EXHIBIT 10.78

 

 

 

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

DATED AS OF DECEMBER 29, 2006

 

by and between

 

PGRT EQUITY, LLC,

as Holder,

 

and

 

CONTINENTAL TOWERS, L.L.C.,

 

as Borrower

 

SECURED BY CONTINENTAL TOWERS, ROLLING MEADOWS, ILLINOIS

 

 

TABLE OF CONTENTS

Page

 

i

ARTICLE I GENERAL PROVISIONS

3

 

1.1

Definition of Terms.

3

 

1.2

Other Terms..

8

 

1.3

Construction and Interpretation

8

 

1.4

Incorporation of Recitals..

8

 

1.5

Conditions Precedent.

8

ARTICLE II LOAN

9

 

2.1

Loan

9

 

2.2

Note.

9

 

2.3

Interest..

9

 

2.4

Security for the Loan.

9

 

2.5

Release.

10

 

2.6

Costs and Expenses.

10

ARTICLE III PAYMENTS

10

 

3.1

Basic Payments.

10

 

3.2

Maturity Date..

10

 

3.3

Payment of Adjusted Net Operating Income.

10

 

3.4

Application of Adjusted Net Operating Income.

11

 

3.5

Application Upon Event of Default

11

ARTICLE IV REPRESENTATIONS AND WARRANTIES

11

 

4.1

Representations and Warranties.

11

 

4.2

Tenant In Common Agreement.

12

 

4.3

Securities Laws Compliance.

12

 

4.4

Continuance of Representations and Warranties..

12

ARTICLE V COVENANTS

12

 

5.1

Payment and Performance.

12

 

5.3

Leasing Guidelines.

13

 

5.4

Management and Contracts

13

 

5.5

Books and Records.

13

 

5.6

Special Undertaking

14

 

5.7

Financial Statements and Reports

14

 

5.8

Tenant In Common Agreement.

14

 

5.9

Rent Account Arrangements.

14

ARTICLE VI EVENTS OF DEFAULT

15

 

6.1

Event of Default.

15

 

6.2

Notice to Holder

16

 

6.3

Rights of and Limitations on Holder.

16

 

6.4

Rights Cumulative.

16

 

6.5

Holder Performance of Obligations

17

 

6.6

Grace Periods.

17

ARTICLE VII REAFFIRMATION

18

 

ii

 

7.1

Reaffirmation

18

ARTICLE VIII MISCELLANEOUS

18

 

8.1

Approvals To Be In Writing

18

 

8.2

Governing Law.

18

 

8.3

Indemnification Against Commissions..

18

 

8.4

Notices.

18

 

8.5

Assignability.

19

 

8.6

Binding Effect.

19

 

8.7

Severability.

19

 

8.8

Time of the Essence..

19

 

8.9

Survival.

19

 

8.10

No Joint Venture: Indemnity.

19

 

8.11

Conflict.

20

 

8.12

Contribution Among Borrowers.

20

 

8.13

Joint and Several

20

 

8.15

Exculpation of Controlling Entities.

20

 

iii

iv

THIRD AMENDED AND RESTATED LOAN AGREEMENT

 

THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT is made and entered into as of
December 29, 2006 (the “Effective Date”), by and between CONTINENTAL TOWERS,
L.L.C., a Delaware limited liability company, whose mailing address is c/o CTA
General Partner, L.L.C., 77 W. Wacker Drive, Suite 3900, Chicago, IL 60601
(“Borrower”) and PGRT EQUITY, L.L.C., a Delaware limited liability company,
whose mailing address is 77 W. Wacker Drive, Suite 3900, Chicago, IL 60601
(“Holder”).

RECITALS

A.

American National Bank And Trust Company Of Chicago, a national banking
association, not personally but solely as Trustee under Trust Agreement dated
July 26, 1977 and known as Trust No. 40935 (“Original Borrower”), Continental
Towers Associates-I, L.P. (“CTAI”), Richard A. Heise, Roland E. Casati, the
Casati-Heise Partnership and General Electric Capital Corporation (“Original
Lender”) executed and delivered that certain Loan Modification and Amended and
Restated Loan Agreement dated as of June 1, 1995 and recorded August 17, 1995 as
Document Number 95545031, as amended by that certain First Amendment to Loan
Modification and Amended and Restated Loan Agreement dated as of December 12,
1997 and recorded December 17, 1997 as Document Number 97947240 and as amended
and restated by that certain Second Amended and Restated Loan Agreement dated as
of November 21, 2006 executed by Borrower and Continental Towers Associates III,
LLC (“CTAIII”) (as so amended, the “Original Loan Agreement”) relating to a loan
(the “Loan”) in the aggregate stated principal sum not to exceed
$163,103,099.24.

B.

Original Borrower executed and delivered to Original Lender and Great Oak LLC,
collectively as holder, that certain 1997 Promissory Note (the “Original Note”)
dated December 12, 1997 in the original principal amount of $163,103,099.24.

C.

The Original Note is secured by the following documents:

 

1.

That certain First Mortgage dated as of December 27, 1985 and recorded in the
office of the Recorder of Deeds of Cook County on December 30, 1985, as Document
Number 85342789 made by Original Borrower in favor of Original Lender, as
amended by that certain Third Loan Modification Agreement dated December 1, 1988
and recorded January 10, 1989 as Document Number 89013686, that certain that
certain Fourth Loan Modification Agreement dated December 1, 1989 and recorded
January 25, 1990 as Document Number 90041713 and that certain Fifth Loan
Modification dated December 1, 1990 and recorded March 8, 1991 as Document
Number 91105421; as amended and restated by that certain Amended and Restated
First Mortgage dated October 1, 1991 and recorded January 2, 1992 as Document
Number 92001888, as amended by that certain First Amendatory Agreement dated as
of April 30, 1993 and recorded June 9, 1993 as Document Number 93434372, that
certain Second Amendatory Agreement dated as of November 1, 1994 and recorded
December 30, 1994 as Document Number 04084292, that certain Loan Modification
and Amended and Restated Loan Agreement dated as of June 1, 1995 and recorded
August 17, 1995 as Document Number 95545031, that certain First Amendment to
Loan Modification and Amended and Restated Loan Agreement dated as of December
12, 1997 and recorded December 17, 1997 as Document Number 97947240
(collectively, the “Original Mortgage”), from Original Borrower as mortgagor in
favor of Original Lender as assignee; and

 

2.

That certain Assignment of Rents and Leases dated as of December 27, 1985 and
recorded December 30, 1085 as Document Number 85342790 and that certain
Assignment of Rents and Leases dated as of October 1, 1991 and recorded on
January 2, 1992 as Document Number 92001889 (collectively, the “Original
Assignment of Rents”), from Original Borrower as assignor in favor of Original
Lender as assignee; and

 

3.

That certain Supplemental First Mortgage and Security Agreement dated June 1,
1995 and recorded on August 17, 1995 as Document Number 95545032 (the
“Supplemental Mortgage”), from First Bank, N.A., as Successor Trustee to
National Boulevard Bank of Chicago, not personally but solely as Trustee under
Trust Agreement dated September 27, 1976 and known as Trust No. 5602 (“Trust
5602”) to Original Lender.

 

4.

That certain Hazardous Substances Indemnity Agreement dated as of October 1,
1991 (the “Original Environmental Indemnity”) executed by Continental Towers
Associates-I, L.P., as indemnitor, for the benefit of Original Lender.

D.

The Original Mortgage, Original Assignment of Rents, the Supplemental Mortgage
and the Original Environmental Indemnity are collectively called the “Original
Security Documents.” The Note, the Original Security Documents and all other
agreements securing, evidencing, or relating to Original Borrower’s obligations
under the Loan as heretofore or hereafter modified, including, but not limited
to, the documents listed on Schedule A attached hereto (and by this referenced
incorporated herein) are collectively called the “Original Loan Documents.”

