PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "AGREEMENT"), dated as of August
22, 2000, is by and between PRIME GROUP VI, L.P., an Illinois limited
partnership (the "PLEDGOR"), and LaSalle Bank National Association (the
"PLEDGEE").
W I T N E S S E T H
WHEREAS, the Pledgor and the Pledgee are parties to that
certain Loan Agreement, dated as of August 22, 2000, as it may be amended from
time to time (the "LOAN AGREEMENT"), pursuant to which the Pledgee has agreed to
extend loans and certain other financial accommodations to the Pledgor;
WHEREAS, the Pledgor presently owns 47,525 Common Units of
partnership interest ("PRIME GROUP REALTY PARTNERSHIP UNITS") in Prime Group
Realty, L.P., a Delaware limited partnership ("PRIME GROUP REALTY OPERATING
PARTNERSHIP"), and 256,572 common shares of beneficial interest, $0.01 par value
per share ("PLEDGED PGRT STOCK"), of Prime Group Realty Trust, a Maryland real
estate investment trust ("PGRT"). Collectively, the Prime Group Realty
Partnership Units and the PGRT Stock are referred to herein as the "PRIME
SECURITIES";
WHEREAS, pursuant to the Amended and Restated Agreement of
Limited Partnership of the Prime Group Realty, L.P.,dated as of November 17,
1997 (as amended, modified or restated from time to time, the "PRIME GROUP
REALTY PARTNERSHIP AGREEMENT"), the Prime Group Realty Partnership Units may be
exchanged one unit of Prime Group Realty Partnership Units for one share of
common stock, $0.01 par value per share, of PGRT ("PGRT STOCK");
WHEREAS, the Pledgor has agreed to grant the Pledgee a
security interest in the Pledged PGRT Stock (the "PLEDGED SHARES"), and the
Prime Group Realty Partnership Units (collectively, the "PLEDGED UNITS"), more
fully described on Schedule I.
NOW, THEREFORE, for good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, the Pledgor
hereby agrees as follows:
1. PLEDGE. The Pledgor hereby pledges to the Pledgee, and
grants to the Pledgee a security interest in, the following (the "PLEDGED
COLLATERAL"):
(a) the Pledged Shares now owned by the Pledgor and the
certificates, if any, representing such Pledged Shares, and all
dividends, cash, securities, instruments, rights and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Shares;
(b) the Pledged Units now owned by the Pledgor and the
certificates, if any, representing such Pledged Units, the Pledgor's
interest in the capital, income, profits and distributions of the Prime
Group Realty Operating Partnership attributable to such Pledged Units,
and all other cash, securities, instruments and other property from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Units;
(c) all additional shares of Prime Securities and other
securities acquired by the Pledgor in any manner with respect to the
Pledged Shares and the Pledged Units (including, but not limited to,
PGRT Shares for which Prime Group Realty Partnership Units are
exchanged), and the certificates, if any, representing such additional
securities (any such additional securities shall constitute part of the
Pledged Shares or the Pledged Units, as the case may be, under and as
defined in this Agreement), and all dividends, cash, instruments,
subscription warrants, securities and any other rights and options and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
securities; and
(d) all other property hereafter delivered to the Pledgee in
substitution for, as proceeds of, or in addition to any of the
foregoing and all certificates, instruments and documents representing
or evidencing such property, and all cash, securities, interest,
dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in
exchange for or upon conversion of any or all thereof.
2. SECURITY FOR OBLIGATIONS. The Pledged Collateral secures the payment
of all of the Pledgor's "Borrower's Obligations", as such term is defined in the
Loan Agreement, to the Pledgee, whether for principal, interest, fees, expenses
or otherwise, and all obligations of the Pledgor now or hereafter existing under
this Agreement (such Borrower's Obligations under the Loan Agreement and all
such obligations of the Pledgor now or hereafter existing under this Agreement
being referred to herein as the "OBLIGATIONS").
