Exhibit 44
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "AGREEMENT") dated as of November 17, 1997 made
by Primestone Investment Partners L.P., a Delaware limited partnership (the
"PLEDGOR"), and Prudential Securities Credit Corporation, a Delaware corporation
(the "LENDER").
W I T N E S S E T H:
WHEREAS, the Pledgor has entered into an Amended and Restated Agreement
of Limited Partnership (including, without limitation, all exhibits thereto,
as amended, supplemented or otherwise modified from time to time, the
"PARTNERSHIP AGREEMENT") of Prime Group Realty, L.P., a Delaware limited
partnership ("PRIME") dated as of the date hereof among Prime Group Realty
Trust, a Maryland real estate investment trust (the "REIT") and The Xxxxx
Group, L.L.C., a Delaware limited liability company, as the General Partners
and the Persons whose names are set forth on Exhibit A thereto, as the
Limited Partners;
WHEREAS, pursuant to the Partnership Agreement the Pledgor is the
beneficial and record owner of the number of certificated limited partnership
interests issued by Prime pursuant to the Partnership Agreement identified on
Schedule I hereto (the "OP UNITS", and the OP Units together with the REIT
Stock (as defined below) collectively, the "PLEDGED SHARES");
WHEREAS, pursuant to the Partnership Agreement the Pledgor has the
right, subject to certain conditions, to exchange each OP Unit for one common
share of the REIT or, at the option of the REIT, cash equal to the fair
market value of such common share of the REIT at the time of exchange;
WHEREAS, the Pledgor has entered into the Credit Agreement dated as of
the date hereof (as the same may from time to time be amended, extended,
supplemented, restated or otherwise modified or replaced, the "CREDIT
AGREEMENT"; terms used herein, and not otherwise defined herein, are used
with the meanings ascribed to them in the Credit Agreement) between the
Pledgor and the Lender pursuant to which the Lender has agreed to make a loan
to the Pledgor in an amount no greater than the Commitment; and
WHEREAS, as a condition precedent to the Lender's entering into the
Credit Agreement, the Lender has required the Pledgor to grant, assign and
pledge, and the Pledgor has agreed to grant, assign and pledge, to the Lender
a continuing first priority security interest in and to all its rights, title
and interests in the Pledged Collateral (as hereinafter defined) to secure
all of the obligations of the Pledgor to the Lender under the Credit
Agreement, the Note and the other Loan Documents.
NOW, THEREFORE, Pledgor, intending to be bound hereby, in consideration
of the premises hereof, in order to induce the Lender to provide the Loan
under and in accordance with the terms of the Credit Agreement and for other
good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby agrees with, and for the
benefit of, the Lender as follows:
SECTION 1. PLEDGE. Pledgor hereby pledges and assigns to the Lender and
grants to the Lender a continuing first and prior security interest in all of
its rights, title and interests in and to, whether now owned or existing or
hereafter acquired or arising:
(i) Prime, including without limitation, the OP Units;
(ii) all common shares issued by the REIT in exchange for the OP Units
("REIT STOCK");
(iii) all payments due or to become due to the Pledgor arising out of,
as a result of or in connection with the OP Units, whether as distributions
of cash or property or otherwise and all of Pledgor's rights arising out of,
as a result of or in connection with the Pledged Shares, whether now existing
or hereafter arising or acquired, to exercise all voting, consensual and
other powers of ownership pertaining to the Pledge Shares (including, without
limitation, to make determinations, to exercise any election (including,
without limitation, election of remedies) or option, to give or receive any
notice, consent, amendment, waiver or approval), together with full power and
authority to demand, receive, enforce, collect or give receipt for any of the
foregoing, to enforce or execute any checks or other instruments or orders,
to file any claims and to take any action which, in the opinion of the
Lender, may be necessary or advisable in connection with any of the foregoing;
(iv) (a) that certain Registration Rights Agreement dated as of November
17, 1997 (as the same may from time to time be amended, supplemented,
restated or modified, the "REGISTRATION RIGHTS AGREEMENT") among the REIT,
Prime, The Prime Group, Inc., Primestone Investment Partners L.P. and the
other investors named therein and (b) the Partnership Agreement, (the
Partnership Agreement together with the Registration Rights Agreement
collectively, the "ASSIGNED AGREEMENTS"), including, without limitation, (1)
all rights of the Pledgor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (2) all rights of the Pledgor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to
the Assigned Agreements, (3) claims of the Pledgor for damages arising out of
or for breach of or default under the Assigned Agreements, (4) the right of
the Pledgor to terminate the Assigned Agreements, to perform thereunder and
to compel performance and otherwise exercise all remedies thereunder and (5)
the right of the Pledgor to exchange OP Units into REIT Stock, including,
without limitation, all income, cash, dividends or other distributions
received therefrom; and
(v) all proceeds and any replacements of any of the foregoing;
all of the foregoing being herein referred to as the "PLEDGED COLLATERAL."