E.

Original Lender assigned all of its right, title and interest in and to the
Original Loan Documents to Prime Group Realty, L.P. pursuant to that certain
Assignment of Liens and Documents dated as of December 12, 1997 and recorded
December 17, 1997 as Document Number 97947241.

F.

Continental Towers Associates I, L.P. (“CTA”), as the sole beneficiary of Trust
No. 5602 and Original Borrower (the “Land Trusts”), terminated each of the Land
Trusts and caused the trustees thereof to convey the Entire Property (as
hereinafter defined) directly to Continental Towers Associates I, L.P.; and
immediately assigned and conveyed an undivided 64% interest in and to the
Property to Borrower, as a tenant in common under that certain Co-Ownership
Agreement dated as of January 10, 2006 and recorded January 13, 2006 as Document
Number 0601341113 (the “Tenant in Common Agreement”).

G.

CTA and Borrower jointly and severally assumed all of Original Borrower’s
obligations under the Loan and agreed to certain modifications thereof pursuant
to that certain Assumption Agreement dated as of January 10, 2006 and recorded
January 13, 2006 as Document Number 0601341117.

 

H.

Prime Group Realty, L.P. assigned all of its right, title and interest in and to
the Original Loan Documents to PGRT Equity, LLC pursuant to that certain
Assignment of Mortgage and Other Loan Documents dated as of January 10, 2006 and
recorded January 13, 2006 as Document Number 0601341121.

I.

On November 21, 2006, CTAI transferred all of its right, title and interest in
and to the Premises, being an undivided 36% interest in the Premises, to CTAIII,
and Borrower, CTAIII, Heise (as applicable) and Holder (as applicable) entered
into:

 

1.

that certain Amended and Restated Promissory Note which amends and restates the
Original Note in its entirety;

 

2

 

2.

that certain Second Amended and Restated Loan Agreement which amended and
restated the Original Loan Agreement in its entirety,

 

3.

that certain Amended and Restated Mortgage and Security Agreement which amends
and restates the Original Mortgage and the Supplemental Mortgage in their
entirety (the mortgaged property described on Exhibit A to the Amended and
Restated Mortgage and Security Agreement is hereinafter referred to as the
“Entire Property”);

 

4.

that certain Amended and Restated Assignment of Leases and Rents which amends
and restates the Original Assignment in its entirety; and

 

5.

that certain Amended and Restated Environmental Indemnity Agreement which amends
and restates the Original Environmental Indemnity in its entirety

(collectively, the “Amended and Restated Loan Documents”).

J.

On or before the date hereof, CTAIII and Borrower will collectively convey (a)
36% of the Entire Property to CTAIII, and (b) 64% of the Entire Property to
Borrower and, in connection therewith, Borrower and CTAIII will enter into
amendments of each of the Amended and Restated Loan Documents as required to
document the bifurcation of the Entire Property and the Loan. Holder has agreed
to consent to the bifurcation of the Entire Property and the Loan, subject to
the terms, covenants and conditions of this Agreement and the other Loan
Documents.

K.

The Parties desire that this instrument, together with the Third Amended and
Restated Loan Agreement dated as of the date hereof by and among CTAIII, Heise
and Holder (the “CTAIII Loan Agreement”), shall constitute an amendment and
restatement in its entirety of the Second Amended and Restated Loan Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements hereinafter set forth, and for Ten Dollars and other good and
valuable considerations in hand paid by each party hereto to the other, the
receipt and sufficiency of all of which is hereby acknowledged, the Parties
hereby covenant and agree as follows:

ARTICLE I

 

GENERAL PROVISIONS

 

 

1.1

Definition of Terms. The following terms shall have the following meanings:

“Adjusted Net Operating Income” for any period shall mean Net Operating Income
for such period less Basic Payments made during such period.

“Affiliated Entities” shall mean, collectively, CTA General Partner, LLC, CTA
Member, Inc. and any of the partners, members or shareholders of any
partnership, limited liability company, corporation or other entity which,
directly or indirectly, through corporations, partnerships, limited liability
companies or other entities controlled by them is a member of Borrower; provided
that (a) any one of the foregoing Affiliated Entities is individually called an
“Affiliated Entity”; and (b) the term Affiliated Entity shall specifically
include Heise and his spouse, blood and adopted relatives, ancestors and
descendants.

“Ancillary Security Documents” shall have the meaning set forth in Section 2.4.

 

3

“Assignment of Rents” shall mean that certain Second Amended and Restated
Assignment of Leases and Rents dated as of the date hereof executed by Borrower
for the benefit of Holder.

“Bankruptcy Laws” shall have the meaning set forth in Section 6.1(f)(i) hereof.

“Basic Payments” shall have the meaning set forth in Section 3.1 hereof.

“Borrower” shall mean Continental Towers, L.L.C., a Delaware limited liability
company.

“Borrowing Group” shall mean Borrower, CTA General Partner, L.L.C., and CTA
Member, Inc.

“Business Day” shall mean any day on which commercial banks are not authorized
or required to close in Chicago, Illinois.

“Collateral” shall have the meaning set forth in Section 2.4 hereof, and shall
include the proceeds of realization thereon.

“Commercium” shall mean that portion of the Premises used as a restaurant,
health club, spa and related facilities.

“Conditions Precedent” shall have the meaning set forth in Section 1.5 hereof.

“Controlling Entities” shall mean CTA General Partner, L.L.C. and CTA Member,
Inc., collectively; and “Controlling Entity” shall mean generally one of such
Persons.

“Current Management Agreement” shall mean that certain Management Agreement
dated as of the date hereof by and between Borrower and Prime Group Management,
L.L.C.

“Current Manager” shall mean Prime Group Management, L.L.C.

“Effective Date” shall have the meaning set forth in the Recitals.

“Environmental Indemnity Agreement” shall mean that certain Second Amended and
Restated Environmental Indemnity Agreement dated as of the date hereof executed
by Borrower for the benefit of Holder.

“Event of Default” shall have the meaning set forth in Section 6.1 hereof.

“Governmental Authorities” shall mean any and include any and all federal,
state, county and municipal governmental bodies, courts, administrative
commissions, agencies and authorities.

“Governmental Regulations” shall mean all laws, ordinances, regulations, orders,
adjudications and decrees of Governmental Authorities.

“Gross Revenues” for any period shall mean the sum of the gross rental receipts
and all other receipts and revenues generated during such period by and from the
use and operation of the Premises or any part thereof, including, base rental
income, percentage rental income, items of expense (including real estate taxes)
passed through and charged to, and/or collected from,

 

4

tenants, membership fees, dues, net concession income and other net revenues
from the Commercium, vending machine income, any non-refundable security
deposits, charges for space occupancy, parking revenues, Lease Termination
Payments and the proceeds of any insurance proceeds specifically paid to
reimburse Borrower for loss of business or rental income and not applied by
Holder in reduction of the unpaid principal balance of the Loan; and in
connection with the calculation and determination of Gross Revenues:

(a)           Gross Revenues shall be determined in accordance with the cash
basis method of accounting, except that rents for the month of January which are
paid in the preceding December shall be included in Gross Revenues for the month
of January to which they apply; and

(b)           There shall be excluded from the determination of Gross Revenues
(i) the proceeds of the Loan, (ii) proceeds of casualty insurance or
condemnation, and (iii) proceeds of any other indebtedness encumbering the
Premises or encumbering other Collateral.

“Heise” shall mean Richard A. Heise.

