EXHIBIT 10.3

 

LOAN AGREEMENT

(Loan B)

between

330 N. WABASH AVENUE, L.L.C.

as Borrower

and

THE LENDERS PARTY HERETO,

as Lenders

and

GENERAL ELECTRIC CAPITAL CORPORATION

as Collateral Agent

 

March 18, 2008

 

 

 

 

 

 

 

 

 

 

LOAN AGREEMENT

(Loan B)

This Loan Agreement (Loan B) (this "Agreement") is entered into as of March 18,
2008, among 330 N. WABASH AVENUE, L.L.C., a Delaware limited liability company
("Borrower"); each of the lenders that is a signatory hereto identified under
the caption "LENDERS" on the signature pages hereof and each lender that becomes
a "Lender" after the date hereof pursuant to Section 4.2(1) (individually, a
"Lender" and, collectively, the "Lenders"); and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, as collateral agent for the Lenders (in
such capacity, together with its successors in such capacity, the "Collateral
Agent").

ARTICLE 1

 

CERTAIN DEFINITIONS

 

Section 1.1

Certain Definitions

. As used herein, the following terms have the meanings indicated:

"Adjusted Libor Rate" means, for any Interest Period for any Eurodollar Loan, a
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Collateral Agent to be equal to the LIBOR Rate for such
Interest Period divided by 1 minus the Reserve Requirement (if any) for such
Interest Period.

"Administration Agreement" means the Intercreditor Agreement executed by and
among the Lenders, the Loan A Lenders and the Collateral Agent.

"Advance" means each advance of the Loans made by Lenders to Borrower pursuant
to and in accordance with the terms and conditions of this Agreement.

"Affiliate" means, as to any Person, (a) any corporation in which such Person or
any partner, shareholder, director, officer, member, or manager of such Person,
at any level, directly or indirectly owns or controls more than ten percent
(10%) of the beneficial interest, (b) any partnership, joint venture or limited
liability company in which such Person or any partner, shareholder, director,
officer, member, or manager of such Person, at any level, is a partner, joint
venturer or member, (c) any trust in which such Person or any partner,
shareholder, director, officer, member or manager of such Person, at any level,
or any individual related by birth, adoption or marriage to such Person, is a
trustee or beneficiary, (d) any entity of any type which is directly or
indirectly owned or controlled by (or is under common control with) such Person
or any partner, shareholder, director, officer, member or manager of such
Person, at any level, (e) any partner, shareholder, director, officer, member,
manager or employee of such Person, or (f) any individual related by birth,
adoption or marriage to any partner, shareholder, director, officer, member,
manager, or employee of such Person. Each Borrower Party shall be

 

 

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deemed to be an Affiliate of Borrower.

"Alternate Base Rate" means, for any day, a rate per annum equal to the Prime
Rate in effect for such day plus one and eighteen hundredths percent (1.18%) per
annum.

"Alternate Base Rate Loans" means Loans that bear interest at rates based upon
the Alternate Base Rate.

"Applicable Lending Office" means, for each Lender and for each Type of Loan,
the "Lending Office" of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on the respective signature pages hereof or
such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Collateral Agent and Borrower as the
office by which its Loans of such Type are to be made and maintained.

"Approved Leasing Parameters" means the leasing parameters for the Office
Building set forth on Schedule 1.1(D).

"Assignment and Acceptance" means an Assignment and Acceptance, duly executed by
the parties thereto, in form and substance acceptable to the Collateral Agent in
accordance with Section 4.2(1).

"Basel Accord" means the proposals for risk-based capital framework described by
the Basel Committee on Banking Regulations and Supervisory Practices in its
paper entitled "International Convergence of Capital Measurement and Capital
Standards" dated July 1988, as amended, modified and supplemented and in effect
from time to time or any replacement thereof.

"Borrower Party" means any Guarantor and any managing member in Borrower, at any
level.

"Budget" means the budget attached as Schedule 1.1(A) showing total costs
relating to the subject transaction, use of the initial advance of Loans, and
amounts allocated for future advances (if any), together with the Capex Budget.

"Business Day" means (a) any day other than a Saturday, a Sunday or other day on
which commercial banks located in the State of New York or the State of Illinois
are authorized or required by law to remain closed and (b) in connection with a
borrowing of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
by Borrower with respect to any such borrowing, payment, prepayment or
Conversion, the term "Business Day" shall also exclude a day on which banks are
not open for dealings in Dollar deposits in the London interbank market.

"Capex Budget" means the budget for the Capex Work, attached as
Schedule 1.1(A-1).

"Capex Costs" means all hard and soft costs and expenses of every nature
relating to the Capex Work.

"Capex Work" means the capital improvements and other work to floors 37-47

 

 

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of the Office Building contemplated by the Capex Budget, as set forth in the
plans and specifications for such work approved by Collateral Agent.

"Closing Date" means the date on which the Lenders make the Initial Advance.

"Collateral" means the Project and any other property that at any time secures
the Loans or any portion thereof.

"Collateral Agent Account" means, for any reserve established pursuant to this
Agreement or the other Loan Documents, an account of the type customarily
maintained by Collateral Agent or its servicing agent for (and may be commingled
with) similar reserves or Collateral Agent's general funds. Such account shall
be in Collateral Agent's name, as agent for the Lenders, or such other account
name as Collateral Agent may elect. Such account shall be maintained at a
financial institution or other depository selected by Collateral Agent (or its
servicer) in its sole discretion.

"Commitment" means, as to each Lender, the obligation of such Lender to make
Loans in the aggregate principal amount up to but not exceeding the amount set
opposite the name of such Lender on Schedule 1.1(B) under the caption
"Commitment" or, in the case of a Person that becomes a Lender pursuant to an
assignment permitted under Section 4.2(1), as specified in the respective
Assignment and Acceptance pursuant to which such assignment is effected. The
original aggregate principal amount of the Commitments is $100,000,000.00.

"Continue" "Continuation" and "Continued" refer to the continuation pursuant to
Section 2.2 of a Eurodollar Loan from one Interest Period to the next Interest
Period for such Loan.

"Contract Rate" means (a) with respect to the Initial Advance, the Initial
Advance Contract Rate, and (b) with respect to each Subsequent Advance, the
Subsequent Advances Contract Rate.

"Convert" "Conversion" and "Converted" refer to a conversion pursuant to the
terms of this Agreement of one Type of Loan into another Type of Loan, which may
be accompanied by the transfer by a Lender (at its sole discretion) of a Loan
from one Applicable Lending Office to another.

"CTT" means Chicago Title and Trust Company.

"CTT Escrow" means the escrow established with CTT pursuant to the CTT Escrow
Agreement.

"CTT Escrow Agreement" means Construction Escrow Trust and Disbursing Agreement
by and among CTT, Borrower and Collateral Agent (for the benefit of the Lenders
and the Loan A Lender), in form and substance reasonably satisfactory to
Borrower and Collateral Agent.

"Debt Service Coverage Ratio" has the meaning assigned in the Mortgages.

 

 

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"Default Rate" means the lesser of (a) the maximum per annum rate of interest
allowed by applicable law, and (b) five percent (5%) per annum in excess of
(i) with respect to Alternate Base Rate Loans, the Alternate Base Rate as in
effect from time to time or (ii) with respect to all other Loans, the Contract
Rate.

"Dollars" and "$" means lawful money of the United States of America.

"Eligibility Requirements" means, with respect to any Person, that such Person
(a) has total assets (in name or under management) in excess of $600,000,000 and
(except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder's equity in excess of $200,000,000, and
(b) is regularly engaged in the business of making or owning commercial real
estate loans or operating commercial properties.

"Eurodollar Loans" means Loans that bear interest at rates based on rates
referred to in the definition of "LIBOR Rate".

"Event of Default" has the meaning assigned in the Notes.

"Existing TI Obligations" means the tenant improvement allowance obligations
identified on Schedule 1.1(C), which are owed by Borrower to the tenants
described on Schedule 1.1(C) as of the Closing Date.

"Federal Funds Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Rate for such Business Day shall be the average
rate charged to Deutsche Bank AG on such Business Day on such transactions as
determined by the Collateral Agent, or such other commercial bank as selected by
the Collateral Agent.

"Fee Letter" means the letter agreement, dated the date hereof, between Borrower
and the Collateral Agent with respect to certain fees payable by Borrower in
connection with the Loans, as the same may be modified or amended from time to
time.

"Fixed Portion" has the meaning assigned in Section 2.2(3).

"Fixed Rate" means per annum interest rate equal to the Swap Rate plus four and
sixty-two hundredths percent (4.62%).

"Fixed Rate Conversion Date" has the meaning assigned in Section 2.2.

"Fixed Rate Loans" means Loans that bear interest at the Initial Advance
Contract Rate or at a Fixed Rate.

 

 

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"GECC" means General Electric Capital Corporation.

"Guarantors" means the Persons, if any, executing a Guaranty, including Prime
Group Realty, L.P., a Delaware limited partnership.

"Guaranty" means the instruments of guaranty, if any, now or hereafter in effect
from a Guarantor to the Collateral Agent (on behalf of the Lenders).

"Hotel Purchase Agreement" means that certain Agreement for Purchase and Sale of
Hotel Property and the Development of a Hotel dated May 15, 2007 by and between
Borrower and Modern Magic Hotel, LLC ("Hotel Buyer"), as amended by that certain
Sixth Amendment to Agreement for the Purchase and Sale of Hotel Property and the
Development of a Hotel dated as of March 18, 2008 between Borrower and Hotel
Buyer and as previously amended as described in Recital A of such Sixth
Amendment.

"Hotel Work" means, collectively, the "Seller's Turnover Work," the "Seller's
Additional Work" and the "Seller's Additional Shaft Work" as described in the
Hotel Purchase Agreement.

"Hotel Work Reserve" has the meaning assigned in Schedule 2.4(2).

"Initial Advance" has the meaning assigned in Section 2.1.

"Initial Advance Contract Rate" has the meaning assigned in Section 2.2.

"Initial TI/LC Reserve" has the meaning assigned in the Notes.

"Interest Period" means, for any Eurodollar Loan, each period commencing on the
date such Eurodollar Loan is made or Converted from a Loan of another Type or
(in the event of a Continuation) the last day of the immediately preceding
Interest Period for such Loan, and ending on the first Business Day of the next
calendar month; provided that, if any Interest Period would otherwise end after
the Maturity Date, such Loan shall not be Continued as, or Converted into, a
Eurodollar Loan and shall bear interest at the Alternate Base Rate. In no event
may Borrower have more than one Interest Period in respect of Eurodollar Loans
from all Lenders outstanding at any one time and to the extent any Loan does not
qualify for such Interest Period, such loan shall bear interest at the
Alternative Base Rate. Notwithstanding the foregoing, the first Interest Period
shall be the period commencing on the Closing Date and ending on April 1, 2008.

"Interest Rate Cap Security Agreement" means an Interest Rate Cap Security
Agreement, in form and substance reasonably satisfactory to Collateral Agent,
executed by Borrower in favor of Collateral Agent (on behalf of the Lenders).

"Leasehold Mortgage" means that certain Leasehold Mortgage, Assignment of
Leases, Security Agreement and Fixture Filing dated of even date herewith,
executed by Borrower, as mortgagor, in favor of Collateral Agent (on behalf of
the Lenders and the Loan A Lender), as mortgagee, as it may be from time to time
amended, modified, extended, renewed, substituted, and/or supplemented.

 

 

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"Lender Verified NOI" has the meaning assigned in the Mortgages.

"LIBOR Rate" means, for any Interest Period, the 30-day London Interbank Offered
Rate as published in The Wall Street Journal on the date two (2) Business Days
prior to the first day of such Interest Period (in the event no such rate is
published in The Wall Street Journal on such date, then the next immediately
preceding date on which such rate is published by The Wall Street Journal). If
the 30-day London Interbank Offered Rate ceases to be published in, or is
otherwise unascertainable from, The Wall Street Journal, or if the information
contained on such page, in the reasonable judgment of the Collateral Agent shall
cease accurately to reflect the rate offered by leading banks in the London
interbank market as reported by any publicly available source of similar market
data selected by the Collateral Agent, the LIBOR Rate for such Interest Period
shall be determined from such substitute financial reporting service as the
Collateral Agent in its discretion shall determine, so long as the substitute
reporting service is the same substitute reporting service generally selected by
Collateral Agent for purposes of determining the LIBOR Rate for similar loan
transactions; provided, however, if in the Collateral Agent's reasonable
judgment no such suitable substitute reporting service is available, the
Collateral Agent shall select a comparable reference rate as the new index for
purposes of this Agreement, so long as the substitute index is the same
substitute index generally selected by Collateral Agent to replace the LIBOR
Rate in similar loan transactions.

"Libor-based Rate" has the meaning assigned in Section 2.2(2)(a).

"Lien" means any interest, or claim thereof, in the Collateral securing an
obligation owed to, or a claim by, any Person other than the owner of the
Collateral, whether such interest is based on common law, statute or contract,
including the lien or security interest arising from a deed of trust, mortgage,
assignment, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions, leases and other title exceptions
and encumbrances affecting the Collateral.

"Loan A" means the loan in the principal amount of $88,000,000.00, made by the
Loan A Lender to Borrower and evidenced by the Loan A Note.

"Loan A Lender" means ING USA Annuity And Life Insurance Company, an Iowa
corporation, or any subsequent holder of the Loan A Note.

"Loan A Note" means that certain Promissory Note A of even date herewith in the
face amount of $88,000,000.00, executed by Borrower to the order of Loan A
Lender, as it may be from time to time amended, modified, extended, renewed,
substituted and/or supplemented.

"Loan A Loan Documents" means, collectively, the Loan A Note and the other "Loan
Documents" described in the Loan A Note, as they may be from time to time
amended, modified, extended, renewed, substituted and/or supplemented.

"Loans" means the loans to be made by the Lenders to Borrower under this
Agreement.

 

 

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"Loan Documents" means: (a) this Agreement, (b) the Notes, (c) the Mortgages,
(d) each Guaranty, (e) the Interest Rate Cap Security Agreements, (f) all other
security agreements, collateral assignments, instruments and documents
evidencing, securing, governing or otherwise pertaining to the Loans, and
(h) all amendments, modifications, renewals, substitutions and replacements of
any of the foregoing.

"Loan Year" means the period between the Closing Date and March 31, 2009 for the
first Loan Year and the period between each succeeding April 1 and March 31
until the Maturity Date.

"Lockout Period" has the meaning assigned in Section 2.3(4).

"Majority Lenders" means Lenders holding at least fifty-one percent (51%) of the
aggregate outstanding principal amount of the Loans or, if the Loans shall not
have been made, at least fifty-one percent (51%) of the Commitments.

"Maturity Date" means the earlier of (a) March 31, 2013, or (b) any earlier date
on which all of the Loans are required to be paid in full, by acceleration or
otherwise, under this Agreement or any of the other Loan Documents.

"Mortgages" means, collectively, the Office Mortgage and the Leasehold Mortgage.

"Notes" means the promissory notes of even date herewith as provided for in
Section 2.1(4) and all promissory notes delivered in substitution or exchange
therefor, in each case as the same may be consolidated, replaced, severed,
modified, amended or extended from time to time.

"Office Building" means the office tower located at 330 North Wabash Avenue,
Chicago, Illinois, which is encumbered by the Office Mortgage.

"Office Mortgage" means that certain Mortgage, Assignment of Leases, Security
Agreement and Fixture Filing dated of even date herewith, executed by Borrower,
as mortgagor, in favor of Collateral Agent (on behalf of the Lenders and the
Loan A Lender), as mortgagee, as it may be from time to time amended, modified,
extended, renewed, substituted, and/or supplemented.

"Participant" has the meaning assigned in Section 4.2(2).

"Payment Date" has the meaning assigned in Section 2.3(1).

"Payor" has the meaning assigned in Section 2.5(3).

"Person" means any individual, limited liability company, corporation,
partnership (whether general or limited), trust, unincorporated association,
joint venture, joint-stock company, government (including political
subdivisions), governmental authority or agency, or any other entity.

 

 

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"Potential Default" means the occurrence of any event or condition which, with
the giving of notice, the passage of time, or both, would constitute an Event of
Default.

"Prime Rate" means the highest prime rate (or base rate) reported in the Money
Rates column or section of The Wall Street Journal as the rate in effect for
corporate loans at large United States money center commercial banks (whether or
not such rate has actually been charged by any such bank) from time to time. If
The Wall Street Journal ceases publication of the Prime Rate, the "Prime Rate"
shall mean the prime rate (or base rate) announced by Citibank, New York, New
York (whether or not such rate has actually been charged by such bank). If such
bank discontinues the practice of announcing the Prime Rate, the "Prime Rate"
shall mean the prime or base rate charged by a large United States commercial
bank selected by the Collateral Agent to its most creditworthy large corporate
borrowers.

"Project" means the property encumbered by the Mortgages.

"Proposed Lender" has the meaning assigned in Section 2.6(7).

"Qualified Institutional Lender" means one or more of the following (other than
Borrower or any Affiliate of Borrower):

(a)       a bank, saving and loan association, investment bank, insurance
company, trust company, commercial credit corporation, pension plan, pension
fund or pension advisory firm, real estate investment trust, mutual fund, or
government entity or plan, provided that any such Person referred to in this
clause (a) satisfies the Eligibility Requirements;

(b)       an investment company, money management firm or "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, or an institutional "accredited investor" within the meaning
of Regulation D under the Securities Act of 1933, as amended, provided that any
such Person referred to in this clause (b) satisfies the Eligibility
Requirements;

(c)       an institution substantially similar to any of the foregoing entities
described in clauses (a) or (b) that satisfies the Eligibility Requirements; or

(d)       any entity controlled by any of the entities described in clauses (a),
(b) or (c) above.

"Rating Agencies" means, collectively, Moody's Investors Service, Inc., Standard
& Poor's Ratings Services, a division of McGraw-Hill, Inc., and Fitch, Inc.

"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System of the United States of America (or any successor), as the same
may be modified and supplemented and in effect from time to time.

"Regulatory Change" means, with respect to any Lender, any change after the date
hereof in Federal, state or foreign law or regulations (including Regulation D)
or the adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Lender of or under any
Federal, state or foreign law or regulations

 

 

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(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.

"Requesting Lender" has the meaning assigned in Section 2.6(7).

"Required Payment" has the meaning assigned in Section 2.5(3).

"Reserve Requirement" means, for any Interest Period for any Eurodollar Loan,
the average maximum rate at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained during such Interest Period
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding $1,000,000,000 against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall include any other reserves required to
be maintained by such member banks by reason of any Regulatory Change with
respect to (i) any category of liabilities that includes deposits by reference
to which the LIBOR Rate for any Interest Period for any Eurodollar Loans is to
be determined as provided in the definition of "LIBOR Rate" or (ii) any category
of extensions of credit or other assets that includes Eurodollar Loans.

"Secondary Market Transaction" has the meaning assigned in Section 4.1(1).

"Spread Maintenance Amount" means, upon a prepayment of the Loans, the amount of
interest that would be earned on the principal amount of the Loans prepaid, from
the date of prepayment through September 30, 2010, at a rate equal to four and
sixty-two hundredths percent (4.62%) per annum (computed on a 360-day year
basis). For purposes of Section 2.3(4), the Spread Maintenance Amount shall be
separately calculated for (a) the portion of the prepaid principal bearing
interest either at the Initial Advance Contract Rate or at a Fixed Rate, and
(b) the portion of the prepaid principal bearing interest at the Libor-based
Rate (or the Alternate Base Rate, if applicable).

"Stage" and "Stages" have the meanings assigned in Section 5.5.

