EXHIBIT NO. 10.11
GUARANTY OF
COMPLETION AND INDEMNITY
This GUARANTY OF COMPLETION AND INDEMNITY (this "Guaranty"), dated as of
the 19th day of March, 2003, is made by PRIME GROUP REALTY, L.P., a Delaware
limited partnership, having an address at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000 ("Guarantor"), in favor of LNR EASTERN LENDING, LLC, a
Georgia limited liability company (the "Lender") having an address c/o LNR
Property Corporation, 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxx
00000.
W I T N E S S E T H:
WHEREAS, Prime/Xxxxxxx Development Company, L.L.C. ("Borrower") and the
Lender have entered into that certain Mezzanine Loan Agreement, dated as of the
date hereof, as same has been amended by that Omnibus First Modification to
Mezzanine Loan Documents, that Omnibus Second Modification to Mezzanine Loan
Documents and that Omnibus Third Modification to Mezzanine Loan Documents, all
dated as of the date hereof (such agreement, as so amended and as same may
hereafter be further amended, modified, supplemented or restated from time to
time, is hereinafter referred to as the "Loan Agreement"; capitalized terms used
but not otherwise defined in this Guaranty but defined in the Loan Agreement
shall have the meanings set forth for such terms in the Loan Agreement);
WHEREAS, pursuant to and in accordance with the Loan Agreement, Borrower
has agreed to cause its subsidiary, Dearborn Center, L.L.C. (the "Property
Owner"), to undertake and complete construction of the Base Building
Improvements;
WHEREAS, the Loan shall be secured by the Loan Documents;
WHEREAS, it is a condition precedent to the execution of the Loan
Documents that Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, Guarantor is a member of Borrower and shall derive substantial
benefit from the completion of construction of the Base Building Improvements
and from the making of the Loan to Borrower.
NOW, THEREFORE, in consideration of Lender's execution of the Loan
Agreement and in order to induce the Lender to make the Loan and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby covenants and agrees as follows:
Section 1. Guarantied Obligations. Guarantor hereby unconditionally, absolutely
and irrevocably, as a primary obligor and not merely as a surety, guaranties to
the Lender that: (a) by the Outside Completion Date, Substantial Completion of
the Base Building Improvements in accordance with the Plans and Specifications
(as the same may be modified in accordance with the Loan Agreement), except for
non-material deviations therefrom that do not adversely affect the use of the
Improvements for their intended purpose, shall have occurred, subject to delays
permitted by the Loan Agreement (i.e., delay caused by Force Majeure Events);
(b) Final Completion of the Base Building Improvements shall be achieved within
the time period required therefor in the Loan Agreement, subject to delays
permitted by the Loan Agreement (i.e., delay caused by Force Majeure Events);
(c) [Intentionally Deleted]; (d) the Base Building Improvements shall at all
times be constructed in compliance in all material respects with all Laws and
Regulations; (e) the Property shall, subject to Borrower's right to contest or
cause the Property Owner to contest pursuant to Section 5.1(b)(ii) of the Loan
Agreement, be free and clear of all liens, claims and demands of any and all
persons, firms, corporations or other entities which furnish materials, labor or
services in connection with the Work; and (f) all Construction Costs shall be
funded when due (including, without limitation, any Shortfalls [as defined in
the Senior Loan Agreement]) (all obligations under clauses (a) through (f) of
this Section 1 and Section 3 hereof, collectively, the "Guarantied
Obligations").