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures the
indefeasible payment of all liabilities, obligations and indebtedness of any
and every kind and nature heretofore, now or hereafter owing, arising, due or
payable from the Pledgor to the Lender pursuant to the Credit Agreement, the
Note and all other Loan Documents to which it is a party,
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however evidenced, created, incurred, acquired or owing, whether for
principal, interest, fees, indemnification, expenses or otherwise, whether
primary or secondary, direct or indirect, joint or several, contingent or
fixed, or otherwise, including the expenses of preparing for and selling any
and all of the Pledged Collateral and the reasonable attorneys' fees and
legal expenses incurred in connection therewith by the Lender and including,
without limitation, obligations of performance, now or hereafter given by
Pledgor to the Lender and whether or not evidenced by promissory notes or
other evidence of indebtedness (all such obligations and liabilities being
hereinafter collectively referred to as the "OBLIGATIONS"). The Pledgor and
the Lender hereby agree that they intend the security interest hereby granted
to attach upon the execution of this Agreement.
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. (a) Should any of the Pledged
Collateral at any time be represented or evidenced by a certificate or
instrument, such certificates or instruments shall be endorsed, delivered to
and held by or on behalf of the Lender pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Lender. Upon the day after the maturity of the
Loan (if the Obligations have not been paid in full) or upon the occurrence
of an Event of Default under the Credit Agreement and/or the other Loan
Documents (any such event being an "ACCELERATION DEFAULT"), the Lender shall
have the right, at any time in its discretion and without notice to the
Pledgor, to transfer to or to register in the name of the Lender or any of
its nominees any or all of the Pledged Collateral. In addition, the Lender
shall have the right at any time to exchange certificates or instruments
representing or evidencing the Pledged Collateral for certificates or
instruments of smaller or larger denominations.
(b) The books and records of Prime shall be marked to reflect the
transfer of the Pledged Collateral and/or the pledge and security interests
granted to the Lender under this Agreement, as applicable.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and
warrants to the Lender as follows:
(a) The OP Units have been, and the REIT Stock upon the exchange of the
OP Units for the appropriate number of REIT Stock, will be duly authorized
and validly issued, are fully paid and non-assessable and represent, on the
Closing Date, the percentage of the issued limited partnership interests of
Prime as is set forth on SCHEDULE I hereto; and, except as set forth in the
REIT's most current registration statement filed with the SEC and in Section
3.08 of the Credit Agreement, no warrants, subscription rights or options are
outstanding with respect to the Pledged Shares.
(b) Other than as set forth in Section 3.08 of the Credit Agreement, it
is the legal and beneficial owner of the OP Units as indicated on SCHEDULE I
hereto, free and clear of any Liens, adverse claims, security interests,
options or other charges or encumbrances, except for the security interests
created by this Agreement.
(c) The pledge of the Pledged Collateral pursuant to this Agreement,
together with the delivery to the Lender of the certificates evidencing the
OP Units and the filing of the
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appropriate financing statements, create a valid and perfected continuing
first priority Lien and security interest in the Pledged Collateral, securing
the indefeasible payment and performance of the Obligations.
(d) Other than as set forth in Section 3.08 of the Credit Agreement, no
authorization, consent, approval or other action by, and no notice to or
filing with, any Governmental Authority, regulatory body or other Persons is
required to be obtained or made by Pledgor either (i) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor, or (ii) for
the exercise by the Lender of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to
this Agreement, subject to applicable state and federal securities laws.