“Holder” shall mean the holder of the Note from time to time.

“Incipient Default” shall mean any event, condition, act or omission which
involves non-payment of money on the due date thereof (without reference to any
period of grace) or which, requisite notice having been given, would with the
passage of time, constitute an Event of Default.

“Leases” shall have the meaning set forth in Section 5.2 hereof.

“Loan” shall mean the loan outstanding from time to time after the Effective
Date pursuant to this Loan Agreement, as evidenced, secured and governed by the
Loan Documents.

“Loan Agreement” shall mean this Third Amended and Restated Loan Agreement.

“Loan Documents” shall mean the instruments evidencing, securing, governing
and/or guarantying the Loan, including this Loan Agreement, the Note, the
Mortgage, the Assignment of Rents, the Environmental Indemnity Agreement and the
Ancillary Security Instruments.

“Loan Year” shall mean (a) in the case of the First Loan Year, the period from
October 1, 1991 through December 31, 1992, and (b) for all periods commencing on
and after January 1, 1993, the calendar year (the Second Loan Year being the
calendar year commencing January 1, 1993), except that the Loan Year commencing
on January 1, 2013 shall end on the Maturity Date.

“Maturity Date” shall mean January 5, 2013.

“Mortgage” shall mean that certain Second Amended and Restated Mortgage and
Security Agreement dated as of the date hereof executed by Borrower for the
benefit of Holder.

“Net Operating Income” for any period shall mean the amount, if any, by which
Gross Revenues for such period exceed Operating Costs for such period.

 

5

“Note” shall mean that certain Second Amended and Restated Promissory Note dated
as of the date hereof executed by Borrower for the benefit of Holder.

“Operating Costs” for any period shall mean the normal and customary operating
costs of the Premises paid during such period by or for the account of Borrower,
all as determined in accordance with the cash basis method of accounting;
provided that:

(a)           If the charges are not usual and customary then, to constitute an
allowable Operating Cost, such items must be approved by Holder as being
permitted Operating Costs for purposes of calculating Net Operating Income;

(b)           Operating Costs shall include, among other things, bona fide
management fees in direct conjunction with services actually rendered;

(c)           If the period for which Operating Costs is being determined is
other than a full year, annual costs, such as insurance premiums and like costs
shall be allocated ratably to such period;

 

(d)

Operating Costs shall not include:

(i)            Any principal, interest or other amounts paid under any notes
secured by liens encumbering the Premises or other Collateral, including, the
Notes;

(ii)          Nonrecurring capital items except as provided for in clause (h)
below;

 

(iii)

Income taxes;

 

(iv)

Non-cash items, such as depreciation or amortization;

(v)           Real estate taxes upon the Premises except to the extent that
accumulated tax reserves required pursuant to the Mortgage or the Senior Loan
Documents shall be insufficient to pay the same; or

(vi)         Costs paid directly by tenants, except to the extent the amount
thereof is included in Gross Revenues;

(e)           For the purposes of computing Operating Costs (except as permitted
in Section 5.4), no fees, commissions, charges, expenses or other amounts paid
to any Affiliated Entity shall constitute an Operating Cost unless such fees,
commissions or other amounts are bona fide costs and are approved by Holder as a
permitted Operating Cost; and specifically, but without limitation, the term
Operating Costs shall not include without the express written approval of Holder
(i) salaries or other compensation directly or indirectly paid to Affiliated
Entities other than as expressly provided herein, (ii) any allocation of
expenses of employees, agents or independent contractors that render services to
or with respect to properties other than the Premises, nor (iii) any expense
that is paid for from proceeds of the Loan or out of reserves established out of
Gross Revenues or otherwise, the amount of which were deducted as Operating
Costs; and

 

6

(f)           Capital expenditures approved by Holder and not paid for from the
Loan Proceeds.

“Permitted Exceptions” shall mean:

 

(a)

The lien of current real estate taxes not due and payable; and

 

(b)

Items set forth in Schedule B of the Title Policy.

“Parties” shall have the meaning defined in the introductory paragraph hereof
which precedes the Recitals.

“Permitted Investments” shall mean (a) direct obligations of the United States
of America having maturities as determined by Holder in its sole discretion, (b)
Commercial Paper issued by Holder having maturities as determined by Holder in
its sole discretion, and (c) other investments designated by the Persons having
provided the funds being invested, and consented to by Holder.

“Permit” shall mean any license, permit or other authorization from a
Governmental Authority required for a particular act or situation.

“Person” shall mean any individual, corporation, partnership (general or
limited), trust or other legal entity.

“Premises” shall mean:

 

(a)

The Property;

(b)           All improvements now or hereafter constructed or erected upon the
Property; and

(c)           All other property described and defined in the Mortgage as
Mortgaged Property.

“Property” shall mean the real property described on Exhibit A attached hereto
and made a part hereof.

“Senior Lender” means WELLS FARGO BANK, N.A., as trustee for the registered
holders of COBALT CMBS COMMERCIAL MORTGAGE TRUST 2006-C1, COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2006-C1.

“Senior Loan” means the mortgage loan made as of the date hereof by Senior
Lender to Borrower in the original principal amount of $73,600,000.

“Tax Indemnity Agreement” shall mean that certain Amended and Restated Tax
Indemnity Agreement dated as of January 10, 2006 among Prime Group Realty, L.P.,
Roland E. Casati, Richard A. Heise, CTA and Borrower (which amends, releases and
restates in its entirety the original Tax Indemnity Agreement dated as of
November 17, 1997), as amended by that certain First Amendment dated as of
November 21, 2006.

“Tenancy Costs” shall mean costs of tenant improvements, leasing commissions and
other tenant inducement expenditures, furniture and equipment costs required in
connection with

 

7

leases, moving costs, lease assumption payments and cash payments to tenants,
all relating to Leases approved by Holder.

“Title Company” shall mean First American Title Insurance Corporation.

1.2          Other Terms. Terms defined elsewhere in this Agreement other than
in Section 1.1 hereof, when used in this Agreement, shall have the meanings so
defined.

1.3          Construction and Interpretation. The provisions of this Agreement
shall be construed and interpreted in accordance with the following provisions:

(a)          Wherever in this Agreement it is provided that any Person• may do
or perform any act or thing, the word “may” shall be deemed permissive and not
mandatory, and it shall be construed that such Person may, but shall not be
obligated, to do and perform any such act or thing;

(b)          The phrase “at any time” shall be construed as meaning “at any time
or from time to time”;

(c)          The word “including” shall be construed as meaning “including, but
not limited to”;

 

(d)

The words “will” and “shall” shall each be construed as mandatory;

(e)          The words “herein”, “hereof”, “hereunder”, “hereinafter” and words
of similar import shall refer to this Agreement as a whole but not to any
paragraph, section or subsection, unless the context specifically refers
thereto;

(f)           Forms of words in the singular, plural, masculine, feminine or
neuter shall be construed to include the other forms as the context may require;
and

(g)          The captions to the sections of this Agreement are for convenience
only and shall not be deemed part of the text of the respective sections and
shall not vary by implication or otherwise any of the provisions hereof.

1.4          Incorporation of Recitals. The Recitals form part of this Agreement
and are incorporated herein as the mutual representations of the Parties.

