EXHIBIT X
PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (this "AGREEMENT"), dated as of December 18,
1998, is by and between PRIME GROUP VI, L.P., an Illinois limited partnership
(the "PLEDGOR"), and LaSalle National Bank (the "PLEDGEE").
W I T N E S S E T H
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WHEREAS, the Pledgor and the Pledgee are parties to that certain Loan
Agreement, dated as of December 18, 1998, as it may be amended from time to time
(the "LOAN AGREEMENT"), pursuant to which the Pledgee has agreed to extend loans
and certain other financial accommodations to the Pledgor;
WHEREAS, the Pledgor presently owns 115,000 shares of class A common
stock, $0.01 par value per share ("AIMCO STOCK"), of Apartment Investment and
Management Company, a Maryland corporation that qualifies as a real estate
investment trust ("AIMCO"), 3,576,933 shares of common stock, $0.01 par value
per share ("BROOKDALE STOCK"), of Brookdale Living Communities, Inc., a Delaware
corporation ("BROOKDALE"), 104,632 Common Units of partnership interest ("PRIME
RETAIL PARTNERSHIP UNITS") in Prime Retail, L.P., a Delaware limited partnership
("PRIME RETAIL OPERATING PARTNERSHIP") and 47,525 Common Units of partnership
interest ("PRIME GROUP REALTY PARTNERSHIP UNITS") in Prime Group Realty, L.P., a
Delaware limited partnership ("PRIME GROUP REALTY OPERATING PARTNERSHIP").
Collectively, the AIMCO Stock, the Brookdale Stock, the Prime Retail Partnership
Units and the Prime Group Realty Partnership Units are referred to herein as the
"PRIME SECURITIES";
WHEREAS, pursuant to the Third Amended and Restated Agreement of
Limited Partnership of the Prime Retail Operating Partnership dated as of
October 15, 1998 (as amended, modified or restated from time to time, the "PRIME
RETAIL PARTNERSHIP AGREEMENT"), the Prime Retail Partnership Units may be
exchanged one share of Prime Retail Partnership Units for one share of common
stock, par value $0.01 per share ("PRIME RETAIL STOCK"), of Prime Retail, Inc.,
a Maryland corporation that has qualified for treatment as a real estate
investment trust ("PRIME RETAIL, INC.");
WHEREAS, pursuant to the Amended and Restated Agreement of Limited
Partnership of the Prime Group Realty Operating Partnership dated as of November
17, 1998 (as amended, modified or restated from time to time, the "PRIME GROUP
REALTY PARTNERSHIP AGREEMENT"), the Prime Group Realty Partnership Units may be
exchanged one unit of Prime Group Realty Partnership Units for one share of
common stock, par value $0.01 per share ("PRIME GROUP REALTY STOCK"), of Prime
Group Realty Trust, a Maryland corporation that has qualified for treatment as a
real estate investment trust ("PGRT");
WHEREAS, the Pledgor has agreed to grant the Pledgee a security
interest in the AIMCO Stock and the Brookdale Stock (collectively, the "PLEDGED
SHARES"), and the Prime Retail Partnership Units and the Prime Group Realty
Partnership Units (collectively, the "PLEDGED UNITS"), more fully described on
Schedule I.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the Pledgor hereby
agrees as follows:
1. PLEDGE. The Pledgor hereby pledges to the Pledgee, and grants to the
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Pledgee a security interest in, the following (the "PLEDGED COLLATERAL"):
(a) the Pledged Shares now owned by the Pledgor and the certificates,
if any, representing such Pledged Shares, and all dividends, cash,
securities, instruments, rights and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Pledged Shares;
(b) the Pledged Units now owned by the Pledgor and the certificates,
if any, representing such Pledged Units, the Pledgor's interest in the
capital, income, profits and distributions of the Prime Retail Operating
Partnership and the Prime Group Realty Operating Partnership attributable
to such Pledged Units, and all other cash, securities, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Units;
(c) all additional shares of Prime Securities and other securities
acquired by the Pledgor in any manner with respect to the Pledged Shares
and the Pledged Units (including, but not limited to, Prime Retail Stock
for which Prime Retail Partnership Units are exchanged, and Prime Group
Realty Shares for which Prime Group Realty Partnership Units are
exchanged), and the certificates, if any, representing such additional
securities (any such additional securities shall constitute part of the
Pledged Shares or the Pledged Units, as the case may be, under and as
defined in this Agreement), and all dividends, cash, instruments,
subscription warrants, securities and any other rights and options and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such securities;
and
(d) all other property hereafter delivered to the Pledgee in
substitution for, as proceeds of, or in addition to any of the foregoing
and all certificates, instruments and documents representing or evidencing
such property, and all cash, securities, interest, dividends, rights and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for or upon conversion
of any or all thereof.