3. DELIVERY OF PLEDGED COLLATERAL.
(a) All certificates, instruments or documents, if any,
representing or evidencing the Pledged Collateral shall be delivered to
and held by or on behalf of the Pledgee pursuant hereto and shall be in
suitable form for transfer by delivery, shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form
and substance satisfactory to the Pledgee. In the event any or all of
the Pledged Collateral are evidenced by a book entry, Pledgor shall
execute and deliver to Pledgee such documents as are required by
Pledgee to create and perfect a security interest in such
uncertificated Pledged Collateral. In addition, the Pledgee shall have
the right at any time to exchange certificates or instruments
representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
2
(b) Pledgor shall, and shall cause other appropriate parties
under Section 8-313 and 8-321 of the Uniform Commercial Code as in
effect on the date hereof in the State of Illinois (the "CODE") to,
▇▇▇▇ it or their books and records with the numbers and face amounts of
all uncertificated securities evidencing the Pledged Shares and/or the
Pledged Units, as applicable, and all rollovers and replacements
therefor to reflect the security interests granted pursuant to Section
2 hereof. Pledgor shall provide Pledgee and shall cause other persons
to provide Pledgee with written confirmation of the security interest
in such uncertificated securities. Pledgor shall take, and shall cause
all other necessary persons to take, all action necessary or
appropriate to create, perfect and maintain a first perfected priority
lien in such uncertificated securities in favor of Pledgee. In the
event that subsequent to the date hereof, the Pledged Shares and/or
Pledged Units, as applicable, are evidenced by certificates, Pledgor
will promptly deliver such certificates to Pledgee, together with an
assignment duly endorsed in blank for transfer.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants as follows:
(a) The Pledge Shares and the Pledged Units have been duly
authorized and validly issued and are fully paid and nonassessable. The
PGRT Stock to be issued upon the conversion of the Prime Group Realty
Partnership Units, has been duly authorized and will be, upon
conversion, fully paid and nonassessable.
(b) The Pledgor is, or at the time of any future delivery,
pledge, assignment or transfer will be, the legal and beneficial owner
of the Pledged Collateral, free and clear of any lien, security
interest, pledge, warrant, option, purchase agreement, shareholders'
agreement, restriction, redemption agreement or other charge,
encumbrance or restriction of any nature on the Pledged Collateral
(except for the lien created by this Agreement, the restrictions
imposed by the agreements listed on Schedule II hereto, completed
copies of which have been delivered to Pledgor, and the liens permitted
by the Loan Agreement), with full right to deliver, pledge, assign and
transfer the Pledged Collateral to the Pledgee as Pledged Collateral
hereunder.
(c) Subject to compliance with the agreements listed on
Schedule II hereto, the Pledged Units can be exchanged at any time at
the rate of one unit of Prime Group Realty Partnership Unit for one
share of PGRT Stock.
(d) Upon (i) filing of the UCC financing statements, forms of
which are attached hereto as Exhibit A, with the Secretary of State of
Illinois, the Secretary of State of Maryland, and the Secretary of
State of Delaware, (ii) execution and delivery of the Acknowledgment
and Consent, dated as of even date herewith, among Pledgor, Prime Group
Realty Operating Partnership, PGRT and Pledgee, and (iii) possession by
Pledgee of the certificates representing the Pledged Collateral, the
pledge of the Pledged Collateral pursuant to this Agreement will create
a valid, perfected and first security interest in the Pledged
Collateral, securing the payment of the Obligations. All other filings,
registrations,
3
recordings and other actions necessary or desirable to create, perfect
and protect such security interest have been duly taken, and such
security interests are entitled to all of the rights, priorities and
benefits afforded by the Code or other relevant law as enacted in any
relevant jurisdiction which relates to perfected security interests.
(e) Except as otherwise set forth in paragraph (d) above, no
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required either
(i) for the pledge by the Pledgor of the Pledged Collateral pursuant to
this Agreement or for the execution, delivery or performance of this
Agreement by the Pledgor, or (ii) for the exercise by the Pledgee of
the voting or other rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this
Agreement (except as may be required in connection with a disposition
of such Pledged Collateral by laws affecting the offering and sale of
securities generally).
(f) The Pledgor has full power and authority to enter into
this Agreement and has the right to pledge and grant a security
interest in the Pledged Collateral as provided by this Agreement.
5. FURTHER ASSISTANCE. The Pledgor agrees that at any time and
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver, or cause to be executed and delivered, all certificates,
stock powers, proxies, assignments, instruments and documents; and will take all
further action that may be reasonably necessary or desirable, or that the
Pledgee may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Pledgee to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral and to carry out the provisions and purposes hereof.
6. VOTING RIGHTS; DIVIDENDS; ETC.
(a) Except as set forth below, so long as no Event of Default
(as hereinafter defined):
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Loan
Agreement; PROVIDED, HOWEVER, that the Pledgor shall not
exercise nor shall it refrain from exercising any such right
if such action or inaction could have a material adverse
effect on the value of the Pledged Collateral or upon the
rights of the Pledgee to effectively realize upon the security
afforded by such Pledged Collateral.