"Stage Construction Schedule" has the meaning assigned in Section 5.5.

"Subsequent Advance" has the meaning assigned in Section 2.2.

"Subsequent Advances Contract Rate" has the meaning assigned in Section 2.2.

"Swap Rate" will be the yield calculated by linear interpolation (rounded to
one-thousandth of one percent (i.e., .001%)) of the yields, as reported by
Bloomberg LP as the US Dollar Composite Swap Rate with terms (one longer and one
shorter) most nearly approximating the remaining term of the Loans as of the
Fixed Rate Conversion Date. In the event the US Dollar Composite Swap Rate is no
longer quoted by Bloomberg LP, Collateral Agent shall select a comparable
publication to determine the Swap Rate.

"TI/LC/CapEx/DS Reserve" has the meaning assigned in the Notes.

 

 

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"Type" has the meaning assigned in Section 1.2.

 

Section 1.2

Types of Loans

. Loans hereunder are distinguished by "Type". The "Type" of a Loan refers to
whether such Loan is an Alternate Base Rate Loan or a Eurodollar Loan or a Fixed
Rate Loan, each of which constitutes a Type.

ARTICLE 2

 

LOAN TERMS

 

Section 2.1

The Loan Amounts

. The Loans in the aggregate principal amount of up to ONE HUNDRED MILLION AND
NO/100 DOLLARS ($100,000,000.00) shall be funded in one or more Advances and
repaid in accordance with this Agreement. Each Lender severally agrees, on the
terms and conditions of this Agreement, to make the initial Advance in the
aggregate amount of up to $50,000,000.00 (the "Initial Advance"), in accordance
with the Budget upon Borrower's satisfaction of the conditions to the Initial
Advance described in Schedule 2.1. Subsequent Advances for the items shown on
the Budget shall be made upon Borrower's satisfaction of the conditions for such
Advances described in Schedule 2.1. The aggregate amount of all Advances on a
cumulative basis shall not exceed the Commitment. The Loans are not revolving
credit loans, and Borrower is not entitled to any readvances of any portion of
the Loans which it may (or is otherwise required to) prepay pursuant to the
provisions of the Notes or this Agreement.

(1)       Lending Offices. The Loans of each Lender shall be made and maintained
at such Lender's Applicable Lending Office for Loans of such Type.

(2)       Several Obligations. The failure of any Lender to make any Loan to be
made by it on the date specified therefor shall not relieve any other Lender of
its obligation to make its Loan, but neither any Lender nor the Collateral Agent
shall be responsible for the failure of any other Lender to make a Loan to be
made by such other Lender.

 

(3)

Notes.

(a)       Loan Notes. The Loans made by each Lender shall be evidenced by a
single promissory note of Borrower substantially in the form of Exhibit A,
payable to such Lender in a principal amount equal to the amount of its
Commitment as originally in effect and otherwise duly completed.

(b)       Endorsements on Notes. The date, amount, Type, interest rate and
duration of Interest Period (if applicable) of each Loan made by each Lender to
Borrower, and each payment made on account of the principal thereof, shall be
recorded by such Lender on its books and, prior to any transfer of the Note held
by it, endorsed by such Lender on the schedule attached to such Note or

 

 

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any continuation thereof; provided that the failure of such Lender to make any
such recordation or endorsement shall not affect the obligations of Borrower to
make a payment when due of any amount owing hereunder or under such Note in
respect of such Loans.

(c)       Substitution, Exchange and Subdivision of Notes. No Lender shall be
entitled to have its Notes substituted or exchanged for any reason, or
subdivided for promissory notes of lesser denominations, except in connection
with a permitted assignment of all or any portion of such Lender's Commitment,
Loans and Note pursuant to Sections 3.9, 4.1(1), and 4.2 (and, if requested by
any Lender, Borrower agrees to so substitute or exchange any Notes and enter
into note splitter agreements in connection therewith).

(d)       Loss, Theft, Destruction or Mutilation of Notes. In the event of the
loss, theft or destruction of any Note, upon Borrower's receipt of a reasonably
satisfactory indemnification agreement executed in favor of Borrower by the
holder of such Note, or in the event of the mutilation of any Note, upon the
surrender of such mutilated Note by the holder thereof to Borrower, Borrower
shall execute and deliver to such holder a new replacement Note in lieu of the
lost, stolen, destroyed or mutilated Note.

(4)       Funding of Loans. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Collateral Agent
most recently designated by it for such purpose by notice to the Lenders. The
Collateral Agent will promptly make such Loans available to Borrower by wire
transfer of immediately available funds to an account in the United States
designated in writing by Borrower to the Collateral Agent.

 

Section 2.2

Interest Rate; Late Charge

. The outstanding principal balance of the Loans shall bear interest at the
Contract Rate, as follows:

(1)       Initial Advance. The Initial Advance shall bear interest at a fixed
rate of interest equal to seven and ninety-five hundredths percent (7.95%) per
annum (the "Initial Advance Contract Rate").

(2)       Subsequent Advances. Each Loan comprising any Advance other than the
Initial Advance (including any amounts added to principal under the Loan
Documents) (each such Advance, a "Subsequent Advance") shall bear interest at
the following rates:

(a)        excluding Fixed Portions (if any), for each Interest Period, a
variable rate of interest, equal to four and sixty-two hundredths percent
(4.62%) per annum in excess of the Adjusted Libor Rate for such Interest Period
(the "Libor-based Rate"); and

 

 

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(b)       As to each Fixed Portion, a fixed rate of interest equal to the Fixed
Rate for such Fixed Portion, determined in accordance with Section 2.2(3).

The interest rate applicable to the portions of the outstanding principal
balance of the Loans covered by this paragraph (2) as of any day (in accordance
with subparagraphs (a) and (b) above) shall be referred to herein as the
"Subsequent Advances Contract Rate". Subject to the provisions of this Agreement
which, in certain instances, require payment of interest at the Alternate Base
Rate, the Loans bearing interest at the Libor-based Rate shall Continue as
Eurodollar Loans from one Interest Period to the next Interest Period.

(3)       Election of Fixed Rate. During the initial term of the Loans, Borrower
may make elections to Convert portions of the Subsequent Advances in minimum
increments of $250,000 (each, a "Fixed Portion") from the Libor-based Rate (or
Alternate Base Rate, if applicable) to a Fixed Rate in accordance with and
subject to satisfaction of the following conditions:

(a)       No more than six (6) different interest rates may be in effect with
respect to the Loans at any time, including the Initial Advance Contract Rate
and the Libor-based Rate (or Alternate Base Rate, if applicable). For the
avoidance of doubt, at any time while any portion of the Loans bears interest at
the Libor-based Rate (or Alternate Base Rate, if applicable), no more than
four (4) Fixed Portions may be simultaneously in effect.

(b)       Borrower shall make no more than two (2) Conversion elections within
any twelve (12) month period.

(c)       Borrower shall have requested in writing that Collateral Agent provide
Borrower with a quote of a Fixed Rate ("Fixed Rate Quote") for a Fixed Portion.

(d)       Within two (2) Business Days of Collateral Agent's receipt of
Borrower's request for a Fixed Rate Quote, Collateral Agent shall provide
Borrower with a Fixed Rate Quote telephonically, at which time Borrower shall
verbally accept or reject the Fixed Rate Quote. If requested by Collateral
Agent, Borrower's acceptance or rejection of a Fixed Rate Quote shall be
subsequently acknowledged by Borrower promptly in writing, provided that
Borrower's verbal acceptance or rejection of a Fixed Rate Quote shall be
irrevocable regardless of whether Borrower subsequently provides such written
acknowledgement to Collateral Agent.

(e)       No Potential Default or Event of Default shall have occurred and be
continuing, either at the time Collateral Agent receives Borrower's request for
a Fixed Rate Quote or as of the effective date of Borrower's election of the
Fixed Rate.

(f)        Borrower shall have executed such amendments to the Loan Documents,
and such other instruments, agreements, certifications and

 

 

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confirmations, as Collateral Agent shall reasonably require to confirm the
Conversion of the Subsequent Advances Contract Rate for the applicable Fixed
Portion.

(g)       Any and all reasonable costs and expenses incurred by Collateral Agent
in connection with such Conversion, including attorneys' fees and costs, shall
be paid by Borrower.

(h)       If Borrower has satisfied all conditions to such Conversion, then such
Conversion shall become effective as to the applicable Fixed Portion as of the
last day of the Interest Period during which Borrower telephonically accepts the
Fixed Rate Quote as provided in Section 2.3(3)(d) (each such date a "Fixed Rate
Conversion Date").

(4)       Computation of Interest; Late Charge. Interest shall be computed on
the basis of a fraction, the denominator of which is three hundred sixty (360)
and the numerator of which is the actual number of days elapsed (including the
first day but excluding the last day) during the period for which interest is
payable. Principal and other amortization payments shall be applied to the
balance of the Loans as and when actually received. If Borrower fails to pay any
installment of interest or principal within ten (10) days after the date on
which the same is due, Borrower shall pay to the Collateral Agent (on behalf of
the Lenders) a late charge on such past-due amount, as liquidated damages and
not as a penalty, equal to four percent (4%) of such amount, but not in excess
of the maximum amount of interest allowed by applicable law. The foregoing late
charge is intended to compensate the Collateral Agent and the Lenders for the
expenses incident to handling any such delinquent payment and for the losses
incurred by the Collateral Agent and the Lenders as a result of such delinquent
payment. Borrower, the Collateral Agent and the Lenders agree that, considering
all of the circumstances existing on the date this Agreement is executed, the
late charge represents a reasonable estimate of the costs and losses the
Collateral Agent and the Lenders will incur by reason of late payment. Borrower,
the Collateral Agent and the Lenders further agree that proof of actual losses
would be costly, inconvenient, impracticable and extremely difficult to fix.
Acceptance of the late charge shall not constitute a waiver of the default
arising from the overdue installment, and shall not prevent the Collateral Agent
and the Lenders from exercising any other rights or remedies available to the
Collateral Agent and/or the Lenders. While any Event of Default exists, the
Loans shall bear interest at the Default Rate; provided, that during the
continuance of an Event of Default the Collateral Agent may suspend the right of
Borrower to Continue any Loan as a Eurodollar Loan, in which event all Loans
shall be Converted (on the last day(s) of the respective Interest Periods
therefor) into Alternate Base Rate Loans and, thereafter, the Default Rate shall
be computed using the Alternate Base Rate.

 

Section 2.3

Terms of Payment

. The Loans shall be payable as follows:

 

(1)

Interest. A payment of interest only shall be payable on the

 

 

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Closing Date for the first Interest Period. Thereafter, commencing on May 1,
2008, Borrower shall pay interest in arrears on the last day of each Interest
Period (assuming clause (b) of the definition of Business Day applies), or if
the Alternate Base Rate is applicable, the first Business Day of each month
(each, a "Payment Date") in accordance with the wire transfer instructions set
forth in Schedule 2.3(1) hereto (or such other instructions as the Collateral
Agent may from time to time provide) until all amounts secured by and
outstanding under the Loan Documents are paid in full.

(2)       Principal Amortization. The Loans shall be interest-only loans and
Borrower shall not be required to make any regularly scheduled principal
amortization payments.

(3)       Maturity. On the Maturity Date, Borrower shall pay to the Collateral
Agent (on behalf of the Lenders) all outstanding principal, accrued and unpaid
interest, and any other amounts due under the Loan Documents.

(4)       Lockout/Prepayment. Prepayment of the Loans shall be subject to the
following restrictions and limitations:

(a)       The Loans are closed to prepayment, in whole or in part, through the
first Loan Year (the "Lockout Period"), except in connection with a sale of the
"Fourteenth Floor" (as defined in the Notes) in accordance with the terms of the
Notes, in which case partial prepayment shall be permitted upon payment of a
prepayment premium equal to the sum of (i) the Spread Maintenance Amount,
calculated on the portion of the prepaid principal bearing interest at the
Libor-based Rate (or the Alternate Base Rate, if applicable) plus (ii) the
greater of (A) the Spread Maintenance Amount, calculated on the portion of the
prepaid principal bearing interest either at the Initial Advance Contract Rate
or at a Fixed Rate and (B) the sum of the Yield Maintenance Amount plus the Make
Whole Breakage Amount, in each case calculated as provided in Schedule 2.3(4).

(b)       After the Lockout Period, upon not less than thirty (30) days' prior
written notice to the Collateral Agent, Borrower may prepay the Loans, in whole
but not in part (except in connection with a sale of the Fourteenth Floor in
accordance with the terms of the Notes, in which case partial prepayment is
permitted), upon payment of a prepayment premium calculated as follows:

(i)     from the beginning of the second Loan Year through September 30, 2010, a
prepayment premium equal to the sum of (A) the Spread Maintenance Amount,
calculated on the portion of the prepaid principal bearing interest at the
Libor-based Rate (or the Alternate Base Rate, if applicable) plus (B) the
greater of (x) the Spread Maintenance Amount, calculated on the portion of the
prepaid principal bearing interest either at the Initial Advance Contract Rate
or at a Fixed Rate and (y) the sum of the Yield Maintenance Amount plus the Make
Whole Breakage Amount, in each case calculated as provided in

 

 

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Schedule 2.3(4); and

(ii)    thereafter, a prepayment premium equal to the greater of (i) one-quarter
percent (0.25%) of the principal amount prepaid and (ii) the Make Whole Breakage
Amount, calculated as provided in Schedule 2.3(4), except that no premium shall
be due if the Loans are repaid during the sixty (60) day period prior to the
scheduled Maturity Date.

(c)       If the Loans are accelerated during the Lockout Period for any reason
other than casualty or condemnation, Borrower shall pay to the Collateral Agent
(on behalf of the Lenders), in addition to all other amounts outstanding under
the Loan Documents, a prepayment premium equal to five percent (5%) of the
outstanding balance of the Loans plus the prepayment premium described in
Section 2.3(4)(a) above, calculated on the entire outstanding balance of the
Loans. If the Loans are accelerated after the Lockout Period for any reason
other than casualty or condemnation, Borrower shall pay to the Collateral Agent
(on behalf of the Lenders) the applicable prepayment premium described in
Section 2.3(4)(b) above.

The prepayment premium required by this Section 2.3(4) is acknowledged by
Borrower to be partial compensation to the Lenders for the cost of reinvesting
the Loan proceeds and for the loss of the contracted rate of return on the
Loans. Furthermore, Borrower acknowledges that the loss that may be sustained by
the Lenders as a result of such a prepayment by Borrower is not susceptible of
precise calculation and the prepayment premium represents the good faith effort
of Borrower and the Lenders to compensate the Lenders for such loss. Borrower
confirms that the Lenders' agreement to make the Loans at the interest rate(s)
and on the other terms set forth herein constitutes adequate and valuable
consideration, given individual weight by Borrower, for the prepayment
provisions set forth in this Section 2.3(4).

(5)       Fees. As partial consideration for the Lenders' agreement to make the
Loans, Borrower shall pay to the Collateral Agent (on behalf of the Lenders) a
loan origination fee in the amount set forth in the Fee Letter (the "Origination
Fee") and an exit fee in the amount set forth in the Fee Letter (the "Exit
Fee"). The Origination Fee shall be payable in full on or before the Closing
Date. The Exit Fee shall be payable in full upon the first to occur of (i) the
Maturity Date, or (ii) repayment of the Loans in full.

(6)       Application of Payments. All payments received by the Collateral Agent
under the Loan Documents shall be applied in accordance with Paragraph 3 of the
Notes.

 

Section 2.4

Security

. The Loans shall be secured by, among other things, the Mortgages creating
first liens on the Project, and the other Loan Documents. As further security
and credit support for the Loans, Borrower agrees:

 

 

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(1)       to fund the Capital Improvements Reserve in accordance with
Schedule 2.4(1);

(2)       to fund the Cash Collateral Reserve, which Borrower shall replace with
the Letter of Credit, all in accordance with Schedule 2.4(2); and

(3)       to fund the Hotel Work Reserve in accordance with Schedule 2.4(3).

 

Section 2.5

Payments; Pro Rata Treatment; Etc.

 

 

(1)

Payments Generally.

(a)       Payments by Borrower. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by Borrower
under this Agreement and the Notes, and, except to the extent otherwise provided
therein, all payments to be made by Borrower under any other Loan Document,
shall be made by 12:00 Noon. (New York City time), on the day when due. Subject
to Paragraph 3 of the Notes, such payments shall be made to the Collateral Agent
(i) if by mail or overnight delivery to the Collateral Agent at c/o GEMSA Loan
Services, L.P., File 55307, Los Angeles, California 90074-5307, or (ii) if by
wire transfer, in accordance with the wire transfer instructions set forth in
Schedule 2.3(1) hereto (or such other instructions as the Collateral Agent may
from time to time provide), or to any successor loan servicer or any other
addressee from time to time designated by the Collateral Agent upon prior
written notice to the Borrower, in lawful money of the United States of America
in funds immediately available at such office without setoff, counterclaim or
other deduction of any nature. Any such payment received by the Collateral Agent
after 12:00 Noon (New York City time), on any day shall be deemed to have been
received on the next succeeding Business Day.

(b)       Application of Payments. Subject to the provisions of Section 2.3(6)
and Section 2.6, Borrower shall, at the time of making each payment under this
Agreement or any Note for account of any Lender, specify to the Collateral Agent
the Loans or other amounts payable by Borrower hereunder for which such payment
is intended to be applied (and in the event that Borrower fails to so specify,
or if an Event of Default has occurred and is continuing, the Collateral Agent
shall apply payments it receives in accordance with Paragraph 3 of the Notes).

(c)       Forwarding of Payments by the Collateral Agent. Except as otherwise
agreed by the Collateral Agent and the Lenders, each payment received by the
Collateral Agent under this Agreement or any Note for account of any Lender
shall be paid by the Collateral Agent promptly to such Lender, in immediately
available funds, for account of such Lender's Applicable Lending Office for the
Loans or other obligation in respect of which such

 

 

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payment is made.

(d)       Extensions to Next Business Day. If the due date of any payment under
this Agreement or any Note would otherwise fall on a day that is not a Business
Day, such date shall be extended to the next succeeding Business Day, and
interest shall be payable for any principal so extended for the period of such
extension.

(2)       Pro Rata Treatment. Except to the extent otherwise provided herein or
in any other agreement among the Collateral Agent and the Lenders: (a) each
advance of a Loan from the Lenders under Section 2.1 shall be made from the
Lenders, and any termination of the obligation to make an advance of the Loans
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (b) except as
otherwise provided in Section 2.5(4), Loans shall be allocated pro rata among
the Lenders according to the amounts of their respective Commitments (in the
case of the making of Loans) or their respective Loans (in the case of
Conversions or Continuations of Loans); (c) each payment or prepayment of
principal of Loans by Borrower shall be made for account of the Lenders pro rata
in accordance with the respective unpaid principal amounts of the Loans held by
them; and (d) each payment of interest on Loans by Borrower shall be made for
account of the Lenders pro rata in accordance with the amounts of interest on
such Loans then due and payable to the respective Lenders.

