<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): DECEMBER 15, 1997
PRIME GROUP REALTY TRUST
(Exact name of Registrant as specified in its Charter)
MARYLAND 1-13589 36-4173047
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
77 West Wacker Drive, Suite 3900, Chicago, Illinois 60601
(Address of principal executive offices) (Zip Code)
(312) 917-1300
(Registrant's telephone number, including area code)
N/A
(Former name or former address,
if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As reported on Form 8-K filed with the Securities and Exchange Commission on
December 15, 1997, Prime Group Realty Trust (the "Company") acquired the
first mortgage note encumbering the office property known as Continental
Towers for approximately $108.0 million. As also reported on Form 8-K filed
with the Securities and Exchange Commission on December 15, 1997, the Company
acquired the first mortgage note encumbering the office property known as 180
North LaSalle Street for approximately $51.2 million in cash and $5.0 million
in common units of Prime Group Realty, L.P.
As reported on Form 8-K filed with the Securities and Exchange Commission on
December 30, 1997, the Company acquired the office property known as 2675
North Mayfair Road for approximately $8.0 million.
Financial statements for the acquisition of Continental Towers, 180 North
LaSalle and 2675 North Mayfair are included in this Form 8-K/A.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements Under Rule 3-14 of Regulation S-X
PAGE
(i) Statements of revenue and expenses of Continental
Office Towers
Report of Independent Auditors 6
Statements of Revenue and Certain Expenses for the year
ended December 31, 1996 (Audited) and for the
nine months ended September 31, 1997 (Unaudited) 7
Notes to Statements of Revenue and Certain Expenses 8-9
(ii) Statements of revenue and expenses of 180 North LaSalle Street
Report of Independent Auditors 10
Statements of Revenue and Certain Expenses for the year ended
December 31, 1996 (Audited) and for the nine months ended
September 31, 1997 (Unaudited) 11
Notes to Statements of Revenue and Certain Expenses 12-13
(iii) Statement of revenue and expenses of 2675 North Mayfair Road
Report of Independent Auditors 14
Statement of Revenue and Certain Expenses for the
nine months ended September 31, 1997 (Audited) 15
Notes to Statement of Revenue and Certain Expenses 16
2
<PAGE>
(b) Pro Forma Financial Statements 17
The accompanying unaudited pro forma condensed consolidated statements of
operations for the nine months ended September 30, 1997 and the year ended
December 31, 1996, were prepared as if each of the following had occurred on
January 1, 1996: (i) the Company had sold 12.38 million of its common shares
of beneficial interest at $20.00 per share (the "Offering") and contributed the
net proceeds to Prime Group Realty, L.P. (the "Operating Partnership"), (ii)
the Company had sold 2.0 million shares of its cumulative convertible preferred
shares of beneficial interest at $20.00 per share (the "Private Placement") and
contributed the net proceeds to the Operating Partnership, (iii) Prime Group,
Inc. ("PGI") and other individuals had contributed certain of their respective
properties and operations, as described in the Company's Prospectus dated
November 11, 1997 as filed with the Securities and Exchange Commission on
November 13, 1997 (the "Prospectus"), to the Operating Partnership, (iv) the
Operating Partnership had issued 4.57 million common units for $85.0 million to
a partnership owned 60% by PGI and 40% by certain affiliates of Blackstone Real
Estate Advisors, L.P., (v) the Operating Partnership acquired various office
and industrial properties (including 2675 North Mayfair Road), (vi) the
Operating Partnership acquired Continental Office, Ltd. and Continental
Offices, Ltd. Realty, construction/property management companies, (vii) the
Operating Partnership acquired the first mortgage notes encumbering Continental
Towers and 180 North LaSalle Street (the operations of Continental Towers have
been consolidated), (viii) the Operating Partnership repaid debt on certain
of its properties, as described in the Prospectus, (ix) the Operating
Partnership financed certain acquisitions with borrowings under new mortgage
notes and a line of credit facility, and (x) the Company sold 600,000 shares of
its common shares of beneficial interest pursuant to the underwriter's over
allotment option and received net proceeds therefrom of approximately $11.25
million.
The acquisitions of Continental Towers, 180 North LaSalle Street and 2675 North
Mayfair Road increased pro forma revenue, expenses and net income by $18,747,
$17,926 and $821, respectively, for the nine months ended September 30, 1997
and $23,117, $22,260 and $857, respectively, for the year ended December 31,
1996.
The unaudited pro forma Condensed Consolidated Statements of Operations should
be read in conjunction with unaudited Pro Forma condensed consolidated
financial statements and all of the historical financial statements contained
in the Prospectus. In management's opinion, all adjustments necessary to
reflect the effects of the Offering and the Private Placement have been made.
The unaudited Pro Forma Condensed Consolidated Statements of Operations of the
Company are not necessarily indicative of what the actual results of operations
would have been assuming the Offering and the Private Placement had occurred at
the dates indicated above, nor do they purport to represent the future results
of operations of the Company.
3
<PAGE>
(c) Exhibits
Exhibit
No. Description
* 2.1 Loan Purchase Agreement by and between General Electric Capital
Corporation and Great Oak LLC, as Sellers, and Prime Group Realty,
L.P., as Purchaser
* 2.2 Loan Purchase Agreement by and between Prime Group Realty, L.P., as
Purchaser, and Allstate Life Insurance Company, as Seller
_______
* Filed herewith
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRIME GROUP REALTY TRUST
------------------------
Registrant
/s/ William M. Karnes
----------------------
William M. Karnes
Executive Vice President and
Chief Financial Officer
Date: February 27, 1997
5
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Prime Group Realty Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
Continental Office Towers (the Property) for the year ended December 31,
1996. The Statement of Revenue and Certain Expenses is the responsibility of
the Property's management. Our responsibility is to express an opinion on
the Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenue and
Certain Expenses is free from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
made in the Statement of Revenue and Certain Expenses. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation of the Statement of Revenue and Certain Expenses. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Current Report on Form 8-K/A of
Prime Group Realty Trust as described in Note 2 and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to
above presents fairly, in all material respects, the revenue and certain
expenses described in Note 2 for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 5, 1997
6
<PAGE>
CONTINENTAL OFFICE TOWERS
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
PERIOD FROM
JANUARY 1, 1997 TO
YEAR ENDED SEPTEMBER 30, 1997
DECEMBER 31, 1996 (UNAUDITED)
----------------- ------------------
Revenue
Rental .................................. $ 8,456 $ 7,104
Tenant reimbursements.................... 7,208 5,940
Other income ............................ 153 113
-------- --------
Total revenue 15,817 13,157
======== ========
Expenses
Cleaning ................................ 829 714
Utilities ............................... 1,025 796
Other property operating ................ 3,764 2,820
Real estate taxes ....................... 2,639 2,170
-------- --------
Total expenses .......................... 8,257 6,500
-------- --------
Revenue in excess of certain expenses ... $ 7,560 $ 6,657
======== ========
See accompanying notes.
7
<PAGE>
CONTINENTAL OFFICE TOWERS
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
1. BUSINESS
The accompanying Statements of Revenue and Certain Expenses relate to
the operations of Continental Office Towers, a three office building complex
located in Rolling Meadows, Illinois (the Property). As of September 30,
1997, the Property had fifty-five tenants, three of which accounted for
approximately 46% of rental revenue for the period from January 1, 1997 to
September 30, 1997 (unaudited).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying Statements of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in the Current Report on Form 8-K/A of
Prime Group Realty Trust. The statements are not representative of the
actual operations of the Property for the periods presented nor indicative of
future operations as certain expenses, primarily depreciation and
amortization which may not be comparable to the expenses expected to be
incurred by Prime Group Realty Trust in future operations of the Property,
have been excluded.
REVENUE AND EXPENSE RECOGNITION
Revenue is recognized in the period in which it is earned. Expenses are
recognized in the period incurred.
USE OF ESTIMATES
The preparation of the Statements of Revenue and Certain Expenses in
conformity with generally accepted accounting principles require management
to make estimates and assumptions that affect the reported amounts of revenue
and certain expenses during the reporting period. Actual results could
differ from these estimates.
3. INTERIM PERIOD (UNAUDITED)
The unaudited Statement of Revenue and Certain Expenses for the period
from January 1, 1997 to September 30, 1997, has been prepared in accordance
with generally accepted accounting principles for interim financial
information. In the opinion of management, all adjustments of a normal
recurring nature considered necessary for a fair presentation have been
included. Operating results for the period from January 1, 1997 to September
30, 1997, are not necessarily indicative of future operating results.
8
<PAGE>
CONTINENTAL OFFICE TOWERS
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
4. RELATED PARTY TRANSACTIONS
In connection with the operation of the Property, an affiliate of the
owner earned management fees equal to 5% of gross collections or $612,422
which are included in Other Property Operating Expenses.
5. RENTALS
The Property has lease agreements with lease terms ranging from one year
to fifteen years. The leases generally provide for tenants to share in
increases in operating expenses and real estate taxes in excess of specified
base amounts. The total future minimum rentals to be received under such
noncancelable operating leases as of September 30, 1997, exclusive of tenant
reimbursements and contingent rentals, are as follows:
YEAR ENDED DECEMBER 31 AMOUNT
1997 .................................... $ 2,036
1998 .................................... 8,270
1999 .................................... 7,271
2000 .................................... 4,299
2001 .................................... 2,265
Thereafter ............................... 1,753
---------
$ 25,894
=========
9
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Prime Group Realty Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
180 North LaSalle Street (the Property) for the year ended December 31, 1996.
The Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenue and Certain
Expenses is free from material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures made in the
Statement of Revenue and Certain Expenses. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation of the
Statement of Revenue and Certain Expenses. We believe that our audit provides
a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Current Report on Form 8-K/A of Prime
Group Realty Trust as described in Note 2 and is not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 2 for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 2, 1997
10
<PAGE>
180 NORTH LASALLE STREET
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
PERIOD FROM
JANUARY 1, 1997 TO
YEAR ENDED SEPTEMBER 30, 1997
DECEMBER 31, 1996 (UNAUDITED)
----------------- ------------------
Revenue
Rental ..................................... $ 11,828 $ 8,905
Tenant reimbursements ...................... 221 210
Other income ............................... 135 243
--------- --------
Total revenue .............................. 12,184 9,358
--------- --------
Expenses
Cleaning ................................... 996 723
Utilities .................................. 1,204 906
Other property operating ................... 1,905 1,325
Real estate taxes .......................... 4,474 3,526
--------- --------
Total expenses ............................. 8,579 6,480
--------- --------
Revenue in excess of certain expenses ...... $3,605 $2,878
========= ========
See accompanying notes
11
<PAGE>
180 NORTH LASALLE STREET
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
1. BUSINESS
The accompanying Statements of Revenue and Certain Expenses relate to the
operations of 180 North LaSalle Street, an office building located in Chicago,
Illinois (the Property). As of September 30, 1997, the Property had eighty-
nine tenants, two of which accounted for approximately 40% of rental revenue
for the period from January 1, 1997 to September 30, 1997 (unaudited), and for
the year ended December 31, 1996.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying Statements of Revenue and Certain Expenses were
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Current Report on
Form 8-K/A of Prime Group Realty Trust. The statements are not
representative of the actual operations of the Property for the periods
presented nor indicative of future operations as certain expenses, primarily
depreciation and amortization which may not be comparable to the expenses
expected to be incurred by Prime Group Realty Trust in future operations of
the Property, have been excluded.