1.5          Conditions Precedent. Notwithstanding anything to the contrary
herein contained, the agreements of Holder hereunder and the effectiveness
hereof and of the amendments to the Loan Documents effected hereby (including
the amendment of the Second Amended and Restated Loan Agreement) are subject to
and conditioned upon the satisfaction, on or prior to the Effective Date. of the
following (herein called the “Conditions Precedent”):

(a)          A complete counterpart of this Agreement executed and acknowledged
by all of the Parties;

(b)          Two Uniform Commercial Code Financing Statements executed by
Borrower, in substantially the same form as the original UCCs and properly
recorded in the appropriate local and state governmental offices;

 

8

(c)          An acceptable endorsement to its original loan policy of title
insurance issued by First American Title Insurance Company (the “Current Loan
Policy”) or (2) a replacement loan policy covering the Property in substantially
the same form as the Current Loan Policy (the “New Loan Policy”); the Current
Loan Policy, as endorsed, or the New Loan Policy, as applicable (in either case,
the “Title Policy”) shall insure the continued first priority lien of the
Mortgage as affected by this Agreement, be written by a title insurance company
acceptable to Holder, be effective as of the date this Agreement is recorded,
and otherwise contain only those exceptions to the Title Policy which are
acceptable to Holder and in the case of a New Loan Policy include the same
endorsements as the Current Loan Policy;

(d)          A certificate of insurance and a new policy or policies of
insurance evidencing that the Property remains and is insured in accordance with
all requirements of the Loan Documents and Holder, naming the Borrower as the
insured owner and Holder as a mortgagee/loss payee, and otherwise in form and
content acceptable to Holder;

(e)          Evidence satisfactory to Holder that Borrower is a Delaware limited
liability company, in good standing; that Borrower has authorized the execution
of this Agreement, and that the persons executing this Agreement on behalf of
Borrower have full power and authority to bind Borrower;

(f)           A legal opinion of Borrower’s counsel, addressed to Holder and
dated as of the date hereof, in form and substance satisfactory to Holder,
opining that the execution, delivery and/or assumption of the Loan Documents
have been duly authorized by all necessary parties (other than Holder), and
addressing such other matters (including the good standing, authority and due
execution and delivery by Borrower) as Holder may reasonably require; and

(g)          As soon as the same shall become available, a copy of the recorded
vesting deed that transfers title to the Property to Borrower.

 

ARTICLE II

 

LOAN

2.1          Loan. Borrower hereby acknowledges that the outstanding balance of
the Loan as of December 29, 2006 is $83,024,815.00 and that this amount is
evidenced and secured and governed in accordance with the terms and provisions
hereof and of the other Loan Documents.

 

 

2.2

Note. The Loan shall be evidenced by the Note.

 

 

2.3

Interest. The Loan shall bear interest at the rates set forth in the Note.

2.4          Security for the Loan. From and after the Effective Date, the Loan
shall be secured by the following (herein called the “Collateral”):

 

(a)

A lien upon the Premises created by the Mortgage;

 

(b)

A lien upon the CTAIII Premises created by the CTAIII Mortgage;

 

9

(c)          The Assignment, assigning to Holder all of the rents, issues,
profits and avails and leases of and from the Premises;

(d)          A lien and security interest in all of the furniture, furnishings
and equipment owned by Borrower comprised within the Premises;

 

(e)

The Environmental Indemnity Agreement; and

(f)           Financing Statements and such other instruments (all herein
generally called “Ancillary Security Instruments”) as Holder may from time to
time require to reflect and perfect the liens and security interests in the
Collateral and security required and/or intended hereby to secure the Loan.

2.5          Release. The Borrowing Group, and each member thereof, jointly and
severally, hereby represents, covenants and agrees as follows:

(a)          Each member of the Borrowing Group represents, acknowledges and
agrees that Holder has duly and timely performed and observed all of the terms,
conditions and obligations on its part to be performed and observed pursuant to
the Loan Documents at all times to and including the date of execution and
delivery thereof; and

(b)          Each member of the Borrowing Group, on its own behalf and on behalf
of all Persons claiming by, through or under it, hereby remises, discharges and
acquits Holder and its shareholders, directors, agents and employees and its and
their successors and assigns (herein called the “Released Parties”) of and from
any and all claims, demands, actions, causes of action, obligations and
liabilities of any kind and nature whatsoever which exist, may exist or may
hereafter exist by reason of any action or inaction of the Released Parties on
or prior to the date of execution and delivery hereof in connection with the
Loan or the Loan Documents.

2.6          Costs and Expenses. Borrower hereby covenants an agrees to pay to
Holder all reasonable costs and expenses (including legal fees and
disbursements) paid or incurred by Holder in connection with the preparation of
this Loan Agreement and of the Loan Documents, the consummation of the
transactions contemplated herein and all title insurance charges and escrow fees
and other costs contemplated herein to be paid to third parties.

ARTICLE III

 

PAYMENTS

 

 

3.1

Intentionally Deleted.

3.2          Maturity Date. In all events the entire outstanding principal
balance of the Loan, including principal and interest and other sums required by
the Loan Documents shall be due and payable on the Maturity Date, without notice
or grace.

3.3          Payment of Adjusted Net Operating Income. On the 20th day of each
month, Borrower shall remit to Holder (to the extent not received by Holder from
the Rent Account) the sum of all Adjusted Net Operating Income accumulated
during the Loan Year to date, net of amounts remitted to Holder earlier in the
Loan year (excluding remittances related to prior Loan Years), subject to annual
reconciliation, to be applied as set forth in Section 3.4 hereof.

 

10

3.4          Application of Adjusted Net Operating Income. So long as no Event
of Default has occurred and is continuing, Holder shall apply amounts of
Adjusted Net Operating Income which it shall receive with respect to any Loan
Year in the following order of priority:

(a)          First, to payments of all Base Interest which has accrued on the
Note in the current Loan Year;

(b)          Second, to payment of all Base Interest which accrued on the Note
in the prior Loan Years and has been capitalized;

 

(c)

Third, to reduction of the outstanding principal balance of the Note; and

(d)          Fourth, to payment of all Contingent Interest which has accumulated
on the Note, plus any accrued interest thereon.

3.5          Application Upon Event of Default. Upon the occurrence of an Event
of Default, Holder may apply Net Operating Income upon the Loan, both interest
and principal, in such order and manner as Holder may deem appropriate; and in
all events at any time when an Incipient Default or Event of Default shall have
occurred and be continuing, Holder shall have no obligation to make any
application of Net Operating Income contemplated by Section 3.4(a) hereof.

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

4.1          Representations and Warranties. Borrower acknowledges and agrees as
follows and represents and warrants to Holder as follows:

(a)          There exists no defense, offset or counterclaim with respect to the
payment of the Loan or with respect to the performance of any Party’s
obligations under the Loan, this Agreement, the Note or any of the Loan
Documents, including, without limitations, any claim for breach of contract,
failure to act in good faith, lack of fair dealing, misrepresentation, breach of
fiduciary duty, fraud, or negligence. No Party has any claim, defense,
abatement, offset, or counterclaim against Holder or otherwise applicable to the
Loan. If any such claims, defenses, abatements, offsets, or counterclaims, do
presently exist, as additional consideration for this Agreement, each Party to
this Agreement hereby waives and releases them to the fullest extent permitted
by applicable law;

(b)          Holder has not breached any duty to any Party in connection with
the Loan. Holder has timely and fully performed all obligations which Holder may
have had or now has to any Party in connection with the Loan;

(c)          Holder has no obligation whatsoever to make any other loans or
advances to or for the benefit of any Party or to grant any modifications or
extensions in connection with the Loan, except as may be set forth specifically
in the Loan Documents and this Agreement;

(d)          Each Party to this Agreement has all requisite power and authority
to enter into this Agreement and to perform all actions required or contemplated
by any provision contained in this Agreement or the Loan Documents. This
Agreement and the applicable Loan Documents are

 

11

and shall be legal, valid, and binding obligations of each Party (subject to
bankruptcy and principles of equity);

(e)          Borrower has good, marketable and indefeasible fee simple title to
the Property;

(f)           There is no legal or other action, proceeding or investigation
pending or threatened against any Party hereto or the Property before any court,
administrative agency or arbitrator that might in any way adversely affect such
Party’ ability to fulfill its obligations under this Agreement or any of the
Loan Documents;

(g)          This Agreement and the other Loan Documents constitute legal, valid
and binding obligations of Borrower, enforceable against Borrower in accordance
with their terms, subject to applicable bankruptcy law and the rights of
creditors generally; and

(h)          This Agreement is not intended for, and shall not be construed to
be for, the benefit of any person or entity not a signatory hereto.

