LOAN AGREEMENT
BETWEEN
PRIME GROUP VI, L.P.,
an Illinois limited partnership
AND
LASALLE NATIONAL BANK,
a national banking association
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND DETERMINATIONS. . . . . . . . . . . . . . . . . . . 1
1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 TIME PERIODS . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.3 ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.4 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.5 LENDER'S DISCRETION. . . . . . . . . . . . . . . . . . . . . . . . 7
1.6 BORROWER'S KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . 7
1.7 MARKET PRICE ADJUSTMENTS.. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2 LOAN AND TERMS OF PAYMENT . . . . . . . . . . . . . . . . . . . . . 8
2.1 REVOLVING LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.1 AMOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.2 PROCEDURE FOR BORROWING. . . . . . . . . . . . . . . . . . . . . . 8
2.2 DISBURSEMENT OF LOAN ON CLOSING DATE . . . . . . . . . . . . . . . 8
2.3 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.1 INTEREST RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.2 INTEREST PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.3 INTEREST COMPUTATION . . . . . . . . . . . . . . . . . . . . . . . 9
2.3.4 MAXIMUM INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 PRINCIPAL PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5.1 VOLUNTARY PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . 9
2.5.2 MANDATORY PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 LIBOR OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6.1 OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6.2 NOTICE PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6.3 NOTICE IRREVOCABLE . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6.4 FAILURE TO PROVIDE NOTICE OF CONTINUATION. . . . . . . . . . . . . 11
2.7 INTEREST PERIODS . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.8 SPECIAL PROVISIONS GOVERNING LIBOR LOANS . . . . . . . . . . . . . 11
2.8.1 DETERMINATION OF INTEREST RATE . . . . . . . . . . . . . . . . . . 11
2.8.2 INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. . . . . . . . 12
2.9 ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.10 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 LIBOR RATE TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.11.1 ADDITIONAL PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . 13
2.11.2 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 DEFAULT RATE . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 METHOD OF PAYMENT; GOOD FUNDS. . . . . . . . . . . . . . . . . . . 13
2.14 DEPOSIT TO BORROWER'S ACCOUNT. . . . . . . . . . . . . . . . . . . 13
ARTICLE 3 NOTE AND SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 4 CONDITIONS OF FUNDING . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 INITIAL ADVANCE. . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.2 ALL REVOLVER ADVANCES. . . . . . . . . . . . . . . . . . . . . . . 16
4.2.1 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 16
4.2.2 PERFORMANCE; NO DEFAULT. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 5 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . 16
5.1 BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 PARTNERS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.4 NECESSARY ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 BINDING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 BORROWER'S SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 17
5.7 TITLE TO PROPERTY; LIENS . . . . . . . . . . . . . . . . . . . . . 17
5.8 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . 17
5.9 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.10 CONFLICTING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 17
5.11 COMPLIANCE WITH APPLICABLE LAWS. . . . . . . . . . . . . . . . . . 18
5.12 APPLICATION OF CERTAIN LAWS AND REGULATIONS. . . . . . . . . . . . 18
5.12.1 INVESTMENT COMPANY ACT . . . . . . . . . . . . . . . . . . . . . . 18
5.12.2 HOLDING COMPANY ACT. . . . . . . . . . . . . . . . . . . . . . . . 18
5.13 MARGIN REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 NO MISREPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 NO AFFILIATION . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.16 REGISTRATION EFFECTIVE . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 6 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 LEGAL EXISTENCE; GOOD STANDING . . . . . . . . . . . . . . . . . . 19
6.2 INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 FINANCIAL STATEMENTS AND OTHER INFORMATION OF BORROWER . . . . . . 19
6.3.1 ANNUAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3.2 NOTICE OF DEFAULTS; LOSS . . . . . . . . . . . . . . . . . . . . . 20
6.3.3 NOTICE OF SUITS, ADVERSE EVENTS. . . . . . . . . . . . . . . . . . 20
6.3.4 COVENANT COMPLIANCE CERTIFICATE; BORROWING BASE CERTIFICATE. . . . 20
6.3.5 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 FINANCIAL INFORMATION OF PRIME RETAIL, INC. AND PGRT . . . . . . . 21
6.5 REPORTS TO GOVERNMENTAL BODIES AND OTHER PERSONS . . . . . . . . . 21
6.6 GENERAL PARTNER. . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.7 FINANCIAL STATEMENTS OF GUARANTOR. . . . . . . . . . . . . . . . . 22
ARTICLE 7 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 8 DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1.1 DEFAULT IN PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1.2 BREACH OF COVENANTS AND CERTAIN OTHER PROVISIONS . . . . . . . . . 23
8.1.3 BREACH OF WARRANTY . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1.4 ACCELERATION OF ANY INDEBTEDNESS . . . . . . . . . . . . . . . . . 23
8.1.5 BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1.6 JUDGMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1.7 NON-PERFORMANCE OF GUARANTY, ETC . . . . . . . . . . . . . . . . . 24
8.1.8 INVALIDITY OF PLEDGE AGREEMENT, ETC. . . . . . . . . . . . . . . . 24
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8.2 ACCELERATION OF BORROWER'S OBLIGATIONS . . . . . . . . . . . . . . 25
8.3 REMEDIES ON DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 25
8.3.1 ENFORCEMENT OF SECURITY INTERESTS. . . . . . . . . . . . . . . . . 25
8.3.2 OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 APPLICATION OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . 25
8.4.1 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4.2 BORROWER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . 26
8.4.3 SURPLUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 9 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 10 EXPENSES AND INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . 26
10.1 CLOSING FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 ATTORNEY'S FEES AND OTHER FEES AND EXPENSES. . . . . . . . . . . . 26
10.2.1 FEES AND EXPENSES FOR PREPARATION OF LOAN DOCUMENTS. . . . . . . . 26
10.2.2 FEES AND EXPENSES IN ENFORCEMENT OF RIGHTS OR DEFENSE OF LOAN
DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.3 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3.1 BROKERAGE FEES . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3.2 OPERATION OF COLLATERAL; JOINT VENTURERS . . . . . . . . . . . . . 27
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.2 SURVIVAL OF LOAN AGREEMENT . . . . . . . . . . . . . . . . . . . . 28
11.3 FURTHER ASSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . 28
11.4 TAXES AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.5 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.6 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.7 MODIFICATION OF LOAN DOCUMENTS . . . . . . . . . . . . . . . . . . 29
11.8 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.9 SALE OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.10 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . 29
11.11 REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . . 29
11.12 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.13 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.14 JURISDICTION AND VENUE . . . . . . . . . . . . . . . . . . . . . . 30
11.15 WAIVER OF RIGHT TO JURY TRIAL. . . . . . . . . . . . . . . . . . . 30
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LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of December 18, 1998, by and between
PRIME GROUP VI, L.P., an Illinois limited partnership ("Borrower"), and
LASALLE NATIONAL BANK, a national banking association ("Lender").
R E C I T A L S:
A. Borrower desires to obtain a revolving line of credit from Lender
in the maximum principal amount of $25,000,000 (the "Loan") to refinance
certain indebtedness and for working capital purposes for Borrower and its
affiliates. The Loan is to be secured by a lien on certain securities owned
by Borrower and is to be guaranteed by a limited partner of Borrower.
B. Lender is willing to furnish such revolving line of credit subject
to the terms and conditions set forth herein.
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1
DEFINITIONS AND DETERMINATIONS
1.1 DEFINITIONS. As used in this Loan Agreement and in the other Loan
Documents, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally both to the singular and plural terms defined):
ACCOUNTANTS: Ernst & Young LLP or such other independent certified
public accounting firm selected by Borrower and reasonably satisfactory to
Lender.
AIMCO: Apartment Investment and Management Company, a Maryland
corporation that qualifies as a real estate investment trust.
AIMCO SHARES: The common stock, $0.01 par value per share, of AIMCO.
AVAILABLE BORROWING BASE: the lesser of (i) $25,000,000 and (ii) 50%
of the Fair Market Value of the Collateral.
BORROWER'S OBLIGATIONS: (i) any and all Indebtedness due or to become
due, now existing or howsoever arising of Borrower to Lender pursuant to
the terms of this Loan Agreement or pursuant to any other Loan Document,
and (ii) the performance of the covenants of Borrower contained in the Loan
Documents.
BORROWER'S SECURITIES: See Section 5.6.
BREAK COSTS: See Section 2.10.
BROOKDALE: Brookdale Living Communities, Inc., a Delaware corporation.
BROOKDALE SHARES: the shares of common stock, $0.01 par value per
share, of Brookdale.
BUSINESS: the business of directly or indirectly acquiring,
developing, operating, managing and financing real estate or interests
therein, or investing in, or holding securities of, entities engaged in
such business.
BUSINESS DAY: any day other than a Saturday, Sunday or other day on
which banks in Chicago, Illinois, or London, England, are closed.
CLOSING: as defined in Article 9.
CLOSING DATE: as defined in Article 9.
CODE: the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, and the rules and regulations issued thereunder,
as in effect from time to time.
COLLATERAL: the securities, cash and other property in which Lender
is granted the Security Interests pursuant to the Pledge Agreement.
