment and Personal Property
located thereon and used in connection with the ownership or operation thereof.
"PREPAYMENT PREMIUM" has the meaning set forth in SECTION
2.9(a).
"PRIME" means Prime Group Realty, L.P., a limited partnership
organized under the laws of the State of Delaware.
"PRIME RATE" means the per annum rate of interest publicly
announced from time to time by Westdeutsche ImmobilienBank at Mainz, Germany as
its "Prime Rate".
"PURCHASE AGREEMENT" means that certain Agreement of Purchase
and Sale between BRE\Wabash, LLC and Prime Group Realty Limited Partnership
effective September 30, 1999, as assigned.
"QUALIFIED INSURER" has the meaning set forth in SECTION
5.5(m)(ii).
"QUALIFIED LOAN" has the meaning set forth in SECTION 4.2(j)
hereof.
"REINVESTMENT RATE" shall mean the yield on actively traded
"On The Run" United States Treasury securities having interest payable
semi-annually or the LIBOR corresponding to the appropriate LIBOR Interest
Period, if applicable, and having a maturity date corresponding to the period
from the day preceding the date of the applicable prepayment through the
applicable LIBOR Interest Period as reported by Bloomberg Financial Markets
Commodities News screen USD, PROVIDED, HOWEVER, that if the Maturity Date is not
the same as the maturity date of an actively traded "On The Run" United States
Treasury security, such yield shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the yields of actively
traded "On The Run" Treasury securities having a maturity closest to the
Maturity Date as reported by Bloomberg Financial Markets Commodities News screen
USD or the equivalent screen provided by Bloomberg Financial Markets Commodities
News (or any nationally recognized publicly available on-line source for similar
market data in the United States reasonably selected by Agent).
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"REMEDIATION AMOUNT" has the meaning set forth in Section
6.1(m) hereof.
"REMEDIATION WORK" has the meaning set forth in Section 6.1(m)
hereof.
"RENTS" means all of the rents, royalties, issues, revenues,
income, profits and other benefits now or hereafter arising from the Premises
and the Leasehold Premises and the occupancy, use and enjoyment thereof.
"RENT ROLL" has the meaning set forth in SECTION 3.20 hereof.
"RESTRAINT" means any change (including introduction) after
the date of this Agreement in any applicable law, rule, regulation, guidelines
or directive including, without limitation, those of the United States and the
Federal Republic of Germany, or the interpretation thereof (having the force of
law), by any governmental authority, central bank or comparable agency, and
compliance by Lenders with any request or directive (having the force of law) to
be issued after the date of this Agreement of any such authority, bank or
agency.
"RIGHT OF OTHERS" means, as to any property in which a Person
has an interest, any legal or equitable claim or other interest (other than a
Lien but including a leasehold interest, a right of first refusal in connection
with sale of the Premises or a right of repossession or removal) in or with
respect to such property held by any other Person, and any option or right held
by any other Person to acquire any such claim or other interest or any Lien in
or with respect to such property.
"SECOND EXTENSION PERIOD" means the period from and after the
day following the First Extension Period Termination Date until and including
the Second Extension Period Termination Date.
"SECOND EXTENSION PERIOD OPTION" has the meaning set forth in
SECTION 2.7(C).
"SECOND EXTENSION PERIOD TERMINATION DATE" means December 13,
2004.
"SNDAs" has the meaning set forth in SECTION 4.1(P).
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person
17
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would constitute an
unreasonably small capital. For purposes of this Agreement, the amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that is likely to become an actual or matured liability.
"SPECIAL TAX" means, as to any property, (a) any special
assessment or other Tax which is or may become a Lien affecting such property,
other than general ad valorem real property taxes, and (b) any assessment,
improvement, community facilities or other special taxing district in or into
which such property is or may be located or incorporated or under which any
special assessment or other Tax which is or may become a Lien affecting such
property is or may be imposed.
"SYNDICATION AGREEMENT" means that certain Syndication
Agreement entered into December 9, 1999, by and between Agent and Xxxxxxx Xxxxx
Mortgage Capital Inc.
"TAXES" means any and all present or future taxes, levies,
impositions, deductions, charges or withholdings imposed by the United States or
any state thereof (including any political subdivision or taxing authority
thereof), and all liabilities with respect thereto; PROVIDED, HOWEVER, that
"Taxes" shall not include (a) income, gross receipts and similar taxes imposed
upon Lenders or any tax imposed in lieu of and as a direct substitute for any
such income, gross receipts and similar taxes and (b) any taxes levied or
assessed in connection with a Lender's transfer of all or any part of its
interest in the Loan.
"TENANT" means, as to any Lease, the tenant, lessee, sublessee
or licensee under such Lease.
"TENANT IMPROVEMENT/LEASING COMMISSION COSTS" means,
collectively, all costs and expenses incurred by Borrower for tenant improvement
work, tenant work allowances or other capital improvements, allowances,
concessions and payments of Borrower required pursuant to any Lease, and any
leasing commissions and other costs, expenses and allowances incurred by
Borrower in connection with the leasing or subleasing of all or a portion of the
Premises or the Leasehold Premises pursuant to a Lease.
"TERM" means the period from and after the Closing Date until,
and including, the Maturity Date or, if applicable, the First Extension Period
Termination Date or the Second Extension Period Termination Date.
"TITLE COMPANY" means Chicago Title Insurance Company and/or
such other title insurance companies as may be reasonably acceptable to Agent
insuring the priority of the Lien on the Land and the Improvements created by
the Mortgage.
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"TO THE BEST OF BORROWER'S KNOWLEDGE" (and similar
expressions) shall be construed as meaning to the actual knowledge, after
reasonable due inquiry, of Borrower's Executive Vice President and General
Counsel, or Associate General Counsel after direct inquiry of the building
manager and other officers of Borrower having any relevant involvement in the
operation of the Premises and the Leasehold Premises.
"TRUST" means Prime Group Realty Trust, a Maryland real estate
investment trust, the managing general partner of Prime.
ARTICLE 2
THE LOAN
Section 2.1 LOAN.
(a) The Loan granted under this Agreement shall be in the
aggregate amount of ONE HUNDRED SIXTY MILLION DOLLARS ($160,000,000.00) (the
"LOAN AMOUNT") and shall be used for the sole purpose of the Borrower's partial
financing of the acquisition of the Premises and the Leasehold Premises and the
Improvements located on the Leasehold Premises.
(b) Upon satisfaction of the conditions precedent to Lenders'
obligation to advance the Loan pursuant to this Agreement, all funds to be
advanced hereunder shall be advanced by each Lender to Agent in the amount set
forth opposite its signature on the signature page attached hereto. Agent and
the other Lenders shall advance the Loan Amount to the Title Company's escrow
account on the Closing Date for payment by direction of Agent or Agent's counsel
to make payments required under this Loan Agreement, with any excess proceeds to
be disbursed to Borrower. The obligation of each Lender under this SECTION
2.1(b) shall be several and not joint.
Section 2.2 CONDITIONS PRECEDENT.
The obligations of Lenders hereunder are subject to the
condition that Agent shall have received, at or prior to the Closing, all of the
following documents in form and substance satisfactory to Agent:
(a) a certificate of Borrower signed by a duly authorized
officer of the sole member of Borrower, dated as of the Closing Date, stating
that the following statements are true:
(i) the representations and warranties contained in the
Loan Documents are correct in all material respects on and as of the Closing
Date, before and after giving effect to the making of the Loan by Lenders and to
the application of the proceeds therefrom, as though made on and as of such
date; and
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(ii) to the best of Borrower's knowledge, no material
event has occurred and is continuing, or would result from the making of the
Loan by Lenders or from the application of the proceeds therefrom, that
constitutes an Event of Default;
(b) certified copies of the resolutions of the board of
trustees of the Trust or similar governing body, as applicable, of 77WWLP and
Prime approving the Loan, this Agreement, the Note and each other Loan Document
to which it is or is to be a party, and of all documents evidencing other
necessary partnership or corporate action and governmental and other third party
approvals and consents, if any, with respect to the Loan, this Agreement, the
Note and each other Loan Document;
(c) a copy of the Organizational Documents of Borrower, Prime
and 77WWLP, in each case together with each amendment thereto, and, in the case
of the operating agreement of Borrower, the certificate of limited partnership
of Prime and the certificate of limited partnership of 77WWLP, certified (as of
a date reasonably near the Closing Date) by the Secretary of State of the
jurisdiction of its formation or incorporation as being a true and correct copy
thereof;
(d) a copy of a certificate of the Secretary of State of the
jurisdiction of its incorporation, dated reasonably near the Closing Date,
certifying that Borrower, Prime and 77WWLP are duly incorporated or formed and
in good standing under the laws of the State of the jurisdiction of their
respective organization;
(e) a copy of a certificate of the Secretary of State of the
State of Illinois, dated reasonably near the Closing Date, stating that
Borrower, Prime and 77WWLP are duly qualified and in good standing in such
State;
(f) a notarized certificate of a Secretary or Assistant
Secretary of the Trust certifying the names and true signatures of the officers
of the Trust, authorized to sign this Agreement, the Note and each other Loan
Document to which they are or are to be parties and the other documents to be
delivered hereunder and thereunder;
(g) in connection with the security interests granted pursuant
to the Mortgage:
(i) copies of financing statements, delivered by Borrower
to Title Company for filing under the Uniform Commercial Code of the State of
Illinois, as well as any other jurisdictions deemed necessary or desirable by
Agent, covering the Collateral described in the Mortgage,
(ii) completed requests for information, dated on or
before the Closing Date, listing the financing statements referred to in clause
(i) above and all other effective
20
financing statements filed in the jurisdictions referred to in clause (i) above
that name Borrower as debtor, together with copies of such other financing
statements,
(iii) evidence of the completion of all other recordings
and filings of or with respect to the security interest granted pursuant to the
Mortgage that Agent may deem necessary or desirable in order to perfect and
protect the Liens created thereby, and
(iv) evidence that all other action that Agent may deem
reasonably necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Mortgage has been taken;
(h) the Mortgage in form and substance satisfactory to Agent
and duly executed by Borrower in recordable form, together with:
(i) evidence that counterparts of the Mortgage have been
duly executed and delivered for recording to the Title Company on or before the
Closing Date in such form as Agent may deem necessary or desirable in order to
create a valid first and subsisting Lien on the property described therein in
favor of Agent and that provision has been made for the payment of all filing
and recording taxes and fees,
(ii) a fully paid Mortgage Insurance Policy, in form and
substance, with endorsements and in an amount acceptable to, Agent, issued and
reinsured by the Title Company, insuring the Mortgage to be a valid first and
subsisting Lien on the Premises and the Leasehold described therein, free and
clear of all defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted Encumbrances,
and providing for such other affirmative insurance (including endorsements for
mechanics' and materialmen's Liens) and such coinsurance and direct access
reinsurance as Agent may deem reasonably necessary or desirable,
(iii) a survey of the Premises, certified to Agent and the
issuer of the Mortgage Insurance Policy in a manner satisfactory to Agent,
acceptable to Agent,
(iv) an Appraisal of the Premises and the Leasehold
indicating an open market value of at least $238,000,000, a forced sale value of
at least $160,000,000 and otherwise in form and substance satisfactory to Agent,
(v) an engineering report and such other reports as Agent
has requested with respect to the Premises, in form and substance and from
professional firms acceptable to Agent,
21
(vi) such consents and agreements of lessors, if any, and
other third parties, and such estoppel letters and other confirmations, as Agent
may deem reasonably necessary or desirable,
(vii) evidence of the insurance required by the terms of
the Mortgage,
(viii) evidence that all other action that Agent may deem
reasonably necessary or desirable in order to create valid first and subsisting
Liens on the Premises and the Leasehold Premises has been taken, and
(ix) original copies of all mortgage notes being assigned
to Agent (or, if the same were not available, lost note affidavits, reasonably
acceptable to Agent with respect thereto), together with all assignments,
consolidations, splitters, spreaders, extensions and modifications thereto, to
the extent being recorded in connection herewith, in form for recordation in
Chicago, Illinois;
(i) the Environmental Indemnity Agreement, duly executed by
Borrower;
(j) the Cash Collateral Agreement, duly executed;
(k) the Assignment of Contracts and Authorizations, duly
executed;
(l) the Assignment of Leases and Rents, duly executed;
(m) the Note, duly executed;
(n) this Agreement, duly executed;
(o) the Environmental Site Assessment;
(p) a certified copy of the Management Agreement;
(q) the Property Management Subordination Agreement, duly
executed;
(r) a favorable Opinion of Borrower's Counsel;
(s) copies of notices to be sent to each tenant at the
Premises and the Leasehold Premises regarding the designation of Agent as an
insured/loss payee/mortgagee in accordance with the Mortgage;
22
(t) SNDAs with respect to the Major Tenants, in form and
substance acceptable to Agent;
(u) Estoppel Certificates from the Major Tenants and (ii) any
other tenants under the Leases, that, together with the Major Tenants, account
for at least sixty-six and two-thirds percent (66 2/3%) of the rentable square
footage of the Premises. Notwithstanding the foregoing, Borrower will provide to
Agent Estoppel Certificates for all tenants for which Borrower received Estoppel
Certificates from Seller pursuant to the Purchase Agreement.
(v) financial statements as requested by Agent certified as of
the Closing Date and a certificate of an officer of the Trust stating no
material adverse change in the financial condition of Borrower, 77WWLP, Prime
and the Trust has occurred from the date the financial statements were prepared;
(w) certified copies of all the Leases and a Rent Roll
certified by Borrower as being true and correct in all material respects;
(x) payment of Commitment Fee and Arrangement Fee required to
be paid hereunder pursuant to SECTIONS 2.14 and 2.15, respectively;
(y) the Guaranty, duly executed by Prime;
(z) a copy of the Deferred Maintenance Report; and
(aa) any other documents as may reasonably be requested by
Agent in Agent's reasonable discretion.
Section 2.3 INTEREST.
(a) During the Term and, if applicable, the First Extension
Period and the Second Extension Period, the Loan shall bear interest on the
outstanding principal amount thereof from time to time at a rate per annum equal
to the Floating Rate.
(b) (i) During the Term, Borrower shall pay to Agent interest
on the Loan on the last day of each applicable LIBOR Interest Period.
(ii) If applicable, during the First Extension Period and
the Second Extension Period (if Borrower exercises the First Extension Period
Option and the Second Extension Period Option, respectively, pursuant to SECTION
2.7 hereof), Borrower shall pay to Agent interest on the Loan on the last day of
each applicable LIBOR Interest Period.