2. SECURITY FOR OBLIGATIONS. The Pledged Collateral secures the payment
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of all of the Pledgor's "Borrower's Obligations", as such term is defined in the
Loan Agreement, to the Pledgee,
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whether for principal, interest, fees, expenses or otherwise, and all
obligations of the Pledgor now or hereafter existing under this Agreement (such
Borrower's Obligations under the Loan Agreement and all such obligations of the
Pledgor now or hereafter existing under this Agreement being referred to herein
as the "OBLIGATIONS").
3. DELIVERY OF PLEDGED COLLATERAL.
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(a) All certificates, instruments or documents, if any, representing
or evidencing the Pledged Collateral shall be delivered to and held by or
on behalf of the Pledgee pursuant hereto and shall be in suitable form for
transfer by delivery, shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
the Pledgee. In the event any or all of the Pledged Collateral are
evidenced by a book entry, Pledgor shall execute and deliver to Pledgee
such documents as are required by Pledgee to create and perfect a security
interest in such uncertificated Pledged Collateral. In addition, the
Pledgee shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Collateral for certificates
or instruments of smaller or larger denominations.
(b) Pledgor shall, and shall cause other appropriate parties under
Section 8-313 and 8-321 of the Uniform Commercial Code as in effect on the
date hereof in the State of Illinois (the "CODE") to, ▇▇▇▇ it or their
books and records with the numbers and face amounts of all uncertificated
securities evidencing the Pledged Shares and/or the Pledged Units, as
applicable, and all rollovers and replacements therefor to reflect the
security interests granted pursuant to Section 2 hereof. Pledgor shall
provide Pledgee and shall cause other persons to provide Pledgee with
written confirmation of the security interest in such uncertificated
securities. Pledgor shall take, and shall cause all other necessary
persons to take, all action necessary or appropriate to create, perfect and
maintain a first perfected priority lien in such uncertificated securities
in favor of Pledgee. In the event that subsequent to the date hereof, the
Pledged Shares and/or Pledged Units, as applicable, are evidenced by
certificates, Pledgor will promptly deliver such certificates to Pledgee,
together with an assignment duly endorsed in blank for transfer.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
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as follows:
(a) The Brookdale Stock and the Pledged Units have been duly
authorized and validly issued and are fully paid and nonassessable. The
Prime Retail Stock to be issued upon the conversion of the Prime Retail
Partnership Units, and the Prime Group Realty Stock to be issued upon the
conversion of the Prime Group Realty Partnership Units, has been duly
authorized and will be, upon conversion, fully paid and nonassessable.
(b) The Pledgor is, or at the time of any future delivery, pledge,
assignment or transfer will be, the legal and beneficial owner of the
Pledged Collateral, free and clear of any lien, security interest, pledge,
warrant, option, purchase agreement, shareholders' agreement,
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restriction, redemption agreement or other charge, encumbrance or
restriction of any nature on the Pledged Collateral (except for the lien
created by this Agreement, the restrictions imposed by the agreements
listed on Schedule II hereto, completed copies of which have been delivered
to Pledgor, and the liens permitted by the Loan Agreement), with full right
to deliver, pledge, assign and transfer the Pledged Collateral to the
Pledgee as Pledged Collateral hereunder.
(c) The Brookdale Stock was acquired and fully paid for by an
affiliate of the Pledgor on December 18, 1998 in a transaction exempt from
the registration provisions of the Securities Act of 1933, as amended (the
"SECURITIES ACT").