Section 2. [Intentionally Deleted]
Section 3. Completion Costs Guaranty. Notwithstanding anything to the contrary
herein, if following an Event of Default the Lender exercises its remedies under
the Loan Documents and thereby succeeds to Borrower's ownership of the Property
Owner, Guarantor shall, and does hereby, unconditionally guaranty to the Lender
payment by Guarantor of an amount equal to the Completion Costs (as hereinafter
defined). As used herein, the term "Completion Costs" means, without duplication
of and except for any costs and amounts paid by Guarantor pursuant to that
certain Guaranty of Completion and Indemnity by and between Guarantor and the
Senior Lender, the excess, if any, of (a) all of the Lender's direct and
indirect out-of-pocket costs incurred or to be incurred in connection with the
lien-free completion of the Base Building Improvements in accordance in all
material respects with the Plans and Specifications as required of the Borrower
by the Loan Agreement and the Property Owner by the Senior Loan Agreement,
including, without limitation, interest, fees, sewer and water charges, real
estate taxes and Operating Expenses until Final Completion, but not including
any such costs and expenses that are attributable to or result from the Lender's
gross negligence, willful misconduct or bad faith, over (b) the undisbursed
portion of the Loan and the Senior Loan available to Borrower and the Property
Owner as of the date of the Lender's acceleration of the Loan following such
Event of Default; provided, however, that Completion Costs shall in no event be
greater than the costs actually spent to construct the lien-free completion of
the Base Building Improvements. Guarantor agrees that, for the purpose of this
Guaranty, the Lender's costs shall, at the Lender's sole option, be equal to
either (i) the aggregate amount of such direct and indirect out-of-pocket costs
actually incurred by the Lender from time to time to and including the date on
which the Base Building Improvements are completed, lien-free, in accordance in
all material respects with the Plans and Specifications and the conditions of
the final advance of loan proceeds under the Senior Loan (i.e., Section 3.4 of
the Senior Loan Agreement) have been satisfied in full or (ii) the amount of
such direct and indirect out-of-pocket costs as reasonably estimated by the
Construction Consultant at any time after such acceleration of the Loan. Unless
the Plans and Specifications provide for a standard of completion greater than
that set forth below, for purposes of this Guaranty, the Lender's direct and
indirect costs shall be deemed to also include (x) direct and indirect
out-of-pocket costs incurred, or reasonably estimated by the Construction
Consultant to be required to be incurred, as the case may be, in order to
complete the Base Building Improvements to a building standard in accordance
with industry practices, as reasonably determined by the Construction
Consultant, for improvements comparable to the Base Building Improvements and
(y) direct and indirect out-of-pocket costs incurred, or reasonably estimated by
the Construction Consultant to be required to be incurred, as the case may be,
in order to complete the Base Building Improvements in accordance with the terms
and provisions of any contracts of sale, leases, subleases, permanent commitment
or other agreements, or letters of intent in connection therewith, with respect
to occupancy, sale or financing of all or any portion of the Improvements.
Guarantor further agrees that any amount reasonably estimated by the
Construction Consultant as aforesaid, and any determination by the Construction
Consultant with respect to industry practices, shall be conclusive for purposes
of determining Guarantor's liability hereunder, provided that the Construction
Consultant has made such estimate or determination in good faith. Such payment
shall be due no later than ten (10) days following the giving of a written
demand therefor from the Lender to Guarantor, together with interest at the
Default Rate if not paid within said ten-day period.
In the event of application of this Section 3, the Lender shall make
available to Guarantor evidence reasonably satisfactory to Guarantor, during the
sixty (60) days following Final Completion, that the Completion Costs paid by
Guarantor hereunder actually were spent by the Lender to complete the lien-free
Base Building Improvements. In the event that any Completion Costs were paid by
Guarantor in excess of the amount actually expended by the Lender to complete
the lien-free completion of the Base Building Improvements, such excess shall be
reimbursed by the Lender to Guarantor.
Section 4. Nature of Guaranty. Guarantor hereby reaffirms that this Guaranty is
a guaranty of payment and not of collection, is continuing in nature and applies
to all Guarantied Obligations, whether existing now or in the future, including
Guarantied Obligations arising or accruing after the bankruptcy of Borrower, the
Property Owner or any member of Borrower ("Loan Party") or any sale or other
disposition of any security for this Guaranty or for the obligations of Borrower
or any other Loan Party under the Loan Documents (any such security, the
"Security"). This Guaranty and any Security for this Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time any payment or
performance of any Guarantied Obligations is rescinded or must otherwise be
returned by the Lender or any other party upon the bankruptcy, insolvency or
reorganization of any Loan Party or Guarantor or otherwise, all as though such
payment or performance had not occurred.