23
(c) All interest on the Loan (including interest at the
Default Rate) shall be calculated on an actual/360-day basis (including the
first day but excluding the last day).
(d) Borrower may elect (i) thirty (30), (ii) sixty (60), (iii)
ninety (90) or (iv) one hundred and eighty (180) day LIBOR Interest Periods. In
the event that Borrower fails to so designate the LIBOR Interest Period at least
three (3) LIBO Business Days before the next succeeding LIBOR Interest Period,
Agent shall automatically designate on Borrower's behalf a ninety (90) day LIBOR
Interest Period.
(e) Time shall be of the essence with respect to the time
periods set forth in this SECTION 2.3.
Section 2.4 THE NOTE.
The Loan by Lenders to Borrower shall be evidenced by the
Note.
Section 2.5 THE MORTGAGE AND COLLATERAL.
(a) The Note and all other obligations under the Loan
Documents shall be secured by the Collateral. Upon the Closing of this Agreement
and the execution of the Note, Borrower will cause the Mortgage to be registered
or recorded in such a manner and in such a place as may be required in order to
publish notice of and fully protect the lien or security interest of Lenders in
the Premises and the Leasehold Premises.
(b) On the date hereof, the Collateral includes Borrower's
interest in the Ground Lease and the Improvements located on the Leasehold
Premises. In the event that, at any time during the Term, an amount equal to the
greater of (i) 80% of the gross sale proceeds of Borrower's sale of the
Leasehold and the Improvements located upon the Leasehold Premises (as evidenced
by documentation reasonably satisfactory to Agent) or (ii) 80% of the value of
the Leasehold and the Improvements located upon the Leasehold Premises (as set
forth in the Appraisal described in SECTION 2.2(h)(iv) hereof) is paid by
Borrower to Agent in partial payment of Borrower's debt to Lenders: (A) Agent
shall release the Leasehold and the Improvements located upon the Leasehold from
the lien of the Mortgage and Agent shall provide to Borrower all documents
necessary to cause and evidence such release; and (B) subject to SECTION 2.5(c)
hereof Borrower may transfer Borrower's interest in the Ground Lease and
Improvements located on the Leasehold Premises without further approval by
Agent. Amounts paid under this SECTION 2.5(b) shall reduce the then outstanding
principal balance of the Loan.
(c) Borrower shall not transfer Borrower's interest in the
Ground Lease and the Improvements located on the Leasehold Premises unless such
transfer can be accomplished by
24
Borrower without violating any land use and/or parking regulations or
restrictions now or hereinafter in effect impacting the Premises or the
Leasehold Premises.
Section 2.6 DEFAULT RATE.
Any overdue principal or interest on the Loan shall bear
interest, payable upon demand, for each day from and including the date which is
one (1) day after payment thereof was due but excluding the date of actual
payment at a rate per annum equal to the lesser of the maximum interest rate
permitted under applicable law or a rate equal to the sum of 3.0% plus the Prime
Rate (the "DEFAULT RATE"). After the occurrence and during the continuance of an
Event of Default, the Loan shall bear interest at the Default Rate.
Section 2.7 REPAYMENT OF LOAN.
(a) The outstanding principal balance of the Loan shall be
repaid in annual installments beginning December 13, 2000 as set forth in
EXHIBIT C (each an "ANNUAL INSTALLMENT PAYMENT"). The remaining outstanding
principal balance and any other indebtedness payable to Agent or Lenders under
the Loan Documents shall be due and payable on the Maturity Date if no Extension
Period is entered into or on the First Extension Period Termination Date or the
Second Extension Period Termination Date, as the case may be.
(b) Notwithstanding the foregoing, Borrower may exercise an
option (the "FIRST EXTENSION PERIOD OPTION") extending the Term for the period
from and after the day after the Maturity Date to and including the First
Extension Period Termination Date by providing notice of such exercise (the
"FIRST DESIGNATION NOTICE") to Agent, on or before the date that is thirty (30)
days before the Maturity Date. The First Designation Notice once given shall be
irrevocable. The exercise of the First Extension Period Option shall only be
available in the event that on the date of the First Designation Notice and the
Maturity Date: (i) no monetary Event of Default shall have occurred and be
continuing; (ii) no default of Borrower under any material contract instrument
or agreement to which Borrower is a party or by which Borrower or any of its
properties or assets may be bound or to which any may be subject, which default
might have a material adverse effect upon the business, operations, properties,
assets or conditions (financial or otherwise) of Borrower shall have occurred
and be continuing; or (iii) the Debt Service Coverage Ratio for the four (4)
full calendar quarters immediately preceding the calendar quarter in which the
Maturity Date occurs is at least 1.4:1. In the event that the Term is extended
pursuant to the First Extension Period Option, Borrower shall (A) pay to Agent
on or before the Maturity Date a fee of $200,000.00 and (B) prior to the
Maturity Date, extend the interest rate hedge agreement described in SECTION
4.1(w) hereof or enter into a similar agreement acceptable to Lender for at
least the duration of the First Extension Period. Upon and during the occurrence
of an Event of Default, all Net Cash Flow shall be deposited into the Cash
Collateral Account and shall be governed pursuant to the Cash Collateral
Agreement.
25
(c) Notwithstanding the foregoing, Borrower may exercise an
option (the "SECOND EXTENSION PERIOD OPTION") extending the Term for the period
from and after the day after the First Extension Period Termination Date to and
including the Second Extension Period Termination Date by providing notice of
such exercise (the "SECOND DESIGNATION NOTICE") to Agent, on or before the date
that is thirty (30) days before the First Extension Period Termination Date. The
Second Designation Notice once given shall be irrevocable. The exercise of the
Second Extension Period Option shall only be available in the event that on the
date of the Second Designation Notice and the First Extension Period Termination
Date: (i) no monetary Event of Default shall have occurred and be continuing;
(ii) no default of Borrower under any material contract instrument or agreement
to which Borrower is a party or by which Borrower or any of its properties or
assets may be bound or to which any may be subject, which default might have a
material adverse effect upon the business, operations, properties, assets or
conditions (financial or otherwise) of Borrower shall have occurred and be
continuing; or (iii) the Debt Service Coverage Ratio is at least 1.5:1. In the
event that the Term is extended pursuant to the Second Extension Period Option,
Borrower shall (A) pay to Agent on or before the First Extension Period
Termination Date a fee of $200,000.00, (B) prior to the First Extension Period
Termination Date, extend the interest rate hedge agreement described in SECTIONS
4.1(w) and 2.7(b)(B) hereof or enter into a similar agreement acceptable to
Lender for at least the duration of the Second Extension Period and (C) make the
payment required by SECTION 4.1(g)(ii) hereof.
Section 2.8 PREPAYMENTS.
(a) Borrower shall have the option on not less than ten (10)
Business Days' prior written notice to Agent to prepay the Loan in whole or in
part at any time and from time to time; PROVIDED, HOWEVER, that any such
prepayment shall be accompanied by accrued interest on the principal amount
being prepaid to, but excluding, the date of such prepayment plus the Prepayment
Premium, if any, determined pursuant to SECTION 2.9 hereof and any other amounts
then due and payable under the Loan Documents.
(b) In addition to the foregoing, in the event that Borrower
prepays all or any part of the principal amount of the Loan, Borrower shall also
pay the following amount to Agent (the "EARLY PAYMENT PREMIUM") in addition to
any other amounts required to be paid by Borrower to Agent pursuant to this
SECTION 2.8 in connection with a prepayment of principal under the Loan: (i)
before or on the first (1st) anniversary of the Closing Date, unless such
prepayment is made in order to avoid additional liability under or pursuant to
the requirements of SECTION 2.10 hereof, an amount equal to 2.0% of the
principal amount so prepaid; (ii) after the first (1st) anniversary of the
Closing Date but before or on the second (2nd) anniversary of the Closing Date,
unless such prepayment is made in order to avoid additional liability under or
pursuant to the requirements of SECTION 2.10, an amount equal to 1.0% of the
principal amount so prepaid; (iii) (A) in the event that Borrower has exercised
the First Extension Period Option, after the second (2nd) anniversary of the
Closing Date but before or on the third (3rd) anniversary of the Closing Date,
unless such
26
prepayment is made in order to avoid additional liability under or pursuant
to the requirements of SECTION 2.10, an amount equal to 1.0% of the principal
amount so prepaid and (B) in the event that Borrower has not exercised the
First Extension Period Option, after the second (2nd) anniversary of the
Closing Date but before or on the date that is nine (9) months after the
second (2nd) anniversary of the Closing Date, unless such prepayment is made
in order to avoid additional liability under or pursuant to the requirements
of SECTION 2.10, an amount equal to 1.0% of the principal amount so prepaid
and 0.0% of the principal amount so prepaid thereafter; and (iv) in the event
that Borrower has exercised the First Extension Period Option, after the
Maturity Date but before or on the date that is three (3) months prior to the
First Extension Period Termination Date or, if Borrower has exercised the
Second Extension Period Option, the Second Extension Period Termination Date,
unless such prepayment is made in order to avoid additional liability under
or pursuant to the requirements of SECTION 2.10 and/or SECTION 2.13 hereof in
which event no Early Payment Premium shall be due, an amount equal to 0.5% of
the amount prepaid and 0.0% of the amount so prepaid thereafter.
Notwithstanding anything to the contrary herein above set forth, payment of
the Early Payment Premium shall not be required in connection with a
prepayment pursuant to SECTION 2.13 or 8.14 HEREOF or Section 3, 6, 13 or 14
of the Mortgage.
(c) Except for prepayments made pursuant to Sections 6 and
3(d) of the Mortgage, any prepayment made pursuant to this SECTION 2.8 must be
made in minimum amount of One Million Dollars ($1,000,000) and in One Hundred
Thousand Dollar ($100,000) increments thereafter, for each such prepayment, not
including any Prepayment Premium or other costs associated with such prepayment
which shall be in addition to the amount so prepaid. Prepayment of principal
will be applied in inverse order to all payments required to be made hereunder.
Any amounts prepaid hereunder may not be reborrowed.
Section 2.9 FUNDING LOSS.
(a) Borrower shall indemnify Agent and Lenders against any
actual, out-of-pocket third party costs resulting solely and directly from
Borrower prepaying (including but not limited to as permitted under SECTION 2.8
hereof, but excluding scheduled payments of principal pursuant to the Note and
payments deemed made pursuant to SECTION 8.14 hereof) all or any portion of the
principal of the Loan before the end of the Term. For purposes of the foregoing
indemnity, such loss shall be deemed to be the lesser of (i) the actual swap
termination costs incurred by Agent (if the Floating Rate was determined by
Agent through the execution of one or more third party swap agreements) and (ii)
any loss arising from the reemployment of funds (such lesser amount, the
"PREPAYMENT PREMIUM"). As used in the preceding sentence, the "loss arising from
the reemployment of funds" shall mean the excess, if any, of (A) the aggregate
present value as of the date of such prepayment of the sum of (1) each dollar
being prepaid and (2) the amount of interest at the Floating Rate (but excluding
the Applicable Margin), that would have been payable in respect of such Loan
amount being prepaid if such prepayment had not been made and the Loan were
repaid in full before the Maturity Date, determined by discounting such amounts
27
at a rate equal to the applicable Reinvestment Rate from the respective dates
from which they would have been payable over (B) the amount of the Loan being
prepaid. If the applicable Reinvestment Rate is equal to or higher than the
Floating Rate (excluding the Applicable Margin), the Prepayment Premium shall be
zero. The Prepayment Premium, if any, payable by Borrower pursuant to the terms
hereof, shall include such amount or amounts, as calculated by Agent in good
faith, as shall compensate Agent for any out-of-pocket loss, cost or expense
incurred by Agent for terminating or unwinding any "forward swap", "hedging
agreement" or other contractual arrangement entered into by Agent with a third
party in order to commit to provide the Floating Rate to be applicable for the
Extension Period, pursuant to SECTION 2.3 hereof. Agent will use its reasonable
best efforts to mitigate, to the greatest extent possible, such losses and
expenses by reversing or unwinding any swap, forward swap, hedging arrangement
or other contractual arrangement relating to the Loan and/or reinvesting any
funds paid, prepaid or deposited by Borrower in a reverse swap or another manner
so as to reduce or eliminate the amount of any such loss or expense. A
certificate of Agent prepared in good faith and setting forth in reasonable
detail the basis for the determination of any cost and expense and the
computation of the amount thereof, shall, absent manifest error, be presumptive
evidence of such cost and expense and amount.
(b) All amounts due under this SECTION 2.9 shall be payable by
the Borrower within ten (10) days of demand by Agent.
Section 2.10 TAXES.
(a) Any and all payments by the Borrower under this Agreement
and the Note shall be made free and clear of and without deduction for Taxes. If
the Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the Note to Agent:
(i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including but not limited to
deductions applicable to additional sums payable under this provision) Agent
receives an amount equal to the sum it would have received had no such
deductions been made; and
(ii) the Borrower shall pay to the relevant taxation
authority or other authority the full amount deducted in accordance with
applicable law; PROVIDED, HOWEVER, that Borrower shall have the right to contest
the amount paid prior to payment;
(b) In addition to the payment of Taxes, the Borrower agrees
to pay prior to delinquency all Other Taxes, which Other Taxes may be repaid in
installments if so permitted under applicable Laws.
28
(c) The Borrower hereby indemnifies Lenders for the full
amount of Taxes and Other Taxes on amounts payable under this SECTION 2.10 which
are paid by Lenders and for any actual liability (including but not limited to
penalties, interest and expenses) arising in connection therewith whether or not
such Taxes, Other Taxes or liabilities were correctly or legally asserted,
unless due to Lenders' gross negligence or wilful misconduct. Agent shall notify
Borrower immediately after Agent learns of such Taxes, Other Taxes or
liabilities, but Agent's failure to so notify Borrower shall not limit
Borrower's obligations under this SECTION 2.10. Lenders agree to use their
reasonable efforts to minimize amounts due hereunder (including, without
limitation, making any filings that are necessary to maintain Lenders'
respective exemptions from withholding tax and assigning their respective
interests in the Loan to a branch that is eligible for such exemption, provided
such efforts are not otherwise disadvantageous to the respective Lenders). This
indemnity shall be fully performed within thirty (30) days from the date Agent
makes written demand therefor.
(d) Upon request by Agent, within thirty (30) days after the
date of any payment of Taxes or Other Taxes, Borrower will furnish to Agent the
original or a certified copy of a receipt or a copy of a check evidencing
payment thereof or other evidence reasonably satisfactory to Agent.