(ii) The Pledgor shall be entitled to receive and retain
any and all dividends and interest paid in respect of the
Pledged Shares and all distributions paid in respect of the
Pledged Units, PROVIDED HOWEVER, that any and all
4
(A) dividends, interest and distributions paid
or payable other than in cash in respect of,
and instruments and other property received,
receivable or otherwise distributed in
respect of, or in exchange for, any Pledged
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged
Collateral in connection with a partial or
total liquidation or dissolution or in
connection with a reduction of capital,
capital surplus or paid-in-surplus resulting
from a sale or refinancing of any property,
and
(C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any
Pledged Collateral,
shall be Pledged Collateral, shall be forthwith delivered to
the Pledgee to hold as Pledged Collateral and shall, if
received by the Pledgor, be received in trust for the benefit
of the Pledgee, be segregated from the other property or funds
of the Pledgor, and be forthwith delivered to the Pledgee as
Pledged Collateral in the same form as so received (with any
necessary endorsement).
(b) Except as set forth below, upon the occurrence (and during
the continuance) of an Event of Default (as hereinafter defined):
(i) All rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled
to exercise pursuant to Section 6(a)(i) (but only after an
Event of Default) and to receive the dividends and interest
payments and distributions which it would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii)
shall cease, and all such rights shall thereupon become vested
in the Pledgee which shall thereupon have the sole right to
exercise such voting and other consensual rights and to
receive and hold as Pledged Collateral such dividends and
interest payments and distributions;
(ii) All dividends and interest payments and
distributions which are received by the Pledgor contrary to
the provisions of paragraph (i) of this Section 6(b) shall be
received in trust for the benefit of the Pledgee, shall be
segregated from other funds of the Pledgor and shall be
forthwith paid over to the Pledgee as Pledged Collateral in
the same form as so received (with any necessary
endorsements); and
(iii) The Pledgor shall execute and deliver (or cause to
be executed and delivered) to the Pledgee all such proxies and
other instruments as the Pledgee may reasonably request for
the purpose of enabling the Pledgee to exercise the voting and
other rights which it is entitled to exercise pursuant to
paragraph (i) above and to
5
receive the dividends or interest payments or distribution
which it is authorized to receive pursuant to paragraph (ii)
above.
7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. The Pledgor agrees
that it will not (i) sell, assign, transfer, convey, exchange, pledge,
hypothecate or otherwise dispose of, or grant any option, warrant, right,
contract or commitment with respect to, any of the Pledged Collateral without
the prior written consent of the Pledgee, or (ii) create or permit to exist any
lien, security interest, pledge, proxy, purchase arrangement, restriction,
redemption agreements, shareholders' agreement or other charge or encumbrance
upon or with respect to any of the Pledged Collateral, except for the lien
created by this Agreement, restrictions imposed by the agreements listed on
Schedule II hereto and liens permitted by the Loan Agreement.
8. APPLICATION OF PROCEEDS OF SALE OR CASH HELD AS COLLATERAL. All
proceeds from the sale of Pledged Collateral sold pursuant to this Agreement
and/or the cash held as Pledged Collateral hereunder shall be (a) retained by
the Pledgee as cash collateral for the Obligations, or (b) at the election of
the Pledgee, applied by the Pledgee as follows:
FIRST: to payment of the costs and expenses of such
sale, including the out-of-pocket expenses of the Pledgee, including the
reasonable fees and out-of-pocket expenses of counsel employed in connection
therewith, and to the payment of all advances made by the Pledgee for the
account of the Pledgor hereunder, and the payment of all costs and expenses
incurred by the Pledgee in connection with the administration and enforcement of
this Agreement, to the extent that such advances, costs and expenses shall not
have been reimbursed to the Pledgee;
SECOND: to the payment of interest accrued and unpaid,
if any, on any of the Obligations to and including the date of such application
and then to the payment or prepayment of principal of any of the Obligations and
then to the payment of the balance of the Obligations in such order as Pledgee
may determine in its sole discretion; and
THIRD: the balance, if any, of such proceeds shall
be paid to the Pledgor, or its successors or assigns, or as a court of competent
jurisdiction may direct.