Section 5. Waiver. To the extent permitted by applicable Laws and Regulations,
Guarantor hereby waives protest, promptness, diligence, notice of acceptance,
demand for payment and notice of default or non-payment in respect of the Note,
the Loan Agreement and the other Loan Documents. Guarantor hereby waives any
requirement that the Lender protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against Borrower, or against any other guarantor or any other person,
entity or any Security. Guarantor hereby waives, to the fullest extent permitted
by applicable law, the benefit of any statute of limitations which may affect
its liability hereunder or the enforcement hereof. Any payment by Borrower or
other circumstance that operates to toll any statute of limitations as to
Borrower shall operate to toll the statute of limitations as to Guarantor.
Section 6. Remedies. The Lender shall not be required, as a condition precedent
to making a demand upon Guarantor under this Guaranty, to make demand upon
Borrower, Guarantor under any other guaranty, any other guarantor, or anyone
else, or to exhaust its remedies against Borrower, Guarantor under any other
guaranty, any other guarantor, or anyone else, or to proceed against any
Security. Any failure by the Lender to make any demand or to collect any
payments hereunder or under any other Loan Document shall not relieve Guarantor
of its obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies of the Lender against Guarantor hereunder. The obligations
and duties of Guarantor hereunder are independent of the obligations and duties
of Borrower under the Loan Documents and a separate action or actions may be
brought and prosecuted against Guarantor hereunder, whether or not an action is
brought against Borrower under the Loan Documents or Guarantor under any other
guaranty or any other person or entity under any other Loan Document, whether or
not Borrower or Guarantor or any other person or entity be joined in any such
action or actions, and whether or not an action or actions may be brought
against Guarantor or any other person or entity in connection with any other
guaranty. The liability of Guarantor hereunder shall not be affected by or
limited by (a) any direction or application of payment by Borrower or by any
other party, (b) any other guaranty of any other party as to Borrower's
obligations under the Loan Documents or as to the completion of the Improvements
or (c) any payment to the Lender of Borrower's obligations that the Lender repay
pursuant to the order or direction of a court of competent jurisdiction in
connection with any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and Guarantor hereby waives any right to the deferral,
modification or limitation of its obligations and duties hereunder by reason of
any such proceeding.
Section 7. Representations and Warranties. The Guarantor represents and warrants
that, as of the date hereof:
(a) Guarantor has full power, authority and legal right to execute and deliver
this Guaranty and to perform fully and completely all of its obligations
hereunder.
(b) The execution, delivery and performance of this Guaranty by Guarantor will
not violate any provision of any law, regulation, order or decree of any
governmental authority, bureau or agency or of any court which is binding on
Guarantor, or any provision of any contract, undertaking or agreement to which
Guarantor is a party or which is binding upon Guarantor or any of its property
or assets, and will not result in the imposition or creation of any lien, charge
or encumbrance on, or security interest in, any of its property or assets
pursuant to the provisions of any of the foregoing in any case which would have
a Material Adverse Effect on the ability of Guarantor to perform its obligations
hereunder.
(c) This Guaranty has been duly executed and delivered by Guarantor and
constitutes a legal, valid and binding obligation of Guarantor, enforceable
against it in accordance with its terms, subject to any applicable Debtor Relief
Laws and general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
(d) All necessary resolutions, consents, licenses, approvals and authorizations
of any person or entity required in connection with the execution, delivery and
performance of this Guaranty have been duly obtained and are in full force and
effect.
(e) There are no conditions precedent to the effectiveness of this Guaranty that
have not been either satisfied or waived.
(f) Guarantor has, independently and without reliance upon or the Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Guaranty.
(g) The applicable balance sheets of Guarantor and PGRT and statements of income
and cash flows of PGRT (the "Financial Statements") heretofore delivered by
Guarantor to the Lender are true and correct in all material respects and have
been prepared in accordance with GAAP and fairly present, in all material
respects, the financial condition of Guarantor as of the dates thereof and no
material adverse change has occurred in Guarantor's financial condition
reflected therein since the dates thereof.