(e) Without prejudice to the survival of any other agreement
of Borrower hereunder, the agreements and obligations of Borrower contained in
this SECTION 2.10 shall survive the termination of this Agreement and the
payment in full of the Note (subject to applicable statutes of limitation).
Section 2.11 PAYMENTS.
(a) All payments of principal, interest and/or any other
amounts in connection with the Loan are to be made by Borrower without set-off
or counterclaim to the order of Agent to the account of Agent as from time to
time certified by Agent in writing to Borrower in U.S. Dollars in immediately
available (same day) funds not later than 11:00 a.m. (New York City time) on the
date such payment is due. If any payment would otherwise be due on a day which
is not a Business Day, then such payment shall be due on the next succeeding
Business Day, and interest shall accrue up to but not including such next
succeeding Business Day. All amounts received hereunder by Agent shall be deemed
received for the benefit of Lenders.
(b) Borrower hereby authorizes Agent, if and to the extent
payment due by Borrower under any Loan Document is not made when due under
any Loan Document, to charge from time to time against any and all of
Borrower's accounts with Agent any amount so due.
Section 2.12 DISTRIBUTION TO LENDERS.
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When Agent receives current funds, in payment of principal,
interest or any other sums due hereunder, on or prior to 11:00 a.m. (New York
City time) on any Business Day, then, on such date, Agent will notify Lenders of
the same and will distribute like funds by wire transfer of immediately
available funds to the Lenders ratably to such accounts at such places as have
been designated by the respective Lenders in writing from time to time. If such
funds are received after 11:00 a.m. (New York City time) on any Business Day,
then Agent shall distribute such funds no later than the next succeeding
Business Day. Upon Agent's receipt of any other amounts payable by Borrower or
any other Persons, for items other than principal or interest, Agent shall
promptly cause the payment to be applied in accordance with this Agreement.
Unless Agent shall have received notice from Borrower prior to the date on which
any payment is due to Lenders hereunder that Borrower will not make such payment
in full, Agent may assume that Borrower has made such payment in full to Agent
on such date and Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrower shall not have so made such
payment in full to Agent, each Lender shall repay to Agent forthwith on demand
the portion of such amount distributed to such Lender for which Agent did not in
fact receive payment from or on account of Borrower together with interest
thereon, for each day from the date such amount is distributed to such Lender
until the date such Lender makes such repayment to Agent, at the Floating Rate.
Borrower shall not be liable for Agent's failure to make such distributions to
Lenders.
Section 2.13 INCREASED COSTS; OVERRIDING EVENTS.
(a) In the event of the imposition of any Restraint which
shall prohibit or restrict the making or maintaining of the Loan or the charging
of interest thereon, Borrower agrees that Agent shall have the right in good
faith:
(i) to comply with any such Restraint and to require the
conversion of the Floating Rate to an alternative interest rate (if available or
determinable) (Agent shall use its reasonable best efforts to provide Borrower
with a rate of interest commensurate to the Floating Rate or a rate of interest
consistent with loans and borrowers of a similar type);
(ii) to permit compliance with such Restraint; or
(iii) if an alternative interest rate is not available or
determinable, to require repayment in full of the outstanding principal amount
of the Loan together with accrued interest thereon on the earlier of:
(A) immediately, if Lenders may not lawfully continue
to fund and maintain the Loan to such day; PROVIDED, HOWEVER, in the event
Borrower cannot make such immediate payment, Borrower will not be required to
pay interest at the Default Rate for a period of one hundred eighty (180) days
from the date of such request by Agent; or
30
(B) sixty (60) days after written notice (notified by
telecopy or telex) to Borrower to repay the Loan in full, or such longer period
(not to exceed one hundred eighty (180) days) after the date of such written
notice as may be reasonably required for Borrower to repay the Loan in full.
(b) In the event of the imposition of any Restraint which
shall make it impossible or unlawful for Lenders to give effect to or to
maintain any of their obligations under this Agreement (except as noted in
clause (a) above), then except as provided in SECTION 2.13(c) hereof, Agent may
give notice of such fact to Borrower whereupon Lenders' obligations hereunder
shall immediately terminate and Borrower shall, within sixty (60) days after
receipt of such notice (or within such shorter period as may be specified in the
relevant Restraint thereof) or such longer period (not to exceed one hundred
eighty (180) days) as may be reasonably required for Borrower to repay the Loan
in full) repay Agent in full the outstanding principal amount of the Loan
together with accrued interest thereon and any other charges due to Lenders
hereunder, excluding the Early Prepayment Premium and, in respect of a Restraint
based on a change of the laws of the Federal Republic of Germany, excluding the
Prepayment Premium.
(c) If a Restraint requires that any Lender transfer the Loan
from the jurisdiction in which it was originally made or then currently held to
an office of such Lender in another jurisdiction and the transfer shall:
(i) impose, modify or deem applicable any liquidity,
reserve, capital adequacy, special deposit or similar requirement against any
assets of, deposits with or for the account of, or loans by such Lender (or its
Lending Office), or
(ii) impose on such Lender (or its Lending Office) any
other conditions with respect to this Agreement (other than Taxes, Other Taxes
or other liabilities covered by SECTION 2.10 hereof), and the result of any of
the foregoing is to increase the cost to such Lender (or its Lending Office) of
giving effect to the terms of this Agreement or of agreeing to make or making,
funding or maintaining the Loan, then in lieu of SECTION 2.13(b) hereof, upon
notification of such amount by Agent, Borrower shall either (i) promptly
reimburse Agent for such actual, out-of-pocket increased costs or (ii) prepay
the entire outstanding principal of the Loan and any interest accrued thereon
(in which event, the Early Prepayment Premium shall not be due). Lenders shall
use their commercially reasonable efforts to minimize additional amounts due
hereunder (including, without limitation, making any filings that are necessary
to minimize or eliminate the effect of the Restraint and assigning their
respective interests in the Loan to a branch or other Lender to which the
Restraint is not applicable).
(d) A certificate prepared in good faith setting forth the
basis for the determination of the facts, or the increased costs as noted in
subsections (a), (b) and (c) of this
31
SECTION 2.13, submitted by Agent to Borrower shall, absent manifest error, be
presumptive evidence of such actual, out-of-pocket increased costs.
Section 2.14 COMMITMENT FEE.
Borrower shall pay to Agent on the Closing Date for the
account of Lenders a non-refundable commitment fee in the amount of Three
Hundred Twenty Thousand Dollars ($320,000).
Section 2.15 ARRANGEMENT FEE.
(a) Borrower shall pay to Agent on the Closing Date a
non-refundable arrangement fee in the amount of Eight Hundred Eighty Thousand
Dollars ($880,000).
(b) Borrower shall pay to MCM Consulting Group on the Closing
Date a non-refundable arrangement fee in the amount of Four Hundred Thousand
Dollars ($400,000).
Section 2.16 ADMINISTRATION FEE.
.
Borrower shall pay to Agent, on the first day of each calendar
quarter commencing January 1, 2000 during the Term, a non-refundable
administration fee in the amount of Twenty-Two Thousand Five Hundred Dollars
($22,500).
Section 2.17 LENDING OFFICE.
The Loan shall be made by each Lender from the office
identified as its Lending Office hereunder or from such other branch or
affiliate of each such Lender as each such Lender may designate to Borrower and
Agent in writing as its Lending Office.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders, as of the date
hereof, that:
Section 3.1 GOOD STANDING OF BORROWER AND ITS MANAGING
MEMBERS.
Borrower is a limited liability company and is organized,
existing and in good standing under the laws of the State of Delaware, and is
qualified to do business in Illinois. 77WWLP is a limited partnership,
organized, existing and in good standing under the laws of the State of
Illinois. Prime is a limited partnership, organized, existing and in good
standing under
32
the laws of the State of Delaware, and is qualified to do business in
Illinois. The Trust is a real estate investment trust, organized, existing
and in good standing under the laws of the State of Maryland.
Section 3.2 AUTHORITY OF BORROWER.
Borrower has full power and authority to purchase and own the
Premises, to enter into this Agreement, to make the borrowings under this
Agreement, to execute and deliver the Loan Documents, and to incur and perform
the obligations provided for in the Loan Documents, all of which have been duly
authorized by all proper and necessary action. Except for those consents or
approvals already obtained, no consent or approval of any Governmental Authority
is required on the part of Borrower as a condition to the validity or
performance of any Loan Documents.
Section 3.3 AUTHORIZATIONS.
All authorizations, consents, approvals, registrations,
exemptions and licenses with or from Governmental Authorities which are
necessary for the borrowing, the execution and delivery of all Loan Documents,
and Borrower's performance under all Loan Documents have been effected or
obtained and are in full force and effect.
Section 3.4 BINDING AGREEMENT.
The Note and all other Loan Documents as executed and
delivered concurrently with this Agreement for value received, constitute, the
valid and legally binding obligations of Borrower enforceable in accordance with
their terms, subject only as to enforcement, bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity.
Section 3.5 LITIGATION.
There are no proceedings or investigations pending against
Borrower or, to the best knowledge of Borrower, threatened before any court or
arbitrator or before or by any Governmental Authority which, in any one case or
in the aggregate, if determined adversely to the interests of Borrower would
have a material adverse effect on the business, Premises, Leasehold Premises,
condition (financial or otherwise) or operations of Borrower or its sole member.
33
Section 3.6 NO CONFLICTS.
There is no statute, regulation, rule, order or judgment, and
no provision of any mortgage, deed of trust, indenture, contract or agreement to
which Borrower is a party which would prohibit, conflict with or in any way
prevent the execution, delivery or carrying out of the terms of any Loan
Documents by Borrower in any material manner.
Section 3.7 FINANCIAL CONDITIONS.
The financial statements heretofore delivered to Agent fairly
present the financial condition of Borrower, as of the dates and for the periods
referred to, and have been prepared in accordance with Generally Accepted
Accounting Principles consistently applied throughout the periods involved.
There have been no material adverse changes in the (a) business, condition
(financial or otherwise) or operations of Borrower, or (b) to Borrower's
knowledge, Premises or the Leasehold Premises, which would materially, adversely
affect Borrower's ability to comply with its obligations under the Loan
Documents.
Section 3.8 EMPLOYEE BENEFIT PLANS.
Borrower (a) is not and will not be an "employee benefit plan"
(as defined in Section 3(3) of ERISA), which is subject to Title I of ERISA, and
the assets of Borrower do not and will not constitute"plan assets" of one or
more such plans for purposes of Title I of ERISA, and (b) Borrower is not
subject to state statutes regulating investments and fiduciary obligations with
respect to "governmental plans".
Section 3.9 GOVERNMENTAL PLAN.
Borrower is not and will not be a "governmental plan" (within
the meaning of Section 3(32) of ERISA) and transactions by or with Borrower are
not and will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.
Section 3.10 INVESTMENT COMPANY.
Borrower is not (a) an "investment company", an "affiliated
person" of, "promoter" or "principal" underwriter for or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended, (b) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (c) subject to any other Law that purports to
restrict or regulate its ability to borrow money. The making and funding of the
Loan by Lenders, the application of the proceeds
34
and repayment thereof by Borrower and the consummation of the transactions
contemplated by this Agreement and the other Loan Documents will not violate any
Law, including, without limitation, any provision of such Acts or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
Section 3.11 HAZARDOUS MATERIALS.
Neither Borrower nor its sole member is undertaking, and has
not completed, either individually or together with other potentially
responsible parties, any investigation or assessment (other than investigations
and/or assessments made in connection with the Environment Site Assessment) or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at the Premises or the Leasehold
Premises in violation of applicable laws, either voluntarily or pursuant to the
order of any Governmental Authority or the requirements of any Environmental
Law; and, to Borrower's knowledge, all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, the Premises or the
Leasehold Premises have been disposed of in a manner not reasonably expected to
result in material liability to Borrower or any of its members.
Section 3.12 SOLVENCY.
Borrower, its sole member, Prime and Trust are Solvent.
Section 3.13 BORROWER'S ADDRESS.
The location of Borrower's and its sole member's principal
place of business and chief executive office is as follows:
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
c/o Prime Group Realty, L.P.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Section 3.14 FOREIGN PERSON.
Neither Borrower nor its sole member is a "foreign person"
within the meaning of ss 1445(f)(3) of the Code (a "FOREIGN PERSON").
35
Section 3.15 BANKRUPTCY.
No bankruptcy, reorganization or insolvency proceedings are
pending or contemplated either by Borrower or, to the best of Borrower's
knowledge, against Borrower (or, if Borrower is a partnership or a limited
liability company, any of its general partner(s) or managing member(s)).
Section 3.16 COMPLIANCE WITH LAWS.
To the best of Borrower's knowledge, the Premises, the
Leasehold Premises and the current intended use thereof by Borrower comply in
all material respects with all applicable restrictive covenants, zoning
ordinances, subdivision and building codes, flood disaster laws, health and
occupational laws having jurisdiction over the Premises and the Leasehold
Premises. The Premises constitutes one or more separate tax parcels for purposes
of ad valorem taxation. To the best of Borrower's knowledge, the Premises and
the Leasehold Premises do not require any rights over, or restrictions against,
other property in order to comply with any of the aforesaid Laws which have not
been obtained and provided to Agent or its counsel for its review and approval.
Section 3.17 UTILITY SERVICE.
All utility services necessary and sufficient for the full
use, occupancy and operation of the Premises and the Leasehold Premises for
their intended purposes are available to the Premises and the Leasehold
Premises, as applicable, including water, storm sewer, sanitary sewer, gas,
electric, cable and telephone facilities, through public rights-of-way or
perpetual private easements approved by Agent.
Section 3.18 ACCESS.
All streets, curb cuts and driveways necessary for access to
and full use, occupancy, operation and disposition of the Premises have been
completed, have been dedicated to and accepted by the appropriate municipal
authority and are open and available to the Premises and the Improvements
without further condition or cost to Borrower.
Section 3.19 INSURANCE.
As of the date of this Agreement, all insurance required by
the terms of the Mortgage is in full force and effect and none of the premiums
payable therefore have been financed.
36
Section 3.20 RENT ROLL.
Borrower has delivered a true and correct (in all material
respects) and complete schedule (a "RENT ROLL") of all Leases affecting the
Premises and the Leasehold Premises as of the date hereof reasonably
satisfactory to Agent and its counsel, which, information thereon is accurate,
in all material respects, in respect of each Lease, and Borrower has delivered
to Agent and its counsel for its review and approval true, correct and complete
copies of all Leases described in the Rent Roll.
Section 3.21 NO RELIANCE ON AGENT OR LENDERS.