(e) Other than as set forth in Section 3.08 of the Credit Agreement,
there are no restrictions on the transfer of the Pledged Collateral, except
such, if any, as are imposed by operation of law. Other than as set forth in
Section 3.08 of the Credit Agreement, Pledgor has the right to transfer the
Pledged Collateral free of any Liens or encumbrances and without the consent
of the creditors of the Pledgor (other than the Lender), any persons or any
Governmental Authority whatsoever.
(f) Other than as set forth in Section 3.08 of the Credit Agreement,
neither the execution or delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, nor the compliance with or performance
of the terms and conditions of this Agreement by Pledgor is prevented by,
limited by, conflicts with or will result in the breach or violation of or a
default under the terms, conditions or provisions of (i) the by-laws or the
certificate of incorporation (or an equivalent organizational document) of
such Pledgor, Prime or the REIT or any agreement among the partners of Prime,
(ii) any mortgage, security agreement, indenture, evidence of indebtedness,
loan or financing agreement, trust agreement or other agreement or instrument
to which such Pledgor is a party or by which it is bound or to which any of
Pledgor's property or assets is subject, or (iii) any provision of law, any
order of any court or administrative agency or any rule or regulation
applicable to such Pledgor or any of its properties, subject to applicable
state and federal securities laws.
(g) Pledgor has full power, right and legal authority to execute,
deliver and perform its obligations under this Agreement and has taken all
partnership and other actions necessary to authorize the execution and
delivery of, and the performance of its obligations hereunder.
(h) This Agreement constitutes the legal, valid and binding obligation
of Pledgor, enforceable in accordance with its terms, subject to the effect
of any applicable bankruptcy, insolvency, reorganization or moratorium or
similar laws affecting the rights of creditors generally.
(i) Any assignee of all or any portion of the Pledged Collateral is
entitled to receive payments with respect thereto without any defense,
counterclaim, setoff, abatement, reduction, recoupment or other claim
arising out of the actions of Pledgor.
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(j) There are no actions, suits or proceedings (whether or not
purportedly on behalf of Pledgor) pending or, to the knowledge of Pledgor,
threatened affecting Pledgor that involve the Pledged Collateral, this
Agreement, the Credit Agreement, the Note or any of the other Loan Documents.
(k) Each Assigned Agreement, a true and complete copy of which has been
furnished to the Lender, has been duly authorized, executed and delivered by
Prime and the REIT and, to Pledgor's best knowledge, the other parties
thereto, has not been amended or otherwise modified, is in full force and
effect and is binding upon and enforceable against all parties thereto in
accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization or moratorium or similar laws
affecting the rights of creditors generally. There exists no default under
each Assigned Agreement by any party thereto. Each of the REIT, Prime, and
the Primestone Partners has executed and delivered to the Lender a consent to
the assignment of the Assigned Agreement pursuant to the Credit Agreement.
SECTION 5. FURTHER ASSURANCES. Pledgor hereby agrees that at any time
and from time to time, at its expense, Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action,
that may be reasonably necessary or desirable and whether or not requested by
Lender, or that the Lender may reasonably request, in order to perfect and
protect any Lien or security interest granted or purported to be granted
hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder, subject to applicable state and federal securities laws,
with respect to any Pledged Collateral. Pledgor agrees that at any time and
from time to time, upon the written request of the Lender and at the cost and
expense of the Pledgor, the Pledgor will promptly and duly execute and
deliver any and all instruments and documents and take such action as the
Lender deems necessary.
SECTION 6. VOTING RIGHTS; DISTRIBUTIONS, ETC. (a) So long as no
Acceleration Default shall have occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all voting and
other rights pertaining to the Pledged Collateral or any part thereof
for any purpose not inconsistent with the terms of this Agreement, the
Credit Agreement or any other Loan Document to which Pledgor is a party;
PROVIDED, HOWEVER, that (a) Pledgor shall not vote for or consent to, any
amendment, supplement, restatement or modification to the Partnership
Agreement without the prior written consent of the Lender and (b)
Pledgor shall not exercise any other voting right without giving the
Lender prior written notice whenever Pledgor shall exercise or refrain
from exercising any such voting or other consensual right if such action
would have a Material Adverse Effect on the value of the Pledged
Collateral or any part thereof.