(h) There are no actions, suits or proceedings pending, or, to the Knowledge of
Guarantor, threatened against or affecting Guarantor, which if adversely
determined would have a Material Adverse Effect on the ability of Guarantor to
perform its obligations under this Guaranty, and Guarantor is not in default
with respect to any order, writ, injunction, decree or demand of any court,
arbitration body or governmental authority, which default would materially
adversely affect the ability of Guarantor to perform its obligations hereunder.
Section 8. Covenants.
(a) Annual Financial Statements. Guarantor shall furnish to the Lender within
one hundred twenty (120) days following the end of each calendar year, a copy of
its annual Financial Statements in a form reasonably acceptable to the Lender,
and a copy of the audited annual Financial Statements of each of Guarantor and
of Prime Group Realty Trust and its successors and assigns ("PGRT"). Such annual
Financial Statements shall be accompanied by (i) an Officer's Certificate from
PGRT certifying that such annual Financial Statements are true, correct,
accurate and complete in all material respects and present fairly, in all
material respects, the financial condition and results of operation of each of
Guarantor and of PGRT and have been prepared in accordance with GAAP and (ii) an
Officer's Certificate from PGRT certifying as of the date thereof whether, to
such Person's Knowledge, there exists a Default or Event of Default, and if such
Default or Event of Default exists, the nature thereof, the period of time it
has existed and the action then being taken to remedy the same.
(b) Quarterly Financial Statements. Guarantor shall furnish to the Lender on or
before the forty-fifth (45th) day after the end of each of the first three (3)
quarters of each calendar year, the following items, accompanied by an Officer's
Certificate of PGRT, certifying that such items are true, correct, accurate and
complete in all material respects and fairly present, in all material respects,
the financial condition and results of the operations of such Person in a manner
consistent with GAAP (subject to normal year-end adjustments and disclosures),
to the extent applicable:
(i) quarterly and year-to-date unaudited Financial Statements with respect to
each of the Guarantor and PGRT, including the applicable balance sheets of
Guarantor and PGRT, statements of income and cash flows of PGRT for such
quarter; and
(ii) an Officer's Certificate from PGRT certifying as of the date thereof
whether to such Person's Knowledge, there exists a Default or an Event of
Default, and if such Default or Event of Default exists, the nature thereof, the
period of time it has existed and the action being taken to remedy the same.
(c) Consolidated Net Worth. As of the end of the fiscal quarter immediately
preceding the Advance (and as of the end of any fiscal quarter thereafter), the
Consolidated Net Worth of Guarantor shall not at any time that the Loan is
outstanding be less than the sum of (i) Three Hundred Fifty Million and No/100
Dollars ($350,000,000.00) and (ii) seventy-five percent (75%) of any the
aggregate, initial value of any operating partnership units issued by Guarantor
from and after the date hereof.
(d) Liquidity. As of the end of the fiscal quarter immediately preceding the
Advance (and as of the end of any fiscal quarter thereafter), the amount of
Unrestricted Cash shall at no time be less than Twenty Million and No/100
Dollars ($20,000,000.00). "Unrestricted Cash" shall mean, for any period, the
aggregate amount of unrestricted Cash and Cash Equivalents (valued at fair
market value in accordance with GAAP) then actually owned and held by Guarantor
and all of its Subsidiaries (excluding, without limitation, until forfeited or
otherwise entitled to be retained by Guarantor or any of its Subsidiaries, as
applicable, tenant security and other restricted deposits); it being agreed
that, as used in this definition, "unrestricted" means the specified asset is
not subject to any Liens, claims, security interests or restrictions of any kind
in favor of any Person.
(e) Ratio of Liabilities to Assets. As of the end of the fiscal quarter
immediately preceding the Advance (and as of the end of each fiscal quarter
thereafter), at no time that the Loan is outstanding shall the ratio (stated as
a percent) of (i) Total Liabilities to (ii) Total Assets, be greater than 67%.