Borrower is a sophisticated owner, operator, developer,
manager and investor in real estate and its decision to enter into this Loan is
based upon its own independent expert evaluation of the terms, covenants,
conditions and provisions of the Loan Documents and such other matters,
materials and market conditions and criteria which Borrower and such parties
deemed relevant. Borrower and its Affiliates have not relied in entering into
this Agreement, the Loan or the other Loan Documents upon any oral or written
information, representation, warranty or covenant from Lenders, or any of its
representatives, employees, Affiliates or agents other than the representations
and warranties, if any, of Lenders contained herein. Borrower, on behalf of
itself and its Affiliates, further acknowledges that no employee, agent or
representative of Lenders have been authorized to make, and that Borrower and
its Affiliates have not relied upon, any statements, representations, warranties
or covenants other than those specifically contained in this Agreement and in
the other Loan Documents. Without limiting the foregoing, Borrower acknowledges
that Lenders have made no representations or warranties as to the Loan or the
Premises (including, without limitation, the cash flow of the Premises, the
value, marketability, condition or future performance thereof, the existence,
status, adequacy or sufficiency of the Leases, the tenancies or occupancies of
the Premises, or the sufficiency of the cash flow of the Premises, to pay all
amounts which may become due from time to time pursuant to the Loan).
ARTICLE 4
AFFIRMATIVE AND NEGATIVE COVENANTS
Section 4.1 AFFIRMATIVE COVENANTS.
So long as Borrower may borrow hereunder and until payment in
full of the Note and all sums borrowed under this Agreement and performance of
all other obligations of Borrower under this Agreement and the Loan Documents,
Borrower shall do the following:
37
(a) Furnish to Agent:
(i) as soon as available but in no event more than one
hundred twenty (120) days after the close of Borrower's fiscal year, a copy of
the annual audit report relating to Borrower in reasonable detail satisfactory
to Agent and prepared in accordance with Generally Accepted Accounting
Principles by Ernst & Young or other certified independent public accountants
reasonably satisfactory to Agent, together with financial statements consisting
of a balance sheet as of the end of such fiscal year and statements of income
and cash flows of Borrower for such year;
(ii) as soon as available but in no event more than one
hundred twenty (120) days after the close of the Trust's fiscal year, a copy of
the annual financial statement relating to the Trust, in reasonable detail
satisfactory to Agent and prepared in accordance with Generally Accepted
Accounting Principles, together with financial statements consisting of a
balance sheet as of the end of such fiscal year and statements of income and
cash flows of the Trust for such year.
(iii) promptly upon receipt thereof, copies of any reports
and management letters submitted to Borrower by such accountants in connection
with any annual or interim audit of the books of Borrower;
(iv) within forty (40) days after June 30 of each calendar
year during the Term, an updated Rent Roll, quarterly leasing status reports and
unaudited financial statements for the Premises certified by an officer of the
Trust;
(v) within forty-five (45) days after December 31 of each
calendar year during the Term, an updated Rent Roll and quarterly leasing status
reports for the Premises certified by an officer of the Trust;
(vi) within forty-five (45) days after December 31 of each
calendar year during the Term, an updated operating budget for the Premises, and
quarterly operating budgets thereafter, for the Premises certified by an officer
of the Trust;
(vii) within forty-five (45) days after December 31 of
each calendar year during the Term, an updated operating statement for the
Premises, and quarterly operating statements thereafter, for the Premises
certified by an officer of the Trust;
(viii) within thirty (30) days after the end of each
calendar quarter during the Term, beginning with the fourth (4th) full calendar
quarter after the Closing Date, a calculation of Net Operating Income for each
of the previous four (4) calendar quarters and the Debt Service
38
Coverage Ratio associated with such four-quarter period, each certified by an
officer of the Trust; and
(ix) such other financial, statistical and general
information, readily available to or producible by Borrower, as Agent may
reasonably request.
(b) Pay all of its indebtedness as and when the same shall
come due, provided Borrower may contest any of the same as long as such contest
is pursued in good faith and with due diligence and does not adversely affect
Lenders.
(c) Satisfy and comply in all material respects with all
Governmental Requirements applying to and affecting the Premises and the
Leasehold Premises and shall obtain and maintain in full force and effect until
the Loan has been repaid in full all necessary licenses, permits and similar
matters with respect to the Premises and the Leasehold Premises, all without
cost or expense to Lenders where failure to do so would result in a material
adverse effect on the business, Premises, Leasehold Premises, condition
(financial or otherwise) or operations of Borrower, it being understood that
Borrower may contest any of same as long as such contest is pursued in good
faith and with due diligence and does not adversely affect Lenders. Immaterial
violations which Borrower is proceeding to cure and which do not result in a
Lien being created on the Premises or the Leasehold shall not cause Borrower to
be in default of this SECTION 4.1(c).
(d) Permit Agent or its representative and any Governmental
Authority, upon reasonable notice, to visit and inspect the Premises or the
Leasehold Premises at any time during normal business hours and at all other
reasonable times; PROVIDED, HOWEVER, that all such visits and inspections shall
be scheduled so as to cause minimal disruption to the business and operation of
Borrower, Leasehold Premises, Premises and any tenants thereof. Agent hereby
acknowledges and agrees that all such rights to visit and inspect are subject to
any and all limitations and/or restrictions of tenants or other occupants now or
hereafter in the Premises or the Leasehold Premises.
(e) Give prompt written notice to Agent of:
(i) any action or proceeding instituted by or against
Borrower in any court or by any Governmental Authority, or of any such
proceedings of which Borrower obtains actual knowledge threatened against
Borrower, which action or proceeding may have a material adverse effect upon the
business, operations, Premises, Leasehold, assets or conditions (financial or
otherwise), of Borrower; and
(ii) any other action, event or condition of any nature
known to Borrower or of which it should have knowledge which constitutes an
Event of Default, or a default of Borrower under any material contract
instrument or agreement to which Borrower is a party or
39
by which Borrower or any of its properties or assets may be bound or to which
any may be subject, which default may have a material adverse effect upon the
business, operations, properties, assets or conditions (financial or otherwise),
of Borrower.
(f) Deliver to Agent all items, documents, writings, reports
and information reasonably required by Agent to consummate the Loan.
(g)(i) Agent shall hold back, pursuant to and in accordance
with the Cash Collateral Agreement, from the Loan proceeds and deposit
$2,500,000 into the Cash Collateral Account on the Closing Date (which
depositing Borrower acknowledges and agrees to). Borrower shall deliver to Agent
such agreements and other documents and instruments necessary to grant Agent a
perfected first priority security interest in the Cash Collateral Account. Upon
the satisfaction in full of all of Borrower's obligations under the Loan
Documents, Agent shall, within five (5) days after receipt by Agent of the
written request of Borrower, instruct the depository under the Cash Collateral
Account to pay over to Borrower all cash or collateral remaining in the Cash
Collateral Account, together with any interest accrued thereon.
(ii) In the event that Borrower exercises the Second
Extension Period Option, Borrower shall, prior to the First Extension Period
Termination Date, deposit into the Cash Collateral Account $5,000,000, which
amount shall be held pursuant to and in accordance with the Cash Collateral
Agreement.
(iii) In the event that any termination fees are payable
to Borrower on account of the early termination of any Lease during the Term,
such fees shall be deposited in the Cash Collateral Account, which amount shall
be held pursuant to and in accordance with the Cash Collateral Agreement.
(iv) Any and all funds deposited into the Cash Collateral
Account shall be invested in Permitted Investments and any interest carried on
such funds shall be paid to Borrower from time to time, but not more frequently
than monthly in accordance with the Cash Collateral Agreement.
(v) Notwithstanding anything to the contrary set forth
previously in this SECTION 4.1(G), Borrower shall have the right to withdraw up
to an aggregate amount of $2,500,000 (and, during the Second Extension Period
Option, if any, an aggregate amount of (a) $7,500,000) of the funds on deposit
in the Cash Collateral Account plus (b) any amounts deposited into the Cash
Collateral Account pursuant to Section 3(c) of the Cash Collateral Account for
Tenant Improvement/Leasing Commission Costs made by or at the direction of
Borrower from time to time in accordance with the terms of the Cash Collateral
Agreement upon the satisfaction of the following terms and conditions: (A) no
Event of Default has occurred and is continuing; (B) Borrower has expended, out
of funding sources other than the Loan Proceeds, at least
40
$2,500,000 for Tenant Improvement/Leasing Commissions Costs or other costs
associated with Capital Improvements made at or to the Mortgaged Property; (C)
any amounts so withdrawn will be applied only to the payment or reimbursement of
Tenant Improvement/Leasing Commission Costs (except for interest distributed
pursuant to Section 3(d) of the Cash Collateral Agreement) with respect, related
or pursuant to any Lease; and (D) Borrower shall have delivered to Agent a
certificate executed by an officer of the Trust on behalf of Borrower confirming
the truth of clauses (A), (B), and (C) of this SECTION 4.1(G)(IV), and Borrower
shall deliver, or will have previously delivered, to Agent a copy of the fully
executed Lease or the amendment to the Lease, or the final draft thereof, to
which such Tenant Improvement/Leasing Commission Costs relate (or, in lieu
thereof, a summary of the material terms of such lease, with a full copy to be
delivered within thirty (30) days). Disbursements to be made under this
subsection (v) shall be paid by the Depositary (as defined in the Cash
Collateral Agreement) to Borrower within then (10) days after satisfaction of
the foregoing conditions precedent.
(h) Operate the Premises at all times as a class "A" office
building in accordance with all applicable Laws, cause the Premises to be
managed by the Manager in accordance, in all material respects, with the terms
of the Management Agreement, perform and cause Manager to observe all the terms
and provisions of the Management Agreement to be performed or observed by it in
all material respects, maintain the Management Agreement in full force and
effect and enforce the Management Agreement in accordance with its terms in all
material respects, in each case subject to the provisions of SECTION 4.2(g)
hereof. Notwithstanding the foregoing or anything in SECTION 4.2(g) hereof, if
the Management Agreement is terminated in accordance with the terms hereof, any
successor manager selected hereunder by Agent or Borrower to manage the Premises
shall be recognized in the City of Chicago as a first-class manager of a stature
at least comparable, in Agent's reasonable judgment, to the preceding Manager,
or a qualified (in Agent's reasonable judgment) independent office building
management company managing similar buildings. Any agreement between Borrower
and the new Manager shall be subject to Agent's prior written approval (which
approval shall not be unreasonably withheld, conditioned or delayed) provided
that (i) in Agent's reasonable judgment such agreement is no more favorable to
the new Manager and no less favorable to Agent than the Management Agreement
with the preceding Manager; and (ii) the new Manager enters into an agreement to
subordinate its management fees in the same form as the preceding Manager or in
such other form as Agent shall have approved in Agent's reasonable discretion.
(i) Pay and discharge before the same shall become delinquent,
(i) all Impositions imposed upon or that become a Lien upon the Premises;
PROVIDED, HOWEVER, that Borrower shall not be required to pay or discharge any
such Imposition that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained in accordance with the
provisions of and as provided by this Agreement, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable against its
other creditors and the enforcement thereof is not stayed pending resolution of
the subject contest.
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(j) Comply, and require all tenants in accordance with their
applicable Leases and other Persons operating or occupying the Premises or the
Leasehold Premises to comply, in all material respects, except as may be
permitted by and provided in this Agreement, with all applicable Environmental
Laws and Environmental Permits; obtain and renew all Environmental Permits
necessary for its operations, the Leasehold Premises and the Premises, if any,
and to the extent required by any Environmental Law, conduct any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove from the Premises or the Leasehold Premises, as
applicable, and clean up all Hazardous Materials which are reasonably expected
to result in material liability to Borrower, in accordance with the requirements
of all Environmental Laws; PROVIDED, HOWEVER, that Borrower shall not be
required to undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
(k) Preserve and maintain its existence, legal structure,
legal name, rights (charter and statutory), permits, licenses, approvals,
privileges and franchises; PROVIDED, HOWEVER, that Borrower shall not be
required to preserve any right, permit, license, approval, privilege or
franchise if Borrower shall determine that the preservation thereof is no longer
desirable in the conduct of the business of Borrower, as the case may be, and
that the loss thereof is not disadvantageous in any material respect to Borrower
or Lenders and on the condition that Borrower notifies Agent in writing of any
such change, promptly thereafter.
(l) To the extent required by Environmental Law, establish and
maintain an operations and maintenance program with respect to any Asbestos and
Asbestos-containing Materials located at the Premises or the Leasehold Premises
which operations and maintenance program shall comply with all applicable Laws,
conform in all material respects to applicable guidelines established by any
Governmental Authority and otherwise be designed in all material respects to
incorporate all prudent and reasonable safeguards in order to minimize any
health risk to patients, residents, employees and guests at the Premises and the
Leasehold Premises from the presence of Asbestos or Asbestos-containing
Material.
(m) Maintain or cause to be maintained the Premises as a class
"A" office building, in good order, repair and operating condition, ordinary
wear and tear and the occurrence of any casualty or condemnation excepted, (ii)
make or cause to be made promptly, when necessary, all necessary repairs,
restorations, renewals, replacements, additions and improvements thereto,
interior and exterior, structural and nonstructural, foreseen and unforeseen, or
otherwise necessary to ensure that the same shall not in any way be diminished
or impaired in any material respect, (iii) not cause or knowingly allow the
Premises or the Leasehold Premises to be wasted and (iv) complete, to Agent's
satisfaction, all of the maintenance and repair work as specified in the
Deferred Maintenance Report.
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(n) Keep the Premises and the Leasehold Premises equipped as
now operated and will replace all worn out or obsolete equipment in order to
maintain and operate the Premises as a class "A" office building and comply with
all Laws; PROVIDED, HOWEVER, that Borrower shall not be required to replace any
equipment if Borrower shall determine that such replacement is no longer
necessary or desirable in the conduct of the business of Borrower and that the
non-replacement of such equipment does not adversely affect, in any material
respect, Borrower or Lenders.