REVENUE AND EXPENSE RECOGNITION
Revenue is recognized in the period in which it is earned. Expenses are
recognized in the period incurred.
USE OF ESTIMATES
The preparation of the Statements of Revenue and Certain Expenses in
conformity with generally accepted accounting principles require management to
make estimates and assumptions that affect the reported amounts of revenue and
certain expenses during the reporting periods. Actual results could differ
from these estimates.
3. INTERIM PERIOD (UNAUDITED)
The unaudited Statement of Revenue and Certain Expenses for the period
from January 1, 1997 to September 30, 1997, has been prepared in accordance
with generally accepted accounting principles for interim financial
information. In the opinion of management, all adjustments of a normal
recurring nature considered necessary for a fair presentation have been
included. Operating results for the period from January 1, 1997 to September
30, 1997, are not necessarily indicative of future operating results.
12
<PAGE>
180 NORTH LASALLE STREET
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
4. RENTALS
The Property has lease agreements with lease terms ranging from one year
to twenty years. The leases generally provide for tenants to share in
increases in operating expenses and real estate taxes in excess of specified
base amounts. The total future minimum rentals to be received under such
noncancelable operating leases as of September 30, 1997, exclusive of tenant
reimbursements and contingent rentals, are as follows:
YEAR ENDED DECEMBER 31 AMOUNT
1997 ............................... $ 2,872
1998 ............................... 10,332
1999 ............................... 7,872
2000 ............................... 6,004
2001 ............................... 5,053
Thereafter ......................... 7,135
---------
$39,268
=========
5. RELATED PARTY
The Property was managed by an affiliate of the current owner.
Management fees of $371 and $282 (unaudited) were incurred for the twelve
months ended December 31, 1996, and the for the period from January 1, 1997
to September 30, 1997, respectively. The management agreement provided for
fees of 3% of gross receipts, as defined. In addition, the management
company is a tenant at the Property. The management company paid
approximately $2,650 and $2,013 (unaudited) in lease payments to the Property
during the twelve months ended December 31, 1996, and for the period from
January 1, 1997 to September 30, 1997, respectively. Future minimum rentals
in Note 4 include amounts to be received from the management company totaling
$14,656.
13
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Prime Group Realty Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
2675 Mayfair (the Property) for the period from January 1, 1997 to September
30, 1997. The Statement of Revenue and Certain Expenses is the
responsibility of the Property's management. Our responsibility is to
express an opinion on the Statement of Revenue and Certain Expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenue and
Certain Expenses is free from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
made in the Statement of Revenue and Certain Expenses. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation of the Statement of Revenue and Certain Expenses. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Current Report on Form 8-K/A of
Prime Group Realty Trust as described in Note 2 and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to
above presents fairly, in all material respects, the revenue and certain
expenses described in Note 2 for the period from January 1, 1997 to September
30, 1997, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 4, 1997
14
<PAGE>
2675 MAYFAIR
STATEMENT OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
PERIOD FROM
JANUARY 1, 1997 TO
SEPTEMBER 30, 1997
------------------
Revenue
Rental................................................. $ 1,076
Tenant reimbursements ................................. 6
--------
Total revenue ......................................... 1,082
--------
Expenses
Cleaning .............................................. 80
Utilities ............................................. 104
Other property operating .............................. 144
Real estate taxes ..................................... 152
--------
Total expenses ........................................ 480
--------
Revenue in excess of certain expenses ................. $ 602
========
See accompanying notes.
15
<PAGE>
2675 MAYFAIR
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
1. BUSINESS
The accompanying Statement of Revenue and Certain Expenses relates to
the operations of 2675 Mayfair, an office building located in Wauwatosa,
Wisconsin (the Property). As of September 30, 1997, the Property had
thirteen tenants, one of which accounted for approximately 55% of rental
revenue for the period from January 1, 1997 to September 30, 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying Statement of Revenue and Certain Expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in the Current Report on Form 8-K of
Prime Group Realty Trust. The statement is not representative of the actual
operations of the Property for the period presented nor indicative of future
operations as certain expenses, primarily depreciation and amortization which
may not be comparable to the expenses expected to be incurred by Prime Group
Realty Trust in future operations of the Property, have been excluded.
REVENUE AND EXPENSE RECOGNITION
Revenue is recognized in the period in which it is earned. Expenses are
recognized in the period incurred.
USE OF ESTIMATES
The preparation of the Statement of Revenue and Certain Expenses in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of revenue
and certain expenses during the reporting period. Actual results could
differ from these estimates.
3. RENTALS
The Property has lease agreements with lease terms ranging from one year
to ten years. The leases generally provide for tenants to share in increases
in operating expenses and real estate taxes in excess of specified base
amounts. The total future minimum rentals to be received under such
noncancelable operating leases as of September 30, 1997, exclusive of tenant
reimbursements and contingent rentals, are as follows:
YEAR ENDED DECEMBER 31 AMOUNT
---------------------- ------
1997 .................................... $ 376
1998 .................................... 1,399
1999 .................................... 864
2000 .................................... 275
2001 .................................... 257
Thereafter .............................. 1,289
-------
$4,460
=======
16
<PAGE>
Prime Group Realty Trust
Pro Forma Condensed Statements of Operations
(in thousands, except per share data)
(UNAUDITED)
FOR THE NINE FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
REVENUE:
Rental $ 50,835 $ 62,738
Tenant reimbursements 20,805 26,432
Other 4,994 8,942
---------- ---------
TOTAL REVENUE 76,634 98,111
EXPENSES:
Property operations 13,390 18,587
Real estate taxes 12,736 16,282
Depreciation and amortization 14,799 19,371
Interest 15,673 21,566
Financing fees 934 -
General and administrative 4,578 7,161
Write-off of deferred costs 3,081
Provision for environmental remediation 3,205 -
---------- ---------
TOTAL EXPENSES 65,314 86,048
---------- ---------
INCOME(LOSS) FROM OPERATIONS BEFORE
SHARE OF INCOME OF INVESTMENT
SUBSIDIARIES AND MINORITY INTEREST 11,320 12,064
SHARE OF INCOME OF INVESTMENT SUBSIDIARIES 170 387
---------- ---------
INCOME (LOSS) BEFORE PREFERRED STOCK
AND MINORITY INTEREST 11,490 12,451
PREFERRED STOCK DIVIDENDS (2,100) (2,800)
---------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST 9,390 9,651
MINORITY INTEREST (4,142) (4,257)
---------- ---------
NET INCOME(LOSS) $ 5,248 $ 5,394
========== =========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
OF BENEFICIAL INTEREST OUTSTANDING 12,980 12,980
========== =========
NET INCOME PER COMMON SHARE OF BENEFICIAL INTEREST $ 0.40 $ 0.42
========== =========
17
<PAGE>
(EXHIBIT 2.1)
LOAN PURCHASE AGREEMENT
By and Between
GENERAL ELECTRIC CAPITAL CORPORATION
and GREAT OAK LLC, Sellers
and
PRIME GROUP REALTY, L.P., Purchaser
November 6, 1997
<PAGE>
<TABLE>
<CAPTION>
INDEX
Section Heading Page
- --------------- ----
<S> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Sale and Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Items to be Provided . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Termination, Default and Remedies . . . . . . . . . . . . . . . . . . . 5
7. Reimbursement Payment.
8. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
9. Conditions Precedent to Performance by Purchaser. . . . . . . . . . . . 9
10. Conditions Precedent to Performance by Sellers. . . . . . . . . . . . . 9
11. Representations and Warranties of Sellers . . . . . . . . . . . . . . 10
12. DISCLAIMER OF REPRESENTATIONS OR WARRANTIES BY SELLER . . . . . . . . 13
13. Representations, Warranties and Covenants of Purchaser. . . . . . . . 14
14. Obligations and Liabilities of the Parties and Limitations Thereon.
15. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
16. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
18. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
19. Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20. Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
<PAGE>
21. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
22. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
23. NO ORAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 20
24. Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . 20
25. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
26. Rule of Construction. . . . . . . . . . . . . . . . . . . . . . . . . 21
27. Saturday, Sunday or Legal Holiday . . . . . . . . . . . . . . . . . . 21
28. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . 21
29. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-21-
30. No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . .-21-
31. Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-21-
32. Jury Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-21-
33. No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . .-22-
</TABLE>
<TABLE>
Exhibits
- --------
<S> <C> <C>
Exhibit A - Property Description
Exhibit B - Loan Documents
Exhibit C - Loan Balance Confirmation
Exhibit D - Assignment of Liens and Documents
Exhibit E - Tax Identification Certificate
Exhibit F - Borrower's Consent
Exhibit G - Estoppel Certificate
</TABLE>
<PAGE>
11/5/97 v5 LOAN PURCHASE AGREEMENT
THIS LOAN PURCHASE AGREEMENT ("AGREEMENT"), is executed as of November 6,
1997 by and between General Electric Capital Corporation, a New York
corporation, ("GECC"), GREAT OAK LLC, a Delaware limited liability company
("GREAT OAK") and Prime Group Realty, L.P., a Delaware limited partnership
("PURCHASER").
RECITALS:
A. GECC is party to that certain Loan Modification and Amended and
Restated Loan Agreement dated as of June 1, 1995 ("Loan Agreement"), by and
among GECC and American National Bank and Trust Company of Chicago Trust No.