(d) The AIMCO Stock was acquired and fully paid for by an affiliate of
the Pledgor on December 18, 1998 in a transaction exempt from the
registration provisions of the Securities Act.
(e) Subject to compliance with the agreements listed on Schedule II
hereto, the Pledged Units can be exchanged at any time at the rate of one
unit of Prime Retail Partnership Unit for one share of Prime Retail Stock,
and one unit of Prime Group Realty Partnership Unit for one share of Prime
Group Realty Stock.
(f) Upon (i) filing of the UCC financing statements, forms of which
are attached hereto as Exhibit A, with the Secretary of State of Illinois
and the Secretary of State of Maryland, (ii) execution and delivery of the
Acknowledgment and Consent, dated as of even date herewith, among Pledgor,
Prime Retail Operating Partnership, Prime Retail, Inc. and Pledgee, (iii)
execution and delivery of the Acknowledgment and Consent, dated as of even
date herewith, among Pledgor, Prime Group Realty Operating Partnership,
PGRT, Prudential Securities Incorporated and Pledgee, and (iv) possession
by Pledgee of the certificates representing the Pledged Collateral, the
pledge of the Pledged Collateral pursuant to this Agreement will create a
valid, perfected and first security interest in the Pledged Collateral,
securing the payment of the Obligations. All other filings, registrations,
recordings and other actions necessary or desirable to create, perfect and
protect such security interest have been duly taken, and such security
interests are entitled to all of the rights, priorities and benefits
afforded by the Code or other relevant law as enacted in any relevant
jurisdiction which relates to perfected security interests.
(g) Except as otherwise set forth in paragraph (g) above, no
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required either (i)
for the pledge by the Pledgor of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement
by the Pledgor, or (ii) for the exercise by the Pledgee of the voting or
other rights provided for in this Agreement or the remedies in respect of
the Pledged Collateral pursuant to this Agreement (except as may be
required in connection with a disposition of such Pledged Collateral by
laws affecting the offering and sale of securities generally).
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(h) The Pledgor has full power and authority to enter into this
Agreement and has the right to pledge and grant a security interest in the
Pledged Collateral as provided by this Agreement.
5. FURTHER ASSISTANCE. The Pledgor agrees that at any time and from time
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to time, at the expense of the Pledgor, the Pledgor will promptly execute and
deliver, or cause to be executed and delivered, all certificates, stock powers,
proxies, assignments, instruments and documents; and will take all further
action that may be reasonably necessary or desirable, or that the Pledgee may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Pledgee to exercise
and enforce its rights and remedies hereunder with respect to any Pledged
Collateral and to carry out the provisions and purposes hereof.
6. VOTING RIGHTS; DIVIDENDS; ETC.
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(a) Except as set forth below, so long as no Event of Default (as
hereinafter defined):
(i) The Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or
any part thereof for any purpose not inconsistent with the terms of
this Agreement or the Loan Agreement; provided, however, that the
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Pledgor shall not exercise nor shall it refrain from exercising any
such right if such action or inaction could have a material adverse
effect on the value of the Pledged Collateral or upon the rights of
the Pledgee to effectively realize upon the security afforded by such
Pledged Collateral.
(ii) The Pledgor shall be entitled to receive and retain any and
all dividends and interest paid in respect of the Pledged Shares and
all distributions paid in respect of the Pledged Units, provided
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however, that any and all
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(1) dividends, interest and distributions paid or payable other
than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral,
(2) dividends and other distributions paid or payable in cash in
respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in-
surplus resulting from a sale or refinancing of any
property, and
(3) cash paid, payable or otherwise distributed in redemption
of, or in exchange for, any Pledged Collateral,
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shall be Pledged Collateral, shall be forthwith delivered
to the Pledgee to hold as Pledged Collateral and shall, if
received by the Pledgor, be received in trust for the
benefit of the Pledgee, be segregated from the other
property or funds of the Pledgor, and be forthwith
delivered to the Pledgee as Pledged Collateral in the same
form as so received (with any necessary endorsement).
