EXHIBIT 10.19
RESERVE ACCOUNT AGREEMENT
THIS RESERVE ACCOUNT AGREEMENT (this "Agreement") is made and dated as of
March 12, 2001 by and among DEARBORN CENTER, L.L.C., a Delaware limited
liability company (the "Senior Borrower"), BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH ("Senior Agent"), a banking corporation organized under the laws
of the Federal Republic of Germany, as a lender and as agent for the lenders
from time to time party to the Senior Loan Agreement (as defined below) (each, a
"Senior Lender" and, collectively, the "Senior Lenders"), BANKERS TRUST COMPANY
("Mezzanine Agent"), a New York banking corporation, as a lender and as agent
for the Mezzanine Lenders (as defined below), PRIME/XXXXXXX DEVELOPMENT COMPANY,
L.L.C., a Delaware limited liability company (the "Mezzanine Borrower"), PRIME
GROUP REALTY, L.P., a Delaware limited partnership ("PGLP"), XXXXX XXXXXXX
L.L.C., an Illinois limited liability company ("Xxxxx"), and J. XXXX XXXXXXX
DEVELOPMENT COMPANY, an Illinois corporation ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Senior Agent and Senior Borrower are party to that certain Credit
Agreement, dated as of January 5, 2001, as the same has been amended as of the
date hereof (as so amended, the "Senior Loan Agreement") pursuant to which the
Senior Lenders have agreed to make a loan (the "Senior Loan") to the Senior
Borrower as more fully set forth therein;
WHEREAS, Mezzanine Borrower, Vornado Realty Trust, MMBC Debt Holdings I,
LLC, New York Life Insurance Company and Mezzanine Agent, in its capacity as a
lender and as agent on behalf of the other lenders (together with their
successors and assigns, collectively, "Mezzanine Lenders"), are party to that
certain Mezzanine Construction Loan Agreement, dated as of January 5, 2001, as
the same has been amended as of the date hereof (as so amended, the "Mezzanine
Loan Agreement") pursuant to which the Mezzanine Lenders have agreed to make a
loan (the "Mezzanine Loan") to the Mezzanine Borrower as more fully set forth
therein;
WHEREAS, Senior Borrower and the Mezzanine Borrower requested that Senior
Agent and Mezzanine Lenders approve that certain Lease Agreement, dated as of
February 9, 2001, as the same had been amended by that certain First Amendment
to Lease Agreement, dated as of February 21, 2001 (as amended, the "Citadel
Lease") between Senior Borrower, as landlord, and Citadel Investment Group,
L.L.C. ("Citadel"), as tenant, for approximately 206,146 NRSF of office space at
the Project (as defined in the Senior Loan Agreement) (the "Citadel Space");
WHEREAS, Citadel is currently the tenant under a lease, dated as of August
27, 1999, as the same has been amended and modified by that certain First Lease
Amendment, dated as of November 1, 1999, that certain Second Lease Amendment,
dated as of April 2, 2000, that certain Third Lease Amendment, dated as of
September 3, 2000, that certain letter dated August 27, 1999 from One North
Xxxxxx Drive Venture, L.L.C. ("Wacker Landlord") to Citadel and that certain
letter dated November 16, 2000 from Wacker Landlord to Citadel (as amended, the
"Wacker Lease") relating to approximately 161,488 square feet of office space
located at Xxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx (the "Wacker Space") owned
by Wacker Landlord;
WHEREAS, as a condition to entering into the Citadel Lease, Citadel
requested that the Senior Borrower reimburse Citadel for the rental payments
made by Citadel under the Xxxxxx Lease (the "Xxxxxx Reimbursement Obligations")
and that, subject to the terms and conditions of the Citadel Lease, Citadel be
permitted to set off any amounts not paid by Senior Borrower in respect of the
Xxxxxx Reimbursement Obligations against the rental payments otherwise due from
Citadel under the Citadel Lease;
WHEREAS, as an inducement to Senior Agent and the Mezzanine Lenders to
approve the Citadel Lease (which lease neither Senior Agent nor the Mezzanine
Lenders would approve without such agreements), Mezzanine Borrower, Senior
Borrower, Xxxxx, Xxxxxxx and PGLP (collectively, the "Borrower Parties") agreed
to escrow certain funds, modify certain Loan Documents and otherwise take the
actions described in that certain Consent and Agreement (the "Consent
Agreement"), which was entered into by the parties to this Agreement as of
February 21, 2001;
WHEREAS, the Senior Borrower and the Senior Agent have entered into that
certain Omnibus First Modification to Senior Loan Documents (the "First Senior
Modification") of even date herewith to memorialize certain agreements made in
the Consent Agreement;
WHEREAS, the Mezzanine Borrower and the Mezzanine Lenders have entered into
that certain Omnibus First Modification to Mezzanine Loan Documents of even date
herewith to memorialize certain agreements made in the Consent Agreement; and
WHEREAS, the parties hereto desire to memorialize certain agreements made
in the Consent Agreement with respect to the Citadel Reserve Accounts (as
defined below) in accordance with the covenants, agreements, representations and
warranties set forth herein.
NOW, THEREFORE, in consideration of the approval of the Citadel Lease by
Senior Agent and the Mezzanine Agent (on behalf of the Mezzanine Lenders) and
the covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:
Section 1. Establishment and Maintenance of Accounts.
(a) Concurrently herewith, a segregated account entitled the "Mezzanine
Citadel Reserve Account" is being established with the Mezzanine Agent (the
"Mezzanine Citadel Reserve Account") and a segregated account entitled the
"Senior Citadel Reserve Account" is being established with the Senior Agent (the
"Senior Citadel Reserve Account" and, together with the Mezzanine Citadel
Reserve Account, the "Citadel Reserve Accounts").
(b) The Mezzanine Citadel Reserve Account (i) shall be in the name of
Mezzanine Borrower as pledgor and Mezzanine Agent as pledgee (and, upon
Mezzanine Agent's request, shall bear a designation clearly indicating that the
funds deposited therein are held by the Mezzanine Agent as a trustee for the
Mezzanine Lenders) and shall be under the sole dominion and control of the
Mezzanine Agent and held in accordance with the terms and provisions of this
Agreement, (ii) shall be a segregated account, (iii) shall not be evidenced by a
certificate of deposit, passbook or other instrument and (iv) shall contain only
funds held for the benefit of the Mezzanine Lenders in accordance herewith.