40935 ("Borrower"), Continental Towers Associates-I, an Illinois limited
partnership, as the beneficiary of Borrower ("Beneficiary"), Richard A. Heise,
Roland E. Casati and Casati-Heise Partnership, an Illinois general partnership
(the parties to the Loan Agreement other than GECC being herein called "Borrower
Parties"), pursuant to which GECC has made available to Borrower loans in the
aggregate principal amount not to exceed $156,306,073 (the "Loan") evidenced by
six separate Notes (generally, the "Notes") described as items 9 through 14,
both inclusive in Exhibit B attached hereto and made a part hereof (said
separate Notes being denominated as 1995 Note A-1 ("Note A-1"), 1995 Note A-2
("Note A-2"), 1995 Note A-3 ("Note A-3"), 1995 Note A-4 ("Note A-4"), 1995 Note
B ("Note B") and 1995 Note C ("Note C");
B. The Loan is secured by mortgage liens upon real property and
improvements located in the State of Illinois, County of Cook, more particularly
described on Exhibit A attached hereto (the "Property") and other collateral and
security specified in the Loan Agreement (the liens upon the Property and such
other collateral and security being herein generally called the "Security");
C. Note A-1, Note A-2, Note A-3 and Note A-4 (together the "Great Oak
Notes") have previously been assigned to Great Oak, and Great Oak is presently
the owner and holder thereof; and GECC has retained and is presently the owner
and holder of Note B and Note C (together the "GECC Notes") (GECC and Great Oak
together being herein sometimes called "Sellers" and severally a "Seller");
D. Purchaser desires to purchase all of Sellers' right, title and
interest in and to the Loan, the Notes and the Security, and to assume all of
the obligations of the respective Sellers under the Loan Agreement and all of
the other documents described in Exhibit B hereto, evidencing, securing and
governing the Loan (the "Loan Documents") from and after the Closing Date
hereinafter referred to, all at the times and on the terms and subject to the
conditions set forth herein. and
E. Concurrently with the execution and delivery hereof, GECC and Borrower
Parties have executed and delivered a Loan Balance Confirmation (the "Loan
Balance Confirmation") setting forth the outstanding balances of the Loan and
Notes, a copy of which Loan Balance Confirmation is attached hereto as Exhibit C
and made a part hereof.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Sellers and Purchaser hereby agree as follows:
1. Definitions. Whenever used herein, the following terms shall have the
meanings set forth below unless otherwise expressly provided or unless the
context clearly requires otherwise:
<TABLE>
<S> <C> <C>
"Agreement" - See opening paragraph
"Assignment" - See Section 7(b)(i)(B)
"Beneficiary" - See Recitals
"Borrower" - See Recitals
"Borrower Parties" - See Recitals
"Consent" - See Section 8(b)(ii)(D)
"Closing" - See Section 5(a)
"Closing Date" - See Section 5(a)
"Evaluation Material" - See Section 4(b)
"Final Reimbursement Payment" - See Section 7
"GECC" - See opening paragraph
"GECC Notes" - See Recitals
"Great Oak" - See opening paragraph
"Great Oak Notes: - See Recitals
"Indemnified Party" - See Section 13(c)
"Indemnifying Party" - See Section 13(c)
"Initial Reimbursement Payment" - See Section 7(a)
"Inspection Period" - See Section 5(a)
"Inspections" - See Section 5(a)
"Loan" - See Recitals
"Loan Agreement" - See opening paragraph
"Loan Balance Confirmation" - See Recitals
"Loan Documents" - See Recitals
"Lockbox Account" - See Section 8(b)(i)(F)
"Lockbox Agreement" - See Item 15 of Exhibit B
"Notes" and "Note A-1",
Note A-2, Note A-3, Note A-4,
Note B and Note C - See Recitals
"Notice of Claim" - See Section 13(c)
"Property" - See Recitals
"Purchase Price" - See Section 3
"Purchaser" - See opening paragraph
"Reimbursement Payment" - See Section 7
"Security" - See Recitals
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
"Sellers" - See Recitals
"Survival Obligations" - See Section 5(e)
</TABLE>
2. Sale and Purchase.
(a) Each Seller agrees to sell, convey, and assign to Purchaser, and
Purchaser agrees to purchase and accept from each Seller, for the Purchase
Price, on the terms and conditions set forth in this Agreement, all of
Sellers' assignable right, title and interest in and to the Loan evidenced
and secured by the Loan Agreement and the other Loan Documents described
on Exhibit B attached hereto.
(b) It is the intent of the parties hereto that, by the transfers and
assignments provided for herein, the priority of the liens and security
interests in favor of Sellers or either of them by reason of the Loan
Documents shall be deemed preserved and maintained, and any subsequent
advances by Purchaser under the Loan Documents (or any extensions,
renewals, modifications, amendments or replacements thereof) shall be
entitled to the lien priority and dignity of the Loan Documents and shall
relate back to the lien priority accorded the original indebtedness the
payment of which is secured by the Loan Documents. Nothing contained in
this Agreement shall be considered as a payment of any indebtedness or a
release, cancellation, termination or impairment of the priority of any
lien or security interest created by any of the Loan Documents or any
obligation or liability of any of Borrower Parties under the Loan
Documents.
3. Purchase Price.
(a) The purchase price ("Purchase Price") to be paid by Purchaser to
Sellers for the Loan is ONE HUNDRED FIFTEEN MILLION SEVEN HUNDRED FIFTY
THOUSAND and NO/100 DOLLARS ($115,750,000.00), all of which shall be paid
to Great Oak;
(b) If prior to the Closing Date the principal balance of the Loan is
increased or decreased (other than by application of $1,750,000.00 out of
the Lockbox Account as provided for in Section 8(b)(ii)(F) hereof, or by
virtue of advances made out of funds in the Lockbox Account not to exceed
$1,600,000.00 in the aggregate made by Sellers for operating costs or
necessary repairs to the Property in accordance with requests therefor made
by Borrower Parties pursuant to the Loan Documents), the Purchase Price
shall be adjusted upward or downward accordingly; provided that (i) nothing
herein contained shall require Sellers to make any disbursements of the
Loan for the repair, renovation or improvement of the deck at the Property
and (ii)during the Purchase Period (as defined in the Loan Balance
Confirmation) amounts in the Lockbox Account shall be applied in accordance
with the provisions of Section 8 of the Loan Balance Confirmation.
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<PAGE>
(c) Purchaser shall pay the Purchase Price to Sellers at the Closing
by wire transfer pursuant to the following wiring instructions:
Bankers Trust
New York, NY
ABA No.:021001033
Account No.:50-256-477
Reference: Continental Towers
(d) Sellers hereby represent to Purchaser that they have entered into
a separate agreement as to the allocation between them of the Purchase
Price, of the Reimbursement Payment hereinafter referred to, and of any
sums payable to Sellers pursuant to Sections 8(b)(ii)(E) and 8(c) hereof.
4. Items to be Provided to Purchaser Within five (5) days after the date
hereof, GECC shall make available to Purchaser, for Purchaser's review, at
Purchaser's offices in Chicago, Illinois, the following:
(a) Copies of the Loan Documents, to the extent the same are in
Sellers' possession; and
(b) Such other information (the "Evaluation Material") in GECC's
actual possession and control, such as property operating statements, rent
rolls, mortgagee title insurance policies, and other material pertaining to
the Loan to the extent same are not subject to any confidentiality
agreement or privilege.
5. Inspection.
(a) Purchaser shall have a period ("Inspection Period") commencing
upon the date hereof and terminating at 5:00 p.m. Central Standard Time on
December 9, 1997 (or such earlier date that Purchaser shall specify by
notice to Sellers), to make such examinations, studies, inspections and
investigations ("Inspections") regarding the Loan, the Loan Documents and
the Property as Purchaser may desire;
(b) Nothing contained herein shall authorize any Inspection of the
Property by Purchaser which would not be permitted under the terms and
provisions of the Loan Documents;
(c) Any inspection fee, appraisal fee, engineering fee and other
expense of any kind incurred by Purchaser relating to, or in connection
with, any Inspections will be solely Purchaser's expense;
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<PAGE>
(d) Purchaser shall make such examination, review and investigation
of the facts and circumstances necessary to evaluate the Loan, the Loan
Documents, the Property and other Security as it deems necessary or
appropriate to form a basis for its evaluation of the purchase of the Loan.
Purchaser is assuming all risk with respect to the completeness, accuracy,
sufficiency, validity, authorization and execution by Borrower Parties and
enforceability of the Loan, the Loan Documents and any information
pertaining to the Property and other Security. Purchaser further
acknowledges that in acquiring the Loan, Purchaser is assuming the risk of
full or partial loss which is inherent with the credit, collateral and
collectibility risks associated with the quality and character of the Loan,
the authorization, execution, delivery by Borrower Parties, and
enforceability of, the Loan Documents and value of the Security; and
(e) If Purchaser, in its sole and absolute discretion, is not
satisfied with the results of its Inspections for any reason whatsoever,
Purchaser, as Purchaser's sole and exclusive remedy, shall have the right
to terminate this Agreement by giving written notice of termination to
Seller on or before 5:00 p.m. Central Standard Time on the last day of the
Inspection Period. Upon such termination, neither party hereto shall have
any further rights or obligations hereunder, except as set forth in Section
14 hereof.
6. Termination, Default and Remedies.
(a) If Purchaser fails or refuses to consummate the purchase of the
Loan pursuant to this Agreement at the Closing for any reason, other than
termination of this Agreement by Purchaser pursuant to a right to so
terminate set forth in Subsection 5(e) above or any Seller's failure to
perform its obligations under Section 8(b)(i) of this Agreement (after the
notice and opportunity to cure set forth in Section 6(b) hereof), or if
prior to or at Closing, either Seller discovers that Purchaser has failed
to timely perform any of its other obligations hereunder or that any of
Purchaser's representations or warranties contained in this Agreement are
not true or accurate as of the date made or on the Closing Date and
Purchaser does not perform such obligations or make good such
representations and warranties within three business days after notice by
any Seller to Purchaser (provided that Purchaser shall not be entitled to
any notice or opportunity to perform or make good with respect to payment
of any Reimbursement Payment or the Purchase Price), then, such event shall
constitute a default by Purchaser hereunder and either Seller may terminate
this Agreement by giving written notice to Purchaser prior to or at the
Closing, whereupon no party hereto shall have any further right or
obligation hereunder, other than as set forth in Section 14 hereof.
(b) If (i) either Seller fails or refuses to consummate the purchase
of the Loan pursuant to this Agreement at the Closing for any reason, other
than termination of this Agreement by a Seller pursuant to a right to so
terminate expressly set forth in Section 6(a) or Section 7(b) hereof or
Purchaser's failure to perform Purchaser's obligations under Section
8(b)(ii) of this Agreement, or (ii) if prior to or at Closing, Purchaser
discovers that a Seller has failed to timely perform any of its other
obligations hereunder or that any of either Seller's
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<PAGE>
representations or warranties contained in this Agreement are not true or
accurate as of the date made or on the Closing Date and Sellers do not
perform such obligations or make good such representations and warranties
within three business days after notice to Sellers by Purchaser (the
Closing Date to be deferred, if necessary, to allow for such three business
day period), then such event shall constitute a default by Sellers
hereunder and Purchaser may terminate this Agreement by giving written
notice to Sellers prior to or at the Closing, whereupon no party hereto
shall have any further right or obligation hereunder, except as set forth
in Section 14(a)(ii) hereof.
7. Reimbursement Payment.
(a) Concurrently with the execution and delivery hereof, Purchaser
shall pay to Sellers in the manner specified in Section 3(c) hereof, the
sum of $500,000.00 (the "Initial Reimbursement Payment") and, if the
Closing Date shall not have occurred on or prior to November 12, 1997,
Purchaser shall pay to Sellers in like manner on November 12, 1997 the
additional sum of $500,000.00 (the "Final Reimbursement Payment"; and the
Initial Reimbursement Payment and Final Reimbursement Payment being herein
generally called the "Reimbursement Payment") to defer the costs and
expenses incurred by Sellers in connection with the transactions
contemplated hereby and refraining from disposing of the Loan during the
Inspection Period;
(b) If Purchaser shall fail to make the Final Reimbursement Payment,
as and when required by Subsection (a) above, Sellers may thereafter
terminate this Agreement by notice to Purchaser;
(c) In the event that the sale of the Loan is consummated in
accordance with the terms and conditions hereof, Purchaser shall be
credited against the Purchase Price with the amount of the Reimbursement
Payment actually paid;
(d) In the event that the sale of the Loan is not consummated in
accordance with the terms and conditions hereof, Sellers shall be entitled
to retain the Reimbursement Payment previously paid, without any claim
thereto on the part of Purchaser, except that if Purchaser is entitled to
terminate this Agreement under the circumstances set forth in Section 6(b)
hereof, Purchaser shall be entitled to the return of the Reimbursement
Payment paid; and
(e) Purchaser and Sellers agree that the costs and expenses incurred
and to be incurred by Sellers in connection with the transactions
contemplated hereby (including costs consequent upon the necessity for
Sellers to refrain from otherwise attempting to dispose of the Loan during
the Inspection Period) are difficult or impossible to ascertain with
particularity and that the amount of the Reimbursement Payment is a
reasonable estimate of such costs and expenses.