"Total Liabilities" shall mean, for Guarantor and all of its Subsidiaries, at
any time, the sum (without duplication) of the following (A) all liabilities,
consolidated and determined in accordance with GAAP, (B) all Indebtedness,
whether or not so classified, and (C) the balance available for drawing under
letters of credit issued for the account of Guarantor and all of its
Subsidiaries but excluding all Indebtedness related to the Project, including,
without limitation, the Debt and the Senior Loan (collectively, the "Project
Liabilities"). "Total Assets" shall mean, for Guarantor and all of its
Subsidiaries, at any time, the aggregate book value of all assets, consolidated
and determined in accordance with GAAP, plus accumulated depreciation and
amortization related to those fixed and tangible properties (the "Real Estate
Assets") consisting of land, buildings and/or other improvements, and/or
interests therein and/or interests in mortgage loans, owned by Guarantor or any
of its Subsidiaries (but excluding (a) all leaseholds other than leaseholds
under ground leases having unexpired terms of at least 30 years and (b) any
assets that constitute investments in the Project that are paid for by Advances
or advances made under the Senior Loan (the assets described in this clause (b),
collectively, the "Project Assets")).
(f) Maximum Distribution. As of the end of the fiscal quarter immediately
preceding the Advance (and as of the end of each fiscal quarter thereafter), at
no time that the Loan is outstanding shall Guarantor's and PGRT's aggregate
maximum distribution for the most recent four (4) full fiscal quarters prior to
the date of determination to their common shareholders and unit holders, as
applicable, exceed 90% of PGRT's Funds From Operations. "Funds From Operations",
for any period, shall be determined in accordance with the definition for such
term promulgated by the National Association of Real Estate Investment Trusts as
in effect as of the Closing Date (as adjusted for any straight-lining of rent
and any write down in the value of land or loss on the sale of land), as
published in The White Paper on Funds From Operations, dated October 1999.
(g) Ratio of Consolidated EBITDA to Consolidated Total Interest Expense. As of
the end of the fiscal quarter immediately preceding the Advance (and as of the
end of each fiscal quarter thereafter), at no time that the Loan is outstanding
shall the ratio (stated as a percent), in respect of any period, of (i)
Consolidated EBITDA to (ii) Consolidated Total Interest Expense, be less than
165%. "Consolidated EBITDA" shall mean, in respect of Guarantor and all of its
Subsidiaries, for any period (A) net income or loss (before minority interests
and as adjusted for any straight-lining of rent), as determined in accordance
with GAAP, plus (B) to the extent deducted in computing such net income or loss,
(1) Consolidated Total Interest Expense and (2) depreciation and amortization,
and (C) minus all gains or plus all losses attributable to the sale or
disposition of assets or debt restructuring as well as any other extraordinary,
non-recurring sources of revenues, in each case adjusted to include only the
funds actually received in cash by the Guarantor and its Subsidiaries from any
Partially Owned Entities. "Consolidated Total Interest Expense" shall mean, in
respect of Guarantor and all of its Subsidiaries, for any period, (x) the amount
of interest required to be paid or accrued in accordance with GAAP on (A) all
Indebtedness of Guarantor, and all of its Subsidiaries and (B) all amounts
available for borrowing or for drawing under letters of credit, if any, issued
for the account of Guarantor and all of its Subsidiaries, but only if such
interest was or is required to be reflected as an item of expense in accordance
with GAAP plus (y) capitalized interest to be paid or accrued in accordance with
GAAP (but excluding that portion of capitalized interest funded from the
interest reserve proceeds of any construction loan). "Partially Owned Entities"
shall mean any of the partnerships, associations, corporations, limited
liability companies, trusts, joint ventures or other business entities in which
Guarantor, directly or indirectly through its full or partial ownership of
another entity, owns an equity interest, but which is not required in accordance
with GAAP to be consolidated with Guarantor for financial reporting purposes.
(h) Ratio of Consolidated EBITDA to Consolidated Total Fixed Charges.