(c) The Senior Citadel Reserve Account (i) shall be in the name of Senior
Borrower as pledgor and Senior Agent as pledgee (and, upon Senior Agent's
request, shall bear a designation clearly indicating that the funds deposited
therein are held by the Senior Agent as a trustee for the Senior Lenders) and
shall be under the sole dominion and control of the Senior Agent and held in
accordance with the terms and provisions of this Agreement, (ii) shall be a
segregated account, (iii) shall not be evidenced by a certificate of deposit,
passbook or other instrument and (iv) shall contain only funds held for the
benefit of the Senior Lenders in accordance herewith.
(d) The Mezzanine Agent and the Senior Agent, as applicable, shall invest
amounts held in the applicable Citadel Reserve Account in Cash and Cash
Equivalents (as defined in the Senior Loan Agreement) at the written direction
of Mezzanine Borrower and Senior Borrower, as applicable; provided, however,
that during the continuance of an Event of Default under and as defined in the
Senior Loan Agreement, all investments of funds held in the Senior Citadel
Reserve Account shall be made at the direction of the Senior Agent and during
the continuance of an Event of Default under and as defined in the Mezzanine
Loan Agreement, all investments of funds held in the Mezzanine Citadel Reserve
Account shall be made at the direction of the Mezzanine Agent. All earnings on
Cash and Cash Equivalents shall be credited to the applicable Citadel Reserve
Account and shall only be disbursed in accordance with this Agreement.
Section 2. Funding of the Accounts.
(a) All funds required to be deposited into the Citadel Reserve Accounts
pursuant to this Agreement shall be deposited as follows: (i) prior to the
initial advance made by the Senior Lenders under the Senior Loan Agreement (the
"Initial Senior Advance"), all required funds shall be deposited into the
Mezzanine Citadel Reserve Account; and (ii) from and after the Initial Senior
Advance, all required funds shall be deposited into the Senior Citadel Reserve
Account.
(b) The Mezzanine Agent hereby agrees that in connection with and
immediately prior to the Initial Senior Advance, it shall transfer (i) all
amounts then on deposit in the Mezzanine Citadel Reserve Account and (ii) the
Extra Citadel Costs Transfer Amount (as defined below), directly to the Senior
Citadel Reserve Account pursuant to wiring instructions provided by the Senior
Agent. Mezzanine Agent further agrees that any funds mistakenly received or
deposited into the Mezzanine Citadel Reserve Account after the date of the
Initial Senior Advance shall be held by the Mezzanine Agent in trust on behalf
of the Senior Agent and shall be promptly transferred to the Senior Citadel
Reserve Account.
(c) PGLP and, with respect to clauses (viii) and (ix) below only, Xxxxx,
hereby agree to fund, as a "deficit contribution" under and pursuant to the
limited liability agreement of Mezzanine Borrower (as amended) except as
specifically provided below, not less than $6,800,000 (in the aggregate) into
the Citadel Reserve Accounts as follows:
(i) $1,000,000 on March 12, 2001;
(ii) $1,000,000 on June 30, 2001;
(iii) $1,000,000 on September 30, 2001;
(iv) $1,000,000 on December 31, 2001;
(v) $1,000,000 on March 31, 2002;
(vi) $500,000 on June 30, 2002;
(vii)PGLP shall deposit PGLP's share (approximately $650,000) of the
leasing commission payable with respect to the Citadel Lease, as and
when paid (but in no event later than April 15, 2001 with respect to
the initial 50% of such leasing commission due in connection with the
execution of the Citadel Lease);
(viii) In lieu of Xxxxxxx receiving its initial 50% of the leasing
commission relating to the Citadel Lease (approximately $325,000) and
Xxxxx depositing, or causing to be deposited, the same into the
Citadel Reserve Accounts, Xxxxx and Xxxxxxx hereby elect to fully and
forever waive any and all rights under the Leasing Agreement (as
defined under the Senior Loan Agreement), the LLC Agreements
(hereinafter defined) and under applicable law to be paid their share
of the initial 50% of the leasing commission to which they are
entitled in accordance with the following terms and provisions:
(A) Notwithstanding anything to the contrary contained in the Leasing
Agreement or the Limited Liability Company Agreements (as
amended) of Mezzanine Borrower or Senior Borrower (collectively,
the "LLC Agreements"), Xxxxxxx shall not be entitled to be paid
any portion of the initial 50% leasing commission related to the
execution of the Citadel Lease in excess of the share of such
initial 50% leasing commission to be paid to PGLP pursuant to the
Leasing Agreement and the LLC Agreements (such excess, the
"Initial Xxxxxxx Waived Commission") (it being the understanding
and agreement of Xxxxxxx that it shall waive all rights to
receive payment of the Initial Xxxxxxx Waived Commission from
Senior Borrower, Mezzanine Borrower and their respective
successors and assigns), Xxxxxxx hereby agreeing that it shall
immediately pay to PGLP (as and when paid) PGLP's share of any
and all leasing commissions paid to Xxxxxxx by Senior Borrower
pursuant to the Leasing Agreement and related to the Citadel
Lease; and
(B) Mezzanine Agent shall disburse approximately $325,000 of the
Mezzanine Loan in respect of leasing commissions under the
Approved Construction Budget, after satisfaction of all
conditions to advances under the Mezzanine Loan, to fund a
portion of the Citadel Reserve Accounts at the time that the
initial 50% portion of the leasing commission payable as a result
of the execution of the Citadel Lease is paid by Xxxxxxx to PGLP.