-6-
<PAGE>
8. Closing.
(a) Unless this Agreement has been terminated pursuant to Section
5(e) or Section 7(b) hereof, the Closing ("Closing") of the sale of the
Loan by Sellers to Purchaser shall occur at the offices of GECC, 209 West
Jackson Boulevard, Second Floor, Chicago, Illinois or any other mutually
acceptable location, on the third business day following the first to occur
of the end of the Inspection Period, or any other mutually acceptable date
(the "Closing Date"). If the Closing has not occurred by December 12,
1997, and provided that terminating party is not in default under this
Agreement, then either party may terminate this Agreement whereupon neither
party shall have any further right or obligation hereunder, other than as
set forth in Section 14 hereof.
(b) At the Closing, all of the following shall occur, all of which
shall be deemed concurrent conditions precedent:
(i) Sellers, at their sole cost and expense, shall deliver or
cause to be delivered to Purchaser the following:
(A) The Notes, which shall be endorsed by GECC as to the
GECC Notes and by Great Oak as to the Great Oak Notes with the
following endorsement: "Pay to the order of Prime Group Realty,
L.P., as is, where is, with all faults and without
representation, warranty or recourse, express or implied, of any
type, kind, character or nature"; which endorsement shall be
either placed on the face of each respective Note or by allonge
attached thereto;
(B) An Assignment of Liens and Documents (the "Assignment")
for the Loan Documents and related rights and liens in the form
of Exhibit D attached hereto with all blanks appropriately
completed and executed by the record holder of each such Loan
Document;
(C) One or more UCC-3 Assignment of Financing Statement
forms evidencing the assignment to Purchaser of all Sellers'
right, title and interest in and to any security interests in
personal property and fixtures created by the Loan Documents and
held by Sellers, executed by the secured party of record which
are in effect on the Closing Date;
(D) The originals, to the extent the same are in Sellers'
actual possession and control on the Closing Date, of the other
Loan Documents;
(E) All tax reserves (as defined in the Loan Agreement) on
deposit with the Sellers or either of them for the payment of
real estate taxes upon the Property on the Closing Date;
-7-
<PAGE>
(F) An assignment to Purchaser of the rights of GECC under
the Lockbox Agreement and a transfer to Purchaser of all
signatory rights to the account (the "Lockbox Account")
established pursuant to the Lockbox Agreement; provided that if
and to the extent that a Lease Termination Fee (as defined in the
Loan Agreement) paid by Transamerica, a tenant of the Property on
account of termination of its lease and deposited in the Lockbox
Account has not previously been withdrawn by GECC from such
Account and applied upon the Loan in accordance with the Loan
Agreement and the Loan Balance Confirmation, such sum shall be
paid to GECC from the Lockbox Account on the Closing Date prior
to the transfer of the Lockbox Account;
(ii) Purchaser, at Purchaser's sole cost and expense, shall
deliver or cause to be delivered to Sellers the following:
(A) The Purchase Price, paid in the manner set forth in
Section 3(c) hereof;
(B) An agreement, executed by Purchaser, whereby Purchaser
assumes the obligations of Sellers (if any) under the Loan
Documents, the form of which is incorporated in the Assignment;
(C) A Purchaser's Tax Identification Certificate, executed
by Purchaser, in the form attached hereto as Exhibit E with all
applicable blanks appropriately completed;
(D) An agreement, release and consent (the "Consent")
executed by each Borrower Party in the form attached hereto as
Exhibit F;
(E) An amount (payable as set forth in Section 3(c) hereof)
equal to Base Interest (as defined in the Notes) actually payable
for the month in which the Closing Date occurs (but not including
any interest which may be deferred in accordance with the
provisions of the Loan Documents) less the amount thereof
accruing between the Closing Date and the last day of the month
in which the Closing Date occurs;
(c) Purchaser shall prepare a statement of Adjusted Net Operating
Income (as defined in the Loan Agreement) for the fiscal quarter in which
the Closing Date occurs, and shall pay to Sellers their proportionate share
of Adjusted Net Operating Income (less Sellers' proportionate share of the
payment to be made to the Beneficiary pursuant to Section 6.4(a) of the
Loan Agreement. Proportionate shares will be calculated by dividing the
number of days in the quarter through the Closing Date by the actual number
of days in the quarter. Purchaser shall also prepare the annual
reconciliation of Adjusted Net Operating Income for the year in which the
Closing occurs. If the Closing occurs in the fourth quarter of the year,
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<PAGE>
Purchaser shall not remit Sellers' share of fourth quarter Adjusted Net
Operating Income until the annual reconciliation is prepared and shall pay
the same within 15 days after the preparation thereof; and any adjustment
shall be taken into account in determining the payment to be made to
Sellers. If the Closing occurs in a quarter other than the fourth quarter,
Purchaser shall notify Sellers when the annual reconciliation has been
made, and any required adjustment will be made by a payment from Sellers to
Purchaser or vice versa, as appropriate, and any payment shall be made to
Sellers as provided for in Section 3(c) hereof.
9. Conditions Precedent to Performance by Purchaser.
(a) Without limitation upon the conditions set forth in
Section 8(b)(i) hereof, (all of which shall be conditions precedent to
Purchaser's obligations hereunder) Purchaser's obligations under this
Agreement shall be contingent and specifically conditioned upon the
following:
(i) Sellers shall have, in all material respects, delivered,
performed, observed, and complied with all of the items, instruments,
documents, covenants, agreements, and conditions required by this
Agreement to be delivered, performed, observed, and complied with by
Sellers prior to or as of the Closing;
(ii) The representations made by Sellers in Section 11 of this
Agreement shall be true and correct in all material respects as though
made at and as of the Closing Date, except as otherwise contemplated
by this Agreement or consented to in writing by the Purchaser (it
being understood that representations that speak as of a specified
date shall continue to speak as of the date so specified); and
(iii) Purchaser shall have obtained (and hereby agrees to use
its best efforts to obtain) from the Borrower Parties a duly completed
Estoppel Certificate in the form attached hereto as Exhibit G, or as
may otherwise be acceptable to Purchaser;
(b) In the event that any of the conditions described in Section 8(b)
hereof have not been satisfied at or prior to the Closing, Purchaser shall
have the option at any time at or before the Closing, to either (i)
terminate this Agreement by written notice to Sellers pursuant to Section
6(b) hereof, whereupon no party hereto shall have any further right or
obligation hereunder, other than as set forth in Section 14(a) hereof or
(ii) waive such condition and close the purchase of the Loan in accordance
with the terms hereof, in which case the provisions of Section 14(b) hereof
shall apply.
10. Conditions Precedent to Performance by Sellers.
(a) Without limitation upon the conditions set forth in
Section 8(b)(ii) hereof, (all of which shall be conditions precedent to
Sellers' obligations hereunder) Sellers' obligations under this Agreement
shall be contingent and specifically conditioned upon the following:
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<PAGE>
(i) Purchaser shall have, in all material respects,
delivered, performed, observed, complied with and paid all of the
items, instruments, documents, payments, covenants, agreements, and
conditions required by this Agreement to be delivered, performed,
observed, and complied with, and paid by Purchaser prior to or as of
the Closing, including, but not limited to, the Reimbursement Payment
as and when due and the balance of the Purchase Price and all amounts
payable pursuant to Section 8(b)(ii)(E) hereof and an executed
Assignment as required by Section 8(b)(ii)(B) hereof;
(ii) The representations and warranties made by Purchaser in
Section 13 of this Agreement shall be true and correct in all material
respects on the date hereof and as though made at and as of the
Closing Date, except as otherwise contemplated by this Agreement or
consented to in writing by the Sellers (it being understood that
representations and warranties that speak as of a specified date shall
continue to speak as of the date so specified);
(iii) Sellers shall have received duly completed and executed
counterparts of the Consent;
(b) In the event that any of the conditions described in
Section 10(a) hereof have not been satisfied by the Closing Date, either
Seller shall have the option, at any time on or before the Closing, to
either (i) terminate this Agreement by written notice to Purchaser pursuant
to Section 6(a) hereof, whereupon neither party hereto shall have any
further right or obligation hereunder, other than as set forth in Section
14 hereof or (ii) waive such condition and close the sale of the Loan in
accordance with the terms hereof.
11. Representations and Warranties of Sellers.
(a) GECC hereby represents and warrants to Purchaser that:
(i) GECC is a duly organized corporation, validly existing
and in good standing under the laws of the State of New York;
(ii) GECC has all requisite power and authority to execute,
deliver, and perform all of its obligations under this Agreement and
all instruments and other documents executed and delivered by GECC in
connection herewith;
(iii) The execution, delivery and performance of this Agreement
and all instruments and other documents to be executed and delivered
by GECC in connection herewith have been duly authorized by all
necessary action on the part of GECC and do not and will not
(A) require any consent or approval that has not been obtained, or
(B) violate any law, rule, regulation, order, writ, judgment,
injunction,
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<PAGE>
decree, determination or award presently in effect having
applicability to GECC or any provision of GECC's charter or bylaws;
(iv) This Agreement constitutes a legal, valid and binding
obligation of GECC, enforceable against GECC in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to
or affecting the enforcement of creditors' rights and general
equitable principles which may limit the availability of equitable
remedies;
(v) GECC has not filed and is not planning to file any
petition seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any law relating to bankruptcy or insolvency, nor has any such
petition been filed against GECC. No general assignment of GECC's
property has been made for the benefit of creditors, and no receiver,
master, liquidator or trustee has been appointed for GECC or any of
its properties. GECC is not insolvent and the consummation of the
transactions contemplated by this Agreement shall not render GECC
insolvent. GECC has now, and will have as of the Closing, sufficient
capital or net worth to meet its obligations. GECC has liquidated
financial resources adequate to consummate the transactions
contemplated herein;
(vi) GECC is a "United States person" within the meaning of
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended;
(vii) GECC has not assigned, transferred or hypothecated to any
third party (other than the transfer of the Great Oak Notes resulting
through mesne assignments in ownership of the Great Oak Notes by Great
Oak) any portion of its interest in the GECC Notes or any other Loan
Documents which assignment, transfer or hypothecation would remain in
effect after Closing;
(viii) GECC has not violated any law relating to unfair or
unlawful collection practices in connection with the Loan purchased by
Purchaser hereunder; and
(ix) As of November 3, 1997 (A) the outstanding principal
balance of the Loan and each respective Note (including capitalized
deferred interest) and accrued interest thereon (not deferred or
capitalized) are as set forth in Section 6 of the Loan Balance
Confirmation; and (B) the amount in the Lockbox Account and Tax
Reserve is the sum set forth in Section 7 of the Loan Balance
Confirmation.
