EXHIBIT 10.29
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "AGREEMENT"), dated as of April 18, 2000,
is by and among PRIME GROUP LIMITED PARTNERSHIP, an Illinois limited partnership
("PGLP"), PRIME GROUP II, L.P., an Illinois limited partnership ("PG2LP"), PRIME
GROUP III, L.P., an Illinois limited partnership ("PG3LP"), PRIME GROUP IV,
L.P., an Illinois limited partnership ("PG4LP"), PRIME GROUP V, L.P., an
Illinois limited partnership ("PG5LP"), and PRIME FINANCING LIMITED PARTNERSHIP,
an Illinois limited partnership ("PFLP"? PGLP, PG2LP, PG3LP, PG4LP, PG5LP and
PFLP are sometimes referred to herein collectively as the "PLEDGOR"), and
HORIZON GROUP PROPERTIES, L.P., a Delaware limited partnership (the "PLEDGEE").
W I T N E S S E T H
WHEREAS, the Pledgee made a loan (the "LOAN") to Prime Outdoor
Group, LLC, a Delaware limited liability company ("BORROWER") in the amount of
One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), the
repayment of which is evidenced by that certain Promissory Note, dated of even
date herewith (the "NOTE"), issued by Borrower payable to the order of the
Pledgee; and
WHEREAS, each of the Pledgors are affiliates of Borrower and will
receive direct or indirect financial benefits from the Loan; and
WHEREAS, PFLP owns 277,850 common units of partnership interests in
the Pledgee ("HGPLP PARTNERSHIP UNITS"); PGLP owns (or has the rights to as more
specifically described on Schedule I attached hereto) 75,620 HGPLP Partnership
Units; PG2LP owns 42,281 HGPLP Partnership Units; PG3LP owns 3,081 HGPLP
Partnership Units; PG4LP owns 6,818 HGPLP Partnership Units, and PG5LP owns
5,133 HGPLP Partnership Units (the HGPLP Partnership Units referred to in this
paragraph are referred to in this Agreement as the "PLEDGED HGPLP PARTNERSHIP
UNITS"); and
WHEREAS, pursuant to the Amended and Restated Agreement of Limited
Partnership of the Pledgee, dated as of _______________ (as amended, modified or
restated from time to time, the "HORIZON PARTNERSHIP AGREEMENT"), each of the
Pledged HGPLP Partnership Units may be exchanged one unit of HGPLP Partnership
Unit for one share of common stock, par value $0.01 per share ("HORIZON STOCK"),
of Horizon Group Properties, Inc., a Maryland corporation that has qualified for
treatment as a real estate investment trust ("HGPI"); and
WHEREAS, as a condition to making the Loan, the Pledgee has required
that the Pledgor grant to the Pledgee a security interest in the Pledged HGPLP
Partnership Units as described on Schedule I attached hereto, as security for
the repayment of the Loan.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the Pledgor and the
Pledgee hereby agree 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 HGPLP Partnership Units now owned by the Pledgor and
the certificates, if any, representing such Pledged HGPLP Partnership
Units, the Pledgor's interest in the capital, dividends, income, profits
and distributions of HGPLP attributable to the Pledged HGPLP Partnership
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 HGPLP Partnership Units;
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(b) all securities acquired by the Pledgor in any manner with
respect to the Pledged HGPLP Partnership Units (including, but not limited
to, Horizon Stock for which the Pledged HGPLP Partnership Units are
exchangeable), and the certificates, if any, representing such securities
(any such securities shall constitute part of the Pledged HGPLP
Partnership Units 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
(c) 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 repayment
of the Loan and all other amounts due and payable under the Note or in
connection with the Loan, whether for principal, interest, fees, expenses or
otherwise, and all obligations of the Pledgor now or hereafter existing under
this Agreement (the "OBLIGATIONS").
3. DELIVERY OF PLEDGED COLLATERAL.
(a) All certificates, instruments or documents, if any, representing
or evidencing the Pledged Collateral (including all certificates
representing the HGPLP Partnership Units to which PGLP is entitled as more
specifically described on Schedule I attached hereto) 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.
(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, xxxx it or their
books and records with the numbers and face amounts of all uncertificated
securities evidencing the Pledged Collateral, 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 Collateral 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 Horizon Stock to be issued upon the exchange of the Pledged
HGPLP Partnership Units has been duly authorized and will be, upon
exchange, 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,
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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 and the restrictions imposed by the agreements listed on
Schedule II hereto), 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, each of the Pledged HGPLP Partnership Units can be exchanged at
any time at the rate of one unit of Pledged HGPLP Partnership Unit for one
share of HGPI Stock.