(ix) Xxxxx shall deposit, or cause to be deposited, Xxxxxxx'x respective
share (approximately $325,000), of the second 50% of the leasing
commission payable in connection with Citadel's occupancy of the space
demised by the Citadel Lease, as and when paid. Notwithstanding the
requirements of the immediately preceding sentence and in lieu of
Xxxxxxx receiving its share of the second 50% of the leasing
commission relating to the Citadel Lease and making the deposit into
the Citadel Reserve Accounts as provided above, Xxxxx and Xxxxxxx
shall have the right to elect (which determination shall be made prior
to the date that Citadel takes occupancy of the space demised by the
Citadel Lease) to fully and forever waive any and all rights under the
Leasing Agreement, the LLC Agreements and under applicable law to be
paid their share of the second 50% of the leasing commission to which
they are entitled in which event the following terms and provisions
shall apply:
(A) Notwithstanding anything to the contrary contained in the Leasing
Agreement or the LLC Agreements, Xxxxxxx shall not be entitled to
be paid any portion of the second 50% of the leasing commission
related to the occupancy by Citadel of the space demised under
the Citadel Lease in excess of the share of such second 50% of
the leasing commission to be paid to PGLP pursuant to the Leasing
Agreement and the LLC Agreements (such excess, the "Second
Xxxxxxx Waived Commission") (it being the understanding and
agreement of Xxxxxxx that it shall waive all rights to receive
payment of the Second Xxxxxxx Waived Commission from Senior
Borrower, Mezzanine Borrower and their respective successors and
assigns), Xxxxxxx hereby agreeing that it shall immediately pay
to PGLP (as and when paid) PGLP's share of any and all leasing
commissions paid to Xxxxxxx by Senior Borrower pursuant to the
Leasing Agreement and related to the Citadel Lease; and
(B) Mezzanine Agent or, after the Initial Senior Advance, the Senior
Agent, shall disburse approximately $325,000 of the Mezzanine
Loan or the Senior Loan, as the case may be, in respect of
leasing commissions under the Approved Construction Budget under
the Mezzanine Loan or the Senior Loan, as applicable, after
satisfaction of all conditions to advances under the Mezzanine
Loan or the Senior Loan, as applicable, to fund a portion of the
Citadel Reserve Accounts at the time that the second 50% portion
of the leasing commission payable as a result of the occupancy by
Citadel of the space demised under the Citadel Lease is paid by
Xxxxxxx to PGLP.
(d) Notwithstanding the foregoing, in the event that a Full Release (as
hereinafter defined) occurs prior to the full funding of the Citadel Reserve
Accounts, none of PGLP, Xxxxx or Xxxxxxx or the Mezzanine Agent or the Senior
Agent (pursuant to Section 2(c)(viii)(B) and/or Section 2(c)(ix)(B) hereof)
shall have any further obligation to make any additional deposits into the
Citadel Reserve Accounts (other than amounts required to pay costs incurred
prior to such Full Release and any amounts necessary to fulfill any conditions
to or costs of such Full Release). In addition, if the conditions set forth in
Section 3(c)(iii) or Section 3(c)(iv) hereof have been satisfied and/or a
Partial Release (as hereinafter defined) has occurred prior to the full funding
of the Citadel Reserve Accounts, PGLP, Xxxxx, Xxxxxxx and the Mezzanine Agent
and the Senior Agent (with respect to their obligations under Section
2(c)(viii)(B) and Section 2(c)(ix)(B) hereof) shall be entitled to a credit
against their remaining funding obligations in excess of $4,000,000 under this
Section 2 (with such credit being applied in inverse order beginning with the
final payment due as set forth above), but no such credit shall reduce the
obligation to fund the Citadel Reserve Accounts below the minimum $4,000,000
funding required by Section 2(e) hereof.
(e) A minimum of $4,000,000 of the funds deposited in accordance with this
Section 2 in the Citadel Reserve Accounts (the "Xxxxxx Future Risk Funds") shall
remain on deposit in the applicable Citadel Reserve Account until the
satisfaction of the conditions set forth in Section 3(c)(i), 3(c)(ii),
3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof.
(f) The parties hereto acknowledge and agree that pursuant to that certain
Dearborn Center Registration Agreement (the "Registration Agreement") entered
into by and between Senior Borrower and U.S. Equities Realty, LLC ("US
Equities"), and related to the Citadel Lease, Senior Borrower is required to pay
to US Equities a full leasing commission (the "Outside Leasing Commission") upon
full execution of the Citadel Lease. Additionally, the terms of the Registration
Agreement provide that US Equities is required to return to Senior Borrower
one-half (1/2) of the Outside Leasing Commission in certain circumstances.
Senior Borrower hereby agrees that the Registration Agreement (including,
specifically, the right to receive any refund of the Outside Leasing Commission
from US Equities) has been collaterally assigned to each of the Senior Agent (on
a first priority basis) and Mezzanine Lenders (on a subordinate basis) pursuant
to certain of the documents securing the Senior Loan and the Mezzanine Loan,
respectively. Senior Agent and Mezzanine Agent hereby agree that: (i) the full
Outside Leasing Commission shall be permitted to be paid as aforesaid; and (ii)
Mezzanine Lenders shall disburse, subject to the satisfaction of all conditions
to making an advance contained in the Mezzanine Loan Agreement, funds from the
Mezzanine Loan to pay such full Outside Leasing Commission. Senior Borrower
hereby agrees that in the event that US Equities returns any portion of the
Outside Leasing Commission to Senior Borrower (the "Returned Outside Leasing
Commission"), Senior Borrower promptly shall deposit the same into the
applicable Citadel Reserve Account (in addition to, and not in substitution of,
amounts otherwise required to be deposited into the Citadel Reserve Accounts in
accordance with this Agreement), to be held and disbursed in accordance with the
terms and provisions of Section 3(d) hereof.
Section 3. Disbursements from the Accounts.
(a) Xxxxxx Subleasing Costs Funds.
(i) Up to $2,800,000 of the Citadel Reserve Accounts (the "Xxxxxx
Subleasing Cost Funds") may be used to pay leasing commissions and tenant
improvement costs that are: (x) in excess of the $47.50 per square foot work
allowance relating to tenant improvements provided by the Xxxxxx Landlord
pursuant to the Work Letter (as defined in the Xxxxxx Lease) and (y) actually
incurred in connection with leasing commissions and tenant improvements in
respect of Approved Subleases (as hereinafter defined) on a current basis (i.e.,
regardless of when during the funding of the Citadel Reserve Accounts such costs
are incurred) (collectively, "Xxxxxx Subleasing Costs").
(ii) Provided that no Event of Default under the Senior Loan Agreement and
no Event of Default under and as defined in the Mezzanine Loan Agreement and no
default by any of the Borrower Parties under this Agreement has occurred and is
continuing, Xxxxxx Subleasing Cost Funds may be released from the Citadel
Reserve Accounts at the written request of the Senior Borrower upon delivery to
the Mezzanine Agent and the Senior Agent of (x) evidence reasonably satisfactory
to both the Senior Agent and the Mezzanine Agent that the amount requested is in
respect of Xxxxxx Subleasing Costs that have been actually incurred and (y) lien
waivers in respect of all work performed, and all labor or material supplied for
which payment is being requested (which may be conditioned upon receipt of
payment). In the event that the Senior Lender and the Mezzanine Lender disagree
as to the satisfaction of the foregoing conditions with respect to any requested
disbursement of the Xxxxxx Subleasing Cost Funds, such disbursement shall not be
made and such amounts shall remain on deposit in applicable Citadel Reserve
Account.