9. THE PLEDGEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints
the Pledgee as the Pledgor's attorney-in-fact, with full authority, after the
occurrence of an Event of Default, in the place and stead of the Pledgor and in
the name of the Pledgor or otherwise, from time to time after giving notice to
Pledgee in the Pledgee's discretion to take any action and to execute any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, (i) to receive,
endorse and collect all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same and (ii)
to exercise all rights, including conversion rights, with respect to such
Pledged Collateral.
6
10. THE PLEDGEE MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Pledgee may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Pledgee incurred in
connection therewith shall be payable by the Pledgor under Section 17.
11. REASONABLE CARE. The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Pledgee accords its own property, it being understood that the
Pledgee shall not have any responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Collateral, whether or not the Pledgee has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral;
PROVIDED, HOWEVER, that upon the Pledgor's instruction, the Pledgee shall use
reasonable efforts to take such action as the Pledgor directs the Pledgee to
take with respect to calls, conversions, exchanges, maturities, tenders, rights
against other parties or other similar matters relative to the Pledged
Collateral, but failure of the Pledgee to comply with any such request shall not
of itself be deemed a failure to exercise reasonable care, and no failure of the
Pledgee to preserve or protect any rights with respect to the Pledged Collateral
against prior parties, or to do any act with respect to preservation of the
Pledged Collateral not so requested by the Pledgor, shall be deemed a failure to
exercise reasonable care in the custody or preservation of the Pledged
Collateral.
12. SUBSEQUENT CHANGES AFFECTING COLLATERAL. The Pledgor represents to
the Pledgee that the Pledgor has made its own arrangements for keeping informed
of changes or potential changes affecting the Pledged Collateral (including, but
not limited to, rights to convert, rights to subscribe, payment of dividends or
distributions, reorganization or other exchanges, tender offers and voting
rights), and the Pledgor agrees that the Pledgee shall have no responsibility or
liability for informing the Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto.
13. EVENTS OF DEFAULT; REMEDIES UPON AN EVENT OF DEFAULT.
(a) The occurrence of any one or more of the following events
shall constitute an "EVENT OF DEFAULT" by Pledgor under this Agreement:
(i) there occurs (and is continuing) an Event of Default
under and as defined in the Loan Agreement;
(ii) the Prime Group Realty Partnership Units shall not
be exchangeable for shares of PGRT Stock as set forth in (and
subject to the conditions in) Section 4(c) hereof;
(iii) the Pledgor fails to perform or observe any
material term, covenant (after 5 day written notice) or
agreement contained in this Agreement on its part to
7
be performed or observed, or any representation or warranty
made by the Pledgor in this Agreement shall be untrue or
misleading in any material respect as of the date with respect
to which such representation or warranty was made;
(iv) a notice of lien, levy or assessment is filed or
recorded with respect to all or a substantial part of the
Pledged Collateral, and such lien, levy or assessment is not
released, discharged or removed within thirty (30) days from
the date it is filed or recorded, except for a lien, levy or
assessment which relates to current taxes not yet due and
payable or a lien permitted by the Loan Agreement; and
(v) all or a substantial part of the Pledged Collateral
is attached, seized, subjected to a writ or distress warrant,
or is levied upon, or comes within the possession of any
receiver, trustee, custodian or assignee for the benefit of
creditors.
(b) If any Event of Default shall have occurred (and be
continuing), the Pledgee shall have, in addition to all other rights
given by law or by this Agreement, the Loan Agreement or otherwise, all
of the rights and remedies with respect to the Pledged Collateral of a
secured party under the Code in effect in the State of Illinois at that
time, and the Pledgee may, without notice and at its option, transfer
or register the Pledged Collateral or any part thereof on the books of
the issuer thereof into the name of the Pledgee or the Pledgee's
nominee(s), with or without any indication that such Pledged Collateral
is subject to the security interest hereunder. In addition, with
respect to any Pledged Collateral which shall then be in or shall
thereafter come into the possession or custody of the Pledgee, the
Pledgee may sell or cause the same to be sold at any broker's board or
at public or private sale, in one or more sales or lots, at such price
or prices as the Pledgee may deem best, for cash or on credit or for
future delivery, without assumption of any credit risk. The purchaser
of any or all Pledged Collateral so sold shall thereafter hold the same
absolutely, free from any claim, encumbrance or right of any kind
whatsoever, except for claims, encumbrances or rights that may arise
without the knowledge or consent of the Pledgor. Unless any of the
Pledged Collateral threatens to decline speedily in value or is or
becomes of a type sold on a recognized market, the Pledgee will give
