FIRST AMENDMENT TO LOAN
AGREEMENT
THIS FIRST AMENDMENT TO LOAN
AGREEMENT (together with
all schedules hereto, this “Amendment”) among PGRT ESH,
Inc., a Delaware corporation (the “Borrower”),
Lightstone Holdings LLC, a Delaware limited liability company
(“Lightstone Holdings”), David Lichtenstein (together
with Lightstone Holdings, the “Guarantors,” and
collectively with the Borrower, the “Loan Parties”),
and Citicorp USA, Inc., a Delaware corporation (the
“Lender”), is made as of October 31,
2008.
WHEREAS , the Borrower and the Lender are parties to the
Amended and Restated Loan Agreement dated as of June 6, 2008
(the “Loan Agreement”; the terms defined therein being
used herein as therein defined); and
WHEREAS , each of the Guarantors guaranteed the
liabilities and obligations of the Borrower under the Loan
Agreement on the terms and conditions set forth in an Amended and
Restated Guaranty dated June 6, 2008 (collectively the
“Guaranties,” and each, a “Guaranty”) by
each of the Guarantors in favor of the Lender.
SECTION 1. Amendments to Loan Agreement
. Effective as of the
date hereof, subject to the satisfaction of the conditions to
effectiveness set forth in Section 2, the Loan Agreement is
amended as follows:
(a) The new definitions specified in
Schedule 1(a) hereto are hereby added to Section 1.1 of the
Loan Agreement in the appropriate alphabetical order:
(b) The definition of “Adjusted Base
Rate” in Section 1.1 is hereby amended and restated as
follows:
“ ‘Adjusted Base Rate’
shall mean an interest rate per annum equal to ten percent (10%)
above the Base Rate, in effect from time to time.”
(c) The definition of “Applicable
Interest Rate” in Section 1.1 is hereby amended and
restated as follows:
“ ‘ Applicable Interest Rate
’ shall mean, for each Interest Period through and including
the date on which the Obligations are paid in full, an interest
rate per annum equal to the Eurodollar Rate or, if the provisions
of Section 2.2.3(a) or (b) are applicable, the Adjusted
Base Rate.”
(d) The definition of “Eurodollar
Rate” in Section 1.1 is hereby amended and restated as
follows:
“ ‘ Eurodollar Rate ’
shall mean, effective September 30, 2008, with respect to any
Interest Period, an interest rate per annum equal to LIBOR
plus ten percent (10%).”
(e) The definition of “Maturity
Date” is hereby amended and restated as specified in Schedule
1(e) hereto.
(f) Section 2.2.1 is amended by
deleting the second and third sentences thereof.
(g) Section 2.2.7 is hereby amended
and restated as follows:
Borrower shall
pay to Lender, upon the earliest of (a) the Maturity Date,
(b) the date of the prepayment of the Loan in full, or
(c) the date of the occurrence of an Event of Default (other
than the Specified Defaults), whether or not the Loan has been
declared immediately due and payable, a fully earned and
non-refundable restructuring fee in the aggregate amount of
$1,000,000 (the “ Restructuring Fee
”).”
(h) Section 2.3.2 is hereby amended as
follows:
(i) Subsection (b) is amended by
deleting “(but after the aggregate outstanding principal
amount of the Loan is equal to or less than $60,000,000, if such
sale occurs, Borrower shall prepay the Loan by an amount equal to
fifty percent (50%) of the Net Cash Proceeds of such sale)”
and “(but after the aggregate outstanding principal amount of
the Loan is equal to or less than $60,000,000, if such a sale or
refinancing occurs, Borrower shall prepay the Loan by an amount
equal to fifty percent (50%) of the Net Cash Proceeds of such sale
or refinancing)”;
(ii) Subsection (c) is amended by
deleting “(but after the aggregate outstanding principal
amount of the Loan is equal to or less than $60,000,000, if such
issuance occurs, Borrower shall prepay the Loan by an amount equal
to fifty percent (50%) of the Net Cash Proceeds of such
issuance)”;
(iii) Subsection (d) is amended by
deleting “(but after the aggregate outstanding principal
amount of the Loan is equal to or less than $60,000,000, if such
dividends or other distributions are received, Borrower shall
prepay the Loan by an amount equal to fifty percent (50%) of the
amount of such dividends or other distributions)”;
and
(iv) Subsection (e) is amended by
deleting “(or, if applicable, 50% thereof)”.
(i) Section 2.3.5 is hereby amended by
deleting the proviso thereto.
(j) Section 3.1 is hereby amended by
deleting the sentence “If Lender or its servicer withdraws
from the Blocked Account an amount sufficient to pay accrued
interest on any Payment Date or any principal then due and there
are any amounts remaining in the Blocked Account after such payment
of accrued interest or such principal amount, Lender shall, so long
as no Deferred Amount is outstanding and the aggregate outstanding
principal amount of the Loan is equal to or less than $60,000,000,
transfer, on a monthly basis, fifty percent (50%) of such remaining
amounts to any account to which Borrower directs promptly upon
receipt of such direction.”
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(k) Section 5.2.3 is hereby amended by
deleting “(or, if applicable, 50% thereof)”.
(l) Section 6.1(a)(x) is amended by
adding “, the covenants specified in Schedule 1
thereof” before “under the second
sentence”.