(o) Cause all Leases, and all amendments, renewals and
extensions thereof, to (i) provide for rental rates and terms which, in
Borrower's reasonable judgment, are comparable to existing local market rates
and terms, (ii) be arms-length transactions and (iii) be written on the standard
form of lease, which is hereby approved by Agent without material changes
therefrom (or, with respect to any amendment, renewal or extension of an
existing Lease, on the form of such existing Lease). Upon request, Borrower
shall furnish Agent with executed copies of all Leases (including any amendments
or modifications). No material changes may be made to Agent-approved standard
form of lease without the prior written consent of Agent, which consent shall
not be unreasonably withheld, conditioned or delayed. Without Lender's prior
consent (which consent shall not be unreasonably withheld, conditioned or
delayed), Borrower shall not (1) amend or terminate any Lease with any Tenant
whose Lease or Leases demise in the aggregate at least 30,000 square feet of the
rentable square feet of the Premises, and (2) amend or terminate any Lease with
any Tenant so as to cause a material adverse effect on the Net Operating Income,
and (3) enter into any new Lease which demises in the aggregate at least 45,000
square feet of the rentable square feet of the Premises. Within ten (10)
Business Days of receipt by Lender of written notification by Borrower to Lender
of Lender's need to provide its consent pursuant to this SECTION 4.1(o), Lender
shall provide Borrower with its written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, or objection, and stating the
reason for such objection. If such consent or objection is not received by
Borrower within the time frame provided for in the previous sentence, Lender's
consent to the specific request shall be deemed granted, PROVIDED that such
consent shall not be deemed granted after the occurrence and during the
continuance of any Event of Default.
(p) Use reasonable efforts to obtain, within ninety (90) days
of the Closing Date, Subordination, Non-Disturbance and Attornment Agreements
(the "SNDAS") with respect to the Leases from each Tenant in favor of Agent, in
form and substance acceptable to Agent; PROVIDED, HOWEVER, that a Tenant's
failure to execute an SNDA pursuant to the terms of such Tenant's Lease shall
not be deemed to be a default of Borrower under this SECTION 4.1(P).
(q) Now and in the future remain Solvent and pay its debts
from its assets as the same shall be due and payable unless such debts are
contested by Borrower in good faith, and such contest is pursued continually and
diligently.
43
(r) Do, will do or caused to be done all things necessary to
preserve its limited liability company status and/or existence.
(s) Maintain its books, records and bank accounts separate
from those of its Affiliates and any constituent party.
(t) Be, and at all times hold itself out to the public as a
legal entity separate and distinct from any other entity (including any
Affiliate of Borrower, any constituent party or any Affiliate of any constituent
party).
(u) Now and in the future maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any constituent party or any Affiliate of any
constituent party, or any other Person.
(v) Prior to the date hereof, and from time to time upon the
reasonable request of Lender, the Borrower shall deliver to Lender, in form and
substance satisfactory to Lender, such endorsements to the Mortgage Insurance
Policy and such preliminary title reports and other title or lien searches
(including UCC searches) and tax service contracts as Lender may reasonably
require from time to time.
(w) Prior to the date that is ten (10) days after the date
hereof (i) cause there to be executed by an unrelated third-party an interest
rate hedge guaranty, acceptable to Agent, indemnifying Lenders against interest
that accrues on the Loan at an annual rate in excess of 8%, such interest rate
hedge guaranty shall be collaterally assigned to Agent pursuant to an assignment
in a form acceptable to Agent; and (ii) cause there to be executed by the
unrelated third-party to the interest rate hedge guaranty a payment direction
letter in substantially the same form attached hereto as Exhibit D. Until such
time as the guaranty described in the immediately preceding sentence is in
place, Prime shall be personally liable for and guaranty to Lenders the interest
that accrues on the Loan at an annual rate in excess of 8%.
(x) Within a reasonable period of time after Agent's request,
Borrower agrees to provide at its sole cost and expense updated engineering
and/or environmental reports satisfactory to Agent, not to exceed one (1) time
per year, except upon the occurrence of and during the continuance of an Event
of Default.
Section 4.2 NEGATIVE COVENANTS.
Until payment in full of the Note and all sums borrowed under
this Agreement and performance of all other obligations of Borrower under this
Agreement and the Loan Documents, Borrower shall not do the following:
44
(a) Mortgage, pledge, grant or permit to exist a security
interest in or a lien upon any of its assets now owned or hereafter acquired,
without first obtaining the written consent of Agent which consent cannot be
unreasonably withheld, conditioned or delayed; PROVIDED, HOWEVER, that Borrower
may contest any Lien upon its assets as long as such contest is pursued in good
faith and with due diligence and does not materially adversely affect Lenders.
Notwithstanding the aforementioned, Borrower may enter into such equipment
financing contracts, installment sales contracts and the like in order to
finance the reasonable day-to-day equipment needs of Borrower at the Premises.
(b) Institute or cause to be instituted, by an issuer or
underwriter of, or be a party to any public offering with respect to the
Premises within the meaning of the Securities Act of 1933 and the Securities and
Exchange Act of 1934.
(c) Enter into or suffer to exist any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets other than in favor of Lenders; PROVIDED, HOWEVER, that Borrower may
contest any such lien upon on its property or assets as long as such contest is
pursued in good faith and with due diligence and does not adversely affect
Lenders.
(d) Make any material change in the nature of its business as
carried on at the date hereof or engage in any business or activity other than
the ownership, operation and maintenance of the Premises and the Leasehold
Premises, and activities incidental thereto.
(e) Guarantee payment of any obligation of any Person or
pledge its assets for the benefit of any third party, including the sole member,
principal or Affiliate of Borrower, as the case may be.
(f) File or consent to the filing of any petition, either
voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for the
benefit of creditors.
(g) Without Agent's prior consent (which consent shall not be
unreasonably withheld, conditioned or delayed): (i) cancel or terminate the
Management Agreement or consent to or accept any cancellation or termination
thereof, (ii) amend or otherwise modify, in any material respect, the Management
Agreement, (iii) waive any material default under or breach of the Management
Agreement, or (iv) agree in any manner to any other amendment, modification or
change of any material term or condition of the Management Agreement, in each
case of each of clauses (i) through (iv) inclusive, Agent's consent shall be
required only if such action would materially and adversely impair the interest
or rights of Lenders. Agent's withholding of its consent to a new property
manager shall not be deemed to be unreasonable if the new property
45
manager, in Agent's sole reasonable determination, is not a generally recognized
manager of first-class office buildings in Chicago.
(h) Change its Fiscal Year unless such change would not
adversely affect or alter in any material respect the calculation of Debt
Service Coverage Ratio pursuant to this Agreement.
(i) Now or in the future own any encumbered asset or property
other than (i) the Premises and the Leasehold Premises, and (ii) incidental
personal property necessary for the ownership or operation of the Premises.
(j) Except as expressly provided in this Agreement, enter into
any agreement to borrow funds, including the entering into of equipment
financing contracts, installment sales contracts, sale-lease back transactions
or the like, from any party without the prior approval of Agent. Notwithstanding
the preceding sentence or other provision of this Agreement or any other Loan
Document, at any time and from time to time without Agent's prior approval:
(i) Borrower may obtain additional financing necessary for
the reasonable day-to-day operations of the Premises; PROVIDED that (A)
projected Net Cash Flow is sufficient to repay such amounts when they become due
and (B) such debt (w) includes customary repayment and amortization schedules,
(x) is unsecured, (y) is at all times subordinated to the lien of the Mortgage
and (z) cannot be terminated and the term thereof accelerated (other than by
repayment and satisfaction in full of same) prior to the repayment and
satisfaction in full of the indebtedness created hereunder;
(ii) Borrower may borrow funds from one or more direct or
indirect partners of Borrower and/or any of their respective Affiliates;
PROVIDED that such debt (x) is unsecured, (y) is at all times subordinated to
the lien of the Mortgage and (z) cannot be terminated and the term thereof
accelerated (other than by repayment and satisfaction in full of same) prior to
the repayment and satisfaction in full of the indebtedness created hereunder; or
(iii) 77WWLP, Prime or Trust may assign or pledge its
interest in Borrower to a financial institution that holds at least
$1,000,000,000 of real estate assets located in the United States in order to
secure financing of no more than $45,000,000 to 77WWLP, Prime or Trust, as the
case may be; PROVIDED that (A) Borrower is not the borrowing entity for such
debt and (B) such debt (1) includes customary repayment and amortization
schedules, (2) is not secured by the Premises, (3) is at all times subordinated
to the lien of the Mortgage, and (4) cannot be terminated and the term thereof
accelerated (other than by repayment and satisfaction in full of same) prior to
the repayment and satisfaction in full of the indebtedness created hereunder;
and (C) Borrower provides Agent with at least thirty (30) days prior written
notice thereof.
46
Any indebtedness described in clauses (i), (ii) and (iii) of this SECTION
4.2(j), a "QUALIFIED LOAN". Except as expressly provided in this Agreement,
Borrower shall not incur any further indebtedness or other obligations, other
than in the ordinary course of business, without the prior approval of Agent,
which approval Agent may grant or withhold in its sole discretion.
(k) Other than pursuant to the Cash Management System, now or
in the future make any loans or advances to any third party (including any
constituent party or any affiliate of Borrower, or any constituent party
thereof), other than tenants that are not Affiliates of Borrower in connection
with Leases relating to the Premises and the Leasehold Premises tenant
improvements thereunder.
(l) Amend, modify or otherwise change the certificate of
organization or operating agreement of Borrower in a manner which would
adversely affect Borrower's existence as a single purpose entity.
(m) Seek the dissolution or winding up, in whole or in part,
of Borrower or any of its sole member.
(n) Other than pursuant to the Cash Management System,
commingle the funds and other assets of Borrower with those of any constituent
party thereof, any Affiliate, or any constituent party, or any other Person.
(o) Now or in the future, hold itself out to be responsible
for the debts or obligations of any other Person.
(p) Cause, permit or allow the partition of the Premises.
(q) Without the prior written consent of Lender, which consent
or the denial thereof shall be in Lender's sole and absolute discretion: (i)
sell, convey, alienate, mortgage, encumber, pledge or otherwise transfer all or
any part of the Premises; (PROVIDED, HOWEVER, that the sale or transfer of the
Borrower's interest in the Ground Lease located on the Leasehold Premises in
accordance with Section 2.5(c) hereof shall not be deemed a transfer for
purposes of this Section 4.2(q)) or (ii) make a change in the Control of
Borrower, PROVIDED, HOWEVER, that, so long as notice thereof is provided to
Agent at least forty-five (45) days prior to such transfer, the following shall
not require Agent's prior consent: (1) up to 50% of 77WWLP's and/or Prime's
interest in Borrower may be transferred to a Permitted Transferee in a single or
series of transactions and (2) so long as a subordination agreement acceptable
to Agent is duly executed and provided to Agent, the interest in Borrower
described in SECTION 4.2(j)(iii) hereof may be transferred pursuant to such
SECTION 4.2(j)(iii) hereof. Notwithstanding any other provision of this SECTION
4.2(q) to the contrary so long as Prime retains Control of Borrower, up to 50%
of 77WWLP's and/or Prime's interest in Borrower may be transferred to any
Person. All
47
reasonable, actual out-of-pocket expenses of Lenders and Agent resulting from a
transfer pursuant to this SECTION 4.2(Q) shall be paid, on Agent's demand, by
Borrower. Nothing herein is intended to or shall restrict transfer of shares of
the Trust.
(r) (i) Install or otherwise use or acquire for use in
connection with the Collateral any Personal Property (including replacement
Personal Property pursuant to clause (C) below) which is not owned or leased by
Borrower free and clear of all Liens (including conditional sale contracts) and
Rights of Others (other than Permitted Exceptions) or which is not a part of the
Collateral, or (ii) cause or permit the removal from the Premises or the
Leasehold Premises of any Personal Property of the Borrower which is installed
or otherwise used or acquired for use in connection with the Collateral, except
that so long as no Event of Default has occurred and is continuing, this clause
(t) shall not prohibit (A) the temporary removal of Personal Property for
repairs in the ordinary course of business, (B) the removal of Personal Property
of insignificant value which is not reasonably necessary or appropriate to the
efficient operation of the Premises or the Leasehold Premises, as the case may
be, or (C) the removal of obsolete, defective or worn out Personal Property
which has been replaced by other Personal Property of equal or greater
suitability and value which is intended for the same purpose. Upon the removal
of any Personal Property in compliance with clause (B) or (C) above, the
Borrower shall be permitted to transfer or otherwise dispose of such Personal
Property as the Borrower may determine.
ARTICLE 5
DEFAULT
Section 5.1 EVENTS OF DEFAULT.
The term "EVENT OF DEFAULT" as used herein shall mean the
occurrence or happening, at any time and from time to time, of any one or more
of the following which shall include by definition the expiration of any period
of grace or right to cure provided therein, provided there has been satisfied
any requirement in connection therewith for the giving of notice, lapse of time,
or happening of any further condition, event or act:
(a) if an Event of Default occurs under the Mortgage (as
defined in Section 22 thereof) after expiration of any period of grace or right
to cure provided therein, provided there has been satisfied any requirement in
connection therewith for the giving of notice, lapse of time, or happening of
any further condition, event or act;
(b) if Borrower shall fail to pay any portion of the Debt,
including, but not limited to, principal (including, without limitation, any
Annual Installment Payment), interest, fees or other amounts payable to Agent
under the Loan Documents within three (3) days after Borrower receives written
notice from Agent that such payment is overdue;
48
(c) if Borrower shall fail to comply with the provisions of
SECTION 4.1(G) hereof, within the time periods provided for therein;
(d) if Borrower fails to duly and promptly observe, perform
and discharge any covenant, term, condition or agreement contained in the Loan
Documents, other than any default described in the other paragraphs of this
SECTION 5.1, and such failure is not curable, or if curable such failure
continues for a period of thirty (30) days after written notice thereof from
Agent to Borrower, provided if such failure is not curable in thirty (30) days
Borrower shall have such additional time as is reasonably necessary in the good
faith opinion of Agent after consultation with Borrower to cure provided that
such cure is being diligently pursued;
(e) if any representation or warranty made by Borrower herein
or any statement or representation made in any certificate, report or opinion
delivered in connection herewith or in any of the Loan Documents, shall prove to
have been incorrect in any material respect on the date as of which made
(provided that if such misrepresentation or breach of warranty is capable of
being cured, Borrower shall have a period of thirty (30) days from the date
Borrower receives written notice from Agent or, if such misrepresentation or
breach of warranty is not curable within thirty (30) days, Borrower shall have
such additional time as is reasonably necessary in the good faith opinion of
Agent after consultation with Borrower to cure provided that such cure is being
diligently pursued);
(f) If (i) Borrower shall be in default beyond any notice,
grace or cure period under any other mortgage or security agreement covering any
part of the Premises and the Leasehold Premises whether it be superior or junior
in lien to the Mortgage, or (ii) subject to Borrower's right to contest as
provided in the Loan Documents, the Premises or the Leasehold becomes subject to
any mechanic's, materialman's or other lien (except a lien for local real estate
taxes and assessments not then due and payable unless contested by Borrower in
good faith, and such contest is pursued continually and with diligence) and such
lien is not removed within thirty (30) days after Agent delivers notice thereof
to Borrower;
(g) In the event that financing permitted by SECTION
4.2(j)(III) hereby is entered into on behalf of Borrower, any default (after the
expiration of all applicable notice, grace and opportunity to cure periods)
under such documents memorializing such financing; and
(h) If Borrower or Prime fails to perform any of the
obligations set forth in Section 6.1(m) hereof within ten (10) days after Agent
delivers written notice thereof to Borrower.