(b) Except as set forth below, upon the occurrence (and during the
continuance) of an Event of Default (as hereinafter defined):
(i) All rights of the Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Section 6(a)(i) (but only after an Event of Default) and
to receive the dividends and interest payments and distributions which
it would otherwise be authorized to receive and retain pursuant to
Section 6(a)(ii) shall cease, and all such rights shall thereupon
become vested in the Pledgee which shall thereupon have the sole right
to exercise such voting and other consensual rights and to receive and
hold as Pledged Collateral such dividends and interest payments and
distributions;
(ii) All dividends and interest payments and distributions which
are received by the Pledgor contrary to the provisions of paragraph (i)
of this Section 6(b) shall be received in trust for the benefit of the
Pledgee, shall be segregated from other funds of the Pledgor and shall
be forthwith paid over to the Pledgee as Pledged Collateral in the same
form as so received (with any necessary endorsements); and
(iii) The Pledgor shall execute and deliver (or cause to be
executed and delivered) to the Pledgee all such proxies and other
instruments as the Pledgee may (reasonably) request for the purpose of
enabling the Pledgee to exercise the voting and other rights which it
is entitled to exercise pursuant to paragraph (i) above and to receive
the dividends or interest payments or distribution which it is
authorized to receive pursuant to paragraph (ii) above.
7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. The Pledgor agrees that
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it will not (i) sell, assign, transfer, convey, exchange, pledge, hypothecate or
otherwise dispose of, or grant any option, warrant, right, contract or
commitment with respect to, any of the Pledged Collateral without the prior
written consent of the Pledgee, or (ii) create or permit to exist any lien,
security interest, pledge, proxy, purchase arrangement, restriction, redemption
agreements, shareholders' agreement or other charge or encumbrance upon or with
respect to any of the Pledged Collateral, except for the lien created by this
Agreement, restrictions imposed by the agreements listed on Schedule II hereto
and liens permitted by the Loan Agreement.
8. APPLICATION OF PROCEEDS OF SALE OR CASH HELD AS COLLATERAL. All
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proceeds from the sale of Pledged Collateral sold pursuant to this Agreement
and/or the cash held as Pledged
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Collateral hereunder shall be (a) retained by the Pledgee as cash collateral for
the Obligations, or (b) at the election of the Pledgee, applied by the Pledgee
as follows:
FIRST: to payment of the costs and expenses of such sale,
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including the out-of-pocket expenses of the Pledgee, including the reasonable
fees and out-of-pocket expenses of counsel employed in connection therewith, and
to the payment of all advances made by the Pledgee for the account of the
Pledgor hereunder, and the payment of all costs and expenses incurred by the
Pledgee in connection with the administration and enforcement of this Agreement,
to the extent that such advances, costs and expenses shall not have been
reimbursed to the Pledgee;
SECOND: to the payment of interest accrued and unpaid, if any,
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on any of the Obligations to and including the date of such application and then
to the payment or prepayment of principal of any of the Obligations and then to
the payment of the balance of the Obligations in such order as Pledgee may
determine in its sole discretion; and
THIRD: the balance, if any, of such proceeds shall be paid to
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the Pledgor, or its successors or assigns, or as a court of competent
jurisdiction may direct.
9. THE PLEDGEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints
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the Pledgee as the Pledgor's attorney-in-fact, with full authority in the place
and stead of the Pledgor and in the name of the Pledgor or otherwise, from time
to time after giving notice to Pledgee in the Pledgee's discretion to take any
action and to execute any instrument which the Pledgee may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation, (i) to receive, endorse and collect all instruments made payable to
the Pledgor representing any dividend, interest payment or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same and (ii) to exercise all rights, including conversion rights, with
respect to such Pledged Collateral.
10. THE PLEDGEE MAY PERFORM. If the Pledgor fails to perform any
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agreement contained herein, the Pledgee may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Pledgee incurred in
connection therewith shall be payable by the Pledgor under Section 17.
