EXHIBIT C
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "AGREEMENT") dated as
of September 26, 2000 made by Primestone Investment Partners L.P., a Delaware
limited partnership (the "PLEDGOR"), and P-B Finance Ltd., a Cayman Islands
company (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 November 17, 1997 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
November 17, 1997 (as the same may from time to time be amended, extended,
supplemented, restated or otherwise modified or replaced, the "EXISTING CREDIT
AGREEMENT") between the Pledgor and Prudential Securities Credit Corporation
("PSCC") pursuant to which PSCC agreed to make a loan to the Pledgor;
WHEREAS, the Pledgor has entered into the Pledge and Security Agreement,
dated as of November 17, 1997 (the "EXISTING PLEDGE AND SECURITY AGREEMENT"),
with PSCC, whereby the Pledgor granted to PSCC a continuing first priority
security interest in and to all its rights, title and interests in the Pledged
Collateral (as hereinafter defined);
WHEREAS, on December 30, 1997 PSCC assigned all of its rights, obligations
and interest in and under the Existing Credit Agreement to the Lender and the
Lender assumed all of PSCC's rights, obligations and interest thereunder;
WHEREAS, the Pledgor and the Lender have entered into that Amended and
Restated Credit Agreement, dated 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);
WHEREAS, as a condition precedent to the Lender's entering into the Credit
Agreement, the Lender has required the Pledgor to enter into the Securities
Account Control Agreement, dated as of the date hereof (the "SECURITIES ACCOUNT
CONTROL AGREEMENT"), among the Debtor, the Lender and Prudential Securities
Incorporated, as Securities Intermediary, which creates an account maintained
with Prudential Securities Incorporated, in the name of Primestone Investment
Partners L.P., bearing account number 084 953016 (together with any and all
subaccounts with respect thereto and any successor accounts thereto, the
"SECURITIES ACCOUNT"); and
WHEREAS, as a condition precedent to the Lender's entering into the Credit
Agreement, the Lender has required the Pledgor to amend and restate the Existing
Pledge and Security Agreement on the terms and conditions set forth herein; and
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 or REIT Stock, 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;
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(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;
(v) the Securities Account; and
(vi) 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, 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,
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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 and the Vornado Loan 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 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 and the Intercreditor 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.
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(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 the Securities Account
Control Agreement and has taken all partnership and other actions necessary to
authorize the execution and delivery of, and the performance of its obligations
hereunder and thereunder.
(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.
(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
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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 as set forth in the terms of the Securities Account
Control Agreement; 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 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,
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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. Subject to the
provisions of the Intercreditor Agreement, dated as of the date hereof (the
"INTERCREDITOR AGREEMENT"), between Lender and Vornado: (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, except
to Vornado PS, L.L.C. ("VORNADO") as permitted under the Intercreditor
Agreement, 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 interest of Vornado as permitted under the
Intercreditor Agreement, and 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:
(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:
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(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) Subject to Vornado's
rights under the Intercreditor Agreement, 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 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
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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. LENDER 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,
subject to the terms of the Intercreditor Agreement:
(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. 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;
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(iii) Subject to the terms of the Intercreditor Agreement, 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
Vornado, as permitted under the Intercreditor Agreement, 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.
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
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:
Primestone Investment Partners L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
00
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to:
Primestone Investment Partners L.P.
c/o The Prime Group, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
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
Telephone No.: (000) 000-0000
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:
P-B Finance Ltd.
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
12
With copies to:
Prudential Securities Incorporated
One Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxxx Xxxxxx
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,
13
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.
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.
SECTION 23. CONSTRUCTION. The parties hereto acknowledge that each party
and its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.
SECTION 24. NO PREFERENCE IN INTERPRETATION. The parties hereto acknowledge
and assert that there has existed parity of bargaining power among the parties
in the negotiation of this Agreement. The parties hereto agree that none of the
provisions in this Agreement should be interpreted in such a way as to give
preferential treatment to a party solely because such party was not primarily
responsible for the drafting of this Agreement.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]
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: ____________________________________
Name:
Title:
P-B FINANCE LTD.
By: ____________________________________
Name:
Title:
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