(i) Ratio of Consolidated EBITDA to Consolidated Total Fixed Charges A. As of
the end of the calendar quarter immediately preceding the Advance (and as of the
end of each fiscal quarter thereafter), at no time that the Loan is outstanding
shall the ratio (stated as a percent), in respect of any period, of (A)
Consolidated EBITDA to (B) Consolidated Total Fixed Charges A, be less than
145%. "Consolidated Total Fixed Charges A" shall mean, for any period, the
aggregate amount of (1) Consolidated Total Interest Expense, plus (2) scheduled
principal payments of Indebtedness (excluding optional prepayments and balloon
or bullet payments at maturity) for such period.
(ii) Ratio of Consolidated EBIDTA to Consolidated Total Fixed Charges B. As of
the end of the calendar quarter immediately preceding the Advance (and as of the
end of each fiscal quarter thereafter), at no time that the Loan is outstanding
shall the ratio (stated as a percent), in respect of any period, of (A)
Consolidated EBITDA to (B) Consolidated Total Fixed Charges B, be less than
125%. "Consolidated Total Fixed Charges B" shall mean, for any period, the
aggregate amount of (1) Consolidated Total Interest Expense, plus (2) scheduled
principal payments of Indebtedness (excluding optional prepayments and balloon
or bullet payments at maturity) for such period, plus (3) dividends and
distributions, if any, paid or required to be paid on preferred stock, preferred
partnership interests or other preferred equity of PGRT for such period.
(i) Loan Agreement Covenants. Guarantor shall perform and comply with each
obligation expressly stated in the Loan Agreement to be an obligation of
Guarantor.
(j) No Duplication. It is expressly acknowledged and agreed that in calculating
the values required for the foregoing financial covenants, it is intended that
each value, as applicable, be counted without duplication.
Section 9. Recourse. The exculpation provisions contained in any of the other
Loan Documents relieving Borrower and any member of Borrower from personal
liability for payment of the Loan shall not in any manner reduce the liability
of Guarantor arising hereunder. Notwithstanding the foregoing, the Lender
acknowledges and agrees that PGRT has no liability (direct, indirect or
otherwise) under or pursuant to this Guaranty and that, accordingly, the
exculpation granted to Borrower or any member of Borrower from personal
liability for payment of the Loan under the exculpation provisions contained in
any of the other Loan Documents shall hereby be made applicable to PGRT.
Section 10. No Limitation of Liability. Guarantor's liability hereunder shall in
no way be limited or impaired by, and Guarantor hereby consents to and agrees to
be bound by, any amendment or modification of the provisions of the Loan
Agreement, the Note, the Pledge Agreement, or any other instrument made to or
with the Lender by Guarantor or Borrower. In addition, Guarantor's liability
hereunder shall in no way be limited or impaired by (a) any extensions of time
for performance required by any of said documents, (b) any sale, assignment or
foreclosure of the Note or the Pledge Agreement (or transfer in lieu thereof) or
any sale or transfer of all or part of the Collateral or the Improvements;
provided, however, that if the Debt shall be paid in full, Guarantor's
obligations and liability under this Guaranty shall cease and terminate and be
of no further force or effect, (c) the accuracy or inaccuracy of the
representations and warranties made by Borrower under the Loan Documents, (d)
the release of Borrower, the Property Owner, Guarantor or any other person from
performance or observance of any of the agreements (other than this Guaranty),
covenants, terms or conditions contained in any of said instruments by operation
of law, the Lender's voluntary act, or otherwise, (e) the release or
substitution in whole or in part of any Security, (f) the Lender's failure to
file the Financing Statements (or the Lender's improper recording or filing of
any thereof) or to otherwise perfect, protect, secure or insure any security
interest or Lien given as security for the Loan or (g) the invalidity,
irregularity or unenforceability, in whole or in part, of the Loan Documents, or
any other instrument or agreement executed or delivered to the Lender in
connection with the Loan, and, in any such case, whether with or without notice
to Guarantor (except as may be required pursuant to applicable Laws and
Regulations) and with or without consideration.