(3)       Non Receipt of Funds by the Collateral Agent. Unless the Collateral
Agent shall have been notified by a Lender or Borrower (in either case, the
"Payor") prior to the date on which the Payor is to make payment to the
Collateral Agent of (in the case of a Lender) the proceeds of a Loan to be made
by such Lender hereunder or (in the case of Borrower) a payment to the
Collateral Agent for account of any Lender hereunder (in either case, such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Collateral Agent, the Collateral Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made the Required
Payment to the Collateral Agent, the recipient(s) of such payment shall, on
demand, repay to the Collateral Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
(the "Advance Date") such amount was so made available by the Collateral Agent
until the date the Collateral Agent recovers such amount at a rate per annum
equal to (a) the Federal Funds Rate for such day in the case of payments
returned to the Collateral Agent by any of the Lenders or (b) the applicable
interest rate due hereunder with respect to payments returned by Borrower to the
Collateral Agent and, if such recipient(s) shall fail promptly to make such
payment, the Collateral Agent shall be entitled to recover such amount, on
demand, from the Payor, together with interest as aforesaid, provided that if
neither the recipient(s) nor the Payor shall return the Required Payment to the
Collateral Agent within three (3) Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s) shall each be
obligated to pay interest on the Required Payment as follows:

 

 

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(a)       if the Required Payment shall represent a payment to be made by
Borrower to the Lenders, Borrower and the recipient(s) shall each be obligated
retroactively to the Advance Date to pay interest in respect of the Required
Payment at the Default Rate (without duplication of the obligation of Borrower
under Section 2.2 to pay interest on the Required Payment at the Default Rate),
it being understood that the return by the recipient(s) of the Required Payment
to the Collateral Agent shall not limit such obligation of Borrower under
Section 2.2 to pay interest at the Default Rate in respect of the Required
Payment, and

(b)       if the Required Payment shall represent proceeds of a Loan to be made
by the Lenders to Borrower, the Payor and Borrower shall each be obligated
retroactively to the Advance Date to pay interest in respect of the Required
Payment pursuant to whichever of the rates specified in Section 2.2 is
applicable to the Type of such Loan, it being understood that the return by
Borrower of the Required Payment to the Collateral Agent shall not limit any
claim Borrower may have against the Payor in respect of such Required Payment.

 

(4)

Sharing of Payments, Etc.

(a)       Right of Set off. Borrower agrees that while any Event of Default
exists, in addition to (and without limitation of) any right of set off,
banker's lien or counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option (to the fullest extent permitted by law), to set off and
apply any deposit (general or special, time or demand, provisional or final), or
other indebtedness, held by it for the credit or account of Borrower at any of
its offices, in Dollars or in any other currency, against any principal of or
interest on any of such Lender's Loans or any other amount payable to such
Lender hereunder, that is not paid when due (regardless of whether such deposit
or other indebtedness is then due to Borrower), in which case it shall promptly
notify Borrower and the Collateral Agent thereof, provided that such Lender's
failure to give such notice shall not affect the validity thereof.

(b)       Sharing. If any Lender shall obtain from Borrower payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement or any other Loan Document through the exercise of any
right of set off, banker's lien or counterclaim or similar right or otherwise
(other than from the Collateral Agent as provided herein), and, as a result of
such payment, such Lender shall have received a greater percentage of the
principal of or interest on the Loans or such other amounts then due hereunder
or thereunder by Borrower to such Lender than the percentage received by any
other Lender, it shall promptly purchase from such other Lenders participations
in (or, if and to the extent specified by such Lender, direct interests in) the
Loans or such other amounts, respectively, owing to such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses that
may be incurred by

 

 

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such Lender in obtaining or preserving such excess payment) pro rata in
accordance with the unpaid principal of and/or interest on the Loans or such
other amounts, respectively, owing to each of the Lenders. To such end all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.

(c)       Consent by Borrower. Borrower agrees that, while any Event of Default
exists, any Lender so purchasing such a participation (or direct interest) may
exercise all rights of set off, banker's lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender were a direct
holder of Loans or other amounts (as the case may be) owing to such Lender in
the amount of such participation.

(d)       Rights of Lenders; Bankruptcy. Nothing contained herein shall require
any Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a set off to which this Section 2.5(4) applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders entitled under this
Section 2.5(4) to share in the benefits of any recovery on such secured claim.

 

Section 2.6

Yield Protection; Etc.

 

 

(1)

Additional Costs.

(a)       Costs of Making or Maintaining Eurodollar Loans. Borrower shall pay
directly to each Lender from time to time such amounts as such Lender may
determine to be necessary to compensate such Lender for any costs that such
Lender determines are attributable to its making or maintaining of any
Eurodollar Loans or its obligation to make any Eurodollar Loans hereunder, or
any reduction in any amount receivable by such Lender hereunder in respect of
any of such Loans or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), resulting from any
Regulatory Change that:

(i)   shall subject any Lender (or its Applicable Lending Office for any of such
Loans) to any tax, duty or other charge in respect of such Loans or its Note or
changes the basis of taxation of any amounts payable to such Lender under this
Agreement or its Note in respect of any of such Loans (excluding changes in the
rate of tax on the overall net income of such Lender or of such Applicable
Lending Office by the jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or

 

 

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(ii)  imposes or modifies any reserve, special deposit or similar requirements
(other than the Reserve Requirement used in the determination of the Adjusted
Libor Rate for any Interest Period for such Loan) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Lender (including any of such Loans or any deposits referred to in the
definition of "LIBOR Rate"), or any commitment of such Lender (including the
Commitment of such Lender hereunder); or

(iii) imposes any other condition affecting this Agreement or its Note (or any
of such extensions of credit or liabilities) or its Commitment.

If any Lender requests compensation from Borrower under this paragraph (a),
Borrower may, by notice to such Lender (with a copy to the Collateral Agent),
suspend the obligation of such Lender thereafter to make or Continue Eurodollar
Loans, or to Convert Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 2.6(4) shall be applicable), provided that such suspension shall not
affect the right of such Lender to receive the compensation so requested.

(b)       Costs Attributable to Regulatory Change or Risk-Based Capital
Guidelines. Without limiting the effect of the foregoing provisions of this
Section 2.6(1) (but without duplication), Borrower shall pay directly to each
Lender from time to time on request such amounts as such Lender may determine to
be necessary to compensate such Lender (or, without duplication, the bank
holding company of which such Lender is a subsidiary) for any costs that it
determines are attributable to the maintenance by such Lender (or any Applicable
Lending Office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority (i) following any Regulatory Change
or (ii) implementing any risk based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) hereafter issued by any government or governmental
or supervisory authority implementing at the national level the Basel Accord, of
capital in respect of its Commitment or Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Lender (or any Applicable Lending Office or such bank
holding company) to a level below that which such Lender (or any Applicable
Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request.

(c)       Notification and Certification. Each Lender shall notify Borrower of
any event occurring after the date hereof entitling such Lender to compensation
under Section 2.6(1)(a) or Section 2.6(1)(b) as promptly as practicable, but in
any event within forty-five (45) days, after such Lender obtains actual
knowledge thereof; provided that (i) if any Lender fails to give such notice
within forty-five (45) days after it obtains actual knowledge of such an event,

 

 

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such Lender shall, with respect to compensation payable pursuant to this
Section 2.6(1) in respect of any costs resulting from such event, only be
entitled to payment under this Section 2.6(1) for costs incurred from and after
the date forty-five (45) days prior to the date that such Lender does give such
notice and (ii) each Lender will designate a different Applicable Lending Office
for the Loans of such Lender affected by such event if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the sole opinion of such Lender, be disadvantageous to such Lender, except that
such Lender shall have no obligation to designate an Applicable Lending Office
located in the United States of America. Each Lender will furnish to Borrower a
certificate setting forth the basis and amount of each request by such Lender
for compensation under Section 2.6(1)(a) or Section 2.6(1)(b). Determinations
and allocations by any Lender for purposes of this Section 2.6(1) of the effect
of any Regulatory Change pursuant to Section 2.6(1)(a), or of the effect of
capital maintained pursuant to Section 2.6(1)(b), on its costs or rate of return
of maintaining Loans or its obligation to make Loans, or on amounts receivable
by it in respect of Loans, and of the amounts required to compensate such Lender
under this Section 2.6(1), shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.

(2)       Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the LIBOR Rate for any
Interest Period for any Eurodollar Loan:

(a)       the Collateral Agent determines, which determination shall be
conclusive absent manifest error, that quotations of interest rates for the
relevant deposits referred to in the definition of "LIBOR Rate" are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein; or

(b)       the Majority Lenders determine, which determination shall be
conclusive, and notify the Collateral Agent that the relevant rates of interest
referred to in the definition of "LIBOR Rate" upon the basis of which the rate
of interest for Eurodollar Loans for such Interest Period is to be determined
are not likely adequately to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;

then the Collateral Agent shall give Borrower and each Lender prompt notice
thereof and, so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional Eurodollar Loans, to Continue Eurodollar
Loans or to Convert Loans of any other Type into Eurodollar Loans, and on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, such Loans shall be automatically Converted into Alternate
Base Rate Loans.

(3)       Illegality. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender or its Applicable Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder
(and, in the sole

 

 

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opinion of such Lender, the designation of a different Applicable Lending Office
would either not avoid such unlawfulness or would be disadvantageous to such
Lender), then such Lender shall promptly notify Borrower thereof (with a copy to
the Collateral Agent) and such Lender's obligation to make or Continue, or to
Convert Loans of any other Type into, Eurodollar Loans shall be suspended until
such time as such Lender may again make and maintain Eurodollar Loans (in which
case the provisions of Section 2.6(4) shall be applicable).

(4)       Treatment of Affected Loans. If the obligation of any Lender to make
Eurodollar Loans or to Continue, or to Convert Alternate Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 2.6(2) or
Section 2.6(3), such Lender's Loans shall be automatically Converted into
Alternate Base Rate Loans on the last day(s) of the then current Interest
Period(s) for Loans (or, in the case of a Conversion resulting from a
circumstance described in Section 2.6(3), on such earlier date as such Lender
may specify to Borrower with a copy to the Collateral Agent) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 2.6(2) or Section 2.6(3) that gave rise to such Conversion
no longer exist:

(a)       to the extent that such Lender's Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender's Loans shall be applied instead to its Alternate Base Rate Loans; and

(b)       all Loans that would otherwise be made or Continued by such Lender as
Eurodollar Loans shall be made or Continued instead as Alternate Base Rate
Loans, and all Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Alternate Base Rate Loans.

If such Lender gives notice to Borrower with a copy to the Collateral Agent that
the circumstances specified in Section 2.6(2) or Section 2.6(3) that gave rise
to the Conversion of such Lender's Loans pursuant to this Section 2.6(4) no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Alternate Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Alternate Base Rate Loans and Eurodollar Loans are allocated
among the Lenders ratably (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.

(5)       Compensation. Borrower shall pay to the Collateral Agent for account
of each Lender, upon the request of such Lender through the Collateral Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense that such Lender
determines is attributable to:

(a)       any payment, prepayment or Conversion of a Eurodollar Loan made by
such Lender for any reason (including the acceleration of the

 

 

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Loans pursuant to the Collateral Agent's or the Lenders' rights under the Loan
Documents) on a date other than the last day of the Interest Period for such
Loan; or

(b)       any failure by Borrower for any reason to borrow a Eurodollar Loan
from such Lender on the date for such borrowing specified in the relevant notice
of borrowing given to the Collateral Agent in accordance with the terms of this
Agreement.

Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such
Lender), or if such Lender shall cease to make such bids, the equivalent rate,
as reasonably determined by such Lender, derived from The Wall Street Journal or
other publicly available source as described in the definition of "LIBOR Rate."

 

(6)

United States Taxes.

(a)       Gross-up for Deduction or Withholding of United States Taxes. Borrower
agrees to pay to each Lender that is not a U.S. Tax Person such additional
amounts as are necessary in order that the net payment of any amount due to such
non-U. S. Tax Person hereunder after deduction for or withholding in respect of
any U.S. Taxes imposed with respect to such payment (or in lieu thereof, payment
of such U.S. Taxes by such non-U.S. Tax Person), will not be less than the
amount stated herein to be then due and payable, provided that the foregoing
obligation to pay such additional amounts shall not apply:

(i)   to any payment to any Lender hereunder unless such Lender is, on the date
hereof (or on the date it becomes a Lender hereunder as provided in
Section 4.2(1)) and on the date of any change in the Applicable Lending Office
of such Lender, either entitled to submit a Form W-8BEN (relating to such Lender
and entitling it to a complete exemption from withholding on all interest to be
received by it hereunder in respect of the Loans) or Form W-8ECI (relating to
all interest to be received by such Lender hereunder in respect of the Loans),
or

(ii)  to any U.S. Taxes imposed solely by reason of the failure by such non-U.S.
Tax Person to comply with applicable certification, information,

 

 

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documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of such
non-U.S. Tax Person if such compliance is required by statute or regulation of
the United States of America as a precondition to relief or exemption from such
U.S. Taxes.

For the purposes hereof, (A) "U.S. Tax Person" means a citizen, national or
resident of the United States of America, a corporation, limited liability
company, partnership or other entity created or organized in or under any laws
of the United States of America or any State thereof, or any estate or trust
that is subject to Federal income taxation regardless of the source of its
income, (B) "U.S. Taxes" means any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof or therein, (C) "Form W-8BEN" means Form W-8BEN of the
Department of the Treasury of the United States of America, and (D) "Form
W-8ECI" means Form W-8ECI of the Department of the Treasury of the United States
of America. Each of the forms referred to in the foregoing clauses (C) and (D)
shall include such successor and related forms as may from time to time be
adopted by the relevant taxing authorities of the United States of America to
document a claim to which such form relates.

(b)       Evidence of Deduction, Etc. Within thirty (30) days after paying any
amount to the Collateral Agent or any Lender from which it is required by law to
make any deduction or withholding, and within thirty (30) days after it is
required by law to remit such deduction or withholding to any relevant taxing or
other authority, Borrower shall deliver to the Collateral Agent for delivery to
such non-U.S. Tax Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).

(c)       Refund. If any Lender receives a refund of, or realizes a credit
relating to, any tax which has been paid by Borrower pursuant to any provision
of this Section 2.6, or the cost of which Borrower has borne pursuant to any
provision of this Section 2.6, it shall pay over such refund or credit to
Borrower when received or realized by the applicable Lender.

(7)       Replacement of Lenders. If any Lender requests compensation pursuant
to Section 2.6(1) or Section 2.6(6), or any Lender's obligation to Continue
Loans of any Type, or to Convert Loans of any Type into the other Type of Loan,
shall be suspended pursuant to Section 2.6(2) or Section 2.6(3) (any such Lender
requesting such compensation, or whose obligations are so suspended, being
herein called a "Requesting Lender"), Borrower, upon three (3) Business Days
notice, may require that such Requesting Lender transfer all of its right, title
and interest under this Agreement and such Requesting Lender's Note to any bank
or other financial institution (a "Proposed Lender") identified by Borrower that
is an Qualified Institutional Lender and is reasonably satisfactory to
Collateral Agent (provided that the other Lenders first shall have the right to
acquire the Requesting Lender's Loans on a pro rata basis, in accordance with
their respective Commitments) (i) if such Proposed Lender agrees to assume all
of

 

 

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the obligations of such Requesting Lender hereunder, and to purchase all of such
Requesting Lender's Loans hereunder for consideration equal to the aggregate
outstanding principal amount of such Requesting Lender's Loans, together with
interest thereon to the date of such purchase (to the extent not paid by
Borrower), and satisfactory arrangements are made for payment to such Requesting
Lender of all other amounts accrued and payable hereunder to such Requesting
Lender as of the date of such transfer (including any fees accrued hereunder and
any amounts that would be payable under Section 2.6(5) as if all of such
Requesting Lender's Loans were being prepaid in full on such date) and (ii) if
such Requesting Lender has requested compensation pursuant to Section 2.6(1) or
Section 2.6(6), such Proposed Lender's aggregate requested compensation, if any,
pursuant to Section 2.6(1) or Section 2.6(6) with respect to such Requesting
Lender's Loans is lower than that of the Requesting Lender. Subject to the
provisions of Section 4.2(1), such Proposed Lender shall be a "Lender" for all
purposes hereunder. Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements of Borrower contained in Section 2.6(1),
Section 2.6(6) and Section 3.4 (without duplication of any payments made to such
Requesting Lender by Borrower or the Proposed Lender) shall survive for the
benefit of such Requesting Lender under this Section 2.6(7) with respect to the
time prior to such replacement.

ARTICLE 3

 

MISCELLANEOUS

 

Section 3.1

Notices

. All notices, demands, requests, and other communications desired or required
to be given hereunder (hereinafter individually referred to as a "Notice" and
collectively referred to as the "Notices") shall be in writing and shall be
given by: (1) hand delivery to the address for Notices; (2) delivery by
overnight courier service to the address for Notices; or (3) sending the same by
United States mail, postage prepaid, certified mail, return receipt requested,
addressed to the address for Notices. All Notices shall be deemed given and
effective upon the earliest to occur of: (a) the hand delivery of such Notice to
the address for Notices; (b) one (1) Business Day after the deposit of such
Notice with an overnight courier service by the time deadline for next day
delivery addressed to the address for Notices; or (c) three (3) Business Days
after depositing the Notice in the United States mail as set forth in clause (3)
above. All Notices shall be shall be mailed, sent or delivered, addressed to the
party for whom it is intended at its address set forth below.

If to Borrower:

330 N. Wabash Avenue, L.L.C.

c/o Prime Group Realty Trust

77 West Wacker Drive

Suite 3900

Chicago, Illinois 60601

Attn.: Jeffrey A. Patterson

 

 

 

 

 

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with a copy to:

330 N. Wabash Avenue, L.L.C.

c/o Prime Group Realty Trust

77 West Wacker Drive

Suite 3900

Chicago, Illinois 60601

Attn.: James F. Hoffman, Esq.

 

and

 

Jones Day

77 West Wacker Drive, 35th Floor

Chicago, Illinois 60601

Attn.: Stephen E. Hall, Esq.

 

 

If to Collateral Agent:

General Electric Capital Corporation

c/o GE Real Estate

500 W. Monroe Street

Chicago, Illinois 60661

Attention: Asset Manager (IBM Plaza)

 

and

 

General Electric Capital Corporation

c/o GE Real Estate – Legal

901 Main Avenue

Norwalk, Connecticut 06851

Attention: Paul Mundinger, Esq.

 

 

with a copy to:

Reed Smith LLP

1650 Market Street, Suite 2500

Philadelphia, PA 19103

Attention: Stephen M. Lyons III, Esq.

 

 

 

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If to GECC as a Lender

General Electric Capital Corporation

c/o GE Real Estate

500 W. Monroe Street

Chicago, Illinois 60661

Attention: Asset Manager (IBM Plaza)

 

and

 

General Electric Capital Corporation

c/o GE Real Estate – Legal

901 Main Avenue

Norwalk, Connecticut 06851

Attention: Paul Mundinger, Esq.

Provided, that the "copy to" Notice to be given as set forth above is a courtesy
copy only; and a Notice given to such Person is not sufficient to effect giving
a Notice to the principal party, nor does a failure to give such a courtesy copy
of a Notice constitute a failure to give Notice to the principal party. Any
party may designate a change of address by written notice to the other parties
by giving at least ten (10) days prior written notice of such change of address.

 

Section 3.2

Amendments and Waivers; References.