(iii) In the event that any portion of the Xxxxxx Subleasing Cost Funds
remains on deposit in the Citadel Reserve Accounts on the earlier to occur of
(A) the date on which eighty percent (80%) of the Xxxxxx Space has been leased
pursuant to Approved Subleases and (B) June 30, 2003, the Mezzanine Borrower, or
if such date occurs after the Initial Senior Advance, the Senior Borrower, shall
be entitled to a disbursement of such remaining amounts (including all interest
earned thereon); provided, however, that if less than 100% of the Xxxxxx Space
has been subleased pursuant to Approved Subleases as of such date, the Mezzanine
Borrower or the Senior Borrower, as applicable, shall only be entitled to that
portion of the remaining Xxxxxx Subleasing Cost Funds not anticipated to be
necessary to pay tenant improvements and leasing commissions for the remainder
of the unleased Xxxxxx Space (as reasonably estimated by the Mezzanine Agent and
the Senior Agent). In the event that the Senior Agent and the Mezzanine Agent
cannot agree on the amount estimated to be necessary to pay such tenant
improvements and leasing commissions for the remainder of the unleased Xxxxxx
Space, the higher estimate shall control.
(iv) Upon the occurrence of Full Release, the Mezzanine Borrower or, if
such Full Release occurs after the Initial Senior Advance, the Senior Borrower,
shall be entitled to receive all of the Xxxxxx Subleasing Cost Funds then on
deposit in the applicable Citadel Reserve Account (together with any accrued
interest thereon).
(b) Extra Citadel Costs Transfer Amount.
(i) The parties hereto acknowledge that additional tenant improvement and
leasing commission costs beyond those currently budgeted under the Approved
Construction Budget (as defined in the Mezzanine Loan Agreement) may be incurred
in connection with the Citadel Lease (such costs, the "Extra Citadel Costs").
Pursuant to the Mezzanine Loan Agreement, the Mezzanine Agent has agreed that up
to $2,000,000 of the funds on deposit in the Restricted Securities Account (as
defined in the Mezzanine Loan Agreement) may be used by the Mezzanine Borrower
to pay for Extra Citadel Costs. The Mezzanine Borrower shall have the right to
draw the $2,000,000 to fund such Extra Citadel Costs on a current basis subject
to the same terms and conditions currently set forth in the Mezzanine Loan
Agreement relating to disbursements from the Restricted Securities Account;
provided, however, that the Mezzanine Lenders and the Senior Agent shall be
deemed to have approved the use of up to $2,000,000 to pay for Extra Citadel
Costs.
(ii) In the event that the Mezzanine Borrower has not used the full amount
available to it from the Restricted Securities Account prior to the Initial
Senior Advance, the Mezzanine Agent has agreed to deposit an amount equal to (x)
$2,000,000, minus (B) any Extra Citadel Costs funded prior to the Initial Senior
Advance (the "Extra Citadel Costs Transfer Amount") into the Senior Citadel
Reserve Account on the date of the Initial Senior Advance. The deposit of any
Extra Citadel Costs Transfer Amount shall be in addition to, and not in
substitution of, all other amounts required to be deposited into the Citadel
Reserve Accounts in accordance with this Agreement.
(iii) The Extra Citadel Costs Transfer Amount may only be used to fund
Extra Citadel Costs. From and after the Initial Senior Advance, disbursements of
the Extra Citadel Costs Transfer Amount shall be made in accordance with the
requirements for advances under Article III of the Senior Loan Agreement. Except
as set forth in Section 5(c) hereof, any proposed use of the Extra Citadel Costs
Transfer Amount for items other than Extra Citadel Costs shall require the prior
consent of the Mezzanine Agent (which shall not be unreasonably withheld).
(c) Xxxxxx Future Risk Funds.
The Xxxxxx Future Risk Funds shall be disbursed as follows:
(i) Upon the occurrence of a Full Release, the Mezzanine Borrower or, if
such Full Release occurs after the Initial Senior Advance, the Senior Borrower,
shall be entitled to receive all of the Xxxxxx Future Risk Funds then on deposit
in the applicable Citadel Reserve Account (together with any accrued interest
thereon), less any amounts required to pay costs relating to the subleasing of
the Xxxxxx Space or the Xxxxxx Reimbursements Obligations incurred by any of the
Borrower Parties prior to such Full Release and any amounts necessary to fulfill
any conditions to or costs payable by any of the Borrower Parties in connection
with such Full Release. "Full Release" shall mean (x) the Xxxxxx Landlord has
terminated the Xxxxxx Lease in writing, (y) Citadel has been released in writing
from its rental obligation under the Xxxxxx Lease and (z) the Senior Agent and
the Mezzanine Agent have received evidence reasonably satisfactory to each of
them that no further Xxxxxx Reimbursement Obligations will exist after the date
of the termination of the Xxxxxx Lease.
(ii) Upon the occurrence of a Partial Release, the Mezzanine Borrower or,
if such Partial Release occurs after the Initial Senior Advance, the Senior
Borrower shall be entitled to receive a portion of the Xxxxxx Future Risk Funds
in an amount equal to the product of (x) the amount of Xxxxxx Future Risk Funds
theretofore deposited in the Citadel Reserve Accounts (without giving effect to
any prior releases or applications of any Xxxxxx Future Risk Funds, but
exclusive of any interest earned on the Xxxxxx Future Risk Funds, and less any
amounts required to pay costs relating to the subleasing of the Xxxxxx Space or
the Xxxxxx Reimbursement Obligations incurred by any of the Borrower Parties
prior to such Partial Release and any amounts necessary to fulfill any
conditions to or costs payable by any of the Borrower Parties in connection with
such Partial Release) and (y) a fraction, the numerator of which is the rentable
square footage of the Xxxxxx Lease which has been the subject of a Partial
Release, and the denominator of which shall be 161,488 (as such denominator may
be adjusted as provided in the Xxxxxx Lease). "Partial Release" shall mean (1)
the Xxxxxx Landlord has terminated a portion of the Xxxxxx Lease in writing, (2)
Citadel has been released in writing from its rental obligation with respect to
the terminated portion of the Xxxxxx Lease and (3) the Senior Agent and the
Mezzanine Agent have received evidence reasonably satisfactory to each of them
that no further Xxxxxx Reimbursement Obligations will exist with respect to the
terminated portion of the Xxxxxx Lease after the date of such partial
termination of the Xxxxxx Lease.