 

 

4.2

Intentionally Deleted.

 

 

4.3

Intentionally Deleted.

4.4          Continuance of Representations and Warranties. Each and all of the
representations and warranties set forth in Sections 4.1, 4.2 and 4.3 hereof
shall be true and correct on the Effective Date and shall survive the Effective
Date.

ARTICLE V

 

COVENANTS

5.1          Payment and Performance. Borrower hereby covenants and agrees that
it will duly, punctually and faithfully pay all payments required hereby, by the
Notes and by each and all of the Loan Documents as and when the same become due
and payable and will duly, punctually and faithfully perform and observe and
will cause each other member of the Borrowing Group to perform and observe all
of the covenants and agreements on the part of each member at the Borrowing
Group to be performed and observed under and pursuant to this Loan Agreement,
the Notes and the other Loan Documents.

 

 

5.2

Leases. Borrower hereby agrees, subject to the provisions of Section 5.3 hereof,
that:

(a)          All leases and rental arrangements with tenants of the Premises,
including renewal leases (all herein generally called “Leases”) shall be subject
to the approval of Holder as to form, content, economic terms (including
concessions, tenant improvements and otherwise), and term, and once approved
shall not be modified, amended or terminated without Holder’s prior written
approval; provided that Holder will provide to Borrower its approval or
disapproval of any Lease within 10 Business Days after it shall have been
furnished with a copy thereof, a copy of all requisite credit information and
other information regarding the tenant which Holder may reasonably acquire and
plans, specifications and estimated Tenant Costs relating to such Lease, all in
such detail as Holder may require;

(b)          Prior to presenting to any proposed tenant a proposal with respect
to any proposed lease, Borrower shall furnish to Holder notice of such proposal
and of the terms and

 

12

provisions to be contained therein, which proposal shall not be sent to such
proposed tenant unless the same shall have been approved by Holder; provided
that:

(i)           Holder shall be deemed to have approved such proposal if it shall
not object thereto within two Business Days after having been furnished with a
request for approval thereof; and

(ii)          No such approval or deemed approval by Holder of a proposal as
aforesaid shall be deemed an approval by Holder of any proposed lease or limit
Holder’s right pursuant to Subsection (a) above to approve any proposed lease
prior to its execution, whether or not such proposed lease conforms to the
proposal therefor; and

(c)          Borrower hereby consents and agrees that it will not accept
termination of any Lease, or accept any Lease Termination Payment in connection
therewith, unless such termination and Lease Termination Payment has previously
been approved in writing by Holder.

5.3          Leasing Guidelines. Holder hereby agrees that Holder will not
withhold approval of any proposed Lease (subject to Holder’s approval of the
tenant) if the same conforms to the requirements of the Senior Loan Documents.

 

 

5.4

Management and Contracts. Borrower hereby represents and agrees as follows:

(a)          Borrower shall not enter into any contract or agreement with
respect to the management, operation, leasing or construction of the Premises
with any Affiliated Entity unless specifically provided for in this Agreement or
otherwise agreed to by Holder;

(b)          All contracts and agreements entered into in connection with the
ownership, operation, maintenance, construction and leasing of the Premises
shall be with reputable and competent Persons for a price not exceeding that
which is obtainable from other reputable and competent Persons performing such
services in the area in which the Premises are located; and

(c)          If the Current Management Agreement shall be terminated for any
reason, any substitute management agreement and/or substitute leasing agreement
shall: (i) be subject to the provisions of Subsections (a) and (b) hereof to the
reasonable approval of Holder as to form, content, economic provisions,
compensation and contracting Person, and (iii) in all events be terminable at
the election of Holder upon the occurrence of an Event of Default.

(d)          So long as the Current Manager is an Affiliate of Holder, Holder
agrees that to the extent that responsibility for performance of any obligation
of any member of Borrowing Group under this Loan Agreement has been delegated to
Current Manager, the failure of Current Manager to perform such obligation shall
not be deemed to create a default under the Loan Agreement or any other Loan
Document. This provision shall terminate and be of no further force and effect
when Current Management ceases to be an Affiliate of Holder.

5.5          Books and Records. Borrower hereby covenants and agrees that they
and each of them will:

(a)          Afford Holder and its inspectors or auditors the right to inspect
the Premises and the books and records of Borrower relating to the Premises at
all reasonable times; and

 

13

(b)          Will afford and facilitate to such Person access to the Premises
and to all books and records for such purposes.

 

 

5.6

Intentionally Deleted.

 

 

5.7

Financial Statements and Reports. Borrower shall deliver to Holder:

(a)          Monthly, within 25 days after the end of each month, financial and
operating statements of the Premises (including statements of cash receipts and
disbursements) for the preceding month disclosing for such month Gross Revenues,
Operating Costs and Net Operating Income;

(b)          Quarterly, within 25 days after the end of each quarter, financial
statements of the Premises (including statements of cash receipts and
disbursements) disclosing Net Operation Income and Adjusted Net Operating Income
for the preceding quarter;

(c)          Annual financial statements of Borrower (including an income
statement, a balance sheet and a statement of cash flows) within 90 days after
the end of each Loan Year which shall be subject to audit by an accountant
satisfactory to Holder if and to the extent required by Holder;

(d)          Within 45 days after the end of each of their fiscal years annual
financial statements of Heise, certified by Heise; and

 

(e)

Other statements and reports as Holder may reasonably require,

all of which financial statements and reports required by this Section 5.7 to be
in such form and detail as Holder may require; and the Controlling Entities
shall permit and cause the other Persons above named to permit Holder and its
agents and auditors to examine and audit their respective books and records
relating to the Premises at such reasonable times as Holder may reasonably
require; provided that Holder agrees to hold confidential the personal financial
statements of Heise.

 

 

5.8

Intentionally Deleted.

 

 

5.9

Rent Account Agreement.

(a)          Borrower and Holder acknowledge and agree that pursuant to that
certain Amended and Restated Cash Management Agreement dated as of the date
hereof by and between Borrower and Senior Lender (the “Cash Management
Agreement”), all Gross Revenues of the Property received from and after the
Effective Date are to be deposited into the Rent Account (as defined in the Cash
Management Agreement) for disbursement as provided therein. Subject to the
provisions of the Cash Management Agreement, all disbursements from the Rent
Account are disbursed into Borrower’s account. Subject to the provisions of the
Cash Management Agreement, Borrower covenants and agrees that all disbursements
to Borrower’s account shall be disbursed from Borrower’s account as follows:

(i)           to Senior Lender to pay all amounts due and payable to Senior
Lender under the Senior Loan Documents (as defined in the Mortgage);

 

(ii)

to pay Operating Costs;

 

14

(iii)         to Holder to apply the same upon the Loan in such order and manner
as is provided for in the Loan Documents.

(b)          Upon the occurrence of an Event of Default, subject to the
provisions of the Cash Management Agreement and that certain Amended and
Restated Subordination and Standstill Agreement dated as of the date hereof by
and between Holder and Senior Lender, Holder shall be entitled to all
disbursements to which Borrower is entitled to pursuant to the provisions of the
Cash Management Agreement and shall apply the same upon the Loan in such order
and manner as is provided for in the Loan Documents or as Holder may otherwise
deem appropriate.