(x) Borrower is not in default in the payment of monies
required under the Loan Documents and GECC has no actual knowledge of
any other defaults by Borrower Parties under the Loan Documents other
than problems as to repair and
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<PAGE>
maintenance of the Property as to which Purchaser waives any
representation by GECC;
(b) Great Oak hereby represents and warrants to Purchaser that:
(i) Great Oak is a duly organized limited liability company,
validly existing and in good standing under the laws of the State of
Delaware;
(ii) Great Oak has all requisite power and authority to
execute, deliver, and perform all of its obligations under this
Agreement and all instruments and other documents executed and
delivered by Great Oak in connection herewith;
(iii) The execution, delivery and performance of this Agreement
and all instruments and other documents to be executed and delivered
by Great Oak in connection herewith have been duly authorized by all
necessary action on the part of Great Oak and its manager and do not
and will not (A) require any consent or approval that has not been
obtained, or (B) violate any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in
effect having applicability to Great Oak or any provision of Great
Oak's Articles of Organization and Management Agreement;
(iv) This Agreement constitutes a legal, valid and binding
obligation of Great Oak, enforceable against Great Oak in accordance
with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights and general equitable principles which may limit the
availability of equitable remedies;
(v) Great Oak has not filed and is not planning to file any
petition seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any law relating to bankruptcy or insolvency, nor has any such
petition been filed against Great Oak. No general assignment of Great
Oak's property has been made for the benefit of creditors, and no
receiver, master, liquidator or trustee has been appointed for Great
Oak or any of its properties. Great Oak is not insolvent and the
consummation of the transactions contemplated by this Agreement shall
not render Great Oak insolvent. Great Oak has now, and will have as
of the Closing, sufficient capital or net worth to meet its
obligations. Great Oak has liquidated financial resources adequate to
consummate the transactions contemplated herein;
(vi) Great Oak is a "United States person" within the meaning
of Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended;
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<PAGE>
(vii) Great Oak has not assigned, transferred or hypothecated
to any third party any portion of its interest in the Great Oak Notes
or any other Loan Documents which assignment, transfer or
hypothecation would remain in effect after Closing; and
(viii) Great Oak has not violated any law relating to unfair or
unlawful collection practices in connection with the Loan purchased by
Purchaser hereunder;
(c) The representations and warranties of GECC set forth in
Section 11(a) and of Great Oak set forth in Section 11(b) hereof shall be
deemed to be made both as of the date hereof and as of the Closing Date,
except to the extent that GECC or Great Oak, as the case may be, otherwise
notifies Purchaser in writing at or prior to Closing.
12. DISCLAIMER OF REPRESENTATIONS OR WARRANTIES BY SELLERS. EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 11(a) AND SECTION 11(b) HEREOF, THE LOAN IS BEING
SOLD "AS IS" WITHOUT ANY RECOURSE, REPRESENTATION OR WARRANTY OF ANY KIND OR
NATURE, EXPRESS OR IMPLIED. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN SECTION 11(a) AND SECTION 11(b) , NEITHER SELLER
HAS MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE LOAN, THE
LOAN DOCUMENTS, THE PROPERTY OR ITS CONDITION OR ANY OTHER SECURITY. PURCHASER
ACKNOWLEDGES THAT NEITHER SELLER HAS AUTHORIZED ANY EMPLOYEE, AGENT,
REPRESENTATIVE, BROKER, THIRD PARTY OR OTHER PARTY TO MAKE AND, TO THE EXTENT SO
MADE, SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES,
PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES. PURCHASER ACKNOWLEDGES AND
AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY, IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT, TO INSPECT THE LOAN, THE LOAN DOCUMENTS, THE PROPERTY AND ALL
OTHER SECURITY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE
LOAN, THE LOAN DOCUMENTS AND THE AUTHORIZATION, EXECUTION AND DELIVERY THEREOF
AND THE VALIDITY AND ENFORCEABILITY THEREOF, PROPERTY AND OTHER SECURITY AND NOT
ON ANY INFORMATION PROVIDED OR TO BE PROVIDED, DIRECTLY OR INDIRECTLY, BY EITHER
SELLER. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED
OR TO BE PROVIDED BY SELLERS WITH RESPECT TO THE LOAN, THE LOAN DOCUMENTS, THE
PROPERTY OR OTHER SECURITY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT
SELLERS HAVE NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION AND MAKE NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF
SUCH INFORMATION. IT IS UNDERSTOOD AND AGREED THAT THE LOAN IS SOLD BY SELLERS
AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING. THE
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PROVISIONS OF THIS SECTION 12 SHALL SURVIVE THE CLOSING OR TERMINATION OF THIS
AGREEMENT.
13. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
(a) Purchaser hereby represents and warrants to Sellers and each of
them that:
(i) Purchaser is a duly organized limited partnership,
validly existing and in good standing under the laws of the State of
Delaware.
(ii) Purchaser has all requisite power and authority to
execute, deliver, and perform all of its obligations under this
Agreement and all instruments and other documents executed and
delivered by Purchaser in connection herewith.
(iii) The execution, delivery and performance of this Agreement
and all instruments and other documents to be executed and delivered
by Purchaser in connection herewith have been duly authorized by all
necessary action on the part of Purchaser and do not and will not
(A) require any consent or approval that has not been obtained, or
(B) violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to Purchaser or any provision of Purchaser's charter or
partnership agreement.
(iv) This Agreement constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights and general equitable principles which may limit the
availability of equitable remedies.
(v) Purchaser has not filed and is not planning to file any
petition seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any law relating to bankruptcy or insolvency, nor has any such
petition been filed against Purchaser. No general assignment of
Purchaser's property has been made for the benefit of creditors, and
no receiver, master, liquidator or trustee has been appointed for
Purchaser or any of its properties. Purchaser is not insolvent and
the consummation of the transactions contemplated by this Agreement
shall not render Purchaser insolvent. Purchaser has now, and will
have as of the Closing, sufficient capital or net worth to meet its
obligations. Purchaser has liquidated financial resources adequate to
consummate the transactions contemplated herein;
(vi) Purchaser has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and
risks relating to its purchase of
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<PAGE>
the Loan and making an informed purchase and investment decision in
connection therewith;
(vii) Purchaser has made such examination, review and
investigation of the facts and circumstances necessary to evaluate the
Loan as it has deemed necessary or appropriate to form a basis for its
evaluation of the purchase of the Loan. Purchaser is assuming all
risk with respect to the completeness, accuracy, authorization,
xecution, delivery, validity, enforceability or sufficiency of the
Loan Documents. Purchaser acknowledges that Sellers has made no
assurances as to the collectibility of the Loan or as to the
completeness, accuracy, authorization, delivery, validity,
enforceability or sufficiency of the Loan Documents. Purchaser
further acknowledges that in acquiring the Loan, Purchaser is assuming
the risk of full or partial loss which is inherent with the credit,
collateral and collectibility risks associated with the quality and
character of the Loan and Security;
(viii) Purchaser has agreed to the Purchase Price on the basis
of its own independent investigation and credit evaluation of the Loan
Documents. Purchaser acknowledges that the amount ultimately
recovered by Purchaser under the Loan Documents may be less than the
Purchase Price, and Purchaser shall have no recourse to Sellers for
any such deficiency;
(ix) Purchaser is a "United States person" within the meaning
of Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended;
(x) Purchaser is acquiring the Loan for its own account and
not as a broker, finder or similar agent for any other person or as an
underwriter or with the intent to resell or distribute the Loan or any
part thereof or any of the Notes;
(xi) Neither this Agreement nor any written statement
furnished by or on behalf of Purchaser to Sellers in connection with
the negotiation of the sale of the Loan Documents, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements included herein or therein
not misleading in light of the circumstances under which they were
made;
(b) Purchaser hereby covenants with Sellers as follows:
(i) Purchaser shall, promptly after the Closing, notify
Borrower and any other party liable for the Loan or any portion
thereof of Purchaser's purchase of the Loan and direct that all
payments on and communications regarding the Loan be sent to Purchaser
after the Closing Date, and will provide Sellers with a copy of such
notice;
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<PAGE>
(ii) Purchaser shall be responsible for notifying all
companies providing hazard insurance, collision or any other type of
insurance for the protection of the Property, of the sale of the Loan
to Purchaser as may be required under existing policies;
(iii) After the Closing, Purchaser shall allow Sellers and each
of them and their respective duly authorized agents and
representatives, at such Seller's expense, during normal business
hours to have access to and to use, inspect and make extracts from or
copy the Loan Documents, and any documentation related to the Loan,
following reasonable notice to Purchaser;
(iv) Purchaser agrees to assume, as of the Closing Date, all
obligations with respect to federal and state income tax informational
reporting related to the Loan purchased under this Agreement,
including obligations with respect to Forms 1099 and 1098 and back-up
withholding. Purchaser further agrees to cooperate with Sellers to
the extent necessary to allow Seller to fulfill any obligations which
Sellers may have with respect to such informational reporting for the
Loan for the period prior to the Closing Date;
(v) Purchaser agrees not to violate any law relating to
unfair or unlawful collection practices in connection with the Loan
purchased by Purchaser hereunder;
(vi) From and after the Closing Date, Purchaser shall assume
and shall be deemed to have assumed all of Sellers' obligations and
duties, if any, with respect to (A) making advances upon the Loan or
crediting Borrower for funds received in connection with the Loan and
(B) servicing the Loan and shall service the Loan in accordance with
commercially reasonable standards;
(vii) Purchaser agrees to abide by and be bound by all of the
terms and conditions of the Notes and the other Loan Documents;
(viii) Purchaser agrees to abide, in all material respects by
all applicable state and federal laws, rules and regulations regarding
the handling and maintenance of all documents and records relating to
the Loan purchased hereunder including, but not limited to, the length
of time such documents and records are to be retained. Purchaser
shall preserve and maintain such documents and files, and shall
require any successor or transferor of any such documents and files to
preserve and maintain such documents and files for a period equal to
the longest of the following: (A) six (6) years from the original
closing of the Loan in accordance with 12 U.S.C. 1821(d)(15)(D), (B)
ten (10) years from the date of the underlying transaction or the
events documented by such documents and files, or (C) for such longer
period as may be required by applicable law; and
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(ix) Except as otherwise required by law, Purchaser shall not,
without GECC's and Great Oak's prior review and written approval
(which review and approval if requested by Purchaser shall not be
unreasonably delayed or withheld and, with respect to Great Oak may be
given by GECC as its Manager):
(A) Issue any press releases, advertisements or other
promotional materials containing references to the sale of the
Loan to Purchaser or to the Agreement, prior to the consummation
of such sale as provided for herein; and
(B) Make any reference to GECC or to Great Oak or to
this Agreement in any document publicly filed, including
documents filed or distributed in connection with issuance of any
of Purchaser's securities;
and Purchaser shall pay the costs incurred by Sellers in connection
with any such review; provided, that any review or approval made or
given by GECC or Great Oak pursuant to this clause (ix) shall be for
Sellers' own purposes and neither Seller shall incur any liability
with respect to any document approved or with respect to any reference
to the Sellers, or either of them, therein contained, and no Seller
shall have any obligation to advise Purchaser or any other person
regarding any matter which may come to the attention of either Seller
in the course of any review;
(c) The representations, warranties and covenants of Purchaser
contained in this Section 13 shall be deemed to be made both as of the date
hereof and as of Closing and shall survive the Closing or termination of
this Agreement.