(iii) In conjunction with the execution of an Approved Sublease to a tenant
with an investment grade rating from the Rating Agencies (as defined in the
Senior Loan Agreement) or to a tenant who has provided a full guaranty of its
obligations under such Approved Sublease from a guarantor with an investment
grade rating from the Rating Agencies, the Proportionate Share (as hereinafter
defined) of the Xxxxxx Future Risk Funds relating to such Approved Sublease
shall be either (x) released to Mezzanine Borrower or, if such Approved Sublease
is executed after the Initial Senior Advance, the Senior Borrower, as applicable
or (y) applied as a prepayment of the then-outstanding balance of the Senior
Loan, at the option of Mezzanine Agent and Senior Agent, within thirty (30) days
from the approval of such sublease; provided, however, that if Senior Agent and
Mezzanine Agent cannot agree within such 30-day period as to which option to
choose, such amount shall be applied as a prepayment to the Senior Loan and in
no event shall any amounts be released to Mezzanine Borrower or the Senior
Borrower, as applicable, without the consent of the Mezzanine Agent.
"Proportionate Share" shall mean, with respect to any Approved Sublease, an
amount equal to the product of (A) the amount of Xxxxxx Future Risk Funds
theretofore deposited in the Citadel Reserve Accounts (without giving effect to
any prior releases or applications of any Xxxxxx Future Risk Funds, but
exclusive of any interest earned on the Xxxxxx Future Risk Funds) and (B) a
fraction, the numerator of which is the rentable square footage demised by such
Approved Sublease, and the denominator of which shall be 161,488 (as such
denominator may be adjusted pursuant to the Xxxxxx Lease).
(iv) In conjunction with the delivery by a tenant under an Approved
Sublease of an Acceptable Security Deposit (as hereinafter defined), an amount
equal to the lesser of (x) the Proportionate Share of the Xxxxxx Future Risk
Funds relating to such Approved Sublease and (y) the amount of the Acceptable
Security Deposit shall be either (A) released to Mezzanine Borrower or, after
the Initial Senior Advance, the Senior Borrower, as applicable or (B) applied as
a prepayment of the then-outstanding balance of the Senior Loan, at the option
of Mezzanine Lenders and Senior Agent, within thirty (30) days from the approval
of such Approved Sublease; provided, however, that if Senior Agent and Mezzanine
Agent cannot agree within such 30-day period as to which option to choose, such
amount shall be applied as a prepayment to the Senior Loan and in no event shall
any amounts be released to Mezzanine Borrower or the Senior Borrower, as
applicable, without the consent of Mezzanine Agent). "Acceptable Security
Deposit" shall mean a security deposit delivered by a tenant under an Approved
Sublease in the form of cash or an Acceptable Form Letter of Credit, pledged,
assigned, endorsed or delivered, as applicable, to the Mezzanine Agent (on a
second priority basis) and the Senior Agent (on a first priority basis), from an
entity reasonably acceptable to Mezzanine Agent and Senior Agent, for a minimum
of a one year's gross rent under such Approved Sublease. "Acceptable Form Letter
of Credit" shall mean an irrevocable letter of credit which provides by its
terms that either (x) such letter of credit shall be automatically renewed (no
more frequently than annually) during the entire term of the Approved Sublease
or (y) such letter of credit may be drawn upon if a replacement letter of credit
is not provided at least 30 days in advance of its expiration date, and is in
all other respects reasonably satisfactory to Mezzanine Agent and Senior Agent.
(v) Upon the occurrence of the Rent Break-Even Date (as hereinafter
defined), any Xxxxxx Future Risk Funds then on deposit in the Citadel Reserve
Account (together with any accrued interest thereon) shall be either (x)
released to Mezzanine Borrower or, after the Initial Senior Advance, the Senior
Borrower, as applicable, or (y) applied as a prepayment of the then-outstanding
balance of the Senior Loan, at the option of the Mezzanine Agent and Senior
Agent, within thirty (30) days from the Rent Break-Even Date; provided, however,
that if Senior Agent and Mezzanine Agent cannot agree within such 30-day period
as to which option to choose, such amount shall be applied as a prepayment to
the Senior Loan and in no event shall any amounts be released to Mezzanine
Borrower or the Senior Borrower, as applicable, without the consent of Mezzanine
Agent. "Rent Break-Even Date" shall mean the first date upon which the aggregate
gross revenues generated by the Property and the Approved Subleases for the
Xxxxxx Space, minus (A) stabilized operating expenses for the Property and the
Xxxxxx Space assuming a 90% occupancy rate, minus (B) stabilized taxes for the
Property and the Xxxxxx Space using fully assessed taxes, and minus (C) debt
service payments under the Senior Loan and the Mezzanine Loan, calculated as if
each of the Senior Loan and the Mezzanine Loan had been fully funded (in the
aggregate amount of $290,000,000), are greater than zero (0).
(vi) In the event that the Rent Break-Even Date has not occurred and there
has been an expiration or other termination of all or any portion of an Approved
Sublease, any Xxxxxx Future Risk Funds then on deposit in the Citadel Reserve
Accounts (together with any accrued interest thereon) shall be available for the
payment of leasing commissions and/or tenant improvement costs associated with
any re-tenanting required by such expiration or termination, as the case may be;
provided, however, that the amount available with respect to any new or
replacement Approved Sublease shall not exceed twenty-five dollars ($25) per
square foot of such new or replacement Approved Sublease and such Xxxxxx Future
Risk Funds shall be disbursed upon satisfaction of the same conditions
applicable to disbursements of the Xxxxxx Subleasing Costs Funds as set forth in
Section 3(a)(ii) above.
(vii) The parties hereto agree that other than in connection with a Full
Release, which shall be governed by Section 3(c)(i) above, interest accrued on
the Xxxxxx Future Risk Funds shall be disbursed as follows: (a) the entire
amount of the Xxxxxx Future Risk Funds actually deposited into the Citadel
Reserve Accounts in accordance with this Agreement (the "Deposited Funds") shall
be disbursed before any portion of the interest earned and accrued on such
Deposited Funds is disbursed, and (b) interest earned and accrued on the
Deposited Funds shall be disbursed only at the time the final disbursement of
the Deposited Funds is made, and all such interest shall be disbursed to the
party that receives the final disbursement of the Deposited Funds.