COMMITMENT: $25,000,000.
DEFAULT: any event or condition which, with the giving of notice or
the lapse of time, or both, would become an Event of Default.
DEFAULT RATE: 3% plus the Floating Rate applicable from time to time
to the outstanding principal balance of the Loan.
DEFAULT PERIOD: a period of time commencing on the date that an Event
of Default has occurred and ending on the date that such Event of Default
is cured or waived.
EVENT OF DEFAULT: any of the Events of Default set forth in Section
8.1.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended.
FAIR MARKET VALUE OF THE COLLATERAL: as of any date the same is to be
calculated, (i) as to the Prime Retail Partnership Units, the product of
the Market Price of Prime Retail, Inc. Shares for such date multiplied by
the number of Prime Retail Inc. Shares into which the Prime Retail
Partnership Units may be converted, (ii) as to the Prime Group Realty
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Partnership Units, the product of the Market Price of PGRT Shares for such
date multiplied by the number of PGRT Shares into which the Prime Group
Realty Partnership Units may be converted, (iii) as to the Brookdale
Shares, the Market Price of the Brookdale Shares multiplied by the number
of Brookdale Shares, and (iv) as to the AIMCO Shares, the Market Price of
the AIMCO Shares multiplied by the number of AIMCO Shares.
FIXED RATE: for any Interest Period, a fixed interest rate per annum,
which rate shall be equal to the LIBOR Rate applicable to such Interest
Period plus 2.50%.
FLOATING RATE: 1/2% + the Prime Rate in effect from time to time. The
Floating Rate shall change automatically and immediately as and when the
Prime Rate shall change, without notice to Borrower.
GAAP: generally accepted accounting principles as in effect from time
to time, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, consistently applied.
GOOD FUNDS: United States Dollars available to Lender in federal
funds at or before 1:00 p.m. Chicago time on a Business Day.
GOVERNMENTAL BODY: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof or any court or arbitrator.
GUARANTOR: The Prime Group.
GUARANTY: the Continuing Unconditional Guaranty, substantially in the
form of Exhibit A, issued by Guarantor.
INDEBTEDNESS: all liabilities, obligations and reserves, contingent or
otherwise, which, in accordance with GAAP, would be reflected as a
liability on a balance sheet, including, without duplication: (i) all
Indebtedness for Borrowed Money, (ii) all obligations under conditional
sales or other title retention agreements, (iii) all obligations secured by
any Lien upon Property, (iv) all guaranties and other contingent
obligations, including, without limitation, letters of credit, and (v) all
obligations under operating leases.
INDEBTEDNESS FOR BORROWED MONEY: without duplication, all
Indebtedness (i) in respect of money borrowed, (ii) evidenced by a note,
debenture or other like written obligation to pay money, including, without
limitation, all of Borrower's Obligations, (iii) in respect of rent or hire
of Property under capitalized leases or for the deferred purchase price of
Property or (iv) in respect of obligations under conditional sales or other
title retention agreements, and all guaranties of any and all of the
foregoing.
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INTEREST PERIOD: as defined in Section 2.7.
INTEREST RATE DETERMINATION DATE: the date on which Lender determines
the Fixed Rate applicable to a requested LIBOR Loan or the continuation
thereof, which shall be the second Business Day prior to the first day of
the Interest Period applicable to such LIBOR Loan.
LIBOR LOAN: each portion of the Loan that is bearing interest at an
applicable Fixed Rate.
LIBOR RATE: with respect to any LIBOR Loan for the applicable Interest
Period, the per annum rate of interest equal to the quotient obtained by
dividing (i) the average per annum interest rate at which deposits in
United States dollars are generally offered in the London Interbank Market
at 11:00 a.m. London, England time, on the Interest Rate Determination
Date, for a period equal to such Interest Period and in the amount of such
LIBOR Loan, by (ii) the difference between 100% and any applicable reserve
requirements (rounded upward to the nearest whole multiple of 1/100th of
one percent per annum) including, without limitation, any applicable
maximum reserve requirements for "Eurocurrency Liabilities" under
Regulation D of the Board of Governors of the Federal Reserve System (or
any similar reserves under any successor regulations).
LIBOR RATE TAXES: as defined in Section 2.11.1.
LIEN: any mortgage, pledge, assignment, lien, charge, encumbrance or
security interest of any kind, or the interest of a vendor or lessor under
any conditional sale agreement, capitalized lease, or other title retention
agreement.
LOAN: the revolving loan in the maximum principal amount of
$25,000,000 to be made by Lender from time to time to Borrower in
accordance with the terms set forth in Section 2.2.
LOAN AGREEMENT: this Loan Agreement and any amendments or supplements
hereto.
LOAN DOCUMENTS: (i) Loan Agreement, (ii) Note, (iii) Pledge Agreement,
(iv) Guaranty, (v) appropriate Uniform Commercial Code financing
statements, and (vi) such other instruments and documents as Lender may
require to evidence and perfect the Security Interests granted pursuant to
the Pledge Agreement.
MARKET PRICE: for any date shall be deemed to be (i) so long as the
Prime Shares, the AIMCO Shares and the Brookdale Shares are quoted on a
national securities exchange or the National Association of Securities
Dealers Automated Quotations ("NASDAQ") National Market System, the
reported closing sales price per share for such security on such date as
reported on such national securities exchange or NASDAQ, or, if there were
no reported sales transactions on that date, the reported closing sales
price per
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share for such security for the most recent Business Day (within
the previous ten Business Days) on which sales transactions are reported,
or (ii) if there were no reported transactions on a national securities
exchange or on NASDAQ on that date or within the previous ten Business Days
or if the Prime Shares and/or AIMCO Shares and/or Brookdale Shares are no
longer being quoted on a national securities exchange or on NASDAQ, then as
to those securities, zero.
MATERIAL ADVERSE EFFECT: any changes or effects, as the case may be,
that individually or in the aggregate are or can reasonably be expected to
be materially adverse to (i) the ability of Borrower or Guarantor, or
either of them, as the case may be, to fulfill any covenants or to perform
any of their respective obligations under this Loan Agreement or the other
Loan Documents, or (ii) the Lender's rights to foreclose on the Collateral
or convert any of the Partnership Units into any Prime Shares.
MATURITY DATE: December 31, 2000 or such earlier date on which the
Commitment is reduced to zero or otherwise terminated pursuant to the terms
of this Loan Agreement.
NOTE: the Revolving Note, substantially in the form of Exhibit B,
executed by Borrower to evidence the maximum amount of the Loan.
PARTNERSHIP UNITS: collectively, Prime Retail Partnership Units and
the Prime Group Realty Partnership Units.
PERSON: any individual, firm, corporation, limited liability company,
business enterprise, trust, association, joint venture, partnership,
governmental body or other entity, whether acting in an individual,
fiduciary or other capacity.
PGLP, INC.: PGLP, Inc., a Illinois corporation.
PGRT: Prime Group Realty Trust, a Maryland real estate investment
trust.
PGRT SHARES: shares of common stock, $0.01 par value per share, of
PGRT.
PLEDGE AGREEMENT: the Pledge Agreement, in the form of Exhibit C, by
and between Borrower and Lender.
PRIME GROUP REALTY OPERATING PARTNERSHIP: Prime Group Realty, L.P., a
Delaware limited partnership.
PRIME GROUP REALTY PARTNERSHIP UNITS: units of partnership interest
in the Prime Group Realty Operating Partnership.
PRIME GROUP REALTY REGISTRATION RIGHTS AGREEMENT: that certain
Registration Rights Agreement, dated November 17, 1997, by and among PGRT,
Prime Group Realty
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Operating Partnership, Prime Group Limited Partnership, Primestone
Investment Partners, L.P., a Delaware limited partnership, and the other
investors named therein.
PRIME LOAN: each portion of the Loan that is bearing interest at the
Floating Rate.
PRIME RATE: the per annum rate of interest announced or published
publicly from time to time by Lender at its principal place of business in
Chicago, Illinois, as its prime or equivalent rate of interest, which rate
is not necessarily the lowest rate of interest charged by Lender with
respect to commercial loans.
PRIME RETAIL, INC.: Prime Retail, Inc., a Maryland corporation that
has qualified for treatment as a real estate investment trust.
PRIME RETAIL, INC. REGISTRATION STATEMENT: that certain registration
statement number 333-65617, relating to 8,505,472 Prime Retail Inc. Shares.
PRIME RETAIL, INC. SHARES: shares of common stock, $0.01 par value
per share, of Prime Retail, Inc.
PRIME RETAIL OPERATING PARTNERSHIP.: Prime Retail, L.P., a Delaware
limited partnership.
PRIME RETAIL PARTNERSHIP UNITS: units of partnership interest in the
Prime Retail Operating Partnership.
PRIME RETAIL REGISTRATION RIGHTS AGREEMENT: that certain Registration
Rights Agreement, dated June 15, 1998, by and among Prime Retail, Inc.,
Prime Retail, L.P. and the other investors named therein.
PRIME SHARES: collectively, Prime Retail, Inc. Shares and PGRT Shares.
PRINCIPAL BALANCE: the unpaid principal balance of the Loan
outstanding from time to time.
