Exhibit XX
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") dated as of September 29, 1999
made by Prime Financing Limited Partnership, an Illinois limited partnership
(the "Pledgor"), and Prudential Securities Incorporated, a Delaware corporation
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Pledgor has entered into a Third 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 Retail, L.P., a Delaware limited partnership
("Prime"), dated as of the date hereof among Prime Retail, Inc., a Maryland
corporation (the "REIT"), as the general partner 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 "LP Units", and the LP 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 LP 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, the 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. The 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 LP Units;
(ii) all common shares issued by the REIT in exchange for the LP 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 LP Units, whether as distributions of cash
or property or otherwise and all of the 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 Pledged 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 June 15,
1998 (as the same may from time to time be amended, supplemented, restated or
modified, the "Registration Rights Agreement") by the REIT and Prime for the
benefit of the Persons 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) all rights 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 LP Units into REIT Stock; and
(v) all proceeds and any replacements of any of the foregoing;
all of the foregoing being herein referred to as the "Pledged Collateral."
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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, 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 the 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 (i) 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 and (ii) 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 Pledgor shall notify Prime and request that the books and records
of Prime 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. The Pledgor hereby represents
and warrants to the Lender as follows:
(a) The LP Units have been, and the REIT Stock upon the exchange of the LP
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.
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(b) It is the legal and beneficial owner of the LP Units as indicated on
Schedule I hereto, free and clear of any Liens, adverse claims, security
interests, options or other charges or encumbrances (other than as set forth
under the PFLP Negative Pledge, provided, that the PFLP Negative Pledge in no
way shall restrict the rights and remedies of the Lender granted hereunder or
under the Pledge Agreement with respect to such Collateral), except for the
security interests created by this Agreement.
(c) The pledge of the Pledged Collateral pursuant to this Agreement
creates a valid security interest in the Pledged Collateral to secure the
indefeasible payment and performance of the Obligations. Upon the filing of the
appropriate financing statement in the Secretary of State of the State of
Illinois such security interest will be perfected. No security interest of any
other creditor of the Borrower will be equal or prior to the security interest
granted to the Lender hereunder.
(d) Other than as set forth in the Partnership 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 the Pledgor 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 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) There are no restrictions on the transfer of the Pledged Collateral,
except such, if any, as are imposed by operation of law or set forth in the
Partnership Agreement (or as set forth under the PFLP Negative Pledge, provided,
that the PFLP Negative Pledge in no way shall restrict the rights and remedies
of the Lender granted hereunder or under the Pledge Agreement with respect to
such Collateral). Other than as set forth in the Partnership Agreement, the
Pledgor has the right to transfer the Pledged Collateral to the Lender 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) 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 the 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 the 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 the Pledgor is a party or by which it is bound or to which
any of the 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 the Pledgor or any of its properties, subject to applicable state
and federal securities laws.
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(g) The 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
the 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 in
accordance with this Agreement, the Credit Agreement and the transactions
contemplated hereunder and thereunder, 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 the Pledgor.
(j) There are no actions, suits or proceedings (whether or not purportedly
on behalf of the Pledgor) pending or, to the knowledge of the Pledgor,
threatened affecting the 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 Financing Partners, Prime, and the REIT and, to the 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 Prime Financing 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. The Pledgor hereby agrees that at any time
and from time to time, at its expense, the 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. The 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 reasonably deems necessary.
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SECTION 6. Voting Rights; Distributions, Etc. (a) So long as no
Acceleration Default shall have occurred and be continuing:
(i) The 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 the Pledgor is a party;
provided, however, that (a) the 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) the
Pledgor shall not exercise any other voting right without giving the
Lender prior written notice whenever the 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) The 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;
(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 the Pledgor, be received in trust for the
benefit of the Lender, be segregated from the other property or funds of
the 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 the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the 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:
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(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 the 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) The
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 (other than as set forth under the PFLP Negative
Pledge, provided, that the PFLP Negative Pledge in no way shall restrict the
rights and remedies of the Lender granted hereunder or under the Pledge
Agreement with respect to such Collateral) upon or with respect to any of the
Pledged Collateral, except for the security interests under this Agreement.
(b) The Pledgor shall at its expense:
(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, without the prior written consent of the
Lender:
(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;
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(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, the
Pledgor shall give the Lender immediate notice thereof.
SECTION 9. Lender Appointed Attorney-in-Fact. (a) The Pledgor hereby
appoints the Lender (and any officer or agent of the Lender with full power of
substitution and revocation) the Pledgor's true and lawful attorney-in-fact,
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 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 the 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 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
the 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
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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. Lender May Perform. If the 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 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. The Pledgor hereby agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days' notice to
the 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;
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(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, the 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.
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
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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
in accordance with the terms and conditions 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) 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:
Prime Financing Limited Partnership
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c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) in the case of the Lender, to:
Prudential Securities Incorporated
Credit Analysis
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With copies to:
Prudential Securities Incorporated
Law Department
One Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
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000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, 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
the 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, the 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 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.
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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. Disclosure. No claim may
be made by the 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 the
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.
[signature page follows]
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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.
PRIME FINANCING LIMITED PARTNERSHIP
By: PRIME FINANCE, INC.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
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SCHEDULE I
No. of Pledged Percentage
Certificate Shares or of Total
Pledgor Issuer Class of Interest No. Interest Outstanding
------- ------ ----------------- --- -------- -----------
Prime Financing Limited Prime Retail, L.P. Limited Partnership 6 5,557,000 10.256%
Partnership Interest
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