(d) Returned Outside Leasing Commission
(i) In the event that the Senior Borrower has deposited the Returned
Outside Leasing Commission into the applicable Citadel Reserve Account as
required pursuant to Section 2(f) above, the Returned Outside Leasing Commission
shall be available to the Senior Borrower for the payment of additional tenant
improvement and leasing commission costs which may be incurred in connection
with re-leasing the space at the Project currently demised by the Citadel Lease.
(ii) The Returned Outside Leasing Commission shall be disbursed upon
satisfaction of the same conditions applicable to disbursements of the Xxxxxx
Subleasing Costs Funds as set forth in Section 3(a)(ii) above.
(e) Notwithstanding anything to the contrary contained herein, upon the
final payment in full of the Senior Loan (in accordance with Section 2.5 of the
Senior Loan Agreement) and the Mezzanine Loan (in accordance with Section 2.5 of
the Mezzanine Loan Agreement), all amounts then remaining on deposit in the
Citadel Reserve Accounts (together with any accrued interest thereon) shall be
released to the Senior Borrower or the Mezzanine Borrower, as applicable.
Section 4. Special Rights of the Mezzanine Lenders.
Notwithstanding anything to the contrary contained in this Agreement,
Senior Agent and the other parties hereto hereby agree that (i) in the event
that the Mezzanine Lenders have exercised their foreclosure rights under the
Pledge Agreement (as defined in the Mezzanine Loan Agreement), Mezzanine Lenders
shall be entitled to use all amounts then on deposit in the Citadel Reserve
Accounts to fund Citadel TI Costs (as defined in First Senior Modification)
which the Senior Agent is not obligated to advance in accordance with Section
5(a) of the First Senior Modification and, upon satisfaction of the conditions
set forth in Section 5(a) of the First Senior Modification, shall be entitled to
proceeds of the Senior Loan in reimbursement for the payment of such Citadel TI
Costs and (ii) in the event that the Mezzanine Lenders have cured any defaults
of the Senior Borrower or any other Borrower Party in accordance with the
Intercreditor Agreement (as defined below) and are exercising any remedies under
the Mezzanine Loan Documents, all amounts then on deposit in the Citadel Reserve
Accounts shall be available to the Mezzanine Agent under the same terms and
conditions applicable to the Borrower Parties as set forth in this Agreement.
Section 5. Security Agreement.
(a) Senior Borrower hereby pledges, transfers and assigns to the Senior
Agent for the benefit of the Senior Lenders, and grants to the Senior Agent for
the benefit of the Senior Lenders, as additional security for the payment and
performance of the Senior Loan and the obligations of the Senior Borrower under
the other Senior Loan Documents, a continuing perfected security interest in and
to, and a general first lien upon, (i) the Senior Citadel Reserve Account and
all of the Senior Borrower's right, title and interest in and to all cash,
property or rights transferred to or deposited in the Senior Citadel Reserve
Account from time to time by or on behalf of the Senior Borrower, (ii) all
earnings, investments and securities held in the Senior Citadel Reserve Account
and (iii) any and all proceeds of the foregoing. This Agreement and the pledge,
assignment and grant of security interest made hereby shall secure payment of
all amounts payable by the Senior Borrower to the Senior Lenders under the
Senior Loan Agreement and the other obligations of the Senior Borrower under the
Senior Loan Documents. The Borrower Parties further agree to execute,
acknowledge, deliver, file or do at their sole cost and expense, and hereby
irrevocably grants to Senior Agent a power of attorney on behalf of the Borrower
Parties, to execute and perform (provided the applicable Borrower Party has
failed to so execute or perform), all other acts, assignments, notices,
agreements or other instruments (including UCC financing statements) as the
Senior Agent may reasonably require in order to effectuate, assure, convey,
secure, assign, transfer and convey unto the Senior Agent any of the rights
granted by this Section 5(a). Upon (x) payment in full of the Senior Loan as set
forth in Section 2.5 of the Senior Loan Agreement and the payment in full of the
Mezzanine Loan as set forth in Section 2.5 of the Mezzanine Loan Agreement, or
(y) the final disbursement of all amounts previously deposited into the Citadel
Reserve Accounts (provided that no additional funding of the Citadel Reserve
Accounts is required under this Agreement thereafter), the Senior Agent shall
release the rights granted hereby in accordance with Section 2.5 of the Senior
Loan Agreement.
(b) Mezzanine Borrower hereby pledges, transfers and assigns to the
Mezzanine Agent for the benefit of the Mezzanine Lenders, and grants to the
Mezzanine Agent for the benefit of the Mezzanine Lenders, as additional security
for the payment and performance of the Mezzanine Loan and the obligations of the
Mezzanine Borrower under the other Mezzanine Loan Documents, a continuing
perfected security interest in and to, and a general first lien upon, (i) the
Mezzanine Citadel Reserve Account and all of the Mezzanine Borrower's right,
title and interest in and to all cash, property or rights transferred to or
deposited in the Mezzanine Citadel Reserve Account from time to time by or on
behalf of the Mezzanine Borrower, (ii) all earnings, investments and securities
held in the Mezzanine Citadel Reserve Account and (iii) any and all proceeds of
the foregoing. This Agreement and the pledge, assignment and grant of security
interest made hereby shall secure payment of all amounts payable by the
Mezzanine Borrower to the Mezzanine Lenders under the Mezzanine Loan Agreement
and the other obligations of the Mezzanine Borrower under the Mezzanine Loan
Documents. The Borrower Parties further agree to execute, acknowledge, deliver,
file or do at their sole cost and expense, and hereby irrevocably grant to
Senior Agent a power of attorney on behalf of the Borrower Parties, to execute
and perform (provided the applicable Borrower Party has failed to so execute or
perform), all other acts, assignments, notices, agreements or other instruments
(including UCC financing statements) as the Mezzanine Agent may reasonably
require in order to effectuate, assure, convey, secure, assign, transfer and
convey unto the Mezzanine Agent any of the rights granted by this Section 5(b).
Upon (x) payment in full of the Mezzanine Loan as set forth in Section 2.5 of
the Mezzanine Loan Agreement, or (y) the final disbursement of all amounts
previously deposited into the Citadel Reserve Accounts (provided that no
additional funding of the Citadel Reserve Accounts is required under this
Agreement thereafter), the Mezzanine Agent shall release the rights granted
hereby in accordance with Section 2.5 of the Mezzanine Loan Agreement.