 

(1)       Subject to any consents required pursuant to this Section 3.2 and any
other provisions of this Agreement and any other Loan Document which expressly
require the consent, approval or authorization of the Lenders or the Majority
Lenders, and subject to the terms of the Administration Agreement, this
Agreement and any other Loan Document may be modified or supplemented only by an
instrument in writing signed by Borrower and the Collateral Agent; provided
that, the Collateral Agent may (without any Lender's consent) give or withhold
its agreement to any amendments of the Loan Documents or any waivers or consents
in respect thereof or exercise or refrain from exercising any other rights or
remedies which the Collateral Agent may have under the Loan Documents or
otherwise provided that such actions do not, in the Collateral Agent's judgment
reasonably exercised, materially adversely affect the value of any Collateral,
taken as a whole, or represent a departure from Collateral Agent's standard of
care described in Section 4.7 (and the assignment or granting of a participation
by GECC shall not limit or otherwise affect its discretion in respect of any of
the foregoing), except that the Collateral Agent will not, without the consent
of each Lender, agree to the following (provided that no Lender's consent shall
be required for any of the following which are otherwise required or
contemplated under the Loan Documents): (a) reduce the principal amount of the
Loans or reduce the interest rate thereon; (b) extend any stated payment date
for principal of or interest on the Loans payable to such Lender; (c) release
Borrower, any guarantor or any other party from liability under the Loan
Documents (except for any assigning Lender pursuant to Section 4.2 and any
resigning Collateral Agent pursuant to Section 4.10); (d) release or subordinate
in whole or in part any

 

 

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material portion of the collateral given as security for the Loans; (e) modify
any of the provisions of this Section, the definition of "Majority Lenders" or
any other provision in the Loan Documents specifying the number or percentage of
Lenders required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder; (f) amend the terms of any Event
of Default; or (g) consent to (i) the sale, transfer or encumbrance of any
portion of the Project (or any interest therein) or any direct or indirect
ownership interest therein and (ii) the incurrence by Borrower of any additional
indebtedness secured by the Collateral, in each case to the extent (and subject
to any standard of reasonability) such consent is required under the Loan
Documents.

(2)       Notwithstanding anything to contrary contained in this Agreement, any
modification or supplement of Article 4, or of any of the rights or duties of
the Collateral Agent hereunder, shall require the consent of the Collateral
Agent.

(3)       This Agreement and the other Loan Documents shall not be executed,
entered into, altered, amended, or modified by electronic means. Without
limiting the generality of the foregoing, the Borrower, the Collateral Agent and
the Lenders hereby agree that the transactions contemplated by this Agreement
shall not be conducted by electronic means, except as specifically set forth in
Section 3.1 regarding notices.

(4)       Any reference to a Loan Document, whether in this Agreement or in any
other Loan Document, shall be deemed to be a reference to such Loan Document as
it may hereafter from time to time be amended, modified, supplemented and
restated in accordance with the terms hereof.

 

Section 3.3

Invalid Provisions

. If any provision of any Loan Document is held to be illegal, invalid or
unenforceable, such provision shall be fully severable; the Loan Documents shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part thereof; the remaining provisions thereof shall
remain in full effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance therefrom; and in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically
as a part of such Loan Document a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible to be legal, valid and
enforceable.

 

Section 3.4

Reimbursement of Expenses

. Borrower shall pay all reasonable costs and expenses incurred by the
Collateral Agent and GECC in connection with the negotiation, documentation,
closing, disbursement and administration of the Loans, including fees and
expenses of the Collateral Agent's and/or GECC's attorneys and the Collateral
Agent's environmental, engineering, accounting and other consultants; fees,
charges and taxes for the recording or filing of Loan Documents; financial
investigation, audit and inspection fees and costs; settlement of condemnation
and casualty awards; title search costs, premiums for title insurance and
endorsements thereto; and fees and costs for UCC and litigation searches and
background checks. Borrower shall, upon request,

 

 

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promptly reimburse the Collateral Agent and the Lenders for all amounts
expended, advanced or incurred by the Collateral Agent and the Lenders to
collect the Notes, or to enforce the rights of the Collateral Agent and/or the
Lenders under this Agreement or any other Loan Document, or to defend or assert
the rights and claims of the Collateral Agent and/or the Lenders under the Loan
Documents or with respect to the Collateral (by litigation or other
proceedings), which amounts will include all court costs, attorneys' fees and
expenses, fees of auditors and accountants, and investigation expenses as may be
incurred by the Collateral Agent and the Lenders in connection with any such
matters (whether or not litigation is instituted), together with interest at the
Default Rate on each such amount from the date of disbursement until the date of
reimbursement to the Collateral Agent and the Lenders, all of which shall
constitute part of the Loans and shall be secured by the Loan Documents.

 

Section 3.5

Approvals; Third Parties; Conditions

. All rights retained or exercised by the Collateral Agent and the Lenders to
review or approve leases, contracts, plans, studies and other matters, including
Borrower's and any other Person's compliance with the provisions of Paragraph 27
of the Notes and compliance with laws applicable to Borrower, the Project or any
other Person, are solely to facilitate the Lenders' credit underwriting, and
shall not be deemed or construed as a determination that the Collateral Agent or
the Lenders have passed on the adequacy thereof for any other purpose and may
not be relied upon by Borrower or any other Person. This Agreement is for the
sole and exclusive use of the Collateral Agent, the Lenders and Borrower, and
may not be enforced, nor relied upon, by any Person other than the Collateral
Agent, the Lenders and Borrower. All conditions of the obligations of the
Collateral Agent and the Lenders hereunder, including the obligation to make
advances, are imposed solely and exclusively for the benefit of the Collateral
Agent and the Lenders, their successors and assigns, and no other Person shall
have standing to require satisfaction of such conditions or be entitled to
assume that the Lenders will refuse to make advances in the absence of strict
compliance with any or all of such conditions, and no other Person shall, under
any circumstances, be deemed to be a beneficiary of such conditions, any and all
of which may be freely waived in whole or in part by the Collateral Agent and
the Lenders at any time in their sole discretion.

Section 3.6     Lenders and Collateral Agent Not in Control; No Partnership

. None of the covenants or other provisions contained in this Agreement shall,
or shall be deemed to, give the Collateral Agent or any Lender the right or
power to exercise control over the affairs or management of Borrower, the power
of the Collateral Agent and the Lenders being limited to the rights to exercise
the remedies referred to in the Loan Documents. The relationship between
Borrower, on the one hand, and the Collateral Agent and the Lenders on the
other, and at all times shall remain, solely that of debtor and creditor. No
covenant or provision of the Loan Documents is intended, nor shall it be deemed
or construed, to create a partnership, joint venture, agency or common interest
in profits or income between or among the Collateral Agent, the Lenders and
Borrower or to create an equity in the Project in the Collateral Agent or the
Lenders. The Collateral Agent and the Lenders neither undertake nor assume any
responsibility or duty to Borrower or to any other Person with respect to the
Project or the Loans, except as expressly provided in the Loan Documents; and
notwithstanding any other provision of the Loan Documents: (1) neither the
Collateral Agent nor any Lender is, nor shall it be construed

 

 

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as, a partner, joint venturer, alter ego, manager, controlling person or other
business associate or participant of any kind of Borrower or its stockholders,
members or partners, and neither the Collateral Agent nor any Lender intends
ever to assume such status; (2) no Lender or the Collateral Agent shall in any
event be liable for any indebtedness, obligations, expenses or losses incurred
or sustained by Borrower; and (3) no Lender or the Collateral Agent shall be
deemed responsible for or a participant in any acts, omissions or decisions of
Borrower or its stockholders, members, or partners. The Collateral Agent, the
Lenders and Borrower disclaim any intention to create any partnership, joint
venture, agency or common interest in profits or income among the Collateral
Agent, the Lenders and Borrower, or to create any equity in the Project in the
Collateral Agent or any Lender, or any sharing of liabilities, losses, costs or
expenses.

 

Section 3.7

Time of the Essence

. Time is of the essence with respect to this Agreement.

 

Section 3.8

Successors and Assigns

. Subject to the provisions of Section 4.2, this Agreement shall be binding upon
and inure to the benefit of the Collateral Agent, each Lender and Borrower and
their respective successors and assigns, provided that Borrower shall not,
without the prior written consent of the Collateral Agent and each Lender,
assign any rights, duties or obligations hereunder or under the other Loan
Documents.

 

Section 3.9

Renewal, Extension or Rearrangement

. All provisions of the Loan Documents shall apply with equal effect to each and
all promissory notes and amendments thereof hereinafter executed which in whole
or in part represent a renewal, extension, increase or rearrangement of the
Loans. For portfolio management purposes, at any time during the term of the
Loans the Lenders may elect to divide the Loans into two or more separate loans
evidenced by separate promissory notes so long as the payment and other
obligations of Borrower are not effectively increased or otherwise modified.
Borrower agrees to cooperate with the Collateral Agent and the Lenders and to
execute such documents as the Collateral Agent and the Lenders reasonably may
request to effect such division of the Loans.

 

Section 3.10

Waivers

. No course of dealing on the part of the Collateral Agent or any Lender, or any
of their respective officers, employees, consultants or agents, nor any failure
or delay by the Collateral Agent or any Lender with respect to exercising any
right, power or privilege of the Collateral Agent or any Lender under any of the
Loan Documents, shall operate as a waiver thereof.

 

Section 3.11

Singular and Plural

. Words used in this Agreement and the other Loan Documents in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular in this Agreement and the other
Loan Documents shall apply to such words when used in the plural where the
context so permits and vice versa.

 

 

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Section 3.12

Phrases

. When used in this Agreement and the other Loan Documents, the phrase
"including" shall mean "including, but not limited to;" the phrases
"satisfactory to any Lender" or "satisfactory to the Collateral Agent" shall
mean in form and substance satisfactory to such Lender or the Collateral Agent,
as the case may be, in all respects; the phrases "with Lender's consent", "with
Lender's approval", "with the Collateral Agent's consent" or "with the
Collateral Agent's approval" shall mean such consent or approval at such
Lender's or the Collateral Agent's, as the case may be, discretion; and the
phrases "acceptable to Lender" or "acceptable to the Collateral Agent" shall
mean "acceptable to such Lender or the Collateral Agent, as the case may be, at
such party's sole discretion."

 

Section 3.13

Exhibits and Schedules

. The exhibits and schedules attached to this Agreement are incorporated herein
and shall be considered a part of this Agreement for the purposes stated herein.

 

Section 3.14

Titles of Articles, Sections and Subsections

. All titles or headings to articles, sections, subsections or other divisions
of this Agreement and the other Loan Documents or the exhibits hereto and
thereto are only for the convenience of the parties and shall not be construed
to have any effect or meaning with respect to the other content of such
articles, sections, subsections or other divisions, such other content being
controlling as to the agreement between the parties hereto.

 

Section 3.15

Promotional Material

. Borrower authorizes the Collateral Agent and each of the Lenders to issue
press releases, advertisements and other promotional materials in connection
with the Collateral Agent's or such Lender's own promotional and marketing
activities, and describing the Loans in general terms or in detail and the
Collateral Agent's or such Lender's participation in the Loans. All references
to the Collateral Agent or any Lender contained in any press release,
advertisement or promotional material issued by Borrower (other than press
releases, or other publicly released material, required by securities or other
similar laws) shall be approved in writing by the Collateral Agent and such
Lender in advance of issuance.

 

Section 3.16

Survival

. All of the representations, warranties, covenants, and indemnities hereunder,
and under the indemnification provisions of the other Loan Documents, shall
survive the repayment in full of the Loans and the release of the liens
evidencing or securing the Loans, and shall survive the transfer (by sale,
foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all
right, title and interest in and to the Collateral to any party, whether or not
an Affiliate of Borrower.

 

Section 3.17

WAIVER OF JURY TRIAL

. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER, THE COLLATERAL AGENT AND
EACH LENDER HEREBY KNOWINGLY,

 

 

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VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY
EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN
ANY WAY RELATING TO THE LOANS OR THE COLLATERAL (INCLUDING ANY ACTION TO RESCIND
OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT
WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A
MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT AND EACH LENDER TO ENTER THIS
AGREEMENT.

 

Section 3.18

Punitive or Consequential Damages; Waiver

. None of the Collateral Agent, the Lenders or Borrower shall be responsible or
liable to any of the others or to any other Person for any punitive, exemplary
or consequential damages which may be alleged as a result of the Loans or the
transaction contemplated hereby, including any breach or other default by any
party hereto. Borrower represents and warrants to the Collateral Agent and the
Lenders that as of the Closing Date neither Borrower nor any Borrower Party has
any claims against the Collateral Agent or any of the Lenders (who are Lenders
as of the Closing Date) in connection with the Loans.

 

Section 3.19

Governing Law

. The Loan Documents are being executed and delivered, and are intended to be
performed, in the state of Illinois and the laws of the state of Illinois and of
the United States of America shall govern the rights and duties of the parties
hereto and the validity, construction, enforcement and interpretation of the
Loan Documents, except to the extent otherwise specified in any of the Loan
Documents.

 

Section 3.20

Entire Agreement

. This Agreement and the other Loan Documents embody the entire agreement and
understanding between the Collateral Agent, the Lenders and Borrower and
supersede all prior agreements and understandings between such parties relating
to the subject matter hereof and thereof, including any commitment letter (if
any) issued by the Collateral Agent or any Lender with respect to the Loans.
Accordingly, the Loan Documents may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties. If any conflict or inconsistency
exists between this Agreement and any of the other Loan Documents, the terms of
this Agreement shall control.

 

Section 3.21

Counterparts

. This Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which shall constitute one document.

 

Section 3.22

Brokers

 

 

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. Borrower hereby represents to the Collateral Agent and each Lender that, other
than Draper & Kramer, Borrower has not dealt with any broker, underwriters,
placement agent, or finder in connection with the transactions contemplated by
this Agreement and the other Loan Documents. Borrower hereby agrees to indemnify
and hold the Collateral Agent and each Lender harmless from and against any and
all claims, liabilities, costs and expenses of any kind in any way relating to
or arising from a claim by any Person that such Person acted on behalf of
Borrower in connection with the transactions contemplated herein.

 

Section 3.23

Usury

. The terms of this Agreement are expressly limited so that in no event
whatsoever shall the amount paid or agreed to be paid to the Lenders exceed the
highest lawful rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision hereof or any other
documents securing the Loans at the time performance of such provision shall be
due, shall involve the payment of interest exceeding the highest rate of
interest permitted by law which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the highest lawful rate of interest permissible under applicable law;
and if for any reason whatsoever the Lenders shall ever receive as interest an
amount which would be deemed unlawful, such interest shall be applied to the
payment of the last maturing installment or installments of the principal
portion of the Loans (whether or not then due and payable) and not to the
payment of interest.

ARTICLE 4

 

MATTERS CONCERNING THE LENDERS AND COLLATERAL AGENT

 

Section 4.1

Secondary Market Transactions.

 

(1)       Borrower acknowledges that the Collateral Agent and each Lender and
their respective successors and assigns may without notice to or consent from
Borrower (a) sell this Agreement, the Notes, the other Loan Documents, and any
and all servicing rights thereto, or any portions thereof, to one or more
investors, (b) participate and/or syndicate the Loans to one or more investors,
(c) deposit this Agreement, the Notes and the other Loan Documents, or any
portions thereof, with a trust, which trust may sell certificates to investors
evidencing an ownership interest in the trust assets, or (d) otherwise sell,
transfer or assign the Loans or interests therein in one or more transactions to
investors (the transactions referred to in clauses (a) through (d) are
hereinafter each referred to as a "Secondary Market Transaction"). Borrower
shall reasonably cooperate with the Collateral Agent and each Lender in
effecting any such Secondary Market Transaction and shall reasonably cooperate
and use all reasonable efforts to satisfy the market standards to which the
Collateral Agent and each Lender customarily adheres or which may be reasonably
required by any participant, investor, purchaser or any rating agency involved
in any Secondary Market Transaction (including delivery of opinions of counsel
in form and substance similar to the opinions of counsel

 

 

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delivered to the Collateral Agent on the Closing Date). Borrower shall provide
such information and documents relating to Borrower and the Project as the
Collateral Agent and each Lender may reasonably request in connection with such
Secondary Market Transaction. In addition, Borrower shall make available to the
Collateral Agent and each Lender all information concerning the Project, and the
business and operations of Borrower that the Collateral Agent and the Lenders
may reasonably request. The Collateral Agent and each Lender shall be permitted
to share all information with the participants, investors, purchasers,
investment banking firms, rating agencies, accounting firms, law firms and
third-party advisory firms involved with the Loans and Loan Documents or the
applicable Secondary Market Transaction, provided that the Collateral Agent and
each Lender shall use reasonable efforts to have each recipient of such
information agree in writing (a copy of said written agreement to be furnished
to the Borrower upon request) to use commercially customary and reasonable
precautions to maintain the confidentiality of all non-public information
pertaining to the Borrower and any of its Affiliates; provided further, however,
in no event shall the failure of the Collateral Agent or any Lender to obtain
such a written confidentiality agreement from the recipient of such information
prohibit the Collateral Agent or any Lender from completing any Secondary Market
Transaction. The Collateral Agent and each Lender and all of the aforesaid
participants, investors, purchasers, advisors, rating agencies and professional
firms shall be entitled to rely on the information supplied by or on behalf of
Borrower. Borrower also agrees to execute any amendment of or supplement to this
Agreement and the other Loan Documents as the Collateral Agent or any Lender may
reasonably request in connection with any Secondary Market Transaction, provided
that such amendment or supplement does not adversely affect the interest rate,
term of the Loans, or the Maturity Date, and does not otherwise affect the terms
and provisions of the Loan Documents in any manner having an adverse affect, in
any material respect, on the Borrower or the Guarantors without the Borrower's
or Guarantor's consent (as applicable), which consent shall not be unreasonably
withheld.

(2)       Each of the Notes may hereafter be split, severed and subdivided, by
or in substitution for promissory notes of lesser denominations or otherwise,
and, in such event, Borrower shall promptly execute additional or replacement
Notes.

 

Section 4.2

Assignments and Participations.

 

(1)       Assignments by the Lenders. Each Lender may assign any of its Loans,
its Note and its Commitment (but only with the consent of the Collateral Agent);
provided that:

(a)       no such consent by the Collateral Agent shall be required in the case
of any assignment by any Lender to another Lender or an affiliate of such Lender
or such other Lender;

(b)       except to the extent the Collateral Agent shall otherwise consent, any
such partial assignment (other than to another Lender or an affiliate

 

 

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of a Lender) shall be in an amount at least equal to $10,000,000;

(c)       each such assignment (including an assignment to another Lender or an
affiliate of a Lender) by a Lender of its Loans or Commitment shall be made in
such manner so that the same portion of its Loans and Commitment is assigned to
the respective assignee;

(d)       subject to the applicable Lender's compliance with the provisions of
clauses (b) and (c) above, the Collateral Agent's consent to an assignment shall
not be unreasonably withheld, delayed or conditioned if (i) such assignment is
made to a Qualified Institutional Lender, (ii) such assignment is first offered
to the Collateral Agent in accordance with the terms and conditions of a
separate agency agreement among the Collateral Agent and the Lenders, and
(iii) the provisions of clause (e) have been satisfied; and

(e)       upon execution and delivery by the assignee (even if already a Lender)
to Borrower and the Collateral Agent of an Assignment and Acceptance pursuant to
which such assignee agrees to become a "Lender" hereunder (if not already a
Lender) having the Commitment and Loans specified in such instrument, and upon
consent thereto by the Collateral Agent to the extent required above, the
assignee shall have, to the extent of such assignment (unless otherwise
consented to by the Collateral Agent), the obligations, rights and benefits of a
Lender hereunder holding the Commitment and Loans (or portions thereof) assigned
to it (in addition to the Commitment and Loans, if any, theretofore held by such
assignee) and the assigning Lender shall, to the extent of such assignment, be
released from the Commitment (or portion thereof) so assigned. Upon each such
assignment the assigning Lender shall pay the Collateral Agent a processing and
recording fee of $3,500 and the reasonable fees and disbursements of the
Collateral Agent's counsel incurred in connection therewith.

(f)        All assignments and participations shall be subject to the terms and
conditions of the Administration Agreement.