PROPERTY: as to any Person, all types of real, personal or mixed
property and all types of tangible or intangible property owned by such
Person.
REVOLVER ADVANCE: any advance of the Loan made in accordance with the
terms set forth in Section 2.1.
SEC: the U.S. Securities and Exchange Commission.
SECURITY INTERESTS: the Liens in the Collateral granted to Lender
pursuant to the Pledge Agreement.
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THE PRIME GROUP: The Prime Group, Inc., an Illinois corporation.
1.2 TIME PERIODS. In this Loan Agreement and the other Loan Documents, in
the computation of periods of time from a specified date to a later specified
date (i) the word "from" means "from and including", (ii) the words "to" and
"until" each mean "to, but excluding" and (iii) the words "through", "end of"
and "expiration" each mean "through and including". All references in this Loan
Agreement and the other Loan Documents to "month", "quarter" or "year" shall be
deemed to refer to a calendar month, quarter or year.
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed, all accounting determinations hereunder shall be made
and all financial statements required to be delivered pursuant hereto shall be
prepared in accordance with GAAP.
1.4 REFERENCES. All references in this Loan Agreement to "Article",
"Section", "subsection", "subparagraph", "clause" or "Exhibit", unless otherwise
indicated, shall be deemed to refer to an Article, Section, subsection,
subparagraph, clause or Exhibit, as applicable, of this Loan Agreement.
1.5 LENDER'S DISCRETION. Whenever the terms "satisfactory to Lender",
"determined by Lender", "acceptable to Lender", "Lender shall elect", "Lender
shall request" or similar terms are used in this Loan Agreement, except as
otherwise specifically provided in this Loan Agreement, such terms shall mean
satisfactory to, at the election of, determined by, acceptable to or requested
by, as applicable, Lender in its sole and absolute discretion.
1.6 BORROWER'S KNOWLEDGE. Any statements, representations or warranties
which are based upon the knowledge of Borrower shall be deemed to have been
limited to the knowledge, made after due inquiry by Xxxxxxx X. Xxxxxxx,
President of PGLP, Inc., the managing general partner of Borrower, and
President, Chairman and Chief Executive Officer of The Prime Group, Inc., and
Xxxx X. Xxxxxx, Vice President and Treasurer of PGLP, Inc., the managing general
partner of Borrower and the Senior Vice President and Chief Financial Officer of
The Prime Group, or, if such persons are not then serving Borrower in their
present capacities, their successors., with respect to the matter in question.
1.7 MARKET PRICE ADJUSTMENTS. In the event of a stock dividend, stock
split or combination or other reduction in the number of issued and outstanding
Brookdale shares, AIMCO shares and/or Prime Shares, as to such affected
securities, any applicable Market Price per share specified in this Loan
Agreement shall be proportionately and appropriately adjusted to reflect such
dividend, split or combination or other reduction.
7
ARTICLE 2
LOAN AND TERMS OF PAYMENT
2.1 REVOLVING LOAN.
2.1.1 AMOUNT. The Loan is a revolving loan which shall be made
available to Borrower by Lender from time to time on and after the Closing
Date in the maximum amount outstanding at any one time in the amount of the
Commitment; provided, however, that the aggregate principal amount of the
Loan which shall be outstanding hereunder at any time shall not exceed the
Available Borrowing Base. Subject to the limitations set forth in this
Article 2, from the Closing Date through the Maturity Date, Borrower may
reborrow all or any Revolver Advance which is repaid or prepaid.
2.1.2 PROCEDURE FOR BORROWING. Each Revolver Advance shall be made on
any Business Day by Lender after Borrower has made an irrevocable written
or telephonic request to Lender for a Revolver Advance, provided, however,
if such request is received by Lender after 12:00 p.m., Chicago time, on a
Business Day, such request shall be deemed to have been made on the next
Business Day. If such Revolver Advance is to bear interest at the Floating
Rate, then such Revolver Advance shall be made on the same Business Day as
the date such request is made or deemed to have been made; if such Revolver
Advance is to bear interest at the Fixed Rate in accordance with the terms
of Sections 2.6 and 2.7 below, then such Revolver Advance shall be made on
the third Business Day following the date such request is made or deemed to
have been made. The amount of such Revolver Advance shall not be less than
$100,000, subject to the additional restrictions set forth in Section 2.1.1
and Section 2.6.1. Each request for a Revolver Advance shall be deemed a
certification by Borrower that no Default or Event of Default exists or
will be created if the requested Revolver Advance is made. Lender shall
not be obligated to make any Revolver Advance if (i) a Default or Event of
Default exists or will be created if the requested Revolver Advance is
made, or (ii) after making such Revolver Advance, the outstanding aggregate
principal amount of the Loan will exceed the Available Borrowing Base at
such time.
2.2 DISBURSEMENT OF LOAN ON CLOSING DATE. Provided (i) no Default or
Event of Default shall be in existence on the Closing Date and (ii) all of the
terms and conditions set forth in Article IV below shall have been satisfied, on
the Closing Date and subject to the provisions of Section 2.1.1 above, Lender
shall advance to Borrower such amount of the Loan as Borrower shall request.
2.3 INTEREST. Borrower's Obligations shall bear interest computed and
payable as follows:
2.3.1 INTEREST RATE. The principal balance of the Loan outstanding
from time to time shall bear interest at a per annum rate equal to the
Floating Rate in effect from time to time, subject to the LIBOR option in
Section 2.6.
8
2.3.2 INTEREST PAYMENTS. Accrued and unpaid interest on the Principal
Balance of the Loan shall be due and payable monthly in arrears on the
first Business Day of each month, commencing February 1, 1999; provided,
however, that accrued and unpaid interest on each LIBOR Loan shall also be
due and payable in arrears on the last day of the Interest Period
applicable to such LIBOR Loan.
2.3.3 INTEREST COMPUTATION. Interest shall be: (a) computed on the
basis of a year consisting of 360 days and (b) payable for the actual
number of days during the period for which interest is being charged.
2.3.4 MAXIMUM INTEREST. Notwithstanding any provision to the contrary
herein contained, Lender shall not collect a rate of interest on any
obligation or liability due and owing by Borrower to Lender in excess of
the maximum contract rate of interest permitted by applicable law. Lender
and Borrower have agreed that the interest laws of the State of Illinois
shall govern the relationship between them, but in the event of a final
adjudication to the contrary, Borrower shall be obligated to pay to Lender
only such interest as then shall be permitted by the laws of the state
found to govern the contract relationship between Lender and Borrower. All
interest found in excess of that rate of interest allowed and collected by
Lender shall be applied to the Principal Balance in such manner as to
prevent the payment and collection of interest in excess of the rate
permitted by applicable law.
2.4 PRINCIPAL PAYMENTS. The outstanding Principal Balance of the Loan
shall be paid in full not later than the Maturity Date.
2.5 PREPAYMENT.
2.5.1 VOLUNTARY PREPAYMENT. All or a portion of the Principal Balance
of the Loan may be prepaid at any time without premium or penalty, PROVIDED
that Borrower shall also pay, with such prepayment, all Break Costs
incurred by Lender, if any. All prepayments of the Loan pursuant to this
subsection 2.5.1 shall be accompanied by the payment of any accrued and
unpaid interest on the portion of the Principal Balance being prepaid to
the date on which Lender is in receipt of Good Funds, and any other sums
which are due and payable pursuant to the terms of the Loan Documents.
2.5.2 MANDATORY PREPAYMENT. If, as of 3:30 p.m., Chicago time, on any
Business Day, the outstanding Principal Balance of the Loan exceeds the
amount of the Available Borrowing Base on such Business Day then, not later
than 3:00 p.m., Chicago time, on the next Business Day, Borrower shall
either (i) repay the amount of such excess without notice or demand or
(ii) pledge to the Lender collateral, cash or cash equivalents (acceptable
to the Lender) in such amount sufficient to eliminate such excess. Any
payment made pursuant to this subsection 2.5.2 shall be accompanied by
accrued interest on the amount paid through the date on which Lender is in
receipt of Good Funds and in the case of LIBOR Loans, all Break Costs.
Such payment shall first be applied to the Floating Loan and then to the
LIBOR Loans.
9
2.6 LIBOR OPTION.
2.6.1 OPTION. Subject to the provisions of Sections 2.7 and 2.8,
Borrower shall have the option (i) to request that a Revolver Advance be
made at the Fixed Rate rather than the Floating Rate, (ii) to convert at
any time the interest rate charged on all or any part of the Principal
Balance of the Loan from the Floating Rate to a Fixed Rate; or (iii) upon
the expiration of any Interest Period applicable to a LIBOR Loan, to
continue all or any portion of the same as a LIBOR Loan, and the succeeding
Interest Period of such continued LIBOR Loan shall commence on the
expiration date of the Interest Period applicable thereto; PROVIDED, that
no portion of the outstanding Loan may be continued as, or be converted
into, a LIBOR Loan when any Event of Default or Default has occurred and is
continuing. Any Revolver Advance to be made at a Fixed Rate and any
partial conversion of the Loan to a Fixed Rate or continuation of the Loan
at a Fixed Rate under this Section shall be in a minimum amount of
$100,000, and in integral multiples of $100,000 in excess of that amount.