(c) The parties hereto agree and acknowledge that the Senior Citadel
Reserve Account, and all amounts on deposit therein from time to time, including
interest earned thereon, shall constitute additional collateral for the Senior
Loan and may, upon the occurrence of an Event of Default under and as defined in
the Senior Loan Agreement (but subject to the rights of the Mezzanine Lenders
pursuant to Section 4 above), be applied by the Senior Agent in accordance with
the Senior Loan Documents.
(d) The parties hereto agree and acknowledge that the Mezzanine Citadel
Reserve Account, and all amounts on deposit therein from time to time, including
interest earned thereon, shall constitute additional collateral for the
Mezzanine Loan and may, upon the occurrence of an Event of Default under and as
defined in the Mezzanine Loan Agreement which results in the Senior Lender
having no further obligation to fund the Initial Senior Advance, be applied by
the Mezzanine Agent in accordance with the Mezzanine Loan Documents.
(e) The parties hereto agree and acknowledge that this Agreement is a "Loan
Document" under each of the Senior Loan and the Mezzanine Loan and that a
default hereunder shall constitute an Event of Default under the Senior Loan
Agreement and the Mezzanine Loan Agreement (subject to the specific terms and
conditions of each of the Senior Loan Agreement and the Mezzanine Loan
Agreement.
Section 6. Approval of Subleases and Expansions.
(a) From and after the date hereof, Senior Borrower shall not enter into
any sublease of any portion of the Xxxxxx Space unless such sublease is an
Approved Sublease.
(b) The exercise of any expansion rights, extension options or rights of
first offer under Article 34 of the Xxxxxx Lease shall require the prior written
consent of Senior Agent and the Mezzanine Agent, which consent may be withheld
or conditioned upon the further modification of the terms of the Senior Loan and
the Mezzanine Loan and/or the establishment of additional reserves and
restrictions, in either case, in the sole discretion of Senior Agent and the
Mezzanine Agent.
(c) "Approved Sublease" shall mean any lease or sublease of all or any
portion of the Xxxxxx Space which either (i) has been approved in writing by the
Mezzanine Agent and the Senior Agent, or (ii) meets all of the following
criteria:
(A) is co-terminus with the expiration date of the Xxxxxx Lease (as
that expiration date may have been extended pursuant to Article
34 of the Xxxxxx Lease at the time such lease or sublease is
executed);
(B) satisfies all of the requirements of Article 20 of the Xxxxxx
Lease;
(C) is to a tenant that either (1) has a net worth (on a GAAP basis)
of no less than five (5) times the annual gross rent payable
under such sublease and an operating cash flow for the prior
calendar year of no less than two (2) times the annual gross rent
payable under such sublease, or provides an unconditional
guaranty of all of the obligations of such tenant under such
sublease from an entity which satisfies the conditions set out in
the foregoing clause (1), or (2) provides a cash security deposit
or an Acceptable Form Letter of Credit from an entity reasonably
acceptable to Mezzanine Agent and Senior Agent in an amount equal
to or greater than one full year of gross rent under such
sublease;
(D) provides for a minimum net rental amount of $24 per square foot
and a tenant improvement allowance by the landlord of no more
than $47.50 per square foot;
(E) demises no more than 50,000 square feet of the Xxxxxx Space;
(F) provides (i) that the subtenant thereunder shall perform and
discharge all of Citadel's obligations under the Xxxxxx Lease (on
a pro rata basis based on the rentable square footage subject to
such sublease), other than such obligations that can be performed
solely by Citadel, as tenant under the Xxxxxx Lease, including,
without limitation, the payment of rent under the Xxxxxx Lease,
and (ii) for other terms and conditions reasonably acceptable to
Senior Borrower that are consistent with the terms and conditions
of the Xxxxxx Lease; provided, however, that no such sublease
shall grant any sublessee (a) the right to assign the sublease or
sublease any portion of the space subject to the sublease (the
"Subleased Premises") without the consent, of the Senior
Borrower, (b) the right to expand or contract the Subleased
Premises, other than options for additional space which, if
exercised, would not cause the Subleased Premises to exceed
50,000 square feet, (c) any expansion rights (other than as
permitted in clause (b) above), contraction rights, rights of
first offer, rights of first refusal or similar rights, (d) the
right to extend the term of the sublease, (e) any termination or
cancellation rights with respect to the Subleased Premises (other
than in connection with a termination or cancellation of the
Citadel Lease), (f) any free rental periods, or (g) any other
right that is greater in scope than the rights granted to Citadel
under the Xxxxxx Lease; and
(G) such sublease does not impose upon the sublandlord or Senior
Borrower any obligation to reimburse the sublessee for such
sublessee's rental obligations in any other space currently
leased by such sublessee as an inducement for such sublessee to
sublease any portion of the Xxxxxx Space.
Section 7. Certain Matters Affecting the Senior Agent and the Mezzanine
Agent.
(a) The Senior Borrower agrees to pay or reimburse the Senior Agent, and
the Mezzanine Borrower agrees to pay or reimburse the Mezzanine Agent upon
request for all reasonable expenses, fees and charges, return items,
disbursement and advances, including reasonable attorneys' fees, incurred or
made by it, in connection with the preparation, execution, performance,
delivery, modification and termination of the Consent Agreement, this Agreement
and the other documents executed in connection herewith.
(b) Neither the Senior Agent nor the Mezzanine Agent shall be liable for
any claims, suits, actions, costs, damages, liabilities or expenses or for any
interruption of services ("Liabilities") in connection with the subject matter
of this Agreement other than Liabilities caused by the gross negligence or
willful misconduct of the Senior Agent or the Mezzanine Agent, as applicable,
and the Borrower Parties hereby agree to indemnify and hold harmless the Senior
Agent and the Mezzanine Agent and their respective affiliates and the directors,
officers, employees and agents of any of them from and against any and all
Liabilities arising from or in connection with any acts or omissions taken by
the Senior Agent and/or the Mezzanine Agent, as applicable, or any of their
respective affiliates or any director, officer, employee or agent of any of them
in connection with this Agreement, other than those Liabilities caused by the
gross negligence or willful misconduct of the Senior Agent or the Mezzanine
Agent, as applicable, or such other respective indemnified parties. In no event
shall the Senior Agent or the Mezzanine Agent be liable to any person for
incidental, special, consequential or punitive damages even if advised of the
possibility thereof.