14. Obligations and Liabilities of the Parties and Limitations Thereon.
The obligations and liabilities of the parties, whether or not the transaction
contemplated in this Agreement are consummated shall be solely as set forth in,
and shall be strictly limited by the provisions of this Section 14:
(a) If for any reason this Agreement shall be terminated (including,
but not limited to, termination by Purchaser pursuant to the provisions of
Section 5(e) hereof), or if the Closing shall not occur for any reason,
then the sole obligations and liabilities of the parties, one to the other,
shall be as follows and no party shall have any other obligation or
liability to the others:
(i) Except as provided in clause (ii) below, Sellers shall
retain the Reimbursement Payment as their sole and exclusive property
without any claim thereto on the part of Purchaser; and
(ii) If the Closing does not occur and/or this Agreement is
terminated by Purchaser solely by reason of an event specified in
Section 6(b) hereof, then Purchaser
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<PAGE>
shall be entitled to the return of the Reimbursement Payment
theretofore paid and Sellers hereby agree to return the same upon
demand;
provided that without limiting the generality of the foregoing, Purchaser
shall not be entitled to return of the Reimbursement Payment by reason of
any failure by Purchaser to obtain the Estoppel Certificate contemplated
in Section 9(a)(iii) hereof;
(b) Sellers shall have no obligations or liability and Purchaser
shall have no right to any damages or indemnification with respect to any
matters or conditions which Purchaser shall have waived pursuant to the
provisions of Section 9(b)(ii) hereof;
(c) Subject to the limitations of Section 14(b) above, GECC shall be
liable for and shall indemnify Purchaser against any loss or damage
incurred by Purchaser by reason of any material inaccuracy or
misrepresentation in or breach of any of the representations and warranties
of GECC set forth in Section 11(a) hereof and Great Oak shall be liable
for and shall indemnify Purchaser against any loss or damage incurred by
Purchaser by reason of any material inaccuracy or misrepresentation in or
breach of any of the representations and warranties of Great Oak set forth
in Section 11(b) hereof; and the provisions of this Subsection (c) shall
survive the Closing;
(d) Purchaser shall be liable for and shall indemnify Sellers, and
each of them, against any liability or damage incurred by Sellers or either
of them by reason of any material inaccuracy or misrepresentation in or
breach of any of the representations and warranties of Purchaser set forth
in Section 13(a) hereof or by reason of any breach by Purchaser of its
covenants set forth in Section 13(b) hereof or in the Assignment; and the
provisions of this Subsection (d) shall survive the Closing.
15. Brokers. Neither Sellers nor Purchaser has had any dealings with
respect to the Loan, the Loan Documents or the transactions contemplated hereby
with any mortgage or real estate advisor, broker, investment advisory firm or
salesman or any other person or corporation, whether known or unknown to any of
the parties hereto (each a "Broker"), and Sellers and Purchaser each agrees to
pay any and all commissions, fees or other compensation which may become due and
payable to any such Broker of such party as a result of this Agreement or the
such party's actions.
16. Notices. Any notice or other communications required or permitted
under or given in connection with this Agreement shall be in writing and shall
be addressed as follows:
If to Sellers: c/o General Electric Capital Corporation
209 W. Jackson Boulevard,
Suite 200
Chicago, IL 60606
Attention: James Freko
Facsimile No.: (312) 781-7826
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<PAGE>
with a copy to: Lester Rosen, Esq.
Rosenthal and Schanfield
55 East Monroe Street
46th Floor
Chicago, IL 60603
Facsimile No.: (312) 236-7274
If to Purchaser: Prime Group Realty, L.P.
77 West Wacker Drive
Suite 3900
Chicago, IL 60601
Attention: Jeffrey A. Patterson
Facsimile No.: (312) 917-0460
with a copy to: Wayne D. Boberg, Esq.
Winston & Strawn
35 West Wacker Drive
Chicago, IL 60601
Facsimile number: (312) 558-5700
Any such notice or other communication shall be deemed given upon the occurrence
of any of the following: (a) the first business day following the day sent by
United States express mail, postage prepaid, return receipt requested; (b) on
the first business day following the day sent by an overnight carrier service
that operates on a nationwide basis; (c) on the third business day following the
day sent by United States certified mail, postage prepaid, return receipt
requested; or (d) on the date delivered by hand to the address above for which a
signed receipt is given, whether or not actually received by the person to whom
directed. From time to time either party may designate another address within
the continental United States for purposes of this Agreement by giving the other
party not less than ten (10) days advance written notice of such change of
address in accordance with the provisions of this Section. Facsimile numbers
are given for convenience only and delivery by facsimile or similar transmission
shall not constitute notice hereunder.
17. Waiver. Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is entitled to the benefits
thereof.
18. Governing Law. The terms and provisions hereof shall be governed by,
and construed in accordance with, the substantive laws of the State of Illinois
without regard to conflict of law principles.
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<PAGE>
19. Binding Agreement. This Agreement shall be binding upon the heirs,
executors, administrators, personal representatives, successors and assigns of
the parties hereto; provided, however, the foregoing shall not be deemed or
construed to (a) permit the assignment of either party's rights or obligations
hereunder except as provided in Section 33 hereof or (b) confer any right,
title, benefit, cause of action or remedy upon any person or entity not a party
hereto.
20. Construction. Whenever the context hereof so requires, reference to
the singular shall include the plural and the plural shall include the singular;
words denoting gender shall be construed to mean the masculine, feminine or
neuter, as appropriate; and specific enumeration shall not exclude the general,
but shall be construed as cumulative of the general recitation. The headings
contained in this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provision hereof.
21. Severability. If any clause or provision of this Agreement is held to
be illegal, invalid or unenforceable under any law applicable to the terms
hereof, then the remainder of this Agreement shall not be affected thereby, and
in lieu of each such clause or provision of this Agreement that is illegal,
invalid or unenforceable, such clause or provision shall be judicially construed
and interpreted to be as similar in substance and content to such illegal,
invalid or unenforceable clause or provision, as the context thereof would
reasonably suggest, so as to thereafter be legal, valid and enforceable.
22. Counterparts. To facilitate execution, this Agreement may be executed
in as many counterparts as may be convenient or required. It shall not be
necessary that the signature and acknowledgment of, or on behalf of, each party,
or that the signature and acknowledgment of all persons required to bind any
party, appear on each counterpart. All counterparts shall collectively
constitute a single instrument. It shall not be necessary in making proof of
this Agreement to produce or account for more than a single counterpart
containing the respective signatures and acknowledgments of each of the parties
hereto.
23. NO ORAL AGREEMENTS. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTION CONTEMPLATED HEREIN,
SUPERSEDES ANY AND ALL PRIOR DISCUSSIONS AND AGREEMENTS (WRITTEN OR ORAL)
BETWEEN SELLERS AND PURCHASER WITH RESPECT TO THE TRANSACTION CONTEMPLATED
HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
24. Time of the Essence. Time is of the essence in the execution and
performance of this Agreement and of each provision hereof.
25. Attorneys' Fees. If either party shall default in the performance of
any of the terms and conditions of this Agreement, the non-defaulting party
shall be entitled to recover all costs, charges, and expenses of enforcing this
Agreement including reasonable attorneys' fees, paralegal
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<PAGE>
fees, and costs, including, but not limited to, attorneys' and paralegal fees
incurred in any trial or appellate proceedings.
26. Rule of Construction. The parties acknowledge that each party and its
counsel has reviewed this Agreement, and the parties hereby agree that normal
rules of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
27. Saturday, Sunday or Legal Holiday. If any date set forth in this
Agreement for the performance of any obligation by Purchaser or Sellers or for
the delivery of any document or notice should be on other than a Business Day,
the compliance with such obligation or delivery shall be deemed acceptable on
the next following Business Day. For purposes of this Agreement, the term
"Business Day" shall mean any day on which banks and federal savings
associations in New York, New York are required to be open for business.
28. Further Assurances. Sellers will, whenever and as often as shall be
reasonably requested to do so by Purchaser, and Purchaser will, whenever and as
often as shall be reasonably requested so to do by any Seller, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all conveyances, assignments and all other instruments and documents as
may be reasonably necessary to complete the transaction herein contemplated and
to carry out the intent and purposes of this Agreement.
29. Amendments. This Agreement shall not be amended except by a writing
signed on behalf of the party to be charged with such amendment.
30. No Third Party Beneficiaries. No person or entity not a party to this
Agreement shall have any third party beneficiary claim or other right hereunder
or with respect thereto.
31. Exhibits. Each exhibit referred to in this Agreement is attached
hereto and each such exhibit is hereby incorporated by reference and made a part
hereof as if fully set forth herein.
32. Jury Waiver. SELLERS AND PURCHASER DO HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ANY
ACTION OF ANY PARTY ARISING OUT OF OR RELATED IN ANY MANNER TO THIS AGREEMENT,
THE LOAN, THE LOAN DOCUMENTS OR THE PROPERTY (INCLUDING WITHOUT LIMITATION, ANY
ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR DEFENSES ASSERTING
THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).
THIS WAIVER IS A MATERIAL
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INDUCEMENT FOR SELLERS AND PURCHASER TO ENTER INTO THIS AGREEMENT AND SHALL
SURVIVE THE CLOSING OR ANY TERMINATION OF THIS AGREEMENT.
33. No Assignment. Neither party may assign this Agreement or any right,
liability, or obligation hereunder without the prior written consent of the
other party, which consent may not be unreasonably withheld. Any purported
assignment in violation of this provision shall be null and void.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SELLERS:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ James Freko
-----------------------------------------
Title: Authorized Representative
GREAT OAK LLC, a Delaware limited liability company
By: General Electric Capital Corporation,
its Manager
By: /s/ James Freko
-----------------------------------------
Title: Authorized Representative
PURCHASER:
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust, its general partner
By: /s/ Jeffrey A. Patterson
---------------------------------
Title: Executive Vice President
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February 16, 1998
<PAGE>
(EXHIBIT 2.2)
LOAN PURCHASE AGREEMENT
THIS LOAN PURCHASE AGREEMENT ("Agreement"), is executed as of December 15,
1997, by and between PRIME GROUP REALTY, L.P., a Delaware limited partnership
("Purchaser"), and ALLSTATE LIFE INSURANCE COMPANY, an Illinois insurance
corporation ("Seller").
RECITALS:
A. Seller holds legal title to a certain mortgage loan described on
Exhibit A attached hereto (the "Loan");
B. The Loan encumbers real property and improvements located in the State
of Illinois, County of Cook, more particularly described on Exhibit B attached
hereto (the "Property"); and
C. Purchaser desires to purchase all of Seller's right, title and
interest in and to the Loan on the terms and subject to the conditions set forth
herein.
AGREEMENT:
NOW THEREFORE, in consideration of Ten Dollars and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser hereby agree as follows:
1. SALE AND PURCHASE.
Seller agrees to sell, convey, and assign to Purchaser, and Purchaser
agrees to purchase and accept from Seller, for the Purchase Price (as
hereinafter defined), on the terms and conditions set forth in this Agreement,
all of Seller's right, title and interest in and to the Loan evidenced and
secured by the documents (the "Loan Documents") described in Exhibit C attached
hereto.
2. PURCHASE PRICE; EARNEST MONEY.
(a) The purchase price ("Purchase Price") to be paid by
Purchaser to Seller for the Loan is FIFTY ONE MILLION AND NO/100
DOLLARS ($51,000,000.00).