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Section 5.2 REMEDIES.
Upon an Event of Default, Agent may, at its option, use any,
some or all of the following remedies, concurrently or consecutively.
(a) Agent may declare all principal, interest and other
amounts outstanding on the Loan immediately due and payable. Borrower expressly
waives a presentment, notice, demand and protest of any kind.
(b) Agent may exercise any and all of its rights and remedies
provided at law and under the Note, Mortgage and any other Loan Documents.
Section 5.3 REMEDIES CUMULATIVE AND CONCURRENT.
No right, power or remedy of Agent as provided in this
Agreement or in any of the Loan Documents is intended to be exclusive of any
other right, power, or remedy of Agent, but each and every such right, power or
remedy shall be cumulative and concurrent and in addition to any other right,
power or remedy available to Agent now or hereafter existing at law or in equity
and may be pursued separately, successively or concurrently at the sole
discretion of Agent. The failure of Agent to exercise any such right, power or
remedy shall in no event be construed as a waiver or release thereof.
Section 5.4 WAIVER, DELAY OR OMISSION.
No waiver of any Event of Default hereunder shall extend to or
affect any subsequent or any other Event of Default then existing, or impair any
rights, powers or remedies consequent thereon, and no delay or omission of Agent
to exercise any right, power or remedy shall be construed to waive any such
Event of Default or to constitute acquiescence therein.
Section 5.5 INDEMNITY.
Borrower hereby agrees that it will defend, indemnify and hold
harmless each Lender, and each of its affiliates, officers, directors, partners,
participants, employees and agents (each, an "INDEMNIFIED PARTY") from and
against, and shall reimburse the affected Indemnified Party for, any and all
actual, out-of-pocket losses, claims, damages, costs, expenses (including
reasonable attorney fees' and expenses), liabilities, fines, penalties and
charges arising out of claims made by Persons other than the Indemnified Parties
(collectively, the "LOSSES"), which are or may be imposed, or sustained by such
Indemnified Party by reason of: (a) ownership of the Mortgage, the Premises, the
Leasehold or any interest therein or receipt of any Rents therefrom; (b) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Premises, the Leasehold Premises or any part
thereof or on the adjoining sidewalks,
50
curbs, adjacent property or adjacent parking areas, streets or ways; (c) any
use, nonuse or condition in, on or about the Premises, the Leasehold Premises or
any part thereof or on adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (d) any failure on the part of Borrower to
perform or comply with any of the terms of the Loan Documents; (e) performance
of any labor or services or the furnishing of any materials or other property in
respect of the Premises, the Leasehold Premises or any part thereof; (f) the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release, or threatened release of any Hazardous Substance or Asbestos on, from,
or affecting the Premises, the Leasehold Premises or any other property; (g) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to any Hazardous Substance or Asbestos on, from, or
affecting the Premises or the Leasehold Premises; (h) any lawsuit brought or
threatened, settlement reached, or government order relating to any Hazardous
Substance or Asbestos on, from, or affecting the Premises or the Leasehold
Premises; (i) any violation of the Environmental Laws, which are based upon or
in any way related to any Hazardous Substance or Asbestos on, from, or affecting
the Premises or the Leasehold Premises including, without limitation, the costs
and expenses of any remedial action in accordance with Laws, reasonable attorney
and consultant fees, investigation and laboratory fees, court costs, and
litigation expenses; (j) any failure of the Premises or the Leasehold Premises
to comply with any Laws in all material respects; (k) any representation or
warranty made in this Loan Agreement, the Note, the Mortgage or the other Loan
Documents being false or misleading in any material respect as of the date such
representation or warranty was made; (l) any claim by brokers, finders or
similar persons claiming to be entitled to a commission in connection with any
Lease or other transaction involving the Premises, the Leasehold Premises or any
part thereof under any legal requirement or any liability asserted against
Lenders with respect thereto; and (m) the claims of any lessee of all or any
portion of the Premises, the Leasehold Premises or any person acting through or
under any lessee or otherwise arising under or as a consequence of any Lease,
except to the extent that (i) such Losses resulted from the gross negligence or
willful misconduct of such Indemnified Party or (ii) in the case of the
foregoing clauses (f) through (i), Mortgagor establishes that such Losses
resulted from Hazardous Materials being placed on, above or under the Premises
or the Leasehold Premises only subsequent to any foreclosure by Agent (or any
assignee of Agent) or acceptance by Agent (or any designee of Agent) of a deed
in lieu of foreclosure with respect to the Premises or the Leasehold. In case
any such claim, action or proceeding (a "CLAIM") is brought against an
Indemnified Party in respect of which indemnification may be sought by such
Indemnified Party pursuant hereto, Agent shall give prompt written notice
thereof to Borrower, which notice shall include all documents and information in
the possession of or under the control of Agent and such Indemnified Party
relating to such Claim and shall specifically state that indemnification for
such Claim is being sought under this SECTION 5.5; PROVIDED, HOWEVER, that the
failure of Agent to so notify Borrower shall not limit or affect such
Indemnified Party's rights to be indemnified pursuant to this SECTION 5.5 except
to the extent Borrower is materially prejudiced by such failure. Upon receipt of
such notice of Claim (together with such documents and information from Agent
and such Indemnified Party), Borrower shall, at its sole cost and expense, in
good faith defend any
51
such Claim with counsel reasonably satisfactory to Agent (it being understood
that counsel selected by Borrower's insurance carrier shall be deemed to be
acceptable to Agent and the Indemnified Party, PROVIDED such insurer is an
insurer under an insurance policy provided by Borrower pursuant to the Loan
Documents or otherwise was accepted by Agent as an insurer (a "QUALIFIED
INSURER")), which counsel may, without limiting the rights of Agent and such
Indemnified Party pursuant to the next succeeding sentence of this SECTION 5.5,
also represent Borrower in such investigation, action or proceeding. In the
alternative, such Indemnified Party may elect to conduct its own defense through
counsel of its own choosing and at the reasonable expense of Borrower, if (A)
such Indemnified Party reasonably determines that the conduct of its defense by
Borrower could be materially prejudicial to its interests, (B) Borrower refuses
to defend, or (C) Borrower shall have failed, in such Indemnified Party's
reasonable judgment, to defend the Claim in good faith (unless, in the case of
each of clauses (A), (B) and (C), such Claim is being defended by a Qualified
Insurer). Borrower may settle any Claim against such Indemnified Party without
such Indemnified Party's consent, PROVIDED (i) such settlement is without any
liability, cost or expense whatsoever to such Indemnified Party, (ii) the
settlement does not include or require any admission of liability or culpability
by such Indemnified Party under any federal, state or local statute or
regulation, whether criminal or civil in nature and (iii) Borrower obtains an
effective written release of liability for such Indemnified Party from the party
to the Claim with whom such settlement is being made, which release must be
reasonably acceptable to such Indemnified Party, and a dismissal with prejudice
with respect to all claims made by the party against such Indemnified Party in
connection with such Claim. Agent and such Indemnified Party shall reasonably
cooperate with Borrower, at Borrower's sole cost and expense, in connection with
the defense or settlement of any Claim in accordance with the terms hereof. If
Borrower refuses to defend any Claim or fails to defend such Claim in good faith
(other than a Claim that is being defended by a Qualified Insurer) and such
Indemnified Party elects to defend such Claim by counsel of its own choosing,
Borrower shall be responsible for any good faith settlement of such Claim
entered into by such Indemnified Party. If such Indemnified Party reasonably
determines that the conduct of its defense by Borrower or a Qualified Insurer
(whichever is defending such claim) would be materially prejudicial to its
interests and elects to defend such Claim by counsel of its own choosing,
Borrower shall be responsible for any reasonable settlement of such Claim
entered into by such Indemnified Party. Except as provided in the preceding two
(2) sentences, no Indemnified Party may pay or settle any Claim and seek
reimbursement therefor under this SECTION 5.5. Nothing contained herein shall be
construed as requiring Agent or any Indemnified Party to expend funds or incur
costs to defend any Claim in connection with the matters for which Agent or any
Indemnified Party is entitled to indemnification pursuant to this SECTION 5.5.
The obligations of Borrower hereunder shall specifically include the obligation
to expend its own funds, to incur costs in its own name and to perform all
actions as may be necessary to protect Agent or any Indemnified Party from the
necessity of expending its own funds, incurring cost or performing any actions
in connection with the matters for which each Lender is entitled to
indemnification hereunder. Any obligation of the Borrower under clauses (f),
(g), (h) and (i) of this SECTION 5.5 shall terminate upon the earlier of (1) the
tenth (10th) anniversary of the
52
conveyance or assignment of the Premises and the Leasehold pursuant to a
judicial sale in any foreclosure action or by assignment in lieu of foreclosure
and (2) repayment in full of the outstanding principal balance and any other
indebtedness payable to Agent or Lenders under the Loan Documents.
ARTICLE 6
LIMITED RECOURSE OBLIGATIONS
Section 6.1 LIMITED RECOURSE.
Subject to the qualifications below in this SECTION 6.1, the
obligations and liabilities of Borrower under the Note, this Agreement, the
Mortgage and the other Loan Documents shall be non-recourse. Accordingly,
subject to the qualifications below in this SECTION 6.1, Lenders shall not
enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Note, the Mortgage, this Loan Agreement or the
other Loan Documents by an action or proceeding wherein a money judgment shall
be sought against Borrower or any direct or indirect partner, member,
shareholder, principal, director, employee, officer or Affiliate of Borrower,
except that Agent may bring a foreclosure action, an action for specific
performance or any other appropriate action or proceeding to enable Lenders to
enforce and realize upon the Note, the Mortgage, this Loan Agreement, the other
Loan Documents, and the interests in the Premises and any other collateral given
to Lenders pursuant to the Mortgage, and the other Loan Documents; PROVIDED,
HOWEVER, that, except as specifically provided in this SECTION 6.1, any judgment
in any such action or proceeding shall be enforceable against Borrower only to
the extent of Borrower's interest in the Premises and in any other Collateral
given to Lenders. Agent, by accepting the Note, the Mortgage, this Loan
Agreement and the other Loan Documents, and Lenders, by becoming Lenders
hereunder, agree that they shall not xxx for, seek or demand any deficiency
judgment against Borrower or any direct or indirect partner, member,
shareholder, principal, director, employee, officer or affiliate of Borrower, in
any such action or proceeding, under or by reason of or under or in connection
with the Mortgage, this Loan Agreement, the other Loan Documents or the Note.
The provisions of this SECTION 6.1 shall not, however: (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by the Mortgage,
this Loan Agreement, the other Loan Documents or the Note; (ii) impair the right
of Agent to name Borrower as a party in any action or suit for foreclosure and
sale under the Mortgage; (iii) affect the validity or enforceability of any
guaranty made in connection with the Mortgage, this Loan Agreement, the Note or
the other Loan Documents; or (iv) impair the right of Agent to obtain the
appointment of a receiver. Nothing herein shall be deemed to be a waiver of any
right which Agent may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Loan secured by the Mortgage or to require that all collateral shall
continue to secure all of the debt owing to Lenders in accordance with the Note,
the Mortgage, this Loan Agreement and the other Loan Documents.
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Notwithstanding the foregoing provisions of this SECTION 6.1 or any other
provision in the Loan Documents, Borrower and Prime, but not any other direct or
indirect partner, member, shareholder, principal, director, employee, officer or
affiliate of Borrower or Prime, shall be fully liable for:
(a) all actual, out-of-pocket losses suffered and liabilities
and expenses incurred by Lenders relating to fraud or intentional
misrepresentation by Borrower in connection with the loan evidenced by the Loan
Documents;
(b) the physical waste of the Premises or the Leasehold
Premises by Borrower, or any failure to maintain, repair or restore any part of
the Premises or the Leasehold Premises as may be required by the Mortgage, this
Loan Agreement or any of the other Loan Documents so as to constitute physical
waste;
(c) the breach of provisions in the Mortgage concerning
Environmental Laws, Hazardous Substances and Asbestos and any indemnification of
Lenders therein;
(d) the removal or disposal of any portion of the Premises or
the Leasehold Premises in violation of the terms of the Loan Documents after the
occurrence and during the continuance of an Event of Default under the Note, the
Mortgage, this Loan Agreement or any other Loan Documents;
(e) the misapplication or conversion of Borrower of (i) any
insurance proceeds paid by reason of any loss, damage or destruction to the
Premises or the Leasehold Premises, (ii) any awards or other amounts received in
connection with the condemnation of all or a portion of the Premises or the
Leasehold Premises, or (iii) rents, issues, profits, proceeds, accounts, or
other amounts received by Borrower after the occurrence and during the
continuance of an Event of Default under the Note, the Mortgage, this Loan
Agreement or the other Loan Documents, except when applied with the written
consent of Agent or to pay Operating Expenses incurred or paid to Agent or
Lenders as Debt Service or otherwise;
(f) the costs (including reasonable attorneys' fees and
disbursements) incurred by Lenders in connection with the collection or
enforcement of the Loan;
(g) failure to pay Taxes, assessments, charges for labor or
materials or other charges that create liens on any portion of the Premises or
the Leasehold for which Borrower is assessed unless contested in good faith,
such contest being pursued with due diligence and continually;
(h) any actual, out-of-pocket loss, damage, expense or
liability incurred by Lenders arising out of Borrower's failure to obtain
Agent's prior written consent to any sale,
54
conveyance, alienation, mortgage, encumbrance, pledge or other transfer of the
Premises or the Leasehold any part thereof;
(i) any security deposits collected with respect to the
Premises that are not delivered to Agent upon a foreclosure of the Premises or
action in lieu thereof, except to the extent previously applied in accordance
with the respective Leases (as defined in the Mortgage);
(j) all of the terms and provisions of the Environmental
Indemnity Agreement and any indemnification of Lenders set forth therein;
(k) the voluntary filing of bankruptcy, reorganization or
insolvency proceedings by Borrower, or if an Affiliate of Borrower causes
Borrower to have to file bankruptcy, reorganization or insolvency proceedings;
(l) the indemnification of Agent and each Lender, and each of
its affiliates, officers, directors, partners, participants, employees and
agents from and against any and all actual, out-of-pocket losses, claims,
damages, costs, expenses, liabilities, fines, penalties and charges which are or
may be imposed upon the Improvements or which are or may be imposed upon or
suffered or incurred by any such indemnified party by reason of the lack of a
certificate of occupancy for the Improvements, including, without limitation,
costs and expenses incurred to obtain a certificate of occupancy if and to the
extent one is required pursuant to applicable Laws and is requested by
applicable Governmental Authorities; and
(m) to the extent required by any Governmental Authorities or
by the terms of any Lease, whether existing as of the date hereof or entered
into subsequent to the date hereof, Borrower or Prime shall remove or otherwise
remediate the Asbestos at the Premises, as so required (collectively, the
"Remediation Work"), and Borrower and Prime shall be fully liable for such
removal or other remediation, as applicable. Within ten (10) Business Days of
Borrower and/or Prime becoming aware of such requirement to remove or otherwise
remediate Asbestos at the Premises (or if Agent becomes aware of any such
requirement then within ten (10) Business Days of receiving written notice from
Agent regarding such removal and/or remediation, whichever is earlier), Borrower
and Prime shall cause to be delivered to Agent a letter of credit for the
benefit of Agent to be drawn on a bank reasonably acceptable to Agent (the
"LETTER OF CREDIT") in an amount equal to the product of (i) twenty dollars
($20.00) and (ii) the number of square feet at the Premises affected by such
requirement to remove and/or remediate (the "REMEDIATION AMOUNT"). After
Borrower has completed and paid for the Remediation Work, or any portion
thereof, and evidence satisfactory to Agent has been provided to Agent by
Borrower of such completion and payment, the amount of the Letter of Credit
shall be reduced by the amount paid by Borrower for such Remediation Work, or
portion thereof, as applicable. The Letter of Credit shall expire upon
completion of the Remediation Work (a) to the satisfaction of the Governmental
Authority, or (b) to the extent required under the applicable Lease, as
55
applicable. The Letter of Credit shall be additional Collateral for the Loan.