ARTICLE VI

 

EVENTS OF DEFAULT

6.1          Event of Default. The occurrence of any one or more of the
following events shall constitute and “Event of Default” hereunder:

(a)          If Borrower defaults in making due and punctual payment of the
Notes, or any of them, or any payment required to be paid thereon, either
principal or interest, if and when the same become due and payable, and such
default continues after the expiration of any period of grace provided for in
the respective Notes;

(b)          If Borrower shall fail to perform and/or comply with the provisions
of Section 5.9 hereof or shall fail to remit to Holder (or to deposit or cause
to be deposited in the Rent Account) all Gross Revenues as specified in Section
5.9 hereof;

 

(c)

If any Event of Default shall exist under any of the other Loan Documents;

(d)          If any representation or warranty made by any member at the
Borrowing Group herein or in any instrument delivered pursuant hereto shall
prove to be untrue in any material respect; or

(e)          If any member of the Borrowing Group defaults in the performance or
observance of any of the other terms, provisions, conditions and agreements on
their part or on the part of any one or more of them to be performed and
observed pursuant hereto and such default shall remain uncured for a period of
five days in connection with any default in payment of money or 30 days after
Holder shall have given notice thereof to the defaulting member in the case of a
default other than in the payment of money; provided that if a default other
than in the payment of money is not susceptible of cure within such 30-day
period, such 30-day period shall be extended to the extent necessary to permit
such cure if, but only if, (A) cure is commenced within such 30-day period and
thereafter prosecuted to completion, diligently and without delay; (B) neither
the Premises nor the lien of the Loan Documents shall be limited by or subject
to any foreclosure, forfeiture, subordination or other adverse consequence on
account of such default.

 

(f)

If any one or more of the following event shall occur:

(i)           If any member of the Borrowing Group shall file a petition in
bankruptcy or for relief under the Bankruptcy Code of the United States, or any
Chapter thereof, or any similar law, state or federal, now or hereafter in
effect (herein generally called the “Bankruptcy Laws”);

 

15

(ii)          If any member of the Borrowing Group shall file an answer in any
proceeding or execute any writing admitting insolvency or inability to pay its
debts;

(iii)         If there shall have been filed against any member of the Borrowing
Group any insolvency proceeding under any Bankruptcy Law and such proceedings
shall not have been vacated or stayed within 90 days after such filing;

(iv)         any member of the Borrowing Group shall be adjudicated a bankrupt,
or a trustee or receiver shall be appointed for any member of the Borrowing
Group or for all or a major part of such member’s property or the Premises, or
such member shall be appointed a debtor in possession in any insolvency
proceeding under any Bankruptcy Law, or if any court shall have taken
jurisdiction of all or a major part of such member’s property or the Premises in
any insolvency proceeding under any Bankruptcy Law for the reorganization,
dissolution, liquidation or winding up of such member and such trustee or
receiver (or such member as debtor in possession) shall not be discharged or any
such jurisdiction relinquished or forfeited or stayed on appeal or otherwise
stayed within 90 days; and

(v)          If any member of the Borrowing Group shall make an assignment for
the benefit of creditors generally or shall consent to the appointment of a
receiver, trustee or liquidator of all or a major portion of its property or of
the Premises.

6.2          Notice to Holder. Borrower covenants and agrees that it will
promptly (and in any event within three Business Days after it knows or should
know of the same), give notice to Holder of the occurrence of an Event of
Default or Incipient Default.

6.3          Rights of and Limitations on Holder. Upon the occurrence of any
Event of Default, Holder may, without further notice, declare immediately due
and payable the Note and all indebtedness evidenced thereby and/or secured by
the Loan Documents and may institute such actions and proceedings, judicial or
otherwise, as Holder may deem necessary or appropriate to realize upon the
Collateral and security afforded by the Loan Documents or otherwise, and/or to
recover from any Person liable therefor all sums so due and payable and any
damages. Notwithstanding the foregoing, Holder shall not cause a discharge or
cancellation of all or any portion of the Loan or any event having the same
effect for federal income tax purposes without the consent of Borrower,
provided, however, this limitation shall not preclude Holder from foreclosing or
accepting a deed in lieu of foreclosure with respect to the Loan without such
consent.

6.4          Rights Cumulative. Each right, power and remedy conferred upon
Holder herein, in the Notes and in the other Loan Documents is cumulative and in
addition to each other right, power or remedy, express or implied, given now or
hereafter existing at law or in equity, and each and every right, power and
remedy herein, in the Notes and other Loan Documents set forth: or otherwise so
existing may be exercised from time to time as often and in such order as may be
deemed expedient by Holder; and exercise or beginning of the exercise of any one
right, power or remedy (including institution of any proceeding, judicial or
otherwise, under the Loan Documents shall not be waiver of the right at the same
time or thereafter to exercise any other right, power or remedy (including
institution of proceedings, judicial or otherwise, enforcing any rights under
Loan Documents encumbering the Premises or other Collateral); and no delay or
omission on the part of Holder in the exercise of any right, power or remedy
accruing hereunder, under the Notes or under any other Loan Document or
otherwise arising shall impede any right, power or remedy or be construed to be
a waiver of any default or acquiescence therein.

 

16

6.5          Holder Performance of Obligations. Upon the occurrence of any Event
of Default or Incipient Default, Holder may, but shall not be required, to make
any payment or perform any act herein or in the Notes or in any of the Loan
Documents required to be paid or performed by Borrower or any other Person
(whether or not Borrower or such other Person is personally liable therefor) in
any form or manner deemed expedient to Holder; and in connection therewith (but
without limiting the generality of the foregoing):

(a)          Holder may, but shall not be required to, make full or partial
payments of principal or interest on liens encumbering the Premises or other
Collateral, and purchase, discharge, compromise, and/or settle any tax lien or
other lien or claim, or redeem from any tax sale or forfeiture or other
foreclosure of any lien affecting any such Premises and other Collateral, or
contest any tax assessment or claim relating to the Premises or other
Collateral;

(b)          Holder may, but shall not be required to, complete construction,
furnishing and equipping of the Premises and (either itself or through agents or
other Persons employed by Holder) rent, operate and manage the Premises and pay
construction costs, costs of equipment and furnishings, personnel expenses and
operating costs and expenses (including management and leasing fees and
compensation) of every kind and nature in connection therewith, so that the
Premises and the improvements thereon shall be operational and usable for their
intended purpose, and open for business;

(c)          All monies disbursed by Holder for any of the purposes herein
authorized or authorized by the Note or other Loan Documents, and any expenses
paid or incurred in connection therewith, including reasonable attorneys’ fees
and any other funds advanced by Holder to protect the Premises or other
Collateral shall be reimbursable from the Rent Account; and

(d)          The provisions of this Section are in amplification of the
provisions of the Notes and the other Loan Documents and shall not limit, affect
or impair any provision of the Notes or other Loan Documents.

6.6          Grace Periods. Borrower and other members of the Borrowing Group
shall be entitled to only one grace period in connection with any determination
as to whether an Incipient Default has become an Event of Default; and
accordingly:

(a)          The provisions herein or in any other of the Loan Documents
providing to Borrower the longest grace period with respect to any Incipient
Default shall govern; and

(b)          When the grace period referred to in Subsection (a) above shall
have expired without cure with respect to a particular Incipient Default, such
Incipient Default shall for all purposes be deemed to have become an Event of
Default, and

no Person shall be entitled to or claim or have any right to claim any further
period of grace with respect thereto.