Section 11. Waiver of Claims. Guarantor (a) waives any right or claim of right
to cause a marshalling of Borrower's assets or to cause the Lender to proceed
against any of the Security before proceeding against Guarantor or to proceed
against Guarantor in any particular order, and (b) agrees that any payments
required to be made by Guarantor hereunder shall become due on demand in
accordance with the terms hereof. Without limiting the generality of the
foregoing, until this Guaranty is released or the Loan is paid in full and the
Lender shall have no continuing obligations under the Loan Documents, Guarantor
hereby waives (1) all rights of subrogation or contribution Guarantor may have
against Borrower and/or the Property Owner whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Federal Bankruptcy Code) or otherwise by reason of any payment by Guarantor
pursuant to the provisions hereof and (2) all suretyship defenses Guarantor
would otherwise have under the laws of the jurisdiction in which the
Improvements are located or any other jurisdiction.
Section 12. Notices. All notices, consents, approvals and requests required or
permitted hereunder shall be given in writing and shall be effective for all
purposes if hand delivered or sent by (a) certified or registered United States
mail, postage prepaid, (b) expedited overnight prepaid delivery service, either
commercial or United States Postal Service, with proof of attempted delivery or
(c) facsimile transmission provided confirmation of receipt is obtained by one
of the methods in clause (a) or (b) above, addressed as follows (or at such
other address and person as shall be designated from time to time by any party
hereto, as the case may be, in a written notice to the other parties hereto in
the manner provided for in this Section 12):
If to Lender:
LNR Eastern Lending, LLC
c/o LNR Property Corporation
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
with a copy to
Bilzin Xxxxxxx Xxxxx Price &Axelrod LLP
000 Xxxxx Xxxxxxxx Xxxx. Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
If to Guarantor:
Prime Group Realty, L.P.
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Prime Group Realty, L.P
c/o Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, two (2)
Business Days after deposit in the United States mail; in the case of expedited
overnight prepaid delivery, upon the first attempted delivery on a Business Day;
or in the case of facsimile transmission, at the time of the confirmed receipt
thereof.
Section 13. No Waiver; Remedies. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. All remedies afforded to the Lender by reason of this Guaranty and all of
the other Loan Documents are separate and cumulative remedies and each one of
such remedies, whether exercised by the Lender or not, shall not be deemed to be
exclusive of any of the other remedies available to the Lender and shall not
limit or prejudice any other legal or equitable remedy which the Lender may have
under this Guaranty or under any other Loan Document.
Section 14. Right of Set-Off. Upon the occurrence and during the continuance of
any breach of any of Guarantor's covenants hereunder, the Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final, excepting only tenant security
deposits and similar escrow deposits) at any time held and other indebtedness at
any time held or owing of the Lender (including branches, agencies or Affiliates
of the Lender wherever located) to or for the credit or the account of Guarantor
against any and all of the obligations of Guarantor now or hereafter existing
under this Guaranty, irrespective of whether or not the Lender shall have made
any demand under this Guaranty and although such obligations, liabilities or
claims may be contingent and unmatured and any such set-off shall be deemed to
have been made immediately upon the occurrence of a default under this Guaranty
even though such charge is made or entered on the books of the Lender subsequent
thereto. The Lender agrees promptly to notify Guarantor after any such set-off
and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Lender under
this Section 14 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Lender may have under the Loan
Documents, at law or in equity.
Section 15. Continuing Guaranty. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time payment of the Loan, or any
part thereof, is rescinded or must otherwise be restored or returned by the
Lender upon the insolvency, bankruptcy, dissolution, liquidation or the
reorganization of Borrower or the Property Owner, or upon or as a result of the
appointment of a receiver, intervenor, custodian or conservator of, or trustee
or similar officer for, Borrower or the Property Owner or any substantial part
of its property, or otherwise, all as though such payments had not been made.
Section 16. Lender's Rights. Guarantor acknowledges and agrees that the Lender's
rights (and Guarantor's obligations) hereunder shall be in addition to all of
the Lender's rights (and all of Guarantor's obligations) under any other
agreement executed and delivered to the Lender by Guarantor in connection with
the Loan, and payments by Guarantor hereunder shall not reduce any of
Guarantor's obligations and liabilities under any such agreement.
Section 17. Delay. No delay on the Lender's part in exercising any right, power
or privilege hereunder or under the Loan Documents shall operate as a waiver of
any such privilege, power or right.