Agent shall be entitled to draw on the Letter of Credit if either of the
following should occur: (i) the occurrence of an Event of Default under the Loan
Documents, or (ii) such Letter of Credit is due to expire in less than fifteen
(15) days and has not been renewed and the Remediation Work has not been
completed as required by (a) or (b) above, as applicable. In the case of
subsection (ii) immediately above, Agent shall hold any amounts drawn on the
Letter of Credit as cash collateral as security for the purpose of paying for
the Remediation Work, and, in the case of subsection (i) immediately above,
Agent may hold any amounts drawn on the Letter of Credit as cash collateral as
security for the purpose of paying for the Remediation Work or apply the amount
against any amounts due under the Loan. Within ten (10) Business Days of January
1 and July 1 of each year throughout the Term of the Loan, Borrower and/or Prime
shall deliver to Agent evidence satisfactory to Agent that Borrower and/or Prime
(individually or in the aggregate) has a line of credit, borrowing capacity,
cash or cash equivalents available to it which evidence Borrower's ability to
procure a letter of credit in an amount of at least ten million ($10,000,000)
dollars. In lieu of providing Agent with a Letter of Credit, Borrower may
substitute cash therefor in an amount equal to the Remediation Amount.
ARTICLE 7
THE AGENT
Section 7.1 PERFORMANCE BY AGENT.
If an Event of Default shall have occurred and be continuing,
Agent shall have the right, but not the duty, without limitation upon any of
Agent's rights pursuant hereto, to perform in good faith the obligations of
Borrower which are the subject of the Event of Default, in which event Agent
shall endeavor to give notice to Borrower of Agent's performance, and Borrower
agrees to pay to Agent, within five (5) days of demand therefor, all actual and
reasonable costs and expenses incurred by Agent in connection therewith,
including without limitation reasonable attorneys' fees, together with interest
from the date of expenditure at the Default Rate, if an Event of Default shall
have given rise to such expenditure; PROVIDED, HOWEVER that Borrower shall not
be obligated to reimburse Agent for costs and expenses incurred by Agent
pursuant to this SECTION 7.1 due to Agent's gross negligence or willful
misconduct. Upon demand by Agent, each of the Lenders shall promptly advance to
Agent in immediately available funds its ratable portion of the funds expended
by Agent in curing such Event of Default together with interest thereon at the
Default Rate from the date of Agent's payment through the date prior to the date
on which such advance is received by Agent. Agent will disburse to each Lender
such Lenders' ratable share of any fees or charges paid or advanced to Agent by
Borrower (i) pursuant to SECTIONS 2.7, 2.8, and 8.12 hereof and/or (ii) pursuant
to Section 11(c) of the Mortgage.
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Section 7.2 ACTIONS.
If Agent shall have reasonable cause to believe that any
action or proceeding related to the Premises or the Leasehold may, if adversely
determined, have a material adverse effect upon the rights or interests of Agent
and/or Lenders under this Agreement or any of the other Loan Documents, Agent,
after any applicable notice to Borrower shall have the right to commence, appear
in and defend such action or proceeding, and in connection therewith Agent may
pay necessary expenses, employ counsel, and pay reasonable attorneys' fees.
Borrower agrees to pay to Agent, within five (5) days after demand therefor by
Agent, all actual and reasonable costs and expenses incurred by Agent in
connection therewith, including without limitation reasonable attorneys' fees,
together with interest from the date of expenditure at the Default Rate, if an
Event of Default shall have given rise to such action or proceeding. Borrower's
obligations to repay such expenses shall be secured by the Loan Documents.
Section 7.3 NONLIABILITY OF AGENT AND LENDERS.
Borrower acknowledges and agrees that:
(a) by accepting or approving anything required to be
observed, performed, fulfilled or given to Agent or Lenders pursuant to the Loan
Documents, including any certificate, statement of profit and loss or other
financial statement, survey, appraisal, lease or insurance policy, neither Agent
nor Lenders shall be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any term, provision
or condition thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect thereto by Agent;
(b) neither Agent nor Lenders undertake nor assume any
responsibility or duty to Borrower to select, review, inspect, supervise, pass
judgment upon or inform Borrower of any matter in connection with the Premises
or the Leasehold and Borrower shall rely entirely upon its own judgment with
respect to such matters, and any review, inspection, supervision, exercise of
judgment or supply of information to Borrower by Agent or Lenders in connection
with such matters is for the protection of Agent and/or Lenders only and neither
Borrower nor any third party is entitled to rely thereon; and
(c) except to the extent caused by a Lender's gross negligence
or willful misconduct, neither Agent nor any Lender shall be directly or
indirectly liable or responsible for any loss, claim, cause of action,
liability, indebtedness, damage or injury of any kind or character to any person
or property arising from any construction on, or occupancy or use of, any of the
Premises or the Leasehold Premises, including without limitation any loss,
claim, cause of action, liability, indebtedness, damage or injury caused by, or
arising from: (i) any defect in any building, structure, grading, fill,
landscaping or other improvements thereon or in any on-site or
57
off-site improvement or other facility therein or thereon; (ii) any act or
omission of Borrower, the parties comprising Borrower or any of Borrower's
agents, employees, independent contractors, licensees or invitees; (iii) any
accident in or on the Premises or the Leasehold Premises or any fire, flood or
other casualty or hazard thereon; (iv) the failure of Borrower, any of
Borrower's licensees, employees, invitees, agents, independent contractors or
other representatives to maintain the Premises and the Leasehold Premises in a
safe condition; and (v) any nuisance made or suffered on any part of the
Premises or the Leasehold Premises.
Section 7.4 AUTHORIZATION AND ACTION.
(a) Each Lender hereby appoints and authorizes Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto, including but not limited
to (i) all actions set forth in Section 59 of the Mortgage or any similar
provision of any other Loan Document and (ii) except if an Event of Default has
occurred or is continuing hereunder, any and all actions related to the Cash
Collateral Account (Central Account), Cash Collateral Account (Ratio Reserve),
if any, Cash Collateral Account , if any, and any other cash collateral accounts
required to be made hereunder, including but not limited to, the release of
monies or other collateral deposited or delivered to Agent pursuant thereto. As
to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Note), Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders; PROVIDED, HOWEVER, that Agent
shall not be required to take any action which exposes Agent to personal
liability or which is contrary to this Agreement or applicable law. Agent agrees
to give to each Lender prompt notice of each notice given to it by Borrower
pursuant to the terms of the Loan Documents.
(b) By their execution of this Agreement, all of the Lenders
hereby delegate, authorize and direct Agent to act on their behalf in all
respects in connection with the Loan Documents and the making of the Loan and
agree with Borrower that Borrower shall only be required to deal with Agent and
each of the Lenders shall be bound by any acts of Agent.
(c) Except as otherwise expressly provided in this Agreement,
Agent (i) shall take all such actions hereunder and under the other Loan
Documents which are not inconsistent with the terms hereof or thereof as the
Majority Lenders shall instruct and (ii) shall not take any material actions
hereunder or under the Loan Documents contrary to the instructions of the
Majority Lenders. Any provision of this Agreement which grants to Agent the
right to make a decision at its sole discretion or in its reasonable judgment or
at its option or any other similar provision is intended, unless the context
shall clearly require otherwise, to apply only to relations between Borrower and
Agent and the respective rights and obligations of Borrower and Agent
58
hereunder and shall not apply to the relations between Agent and the Lenders or
the respective rights and obligations of Agent and the Lenders hereunder.
(d) Promptly after Agent acquires actual knowledge thereof,
Agent will give written notice to each Lender of any lien on the Premises or the
Leasehold or default under this Agreement or any of the other Loan Documents.
Agent agrees to consult with Lenders in respect of any remedial action to be
taken in respect of any such default and shall act in accordance with any
decision of the Majority Lenders. Agent agrees that during a period of
forty-five (45) days from Agent's notice to Lenders of any such default, Agent
will not take any such material remedial action without the prior agreement of
the Majority Lenders unless in Agent's good faith judgment it is necessary to
take more prompt remedial action within such period, with or without the
agreement of the Majority Lenders, in order to preserve any collateral for the
payment of the Loan or substantive rights or remedies under any of the Loan
Documents. Agent shall advise Lenders from time to time of such remedial action
as Agent shall have taken. All losses and expenses incurred by Agent in
connection with the Loan, the enforcement thereof or the realization of the
security therefor shall be borne by the Lenders in accordance with their ratable
interest in the Loan, and Lenders will, upon request, reimburse Agent for their
ratable shares of any expenses incurred by Agent in connection with any such
default, any advances made to pay taxes or insurance or otherwise to preserve
the lien of the Mortgage or to preserve and protect the Premises or the
Leasehold (PROVIDED, HOWEVER, that Agent shall not advance sums in excess of the
principal amount of the Mortgage), any other expenses incurred in connection
with the enforcement of the Mortgage and any expenses incurred by Agent in
connection with the consummation of the Loan not paid or provided for by
Borrower.
(e) Agent shall, in making any Major Decision, act upon the
direction of the Majority Lenders; PROVIDED, HOWEVER, that without the consent
of all of the Lenders, Agent shall not, except as expressly provided for in
SECTION 7.4(A), SECTION 7.4(C) or SECTION 7.4(D) hereof, make or consent to any
modification of the Loan or the Loan Documents, release any security for the
Loan, or release any Person from liability in connection with the Loan under any
guaranty or otherwise. As used herein, "MAJOR DECISION" means any decision to
exercise any material rights or remedies under the Loan Documents. The
provisions of this subsection are solely for the benefit of the Lenders and
Agent and shall not create any rights in Borrower.
(f) If Agent shall be prohibited by Law from continuing to act
as agent with respect to the Loan, then, subject to Borrower's approval (which
approval shall not be unreasonably withheld, conditioned or delayed), the
Majority Lenders shall (and at any time may) designate another Lender to perform
the obligations and exercise the rights of Agent hereunder. The successor Agent
shall assume such obligations in writing and from and after Borrower's receipt
of a copy of notice of such replacement and receipt of a copy of such assumption
the successor Agent shall be the sole Agent hereunder and the term "Agent" shall
thereafter refer to such successor.
59
Section 7.5 WITHHOLDING EXEMPTION CERTIFICATES.
Concurrently with the disbursement of proceeds of the Loan and
concurrently with (and as a condition precedent to) the sale of any
participation interest in the Loan or assignment of all or any portion of the
Loan, Agent shall deliver to Borrower via facsimile two completed copies of
United States Internal Revenue Service Form 1001 or Form 4224, as applicable, or
the successor applicable form, with respect to each Lender (or, in the case of
any sale of a participation interest or assignment of all or any portion of the
Loan, the applicable purchaser or assignee) certifying that such Lender (or, if
applicable, purchaser or assignee) is entitled to receive payments under the
Loan without deduction or withholding of any United States federal income taxes.
Each Lender shall further deliver to Borrower two (2) copies of such Form 1001
or Form 4224, as applicable, or the successor applicable form, at least thirty
(30) days before the date that any such form expires or becomes obsolete or
immediately after the occurrence of any event requiring a change in the most
recent form previously delivered by it to Borrower, in each case certifying that
such Lender is entitled to receive payments under the Loan without deduction or
withholding of any United States federal income taxes.
Section 7.6 AGENT'S RELIANCE, ETC.
Agent shall administer this Agreement and the other Loan
Documents and service the Loan in accordance with the terms and conditions of
this Agreement and with the same degree of care as Agent would use in servicing
a loan of similar size and type held for its own account, PROVIDED, HOWEVER,
that none of its directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, Agent: (i) may
consult with legal counsel (including counsel for Borrower), independent public
accountants and other experts selected and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with the advice
of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iii) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of Borrower or to inspect either the
Premises, the Leasehold or the books and records of Borrower; (iv) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (v) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
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(a) Subject to SECTION 7.7(B) hereof, payments actually
received by Agent for the account of the Lenders shall be paid to them promptly
after receipt thereof by Agent, but in any event within one (1) Business Day,
PROVIDED that, if any such payments are not distributed to the Lenders within
one Business Day after Agent's receipt thereof, Agent shall pay to such Lenders
interest thereon, at the lesser of (a) the overnight cost of funds at which
federal funds are made available to Agent (such interest rate to change
automatically effective as of the date of each change in the overnight cost of
federal funds) and (b) if the applicable payment represents repayment of a
portion of the principal of the Loan, the rate of interest applicable to such
portion of the Loan, from the date of receipt of such funds by Agent until such
funds are paid in immediately available funds to such Lenders provided such
funds are received by Agent not later than [11:00 A.M. (New York time)] on the
date of receipt. All payments of principal and interest in respect of the Loan,
all payments of the fees described in this Agreement and all payments in respect
of any other obligations of Borrower under the Loan Documents shall be allocated
among such of Lenders as are entitled thereto, in proportion of their respective
Percentages or otherwise as provided herein, in the other Loan Documents, or in
the Syndication Agreement as the case may be. Borrower shall have no liability
to any Lender on account of a failure by Agent to timely or correctly allocate
among the Lenders any payments in respect of any obligations of Borrower. Agent
shall wire transfer immediately available funds to each Lender in accordance
with wiring instructions provided by Lender to Agent, such funds as it may be
entitled to receive, PROVIDED that Agent shall in any event not be bound to
inquire into or determine the validity, scope or priority of any interest or
entitlement of any Lender and may suspend all payments and seek appropriate
relief (including without limitation instructions from the Lenders, or an action
in the nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby.