(2)       Participations. Subject to the terms of the Administration Agreement,
Lender may sell or agree to sell to one or more other Persons (each a
"Participant") a participation in all or any part of any Loans held by it, or in
its Commitment, provided that such Participant shall not have any rights or
obligations under this Agreement or any Note or any other Loan Document (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender and the applicable
Participant). All amounts payable by Borrower to any Lender under Section 2.5 in
respect of Loans held by it and its Commitment shall be determined as if such
Lender had not sold or agreed to sell any participations in such Loans and
Commitment, and as if such Lender were funding each of such Loans and Commitment
in the same way that it is funding the portion of such Loans and Commitment in
which no participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking

 

 

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any action hereunder or under any other Loan Document except that such Lender
may agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term of such Lender's
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans or any portion of any fee hereunder
payable to the Participant, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable thereon, or any fee
hereunder payable to the Participant, to a level below the rate at which the
Participant is entitled to receive such interest or fee or (v) consent to any
modification, supplement or waiver hereof or of any of the other Loan Documents
to the extent that the same, under Section 3.2, requires the consent of each
Lender.

(3)       Certain Pledges. In addition to the assignments and participations
permitted under the foregoing provisions of this Section 4.2 (but without being
subject thereto), any Lender may (without notice to Borrower, the Collateral
Agent or any other Lender and without payment of any fee) assign and pledge all
or any portion of its Loans and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any operating circular issued
by such Federal Reserve Bank, and such Loans and Notes shall be fully
transferable as provided therein. No such assignment shall release the assigning
Lender from its obligations hereunder.

(4)       Provision of Information to Assignees and Participants. A Lender may
furnish any information concerning Borrower or any of its Affiliates in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants), provided that such Lender
shall use reasonable efforts to have each recipient of such information agree in
writing (a copy of said written agreement to be furnished to the Borrower upon
request) to use commercially customary and reasonable precautions to maintain
the confidentiality of all non-public information pertaining to the Borrower and
any of its Affiliates; provided further, however, in no event shall the failure
of such Lender to obtain such a written confidentiality agreement from the
recipient of such information prohibit such Lender from completing any
assignment or participation.

(5)       No Assignments to Borrower or Affiliates. Anything in this Section 4.2
to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan held by it hereunder to Borrower or any of its Affiliates
without the prior consent of each Lender.

 

Section 4.3

Appointment, Powers and Immunities

. Each Lender hereby appoints and authorizes the Collateral Agent to act as its
agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Collateral Agent by the terms of this Agreement
and of the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Collateral Agent (which term as used in this
sentence and in Section 4.7 and the first sentence of Section 4.8 shall include
reference to its affiliates and its own and its affiliates' officers, directors,
employees and agents):

 

(1)

shall have no duties or responsibilities except those expressly set

 

 

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forth in this Agreement and in the other Loan Documents, and shall not by reason
of this Agreement or any other Loan Document be a trustee for any Lender;

(2)       shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement or any other Loan Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Loan Document or any other
document referred to or provided for herein or therein or for any failure by
Borrower or any other Person to perform any of its obligations hereunder or
thereunder; and

(3)       shall not be responsible for any action taken or omitted to be taken
by it hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except to the extent any such action taken or omitted
violates the Collateral Agent's standard of care set forth in the first sentence
of Section 4.7.

The Collateral Agent may employ agents and attorneys in fact, and may delegate
all or any part of its obligations hereunder, to third parties and shall not be
responsible for the negligence or misconduct of any such agents, attorneys in
fact or third parties selected by it in good faith. The Collateral Agent may
deem and treat the payee of a Note as the holder thereof for all purposes hereof
unless and until a notice of the assignment or transfer thereof shall have been
filed with the Collateral Agent.

 

Section 4.4

Reliance by Collateral Agent

. The Collateral Agent shall be entitled to rely upon any certification, notice
or other communication (including any thereof by telephone, telecopy, telegram
or cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Collateral Agent. As to any matters not expressly provided for
by this Agreement or any other Loan Document, the Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Majority Lenders, and
such instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.

 

Section 4.5

Defaults

. The Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of a Potential Default or Event of Default unless the Collateral
Agent has received notice from a Lender or Borrower specifying such Potential
Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Collateral Agent receives such a notice of the
occurrence of a Potential Default or Event of Default, the Collateral Agent
shall give prompt notice thereof to the Lenders. The Collateral Agent shall
(subject to Section 4.9) take such action with respect to such Potential Default
or Event of Default and other matters relating to the

 

 

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Loans as shall be directed by the Lenders in accordance with the Administration
Agreement.

 

Section 4.6

Rights as a Lender

. With respect to GECC's Commitment and the Loans made by it, GECC (and any
successor acting as Collateral Agent), in its capacity as a Lender hereunder,
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Collateral Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Collateral Agent in its individual capacity. GECC (and any successor
acting as Collateral Agent) and its Affiliates may (without having to account
therefor to any Lender) lend money to, make investments in and generally engage
in any kind of lending, trust or other business with Borrower (and any of its
Affiliates) as if it were not acting as the Collateral Agent, and GECC and its
Affiliates may accept fees and other consideration from Borrower for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.

 

Section 4.7

Standard of Care; Indemnification

. In performing its duties under the Loan Documents, the Collateral Agent will
exercise the same degree of care as GECC normally exercises in connection with
real estate loans in which no syndication or participations are involved, but
the Collateral Agent shall have no further responsibility to any Lender except
as expressly provided herein and except for its own gross negligence or willful
misconduct which resulted in actual loss to such Lender, and, except to such
extent, the Collateral Agent shall have no responsibility to any Lender for the
failure by the Collateral Agent to comply with any of the Collateral Agent's
obligations to Borrower under the Loan Documents or otherwise. The Lenders agree
to indemnify the Collateral Agent (to the extent not reimbursed under
Section 3.4, but without limiting the obligations of Borrower under Section 3.4)
ratably in accordance with the aggregate principal amount of the Loans held by
the Lenders (or, if no Loans are at the time outstanding, ratably in accordance
with their respective Commitments), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against the Collateral Agent (including by any Lender) arising
out of or by reason of any investigation in or in any way relating to or arising
out of this Agreement or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Borrower
is obligated to pay under Section 3.4, but excluding, unless a Event of Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the Collateral Agent's breach of its standard of care set forth in the
first sentence of this Section.

 

Section 4.8

Non Reliance on Collateral Agent and Other Lenders

. Each Lender agrees that it has, independently and without reliance on the
Collateral Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
Borrower and its Affiliates and decision to enter into this

 

 

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Agreement and that it will, independently and without reliance upon the
Collateral Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under any other Loan Document. Subject to the provisions of the first sentence
of Section 4.7, the Collateral Agent shall not be required to keep itself
informed as to the performance or observance by Borrower of this Agreement or
any of the other Loan Documents or any other document referred to or provided
for herein or therein or to inspect the Project or the books of Borrower or any
of its Affiliates. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Collateral
Agent hereunder or as otherwise agreed by the Collateral Agent and the Lenders,
the Collateral Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of Borrower or any of its Affiliates that may come into
the possession of the Collateral Agent or any of its affiliates.

 

Section 4.9

Failure to Act

. Except for action expressly required of the Collateral Agent hereunder, and
under the other Loan Documents, the Collateral Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 4.7 against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action.

 

Section 4.10

Resignation of Collateral Agent

. The Collateral Agent may resign at any time by giving notice thereof to the
Lenders and Borrower. Upon any such resignation, the Majority Lenders shall have
the right to appoint a successor Collateral Agent, which shall be a financial
institution that has (1) an office in New York, New York with a combined capital
and surplus of at least $500,000,000 and (2) knowledge and experience comparable
to the resigning Collateral Agent's knowledge and experience in the servicing of
loans similar to the Loans hereunder. In addition, upon any voluntary
resignation by the Collateral Agent (but not upon any forced or required removal
or resignation), the Borrower shall have the right to approve, in its reasonable
discretion, any successor Collateral Agent. If no successor Collateral Agent
shall have been so appointed by the Majority Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Collateral Agent's
giving of notice of resignation of the retiring Collateral Agent, then the
retiring Collateral Agent's resignation shall nonetheless become effective and
(a) the retiring Collateral Agent shall be discharged from its duties and
obligations hereunder and (b) the Majority Lenders shall perform the duties of
the Collateral Agent (and all payments and communications provided to be made
by, to or through the Collateral Agent shall instead be made by or to each
Lender directly) until such time as the Majority Lenders appoint a successor
agent as provided for above in this Section 4.10. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring (or retired)
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations hereunder (if not already discharged therefrom as
provided above in this Section 4.10). The fees payable by Borrower to a
successor Collateral Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrower and such

 

 

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successor. After any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Article 4 and Section 3.4 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Collateral Agent.

ARTICLE 5

 

ADDITIONAL COVENANTS AND REPRESENTATIONS

 

Section 5.1

Interest Rate Cap Agreement

. On or before the "Rate Adjustment Date" (as defined in the Loan A Note), or on
or before any other date on which the Loan A commences bearing interest at the
"Extension Rate" under the Loan A Note, and thereafter as a condition precedent
to any Subsequent Advance that will result in the aggregate amount of
outstanding Subsequent Advances totaling at least $10,000,000 (excluding any
Subsequent Advances already covered by a Cap Agreement assigned to Collateral
Agent), and as a condition precedent to the final Subsequent Advance, Borrower
shall enter into and at all times thereafter maintain an interest rate cap
agreement ("Cap Agreement") in connection with the Loans and Loan A. Each Cap
Agreement shall have a notional amount not less than the sum of (1) the portion
of the outstanding principal balance of the Loans then bearing interest at the
Libor-based Rate and not covered by another Cap Agreement, plus (2) the
outstanding principal balance of Loan A, and shall have a strike price of, or
shall otherwise cap Borrower's LIBOR Rate exposure at, the greater of (a) 3.29%
or (b) an amount which, when included within the Libor-based Rate and the
"Extension Rate" under the Loan A Note, would result in a Debt Service Coverage
Ratio of 1.10 to 1.0 (provided that in calculating the Debt Service Coverage
Ratio for purposes of this Section 5.1, the "Lender Verified NOI" (as defined in
the Mortgages) shall be deemed to include the undrawn and available amount under
the Letter of Credit, if the Letter of Credit is then held by Collateral Agent,
and shall be deemed to include the funds then on deposit in the TI/LC/Capex/DS
Reserve that are available for payment of debt service on the Loan, subject to
the "DS Cap" described in the Notes). The form of each Cap Agreement required
pursuant to this Section, and the counterparty to each Cap Agreement (the
"Counterparty"), shall be reasonably satisfactory to Collateral Agent (and shall
otherwise satisfy the ratings criteria set forth below). Concurrently with
entering into each Cap Agreement, Borrower also shall deliver to Collateral
Agent an Interest Rate Cap Security Agreement covering such Cap Agreement, duly
executed and delivered by Borrower in favor of Collateral Agent, together with
the consent of the Counterparty to such collateral assignment. Each Counterparty
shall be rated at least AA by Standard & Poor's and Aa2 by Moody's. If the
rating of any Counterparty is at any time downgraded below AA- (Standard &
Poor's) or Aa3 (Moody's), then Borrower shall obtain a substitute Cap Agreement
with a third party provider rated at least AA by Standard & Poor's and Aa2 by
Moody's, which substitute Cap Agreement shall otherwise comply with the
foregoing provisions of this Section. If Borrower is required by the foregoing
provisions to obtain a Cap Agreement during the fourth Loan Year, Borrower may
satisfy this obligation by obtaining a series of 3-month Cap Agreements that
satisfy the foregoing requirements (including the requirement that each such Cap
Agreement be assigned to Collateral Agent), so long as each new Cap Agreement is
obtained on or before the expiration date of the previous Cap Agreement.
However, beginning in the fifth Loan Year, each Cap Agreement shall be for a
term of not less than one (1) year.

 

 

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Section 5.2

Curing

. To the extent permitted by the Loan A Lender, the Collateral Agent shall have
the right (on behalf of the Lenders), but shall not have the obligation, to cure
any "Event of Default" by Borrower under the Loan A Loan Documents. The
Collateral Agent also shall have the right (on behalf of the Lenders), but shall
have no obligation, to satisfy any Liens, claims or judgments against the
Project unless no Potential Default has occurred and is continuing or the
Borrower shall be diligently pursuing remedies to cure to the Collateral Agent's
sole satisfaction. Borrower agrees to reimburse the Collateral Agent and each
Lender on demand for any and all costs incurred by the Collateral Agent or such
Lender in connection with curing such an Event of Default under the Loan A Loan
Documents or satisfying any Liens, claims or judgments against the Project.

 

Section 5.3

Loan A; Project

. Without the prior written consent of the Collateral Agent and Majority
Lenders, Borrower shall not:

(1)       amend, modify, waive, consolidate, spread, restate or terminate any
provisions of any of the Loan A Loan Documents (other than routine amendments
and modifications which Borrower is required to provide to Loan A Lender under
the terms of the Loan A Loan Documents in connection with matters such as, but
not limited to, the contemplated conversion of the interest rate under the
Loan A Note to a Libor Rate-based interest rate, the release of the Fourteenth
Floor (as defined in the Loan A Note), permitted transfers of interests, and the
like); or

(2)       grant a Lien in the Project or in any other assets of Borrower other
than as set forth in the Loan Documents; or

(3)       permit any Borrower Party or the holder of any ownership interests in
any Borrower Party or any Affiliate of any of the foregoing to become the holder
of any of the Loan A Loan Documents or to succeed to any of the rights of the
Loan A Lender thereunder.

Subject to Section 5.4, Borrower may prepay the Loan A in connection with a
refinance thereof without a simultaneous prepayment of the Loans provided:
(a) no Event of Default or Potential Default exists; (b) the principal amount of
the new loan does not exceed $88,000,000, and the new loan is on the same or
better terms for Borrower as Loan A and is otherwise reasonably acceptable to
the Collateral Agent and Majority Lenders; (iii) the Collateral Agent shall have
approved, in its reasonable discretion, the documents evidencing and securing
the new loan; and (iv) the new lender provides to Collateral Agent and Lenders
an intercreditor agreement in form and substance acceptable to the Collateral
Agent and Majority Lenders.

Section 5.4     Refinance of Loan A. Prior to seeking engaging in discussions
with another lender regarding the possible refinance of Loan A (a "Loan A
Refinancing"), Borrower covenants to notify Collateral Agent (for the benefit of
Lenders) in writing of its intention to seek such Loan A Refinancing. Within
fifteen (15) Business Days after receipt of such notice from Borrower, the
Lenders (through the Collateral Agent) shall have the  

 

 

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right, in their sole and absolute discretion (but shall be under no obligation),
to provide to Borrower a term sheet or other form of outline in writing of the
terms upon which the Lenders would be willing to provide such Loan A
Refinancing, subject to obtaining necessary internal loan approvals (a "Term
Sheet"), which Borrower shall consider in good faith. If Borrower has not
received a Term Sheet from the Collateral Agent within such 15-Business Day
period, or if Borrower determines that the terms set forth in the Term Sheet are
unsatisfactory, Borrower may proceed with seeking Loan A Refinancing from other
lenders.

 

Section 5.5

Commencement and Completion of Capex Work

. The parties contemplate that Borrower will perform the Capex Work in stages,
each of which stages shall be comprised of one or more floors of the Office
Building as determined by Borrower (each such stage of Capex Work shall be
referred to herein as a "Stage" and, collectively, the "Stages"). The Stages may
overlap in time. Commencement of each Stage shall be subject to Collateral
Agent's approval (in accordance with Part C of Schedule 2.1) of the detailed
budget for that Stage, allocating a portion of the Capex Budget to such Stage
("Stage Budget"), and the construction schedule for such Stage, which must show
to Collateral Agent's reasonable satisfaction, if such Stage Budget allocates
Loan funds from the "Capital Expenditures" line item of the Budget to such Stage
pursuant to the Stage Budget therefor (i.e., if such Stage Budget is not funded
exclusively from TI/LC/CapEx/DS Reserve funds), that Borrower can complete such
Stage by or before December 31, 2012 (the "Stage Construction Schedule").
Borrower covenants and agrees to commence each Stage as soon as reasonably
practical (i.e., as floors 37-47 of the Office Building are vacated and new
tenants therefor are obtained), and thereafter Borrower shall diligently
prosecute the same to completion, Lien-free and in accordance with applicable
legal requirements (and applicable private restrictions, if any). As used in
this Section 5.5, "completion" free and clear of Liens shall be deemed to have
occurred only upon completion of construction of the applicable Stage in
accordance with the Stage Budget therefor, the approved Stage Construction
Schedule therefor, and approved construction contracts and related architectural
and engineering contracts (if any) and approved plans and specifications, as
evidenced by (1) a certificate of occupancy (or its equivalent), if applicable,
permitting legal occupancy thereof issued by the local governmental authorities
with jurisdiction over construction of the Capex Work, and (2) certificates of
the general contractor, the architect (if any) and the Collateral Agent's
construction consultant in form and substance reasonably satisfactory to
Collateral Agent, confirming that construction of such Stage has been completed
free of Liens and in accordance with applicable legal requirements.

 

Section 5.6

Loan Balancing Requirement

. If Collateral Agent at any time after a Stage has commenced determines that
any actual or estimated Capex Costs with respect to such Stage have exceeded or
can reasonably be expected to exceed the corresponding amount set forth in the
Stage Budget therefor or any line item of such Stage Budget (after permitted
line item reallocations as provided below), whether as a result of change orders
or otherwise, or that Capex Costs with respect to such Stage for any matters not
covered by specific line items in the Stage Budget therefor have been or may be
incurred by Borrower to complete such Stage, or that the undisbursed portion of
the Loans in the "Capital Expenditures" line item of the Budget which have been
allocated to such Stage pursuant to the

 

 

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Stage Budget therefor (together with the funds held in the TI/LC/CapEx/DS
Reserve that are available for capital expenditures and have been allocated to
such Stage pursuant to the Stage Budget therefor, and the undisbursed portion of
all funds deposited by Borrower with Collateral Agent under this Section 5.6
with respect to such Stage) is or may be insufficient to pay all Capex Costs or
such Stage that may be payable under the Loan Documents or otherwise required in
connection with such Stage (including a reasonable reserve for contingency and
other costs and expenses), then upon the Collateral Agent's demand Borrower
shall deliver to the Collateral Agent for deposit into a reserve held by the
Collateral Agent (the "Loan Balancing Reserve") an amount deemed reasonably
necessary by Collateral Agent to pay such Capex Costs or to cover such
insufficiency. If Collateral Agent makes demand on Borrower for a deposit to the
Loan Balancing Reserve based upon an existing or expected cost overrun in a line
item of a Stage Budget, then prior to making any such deposit Borrower may first
reallocate to such deficient line item any undisbursed Loan funds then remaining
allocated to other line items of the Stage Budget (or in other Stage Budgets)
for which all work or services have been completed or performed, Lien-free, and
all costs have been paid (as evidenced by appropriate invoices, bills paid
affidavits, lien waivers, title updates, endorsements to the title insurance,
and other documents as may be required by Collateral Agent), and the amount of
the required deposit into the Loan Balancing Reserve shall be the remaining
deficiency, if any, after such reallocation of Loan funds. Funds deposited in
the Loan Balancing Reserve shall be held by Collateral Agent in one or more
Collateral Agent Accounts with interest in accordance with Section 5.8 and shall
be disbursed by Collateral Agent in such a manner as Collateral Agent reasonably
determines toward the payment of the Capex Costs for which such funds were
deposited prior to further Subsequent Advances allocated to such Capex Costs.
Borrower grants to Collateral Agent (for the benefit of the Lenders) a security
interest in all funds on deposit in the Loan Balancing Reserve to secure
Borrower's obligations under the Loan Documents. Collateral Agent shall not be
obligated to disburse any funds from the Loan Balancing Reserve while either an
Event of Default or Potential Default exists. Further, while an Event of Default
exists, Collateral Agent shall be entitled, without notice to Borrower, to apply
any funds in the Loan Balancing Reserve to satisfy Borrower's obligations under
the Loan Documents in accordance with Paragraph 3 of the Notes.