(c) The Senior Borrower shall provide the Senior Agent and the Mezzanine
Borrower shall provide the Mezzanine Agent with the Tax Identification Number
(TIN) as assigned to each of them by the Internal Revenue Service. All interest
or income earned under this Agreement shall be allocated and paid as provided
herein and reported by the recipient to the Internal Revenue Service as having
been so allocated and paid.
Section 8. Successors and Assigns; Assignments. This Agreement shall bind
and inure to the benefit of and be enforceable by the Senior Agent, the
Mezzanine Agent, the Senior Lenders, the Mezzanine Lenders and each of the
Borrower Parties, and their respective permitted successors and assigns.
Section 9. Notices.
(a) Notices shall be sent as follows:
(i) if to Senior Borrower:
Dearborn Center, L.L.C.
c/o J. Xxxx Xxxxxxx Development Company
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxx Xxxxxxx
with a copy to:
Jenner & Block
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxx and
Xxxxx Xxxxxxx, Esq.
Facsimile No. : (000) 000-0000 (Xxxxxxxxx)
(000) 000-0000 (Xxxxxxx)
(ii) if to Mezzanine Borrower:
Prime/Xxxxxxx Development Company, L.L.C.
c/o J. Xxxx Xxxxxxx Development Company
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Jenner & Block
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
and
Prime Group Realty Trust
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxx and
Xxxxx Xxxxxxx, Esq.
Facsimile No. : (000) 000-0000 (Xxxxxxxxx)
(000) 000-0000 (Xxxxxxx)
(iii) if to Senior Agent:
Bayerische Hypo- Und Vereinsbank Ag, New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Real Estate Lending
Facsimile No.: (000) 000-0000
with a copy to:
Bayerische Hypo- und Vereinsbank AG
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: General Counsel
and
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
(iv) if to Mezzanine Agent:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(v) if to PGLP:
Prime Group Realty, L.P.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxx and
Xxxxx Xxxxxxx, Esq.
Facsimile No. : (000) 000-0000 (Xxxxxxxxx)
(000) 000-0000 (Xxxxxxx)
with a copy to:
Jenner & Block
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(vi) if to Xxxxx:
Xxxxx Xxxxxxx L.L.C.
c/o J. Xxxx Xxxxxxx Development Company
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
(vii) if to Xxxxxxx:
J. Xxxx Xxxxxxx Development Company
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
or, in each case, to such other or additional addresses as shall be designated
in writing by the respective party to the other parties hereto. Unless otherwise
expressly provided herein, all such notices, to be effective, shall be in
writing (including by facsimile), and shall be deemed to have been duly given or
made (x) when delivered by hand or by nationally recognized overnight carrier,
(y) upon receipt after being deposited in the mail, certified mail and postage
prepaid or (z) in the case of notice by fax, when sent and electronically
confirmed, addressed as set forth above, with a copy of such notice sent by any
other means provided in clauses (x) and (y) above.
Section 10. Non-Recourse.
The parties hereto intend that, with respect to Prime Group Realty Trust,
Senior Borrower, Mezzanine Borrower, Xxxxx and Xxxxxxx (and their respective
partners, members, officers and directors other than PGLP), to the extent
provided in the Senior Loan Documents and the Mezzanine Loan Documents with
respect to such parties' other obligations and liabilities under such Senior
Loan Documents and Mezzanine Loan Documents, the terms, provisions, conditions,
agreements, liabilities and obligations contained in this Agreement shall be
non-recourse to all of the parties hereto; provided, however, that the foregoing
is not intended in any way to release PGLP from its liability under the
Guaranties (as defined under the Senior Loan Agreement and under the Mezzanine
Loan Agreement). Accordingly, the non-recourse terms and provisions contained in
the Senior Loan Documents and the Mezzanine Loan Documents are, by this
reference, hereby incorporated into this Agreement as if set forth herein in
their entirety, and shall apply to each of the parties hereto as applicable.
Section 11. Intercreditor Agreement.
Senior Agent and Mezzanine Agent hereby confirm that the terms and
provisions of this Agreement shall control, with respect to the subject matter
hereof, to the extent that there are any conflicts and/or inconsistencies
between this Agreement and that certain Intercreditor and Subordination
Agreement, dated as of January 5, 2001, between Senior Agent and Mezzanine Agent
(the "Intercreditor Agreement") and, without limiting the generality of the
foregoing, that this Agreement shall govern the rights of the Mezzanine Agent
and the Senior Agent with respect to the Citadel Reserve Accounts and all
amounts on deposit from time to time therein, Approved Subleases, disbursements
from the Citadel Reserve Accounts, the application of any funds disbursed from
the Citadel Reserve Accounts and the satisfaction of any conditions relating to
the use and/or disbursement of funds from the Citadel Reserve Accounts.
Section 12. Miscellaneous.
(a) No modification, amendment, termination or waiver of any provision of
this Agreement shall in any event be effective unless the same shall be in a
writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given.
(b) Each of the Senior Agent and the Mezzanine Agent shall receive copies
of all reports, advices, statements and other information supplied hereunder by
any party hereto to any other party hereto.
(c) This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
(d) The terms and provisions hereof and the rights and obligations of the
parties hereunder shall in all respects be governed by, and construed and
enforced in accordance with, the internal laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
several counterparts (each of which shall be deemed an original) as of the date
first above written.
PRIME/XXXXXXX DEVELOPMENT COMPANY, L.L.C.
By: Xxxxx Xxxxxxx L.L.C., its managing member
By: [s] J. Xxxx Xxxxxxx
-------------------
J. Xxxx Xxxxxxx
Member
DEARBORN CENTER, L.L.C.
By: Prime/Xxxxxxx Development Company,
L.L.C., its sole member
By: Xxxxx Xxxxxxx L.L.C.,
its managing member
By: [s] J. Xxxx Xxxxxxx
-------------------
J. Xxxx Xxxxxxx
Member
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust,
its managing general partner
By: [s] Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Co-President
XXXXX XXXXXXX L.L.C.
By: [s] J. Xxxx Xxxxxxx
J. Xxxx Xxxxxxx
Member
J. XXXX XXXXXXX DEVELOPMENT COMPANY
By: [s] J. Xxxx Xxxxxxx
J. Xxxx Xxxxxxx
President
BANKERS TRUST COMPANY, as agent
By: [s] Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Director
BAYERISCHE HYPO-UND VERINSBANNK AG,
NEW YORK BRANCH, as agent
By: [s] Xxxxx Xxxx
Xxxxx Xxxx
Director
By: [s] Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Managing Director