2.6.2 NOTICE PROCEDURE. If Borrower requests that a Revolver Advance
bear interest at the Fixed Rate or if Borrower desires to convert all or a
portion of the Loan to a LIBOR Loan or to continue all or any portion of a
LIBOR Loan as a LIBOR Loan, Borrower shall notify Lender no later than
12:00 p.m. (Chicago time) on the third Business Day prior to the
aforementioned request or the proposed conversion or continuation date.
Each notice shall specify (i) the proposed Revolver Advance disbursement
date or the conversion or continuation date (which shall be a Business
Day), as applicable, (ii) the principal amount of the applicable Revolver
Advance or the principal amount of the Loan to be converted to or continued
as a LIBOR Loan, as applicable, and (iii) the requested Interest Period.
In lieu of delivering the above-described notice, Borrower may give Lender
telephonic notice of any proposed LIBOR Loan or the conversion or
continuation of a LIBOR Loan by the time required under this Section;
PROVIDED, that such notice is confirmed in writing by delivery or fax to
Lender of such notice in no event later than 4:00 p.m. (Chicago time) on
the date of such telephonic notice.
2.6.3 NOTICE IRREVOCABLE. Notice of any proposed LIBOR Loan or of
conversion to a LIBOR Loan or continuation of a LIBOR Loan (or telephonic
notice in lieu thereof) shall be irrevocable and Borrower shall be bound in
accordance with the terms of such notice.
2.6.4 FAILURE TO PROVIDE NOTICE OF CONTINUATION. If notice of the
continuation of a LIBOR Loan is not delivered by Borrower in a timely
manner, the amount of such LIBOR Loan shall bear interest at the Floating
Rate as of the termination date of the applicable Interest Period and shall
no longer bear interest at the Fixed Rate unless it is thereafter converted
to a new LIBOR Loan in the manner described above.
2.7 INTEREST PERIODS. By giving notice as required hereunder, Borrower
shall have the option, subject to the other provisions of this Section, to
specify a one-, two-, three-, four-,
10
five- or six-month interest period (each an "Interest Period") during which
all or a portion of the Loan shall bear (or, if already a LIBOR Loan,
continue to bear) interest at the LIBOR Rate. The determination of Interest
Periods shall be subject to the following provisions:
(a) In the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the
immediately preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on a day which is
not a Business Day, the Interest Period shall be extended to expire on the
next succeeding Business Day (unless the next succeeding Business Day is in
the next calendar month, in which event the Interest Period shall expire on
the immediately preceding Business Day);
(c) Borrower may not select an Interest Period which terminates later
than the Maturity Date;
(d) There shall be no more than four (4) Interest Periods with
respect to the Loan in effect at any one time.
2.8 SPECIAL PROVISIONS GOVERNING LIBOR LOANS.
2.8.1 DETERMINATION OF INTEREST RATE. On the Interest Rate
Determination Date, Lender shall determine (which determination shall,
absent manifest error, be presumptively correct) the Fixed Rate that shall
apply to the subject LIBOR Loan and shall promptly give notice thereof to
Borrower. If on any Interest Rate Determination Date Lender is unable to
obtain the applicable LIBOR Rate quotations, Lender shall give Borrower
prompt notice thereof and such requested LIBOR Loan shall automatically
become a Prime Loan and shall bear interest at the Floating Rate.
2.8.2 INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. If, with
respect to any Interest Period, (i) any change occurs in any applicable law
or governmental rule, regulation or order (or any interpretation thereof
and including the introduction of any new law or governmental rule,
legislation or order) affecting the interbank Eurodollar market for such
Interest Period, or (ii) other circumstances affecting the interbank
Eurodollar market for such Interest Period results in the then applicable
Fixed Rates not adequately reflecting the cost to Lender of making or
funding the LIBOR Loans, Lender shall give notice thereof to Borrower,
whereupon until Lender has determined that the circumstances giving rise to
such inadequacy no longer exist, (A) the right of Borrower to elect to have
any portion of the Loan bear interest based upon the Fixed Rate shall be
suspended for such Interest Period, and (B) each outstanding LIBOR Loan
shall bear interest at the Floating Rate commencing on the last day of the
then current Interest Period therefor, notwithstanding any prior election
by Borrower to the contrary.
2.9 ILLEGALITY. In the event that on any date Lender shall have
reasonably determined that the making or continuation of any LIBOR Loan has
become unlawful by compliance by
11
Lender in good faith with any law, governmental rule, regulation or order of
any Governmental Body, then Lender shall promptly give notice to Borrower of
that determination. Upon the giving of such notice, Borrower's right to
request of Lender and Lender's obligation to make LIBOR Loans shall be
immediately suspended to the extent specified in such notice, and if any
LIBOR Loans are then outstanding, each such LIBOR Loan shall immediately
become a Prime Loan and shall commence bearing interest at the Floating Rate.
If Lender determines at any time following its giving of the aforementioned
notice that Lender may lawfully make LIBOR Loans of the type(s) referred to
in such notice, Lender shall promptly give notice to Borrower of such
determination, whereupon Borrower's right to request of Lender and Lender's
obligation to make LIBOR Loans of such type shall be restored.
2.10 COMPENSATION. Borrower shall indemnify Lender, within five (5)
Business Days following Borrower's receipt of the written statement described
below, for all losses, expenses and liabilities (including, without limitation,
any loss or expense incurred by reason of liquidation or reemployment of
deposits or other funds acquired by Lender to fund or maintain Lender's LIBOR
Loans to Borrower) which Lender may sustain (i) if such LIBOR Loans are not made
when requested due to Borrower's actions or inactions, (ii) if any prepayment of
any LIBOR Loan occurs for any reason on a date which is not the last day of the
applicable Interest Period, or (iii) as a consequence of any required conversion
of the interest rate applicable to a LIBOR Loan to a Floating Rate, (such
losses, expenses and liabilities being collectively referred to as "Break
Costs"). Lender shall promptly deliver to Borrower a written statement as to
such Break Costs, which statement shall be rebuttably presumed correct. The
maximum amount of any indemnification under this Section 2.10 shall not exceed
the interest which would have been payable for the balance of the applicable
Interest Period for the aforesaid LIBOR Loans.
2.11 LIBOR RATE TAXES. Borrower agrees that:
2.11.1 ADDITIONAL PAYMENTS. Borrower shall pay, prior to the date on
which penalties attach thereto, all present and future stamp and other
taxes, levies, or costs and charges whatsoever imposed, assessed, levied or
collected on or in respect of the Loan solely as a result of the interest
rate being determined by reference to the LIBOR Rate or any payments of
principal, interest or other amounts made on or in respect of a Loan made
to Borrower when the interest rate is determined by reference to the LIBOR
Rate (all such taxes, levies, costs and charges being herein collectively
called "LIBOR Rate Taxes"); PROVIDED HOWEVER, that LIBOR Rate Taxes shall
not include income or franchise taxes imposed by any jurisdiction (except
that Borrower shall be liable for the payment of the amount of any
additional net income or franchise taxes attributable to payments made by
Borrower pursuant to this Section).
2.11.2 INDEMNITY. Borrower shall indemnify Lender against, and
reimburse Lender within five (5) days after Lender's written demand for,
any LIBOR Rate Taxes paid by Lender. Lender shall provide Borrower with
appropriate receipts for any payments or reimbursements made by Borrower
pursuant to this Section as a result of the Loan.
12
2.12 DEFAULT RATE. During a Default Period, the Principal Balance shall
bear interest at the Default Rate.
2.13 METHOD OF PAYMENT; GOOD FUNDS. All payments to be made by Borrower
pursuant to the Loan Documents shall be delivered to Lender at 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or to such other address as Lender shall notify
Borrower. Payment shall not be deemed to have been received by Lender until
Lender is in receipt of Good Funds.
2.14 DEPOSIT TO BORROWER'S ACCOUNT. Lender may, at its option, deposit the
proceeds of the Loan into a working capital account maintained by Borrower with
Lender and shall have the right to debit such account (or any other account or
deposit maintained or made by Borrower with Lender) from time to time for any of
Borrower's Obligations that are due and payable.
ARTICLE 3
NOTE AND SECURITY
3.1 NOTE. The Loan shall be evidenced by the Note.
3.2 SECURITY. All Borrower's Obligations shall be secured by the Pledge
Agreement.