Section 18. Trial by Jury; Injunctive Relief; Counterclaim, Consolidation.
Guarantor hereby expressly and unconditionally waives, in connection with any
suit, action or proceeding brought by the Lender hereon, any and every right
Guarantor may have to (a) injunctive relief, (b) a trial by jury, (c) assert or
interpose any counterclaim, defense or offset (other than mandatory) therein,
and (d) have the same consolidated with any other or separate suit, action or
proceeding. Nothing herein contained shall prevent or prohibit Guarantor from
instituting or maintaining a separate action against the Lender with respect to
any asserted claim.
Section 19. Governing Law. Except as provided in Section 11.2 of the Loan
Agreement, the terms and provisions hereof and the rights and obligations of the
parties hereunder shall in all respects be governed by, and construed and
enforced in accordance with, the internal laws of the State of Florida.
Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of the
courts of the State of Florida or any Federal court sitting in the State of
Florida over any suit, action or proceeding arising hereunder, and Guarantor
hereby agrees and consents that, in addition to any methods of service of
process provided for under applicable law, all service of process in any such
suit, action or proceeding in the State of Florida or any Federal court sitting
in the State of Florida may be made by overnight courier or by certified or
registered mail, return receipt requested, directed to Guarantor at the
addresses indicated above.
Section 20. Severability. Any provision in this Guaranty that is held to be
inoperative, unenforceable or invalid as to any party or in any jurisdiction
shall, as to that party or jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions or the operation,
enforceability or validity of that provision as to any other party or in any
other jurisdiction, and to this end the provisions of this Guaranty are declared
to be severable.
Section 21. Integration. This Guaranty, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof and may not be terminated, amended or modified, in any
manner unless by a writing signed by the Lender or its successors or assigns.
This Guaranty was drafted with the joint participation of Guarantor and the
Lender and shall be construed neither against nor in favor of any of them.
Section 22. Time of Essence. Time is of the essence with respect to Guarantor's
obligations under this Guaranty.
Section 23. Successors and Assigns. This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
transferees and permitted assigns, except that Guarantor may not delegate any of
its duties under this Guaranty without the prior written consent of the Lender.
Section 24. Subordination. In the event that Guarantor shall advance or become
obligated to pay any sums towards the completion of construction of the
Improvements or shall advance or become obligated to pay any sums to the Lender
pursuant to any other Loan Document, or in the event that Borrower is now or
shall hereafter become indebted to Guarantor, Guarantor agrees that the amount
of any such indebtedness and all interest thereon shall at all times be
subordinate as to lien, time of payment and in all other respects to all sums at
any time owing to the Lender under any of the Loan Documents, and that Guarantor
shall not be entitled to enforce or receive payments on account of such other
indebtedness from Borrower until all such obligations of Borrower to the Lender
shall have been paid and the Lender shall have no continuing obligations under
the Loan Documents.
Section 25. Modification. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall in any event
be effective unless the same shall be in writing and signed by the Lender, and
shall be effective only in the specific instance and for the specific purpose
for which given.
Section 26. Counterparts. This instrument may be executed in one or more
counterparts, each of which when executed and delivered shall be deemed an
original and all of which when executed and delivered will be deemed to be one
and the same instrument.
Section 27. Joint and Several Liability. The liability hereunder of each Person
constituting Guarantor shall be joint and several
Section 28. Consent to Loan Agreement Provisions. Guarantor hereby acknowledges
and agrees to any waiver or consent specifically granted by the Borrower Parties
in Sections 11.11, 11.23 and 11.24 of the Loan Agreement.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed
and delivered as of the date first above written.
GUARANTOR:
PRIME GROUP REALTY, L.P., a Delaware
limited partnership
By: Prime Group Realty Trust, a
Maryland real estate investment
trust, its managing general partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxxx
Title: Co-President
ACCEPTED BY THE LENDER:
LNR EASTERN LENDING, LLC, a
Georgia limited liability company
By: LNR PROPERTY CORPORATION
EASTERN REGION, a Georgia corporation,
its Member
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