11. REASONABLE CARE. The Pledgee shall be deemed to have exercised
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reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which the Pledgee accords its own property, it being understood that the
Pledgee shall not have any responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Collateral, whether or not the Pledgee has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Pledged Collateral;
provided, however, that upon the Pledgor's instruction, the Pledgee shall use
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reasonable efforts to take such action as the Pledgor directs the Pledgee to
take with respect to calls, conversions, exchanges, maturities, tenders, rights
against other parties or other similar matters
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relative to the Pledged Collateral, but failure of the Pledgee to comply with
any such request shall not of itself be deemed a failure to exercise reasonable
care, and no failure of the Pledgee to preserve or protect any rights with
respect to the Pledged Collateral against prior parties, or to do any act with
respect to preservation of the Pledged Collateral not so requested by the
Pledgor, shall be deemed a failure to exercise reasonable care in the custody or
preservation of the Pledged Collateral.
12. SUBSEQUENT CHANGES AFFECTING COLLATERAL. The Pledgor represents to
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the Pledgee that the Pledgor has made its own arrangements for keeping informed
of changes or potential changes affecting the Pledged Collateral (including, but
not limited to, rights to convert, rights to subscribe, payment of dividends or
distributions, reorganization or other exchanges, tender offers and voting
rights), and the Pledgor agrees that the Pledgee shall have no responsibility or
liability for informing the Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto.
13. EVENTS OF DEFAULT; REMEDIES UPON AN EVENT OF DEFAULT.
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(a) The occurrence of any one or more of the following events shall
constitute an "EVENT OF DEFAULT" by Pledgor under this Agreement:
(i) there occurs (and is continuing) an Event of Default under
and as defined in the Loan Agreement;
(ii) the Pledged Shares and the Pledged Units shall not be
exchangeable for shares of Prime Retail Stock or Prime Group Realty
Stock as set forth in (and subject to the conditions in Section 4(e)
hereof.
(iii) the Pledgor fails to perform or observe any material term,
covenant (after 5 day written notice) or agreement contained in this
Agreement on its part to be performed or observed, or any
representation or warranty made by the Pledgor in this Agreement shall
be untrue or misleading in any material respect as of the date with
respect to which such representation or warranty was made;
(iv) a notice of lien, levy or assessment is filed or recorded
with respect to all or a substantial part of the Pledged Collateral,
and such lien, levy or assessment is not released, discharged or
removed within thirty (30) days from the date it is filed or recorded,
except for a lien, levy or assessment which relates to current taxes
not yet due and payable or a lien permitted by the Loan Agreement; and
(v) all or a substantial part of the Pledged Collateral is
attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors.
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(b) If any Event of Default shall have occurred (and be continuing),
the Pledgee shall have, in addition to all other rights given by law or by
this Agreement, the Loan Agreement or otherwise, all of the rights and
remedies with respect to the Pledged Collateral of a secured party under
the Code in effect in the State of Illinois at that time, and the Pledgee
may, without notice and at its option, transfer or register the Pledged
Collateral or any part thereof on the books of the issuer thereof into the
name of the Pledgee or the Pledgee's nominee(s), with or without any
indication that such Pledged Collateral is subject to the security interest
hereunder. In addition, with respect to any Pledged Collateral which shall
then be in or shall thereafter come into the possession or custody of the
Pledgee, the Pledgee may sell or cause the same to be sold at any broker's
board or at public or private sale, in one or more sales or lots, at such
price or prices as the Pledgee may deem best, for cash or on credit or for
future delivery, without assumption of any credit risk. The purchaser of
any or all Pledged Collateral so sold shall thereafter hold the same
absolutely, free from any claim, encumbrance or right of any kind
whatsoever, except for claims, encumbrances or rights that may arise
without the knowledge or consent of the Pledgor. Unless any of the Pledged
Collateral threatens to decline speedily in value or is or becomes of a
type sold on a recognized market, the Pledgee will give the Pledgor
reasonable notice of the time and place of any public sale thereof, or of
the time after which any private sale or other intended disposition is to
be made. Any sale of the Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property
similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such
notice is mailed to the Pledgor as provided in Section 20 below, at least
five (5) days before the time of the sale or disposition. Any other
requirement of notice, demand or advertisement for sale is, to the extent
permitted by law, waived. The Pledgee may, in its own name or in the name
of a designee or nominee, buy any of the Pledged Collateral at any public
sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
expenses) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other
disposition of Pledged Collateral. In view of the fact that federal and
state securities laws may impose certain restrictions on the method by
which a sale of the Pledged Collateral may be effected after an Event of
Default, the Pledgor agrees that upon the occurrence or existence of any
Event of Default, the Pledgee may, from time to time, attempt to sell all
or any part of the Pledged Collateral by means of a private placement,
restricting the prospective purchasers to those who can make the
representations and agreements required of purchasers of securities in
private placements. In so doing, the Pledgee may solicit offers to buy the
Pledged Collateral, or any part of it, for cash, from a limited number of
investors deemed by the Pledgee in its judgment, to be responsible parties
who might be interested in purchasing the Pledged Collateral, and if the
Pledgee solicits such offers from not less than three (3) such investors,
then the acceptance by the Pledgee of the highest offer obtained therefrom
shall be deemed to be a commercially reasonable method of disposition of
the Pledged Collateral.