ARTICLE 4
CONDITIONS OF FUNDING
Lender's obligation to make any Revolver Advance shall be subject to the
satisfaction of all of the following conditions in a manner, form and substance
reasonably satisfactory to Lender:
4.1 INITIAL ADVANCE. The obligation of the Lender to make the initial
Revolver Advance is, in addition to the conditions precedent specified in
Section 4.2, subject to the following being delivered to Lender, each duly
authorized and executed:
(a) the Loan Documents;
(b) a certificate of the general partner of Borrower, certifying on
the Closing Date:
(i) the certificate of limited partnership of Borrower, certified
by the Secretary of State of the state of organization of Borrower, as
of a date within the month in which the Closing Date occurs; and
(ii) the agreement of limited partnership of Borrower;
13
(c) a certificate of the general partner of each of Prime Group
Operating Partnership and Prime Group Realty Operating Partnership,
certifying on the Closing Date:
(i) the certificate of limited partnership of such partnership,
certified by the Secretary of State of the state of organization of
such partnership, as of a date within the month in which the Closing
Date occurs; and
(ii) the agreement of limited partnership of such partnership;
(d) a certificate of the Secretary or Assistant Secretary of PGLP,
Inc. and The Prime Group, certifying on the Closing Date:
(i) the certificate or articles of incorporation, and all
amendments thereto, of such Person, certified by the Secretary of
State of the state of organization of such Person, as of a date within
the month in which the Closing Date occurs;
(ii) the by-laws, and all amendments thereto, of such Person;
(iii) Copies of the resolutions of such Person approving and
authorizing the execution, delivery and performance by such Person (as
to PGLP, Inc., in its own capacity or in its capacity as managing
general partner of Borrower) of the Loan Documents to be executed or
delivered by it (or, as to PGLP, Inc., by Borrower) hereunder; and
(iv) the names and true signatures of the officers of such
Person authorized to execute, deliver and perform, as applicable, the
Loan Documents to be executed or delivered by it hereunder;
(e) a certificate of existence, as of a date within the month in
which the Closing Date occurs, from the Secretary of State of the state of
organization for each of (i) Borrower, (ii) Prime Retail Operating
Partnership, and (iii) Prime Group Realty Operating Partnership;
(f) a good standing certificate, as of a date within the month in
which the Closing Date occurs, from the Secretary of State of the state of
incorporation for each of (i) PGLP, Inc. and (ii) The Prime Group;
(g) opinions of counsel for Borrower and Guarantor, in form and
substance satisfactory to Lender;
(h) a borrowing base certificate (as described in Section 6.3.4);
14
(i) all filings of Uniform Commercial Code Financing Statements and
all other recordings and actions necessary to perfect and maintain the
Security Interests as first, valid and perfected liens and security
interests in the Collateral shall have been filed or taken and confirmation
thereof received;
(j) all necessary consents under each of (i) the agreement of limited
partnership for the Prime Retail Operating Partnership and the Prime Group
Realty Operating Partnership (the "Partnership Agreements"), and (ii) the
Prime Group Realty Registration Rights Agreement and the Prime Retail
Registration Rights Agreement approving (1) the transactions contemplated
by the Loan Documents, including, but not limited to, the pledge of the
Partnership Units under the Pledge Agreement; (2) the exercise of Lender's
rights hereunder and under the Pledge Agreement upon the occurrence of any
Event of Default; (3) the admission of Lender as a limited partner of the
Prime Retail Operating Partnership and the Prime Group Realty Operating
Partnership upon foreclosure of the Collateral; (4) the exchange of the
Prime Retail Partnership Units for Prime Retail, Inc. Shares, (5) the
exchange of the Prime Group Realty Partnership Units for PGRT Shares,
(6) the registration of such PGRT Shares with the SEC as provided under the
Prime Group Realty Registration Rights Agreement, (7) the registration of
the Prime Retail, Inc. Shares with the SEC as provided under the Prime
Retail Registration Rights Agreement, and (8) the ability of Lender to
become a party to the Prime Retail, Inc. Registration Rights Agreement;
(k) payment of all amounts for fees and expenses owning to Lender
under this Loan Agreement; and
(l) such other instruments, documents, certificates, consents,
waivers and opinions necessary to consummate the transactions contemplated
in this Loan Agreement and in the other Loan Documents, or as Lender may
reasonably request.
4.2 ALL REVOLVER ADVANCES. The obligation of Lender to make any Revolver
Advance is subject to the following further conditions precedent that:
4.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Borrower and Guarantor, as the case may be, set forth in this
Loan Agreement and the other Loan Documents shall be true and correct in
all material respects as of the date such Revolver Advance is made, except
for any representation or warranty limited by its terms to a specific date
and taking into account any disclosures made in writing pursuant to the
terms of this Loan Agreement.
4.2.2 PERFORMANCE; NO DEFAULT. Borrower shall have performed and
complied with all agreements and conditions contained in the Loan Documents
to be performed by or complied with prior to such Revolver Advance and no
Event of Default of Default then exists.
15
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as follows:
5.1 BORROWER. Borrower is a limited partnership duly formed and validly
existing under the laws of the State of Illinois. The Borrower is duly
qualified in each jurisdiction in which the failure to so qualify could have
a Material Adverse Effect on Borrower. The Borrower has full power and
authority to execute and deliver the Loan Documents and to perform its
obligations hereunder and thereunder. The agreement of limited partnership
of Borrower, as amended, a copy of which has been furnished to Lender, is
true, correct and complete.
5.2 PARTNERS OF BORROWER. The managing general partner of Borrower is
PGLP, Inc. and the limited partners of Borrower are Prime Group II, L.P., an
Illinois limited partnership, Prime Group Limited Partnership, an Illinois
limited partnership, The Prime Group, and Prime International, Inc., an
Illinois corporation. PGLP, Inc. is a duly formed corporation, validly
existing and in good standing in the State of Illinois and qualified to do
business in each jurisdiction in which failure to do so would have a Material
Adverse Effect on PGLP, Inc.
5.3 AUTHORITY. No consent or approval of, or other action by, any
partner, Governmental Body or any other Person, which has not already been
obtained, is required to be obtained by Borrower to authorize, or is required
to be obtained by Borrower in connection with the execution, delivery and
performance of, the Loan Documents, or is required as a condition to the
validity or, subject to the terms of the Partnership Agreements,
enforceability of the Security Interests or any of the Loan Documents.
5.4 NECESSARY ASSETS. Borrower owns all of the assets necessary to
operate and maintain the operations of the Business.
5.5 BINDING AGREEMENTS. This Loan Agreement and the other Loan
Documents, when executed and delivered, will constitute the valid and legally
binding obligations of Borrower, and will be enforceable against Borrower in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
equitable principles.
5.6 BORROWER'S SECURITIES. As of the Closing Date, Borrower owns
3,576,933 Brookdale Shares, 104,632 Prime Retail Partnership Units, 115,000
AIMCO Shares, and 47,525 Prime Group Realty Partnership Units (collectively,
the "Borrower's Securities").
5.7 TITLE TO PROPERTY; LIENS. Borrower shall have good and marketable
title to all of the Collateral free and clear of all Liens. The applicable
Loan Documents create a valid and perfected Lien in the Collateral described
therein.
16
5.8 FINANCIAL STATEMENTS. The financial statements previously delivered to
Lender present fairly the financial condition and the results of the operations
of Borrower and Guarantor as of the dates and for the periods indicated therein.
5.9 LITIGATION. To the knowledge of Borrower, there are no actions, suits,
arbitration proceedings or claims pending or threatened at law or in equity or
before any Governmental Body which, if adversely determined, could have a
Material Adverse Effect on Borrower or Guarantor. As of the Closing Date, to
the knowledge of Borrower, there are no proceedings pending or threatened which
call into question the validity or enforceability of any of this Loan Agreement
or the other Loan Documents or any of the transactions contemplated hereby or
thereby.
5.10 CONFLICTING AGREEMENTS. Borrower is not in default under any
agreement to which it is a party or by which Borrower or any of its Property is
bound, the effect of which default has resulted in the termination of such
agreement and such termination will have a Material Adverse Effect on Borrower.
No authorization or approval or other action by, and no notice to or filing
with, any Governmental Body which has not been obtained, given or made by
Borrower is required for the due execution, delivery and performance by Borrower
of any of the Loan Documents. No provision of any mortgage, indenture, contract
or agreement to which Borrower is a party conflicts with, or requires any
consent which has not already been obtained or is anticipated to be obtained as
described above, or in any way would prevent the execution, delivery or
performance of the terms of, any of the Loan Documents. Neither the execution,
delivery, or carrying out of the terms of the Loan Documents will constitute a
default under, or result in the creation or imposition of, or obligation to
create, any Lien upon the Property of Borrower pursuant to the terms of any such
mortgage, indenture, contract or agreement. Neither the execution and deliver
by Borrower of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on Borrower, except where such violation could not reasonably be
expected to have a Material Adverse Effect.
5.11 COMPLIANCE WITH APPLICABLE LAWS. Borrower is not in default in
respect of any judgment, order, writ, injunction, decree or decision of any
Governmental Body, which default would have a Material Adverse Effect on
Borrower. Borrower is in compliance in all material respects with all
applicable statutes and regulations of all Governmental Bodies, a violation of
which would have a Material Adverse Effect on Borrower.
5.12 APPLICATION OF CERTAIN LAWS AND REGULATIONS.
5.12.1 INVESTMENT COMPANY ACT. Borrower is not an "investment
company," or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.12.2 HOLDING COMPANY ACT. Borrower is not a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company"
17
or of a "subsidiary company" of a "holding company," as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended.
5.13 MARGIN REGULATIONS. None of the transactions contemplated by this
Loan Agreement or any of the other Loan Documents, including the use of proceeds
of the Loan, will violate or result in a violation of Section 7 of the Exchange
Act, or any regulations issued pursuant thereto, including, without limitation,
Regulations T, U and X.