 

17

ARTICLE VII

 

REAFFIRMATION  

7.1          Reaffirmation. The parties hereto hereby covenant and agree and
reaffirm that all of the Collateral securing the Original Loan shall be and
remain Collateral for the Loan, whether or not specifically so provided herein.

ARTICLE VIII

 

MISCELLANEOUS

8.1          Approvals To Be In Writing. Any consent, approval or other action
required or permitted to be made, given or taken by Holder pursuant hereto as to
the Notes, Mortgage or other Loan Documents must be in writing and purported
consent, approval or other action on the part of Holder shall not be effective
or made, given or taken unless the same is evidenced by a writing duly executed
by Holder.

8.2          Governing Law. This Loan Agreement, the Note and the Loan Documents
have been negotiated, executed and delivered in the State of Illinois and shall
be governed by and construed in accordance with the laws of the State of
Illinois.

8.3          Indemnification Against Commissions. The Controlling Entities
jointly and severally hereby agree to and do hereby indemnify and hold harmless
Holder against any brokerage commissions or finder’s fee claim or which may be
claimed by any broker or other Person in connection with the transactions
contemplated hereby.

8.4          Notices. Any notice, consent, or approval that Holder or Borrower
may desire or be required to give to the other shall be in writing and shall be
mailed or delivered to the intended recipient thereof at its address set forth
below or at such other address as such intended recipient may, from time to
time, by notice in writing, designate to the sender pursuant hereto. Any such
notice, consent, or approval shall be deemed effective (a) if given by
nationally recognized overnight courier for next day delivery, one (1) business
day after delivery to such courier, or (b) if given by United States mail
(registered or certified), five (5) business days after such communication is
deposited in the mails or (c) if given in person, when written acknowledgment of
receipt thereof is given. Except as otherwise specifically required herein,
notice of the exercise of any right or option granted to Holder by this Loan
Agreement is not required to be given.

 

(a)

If to Holder:

PGRT Equity, L.L.C.

Prime Group Realty Trust

77 West Wicker Drive

Suite 3900

Chicago, Illinois 60601

Attn: James F. Hoffman

 

With a copy to:

 

Winston & Strawn LLP

35 West Wacker Drive

 

18

Chicago, Illinois 60601

Attention: M. Christine Graff

 

 

(b)

If to Borrower:

Continental Towers, L.L.C.

c/o CTA General Partner, LLC

c/o Prime Group Realty Trust

77 West Wacker Drive Suite 3900

Chicago, Illinois 60601

Attn: Jeffrey A. Patterson

 

With a copy to:

 

Prime Group Realty Trust

77 West Wacker Drive

Suite 3900

Chicago, Illinois 60601

Attn: James F. Hoffman

 

8.5          Assignability. The rights of any member of the Borrowing Group
hereunder may not be assigned without the prior written consent of Holder.

8.6          Binding Effect. Subject to the provisions of Section 8.5 above,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

8.7          Severability. If any provision herein shall be held invalid or
unenforceable, such holding shall not affect the validity or enforceability of
any other provision hereof, all of which other provisions shall in such case
remain in full force and effect.

8.8          Time of the Essence. The parties hereto agree that time is of the
essence of this Agreement, the Notes and the other Loan Documents and all of the
provisions hereof and thereof provided that if the date for performance of any
obligation hereunder falls on a day other than a Business Day, the time for such
performance shall be extended to the next succeeding Business Day.

8.9          Survival. All of the terms, provisions, covenants and agreements
herein contained shall survive the Closing Date and the making and disbursing of
the Loan.

8.10       No Joint Venture: Indemnity. All Parties intend that the relationship
created by this Loan Agreement and all other Loan Documents be solely that of
Borrower as debtor and Holder as creditor, or mortgagor and mortgagee, as the
case may be; and in connection therewith:

(a)          Nothing herein, in the Note or in the Mortgage is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship among Borrower and/or the Controlling Entities on the one hand and
Holder, on the other hand, nor to grant Holder any interest in the Premises
other than that of creditor or mortgagee; it being the intent of the parties
hereto that Holder shall have no liability whatsoever for any losses generated
by or incurred with respect to the Premises nor shall Holder have any control
over the day to day management or operations of the Premises;

 

19

(b)          The terms and provisions of this Section shall control and
supersede over every other provision and all other agreements among Borrower,
the Controlling Entities and other parties hereto;

(c)          Borrower and the Controlling Entities, each as to itself but not as
to any other party, hereby agree to indemnify and hold Holder harmless and
defend Holder against any loss or liability, cost or expense (including, without
limitation, reasonable attorneys’ fees and disbursements) and all claims,
actions, procedures and suits arising out of or in connection with any
construction of the relationship of Borrower, the Controlling Entities and
Holder as that of joint venturers, partners, tenants in common, joint tenants or
any relationship other than that of debtor and creditor, or any assertion that
such a construction should be made, and arising out of a claim, assertion or
litigation directly or indirectly brought by, or on behalf of Borrower or such
Controlling Entity; and

(d)          The foregoing indemnity shall survive the repayment of the Loan and
the satisfaction of the Mortgage and shall continue so long as any liability for
which the indemnity is given may exist or arise.

8.11       Conflict. In the event of any conflict between the terms and
provisions contained in this Loan Agreement and the terms and provision
contained in the Notes or in any of the other Loan Documents, the terms and
provisions of this Agreement shall take precedence and shall control, except as
otherwise herein specifically set forth.

 

 

8.12

Intentionally Deleted.

 

8.13

Intentionally Deleted.

 

 

8.14

Intentionally Deleted.

8.15       Exculpation of Controlling Entities. No Controlling Entity nor any
Person comprising any Controlling Entity as a partner, shareholder, or
otherwise, shall be personally liable for repayment of any of the principal of
or interest on the Loan or for any deficiency judgment which Holder may obtain
after foreclosure or other realization upon the collateral or for the
performance of any of the covenants, agreements or payments herein or in the
other Loan Documents contained or required, except as follows:

(a)          Each Controlling Entity shall be liable for any loss, cost and
damages incurred by Holder (including reasonable attorneys’ fees) by reason of
any misrepresentation or breach of warranty of such Controlling Entity set forth
in Article IV hereof;

(b)          Each Controlling Entity shall be obligated upon and liable for all
of the covenants, agreements and payments assumed by such Controlling Entity
pursuant to any separate agreement;

(c)          All of the Controlling Entities, jointly and severally, shall be
obligated and liable to cause all Adjusted Net Operating Income to be paid over
the Holder as provided for in Section 3.3 hereof to the extent not deposited
into the Rent Account;

(d)          The Controlling Entities shall be obligated upon and liable for the
indemnities specified in Section 8.10 hereof;

 

20

and the foregoing provisions of this Section, limiting the exculpations of the
Controlling Entities and confirming their respective obligations and liabilities
shall supersede the exculpation of the Controlling Entities and each of them
contained in any of the other Loan Documents.

 

21

IN WITNESS WHEREOF the parties hereto have caused this Loan Agreement to be duly
executed all on and as of the day, month and year first above written.

CONTINENTAL TOWERS, L.L.C., a Delaware limited liability company

 

 

By:

CTA GENERAL PARTNER, LLC, a Delaware limited liability company, its sole member

 

 

By:

CTA MEMBER, INC., a Delaware corporation, its Managing Member

 

 

By: [s] Paul G. Del Vecchio

 

Name:

Yochanan Danziger, by Paul G.

 

Del Vecchio, Attorney-In-Fact

 

Title:

President

 

 

PGRT EQUITY, LLC, a Delaware limited liability company

 

 

By:

PRIME GROUP REALTY, L.P.