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In addition, upon the occurrence (and during the continuance) of an
Event of Default, all rights of the Pledgor to exercise the voting and
other rights which it would otherwise be entitled to exercise and to
receive cash dividends and interest payments, shall cease, and all such
rights shall thereupon become vested in the Pledgee as provided in Section
6.
14. SECURITIES LAWS. Pledgor hereby acknowledges and confirms that
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Pledgee may be unable to effect a public sale of any or all of the Pledged
Shares and the Pledged Units by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire any of the
Pledged Shares and Pledged Units for their own respective accounts for
investment and not with the view to the distribution or resale thereof. Pledgor
further acknowledges and confirms that any such private sale may result in
prices or other terms less favorable to the seller than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner, and the Pledgee shall be under no obligation to take any steps in order
to permit the Pledged Shares and Pledged Units to be sold at a public sale. The
Pledgee shall be under no obligation to delay a sale of any of the Pledged
Shares and Pledged Units for any period of time necessary to permit any issuer
thereof to register such Pledged Shares and Pledged Units for public sale under
the Securities Act or under applicable state securities laws.
15. AUTHORITY OF THE PLEDGEE. The Pledgee shall have and be entitled to
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exercise all such powers hereunder as are specifically delegated to the Pledgee
by the terms hereof, together with such powers as are incidental thereto. The
Pledgee may execute any of its duties hereunder by or through agents or
employees. Neither the Pledgee, nor any director, officer, agent or employee of
the Pledgee, shall be liable for any action taken or omitted to be taken by it
or them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Pledgor hereby agrees to indemnify and
hold harmless the Pledgee and/or any such director, officer, agent or employee
from and against any and all liability incurred by any of them, hereunder or in
connection herewith, unless such liability shall be due to its or their own
gross negligence or willful misconduct.
16. TERMINATION. This Agreement shall terminate after the time when all
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the Obligations have been fully paid and performed, at which time the Pledgee
shall reassign and redeliver (or cause to be reassigned and redelivered) to the
Pledgor, or to such person or persons as the Pledgor shall designate, against
receipt, such of the Pledged Collateral (if any) as shall not have been sold or
otherwise applied by the Pledgee pursuant to the terms hereof and shall still be
held by it hereunder, together with appropriate instruments of reassignment and
release. Any such reassignment shall be without recourse upon or warranty by
the Pledgee and at the expense of the Pledgor.
17. EXPENSES. The Pledgor agrees to reimburse the Pledgee promptly after
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demand for any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Pledgee may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the registration of the Pledged Collateral, (iii)
the
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exercise or enforcement of any of the rights of the Pledgee hereunder, or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
18. SECURITY INTEREST ABSOLUTE. All rights of the Pledgee and security
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interests hereunder, and all obligations of the Pledgor hereunder, shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Loan
Agreement or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Loan
Agreement;
(iii) any exchange, surrender, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the
Obligations or of this Agreement.