5.14 NO MISREPRESENTATION. To Borrower's knowledge, no representation or
warranty contained herein and no certificate, information or report furnished or
to be furnished by Borrower in connection with any of the Loan Documents or any
of the transactions contemplated hereby or thereby contains or will contain a
misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements contained herein or
therein not misleading in the light of the circumstances under which such
statements were made. To Borrower's knowledge, there is no fact which has not
expressly been disclosed to Lender in writing, or so far as Borrower reasonably
can foresee, that will have a Material Adverse Effect on Borrower or Guarantor.
5.15 NO AFFILIATION. Borrower and AIMCO are not "affiliates" as that term
is defined in the Securities Act of 1933, as amended.
5.16 REGISTRATION EFFECTIVE. The Prime Retail, Inc. Registration
Statement, with respect to the Prime Retail, Inc. Shares issuable upon
conversion of the Prime Retail Partnership Units, has been declared effective
under the Securities Act of 1933, as amended, and to Borrower's knowledge, no
"stop order" suspending the effectiveness of the Prime Retail, Inc.
Registration Statement has been issued, nor has any proceeding for the
issuance of such an order been initiated or threatened.
ARTICLE 6
AFFIRMATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full,
Borrower agrees:
6.1 LEGAL EXISTENCE; GOOD STANDING. Borrower shall maintain its existence
in its jurisdiction of organization and maintain its qualification in any
jurisdiction in which failure to be so qualified would have a Material Adverse
Effect. The Guarantor shall maintain its existence and remain in good standing
in its jurisdiction of incorporation and in any jurisdiction in which failure to
be so qualified would have a Material Adverse Effect.
6.2 INSPECTION. Borrower will permit representatives of Lender to visit
its offices to examine its books and records and Accountants' reports relating
thereto, and to make copies or extracts therefrom, and to discuss its business
and affairs with its employees, all at reasonable times, upon reasonable prior
notice, and, at all reasonable times and upon reasonable prior notice,
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to examine and inspect its Property and to meet and discuss the business and
its affairs with the Accountants.
6.3 FINANCIAL STATEMENTS AND OTHER INFORMATION OF BORROWER. Borrower will
maintain a system of accounting in accordance with GAAP and furnish to Lender:
6.3.1 ANNUAL STATEMENTS. As soon as available and in any event within
120 days after the close of each fiscal year, a copy of (a) the balance
sheet of Borrower as of the end of such year, and (b) the statements of
income and cash flow of Borrower for such year, setting forth in each case
(beginning with the 1998 financial statements) in comparative form the
corresponding figures for the preceding year, all in reasonable detail, and
in each case audited by the Accountants. Such annual statements shall be
accompanied by a report of the Accountants which states that in making the
audit of the financial statements of Borrower, nothing of a financial or
accounting nature came to the attention of the Accountants that caused them
to believe that Borrower was not in compliance with the terms, covenants,
provisions, or conditions of any of the Loan Documents or that there shall
have occurred a condition or event that constitutes an Event of Default
(or, if applicable, specifying in such certificate the nature and status of
any instances of non-compliance or Events of Default), and which is
otherwise in a form reasonably satisfactory to Lender.
6.3.2 NOTICE OF DEFAULTS; LOSS. Immediate written notice if: (i) any
Indebtedness aggregating in excess of $3,000,000 of Borrower or Guarantor
is declared or shall become due and payable prior to its declared or stated
maturity (other than regularly scheduled payments), or called and not paid
when due, (ii) the holder of any note, or other evidence of Indebtedness,
certificate or security evidencing any such Indebtedness aggregating in
excess of $3,000,000 of Borrower or Guarantor has the right to declare such
Indebtedness due and payable prior to its stated maturity, (iii) there
shall occur and be continuing a Default or Event of Default, accompanied by
a certified statement of an authorized officer of PGLP, Inc., as managing
general partner of Borrower, or an authorized officer of Guarantor setting
forth what action Borrower or Guarantor, as the case may be, proposes to
take in respect thereof, or (iv) any event shall occur causing loss or
depreciation in the value of assets having a Material Adverse Effect upon
the business or operations of Borrower or Guarantor, including the amount
or the estimated amount of any such loss or depreciation or adverse effect.
6.3.3 NOTICE OF SUITS, ADVERSE EVENTS. Prompt written notice of: (i)
any citation, summons, subpoena, order to show cause or other order naming
Borrower or Guarantor a party to any proceeding involving in excess of
$3,000,000 and include with such notice a copy of such citation, summons,
subpoena, order to show cause or other order, (ii) any lapse or other
termination of any material license, permit, franchise, agreement or other
authorization issued to Borrower or Guarantor by any Governmental Body or
any other Person, (iii) any refusal by any Governmental Body or any other
Person to renew or extend any such material license, permit, franchise,
agreement or other authorization and (iv) any dispute between Borrower or
Guarantor and any
19
Governmental Body or any other Person, which lapse, termination, refusal
or dispute referred to in clauses (ii) or (iii) above or in this
clause (iv) may have a material adverse effect on the financial
condition, operations, business, prospects or Property of Borrower or
Guarantor.
6.3.4 COVENANT COMPLIANCE CERTIFICATE; BORROWING BASE CERTIFICATE. On
or before the 20th day after the end of each calendar quarter, a compliance
certificate in a form reasonably satisfactory to Lender stating whether
Borrower is in compliance with the terms, covenants, provisions and
conditions of the Loan Documents and specifying any condition or event that
constitutes an Event of Default set forth in Article 8 hereof, together
with any supporting documentation reasonably requested by Lender. On the
date of each requested Revolver Advance, and on or before the 5th day after
the end of each month, a borrowing base certificate in a form reasonably
satisfactory to Lender setting forth the calculation of the Available
Borrowing Base as of the close of business of the business day immediately
preceding the date of such Revolver Advance or as of the end of the
preceding month, as applicable.
6.3.5 OTHER INFORMATION. Such other information and reports relating
to the past, present or future financial condition, operations, plans and
projections of Borrower as Lender reasonably may request from time to time.
6.4 FINANCIAL INFORMATION OF PRIME RETAIL, INC. AND PGRT. Borrower shall
furnish to the Bank:
6.4.1 as soon as available, but in no event more than five (5)
Business Days after request by Lender, a copy of each quarterly report on
Form 10-Q filed by Prime Retail, Inc., PGRT, Brookdale and AIMCO with the
SEC;
6.4.2 as soon as available, but in no event more than five (5)
Business Days after request by Lender, a copy of any annual report on
Form 10-K filed by Prime Retail, Inc., PGRT, Brookdale or AIMCO with the
SEC.
6.4.3 as soon as available, but in any event no more than five (5)
Business Days after request by Lender, any other report filed by Prime
Retail, Inc., PGRT, Brookdale or AIMCO with the SEC under Section 13 of the
Exchange Act, and any definitive proxy material filed by such Person with
the SEC under Section 14 of the Exchange Act.
6.5 REPORTS TO GOVERNMENTAL BODIES AND OTHER PERSONS. Borrower will file,
all on a timely basis, all reports, applications, documents, instruments and
information required to be filed pursuant to all rules, regulations or requests
of any Governmental Body or other Person having jurisdiction over the operation
of Borrower, including, but not limited to, such of the Loan Documents as may be
required to be filed with any such Governmental Body or other Person pursuant to
applicable rules and regulations promulgated by such Governmental Body or other
Person, unless the failure to file would not reasonably be expected to have a
Material Adverse Effect.
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6.6 GENERAL PARTNER. PGLP, Inc. or a "Prime Group Entity" at all times
shall remain the general partner of Borrower. As used herein, a "Prime Group
Entity" shall mean (i) PGLP, Inc., (ii) The Prime Group, (iii) any person in
which The Prime Group or PGLP, Inc. has a beneficial ownership of 51% or more of
the voting interests in such person, (iv) any entity controlling, controlled by
or under common control with, The Prime Group or PGLP, Inc., or (v) any entity
in which The Prime Group or PGLP, Inc., or officers, directors and employees of
The Prime Group or PGLP, Inc. own, directly or indirectly, a controlling
interest.
6.7 FINANCIAL STATEMENTS OF GUARANTOR. Borrower will cause Guarantor to
furnish to Lender as soon as available and in any event within 180 days after
the close of each fiscal year, a copy of Guarantor's (a) balance sheet as of the
end of such year, and (b) statements of income and cash flow for such year,
setting forth in each case (beginning with the 1998 financial statements) in
comparative form the corresponding figures for the preceding year, all in
reasonable detail, and in each case audited by the Accountants.
ARTICLE 7
NEGATIVE COVENANTS
Borrower shall not:
7.1 Engage in any business other than the Business or otherwise materially
change the nature of the Business of Borrower as it exists on the Closing Date.
7.2 Amend, modify or waive any term or provision of Borrower's certificate
of limited partnership or agreement of limited partnership in a manner that
would have a Material Adverse Effect.
7.3 Sell, lease, assign, transfer, pledge, hypothecate or otherwise
dispose of or grant any security interest in any of Borrower's Securities
pledged as Collateral, except as permitted by Section 5.7.