the Pledgor reasonable notice of the time and place of any public sale
thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Pledged Collateral conducted
in conformity with reasonable commercial practices of banks, insurance
companies, commercial finance companies, or other financial
institutions disposing of property similar to the Pledged Collateral
shall be deemed to be commercially reasonable. Any requirements of
reasonable notice shall be met if such notice is mailed to the Pledgor
as provided in Section 20 below, at least five (5) days before the time
of the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is, to the extent permitted by law, waived. The
Pledgee may, in its own name or in the name of a designee or nominee,
buy any of the Pledged Collateral at any public sale and, if permitted
by applicable law, at any private sale. All expenses (including court
costs and reasonable attorneys' fees and expenses) of, or incident to,
the enforcement of any of the provisions hereof shall be recoverable
from the proceeds of the sale or other
8
disposition of Pledged Collateral. In view of the fact that federal and
state securities laws may impose certain restrictions on the method by
which a sale of the Pledged Collateral may be effected after an Event
of Default, the Pledgor agrees that upon the occurrence or existence of
any Event of Default, the Pledgee may, from time to time, attempt to
sell all or any part of the Pledged Collateral by means of a private
placement, restricting the prospective purchasers to those who can make
the representations and agreements required of purchasers of securities
in private placements. In so doing, the Pledgee may solicit offers to
buy the Pledged Collateral, or any part of it, for cash, from a limited
number of investors deemed by the Pledgee in its judgment, to be
responsible parties who might be interested in purchasing the Pledged
Collateral, and if the Pledgee solicits such offers from not less than
three (3) such investors, then the acceptance by the Pledgee of the
highest offer obtained therefrom shall be deemed to be a commercially
reasonable method of disposition of the Pledged Collateral.
In addition, upon the occurrence (and during the continuance)
of an Event of Default, all rights of the Pledgor to exercise the
voting and other rights which it would otherwise be entitled to
exercise and to receive cash dividends and interest payments, shall
cease, and all such rights shall thereupon become vested in the Pledgee
as provided in Section 6.
14. SECURITIES LAWS. Pledgor hereby acknowledges and confirms that
Pledgee may be unable to effect a public sale of any or all of the Pledged
Shares and the Pledged Units by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire any of the
Pledged Shares and Pledged Units for their own respective accounts for
investment and not with the view to the distribution or resale thereof. Pledgor
further acknowledges and confirms that any such private sale may result in
prices or other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner, and the Pledgee shall be under no obligation to take any steps in order
to permit the Pledged Shares and Pledged Units to be sold at a public sale. The
Pledgee shall be under no obligation to delay a sale of any of the Pledged
Shares and Pledged Units for any period of time necessary to permit any issuer
thereof to register such Pledged Shares and Pledged Units for public sale under
the Securities Act or under applicable state securities laws.
15. AUTHORITY OF THE PLEDGEE. The Pledgee shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to the Pledgee
by the terms hereof, together with such powers as are incidental thereto. The
Pledgee may execute any of its duties hereunder by or through agents or
employees. Neither the Pledgee, nor any director, officer, agent or employee of
the Pledgee, shall be liable for any action taken or omitted to be taken by it
or them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Pledgor hereby agrees to indemnify and
hold harmless the Pledgee and/or any such director, officer, agent or employee
from and against any and all liability incurred by any of them, hereunder or in
9
connection herewith, unless such liability shall be due to its or their own
gross negligence or willful misconduct.
16. TERMINATION. This Agreement shall terminate after the time when all
the Obligations have been fully paid and performed, at which time the Pledgee
shall reassign and redeliver (or cause to be reassigned and redelivered) to the
Pledgor, or to such person or persons as the Pledgor shall designate, against
receipt, such of the Pledged Collateral (if any) as shall not have been sold or
otherwise applied by the Pledgee pursuant to the terms hereof and shall still be
held by it hereunder, together with appropriate instruments of reassignment and
release. Any such reassignment shall be without recourse upon or warranty by the
Pledgee and at the expense of the Pledgor.
17. EXPENSES. The Pledgor agrees to reimburse the Pledgee promptly
after demand for any and all reasonable expenses, including the reasonable fees
and expenses of its counsel and of any experts and agents, which the Pledgee may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the registration of the Pledged Collateral, (iii)
the exercise or enforcement of any of the rights of the Pledgee hereunder, or
(iv) the failure by the Pledgor to perform or observe any of the provisions
hereof.