(m) Section 8.6 is amended by
deleting:
“Luskin,
Stern & Eisler LLP
330 Madison Avenue
New York, New York 10017
Attention: Nathan M. Eisler, Esq.
Facsimile No.: (212) 293-2705”
and
substituting therefor the following:
“Hughes
Hubbard & Reed LLP
One Battery Park Plaza
New York, New York, 10004
Attention: Nathan M. Eisler, Esq.
Facsimile No.: (212) 299-6170”
(n) Schedule 2.3.2(b) is hereby
deleted and replaced with Schedule 1(n) hereto.
(o) Schedule 4.1.26 is amended by
deleting the first three pages thereof and replacing such pages
with Schedule 1(o) hereto.
SECTION 2. Conditions to Effectiveness
. This Amendment shall
become effective when, and only when, the Lender shall have
received, among other things (which, in the case of documents,
shall be dated, or dated as of, the date of this
Amendment):
(a) counterparts of this Amendment, duly
executed by each Loan Party;
(b) a certificate of the Secretary or an
Assistant Secretary of the Borrower certifying (i) that the
certificate of incorporation and the bylaws of the Borrower have
not been amended or otherwise modified since June 6, 2008 and
are in full force and effect, (ii) resolutions of the board of
directors of the Borrower authorizing the execution, delivery and
performance of this Amendment and any other documents to be
delivered in connection with this Amendment to which the Borrower
is a party and the transactions contemplated hereby and thereby and
(iii) the incumbency, names and true signatures of the
officers of the Borrower authorized to sign this Amendment and such
other documents;
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(c) a certificate of the managing member of
Lightstone Holdings certifying (i) that the certificate of
formation and the operating agreement of Lightstone Holdings have
not been amended or otherwise modified since July 13, 2005 and
August 1, 2005, respectively, and are in full force and
effect, (ii) that attached thereto is a true and correct copy
of a unanimous consent of the sole member of Lightstone Holdings
authorizing the execution, delivery and performance of this
Amendment and any other documents to be delivered in connection
with this Amendment to which Lightstone Holdings is a party and the
transactions contemplated hereby and thereby and (iii) the
incumbency, names and true signatures of the managing member,
managers or officers of Lightstone authorized to sign this
Amendment and such other documents;
(d) a certificate of the managing member of
Prime Outlets Acquisition Company LLC certifying (i) that the
certificate of formation and the operating agreement of Prime
Outlets Acquisition Company LLC attached thereto respectively, and
are in full force and effect, (ii) that attached thereto is a
true and correct copy of a unanimous consent of the managing member
of Prime Outlets Acquisition Company LLC authorizing the execution,
delivery and performance of this Loan Documents to which it is a
party and any other documents to be delivered in connection with
the Loan Documents to which Prime Outlets Acquisition Company LLC
is a party and the transactions contemplated thereby and
(iii) the incumbency, names and true signatures of the
managing member, managers or officers of Prime Outlets Acquisition
Company LLC authorized to sign the Loan Documents to which it is a
party and such other documents;
(e) an amendment to each Guaranty,
substantially in the form of Exhibit B, duly executed and
delivered by the Guarantor party thereto (collectively, the
“Guaranty Amendments”);
(f) an opinion of counsel for each of the
Loan Parties incident to the transactions contemplated by this
Amendment and the other Loan Documents as the Lender may reasonably
require, which such counsel is hereby requested by the Loan Parties
to provide.
SECTION 3. Forbearance .
Effective as of the date hereof and
continuing for the period (the “Forbearance Period”)
ending on the earlier to occur of (a) December 31, 2008
and (b) the date of the occurrence of any Forbearance Default
(as defined in Section 5), and subject to the satisfaction of
the conditions to effectiveness set forth in Section 2, the
Lender hereby agrees to forbear from exercising, and shall not seek
to exercise, any of its rights or remedies against the Loan Parties
except as specified herein.
SECTION 4. Affirmative Covenant
. (a) The Borrower
shall pay to the Lender the amount of $2,500,000 on or before
November 30, 2008, which payments shall be applied to the
outstanding amount of the Obligations.
(b) Subject to paragraph 2 of
Schedule 1 to each Guaranty, the Guarantors shall maintain, on
a combined basis, but without duplication, Unencumbered Liquid
Assets (as defined in the Guaranties) through November 30,
2008, in an amount not less than $37,500,000, and at all times
thereafter, $40,000,000.
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SECTION 5.
Forbearance Default; Rights upon Forbearance Default
.
(a) Each
of the following shall constitute a “Forbearance
Default” hereunder:
(i) a Loan Party’s failure to perform
or observe any of the agreements contained in (A) this
Amendment, (B) the Loan Agreement, after giving effect to the
amendment thereto provided in Section 1 of this Amendment, or
(C) any other Loan Document, in each case, other than the
events specified in Schedule 7(e) hereto; or
(ii) any representation or warranty of a
Loan Party contained in this Amendment or any certificate or
financial statement delivered in connection herewith shall prove to
have been incorrect in any material respect when made or deemed
made; or
(iii) any
of the events specified in Schedule 5(a)(iii) hereto shall
occur.
(b) Upon the occurrence of a Forbearance
Default or other termination of the Forbearance Period, the Lender
may exe
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