7.4 Consent to any alteration or modification of any provision affecting
the Partnership Units, which alteration or modification would have a Material
Adverse Effect.
ARTICLE 8
DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default under the Loan Documents:
21
8.1.1 DEFAULT IN PAYMENT. If Borrower shall fail to pay all or any
portion of Borrower's Obligations on or before the fifth Business Day
following the date on which the same become due and payable.
8.1.2 BREACH OF COVENANTS AND CERTAIN OTHER PROVISIONS.
(a) If Borrower shall fail to observe or perform any covenant or
agreement made by Borrower contained in Article VI (except for Sections 6.1
and 6.5) or in Article VII.
(b) If Borrower shall fail to observe or perform any covenant or
agreement (other than those referred to in subparagraph (a) above) made by
Borrower in any of the Loan Documents, and such failure shall continue for
a period of 30 days after the earlier of (i) the written notice of such
failure is given to Borrower by Lender or (ii) the date Borrower shall have
actual knowledge of such failure; PROVIDED, HOWEVER, that if such default
is of a nature that it cannot be cured within thirty (30) days and Borrower
commences and diligently proceeds to cure such default, such cure period
shall be extended for such period of time as required to cure such default
but in no event more than thirty (30) additional days.
(c) Any alterations, modifications or amendments are made to the
certificate or articles of incorporation of either Prime Retail, Inc. or
PGRT or to any other agreement that would adversely alter in any material
manner the rights afforded to holders of Collateral consisting of (i) Prime
Retail Partnership Units in the Second Amended and Restated Agreement of
Limited Partnership of Prime Retail, L.P., as further amended, or (ii)
Prime Group Realty Partnership Units in the Amended and Restated Agreement
of Limited Partnership of Prime Group Realty, L.P., as further amended, to
convert such Partnership Units into Prime Shares.
8.1.3 BREACH OF WARRANTY. Any representation or warranty made by
Borrower or Guarantor in or pursuant to any of the Loan Documents to which
Borrower or Guarantor is a party or in any instrument or document
furnished in compliance with the Loan Documents shall prove to be false or
misleading in any material respect as of the date on which made.
8.1.4 ACCELERATION OF ANY INDEBTEDNESS. If Borrower or Guarantor at
any time shall be in default (as principal or guarantor or other surety) in
the payment of any principal of or premium or interest on any Indebtedness
for Borrowed Money in excess of $3,000,000 (other than Borrower's
Obligations) and in each case such default has resulted in an acceleration
of the maturity of such Indebtedness for Borrowed Money which is not paid
promptly upon acceleration.
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8.1.5 BANKRUPTCY.
(a) If Borrower or Guarantor or, to the extent, and for so long as,
the shares or limited partnership units of such Person (or, in the case of
Prime Retail, Inc. and PGRT, shares of limited partnership units that are
exchangeable into shares of such Person) have been pledged to Lender as
security for the Loan, the Prime Retail Operating Partnership, the Prime
Group Realty Operating Partnership, Prime Retail, Inc., PGRT, Brookdale or
AIMCO shall (i) generally not be paying, or admit in writing its inability
to pay, its debts as they become due, (ii) file, or consent, by answer or
otherwise, to the filing against any of such entities, of a petition for
relief or reorganization or arrangement or any other petition in bankruptcy
or insolvency under the laws of any jurisdiction, (iii) make an assignment
for the benefit of creditors, (iv) consent to the appointment of a
custodian, receiver, trustee or other officer with similar powers for, or
for any substantial part of the Property owned by any of such entities, (v)
be adjudicated insolvent, or (vi) take a corporate action to authorize any
of the foregoing.
(b) If any Governmental Body of competent jurisdiction shall enter an
order appointing, without consent of Borrower or Guarantor or, to the
extent, and for so long as, the shares or limited partnership units of such
Person (or, in the case of Prime Retail, Inc. and PGRT, shares of limited
partnership units that are exchangeable into shares of such Person) have
been pledged to Lender as security for the Loan, the Prime Retail Operating
Partnership, the Prime Group Realty Operating Partnership, Prime Retail,
Inc., PGRT, Brookdale or AIMCO, a custodian, receiver, trustee or other
officer with similar powers with respect to any of such Persons, or with
respect to any substantial part of the Property belonging to Borrower or
such Person, or if an order for relief shall be entered in any case or
proceeding for liquidation or reorganization or otherwise to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of any of such entities, or if any
petition for any such relief shall be filed against any of such entities
and such order or petition shall not be dismissed within 90 days.
8.1.6 JUDGMENTS. If there shall exist final judgments against
Borrower or Guarantor which shall have been outstanding for any period of
30 days or more from the date of the entry thereof and shall not have been
discharged in full or stayed pending appeal and if the aggregate amount
thereof exceeds $3,000,000.
8.1.7 NON-PERFORMANCE OF GUARANTY, ETC. Guarantor shall fail (subject
to any applicable notice, cure or grace period) to comply with or to
perform in any material respect any covenant set forth in the Guaranty,
Guarantor (or any Person by, through or on behalf of Guarantor) shall
contest in any manner the validity, binding nature or enforceability of the
Guaranty, or the Guaranty shall cease to be in full force and effect.
8.1.8 INVALIDITY OF PLEDGE AGREEMENT, ETC. The Pledge Agreement shall
cease to be in full force and effect, any party thereto (other than Lender)
shall fail (subject to any applicable notice, cure or grace period) to
comply with or to perform in any material
23
respect any applicable provision of the Pledge Agreement promptly
upon request of the Lender (or, if such noncompliance or nonperformance
would result in the non-perfection of a material portion of the
Collateral granted to the Lender under the Pledge Agreement, at any
time regardless of whether the Lender has made any such request), or
any Person (other than the Lender) party to the Pledge Agreement (or
any Person by, through or on behalf of such Person party thereto)
shall contest in any manner the validity, binding nature of
enforceability of the Pledge Agreement, as applicable.
8.2 ACCELERATION OF BORROWER'S OBLIGATIONS. Upon the occurrence of:
(a) any Event of Default described in clauses (ii), (iii), (iv) and
(v) of subsection 8.1.5(a) or described in Section 8.1.5(b), all of
Borrower's Obligations at that time outstanding automatically shall mature
and become due and payable and Borrower's right to request additional
Revolver Advances shall immediately terminate, or
(b) any other Event of Default, Lender, at any time, (unless such
Event of Default shall have been cured by Borrower or waived by Lender) at
its option, may declare all of Borrower's Obligations due and payable,
whereupon Borrower's Obligations immediately shall mature and become due
and payable and Borrower's right to request additional Revolver Advances
shall immediately terminate,
all without presentment, demand, protest, or notice, all of which hereby are
waived.
8.3 REMEDIES ON DEFAULT. If any of Borrower's Obligations have been
accelerated pursuant to Section 8.2, Lender, at its option, may:
8.3.1 ENFORCEMENT OF SECURITY INTERESTS. Enforce its rights and
remedies under the Loan Documents in accordance with their respective
terms.
8.3.2 OTHER REMEDIES. Enforce any of the rights or remedies granted
to Lender under any other Loan Document and any other rights or remedies
accorded to Lender at equity or law, by virtue of statute or otherwise.
8.4 APPLICATION OF FUNDS. Any funds received by Lender pursuant to the
exercise of any rights accorded to Lender pursuant to, or by the operation of
any of the terms of, any of the Loan Documents, including, without limitation,
insurance proceeds, condemnation proceeds or proceeds from the sale of
Collateral, shall be applied by Lender in the following order of priority:
8.4.1 EXPENSES. First, to the payment of (i) all fees and expenses,
including, without limitation, reasonable attorney's fees, court costs,
fees of appraisers, title charges, costs of maintaining and preserving the
Collateral, costs of sale, and all other costs incurred by the Lender in
exercising any rights accorded to the Lender pursuant to the Loan Documents
or by applicable law and (ii) all Liens superior to the Liens of Lender,
except such superior Liens subject to which any sale of the Collateral may
have been made;
24
8.4.2 BORROWER'S OBLIGATIONS. Next to the payment of Borrower's
Obligations in such order as Lender may determine; and
8.4.3 SURPLUS. Any surplus, to the Person or Persons entitled
thereto.
ARTICLE 9
CLOSING
The closing of the Loan (the "Closing") shall be on the date hereof (the
"Closing Date"), and the Closing shall take place on such date provided all
conditions for the Closing as set forth in this Loan Agreement have been
satisfied. The Closing shall occur at such place as the parties hereto shall
agree.
ARTICLE 10
EXPENSES AND INDEMNITY
10.1 CLOSING FEE. The Borrower shall pay to Lender on the Closing Date
hereof the sum of $250,000, which may be paid out of Borrower's initial
borrowing under the Loan.