(b) If a Lender (a "DEFAULTING LENDER") defaults in making any
advance or paying any other sum payable by it hereunder, such sum together with
interest thereon at the Default Rate from the date such amount was due until
repaid (such sum and interest thereon as aforesaid referred to, collectively, as
the "LENDER DEFAULT OBLIGATION" shall be payable by the Defaulting Lender (a) to
any Lender(s) which elect, at their sole option (and with no obligation to do
so), to fund the amount which the Defaulting Lender failed to fund or (b) to any
Agent or any other Lender, which under the terms of this Agreement is entitled
to reimbursement from the Defaulting Lender for the amounts advanced or
expended. Notwithstanding any provision hereof to the contrary, until such time
as a Defaulting Lender has repaid the Lender Default Obligation in full, all
amounts which would otherwise be distributed to the Defaulting Lender shall
instead be applied first to repay the Lender Default Obligation (to be applied
first to interest at the Default Rate and then to principal) until the Lender
Default Obligation has been repaid in full (whether by such application or by
cure by the Defaulting Lender), whereupon such Lender shall no longer be a
Defaulting Lender. Any interest collected from Borrower on account of principal
advanced by any Lender(s) on behalf of a Defaulting Lender shall be paid to the
Lender(s) who made such advance and shall be credited against the Defaulting
Lender's obligation to pay interest on the
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amount advanced at the Default Rate. The provisions of this section shall apply
and be effective regardless of whether an Event of Default occurs and is then
continuing, and notwithstanding (i) any other provision of this Agreement to the
contrary, (ii) any instructions of Borrower as to its desired application of
payments or (iii) the suspension of such Defaulting Lender's right to vote on
matters which are subject to the consent or approval of Majority Lenders, or all
Lenders. Agent shall be entitled to (A) withhold or set off, and to apply to the
payment of the Lender Default Obligation any amounts to be paid to such
Defaulting Lender in a court of competent jurisdiction to recover the Lender
Default Obligation and, to the extent such recovery would not fully compensate
the Lenders for the Defaulting Lender's breach of this Agreement, to collect
damages. In addition, the Defaulting Lender shall indemnify, defend and hold
Agent and each of the other Lenders harmless from and against any and all
claims, actions, liabilities, damages, costs and expenses (including attorneys'
fees and expense), plus interest thereon at the Default Rate, for funds advanced
by Agent or any other Lender on account of the Defaulting Lender or any other
damages such entities may sustain or incur by reason of or as a direct
consequence of the Defaulting Lender's failure or refusal to abide by its
obligations under this Agreement.
Section 7.8 RATABLE SHARING.
Subject to SECTION 7.7, Lenders agree among themselves that
(a) with respect to all amounts received by them which applicable to the payment
of the Loan, equitable adjustment will be made so that, in effect, all such
amounts will be shared among them ratably in accordance with their Percentages,
whether received by voluntary payment, by the exercise of the right of set-off
or banker's lien, by counterclaim or cross action or by the enforcement of any
or all of the Loan Documents or any collateral and (b) if any of them shall by
voluntary payment or by the exercise of any right of counterclaim, set-off,
banker's lien or otherwise, receive payment of a proportion of the aggregate
amount of the Loan held by it which is greater than its Percentage of the
payments on the account of the Loan, the one receiving such excess payment shall
purchase, without recourse or warranty, an undivided interest and participation
(which it shall be deemed to have done simultaneously upon the receipt of such
payment) in such obligations owed to the others so that all such recoveries with
respect to such obligations shall be applied ratably in accordance with their
Percentages; provided, that if all or part of such excess payment received by
the purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to that party to the extent necessary to adjust for such recovery, but without
interest except to the extent the purchasing party is required to pay interest
in connection with such recovery. Borrower agrees that any Lender so purchasing
a participation from another Lender pursuant to this Section may, to the fullest
extent permitted by law, subject to the terms of the Loan Documents, exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
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ARTICLE 8
MISCELLANEOUS
Section 8.1 FEES AND EXPENSES
Borrower agrees to pay all actual, out-of-pocket expenses of
Agent (including the reasonable fees and expenses of its counsel) in connection
with the Loan, the preparation of this Agreement and any amendments or
supplements, the enforcement of any provision of this Agreement or any amendment
or supplement and the collection of Note and/or the foreclosure of any Lien,
and/or Mortgage, and/or the enforcement of this Agreement through all trial and
appellate levels, whether such fees or expenses arise before proceedings are
commenced or after entry of a final judgment; PROVIDED, HOWEVER, that Borrower
shall not be required to pay more than $10,000 (in total) for Agent's travel and
out-of-pocket expenses incurred in the preparation of the Loan Documents and the
closing of the contemplated transaction. Borrower hereby authorizes Agent to
utilize the proceeds of the Loan to satisfy any and all of the costs and
expenses referred to herein and no further direction or authorization from
Borrower shall be necessary to warrant disbursements in payment of the
foregoing, and all such disbursements shall earn interest as provided in the
Note and shall be secured by the Mortgage.
Section 8.2 CUMULATIVE RIGHTS AND NO WAIVER.
Each and every right granted to Agent hereunder or under any
other Loan Documents delivered hereunder or in connection herewith, or allowed
by law or equity, including but not limited to these rights exercisable in
connection with an Event of Default, shall be cumulative and may be exercised
from time to time. No failure on the part of Agent to exercise, and no delay in
exercising, any right will operate as a waiver thereof, nor will any single or
partial exercise by Agent of any right preclude any other or future exercise
thereof or the exercise of any other right.
Section 8.3 NOTICES.
Unless expressly contained herein, all notices given hereunder
shall be given in accordance with the terms of the Mortgage.
Section 8.4 SEVERABILITY.
In case any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
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Section 8.5 BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the
benefit of the respective permitted successors and assigns of Borrower, Agent
and Lenders; PROVIDED, HOWEVER, that Borrower may not assign any of its rights
hereunder, except as permitted in this Agreement or in the Loan Documents.
Section 8.6 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument.
Section 8.7 TIME OF THE ESSENCE.
Time is of the essence in matters pertaining to this
Agreement.
Section 8.8 IMMUNITY.
Agent's commitment to make this Loan hereunder shall not at
any time be subject or liable to attachment or levy at the suit of any creditor
of Borrower or any agent, contractor, subcontractor or supplier of Borrower. All
third parties' rights shall be and are subordinate and inferior to Lenders'
interest and lien under the terms of the Mortgage and this Agreement. Agent and
Lenders shall not be liable to third parties for services, labor, materials,
Fixtures, equipment and other personal property employed upon, furnished or
delivered to the Premises or the Leasehold Premises, and further as to such
third parties, Agent shall be under no obligation to adhere to the requirements
herein imposed as conditions for the advance of Loan funds which requirements
are expressly intended to be for the sole and exclusive benefit of Agent.
Section 8.9 GOVERNMENTAL REGULATION OF LENDER.
Lenders are subject to various Governmental Authorities and
the laws, rules and regulations enacted, adopted and promulgated by them. To the
extent that Lenders' power and authority to perform the obligations on the part
of Lenders to be performed under this Agreement, now or hereafter, may be
limited or regulated hereby, Lenders are hereby excused from such performance.
Section 8.10 MODIFICATION, WAIVER, CONSENT.
Any modification or waiver or any provision of this Agreement
or any consent to any departure by Borrower therefrom shall not be effective
unless the same is in writing and
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signed by an authorized officer of Agent and Borrower, and then such
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose given. Any notice to or demand on Borrower not
specifically required of Agent hereunder shall not entitle Borrower to any other
or further notice or demand in the same, similar, or other circumstances unless
specifically required hereunder.
Section 8.11 ENTIRE AGREEMENT.
The Loan Documents contain the entire agreement between the
parties hereto and there are no promises, agreements, conditions, undertakings,
warranties and representations, whether written or oral, express or implied,
between the parties hereto other than as set forth in the Loan Documents.
Moreover, in the event of a conflict between the terms of
another Loan Document and this Agreement, the terms of the document which shall
either enlarge the interest of Lenders in the Premises and the Leasehold, grant
to Lenders greater financial security in the Premises and the Leasehold and/or
assure repayment by Borrower of all sums due hereunder in full shall control.
Section 8.12 ASSIGNMENT.
(a) Borrower may not assign this Agreement or any of its
rights or obligations hereunder without the prior approval of Agent except as
provided in this Agreement or in the other Loan Documents.
(b) Borrower and each Lender acknowledges and agrees that
Agent may, and shall have the right without Borrower's or any Lender's consent
to, sell participation interests in, or to assign, its interest in the Loan, or
any portion thereof, subject to SECTION 7.5 hereof, to any Institution and upon
any assignment by Agent, Agent shall be relieved of any liability hereunder and
under any Loan Document arising or accruing from and after the date of such
assignment to the extent of the amount so assigned; PROVIDED, however, Agent
shall give ten (10) days prior notice of such assignment to Borrower (together
with a completed copy of Form 1001 or Form 4224, as applicable, with respect to
the proposed assignee). Borrower and Agent acknowledge that any Lender (other
than Agent) may, and shall have the right, subject to providing Agent and
Borrower with ten (10) days' prior written notice (together with a completed
copy of Form 1001 or Form 4224, as applicable, with respect to the proposed
assignee) to assign its entire interest or any portion thereof to any
Institution, and upon any assignment by such Lender, such Lender shall be
relieved of any liability hereunder or under any other Loan Document arising or
accruing from and after the date of such assignment; PROVIDED, FURTHER, that no
such sale or assignment shall result in a material increase in Borrower's
obligations, costs or liabilities hereunder or a material reduction in
Borrower's rights and remedies. The parties to each such assignment shall
execute
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and deliver to Agent, for its acceptance and recording in the Agent's Register,
Agent's form of assignment and acceptance agreement, together with a processing
and recordation fee of $2,500, which fee shall cover Agent's cost in connection
with the assignments under this Agreement. If an Event of Default has occurred
and is continuing, Borrower's consent to any assignment or participation to any
party whatsoever shall not be required and all parties hereto agree to promptly
execute and file an amendment to this Agreement reflecting any such assignment.
Borrower agrees to execute within ten (10) days after request therefor is made
by Agent, any documents and/or estoppel certificates reasonably requested by
Agent in connection with such participation or assignment, without charge;
provided that such documents and/or estoppel certificates do not expand the
liability or obligations of Borrower or reduce assignee's or participant's
obligations or reduce Borrower's rights and remedies. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (x) the assignee thereunder shall be a party
thereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement, and such Lender assignor
shall cease to be a party hereto. The Agent shall maintain a register (the
"AGENT'S REGISTER") showing the identity of the Lenders from time to time.
Section 8.13 APPLICABLE LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Section 8.14 USURY.
Nothing herein, nor any transaction related hereto or thereto,
shall be construed or so operate as to require Borrower to pay interest at a
greater rate than is lawful under applicable law. Should any interest or other
charges paid by Borrower in connection with all advances made to Borrower under
this Agreement result in the computation or earning of interest in excess of the
maximum lawful rate of interest which is legally permitted under applicable law,
then any and all such excess shall be, and the same is hereby, waived by Agent,
and any and all such excess shall be, at Agent's option, be returned to Borrower
or credited against and in reduction of the balance due under the indebtedness,
and the portion of such excess which exceed the balance due under this Agreement
and the Note evidencing the indebtedness, shall be returned by Agent to
Borrower.
Section 8.15 CONSENT TO JURISDICTION.
Borrower, Agent and Lenders each hereby irrevocably submit to
the exclusive jurisdiction and venue of any state or federal court sitting in
Chicago, Illinois for the purpose of
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any suit, action, proceeding or judgment relating to or arising out of this
Agreement or the Note or the Mortgage and/or the Loan Document.
Section 8.16 MONIES.
All references to monies in this Agreement shall be deemed to
mean lawful monies of the United States of America.
Section 8.17 JURY TRIAL.
AGENT, LENDERS AND BORROWER HEREBY KNOWINGLY AND INTENTIONALLY
WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, AND
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDERS EXTENDING
CREDIT TO BORROWER. FURTHER, BORROWER, HEREBY CERTIFIES THAT NO REPRESENTATIVE
OR AGENT OF AGENT, NOR AGENT'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT AGENT WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, this Agreement was executed and delivered
the day and year first above written.
BORROWER:
000 X. XXXXXX XXXXXX, L.L.C
By: 77 West Xxxxxx Limited Partnership,
its sole member
By: Prime Group Realty, L.P.,
its general partner
By: Prime Group Realty Trust,
its managing general partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
For purposes Section 6.1 hereof only:
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust, its
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
[SIGNATURES CONTINUED ON NEXT PAGE]
AGENT AND LENDER:
WESTDEUTSCHE IMMOBILIENBANK
MAXIMUM US $60,000,000 By: /s/ Claus J. Cohausz
--------------------------
Name: Claus J. Cohausz
Title: Senior Vice President
By: /s/ Armin Gemmerich
--------------------------
Name: Armin Gemmerich
Title: Vice President
LENDER:
XXXXXXX XXXXX MORTGAGE CAPITAL, INC.
US$100,000,000 By: /s/ Xxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
EXHIBIT A
DESCRIPTION OF LAND
[INTENTIONALLY DELETED]
EXHIBIT B
LEASES
[INTENTIONALLY DELETED]
EXHIBIT C
PRINCIPAL REPAYMENT SCHEDULE
December 13, 2000 $1,600,000
December 13, 2001 $3,200,000
December 13, 2002 $3,200,000
In respect of the First Extension
Period, if applicable December 13, 2003 $4,800,000
In respect of the Second
Extension Period, if applicable December 13, 2004 $4,800,000
EXHIBIT D
[INTENTIONALLY DELETED]