(ii) Pledgor shall be entitled to receive and retain any and all
distributions, income, dividends and interest paid in respect of the
Pledged Collateral; PROVIDED, HOWEVER, that any and all:
(A) income, dividends 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;
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(B) income, 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 contributed capital or capital surplus; and
(C) all amounts paid, payable or otherwise distributed in
respect of redemption of, or in exchange for, any Pledged
Collateral,
shall be forthwith delivered to the Lender to hold as, Pledged
Collateral and shall, if received by Pledgor, be received in trust for
the benefit of the Lender, be segregated from the other property or
funds of Pledgor, and be forthwith delivered to the Lender as Pledged
Collateral in the same form as so received (with all necessary
endorsements).
(iii) The Lender shall execute and deliver (or cause to be executed
and delivered) to Pledgor all such proxies and other instruments as
Pledgor may reasonably request for the purpose of enabling Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to clause (i) above and to receive the distributions, income,
dividends, or interest payments which it is authorized to receive and
retain pursuant to clause (ii) above.
(b) Upon the occurrence and during the continuance of an Acceleration
Default:
(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) hereof and to receive the income, dividends
and interest payments which it would otherwise be authorized to receive
and retain pursuant to Section 6(a)(ii) hereof shall cease, and all such
rights shall thereupon become vested in the Lender who shall thereupon
have the sole right to exercise such voting and other consensual rights
and to receive and hold as Pledged Collateral such income, dividends and
interest payments.
(ii) All income, dividends and interest payments which are received
by Pledgor contrary to the provisions of clause (i) of this Section 6(b)
shall be received in trust for the benefit of the Lender, shall be
segregated from other funds of the Pledgor and shall be forthwith paid
over to the Lender as Pledged Collateral in the same form as so received
(with all necessary endorsements).
SECTION 7. TRANSFERS AND OTHER LIENS; ADDITIONAL INTERESTS. (a) Pledgor
hereby agrees that it will not (i) sell or otherwise transfer or dispose of,
or grant any interest in or option with respect to, any of the Pledged
Collateral, or (ii) create or permit to exist any Lien, security interest, or
other charge or encumbrance upon or with respect to any of the Pledged
Collateral, except for the security interests under this Agreement or as
permitted by Section 3.08 of the Credit Agreement.
(b) The Pledgor shall at its expense:
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(i) perform and observe all the terms and provisions of the
Assigned Agreements to be performed or observed by it, maintain the
Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their respective terms; and
(ii) furnish to the Lender promptly upon receipt thereof copies of
all notices, requests and other documents received by the Pledgor under
or pursuant to the Assigned Agreements, and from time to time (A)
furnish to the Lender such information and reports regarding the
Assigned Agreements as the Lender may reasonably request and (B) upon
request of the Lender make to any other party to the Assigned Agreements
such demands and requests for information and reports or as the Pledgor
is entitled to make thereunder.
(c) The Pledgor shall not:
(i) cancel or terminate the Assigned Agreements or consent to or
accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give any
consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned Agreements; or
(iv) take any other action in connection with the Assigned
Agreements which would impair the value of the interest or rights of the
Pledgor thereunder or which would impair the interest or rights of the
Lender.
SECTION 8. LITIGATION RESPECTING THE PLEDGED COLLATERAL. In the event
any action, suit or other proceeding at law, in equity, in arbitration or
before any court, administrative agency or other authority involving or
affecting the Pledged Collateral becomes known to or is contemplated by the
Pledgor, Pledgor shall give the Lender immediate notice thereof.
SECTION 9. LENDER APPOINTED ATTORNEY-IN-FACT. (a) Pledgor hereby appoints
the Lender (and any officer or agent of the Lender with full power of
substitution and revocation) Pledgor's true and lawful attorney-in-fact,
coupled with an interest, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in the
Lender's discretion to (i) if an Acceleration Default occurs and is
continuing, take any action and to execute any instrument which the Lender
may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, (A) to receive, endorse and collect all
instruments made payable to Pledgor representing any income, dividend or
other distribution in respect of the Pledged Collateral or any part or
proceeds thereof and to give full discharge for the same; (B) to transfer the
Pledged Collateral, in whole or in part, to the name of the Lender or such
other Person or Persons as the Lender may designate, or to cause the Pledged
Shares to be transferred on the books of Prime to the name of the Lender, (C)
take possession of and endorse any one or more checks, drafts, bills of
exchange, money orders or any other documents received on account of the
Pledged Collateral; (D) collect, xxx for and give acquittances for moneys due
on account of the foregoing; withdraw any claims, suits, or proceedings
pertaining to or arising
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out of the foregoing; (E) take any other action contemplated by this
Agreement; and (F) sign, execute, acknowledge, swear to, verify, deliver,
file, record and publish any one or more of the foregoing, and (ii) at any
time execute and record or file on behalf of Pledgor any evidence of a
security interest contemplated by this Agreement and any refilings,
continuations or extensions thereof.