 

Section 5.7

Existing TI Obligations

. Borrower hereby represents and warrants to the Collateral Agent and the
Lenders that, except as set forth in Schedule 1.1(C), there are no unpaid tenant
improvement allowances owing in connection with any leases or tenancies in
effect at the Project as of the Closing Date. Borrower hereby further represents
and warrants to the Collateral Agent and the Lenders that there are no leasing
commissions owing in connection with any leases or tenancies in effect at the
Project as of the Closing Date.

Section 5.8     Interest Payable by Collateral Agent. All monies held in
reserves which are expressly designated elsewhere in this Agreement or in the
other Loan Documents as interest-bearing (each, an "Interest-Bearing Reserve")
shall be deposited into interest-bearing Collateral Agent Accounts, which
accounts may not yield the highest interest rate then available. The Collateral
Agent Accounts in which each Interest-Bearing Reserve shall be held shall be
maintained at a financial institution or other depository selected by Collateral
Agent (or its servicing agent) in its sole discretion (collectively, the  

 

 

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"Depository Institution"). Borrower shall earn no more than an amount of
interest on each Interest-Bearing Reserve equal to an amount determined by
applying to the average monthly balance of such Interest-Bearing Reserve the
quoted interest rate for the Depository Institution's money market savings
account, as such rate is determined from time to time (such allocated amount
being referred to as "Borrower's Interest"). Collateral Agent or its Depository
Institution shall be entitled to report under Borrower's Federal tax
identification number the Borrower's Interest on each Interest-Bearing Reserve.
If the Depository Institution does not have an established money market savings
account (or if an interest rate for such account cannot otherwise be determined
in connection with the deposit of each Interest-Bearing Reserve), a comparable
interest rate quoted by the Depository Institution and acceptable to Collateral
Agent (or its servicing agent) in its reasonable discretion shall be used. The
amount of Borrower's Interest allocated to each Interest-Bearing Reserve shall
be added to the balance in such Interest-Bearing Reserve, and shall be disbursed
for payment of the items for which such Interest-Bearing Reserve is to be
disbursed. Any interest earned above the Borrower's Interest shall be retained
by Collateral Agent as compensation for its administration and investment of
each Interest-Bearing Reserve.

Section 5.9     Completion of Hotel Work. Borrower covenants and agrees as
follows:

(1)        Affiliate Obligation. All Hotel Work shall be completed pursuant to
contracts entered into by 330 Redevelopment LLC, a Delaware limited liability
company ("Redevelopment LLC"), which is affiliated with Borrower by common
ownership. Borrower shall have no liability for any obligations under such
contracts. Borrower shall cause Redevelopment LLC to use commercially reasonable
efforts to complete all Hotel Work as required under the Hotel Purchase
Agreement prior to the date on which Borrower will begin to incur the "Daily
Late Payment" described therein.

(2)       ACM Contract; Bond. After the Closing Date, Borrower shall cause
Redevelopment LLC to enter into that certain Construction Work Agreement (the
"ACM Contract") with High Efficiency Professional Abatement, Inc. (the "ACM
Contractor") for the performance of the portion of the Hotel Work consisting of
the "Seller's Turnover Work" as defined in the Hotel Purchase Agreement. The ACM
Contract shall require the ACM Contractor to maintain such insurance coverages,
and in such amounts, as are customarily maintained for contractors performing
asbestos remediation work of this nature and magnitude. The ACM Contract to be
bonded by a bonding company that is an admitted insurer in the state of
Illinois, is listed on the U.S. Treasury Department's List of Approved Sureties,
and has an A.M. Best's rating of at least "A:X". Such bond shall be issued in
"dual-obligee" form, naming Collateral Agent (on behalf of the Lenders) as an
additional obligee, and shall otherwise be in form and substance reasonably
satisfactory to Collateral Agent. Borrower shall cause Redevelopment LLC to
deliver a draft of the bond to Collateral Agent for it's review and approval.

 

(3)

Status Reports. From time to time upon Collateral Agent's

 

 

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request, Borrower shall cause Redevelopment LLC to provide Collateral Agent with
status report, in form, substance and detail reasonably satisfactory to
Collateral Agent, regarding the progress of the Hotel Work. Such status report
shall include Redevelopment LLC's most current estimate of the completion date
for the Hotel Work. Borrower shall cause Redevelopment LLC to respond to such
other reasonable requests for information as Collateral Agent may make regarding
the status of the Hotel Work.

(4)       Completion. Upon completion of the Hotel Work in accordance with the
requirements of the Hotel Purchase Agreement, Borrower shall deliver to
Collateral Agent evidence reasonably satisfactory to Collateral Agent that
Borrower has satisfied all of its obligations to the Hotel Buyer with respect to
the Hotel Work, including a certificate of substantial completion (AIA G704) for
the Hotel Work executed by the engineer supervising such work and copies of any
other documentation evidencing such completion that Borrower is required to
deliver to Hotel Buyer under the Hotel Purchase Agreement (if any).

(5)       Personal Liability for Portion of Loans. If Borrower is the subject of
any claims made by the Hotel Buyer (or any other party) with respect to the
Hotel Work and such claims are reduced to a judgment against Borrower (or
Borrower enters into a settlement of such claims), then notwithstanding anything
to the contrary contained in this Agreement, the Note or any other Loan
Document, unless Borrower or Guarantor satisfies such judgment (or settlement)
using funds other than funds from the Project (i.e., from capital contributions)
prior to an acceleration of the Loans, Borrower shall be personally liable to
Lenders for a portion of the principal amount of the Loans equal to the amount
of such judgment (or the amount Borrower is obligated to pay pursuant to any
such settlement). Borrower's personal obligation to repay such portion of the
principal amount of the Loans shall be guaranteed by Guarantor. Borrower
acknowledges that its liability under this Section 5.9(5) shall not be reduced
by application of payments on the Loan or application of proceeds from the
exercise of remedies against Collateral, or otherwise, unless and until the
Loans are repaid in full. Borrower shall not claim or contend so long as any
portion of the Loans remains unpaid that any payments received by Collateral
Agent or the Lenders from Borrower or otherwise, or proceeds received from the
liquidation of Collateral, shall have reduced or discharged Borrower's
obligations under this Section 5.9(5).

Section 5.10   Borrower's Balance Sheet. Borrower hereby represents and warrants
to the Collateral Agent and the Lenders that the balance sheet for Borrower
attached as Schedule 5.10 is complete, correct and accurate as of the date
thereof.

Section 5.11   Representation by Counsel. Borrower hereby represents and
warrants to the Collateral Agent and the Lenders that (1) it has been
represented by competent counsel of its choice in the negotiation and execution
of this Agreement and the other Loan Documents; (2) it has read and fully
understands the terms of this Agreement and the other Loan Documents;
(3) Borrower and its counsel have been afforded an opportunity to review,
negotiate and modify the terms of this Agreement and the other Loan Documents;
and (4) it intends to be bound by the terms of this Agreement and the other Loan
Documents to which it is a party. In accordance with the foregoing, the general
 

 

 

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rule of construction to the effect that any ambiguities in a contract are to be
resolved against the party drafting the contract shall not be employed in the
construction and interpretation of this Agreement or any other Loan Document.

Section 5.12   Credit Agreement. Borrower, Lenders and Collateral Agent
expressly agree that for purposes of this Agreement and each and every other
Loan Document: (i) this Agreement and each and every other Loan Document shall
be a "credit agreement" under the Illinois Credit Agreements Act, 815 ILCS 160/1
et seq. (the "Credit Act"); (ii) the Credit Act applies to this transaction
including, but not limited to, the execution of this Agreement and each and
every other Loan Document; and (iii) any action on or in any way related to this
Agreement and each and every other Loan Document shall be governed by the Credit
Act. If this Agreement or any other Loan Document contains blanks when executed,
Collateral Agent is hereby authorized by Borrower to complete such blanks
according to the terms upon which this Agreement is executed and delivered. In
the event of a scrivener's error in any term of this Agreement or any other Loan
Document, Borrower shall take all such actions to correct such scrivener's error
and to conform this Agreement and the other Loan Documents to the intended terms
and provisions.

 

[Remainder of page intentionally left blank.]

 

 

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EXECUTED as of the date first written above.

 

COLLATERAL AGENT:

 

GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation,
as Collateral Agent

 

 

By:       /s/ Erik Vessele  

Name: Erik Vessele  

Title:   Authorized Signatory

 

 

 

LENDERS:

 

GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation

 

 

By:       /s/ Erik Vessele  

Name: Erik Vessele  

Title:   Authorized Signatory

 

 

 

S-1

 

 

 

 

 

 

ATTEST:

 

 

/s/ Paul G. Del Vecchio                
Paul G. Del Vecchio

Executive Vice President – Capital Markets

 

BORROWER:

 

330 N. WABASH AVENUE, L.L.C., a Delaware limited liability company

 

By:  330 N. Wabash Mezzanine, L.L.C., a Delaware limited liability company, its
sole member

 

By:  77 West Wacker Limited Partnership, an Illinois limited partnership, its
sole member

 

By:  Prime Group Realty, L.P., a Delaware limited partnership, its sole general
partner

 

By:  Prime Group Realty Trust, a Maryland real estate investment trust, its sole
general partner

 

By:  /s/ Jeffrey A. Patterson
Jeffrey A. Patterson President and Chief Executive Officer

 

 

 

S-2

 

 

 

 

 

 

SCHEDULE 1.1(A)

BUDGET

 

Sources

 

 

 

 

Loan A

 

$  88,000,000

 

 

Loan B

 

$100,000,000

 

 

Borrower Cash Equity

 

$  72,545,739

 

 

Net Cash Flow during first 2 Loan Years

 

$  15,300,000

 

 

 

 

 

 

 

TOTAL SOURCES

 

$275,845,739

 

 

Uses

 

 

 

 

Refinance Existing Debt

 

$195,000,000

 

 

Closing Costs and Fees

 

$     5,660,000

 

 

Cash Collateral Reserve/Letter of Credit

 

$     2,750,000

 

 

Tenant Improvements and Leasing Commissions

 

$  37,000,000

 

 

Capex Costs

 

$  13,000,000

*

 

Initial TI/LC Reserve

 

$    4,995,739

 

 

TI/LC/CapEx/DS Reserve

 

$  15,300,000

**

 

Hotel Work Reserve

 

$    2,140,000

 

 

 

 

 

 

 

TOTAL USES

 

$275,845,739

 

 

 

 

 

 

 

*

Additional breakdown of Capex Costs attached as Schedule 1.1(A-1).

            ** Includes $3,000,000 for Capital Costs identified on
Schedule 1.1(A-1).

 

 

Schedule 1.1(A)

 

 

 

 

 

 

SCHEDULE 1.1(A-1)

CAPEX BUDGET*

 

HVAC and VAV Upgrade/Perimeter Floor

$    3,964,805

Asbestos Abatement

$    4,159,194

Corridors

$    1,720,161

Washrooms

$    3,447,657

Life Safety

$        458,465

Metering and Lighting

$        880,253

Elevator Modernization

$        854,579

Subtotal Capex Costs

$  15,485,114

Contingency

$        514,886

Total Capex Costs

$  16,000,000

 

 

* Capex Work for Floors 37-47 (366,772 sq. ft.)

 

 

Schedule 1.1(A-1)

 

 

 

 

 

 

SCHEDULE 1.1(B)

COMMITMENTS

Lender

Commitment

General Electric Capital Corporation

$100,000,000.00

 

 

 

SCHEDULE 1.1(B)

 

 

 

 

 

 

SCHEDULE 1.1(C)

EXISTING TI OBLIGATIONS

 

INTENTIONALLY OMITTED

 

 

SCHEDULE 1.1(C)

 

 

 

 

 

 

SCHEDULE 1.1(D)

APPROVED LEASING PARAMETERS

 

 

INTENTIONALLY OMITTED

 

 

SCHEDULE 1.1(D)

 

 

 

 

 

 

SCHEDULE 2.1

ADVANCE CONDITIONS

Part A - Conditions To Initial Advance

Part B - General Conditions

Part C - Improvements Advances

Part D - Leasing Commission Advances

PART A. CONDITIONS TO INITIAL ADVANCE

The Initial Advance shall be subject to the Collateral Agent's and each Lender's
receipt, review, approval and/or confirmation of the following, at Borrower's
cost and expense, each in form and content satisfactory to the Collateral Agent
and each Lender in their sole discretion:

1.         The Lender Verified NOI of the Project equals or exceeds $13,758,754
and generates a Cash on Cash Yield (as defined in the Mortgages) of at least 10%
and a Debt Service Coverage Ratio of at least 1.47 to 1.0.

2.         The Loan Documents, executed by Borrower and, as applicable, each
Borrower Party and each other party thereto.

3.         Payment to the Collateral Agent (on behalf of the Lenders) of the
Origination Fee in the amount set forth in the Fee Letter, in cash.

4.         For each Mortgage, an ALTA (or equivalent) mortgagee policy of title
insurance in the maximum amount of the Loan, with reinsurance and endorsements
as Lender may require, containing no exceptions to title (printed or otherwise)
which are unacceptable to Collateral Agent, and insuring that the Mortgage is a
first-priority Lien on the portion of the Project and related collateral
encumbered thereby.

5.         All documents evidencing the formation, organization, valid
existence, good standing, and due authorization of and for Borrower and each
Borrower Party and the authorization for the execution, delivery, and
performance of the Loan Documents by Borrower and each Borrower Party.

6.         Legal opinions issued by counsel for Borrower and each Borrower
Party, opining as to the due organization, valid existence and good standing of
Borrower and each Borrower Party, and the due authorization, execution,
delivery, enforceability and validity of the Loan Documents governed by Illinois
law with respect to, Borrower and each Borrower Party; that the Loans, as
reflected in the Loan Documents, are not usurious; to the extent that Collateral
Agent is not otherwise satisfied, that the Project and its use are in full
compliance with all legal requirements; and as to such other matters as
Collateral Agent and Collateral Agent's counsel reasonably may specify.

 

 

Schedule 2.1 - Page 1

 

 

 

 

 

 

7.         Evidence of insurance as required by this Agreement, and conforming
in all respects to the requirements of Collateral Agent.

8.         A current ALTA/ACSM land title survey of the Project, dated or
updated to a date not earlier than thirty (30) days prior to the date hereof
(provided that the foregoing 30-day requirement shall not apply to the portion
of the Project encumbered by the Leasehold Mortgage), certified to Collateral
Agent, prepared by a licensed surveyor acceptable to Collateral Agent and such
title insurer, and conforming to Collateral Agent's current standard survey
requirements.

9.         A current engineering report or architect's certificate with respect
to the Project, covering, among other matters, inspection of heating and cooling
systems, roof and structural details and showing no failure of compliance with
building plans and specifications, applicable legal requirements (including
requirements of the Americans with Disabilities Act) and fire, safety and health
standards.

 

10.

A current Site Assessment for the Project.

11.       A current rent roll of the Project, in form and detail satisfactory to
Collateral Agent and certified by Borrower. In addition, Borrower shall provide
Collateral Agent with a copy of the standard lease form to be used by Borrower
in leasing space in the Project, and, at Collateral Agent's request, true and
correct copies of all leases of the Project.

12.       A copy of the management agreements for the Project, certified by
Borrower as being true, correct and complete.

13.       Borrower's deposit with Collateral Agent of the amount required by
Collateral Agent (if any) to impound for taxes, assessments and insurance as
required under the Mortgages and to fund any other required escrows or reserves.

14.       Evidence that the Project and the operation thereof comply with all
legal requirements, including that all requisite certificates of occupancy,
building permits, and other licenses, certificates, approvals or consents
required of any governmental authority have been issued without variance or
condition and that there is no litigation, action, citation, injunctive
proceedings, or like matter pending or threatened with respect to the validity
of such matters.

15.       No change shall have occurred in the financial condition of Borrower
or any Borrower Party or in the Lender Verified NOI, which would have, in
Collateral Agent's or any Lender's sole judgment, a material adverse effect on
the Project or on Borrower's or any Borrower Party's ability to repay the Loans
or otherwise perform its obligations under the Loan Documents.

16.       No condemnation or adverse zoning or usage change proceeding shall
have occurred or shall have been threatened against the Project; the Project
shall not have suffered any significant damage by fire or other casualty which
has not been repaired; no law, regulation, ordinance, moratorium, injunctive
proceeding, restriction, litigation, action, citation or similar proceeding or
matter shall have been enacted, adopted, or threatened by any governmental
authority, which would have, in Collateral Agent's or any Lender's judgment, a

 

 

Schedule 2.1 - Page 2

 

 

 

 

 

 

material adverse effect on Borrower, any Borrower Party or the Project.

17.       All fees and commissions payable to real estate brokers, mortgage
brokers, or any other brokers or agents in connection with the Loans or the
acquisition of the Project have been paid, such evidence to be accompanied by
any waivers or indemnifications deemed necessary by Collateral Agent.

18.       The Budget and the Capex Budget showing total costs relating to
closing of the proposed transaction, all uses of the Initial Advance, and
amounts allocated for Subsequent Advances.

19.       Payment of Collateral Agent's costs and expenses in underwriting,
documenting, and closing the transaction, including fees and expenses of
Collateral Agent's inspecting engineers, consultants, and outside counsel.

20.       Such credit checks, background investigations and other information
required by Collateral Agent regarding Borrower, each Borrower Party and any
other Person holding a direct or indirect interest in Borrower, including such
additional information as Collateral Agent may request regarding compliance by
Borrower, and by direct and indirect interest holders in Borrower, with the
provisions of Paragraph 27 of the Notes.

21.       Evidence that Borrower has exercised it extension option under the
"Ground Lease" described in the Leasehold Mortgage, extending the term of the
Ground Lease from May 1, 2019 to April 30, 2044.

22.       Such other documents or items as Collateral Agent or its counsel may
require.

23.       The representations and warranties contained in all Loan Documents are
true and correct.

 

24.

No Potential Default or Event of Default shall have occurred or exist.

 

25.

The Loan A shall have closed or shall concurrently close with the Loans.

PART B. GENERAL CONDITIONS

Each Advance of the Loans following the Initial Advance shall be subject to
Collateral Agent's receipt, review, approval and/or confirmation of the
following, each in form and content satisfactory to Collateral Agent in its sole
discretion:

1.         Prior to the first Subsequent Advance, the parties shall have entered
into the CTT Escrow Agreement and established the CTT Escrow.

2.         There shall exist no Potential Default or Event of Default (currently
and after giving effect to the requested Advance).

 

 

Schedule 2.1 - Page 3

 

 

 

 

 

 

3.         The representations and warranties contained in the Loan Documents
are true and correct in all material respects as of the date of the requested
Advance, with such changes for subsequent events permitted by the Loan Documents
or otherwise approved by the Collateral Agent.

 

4.

Such Advance shall be secured by the Loan Documents.

5.         Borrower shall have paid Collateral Agent's reasonable costs and
expenses in connection with such Advance (including title search charges, and
costs and expenses of Collateral Agent's inspecting engineer and attorneys).