19. AMENDMENTS, WAIVERS AND CONSENTS. No amendment or waiver of any
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provision of this Agreement nor consent to any departure by the Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Pledgee, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
20. NOTICES. Any notice required or desired to be served, given or
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delivered hereunder shall be in writing (including facsimile transmission), and
shall be deemed to have been validly served, given or delivered upon the earlier
of (a) personal delivery to the address set forth below (b) in the case of
mailed notice, two (2) days after deposit in the United States mails, with
proper postage for certified mail, return receipt requested, prepaid, or in the
case of notice by Federal Express or other reputable overnight courier service,
one (1) day after delivery to such courier service, and (c) in the case of
facsimile transmission, upon transmission with confirmation of receipt,
addressed to the party to be notified as follows:
If to the Pledgor: Prime Group VI, L.P.
c/o The Prime Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ (Suite 4200 after February 1, 1999)
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile Number: (▇▇▇)▇▇▇-▇▇▇▇
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With a copies to: Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇)▇▇▇-▇▇▇▇
And to: The Prime Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇)▇▇▇-▇▇▇▇
If to the Pledgee: LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Schwartz, Cooper, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Chartered
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any of the parties may hereafter designate for
itself by written notice to the other parties in the manner herein prescribed.
21. CONTINUING SECURITY INTEREST. This Agreement shall create a
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continuing security interest in the Pledged Collateral and shall (i) be binding
upon the Pledgor, its successors and assigns, and (ii) inure to the benefit of
the Pledgee and its successors, transferees and assigns.
22. WAIVERS. To the extent permitted by applicable law, the Pledgor
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waives presentment and demand for payment of any of the Obligations, protest and
notice of dishonor or default with respect to any of the Obligations, and all
other notices to which the Pledgor might otherwise be entitled, except as
otherwise expressly provided herein or in the Loan Agreement.
23. WAIVER OF JURY TRIAL. The Pledgor and the Pledgee each hereby waive
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any right to a trial by jury in any action or proceeding to enforce or defend
any rights under this Agreement or any amendment, instrument, document or
agreement delivered or which may in the future be delivered in connection
herewith or arising from any banking relationship existing in connection with
this Agreement, and agrees that any such action or proceeding shall be tried
before a court and not before a jury.
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24. GOVERNING LAW; TERMS. This Agreement shall be governed by and
--------------------
construed in accordance with the internal laws (as opposed to conflict of laws
provisions) and decisions of the State of Illinois. Unless otherwise defined
herein, terms defined in Articles 3, 8 and 9 of the Code are used herein as
therein defined. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Agreement shall be interpreted in such manner as
to be ineffective or invalid under applicable law, such provisions shall be
ineffective or invalid only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
25. DEFINITIONS. The singular shall include the plural and vice versa and
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any gender shall include any other gender as the text shall indicate.
26. SECTION HEADINGS. The section headings herein are for convenience of
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reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.
27. NON-RECOURSE. The non-recourse provisions set forth in Section 11.5
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of the Loan Agreement are incorporated in this Agreement by reference as if
fully set forth herein.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Pledgor and the Pledgee have each caused this
Pledge Agreement to be duly executed and delivered by its officer, if any,
thereunto duly authorized as of the date first above written.
PRIME GROUP VI, L.P., an Illinois limited
partnership
By: PGLP, Inc., an Illinois corporation, as
managing general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Its: Vice President
---------------------------------
LASALLE NATIONAL BANK, a national banking
association
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
Its: First Vice President
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SCHEDULE I
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Description of Pledged Collateral
---------------------------------
A. PLEDGED SHARES
--------------
Issuer Shares
------ ------
Brookdale Living Communities, Inc. 3,576,933
Apartment Investment
and Management Company 115,000
B. PLEDGED UNITS
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104,632 units of limited partnership interests in Prime Retail, L.P., a
Delaware limited partnership.
47,525 units of limited partnership interests in Prime Group Realty, L.P.,
a Delaware limited partnership.
SCHEDULE II
Other Agreements
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1. Registration Rights Agreement dated as of November 17, 1997 by and
among Prime Group Realty Trust, Prime Group Realty, L.P., Prime Group
Limited Partnership, Primestone Investment Partners L.P. and the other
investors named therein.
2. Registration Rights Agreement dated as of June 15, 1998 by and among
Prime Retail, Inc., Prime Retail, L.P. and the other investors named
therein.
3. Prime Retail Partnership Agreement.
4. Prime Group Realty Partnership Agreement.
5. Lock-Up Agreement, dated November 11, 1997, from Prime Group Limited
Partnership to Prudential Securities Incorporated, Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company,
Inc.