(b) The powers of attorney which shall be granted pursuant to Section
9(a) hereof and all authority thereby conferred shall be granted and
conferred solely to protect the Lender's interests in the Pledged Collateral
and shall not impose any duty upon the attorney-in-fact to exercise such
powers. Such powers of attorney shall be irrevocable prior to the
indefeasible payment and performance in full of the Obligations and shall not
be terminated prior thereto or affected by any act of the Pledgor or by
operation of law, including, but not limited to, dissolution, liquidation,
wind-up, death, disability or incompetency of any Person, the termination of
any trust, or the occurrence of any other event, and if the Pledgor should
become bankrupt, insolvent, or come under the direct regulation of similar
laws which affect the rights of creditors generally or any other event should
occur before the indefeasible payment and performance in full of the
Obligations and termination of the Credit Agreement, the Note and the other
Loan Documents, such attorney-in-fact shall nevertheless be fully authorized
to act under such powers of attorney as if such event had not occurred and
regardless of notice thereof.
SECTION 10. LEADER MAY PERFORM. If Pledgor fails to perform any
agreement contained herein, the Lender may itself perform, or cause
performance of, such agreement, and the expenses of the Lender incurred in
connection therewith shall be payable by the Pledgor under Section 13 hereof.
SECTION 11. REASONABLE CARE. The Lender 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 Lender accords its own property, it being understood
that the Lender 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 Lender 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.
SECTION 12. REMEDIES UPON ACCELERATION DEFAULT.
(a) If any Acceleration Default shall have occurred and be continuing:
(i) The Lender may notify the obligors or other parties, if any,
interested in any items of Pledged Collateral of the interests of the
Lender therein and of any action proposed to be taken with respect
thereto, and inform any of those parties that all payments otherwise
payable to the Pledgor with respect thereto shall be made to the Lender
until the Loan has been indefeasibly paid in full;
(ii) The Lender may exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party under the Uniform Commercial Code in effect
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in the State of New York at that time (the "CODE"), and the Lender may
also, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the Lender's
offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Lender may deem commercially reasonable.
Pledgor hereby agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days' notice to Pledgor of the time
and place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The Lender shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Lender may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned;
(iii) Any cash held by the Lender as Pledged Collateral and all
cash proceeds received by the Lender in respect of any sale of,
collection from, or other realization upon all or any part of the
Pledged Collateral may, in the discretion of the Lender, be held by the
Lender as collateral for, and thereafter applied (after payment of any
amounts payable to the Lender pursuant to Section 13 hereof) in whole or
in part by the Lender against, all or any part of the Obligations in
such order as the Lender shall elect. Any surplus of such cash or cash
proceeds held by the Lender and remaining after the indefeasible payment
in full of all the Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus; and
(iv) The Lender may otherwise use or deal from time to time with
the Pledged Collateral, in whole or in part, in all respects as if the
Lender were the outright owner thereof.
(b) Except as set forth in Section 12(a)(iii) hereof, the Lender shall
have the sole right to determine the order in which Obligations shall be
deemed discharged by the application of the Pledged Collateral or any other
property or money held hereunder or any amount realized thereon. Any
requirement of reasonable notice imposed by law shall be deemed met if such
notice is in writing and is mailed, teletransmitted or hand delivered to the
Pledgor at least five (5) days prior to the sale, disposition or other event
giving rise to such notice requirement.
(c) The Lender shall collect the cash proceeds received from any sale or
other disposition or from any other source contemplated by and in accordance
with subsection (a) above and shall apply the full proceeds in accordance
with the provisions of this Agreement.