6.         No change shall have occurred in the financial condition of Borrower
or any Borrower Party, or in the Lender Verified NOI which would have, in
Collateral Agent's judgment, a material adverse effect on the Loans, the
Project, or Borrower's or any Borrower Party's ability to perform its
obligations under the Loan Documents.

7.         Borrower shall have delivered to Collateral Agent all information
requested by Collateral Agent pursuant to Paragraph 27 of the Notes.

8.         No condemnation or adverse, as determined by Collateral Agent, zoning
or usage change proceeding shall have occurred or shall have been threatened
against the Project; the Project shall not have suffered any damage by fire or
other casualty which has not been repaired or is not being restored in
accordance with the Loan Documents; no law, regulation, ordinance, moratorium,
injunctive proceeding, restriction, litigation, action, citation or similar
proceeding or matter shall have been enacted, adopted, or threatened by any
governmental authority, which would have, in Collateral Agent's judgment, a
material adverse effect on the Project or Borrower's or any Borrower Party's
ability to perform its obligations under the Loan Documents.

9.         Lenders shall have no obligation to make any Advances for less than
an aggregate amount of $100,000, except for the final additional Advance, or to
make Advances more often than once in any one-month period, or to make any
Advance after December 31, 2012 (unless such Advance is for a tenant improvement
cost or leasing commission already approved and budgeted for as an Advance).

10.       At the option of Collateral Agent (i) each Advance request shall be
submitted to Collateral Agent at least ten (10) Business Days prior to the date
of the requested Advance, and (ii) all Advances shall be made at the address of
Collateral Agent set forth in Section 3.1 or at such other place as Collateral
Agent may designate unless Collateral Agent exercises its option to make an
Advance directly to the Person to whom payment is due.

11.       Unless the Collateral Agent otherwise consents in its sole discretion,
each Subsequent Advances, and each disbursement of funds from the Initial TI/LC
Reserve, the TI/LC/CapEx/DS Reserve and the Capital Improvements Reserve, shall
be disbursed by Collateral Agent into the CTT Escrow, for subsequent
disbursement by CTT to the Person to whom payment is due for the costs for which
such Advance or disbursement is made by Collateral Agent. Borrower hereby
irrevocably directs and authorizes Collateral Agent to so Advance the proceeds
of the Loans and the aforementioned reserves. All Loan sums so

 

 

Schedule 2.1 - Page 4

 

 

 

 

 

 

advanced shall constitute Advances of the Loans and shall be secured by the Loan
Documents.

Each request for and acceptance of a Loan Advance shall be deemed to constitute,
as of the date of such request or acceptance, a representation and warranty by
Borrower that the statements contained in paragraphs 1 and 2 above are true and
correct.

PART C. IMPROVEMENTS ADVANCES

Subsequent Advances shall be made to finance the Capex Work and tenant
improvement costs at the Project (which shall exclude any capital improvements,
tenant improvements or other costs or expenses arising in connection with the
"Fourteenth Floor" as defined in the Note), on the following terms and
conditions:

1.         Each request for such an Advance shall specify the amount requested,
shall be on forms satisfactory to Collateral Agent, and shall be accompanied by
appropriate invoices, bills paid affidavits, lien waivers, title updates,
endorsements to the title insurance, and other documents as may be required by
Collateral Agent. Such Advances may be made, at Collateral Agent's election,
either: (a) in reimbursement for expenses paid by Borrowers, or (b) for payment
of expenses incurred and invoiced but not yet paid by Borrowers, or (c) with
respect to tenant improvements, by funding allowances for tenant improvements
undertaken to be constructed by tenants and completed in accordance with leases.
Collateral Agent may, at Borrower's expense, conduct an audit, inspection, or
review of the Project to confirm the amount of the requested improvements
advance.

2.         Borrower shall have submitted and Collateral Agent shall have
approved (such approval not to be unreasonably withheld) (a) the improvements to
be constructed, (b) if applicable, the plans and specifications for such
improvements, which plans and specifications may not be changed to increase
costs or decrease the scope of work, or otherwise changed in any material
respect, without Collateral Agent's prior written consent (such consent not to
be unreasonably withheld), and (c) if requested by Collateral Agent, each
contract or subcontract for an amount in excess of $50,000 for the performance
of labor or professional services (e.g., architectural and engineering
contracts), or the furnishing of materials, for such improvements. If required
by Collateral Agent, Borrower shall execute and deliver to Collateral Agent
assignments of such contracts (together with consents to such assignments
executed by the counterparties to such contracts), in form and substance
reasonably satisfactory to Collateral Agent. Without limiting the foregoing, in
no event shall Borrower have any right to request any Advance, or any
disbursement from the TI/LC/CapEx/DS Reserve, for payment of capital
improvements or other costs or expenses arising in connection with the
"Fourteenth Floor" (as defined in the Note).

3.         Borrower shall have submitted and Collateral Agent shall have
approved (such approval not to be unreasonably withheld) the Stage Construction
Schedule (for each Stage of Capex Work) or, for tenant improvements, the time
schedule for completing such tenant improvements. After Collateral Agent's
approval of a Stage Budget or other detailed budget (for costs other than Capex
Costs), such budget may not be changed without Collateral Agent's prior written
consent. For improvements other than Capex Work (which shall be governed by

 

 

Schedule 2.1 - Page 5

 

 

 

 

 

 

Section 5.6), if the estimated cost of such improvements exceeds the unadvanced
portion of the amount allocated for such improvements in the approved budget,
then Borrower shall provide such security as Collateral Agent may require to
assure the lien-free completion of improvements before the scheduled completion
date.

4.         All improvements constructed prior to the date an improvements
Advance is requested shall be completed to the satisfaction of Collateral Agent
and Collateral Agent's engineer and in accordance with the plans and budget for
such improvements, as approved by Collateral Agent, and all legal requirements.

5.         Borrower shall not use any portion of any improvements Advance for
payment of any other cost except as specifically set forth in a request for
Advance approved by Collateral Agent in writing.

6.         Each improvements Advance, except for a final improvements Advance,
shall be in the amount of actual costs incurred less the amount of any retainage
Borrower is entitled to deduct from the payments owed under the applicable third
party contracts, which retainage shall be advanced as part of a final
improvements Advance.

7.         No funds will be advanced for materials stored at the Project unless
Borrower furnishes Collateral Agent satisfactory evidence that such materials
are properly stored and secured at the Project.

8.         Borrower shall have submitted to Collateral Agent evidence (including
cancelled checks, invoices and receipts) satisfactory to Collateral Agent that
the proceeds of all prior advances have been used for the purposes for which
such advances were requested.

9.         Notwithstanding anything contained in this Part C to the contrary,
Borrower shall first use any available funds in the TI/LC/CapEx/DS Reserve
(subject to the "CapEx Cap" set forth in the Notes) to pay the costs of Capex
Costs before requesting an Advance to pay such costs. Borrower shall not be
entitled to any Advance for Capex Costs unless Borrower first has exhausted all
available funds in the TI/LC/CapEx/DS Reserve, provided that this condition
shall no longer apply when Borrower reaches the "CapEx Cap" set forth in the
Notes.

10.       Advances for tenant improvements for Office Building space shall be
made on the following additional conditions:

(a)       The Existing TI Obligations shall be funded solely from the Initial
TI/LC Reserve. No Loan funds, and no funds from the TI/LC/CapEx/DS Reserve (or
any other reserve other than the Initial TI/LC Reserve), shall be available to
pay for Existing TI Obligations. The aggregate amount of funds disbursed from
the Initial TI/LC Reserve for each tenant listed on Schedule 1.1(C) shall not
exceed the amount set forth on Schedule 1.1(C) for such tenant (the amounts set
forth on Schedule 1.1(C) for the listed tenants (less such amounts for which a
tenant has delivered an estoppel, in form and substance satisfactory to the
Collateral Agent, in which such tenant shall certify that certain tenant
improvements are no longer required or have otherwise been satisfied, and that
Borrower and the tenant have not agreed to amend or modify the economic terms of

 

 

Schedule 2.1 - Page 6

 

 

 

 

 

 

the lease in exchange for tenant's agreement regarding such tenant improvements)
shall be collectively referred to herein as the "Committed TI/LC Reserve
Funds").

(b)       In addition to the other additional conditions set forth in this
Section 10 (excluding the conditions set forth in subparagraphs (f) and (h)
below, which shall not apply to the Initial TI/LC Reserve) the funds held in the
Initial TI/LC Reserve in excess of the Committed TI/LC Reserve Funds shall be
advanced to pay tenant improvement costs exclusively for leases of space in the
Project that satisfy the following conditions (and provided that Borrower
delivers to Collateral Agent reasonably satisfactory evidence that Loan A Lender
agrees that the following conditions have been satisfied): (i) having a term of
not less than five (5) years, (ii) requiring the tenant to reimburse the
landlord for its pro rata share of operating costs and expenses and (iii) having
an average rental rate during the term of the lease of not less than $18.00 per
square foot per year for leases with terms of 10 years or more or $16.75 per
square foot per year for leases with terms of less than 10 years per square foot
per year, net of required reimbursements for the tenant's pro rata share of
operating costs and expenses (each such lease, a "Qualifying Lease").
Notwithstanding the foregoing, the Aronberg Lease (defined below) shall be
deemed to be a Qualifying Lease. As an express condition to the disbursement of
any Initial TI/LC Reserve funds with respect to tenant improvement costs for any
Qualifying Lease, Collateral Agent must be provided (A) prior to the funding of
the final draw for tenant improvement costs for any Qualifying Lease, a tenant
estoppel certificate in form and substance reasonably acceptable to Collateral
Agent confirming that the lease is in full force and effect, that neither
landlord nor tenant is in default thereunder, that all obligations of the
landlord relating to the preparation of the premises for the tenant's occupancy
(including any obligation of the landlord to pay any tenant improvement
allowance) shall have been satisfactorily completed, that the tenant has
accepted and is in possession of its premises, and that the tenant has no
defenses to paying full rent under the lease in accordance with its terms
(subject to any unexpired concessions or free-rent periods) and (B) if requested
by Collateral Agent (or if Collateral Agent receives notice that Loan A Lender
has requested), an SNDA in form and substance reasonably acceptable to
Collateral Agent. For the avoidance of doubt, after Collateral Agent has
disbursed all Initial TI/LC Reserve Funds (excluding Committed TI/LC Reserve
Funds), Borrower shall not be entitled to request any disbursements of
TI/LC/CapEx/DS Reserve funds, or any advances of Loan funds, for tenant
improvement costs for Qualifying Leases that do not also satisfy the conditions
set forth in subparagraphs (f) and (h) below. As used above, the "Aronberg
Lease" means that certain Office Lease dated July 19, 2007 by and between the
Borrower, as landlord, and Aronberg Goldgehn Davis & Garmisa, as tenant, as
amended, modified, extended and supplemented.

(c)       Notwithstanding anything contained in this Part C to the contrary,
(i) for Qualifying Leases, Borrower shall first use any available funds in the
Initial TI/LC Reserve (excluding the Committed TI/LC Reserve Funds), and then
use any available funds in the TI/LC/CapEx/DS Reserve (subject to the "TI/LC
Cap" set forth in the Notes), to pay tenant improvement costs before requesting
an Advance to pay such costs and (ii) for all other leases, Borrower shall first
use any available funds in the TI/LC/CapEx/DS Reserve (subject to the "TI/LC
Cap" set forth in the Notes), to pay

 

 

Schedule 2.1 - Page 7

 

 

 

 

 

 

tenant improvement costs before requesting an Advance to pay such costs.
Borrower shall not be entitled to any Advance for tenant improvements unless,
with respect to Qualifying Leases, Borrower first has complied with clause (i)
in the immediately preceding sentence and, with respect to all other leases,
Borrower has first complied with clause (ii) in the immediately preceding
sentence, provided that the conditions in clauses (i) and (ii) regarding the
TI/LC/CapEx/DS Reserve shall no longer apply when Borrower reaches the "TI/LC
Cap" set forth in the Notes.

(d)       Borrower shall have submitted and Collateral Agent shall have approved
(and Borrower delivers to Collateral Agent reasonably satisfactory evidence that
Loan A Lender has approved) the lease for which the tenant improvements are to
be constructed, provided that Collateral Agent's approval of the lease shall not
be required if (i) such approval is not required under Section 10(c) of the
Mortgages, or (ii) for purposes of advances from the Initial TI/LC Reserve, such
lease is a Qualifying Lease.

(e)       Borrower shall have submitted and Collateral Agent shall have approved
a schedule of the tenant improvements setting forth (i) each item of tenant
improvements which Borrower or the applicable tenant intends to undertake;
(ii) the estimated cost of each such item, and (iii) the time schedule for
completing the tenant improvements.

(f)        The maximum amount advanced by Collateral Agent for tenant
improvements for any lease, excluding Qualifying Leases, shall not exceed the
applicable tenant improvement allowance set forth in the Approved Leasing
Parameters. Borrower shall be responsible for paying (from capital contributions
to Borrower, not from Loan funds, Project revenues or reserves held by
Collateral Agent) all tenant improvement costs incurred by Borrower for any
lease in excess of such tenant improvement allowance.

(g)       All tenant improvements constructed by Borrower prior to the date a
tenant improvements advance is requested shall be completed to the satisfaction
of Collateral Agent in accordance with the plans therefor approved by the tenant
under the applicable lease.

(h)       As a condition to the funding of the final tenant improvements advance
for any space in the Project:

(i)        the tenant under the lease is in occupancy, has accepted the leased
premises and is paying rent under the lease (unless the lease provides for a
free rent period at the beginning of the lease term), without offset, credit or
defense, as evidenced by a tenant estoppel certificate executed by such tenant,
addressed to Collateral Agent, in form satisfactory to Collateral Agent;

(ii)       the brokers to whom lease commissions are payable have acknowledged
payment in full of all commissions due with respect to the lease in question and
have released Collateral Agent, Lenders, Borrower, the Project and the lease
from all commissions due with respect to such lease; and

 

 

Schedule 2.1 - Page 8

 

 

 

 

 

 

(iii)      Borrower shall have furnished Collateral Agent with (A) a true and
correct copy of the final and unconditional certificate of occupancy, if
available, for the space under said lease, issued without restriction by the
appropriate governmental authority having jurisdiction over the Project; and
(B) final original lien waivers executed by each contractor, subcontractor and
materialmen supplying labor or materials for the tenant improvements.

PART D. LEASING COMMISSION ADVANCES

Subsequent Advances shall be made to pay leasing commissions in accordance with
written leasing commission agreements approved in writing by Collateral Agent
(and Borrower shall deliver to Collateral Agent reasonably satisfactory evidence
that Loan A Lender has approved such agreements) (provided that leasing
commissions for each lease, excluding Qualifying Leases, shall not exceed the
applicable maximum leasing commission amount set forth in the Approved Leasing
Parameters; provided in each case that if the lease contains an early
termination right, the leasing commission paid shall be based on the portion of
the lease term that is not subject to early termination); however, Collateral
Agent shall not be obligated to make any leasing commission advance for any
portion of any leasing commission until the executed lease, as approved by
Collateral Agent, is delivered to Collateral Agent (along with reasonably
satisfactory evidence that Loan A Lender has approved such lease), at which time
Collateral Agent shall make a leasing commission Advance of one hundred percent
(100%) of the leasing commission, or such lesser percentage as is typically paid
based on standard market practice from time to time in the Chicago area for
payment of leasing commissions for similar leases changes. The remaining portion
of any leasing commission (if any) shall be advanced only when (a) the tenant
under the lease is in occupancy, has accepted the leased premises and is paying
rent under the lease, without offset, credit or defense, as evidenced by a
tenant estoppel certificate executed by such tenant, addressed to Collateral
Agent, in form satisfactory to Collateral Agent, and (b) the brokers to whom
such commissions are payable have acknowledged payment in full of all
commissions due with respect to the lease and have released Collateral Agent,
Lenders, Borrower, the Project and the lease from all commissions due with
respect to such lease. Notwithstanding the foregoing, (i) for Qualifying Leases,
Borrower shall first use any available funds in the Initial TI/LC Reserve
(excluding the Committed TI/LC Reserve Funds), and then use any available funds
in the TI/LC/CapEx/DS Reserve (subject to the "TI/LC Cap" set forth in the
Notes), to pay leasing commissions before requesting an Advance to pay such
commissions and (ii) for all other leases, Borrower shall first use any
available funds in the TI/LC/CapEx/DS Reserve (subject to the "TI/LC Cap" set
forth in the Notes), to pay leasing commissions before requesting an Advance to
pay such commissions. Borrower shall not be entitled to any Advance for leasing
commissions unless, with respect to Qualifying Leases, Borrower first has
complied with clause (i) in the immediately preceding sentence and, with respect
to all other leases, Borrower has first complied with clause (ii) in the
immediately preceding sentence, provided that the conditions in clauses (i) and
(ii) regarding the TI/LC/CapEx/DS Reserve shall no longer apply when Borrower
reaches the "TI/LC Cap" set forth in the Notes.

 

 

Schedule 2.1 - Page 9

 

 

 

 

 

 

SCHEDULE 2.3(1)

COLLATERAL AGENT'S WIRE TRANSFER INSTRUCTIONS

All interest payments and other payments to be made by Borrower to the
Collateral Agent pursuant to the terms of the Loan Documents shall be made by
wire transfer in accordance with the following instructions:

Deutche Bank

New York, NY

ABA# 021001033

Acct# 50256477

GEMSA Incoming Wire Account

Ref: IBM PLAZA Deal # 69-0081960

 

 

Schedule 2.3(1)

 

 

 

 

 

 

SCHEDULE 2.3(4)

YIELD MAINTENANCE AMOUNT AND  

MAKE WHOLE BREAKAGE AMOUNT DEFINITIONS

A.

Yield Maintenance Amount

"Yield Maintenance Amount" means the sum of the present value on the date of
prepayment of each YM Monthly Interest Shortfall for the Yield Maintenance
Period discounted at the monthly compounded YM Replacement Rate.

"Yield Maintenance Period" means the period from the date of prepayment through
September 30, 2010.

"YM Monthly Interest Shortfall" will be calculated for each monthly payment date
during the Yield Maintenance Period and means the product of (1) the prepaid
principal balance of the Loans divided by 12, and (2) the positive result, if
any, from (a) the yield derived from compounding semi annually the Contract
Rate, minus (b) the YM Replacement Rate.

"YM Replacement Rate" means the yield calculated by linear interpolation
(rounded to one thousandth of one percent (i.e., .001%)) of the yields, as
reported in Federal Reserve Statistical Release H.15 Selected Interest Rates
under the heading U.S. Government Securities/Treasury Constant Maturities for
the week ending prior to the prepayment date, of U.S. Treasury Constant
Maturities with terms (one longer and one shorter) most nearly approximating the
remaining Weighted Average Life of the Loan as of the prepayment date. In the
event Release H.15 is no longer published, Collateral Agent shall select a
comparable publication to determine the YM Replacement Rate.

B.

Make Whole Breakage Amount

"Make Whole Breakage Amount" means the sum of present value on the date of
prepayment of each MW Monthly Interest Shortfall for the Make Whole Breakage
Period discounted at the monthly compounded MW Replacement Rate.

"Make Whole Breakage Period" means the period from (1) the first day after the
Yield Maintenance Period or (2) the date of prepayment (whichever occurs later),
through the remaining term of the Loans.

"MW Monthly Interest Shortfall" will be calculated for each monthly payment date
during the Make Whole Breakage Period and means the product of (1) the prepaid
principal balance of the Loans divided by 12, and (2) the positive result, if
any, from (a) the applicable US Dollar Composite Swap Rate as quoted by
Bloomberg LP used as the index to compute the Contract Rate (plus a break
contract fee of 20 basis points) minus (b) the MW Replacement Rate. The parties
acknowledge and agree that the US Dollar Composite Swap Rate as quoted by
Bloomberg LP used as the index to compute the Initial Advance Contract Rate is
3.24%.