18. SECURITY INTEREST ABSOLUTE. All rights of the Pledgee and security
interests hereunder, and all obligations of the Pledgor hereunder, shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Loan
Agreement or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to any
departure from the Loan Agreement;
(iii) any exchange, surrender, release or non-perfection
of any other collateral, or any release or amendment or waiver
of or consent to departure from any guaranty, for all or any
of the Obligations; or
(iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the
Pledgor in respect of the Obligations or of this Agreement.
19. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Pledgee, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
10
20. NOTICES. Any notice required or desired to be served, given or
delivered hereunder shall be in writing (including facsimile transmission), and
shall be deemed to have been validly served, given or delivered upon the earlier
of (a) personal delivery to the address set forth below, (b) in the case of
mailed notice, two (2) days after deposit in the United States mail, with proper
postage for certified mail, return receipt requested, prepaid, or in the case of
notice by Federal Express or other reputable overnight courier service, one (1)
day after delivery to such courier service, and (c) in the case of facsimile
transmission, upon transmission with confirmation of receipt, addressed to the
party to be notified as follows:
If to the Pledgor: Prime Group VI, L.P.
c/o The Prime Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇)▇▇▇-▇▇▇▇
With a copies to: Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇)▇▇▇-▇▇▇▇
And to: The Prime Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇)▇▇▇-▇▇▇▇
If to the Pledgee: LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Schwartz, Cooper, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Chartered
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any of the parties may hereafter designate for
itself by written notice to the other parties in the manner herein prescribed.
11
21. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) be binding
upon the Pledgor, its successors and assigns, and (ii) inure to the benefit of
the Pledgee and its successors, transferees and assigns.
22. WAIVERS. To the extent permitted by applicable law, the Pledgor
waives presentment and demand for payment of any of the Obligations, protest and
notice of dishonor or default with respect to any of the Obligations, and all
other notices to which the Pledgor might otherwise be entitled, except as
otherwise expressly provided herein or in the Loan Agreement.
23. WAIVER OF JURY TRIAL. The Pledgor and the Pledgee each hereby waive
any right to a trial by jury in any action or proceeding to enforce or defend
any rights under this Agreement or any amendment, instrument, document or
agreement delivered or which may in the future be delivered in connection
herewith or arising from any banking relationship existing in connection with
this Agreement, and agrees that any such action or proceeding shall be tried
before a court and not before a jury.
24. GOVERNING LAW; TERMS. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to conflict of laws
provisions) and decisions of the State of Illinois. Unless otherwise defined
herein, terms defined in Articles 3, 8 and 9 of the Code are used herein as
therein defined. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Agreement shall be interpreted in such manner as
to be ineffective or invalid under applicable law, such provisions shall be
ineffective or invalid only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
25. DEFINITIONS. The singular shall include the plural and vice versa
and any gender shall include any other gender as the text shall indicate.
26. SECTION HEADINGS. The section headings herein are for convenience
of reference only, and shall not affect in any way the interpretation of any of
the provisions hereof.
27. NON-RECOURSE. The non-recourse provisions set forth in Section
11.16 of the Loan Agreement are incorporated in this Agreement by reference as
if fully set forth herein.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
12
IN WITNESS WHEREOF, the Pledgor and the Pledgee have each caused this
Pledge Agreement to be duly executed and delivered by its officer, if any,
thereunto duly authorized as of the date first above written.
PRIME GROUP VI, L.P., an Illinois limited partnership
By: PGLP, Inc., an Illinois corporation, as managing
general partner
By: _______________________________________________________
Its: _____________________________________________
LASALLE BANK NATIONAL ASSOCIATION, a
national banking association
By: ________________________________________________________________
Its: ______________________________________________________
SCHEDULE I
Description of Pledged Collateral
---------------------------------
A. PLEDGED SHARES
--------------
Issuer Certificate No. Shares
------ --------------- ------
Prime Group Realty Trust 1233 256,572
B. PLEDGED UNITS
-------------
47,525 units of limited partnership interests in Prime Group Realty,
L.P., a Delaware limited partnership, as evidenced by certificate
number 38.
SCHEDULE II
Other Agreements
----------------
1. Registration Rights Agreement dated as of November 17, 1997 by
and among Prime Group Realty Trust, Prime Group Realty, L.P.,
Prime Group Limited Partnership, Primestone Investment
Partners L.P. and the other investors named therein.
2. Prime Group Realty Partnership Agreement.
3. Registration Rights Agreement dated as of December 15, 1997 by
and among Prime Group Realty Trust, Prime Group Realty, L.P.
and H Group LLC, a Delaware limited liability company.