(d) Notwithstanding the foregoing, none of the provisions of this
Section 12 shall confer on the Lender any rights or privileges that are not
permissible under applicable law.
(e) In connection with the provisions of this Agreement, Pledgor from
time to time shall promptly execute and deliver, or cause to be executed and
delivered, to the Lender such documents and instruments, and shall join in
such notices and shall take, or cause to be taken, such other lawful actions
as the Lender shall deem necessary or desirable to enable it to exercise any
of the rights with respect to the Pledged Collateral granted to it pursuant
to this Agreement.
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SECTION 13. EXPENSES. The Pledgor will, upon demand, pay to the Lender
the amount of all reasonable out-of-pocket expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the
Lender may incur in connection with (i) the perfection, custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Pledged Collateral, (ii) the exercise or enforcement of any of the
rights of the Lender hereunder, (iii) the failure by the Pledgor to perform
or observe any of the provisions hereof, or (iv) any actual or attempted
sale, assignment of rights or interests, or exchange of, or any enforcement,
collection, compromise or settlement respecting the Pledged Collateral or
any other property or money held hereunder, or (v) any other action taken by
the Lender hereunder whether directly or as attorney-in-fact pursuant to the
power of attorney herein conferred, and all such expenses shall be deemed a
part of the Obligations for all purposes of this Agreement and the Lender may
apply the Pledged Collateral or any other property or money held hereunder to
payment of or reimbursement of itself for such expenses. The Pledgor shall
pay all such expenses on demand, together with interest thereon from the date
the expense is paid or incurred by the Lender at an interest rate equal to
that under the Note (computed on the basis of the actual number of days
elapsed over a 360-day year).
SECTION 14. WAIVERS AND AMENDMENTS, ETC. The rights and remedies given
hereby are in addition to all others however arising, but it is not intended
that any right or remedy be exercised in any jurisdiction in which such
exercise would be prohibited by law. No action, failure to act or knowledge
of the Lender shall be deemed to constitute a waiver of any power, right or
remedy hereunder, nor shall any single or partial exercise thereof preclude
any further exercise thereof or the exercise of any other power, right or
remedy. Any waiver or consent respecting any covenant, representation,
warranty or other term or provision of this Agreement shall be effective only
in the specified instance and for the specific purpose for which given and
shall not be deemed, regardless of frequency given, to be a further or
continuing waiver or consent. The failure or delay of the Lender at any time
or times to require performance of, or to exercise its rights with respect
to, any representation, warranty, covenant or other term or provision of this
Agreement in no manner shall affect its rights at a later time to enforce any
such provision. No notice to or demand on a party in any case shall entitle
such party to any other or further notice or demand in the same, similar or
other circumstances. Any right or power of the Lender hereunder respecting
the Pledged Collateral and any other property or money held hereunder may at
the option of the Lender be exercised as to all or any part of the same and
the term the "Pledged Collateral" wherever used herein, unless the context
clearly requires otherwise, shall be deemed to mean (and shall be read as)
the "Pledged Collateral and any other property or money held hereunder or any
part thereof." This Agreement shall not be amended nor shall any right
hereunder be deemed waived except by a written agreement expressly setting
forth the amendment or waiver and signed by the party against whom or which
such amendment or waiver is sought to be charged.
SECTION 15. NOTICES. Each notice to, and each demand upon, the Pledgor
by the Lender relating to this Agreement and each notice to, and each demand
upon, the Lender by the Pledgor relating to this Agreement, shall
specifically refer to this Agreement, and shall be in writing and shall be
conclusively deemed to have been received and shall be effective except as
explicitly noted hereinabove (i) on the day on which delivered if delivered
personally, or transmitted by telecopier (followed by a mailed written
confirmation), (ii) on the next Business Day if delivered by a nationally
recognized overnight courier (such as Federal Express), or (iii)
10
five (5) Business Days after the date on which the same is mailed by
certified United States mail postage prepaid, return receipt requested and
shall be addressed:
(a) in the case of the Pledgor, to:
Primestone Investment Partners L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
With a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
With a copy to:
BRE/Primestone Investment Management L.L.C.
c/o Blackstone Real Estate Advisors
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) in the case of the Lender, to:
Prudential Securities Credit Corporation
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With copies to:
Prudential Securities Incorporated
One Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
11
Attention: Xx. Xxxxx Xxxxxxx-Xxxxxxxx
Telecopier No.: (000) 000-0000
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
or at such other address as the party giving such notice shall have been
advised of in writing for such purpose by the party to which the same is
directed.