 

 

Schedule 2.3(4)

 

 

 

 

 

 

"MW Replacement Rate" means the yield calculated by linear interpolation
(rounded to one thousandth of one percent (i.e., .001%)) of the yields, as
reported by Bloomberg LP as the US Dollar Composite Swap Rate with terms (one
longer and one shorter) most nearly approximating the remaining Weighted Average
Life of the Loan as of the prepayment date. In the event the US Dollar Composite
Swap Rate is no longer quoted by Bloomberg LP, Collateral Agent shall select a
comparable publication to determine the MW Replacement Rate.

"Weighted Average Life of the Loan" will be determined as of the prepayment date
by (1) multiplying the amount of each monthly principal payment that would have
been paid had the prepayment not occurred by the number of months from the
prepayment date to each payment date, (2) adding the results, and (3) dividing
the sum by the balance remaining on the Loans on the prepayment date multiplied
by 12. If no monthly principal payments are required, the Weighted Average Life
of the Loan shall be the remaining term of the Loans as of the prepayment date.

The foregoing notwithstanding, (1) if as of the date of prepayment only the
Initial Advance bears interest at a fixed rate of interest (i.e., the Subsequent
Advances are bearing interest at the Libor-based Rate or the Alternate Base
Rate), then the applicable foregoing calculations shall be made on the portion
of the Initial Advance prepaid and the references to the Contract Rate shall
mean the Initial Advance Contract Rate; and (2) if as of the date of prepayment
any Fixed Portion is bearing interest at a Fixed Rate in accordance with
Section 2.2(3), then Collateral Agent shall separately calculate the Yield
Maintenance Amount or the Make Whole Breakage Amount (as applicable) for the
portion of the Initial Advance prepaid and for the portion of each Fixed Portion
prepaid (and the references to the Contract Rate shall mean, with respect to any
Fixed Portion, the applicable Fixed Rate for such Fixed Portion), and the Yield
Maintenance Amount or the Make Whole Breakage Amount payable by Borrower
pursuant to Section 2.3(4) shall be the sum of such amounts.

 

 

Schedule 2.3(4)

 

 

 

 

 

 

SCHEDULE 2.4(1)

CAPITAL IMPROVEMENTS RESERVE

1.         Capital Improvements Reserve. By January 15, 2009, and by the
fifteenth (15th) day of each January thereafter, Borrower shall deposit into a
reserve with Collateral Agent (the "Capital Improvements Reserve") an amount
equal to the positive difference between (1) $219,668 and (2) the sum of all
expenditures by for capital improvements and replacements to the Project during
the preceding calendar year which were approved in advance by Collateral Agent
and not paid with disbursements from the Capital Improvements Reserve (provided
that for the 2008 calendar year, such amount shall be pro-rated to reflect the
portion of such calendar year during which the Loans were outstanding). All
monies on deposit in the Capital Improvements Reserve shall be held by
Collateral Agent, with interest in accordance with Section 5.8, in one or more
Collateral Agent Accounts.

2.         Disbursements. The Capital Improvements Reserve shall be advanced by
Collateral Agent to Borrower for capital improvements and capital repairs to the
Project, as approved by Collateral Agent; however, funds in the Capital
Improvements Reserve shall not be available for financing any of the
improvements for which capital improvements advances are contemplated by the
Budget. The Capital Improvements Reserve shall be disbursed in accordance with
the conditions for improvements advances under Schedule 2.1.

3.         Capital Expenditures Budget. Borrower and Collateral Agent shall meet
annually on a date selected by Collateral Agent to establish monthly, quarterly,
and annual budgets for capital expenditures for the Project for the succeeding
calendar year (the "Capital Expenditures Budget"). The Capital Expenditures
Budget shall be based on the previous year's experience and an assessment of
anticipated future needs, and shall be subject to Collateral Agent's approval.

4.         Security Interest. Borrower grants to Collateral Agent (on behalf of
the Lenders) a security interest in the Capital Improvements Reserve. While an
Event of Default or a Potential Default exists, Collateral Agent shall not be
obligated to advance to Borrower any portion of the Capital Improvements
Reserve, and while an Event of Default exists, Collateral Agent shall be
entitled, without notice to Borrower, to apply any funds in the Capital
Improvements Reserve to satisfy Borrower's obligations under the Loan Documents.

 

 

Schedule 2.4(1)

 

 

 

 

 

 

SCHEDULE 2.4(2)

CASH COLLATERAL RESERVE AND LETTER OF CREDIT

1.         Cash Collateral Reserve. On the Closing Date, Borrower shall deposit
$2,750,000.00 into a reserve with Collateral Agent (the "Cash Collateral
Reserve"), out of its own funds (not Loan proceeds). All monies on deposit in
the Cash Collateral Reserve shall be held by Collateral Agent, with interest in
accordance with Section 5.8, in one or more Collateral Agent Accounts. Borrower
grants to Collateral Agent (on behalf of the Lenders) a security interest in all
funds on deposit in the Cash Collateral Reserve. While an Event of Default or
Potential Default exists, Collateral Agent shall not be obligated to release to
Borrower any portion of the Cash Collateral Reserve, and while an Event of
Default exists, Collateral Agent shall be entitled, without notice to Borrower,
to apply any funds in the Cash Collateral Reserve to satisfy Borrower's
obligations under the Loan Documents. Collateral Agent shall release to Borrower
the funds held in the Cash Collateral Reserve upon Collateral Agent's receipt of
the Letter of Credit.

2.         Letter of Credit. Within ninety (90) days after the Closing Date,
Borrower shall deliver to Collateral Agent an unconditional, irrevocable standby
letter of credit in the amount of $2,750,000.00 in form and substance
satisfactory to Collateral Agent and issued by a banking institution organized
under the laws of the United States of America or one of its constituent states
and otherwise acceptable to Collateral Agent (as such letter of credit may be
renewed, extended or replaced, the "Letter of Credit"). The Letter of Credit
shall have an expiration date not earlier than one year following its issuance
date. Borrower agrees that no less than thirty (30) days prior to the expiration
date of the Letter of Credit and each renewal, extension or replacement thereof
(until the Letter of Credit has been released as provided below), Borrower shall
deliver to Collateral Agent a renewal, extension or replacement of the Letter of
Credit for a term of not less than one year, in form and substance satisfactory
to Collateral Agent and issued by a banking institution organized under the laws
of the United States of America or one of its constituent states and otherwise
acceptable to Collateral Agent. If requested by Collateral Agent, the Letter of
Credit (and each renewal, extension or replacement thereof) shall be accompanied
by evidence satisfactory to Collateral Agent regarding its due authorization,
genuineness, execution and enforceability, all delivered at Borrower's sole cost
and expense. The following terms shall apply to the Letter of Credit:

(a)       Collateral Agent shall be entitled to draw upon the Letter of Credit
when any Event of Default exists (including, Borrower's failure to deliver a
renewal or extension of the Letter of Credit as required above) or if Collateral
Agent believes that its rights to draw on the Letter of Credit could be in
jeopardy. Without limiting the foregoing, Collateral Agent shall also be
entitled to draw on the Letter of Credit and apply such proceeds to the Loan if
the credit rating or financial condition of the issuing bank is no longer
acceptable to Collateral Agent. Following a draw by Collateral Agent on the
Letter of Credit solely because Collateral Agent believes that its rights to
draw on the Letter of Credit could be in jeopardy (including a draw due to the
deterioration of the creditworthiness of the issuing bank), Collateral Agent
will readvance such proceeds to Borrower provided (1) Borrower delivers to
Collateral Agent a replacement Letter of

 

 

Schedule 2.4(2)

 

 

 

 

 

 

Credit within ninety (90) days of Collateral Agent's draw, (2) there exists no
Event of Default or Potential Default, (3) Collateral Agent receives
documentation satisfactory to Collateral Agent to provide security for such
readvance, including any title insurance endorsement necessary to insure the
validity and priority of such security, and (4) Borrower pays all of Collateral
Agent's fees and expenses in connection with such readvance. No draw by
Collateral Agent on the Letter of Credit shall cure or be deemed to cure any
Event of Default or limit in any respect any of Collateral Agent's remedies
under the Loan Documents, it being understood that Collateral Agent's rights and
remedies hereunder shall be cumulative and Collateral Agent shall have no
obligation to apply the proceeds of any draw to missed installments or other
amounts then due and unpaid under the Loan. Borrower shall replace or restore
the Letter of Credit immediately following any full or partial draw thereon by
Collateral Agent.

(b)       Proceeds of any draw upon the Letter of Credit (after reimbursement of
any costs and expenses, including attorneys' fees and reimbursements, incurred
by Collateral Agent in connection with such draw) may be applied by Collateral
Agent to the payment of the amounts owing under the Loan Documents, in
accordance with Paragraph 3 of the Notes.

(c)       No delay or omission of Collateral Agent in exercising any right to
draw on the Letter of Credit shall impair any such right, or shall be construed
as a waiver of, or acquiescence in, any Event of Default.

(d)       Provided no Event of Default or Potential Default exists, Collateral
Agent shall, upon request, release its rights in the Letter of Credit and
surrender the Letter of Credit to the issuing bank after the earlier of:

(i)   Payment in full of all sums due, and performance of all obligations, under
the Loan Documents; or

(ii)  If at any time after the third Loan Year, the Debt Service Coverage Ratio
equals or exceeds 1.50 to 1.0 as of the end of each of three (3) consecutive
calendar months; provided, however, that in calculating the Debt Service
Coverage Ratio for purposes of this paragraph, the outstanding principal balance
of the Loans shall be deemed to include all undisbursed Commitments that remain
available for disbursement.

 

 

Schedule 2.4(2)

 

 

 

 

 

 

SCHEDULE 2.4(2)

HOTEL WORK RESERVE

1.         Hotel Work Reserve. On the Closing Date, Borrower shall deposit
$2,140,000 into a reserve with Collateral Agent (the "Hotel Work Reserve"), out
of its own funds (not Loan proceeds). All monies on deposit in the Hotel Work
Reserve shall be held by Collateral Agent, with interest in accordance with
Section 5.8, in one or more Collateral Agent Accounts. Borrower grants to
Collateral Agent (on behalf of the Lenders) a security interest in all funds on
deposit in the Hotel Work Reserve. While an Event of Default or Potential
Default exists, Collateral Agent shall not be obligated to release to Borrower
any portion of the Hotel Work Reserve, and while an Event of Default exists,
Collateral Agent shall be entitled, without notice to Borrower, to apply any
funds in the Hotel Work Reserve to satisfy Borrower's obligations under the Loan
Documents.

2.         Release of Hotel Work Reserve. Collateral Agent shall release the
funds held in the Hotel Work Reserve as follows:

(a)       Upon completion of the Hotel Work in accordance with the requirements
of the Hotel Purchase Agreement, and Borrower's satisfaction of its obligations
under Section 5.9(5), Collateral Agent shall release one-half of the Hotel Work
Reserve to Borrower; and

(b)       After ninety (90) days following release of one-half of the Hotel Work
Reserve pursuant to paragraph (a) immediately above, Borrower shall deliver to
Collateral Agent a written certification as to whether either Borrower or
Renovation LLC has received any written notice, and otherwise has obtained
actual knowledge, of any objection or other claim made by Hotel Buyer (or any
other party) with respect to the Hotel Work or any portion thereof. Provided
that Borrower is able to certify that neither Borrower nor Renovation LLC has
received any such notice, nor has any such actual knowledge, Collateral Agent
shall release the balance of the Hotel Work Reserve to Borrower. If Borrower is
unable to provide such certification, Collateral Agent shall retain the funds in
the Hotel Work Reserve until such objections or claims are resolved to
Collateral Agent's satisfaction.

 

 

Schedule 2.4(3)

 

 

 

 

 

 

SCHEDULE 5.10

BORROWER BALANCE SHEET

INTENTIONALLY OMITTED

 

Schedule 5.10

 

 

Schedule 5.10

 

 

 

 

 

 

EXHIBIT A

FORM OF PROMISSORY NOTE

 

 

Exhibit A

 

 

 

 

 

 

TABLE OF CONTENTS

Page

ARTICLE 1 CERTAIN DEFINITIONS

1

 

Section 1.1

Certain Definitions

1

 

Section 1.2

Types of Loans

10

 

ARTICLE 2 LOAN TERMS

10

 

Section 2.1

The Loan Amounts

10

 

Section 2.2

Interest Rate; Late Charge

11

 

Section 2.3

Terms of Payment

13

 

Section 2.4

Security

15

 

Section 2.5

Payments; Pro Rata Treatment; Etc.

15

 

Section 2.6

Yield Protection; Etc.

19

 

ARTICLE 3 MISCELLANEOUS

25

 

Section 3.1

Notices

25

 

Section 3.2

Amendments and Waivers; References.

26

 

Section 3.3

Invalid Provisions

27

 

Section 3.4

Reimbursement of Expenses

28

 

Section 3.5

Approvals; Third Parties; Conditions

28

 

Section 3.6

Lenders and Collateral Agent Not in Control; No Partnership

28

 

Section 3.7

Time of the Essence

29

 

Section 3.8

Successors and Assigns

29

 

Section 3.9

Renewal, Extension or Rearrangement

29

 

Section 3.10

Waivers

29

 

Section 3.11

Singular and Plural

30

 

Section 3.12

Phrases

30

 

Section 3.13

Exhibits and Schedules

30

 

Section 3.14

Titles of Articles, Sections and Subsections

30

 

Section 3.15

Promotional Material

30

 

Section 3.16

Survival

30

 

Section 3.17

WAIVER OF JURY TRIAL

30

 

Section 3.18

Punitive or Consequential Damages; Waiver

31

 

Section 3.19

Governing Law

31

 

Section 3.20

Entire Agreement

31

 

Section 3.21

Counterparts

31

 

Section 3.22

Brokers

31

 

Section 3.23

Usury

32

 

ARTICLE 4 MATTERS CONCERNING THE LENDERS AND COLLATERAL AGENT

32

 

Section 4.1

Secondary Market Transactions.

32

 

Section 4.2

Assignments and Participations.

33

 

Section 4.3

Appointment, Powers and Immunities

35

 

Section 4.4

Reliance by Collateral Agent

36

 

Section 4.5

Defaults

36

 

 

-i-

 

 

 

 

 

 

 

Section 4.6

Rights as a Lender

36

 

Section 4.7

Standard of Care; Indemnification

36

 

Section 4.8

Non Reliance on Collateral Agent and Other Lenders

37

 

Section 4.9

Failure to Act

37

 

Section 4.10

Resignation of Collateral Agent

38

 

 

ARTICLE 5 ADDITIONAL COVENANTS AND REPRESENTATIONS

38

 

Section 5.1

Interest Rate Cap Agreement

38

 

Section 5.2

Curing

39

 

Section 5.3

Loan A; Project

39

 

Section 5.4

Refinance of Loan A

40

 

Section 5.5

Commencement and Completion of Capex Work

40

 

Section 5.6

Loan Balancing Requirement

41

 

Section 5.7

Existing TI Obligations

42

 

Section 5.8

Interest Payable by Collateral Agent

42

 

Section 5.9

Completion of Hotel Work

42

 

Section 5.10

Borrower's Balance Sheet

44

 

Section 5.11

Representation by Counsel

44

 

Section 5.12

Credit Agreement

44

 

 

 

 

-ii-

 

 

 

 

 

 

LIST OF EXHIBITS AND SCHEDULES

SCHEDULE 1.1(A)

-

BUDGET

SCHEDULE 1.1(A-1)

-

CAPEX BUDGET

SCHEDULE 1.1(B)

-

COMMITMENTS

SCHEDULE 1.1(C)

-

INITIAL TI OBLIGATIONS

SCHEDULE 2.1

-

ADVANCE CONDITIONS

SCHEDULE 2.3(1)

-

COLLATERAL AGENT'S WIRE TRANSFER INSTRUCTIONS

SCHEDULE 2.3(4)

-       YIELD MAINTENANCE AMOUNT AND MAKE WHOLE BREAKAGE AMOUNT DEFINITIONS

SCHEDULE 2.4(1)

-

CAPITAL IMPROVEMENTS RESERVE

SCHEDULE 2.4(2)

-

CASH COLLATERAL RESERVE AND LETTER OF CREDIT

SCHEDULE 2.4(3)

-

HOTEL WORK RESERVE

SCHEDULE 5.10

-

BORROWER BALANCE SHEET

EXHIBIT A

-

FORM OF NOTE

 

 

 

-iii-

 

 

 

 

 

 

LIST OF DEFINED TERMS

Additional Costs

19

Adjusted Libor Rate

1

Advance

1

Advance Date

17

Affiliate

1

Agreement

1

Alternate Base Rate

2

Alternate Base Rate Loans

2

Applicable Lending Office

2

Approved Leasing Parameters

2

Assignment and Acceptance

2

Basel Accord

2

Borrower

1

Borrower Party

2

Budget

2

Business Day

2

Cap Agreement

38

Capex Budget

2

Capex Costs

2

Capex Work

2

Closing Date

3

Collateral

3

Collateral Agent

1

Collateral Agent Account

3

Commitment

3

Continue

3

Contract Rate

3

Convert

3

Counterparty

39

CTT

3

CTT Escrow

3

CTT Escrow Agreement

3

Debt Service Coverage Ratio

3

Default Rate

3

Dollars

4

Eligibility Requirements

4

Eurodollar Loans

4

Event of Default

4

Existing TI/LC Obligations

4

Exit Fee

15

Federal Funds Rate

4

Fee Letter

4

Fixed Portion

4, 12

Fixed Rate

4

 

 

 

-iv-

 

 

 

 

 

 

 

Fixed Rate Conversion Date

4, 13

Fixed Rate Loans

4

Fixed Rate Quote

12

GECC

4

Guarantors

4

Guaranty

5

Hotel Purchase Agreement

5

Hotel Work

5

Hotel Work Reserve

5

Initial Advance

5

Initial Advance Contract Rate

5, 11

Initial TI/LC Reserve

5

Interest Period

5

Interest Rate Cap Security Agreement

5

Leasehold Mortgage

5

Lender

1

Lender Verified NOI

5

Lenders

1

LIBOR Rate

6

Libor-based Rate

6, 11

Lien

6

Loan A

6

Loan A Lender

6

Loan A Loan Documents

6

Loan A Note

6

Loan Documents

6

Loan Year

7

Loans

6

Lockout Period

7, 14

Majority Lenders

7

Maturity Date

7

Mortgages

7

Notes

7

Office Building

7

Office Mortgage

7

Origination Fee

15

Participant

7

Payment Date

7, 13

Payor

7, 17

Person

7

Potential Default

7

Prime Rate

8

Project

8

Proposed Lender

8

 

 

 

-v-

 

 

 

 

 

 

 

Qualified Institutional Lender

8

Rating Agencies

8

Regulation D

8

 

Regulatory Change

8

 

Requesting Lender

9

 

Required Payment

9, 17

 

Reserve Requirement

9

 

Secondary Market Transaction

9, 32

 

Spread Maintenance Amount

9

 

Stage

9

 

Stage Construction Schedule

9

 

Stages

9

 

Subsequent Advance

9

 

Subsequent Advances Contract Rate

9, 11, 12

 

Swap Rate

9

 

TI/LC/CapEx/DS Reserve

9

 

Type

9

 

U.S. Tax Person

23

 

U.S. Taxes

23

 

 

 

 

-vi-

 

 

 

 

 

 

 

 

 

-i-