(b) Purchaser shall pay the Purchase Price to Seller at the
Closing (as defined in Section 6 below) by wire transfer pursuant to
the following wiring instructions:
Harris Trust and Savings Bank
ABA #071000288
For the benefit of:
Allstate Life Insurance Company Collection Account
Account No. 168-119-6
Reference: Mortgage Loan No. 374-001
<PAGE>
3. ITEMS TO BE PROVIDED BY SELLER. Upon reasonable notice, Seller
shall make available to Purchaser, for Purchaser's review, at Seller's
offices in Northbrook, Illinois, copies of the Loan Documents.
4. INSPECTION.
(a) Purchaser shall have a period ("Inspection Period") commencing
December 5, 1997 and terminating at 5:00 p.m. Central Standard Time on
December 11, 1997, to make such examinations, studies, inspections and
investigations ("Inspections") regarding the Loan and the Loan Documents as
Purchaser may desire.
(b) Any inspection fee, appraisal fee, engineering fee and other
expense of any kind incurred by Purchaser relating to, or in connection
with, any Inspections will be solely Purchaser's expense. Purchaser agrees
to indemnify and hold Seller, and its successors, assigns and predecessors,
parents, partners, subsidiaries, and affiliated organizations, and the
officers, directors, shareholders, employees, asset managers, partners,
subasset managers, attorneys, agents, members and servants of each of the
foregoing (collectively, the "Seller Parties"), harmless from any and all
(i) liability for the payment of damages, claims and judgments for personal
injury or death to any person and for property damage to the property of
others, including, without limitation, the Property, and for the amount of
all losses, judgments, costs, and expenses, (including reasonable
attorneys' fees, court costs, deposition and other discovery fees and
expenses) of every kind suffered, incurred, sustained by or threatened
against any of the Seller Parties which arise out of any Inspections by
Purchaser or any person or entity conducting such Inspections on behalf of
Purchaser, and (ii) damages, costs of repair and replacement suffered to
the Property caused by Purchaser or any employee, agent, representative,
independent contractor or other person on or at the Property at the request
or direction of Purchaser. The provisions of this Section 4(b) shall
survive the Closing and any termination of this Agreement.
(c) Purchaser shall make such examination, review and investigation
of the facts and circumstances necessary to evaluate the Loan, the Loan
Documents and the Property as it deems necessary or appropriate to form a
basis for its evaluation of the purchase of the Loan.
(d) If Purchaser, in its sole and absolute discretion, is not
satisfied with the results of its Inspections for any reason whatsoever,
Purchaser, as Purchaser's sole and exclusive remedy, shall have the right
to terminate this Agreement by giving written notice of termination to
Seller on or before 5:00 p.m. Central Standard Time on the last day of the
Inspection Period. Upon such termination, neither party hereto shall have
any further rights or obligations hereunder, expect for the Survival
Obligations.
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<PAGE>
5. TERMINATION, DEFAULT AND REMEDIES
(a) If Purchaser fails or refuses to consummate the purchase of the
Loan pursuant to this Agreement at the Closing for any reason, other than
termination of this Agreement by Purchaser pursuant to a right to so
terminate expressly set forth in this Agreement or Seller's failure to
perform Seller's obligations under Section 6(b)(i) of this Agreement, or if
prior to or at Closing, Seller discovers that Purchaser has failed to
timely perform any of its other obligations hereunder or that any of
Purchaser's representations or warranties contained in this Agreement are
not true or accurate as of the date made or on the Closing Date, then, such
event shall constitute a default by Purchaser hereunder and Seller may, as
its sole and exclusive remedy, terminate this Agreement by giving written
notice to Purchaser prior to or at the Closing, whereupon neither party
hereto shall have any further right or obligation hereunder, other than the
Survival Obligations.
(b) If Seller fails or refuses to consummate the sale of the Loan
pursuant to this Agreement at the Closing, or if Seller fails to perform
any of Seller's other obligations hereunder, when required, either prior to
or at the Closing, for any reason other than the termination of this
Agreement by Seller pursuant to a right to terminate expressly set forth in
this Agreement or Purchaser's failure to perform Purchaser's obligations
under this Agreement, then Purchaser shall have, as it sole and exclusive
remedy, the right to terminate this Agreement by giving written notice
thereof to Seller prior to or at the Closing, whereupon neither party
hereto shall have any further right or obligation hereunder, other than the
Survival Obligations.
6. CLOSING.
(a) The Closing ("Closing") of the sale of the Loan by Seller to
Purchaser shall occur at Near North Title Insurance Company, Chicago,
Illinois, or any other mutually acceptable location, on or before December
15, 1997 (the "Closing Date"). If the Closing has not occurred by the
Closing Date, and provided that Seller is not in default under this
Agreement, then Seller may terminate this Agreement whereupon neither party
shall have any further right or obligation hereunder, other than the
Survival Obligations.
(b) At the Closing, all of the following shall occur, all of which
shall be deemed concurrent conditions precedent:
(i) Seller, at Seller's sole cost and expense, shall deliver
or cause to be delivered to Purchaser the following:
(A) The original executed promissory note (the
"Note"), together with an Allonge to the Note in the form of
Exhibit D attached hereto.
(B) An Assignment of Mortgage, Assignment of Leases,
Rents and
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Contracts, Security Agreement and Fixture Filing and Other
Documents (the "Assignment") for the Loan Documents and related
rights and liens in the form of Exhibit E attached hereto with
all blanks appropriately completed.
(C) One or more UCC-3 Assignment of Financing
Statement forms (the "UCC-3") evidencing the assignment to
Purchaser of all Seller's right, title and interest in and to any
security interests in personal property and fixtures created by
the Loan Documents and held by Seller which are in effect on the
Closing Date.
(D) The originals of the other Loan Documents.
(E) Intentionally omitted.
(F) An agreement and consent executed by each borrower
party in the form attached hereto as Exhibit F ("Agreement and
Consent").
(ii) Purchaser, at Purchaser's sole cost and expense, shall
deliver or cause to be delivered to Seller the following:
(A) The Purchase Price.
(B) Intentionally Omitted.
(C) A Purchaser's Tax Identification Certificate,
executed by Purchaser, in the form attached hereto as Exhibit G
with all applicable blanks appropriately completed.
(iii) At the Closing, upon receipt of all items to be delivered
to it in accordance with Section 6(b)(i) and (ii) above, Purchaser
shall deliver to Seller the Purchase Price (to be wire transferred in
accordance with the wire transfer instructions contained in Section
2(b) above), and one fully executed counterpart of the document
described in Section 6(b)(ii)(B) above; and Seller, upon receipt of
the foregoing, shall simultaneously deliver to Purchaser the Note, the
executed Allonge, an executed counterpart of the Assignment, the
Agreement and Consent, the executed UCC-3(s) and any original Loan
Documents in Seller's possession and control.
(iv) Purchaser shall pay the escrow fee charged by the Escrow
Agent. Seller and Purchaser shall pay their respective attorneys'
fees for the negotiation and drafting of this Agreement and the
documents described in Section 6(b)(i) and (ii). Purchaser shall pay
all recording fees and the cost of any title insurance coverage or
endorsements that Purchaser elects to obtain.
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7. CONDITIONS PRECEDENT TO PERFORMANCE BY PURCHASER.
(a) Without limitation upon the conditions set forth in Section
6(b)(i) hereof, Purchaser's obligations under this Agreement shall be
contingent and specifically conditioned upon the following:
(i) Seller shall have, in all material respects, delivered,
performed, observed, and complied with all of the items, instruments,
documents, covenants, agreements, and conditions required by this
Agreement to be delivered, performed, observed, and complied with by
Seller prior to or as of the Closing.
(ii) The representations made by Seller in Section 9 of this
Agreement shall be true and correct in all material respects as though
made at and as of the Closing Date, except as otherwise contemplated
by this Agreement or consented to in writing by the Purchaser (it
being understood that representations that speak as of a specified
date shall continue to speak as of the date so specified).
(b) In the event that any of the conditions described in Section 7(a)
hereof have not been satisfied at or prior to the Closing, Purchaser shall
have the option at any time at or before the Closing, to either (i)
terminate this Agreement upon written notice to Seller, whereupon neither
party hereto shall have any further right or obligation hereunder, other
than the Survival Obligations, or (ii) waive such condition and close the
purchase of the Loan in accordance with the terms hereof.
8. CONDITIONS PRECEDENT TO PERFORMANCE BY SELLER.
(a) Without limitation upon the conditions set forth in Section
6(b)(ii) hereof, Seller's obligations under this Agreement shall be
contingent and specifically conditioned upon the following:
(i) Purchaser shall have, in all material respects,
delivered, performed, observed, and complied with all of the items,
instruments, documents, covenants, agreements, and conditions required
by this Agreement to be delivered, performed, observed, and complied
with by Purchaser prior to or as of the Closing.
(ii) The representations and warranties made by Purchaser in
this Agreement shall be true and correct in all material respects on
the date hereof and as though made at and as of the Closing Date,
except as otherwise contemplated by this Agreement or consented to in
writing by the Seller (it being understood that representations and
warranties that speak as of a specified date shall continue to speak
as of the date so specified).
(b) In the event that any of the conditions described in Section 8(a)
hereof have
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not been satisfied by the Closing Date, Seller shall have the option, at
any time on or before the Closing, to either (i) terminate this Agreement
whereupon neither party shall have any further right or obligations
hereunder other than the Survival Obligations, or (ii) waive such condition
and close the sale of the Loan in accordance with the terms hereof.
9. REPRESENTATIONS OF SELLER.
(a) Seller hereby represents to Purchaser that:
(i) Seller is a "United States person" within the meaning of
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.
(ii) Seller has not assigned, transferred or hypothecated to
any third party any portion of its interest in the Note or any other
Loan Documents which assignment, transfer or hypothecation would
remain in effect after Closing.
(iii) Seller is a duly organized corporation, validly existing
and in good standing under the laws of the State of Illinois.
(iv) Seller has all requisite power and authority to execute,
deliver, and perform all of its obligations under this Agreement and
all instruments and other documents executed and delivered by Seller
in connection herewith.
(v) The execution, delivery and performance of this Agreement
and all instruments and other documents to be executed and delivered
by Seller in connection herewith have been duly authorized by all
necessary action on the part of Seller and do not and will not (A)
require any consent or approval that has not been obtained, or (B)
violate any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having
applicability to Seller or any provision of Seller's charter or
bylaws.
(vi) This Agreement constitutes a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with
its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights and general equitable principles with may limit the
availability of equitable remedies.
(vii) Seller has not filed any petition seeking or acquiescing
in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any law relating to
bankruptcy or insolvency, nor, to Seller's knowledge, has any such
petition been filed against Seller. No general assignment of Seller's
property has been made for the benefit of creditors, an no receiver,
master, liquidator or trustee has been appointed for Seller or any of
its properties. Seller is
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not insolvent and the consummation of the transactions contemplated by
this Agreement shall not render Seller insolvent.
(b) The representations of Seller set forth in Section 9(a) hereof
shall be deemed to be made both as of the date hereof and as of the Closing
Date, except to the extent that Seller otherwise notifies Purchaser in
writing at or prior to Closing.
10. DISCLAIMER OF REPRESENTATIONS OR WARRANTIES BY SELLER. EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 9(A) HEREOF, THE LOAN IS BEING SOLD "AS IS"
WITHOUT ANY RECOURSE, REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE,
EXPRESS OR IMPLIED. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN SECTION 9(A), SELLER HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST,
PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE LOAN, THE
LOAN DOCUMENTS, THE PROPERTY OR ITS CONDITION.
11. REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNIFICATIONS OF
PURCHASER.
(a) Purchaser hereby represents and warrants to Seller that:
(i) Purchaser is a duly formed limited partnership,
validly existing and in good standing under the laws of the State
of Delaware.
(ii) Purchaser has all requisite power and authority to
execute, deliver, and perform all of its obligations and under
this Agreement and all instruments and other documents executed
and delivered by Purchaser in connection herewith.
(iii) The execution, delivery and performance of this
Agreement and all instruments and other documents to be executed
and delivered by Purchaser in connection herewith have been duly
authorized by all necessary action on the part of Purchaser and
do not and will not (A) require any consent or approval of its
shareholders and/or partners, whichever is applicable, that has
not been obtained, or (B) violate any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to Purchaser or any
provision of Purchaser's charter or bylaws and/or partnership
agreement, whichever is applicable.
(iv) This Agreement constitutes a legal, valid and
binding
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obligation of Purchaser enforceable against Purchaser in
accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting the enforcement of
creditors' rights and general equitable principles which may
limit the availability of equitable remedies.
(iv) Purchaser has not filed and is not planning to
file any petition seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any law relating to bankruptcy or
insolvency, nor has any such petition been filed against
Purchaser. No general assignment of Purchaser's property has
been made for the benefit of creditors, and no receiver, master,
liquidator or trustee has been appointed for Purchaser or any of
its properties. Purchaser is not insolvent and the consummation
of the transactions contemplated by this Agreement shall not
render Purchaser insolvent.
(v) Purchaser is a "United States person" within the
meaning of Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended.
(b) Purchaser hereby covenants with Seller as follows:
(i) NOTICE OF PURCHASE. Purchaser shall, promptly after the
Closing, notify the borrower and any other party liable for the Loan
or any portion thereof of Purchaser's purchase of the Loan and direct
that all payments on and communications regarding the Loan be sent to
Purchaser after the Closing Date, and will provide Seller with a copy
of such notice.
(ii) INSURANCE. Purchaser shall be responsible for notifying
all companies providing hazard insurance, collision or any other type
of insurance for the protection of the Property, of the sale of the
Loan to Purchaser as may be required under existing policies.
(iii) INFORMATIONAL TAX REPORTING. Purchaser agrees to assume,
as of the Closing Date, all obligations with respect to federal and
state income tax informational reporting related to the Loan purchased
under this Agreement, including obligations with respect to Forms 1099
and 1098 and back-up withholding. Purchaser further agrees to
cooperate with Seller to the extent necessary to allow Seller to
fulfill any obligations which Seller may have with respect to such
informational reporting for the Loan for the period prior to the
Closing Date.
(iv) CONFORMITY TO LAW. Purchaser agrees to abide by all
applicable state and federal laws, rules and regulations regarding the
handling and maintenance of all documents and records relating to the
Loan purchased hereunder including, but not
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limited to, the length of time such documents and records are to be
retained. Purchaser shall preserve and maintain such documents and
files, and shall require any successor or transferor of any such
documents and files to preserve and maintain such documents and files
for a period equal to the longest of the following: (i) six (6) years
from the closing of the Loan by the lender originally named in the
Loan Documents in accordance with 12 U.S.C. 1821(d)(15)(D), (ii) ten
(10) years from the date of the underlying transaction or the events
documented by such documents and files, or (iii) for such longer
period as may be required by applicable law.
(c) Intentionally Omitted.
(d) The representations, warranties and covenants of Purchaser
contained in this Section 11 shall be deemed to be made both as of the date
hereof and as of Closing and shall survive the Closing or termination of
this Agreement.
12. BROKERS. Neither Purchaser nor Seller has had any dealings with
respect to the Loan, the Loan Documents or the transactions contemplated hereby
with any mortgage or real estate advisor, broker, investment advisory firm or
salesman or any other person or corporation, whether known or unknown to any of
the parties hereto (each a "Broker"), and Purchaser agrees to pay any and all
commissions, fees or other compensation which may become due and payable to any
such Broker as a result of this Agreement or the such party's actions.
13. NOTICES. Any notice or other communications required or permitted
under or given in connection with this Agreement shall be in writing and shall
be addressed as follows:
If to Seller: Allstate Life Insurance Company
Allstate Plaza South
3075 Sanders Road - Suite G5C
Northbrook, Illinois 60062
Attention: Adrian B. Corbiere
with a copy to: Allstate Life Insurance Company
Allstate Plaza South
3075 Sanders Road - Suite G5A
Northbrook, Illinois 60062
Attention: Paul N. Kierig
If to Purchaser: Prime Group Realty, L.P.
77 West Wacker Drive
Suite 3900
Chicago, Illinois 60601
Attention: Michael W. Reschke
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With a copy to: Winston & Strawn
35 West Wacker Drive
Suite 4200
Chicago, Illinois 60601
Attention: William J. Ralph, Esq. and
Wayne D. Boberg, Esq.
Any such notice or other communication shall be deemed given upon the occurrence
of any of the following: (a) the first business day following the day sent by
United States express mail, postage prepaid, return receipt requested; (b) on
the first business day following the day sent by an overnight carrier service
that operates on a nationwide basis; (c) on the third business day following the
day sent by United States certified mail, postage prepaid, return receipt
requested; or (d) on the date delivered by hand to the address above for which a
signed receipt is given, whether or not actually received by the person to whom
directed. From time to time either party may designate another address within
the continental United States for purposes of this Agreement by giving the other
party not less than ten (10) days advance written notice of such change of
address in accordance with the provisions of this Section. Delivery by
facsimile or similar transmission shall not constitute notice hereunder.
14. WAIVER. Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is entitled to the benefits
thereof.
15. GOVERNING LAW. The terms and provisions hereof shall be governed by,
and construed in accordance with, the substantive laws of the State of Illinois
without regard to conflict of law principles.
16. BINDING AGREEMENT. This Agreement shall be binding upon the heirs,
executors, administrators, personal representatives, successors and assigns of
the parties hereto; provided, however, the foregoing shall not be deemed or
construed to (a) permit the assignment of any of either party's rights or
obligations hereunder or (b) confer any right, title, benefit, cause of action
or remedy upon any person or entity not a party hereto.
17. CONSTRUCTION. Whenever the context hereof so requires, reference to
the singular shall include the plural and the plural shall include the singular;
words denoting gender shall be construed to mean the masculine, feminine or
neuter, as appropriate; and specific enumeration shall not exclude the general,
but shall be construed as cumulative of the general recitation. The headings
contained in this Agreement are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or any provision hereof.
18. SEVERABILITY. If any clause or provision of this Agreement is held to
be illegal, invalid or unenforceable under any law applicable to the terms
hereof, then the remainder of this Agreement shall not be affected thereby, and
in lieu of each such clause or provision of this Agreement that is illegal,
invalid or unenforceable, such clause or provision shall be judicially construed
and interpreted to be as similar in substance and content to such illegal,
invalid or unenforceable clause or provision,
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as the context thereof would reasonably suggest, so as to thereafter be legal,
valid and enforceable.
19. COUNTERPARTS. To facilitate execution, this Agreement may be executed
in as many counterparts as may be convenient or required. It shall not be
necessary that the signature and acknowledgment of, or on behalf of, each
party, or that the signature and acknowledgment of all persons required to bind
any party, appear on each counterpart. All counterparts shall collectively
constitute a single instrument. It shall not be necessary in making proof of
this Agreement to produce or account for more than a single counterpart
containing the respective signatures and acknowledgments of each of the parties
hereto.
20. NO ORAL AGREEMENTS. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTION CONTEMPLATED HEREIN,
SUPERSEDES ANY AND ALL PRIOR DISCUSSIONS AND AGREEMENTS (WRITTEN OR ORAL)
BETWEEN SELLER AND PURCHASER WITH RESPECT TO THE TRANSACTION CONTEMPLATED HEREIN
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
21. TIME OF THE ESSENCE. Time is of the essence in the execution and
performance of this Agreement and of each provision hereof.
22. ATTORNEYS' FEES. If either party shall default in the performance of
any of the terms and conditions of this Agreement, the non-defaulting party
shall be entitled to recover all costs, charges, and expenses of enforcing this
Agreement including reasonable attorneys' fees, paralegal fees, and costs,
including, but not limited to, attorneys' and paralegal fees incurred in any
trial or appellate proceedings.
23. RULE OF CONSTRUCTION. The parties acknowledge that each party and its
counsel has reviewed this Agreement, and the parties hereby agree that normal
rules of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
24. SATURDAY, SUNDAY OR LEGAL HOLIDAY. If any date set forth in this
Agreement for the performance of any obligation by Purchaser or Seller or for
the delivery of any document or notice should be on other than a Business Day,
the compliance with such obligation or delivery shall be deemed acceptable on
the next following Business Day. For purposes of this Agreement, the term
"Business Day" shall mean any day on which banks and federal savings
associations in Chicago, Illinois are required to be open for business.
25. FURTHER ASSURANCES. Seller will, whenever and as often as shall be
reasonably requested to do so by Purchaser, and Purchaser will, whenever and as
often as shall be reasonably requested so to do by Seller, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
conveyances, assignments and all other instruments and
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documents as may be reasonably necessary to complete the transaction herein
contemplated and to carry out the intent and purposes of this Agreement.
26. AMENDMENTS. This Agreement shall not be amended except by a writing
signed on behalf of the party to be charged with such amendment.
27. NO THIRD PARTY BENEFICIARIES. No person or entity not a party to this
Agreement shall have any third party beneficiary claim or other right hereunder
or with respect thereto.
28. EXHIBITS. Each exhibit referred to in this Agreement is attached
hereto and each such exhibit is hereby incorporated by reference and made a part
hereof as if fully set forth herein.
29. JURY WAIVER. SELLER AND PURCHASER DO HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRAIL BY JURY WITH RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ANY
ACTION OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER TO THIS
AGREEMENT, THE LOAN, THE LOAN DOCUMENTS OR THE PROPERTY (INCLUDING WITHOUT
LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR
DEFENSES ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE
VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER
INTO THIS AGREEMENT AND SHALL SURVIVE THE CLOSING OR ANY TERMINATION OF THIS
AGREEMENT.
30. NO ASSIGNMENT. Neither party may assign this Agreement or any right,
liability, or obligation hereunder without the prior written consent of the
other party, which consent may not be unreasonably withheld. Any purported
assignment in violation of this provision shall be null and void.
[SIGNATURE PAGE FOLLOWS ON NEXT PAGE]
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EXECUTED UNDER SEAL as of the date first above written.
PURCHASER:
PRIME GROUP REALTY, L.P., a Delaware limited
partnership
By: PRIME GROUP REALTY TRUST, a Maryland
Estate Investment Trust, its general
partner
By: /s/ Jeffrey A. Patterson
------------------------------------
Name: Jeffrey A. Patterson
----------------------------
Its: Executive Vice President
----------------------------
SELLER:
ALLSTATE LIFE INSURANCE COMPANY, an Illinois
insurance corporation
By: /s/ Adrian Corbiere
-----------------------------------------
Name: Adrian Corbiere
----------------------------------
Authorized Signatory
By: /s/ Mark A. Bishop
-----------------------------------------
Name: Mark A. Bishop
----------------------------------
Authorized Signatory
13