SECTION 16. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing perfected and first priority Lien and security interest in the
Pledged Collateral and shall (i) remain in full force and effect until the
indefeasible payment in full or performance of the Loan, (ii) be binding upon
Pledgor, its successors and assigns and (iii) inure to the benefit of the
Lender and its successors, transferees and assigns. Upon the indefeasible
payment in full or performance of the Loan, Pledgor shall be entitled to the
return at its out-of-pocket expense, if any, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms of this Agreement and/or applicable law.
SECTION 17. SEVERABILITY. In the event that any provision of this
Agreement shall be determined to be superseded, invalid or otherwise
unenforceable pursuant to applicable law, such determination shall not affect
the validity of the remaining provisions of this Agreement, and the remaining
provisions of this Agreement shall be enforced as if the invalid provision
were deleted.
SECTION 18. SURVIVAL OF REPRESENTATIONS, ETC. All representations,
warranties, covenants and other agreements made herein shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect until all amounts due under the Credit Agreement, the Note and the
other Loan Documents have been indefeasibly paid in full. This Agreement
shall remain and continue in full force and effect without regard to any
modification, execution, renewal, amendment or waiver of any provision of any
of the Credit Agreement, the Note or any other Loan Document.
SECTION 19. TERMINATION AND MISCELLANEOUS PROVISIONS. This Agreement
shall continue in full force and effect until all of the Obligations shall
have been indefeasibly paid and satisfied. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors, and assigns. Section headings used herein are for
convenience only and shall not affect the meaning or construction of any of
the provisions
12
hereof. This Agreement may be executed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 20. ENTIRE AGREEMENT. This Agreement, the Credit Agreement and
the other Loan Documents contain the entire agreement of the parties and
supersedes all other agreements, understandings and representations, oral or
otherwise, between the parties with respect to the matters contained herein.
SECTION 21. GOVERNING LAW; TERMS. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without giving effect to its conflict of laws provisions. Unless otherwise
defined herein or in the Credit Agreement, terms defined in Article 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 22. DISCLOSURE; LIMITATION OF LIABILITY. No claim may be made by
Pledgor or any other Person against the Lender or its affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential, punitive or treble damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Loan Documents, or
any act, omission or event occurring in connection herewith or therewith; and
Pledgor hereby waives, releases and agrees not to xxx upon any claim for any
and all special, indirect, consequential, punitive or treble damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
13
IN WITNESS WHEREOF, the Pledgor and the Lender have each caused this Pledge
and Security Agreement to be duly executed and delivered as of the date first
above written.
PRIMESTONE INVESTMENT PARTNERS L.P.
By: PG/Primestone, L.L.C.,
its general partner
By:
-------------------------------------
Name:
Title:
By: BRE/Primestone Investment
Management, L.L.C.,
its general partner
By:
-------------------------------------
Name:
Title:
PRUDENTIAL SECURITIES CREDIT CORPORATION
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx, III
Title: Vice President
14
IN WITNESS WHEREOF, the Pledgor and the Lender have each caused this
Pledge and Security Agreement to be duly executed and delivered as of the
date first above written.
PRIMESTONE INVESTMENT PARTNERS, L.P.
By: PG/PRIMESTONE, L.L.C.
its general partner
By: THE PRIME GROUP, INC.
its Administrative Member
By: /s/ Xxx Xxxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxxx
Title: Vice President
By: BRE/PRIMESTONE INVESTMENT
MANAGEMENT L.L.C. its general
partner
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: VP and Assistant Secretary
15
SCHEDULE I
No. of Pledged Percentage
Certificate Shares or of Total
Pledgor Issuer Class of Interest No. Interest Outstanding
------- ------ ----------------- --- -------- -----------
Primestone Investment Prime Group Realty, Limited Partnership 19 7,944,893 35.5%
Partners L.P. L.P. Interest
16