10.2 ATTORNEY'S FEES AND OTHER FEES AND EXPENSES. Whether or not any of
the transactions contemplated by this Loan Agreement shall be consummated,
Borrower agrees to pay to Lender on demand all fees paid or expenses incurred
by Lender in connection with the transactions contemplated hereby and in
connection with any amendments, modifications or waivers (whether or not the
same become effective) under or in respect of any of the Loan Documents,
including, without limitation:
10.2.1 FEES AND EXPENSES FOR PREPARATION OF LOAN DOCUMENTS. All
reasonable fees, expenses and disbursements (including without limitation,
charges for required lien searches, reproduction of documents, long
distance telephone calls and overnight express carriers) of counsel
retained by Lender in connection with the preparation and negotiation of
any of the Loan Documents or any amendments, modifications or waivers
hereto or thereto (whether or not the same become effective).
10.2.2 FEES AND EXPENSES IN ENFORCEMENT OF RIGHTS OR DEFENSE OF LOAN
DOCUMENTS. Any reasonable attorneys' fees and expenses or other costs or
expenses incurred by Lender in connection with the enforcement or
collection against Borrower or Guarantor of any provision of any of the
Loan Documents, and in connection with or arising out of any litigation,
investigation or proceeding instituted by any Governmental Body or any
other Person with respect to any of the Loan Documents, whether or not suit
is instituted, including, but not limited to, such costs or expenses
arising from the enforcement or collection against Borrower, of any
provision of any of the Loan Documents in any state or federal bankruptcy
or reorganization proceeding.
25
10.3 INDEMNITY. Borrower hereby agrees to indemnify and save Lender
harmless from the following:
10.3.1 BROKERAGE FEES. The fees, if any, of brokers and finders
incurred by Borrower.
10.3.2 OPERATION OF COLLATERAL; JOINT VENTURERS. Any loss, cost,
liability, damage or expense (including reasonable attorneys' fees and
expenses) incurred in connection with the ownership, operation or
maintenance of the Collateral, the construction of Lender and Borrower as
having the relationship of joint venturers or partners or the determination
that Lender or Borrower has acted as agent for the other.
ARTICLE 11
MISCELLANEOUS
11.1 NOTICES. Any notices, communications and waivers under this Loan
Agreement shall be in writing and shall be (i) delivered in person, (ii) mailed,
postage prepaid, either by registered or certified mail, return receipt
requested, (iii) by overnight express carrier, or (iv) by facsimile
transmission, addressed in each case as follows:
To Lender: LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxx
Facsimile No.: (000)000-0000
With copy to: Schwartz, Cooper, Xxxxxxxxxxx & Xxxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
To Borrower: Prime Group VI, L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000 (Suite 4200 after February 1, 1999)
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000)000-0000
26
With copies to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000)000-0000
And to: The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000)000-0000
or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this Section shall be deemed received (i) if personally
delivered, then on the date of delivery, (ii) if sent by overnight, express
carrier, then on the next federal banking day immediately following the day
sent, (iii) if sent by registered or certified mail, then on the earlier of the
third federal banking day following the day sent or when actually received, or
(iv) if sent by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received.
11.2 SURVIVAL OF LOAN AGREEMENT. All covenants, agreements,
representations and warranties made in this Loan Agreement and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loan and the execution and delivery to Lender of the Note and of all other Loan
Documents and shall continue in full force and effect so long as any of
Borrower's Obligations remain outstanding, unperformed or unpaid.
11.3 FURTHER ASSURANCE. From time to time, Borrower shall execute and
deliver to Lender such additional documents as Lender may require to carry out
the purposes of the Loan Documents and to protect Lender's rights thereunder.
11.4 TAXES AND FEES. Should any tax (other than taxes based upon the net
income of Lender), recording or filing fees become payable in respect of any of
the Loan Documents, or any amendment, modification or supplement thereto,
Borrower agrees to pay the same to Lender promptly after demand, but in no event
after 15 Business Days from the date of demand, together with any interest or
penalties thereon and agrees to hold Lender harmless with respect thereto.
11.5 SEVERABILITY. In the event that any provision of this Loan Agreement
is deemed to be invalid by reason of the operation of law, or by reason of the
interpretation placed thereon by any administrative agency or any court, this
Loan Agreement shall be construed as not containing such provision, and the
invalidity of such provision shall not affect the validity of any other
provisions hereof, and any and all other provisions hereof which otherwise are
lawful and valid shall remain in full force and effect.
27
11.6 WAIVER. No delay on the part of Lender in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, and no single or
partial exercise of any right, power or privilege hereunder shall preclude other
or further exercise thereof, or be deemed to establish a custom or course of
dealing or performance between the parties hereto, or preclude the exercise of
any other right, power or privilege.
11.7 MODIFICATION OF LOAN DOCUMENTS. No modification or waiver of any
provision of any of the Loan Documents shall be effective unless the same shall
be in writing, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on Borrower in any case shall entitle Borrower to any other or further notice or
demand in the same, similar or other circumstances.
11.8 CAPTIONS. The headings in this Loan Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
11.9 SALE OF INTEREST. Borrower may not sell, assign or transfer this Loan
Agreement or any portion thereof, including, without limitation, Borrower's
right, title, interest, remedies, powers, and/or duties hereunder or thereunder.
Borrower hereby consents to Lender's sale, assignment, transfer or other
disposition of this Loan Agreement or of any portion hereof or thereof, at any
time or times after an Event of Default has occurred, including, without
limitation, Lender's right, title, interest, remedies, powers, and/or duties
hereunder or thereunder. Borrower hereby consents to Lender's participation of
this Loan Agreement at any time prior to an Event of Default so long as Lender
retains at least a 50% participating interest in this Loan Agreement. Borrower
acknowledges and agrees that any and all such assignees or participants may be
provided with information concerning Borrower, its operations, business and
financial condition and this Loan Agreement which have been or would be provided
to Lender.
11.10 SUCCESSORS AND ASSIGNS. This Loan Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
11.11 REMEDIES CUMULATIVE. All rights and remedies of Lender pursuant to
this Loan Agreement, any other Loan Documents or otherwise, shall be cumulative
and non-exclusive, and may be exercised singularly or concurrently. One or more
successive actions may be brought against Borrower as often as Lender deems
advisable, until all of Borrower's Obligations are paid and performed in full.
11.12 ENTIRE AGREEMENT. This Loan Agreement and the other Loan Documents
executed prior or pursuant hereto constitute the entire agreement between the
parties hereto with respect to the transactions contemplated hereby or thereby
and supersede any prior agreements, whether written or oral, relating to the
subject matter hereof.
11.13 APPLICABLE LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS AND
28
DECISIONS OF THE STATE OF ILLINOIS (OTHER THAN CHOICE OF LAW PROVISIONS),
UNLESS OTHERWISE PROVIDED THEREIN.
11.14 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL ACTIONS OR
PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THE
LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT COURT OF XXXX COUNTY, ILLINOIS,
OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS OR, IF
LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH
ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. BORROWER HEREBY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED BY LENDER IN ANY OF SUCH COURTS. BORROWER WAIVES ANY CLAIM THAT
CHICAGO, ILLINOIS OR THE NORTHERN DISTRICT OF ILLINOIS IS AN INCONVENIENT FORUM
OR AN IMPROPER FORUM BASED ON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM FOR
BORROWER SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT, BY LENDER, OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE
TAKING, BY LENDER, OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION.
11.15 WAIVER OF RIGHT TO JURY TRIAL. LENDER AND BORROWER ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE LOAN DOCUMENTS OR
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD BE BASED UPON
DIFFICULT AND COMPLEX ISSUES AND THEREFORE, THE PARTIES AGREE THAT ANY COURT
PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
11.16 NON-RECOURSE. Notwithstanding anything to the contrary contained
herein, Lender agrees that no limited partner, agent, director, officer or
employee of Borrower shall be personally liable to Lender for the payment of the
Loan or performance of any of Borrower's Obligations or any other obligations
hereunder, under the Note or under any of the other Loan Documents, or with
respect to the Loan, and recourse hereunder, under the Note and under any other
Loan Documents (including, without limitation, with respect to the
representations and warranties contained herein or therein) shall be limited to
the Collateral. It is understood that the preceding sentence shall not (i) in
the event of any malfeasance, such as fraud, misappropriation of funds or
intentional misrepresentation, estop Lender from instituting or prosecuting a
legal action or proceeding or otherwise making a claim against the Person or
Persons committing such malfeasance, or (ii) constitute a waiver, release or
discharge of any of Borrower's Obligations, and the same shall continue until
paid or discharged in full.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
29
This Loan Agreement has been executed and delivered by each of the parties
hereto by a duly authorized officer of each such party on the date first set
forth above.
PRIME GROUP VI, L.P., an Illinois limited partnership
By: PGLP, Inc., an Illinois corporation, as managing
general partner
By: /s/ XXXXXX X. XXXXXX
---------------------------------------------
Name: XXXXXX X. XXXXXX
-------------------------------------------
Title: VICE PRESIDENT
------------------------------------------
LASALLE NATIONAL BANK, a national banking association
By: /s/ XXXX X. XXXX
--------------------------------------------------
Name: XXXX X. XXXX
------------------------------------------------
Title: FIRST VICE PRESIDENT
-----------------------------------------------
EXHIBIT A
FORM OF GUARANTY
EXHIBIT B
FORM OF NOTE
EXHIBIT C
FORM OF PLEDGE AGREEMENT