(d) Upon possession by the 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, 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 or any other person 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.
(g) Schedule I ATTACHED HERETO LISTS ALL OF THE HGPLP PARTNERSHIP
UNITS OWNED BY PLEDGOR WHICH ARE NOT CURRENTLY SUBJECT TO A PLEDGE TO ANY
PERSON OTHER THAN THE PLEDGEE.
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 any document executed in connection
with this Agreement; PROVIDED, HOWEVER, that the Pledgor shall not
exercise nor shall it refrain from exercising any such right if such
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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 distributions paid in respect of the Pledged HGPLP
Partnership Units, provided however, that any and all
(1) 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,
(2) 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
(3) 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 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 without the prior consent of the Pledgee (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
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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.
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 (such appointment being irrevocable
and coupled with an interest), with full authority 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.
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.
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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) Borrower fails to make any payment when due under the
Note;
(ii) the Pledgor fails to perform or observe any term,
covenant (after 5 business days written notice) or agreement
contained in this Agreement on its part to 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;
(iii) 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 any of the Loan Documents (as defined in the Note);
(iv) 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; and
(v) an Event of Default (after the delivery of all required
notices and the expiration of all applicable cure periods) occurs
under any of the other Loan Documents.
(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 Note 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
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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 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 two (2) 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 Collateral 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 Collateral 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 Collateral to be sold at a public
sale. The Pledgee shall be under no obligation to delay a sale of any of the
Pledged Collateral for any period of time necessary to permit any issuer thereof
to register such Pledged Collateral 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
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
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(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 Note 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 Note
or any other Loan Document;
(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.
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 mails, 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: c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
With copies to: The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
0
Xxxxx 0000
Xxxx: Xxxxxx X. Xxxxxx, Esq.
Facsimile Number: (000) 000-0000
If to the Pledgee: Horizon Group Properties, L.P.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Attention: Xxxx X. Xxxxxx
Facsimile Number: (000) 000-0000
With a copy to: Horizon Group Properties, L.P.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Attention: Xxxxx Xxxxxxx
Facsimile Number: (000) 000-0000
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.
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 Note.
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.
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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 LIMITED PARTNERSHIP, an
Illinois limited partnership
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
Managing General Partner
PRIME GROUP II, L.P., an Illinois limited
partnership
By: PGLP, Inc.,
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Its: PRESIDENT
--------------------------------------
PRIME GROUP III, L.P., an Illinois limited
partnership
By: PGLP, Inc.,
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Its: PRESIDENT
--------------------------------------
PRIME GROUP IV, L.P., an Illinois limited
partnership
By: PGLP, Inc.,
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Its: President
--------------------------------------
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PRIME GROUP V, L.P., an Illinois limited
partnership
By: PGLP, Inc.,
Managing General Partner
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Its: PRESIDENT
--------------------------------------
PRIME FINANCING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: Prime Finance, Inc.
Managing General Partner
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Its: PRESIDENT
--------------------------------------
HORIZON GROUP PROPERTIES, L.P., a Delaware
limited partnership
By: Horizon Group Properties, Inc., a
Maryland corporation, its Managing General
Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Its: CFO
--------------------------------------
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SCHEDULE I
DESCRIPTION OF PLEDGED COLLATERAL
PLEDGED UNITS
277,850 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Financing Limited Partnership as evidenced by certificate number 0101
2,150 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Group Limited Partnership as evidenced by certificate number 0096*
36,363 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Group Limited Partnership as evidenced by certificate number 0121*
42,281 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Group II, L.P. as evidenced by certificate number 0097
3,081 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Group III, L.P. as evidenced by certificate number 0098
6,818 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Group IV, L.P. as evidenced by certificate number 0099
5,133 units of limited partnership interests in Horizon Group
Properties, L.P., a Delaware limited partnership, in the name of Prime
Group V, L.P. as evidenced by certificate number 0120
*37,107 units, although purchased by Prime Group Limited
Partnership, have not been transferred in the records of Horizon Group
Properties, L.P. Upon receipt by Prime Group Limited Partnership of
certificates representing these units, such certificates shall be
delivered to Horizon Group Properties, L.P.
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SCHEDULE II
OTHER AGREEMENTS
1. Registration Rights Agreement dated as of
_________________ by and among Horizon Group
Properties, Inc., Horizon Group Properties, L.P.,
_____________________________________and the other
investors named therein.
2. Agreement of Limited Partnership of Horizon Group
Properties, L.P.
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