 

 

By:

Prime Group Realty Trust, its General Partner

 

 

By: [s] Paul G. Del Vecchio

 

Title: S.V.P. – Capital Markets

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

REAL PROPERTY IN THE CITY OF ROLLING MEADOWS, COUNTY OF COOK, STATE OF ILLINOIS,
DESCRIBED AS FOLLOWS:

Parcel 1:

Lots 1 and 2 in CASATI-HEISE SUBDIVISION, being a subdivision of part of the
Northeast 1/4 of Section 17 and part of the Northwest 1/4 of Section 16, both in
Township 41 North, Range 11 East of the Third Principal Meridian in Cook County,
Illinois according to the plat thereof recorded December 27, 1988 as Document
Number 88592766, in Cook County, Illinois;

 

Excepting therefrom that part of Lot 1 dedicated for roadway purposes according
to instrument recorded December 2, 2002 as Document No. 0021325095;

 

Also excepting therefrom that part of Lot 1 in CASATI-HEISE SUBDIVISION, being a
subdivision of part of the Northeast 1/4 of Section 17 and part of the Northwest
1/4 of Section 16, both in Township 41 North, Range 11 East of the Third
Principal Meridian in Cook County, Illinois according to the plat thereof
recorded December 27, 1988 as Document Number 88592766, bounded by a line
described as follows: Beginning at the northeast corner of said Lot 1; thence
South 06 Degrees 09 Minutes 30 Seconds West, along an east line of said Lot 1, a
distance of 156.16 feet; thence South 58 Degrees 17 Minutes 03 Seconds East,
along a northerly line of said Lot 1, a distance of 152.90 feet; thence North 20
Degrees 09 Minutes 00 Seconds East, along a west line of said Lot 1, a distance
of 10.29 feet; thence South 69 Degrees 51 Minutes 00 Seconds East, along a north
line of said Lot 1, a distance of 0.83 feet to a point in the southwesterly
right of way line of Meijer Drive according to the Plat of Dedication, thereof,
recorded December 12, 2002 as Document Number 0021325095; thence southeasterly,
along said southwesterly line, along the arc of a curve left, having a radius of
75.00 feet, the chord of which bears South 36 Degrees 52 Minutes 51 Seconds
East, an arc distance of 55.06 feet to a point in the easterly most east line of
aforesaid Lot 1; thence South 20 Degrees 09 Minutes 00 Seconds West, along said
east line, 326.25 feet; thence North 69 Degrees 51 Minutes 00 Seconds West,
perpendicular to the last described course, 53.96 feet; thence South 19 Degrees
58 Minutes 13 Seconds West, 301.92 feet; thence North 57 Degrees 41 Minutes 17
Seconds West, 247.73 feet; thence South 32 Degrees 18 Minutes 43 Seconds West,
perpendicular to the last described course, 33.31 feet; thence North 57 Degrees
41 Minutes 17 Seconds West, perpendicular to the last described course, 482.82
feet; thence North 32 Degrees 18 Minutes 43 Seconds East, perpendicular to the
last described course, 218.53 feet; thence North 57 Degrees 45 Minutes 33
Seconds West, 69.41 feet; thence North 00 Degrees 19 Minutes 35 Seconds East,
245.85 feet to a point in the south line of aforementioned Lot 1, also being the
south line of Golf Road (also known as Illinois State Route 58); thence North 89
Degrees 05 Minutes 58 Seconds East, along said north line, 692.03 feet to the
point of beginning, all in Cook County, Illinois.

 

Parcel 2:

Easements appurtenant to and for the benefit of Parcel 1 as created and granted
and set forth in easement agreement dated as of September 23, 1977 and recorded
October 10, 1978 as Document Number 24662689 and as amended by Amendment to
Easement Agreement dated as of May 15, 1980 and recorded June 10, 1980 and
recorded as Document Number 25482426 upon, over, and under portions of Lots 1 to
6, inclusive, in Heise’s Subdivision, a subdivision of part of the Northwest 1/4
of Section 16, Township 41 North, Range 11 East of the Third Principal Meridian,
in Cook County, Illinois, according to the plat thereof recorded December 23,
1977 as Document 24119807 and also over, upon and under portions of that part of
the Northeast 1/4 of Section 17, Township 41 North, Range 11 East of the Third
Principal Meridian, in Cook County, Illinois described as follows:

 

Commencing at the Northeast Corner of the Northeast 1/4 of Section 17; thence
Southerly along the east line of said Northeast 1/4 of Section 17, a distance of
80.0 feet to the southerly right-of-way of Golf Road (State Route 58), as
dedicated and recorded September 24, 1929 as Document Numbers 10488005 and
10488006; thence South 89 Degrees, 08 Minutes West along said southerly
right-of-way of Golf Road (State Route 58), 691.05 feet for a Point of
Beginning; Thence South 0 Degrees, 52 Minutes East, 265.0 feet; thence South 89
Degrees, 08 Minutes West parallel with said southerly right -of-way of Golf Road
(State Route 58) 196.11 feet; thence North 0 Degrees, 27 Minutes, 20 Seconds
East parallel with the west line of Schwake’s Subdivision recorded August 11,
1970 as Document 21235091, now vacated, 265.07 feet to said southerly
right-of-way of Golf Road (State Route 58); thence North 89 Degrees, 08 Minutes
East, along said southerly right-of-way of Golf Road (State Route 58), 190.0
feet to the Point of Beginning, all in Cook County, Illinois, for the operation,
maintenance, repair, replacement, relocation and removal of a water supply line,
sewer and other utilities.

 

Parcel 3:

Easements appurtenant to and for the benefit of Parcel 1 as created and granted
and set forth in Reciprocal Easement and Common Wall Agreement dated as of
September 23, 1977 and recorded October 10, 1978 as Document Number 24662688 and
as amended by Agreement thereto dated as of November 21, 1979 and recorded
December 17, 1979 and recorded as Document Number 25284791 upon and under
portions that part of the Northeast 1/4 of Section 17, Township 41 North, Range
11 East of the Third Principal Meridian, in Cook County, Illinois described as
follows:

 

Commencing at the Northeast Corner of the Northeast 1/4 of Section 17; thence
Southerly along the east line of said Northeast 1/4 of Section 17, a distance of
80.0 feet to the southerly right-of-way of Golf Road (State Route 58), as
dedicated and recorded September 24, 1929 as Document Numbers 10488005 and
10488006; thence South 89 Degrees, 08 Minutes West along said southerly
right-of-way of Golf Road (State Route 58), 691.05 feet for a Point of
Beginning; Thence South 0 Degrees, 52 Minutes East, 265.0 feet; thence South 89
Degrees, 08 Minutes West parallel with said southerly right -of-way of Golf Road
(State Route 58) 196.11 feet; thence North 0 Degrees, 27 Minutes, 20 Seconds
East parallel with the west line of Schwake’s Subdivision recorded August 11,
1970 as Document 21235091, now vacated, 265.07 feet to said southerly
right-of-way of Golf Road (State Route 58); thence North 89 Degrees, 08 Minutes
East, along said southerly right-of-way of Golf Road (State Route 58), 190.0
feet to the Point of Beginning, all in Cook County, Illinois, for the operation,
maintenance, repair, replacement, relocation and removal of a water supply line,
sewer and other utilities.

 

Parcel 4:

Reciprocal Easement Agreement dated December ____, 2006 and recorded
_____________, as Document _____________ made by and between Continental Towers,
L.L.C. and Continental Towers Associates III, LLC for vehicular and pedestrian
ingress and egress and use of parking area.

 

Common address: Continental Towers, 1701 Golf Road, Rolling Meadows, Illinois

PINS: 08-16-100-034 (part) and 08-16-100-035