Exhibit 10.6
MEZZANINE PLEDGE AND SECURITY
AGREEMENT
THIS MEZZANINE PLEDGE AND SECURITY
AGREEMENT (this “ Agreement ”), dated as of
February 1, 2007, made by BREOF UVA GP LLC, a Delaware limited
liability company, BREOF UVA LLC, a Delaware limited liability
company, PPC-UVA 15 th
Street Limited Partnership, a
Texas limited partnership, and PPC Charlottesville GP, Inc., a
Texas corporation (each a “ Pledgor ” and
collectively, the “ Pledgors ”), and Behringer
Harvard UVA, LLC, a Delaware limited liability company (together
with its successors and assigns, “ Lender
”).
RECITALS
A.
Lender has agreed to make a loan (the “ Loan ”)
to Pledgors in the original principal amount of Six Million Forty
Thousand Dollars ($6,040,000.00) pursuant to the terms of that
certain Loan Agreement, dated of even date herewith, between
Pledgors and Lender (herein, as the same may be amended or restated
from time to time, the “ Loan Agreement ”);
and
B.
Pledgors are the sole partners and the legal and beneficial owners
of one hundred percent (100%) of the partnership interests in PPC
Charlottesville Limited Partnership, a Delaware limited partnership
(the “ Mortgagor ”), which is the owner of the
leasehold interest in the Property (as defined in the Loan
Agreement); and
C.
One of the conditions precedent to the Lender’s making of the
Loan under the Loan Agreement is Pledgors’ execution and
delivery of this Agreement; and
D.
Pledgors and Mortgagor shall derive substantial direct and indirect
benefits from the Loan.
NOW, THEREFORE, for and in
consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties agree as follows:
1.
Recitals; Definitions . The recitals set forth above
are true and correct and are incorporated herein by
reference. Capitalized terms not defined herein but which are
defined in the Uniform Commercial Code as in effect from time to
time in the Commonwealth of Virginia (the “ UCC
”) shall have the meanings given them in Article 8 or Article
9, as applicable, thereof. Other capitalized terms used but not
defined herein shall have the meaning ascribed to such term in the
Loan Agreement, in each case unless the context clearly requires
otherwise.
2.
Pledge .
(a)
Grant of Security Interest . As collateral security
for the Indebtedness and the performance of all obligations under
the Loan Documents, Pledgors presently and irrevocably pledge,
hypothecate, assign, deliver and transfer to the Lender, and grant
to the Lender a continuing first priority security interest in, all
of their right, title and interest in and under the following
property (collectively, the “ Collateral ”)
whether now owned or hereafter acquired or coming into
existence:
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(i)
all of Pledgors’ right, title
and interest, whether direct or indirect, whether legal, beneficial
or economic, and whether fixed or contingent, (i) as the
solepartners in and to the Mortgagor, including, without
limitation, Pledgors’ right to vote on Mortgagor matters and
Pledgors’ rights, now existing or hereafter arising or
acquired, to receive from time to time its share of profits,
losses, income surplus, return of capital, proceeds, fees,
preferences, payments or distributions from Mortgagor (“
Pledged Interest ”);
(ii)
all Instruments, certificates, or
other writings evidencing Pledgors’ Pledged
Interest;
(iii)
all of Pledgors’ right, title
and interest in, to and under, respectively, that certain Amended
and Restated Agreement of Limited Partnership of Mortgagor, dated
as of October 2005, executed by Pledgors (the “
Partnership Agreement ”),and the other
organizational documents of Mortgagor;
(iv)
all of Pledgors’ right, title
and interest in, to and under all General Intangibles relating to
or arising out of any of the foregoing; and
(v)
all Proceeds of any of the
foregoing.
(b)
Security for Obligations . This Agreement secures (i)
the Indebtedness and (ii) all obligations of Pledgors under the
Loan Agreement, the Note and all of the other Loan Documents
(collectively, the “ Secured Obligations
”).
(c)
Perfection of Security Interest . In furtherance of
the grant of the pledge and security interest pursuant to
Section 2(a) above, Pledgors hereby agree with Lender as
follows:
(i)
If the Pledged Interest is not
currently represented or evidenced by certificates or Instruments,
Pledgors shall, upon the execution of this Agreement (A) cause the
Mortgagor to keep as a part of its records of ownership a copy of
this Agreement which shall evidence Pledgors’ pledge of the
Pledged Interest to Lender and all other terms contained in this
Agreement, and (B) cause the Mortgagor to agree to comply with
any and all unilateral directions and other Instructions from
Lender concerning such Pledged Interest given in accordance with
this Agreement, without any further consent of (or regardless of
contrary instructions of) Pledgors or any other person.
(ii)
Concurrently with the execution and
delivery of this Agreement, Pledgors are delivering to Lender
assignments of partnership interests in blank (the “
Assignment of Interest ”), in the form set forth on
Exhibit A hereto, for the Pledged Interest, transferring all
of the Pledged Interest in blank, duly executed by each Pledgor
and
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undated. Lender shall have the
right, at any time in its discretion upon the occurrence and during
the continuance of an Event of Default pursuant to Section
6(a) below, to transfer to, and to designate on the Assignment
of Interest, any Person to whom the Pledged Interest is sold in
accordance with the provisions hereof.
(iii)
To the extent the Pledged Interest
hereafter is represented or evidenced by certificates, Instruments
or other writings (other than the Partnership Agreement) whether in
bearer or registered form, Pledgors shall within three (3) days of
receipt of any such certificates, Instruments or other writings
(A) deliver to Lender such certificates, Instruments or other
writings, as applicable and (B) deliver to Lender all
necessary powers, instruments of transfer or assignment, each
undated and duly executed in blank.
(iv)
Regardless of whether the Collateral
is represented or evidenced by certificates, Instruments or other
writings, Pledgors shall do all other acts and deliver such other
documents, and cause Mortgagor to do the same, as Lender reasonably
deems necessary or desirable (or as are otherwise required by the
laws of the jurisdiction governing perfection, the effect of
perfection or nonperfection or the priority of Lender’s
security interest) in order to perfect such security interest in
the Collateral. In furtherance of the foregoing, Pledgors
hereby authorize Lender to file such UCC financing statements
against Pledgors as Lender shall deem necessary or desirable
containing a description of the Collateral pledged by Pledgors
sufficient to satisfy the requirements of Article 9 of the UCC (the
“ UCC Financing Statements ”).
(d)
Continuing Security Interest . This Agreement shall
create a continuing security interest in the Collateral and shall
remain in full force and effect until payment in full of all
Indebtedness. Upon the payment in full of all Indebtedness,
the security interests granted herein shall terminate and all
rights to the Collateral shall revert to Pledgors. Upon any
such termination, the Lender shall, at Pledgors’ sole
expense, deliver to Pledgors, without any representations,
warranties or recourse of any kind whatsoever (other than that such
items are free and clear of any encumbrances or claims of Lender or
anyone claiming by, through or under Lender), all certificates,
Instruments and other writings representing or evidencing all
Collateral then held by the Lender hereunder, if any, and execute
and deliver to Pledgors such documents as Pledgors shall reasonably
request to evidence such termination.
(e)
Waivers of Subrogation . Pledgors hereby irrevocably
waive any claim or other right which they may now have or hereafter
acquire against the Mortgagor in connection with this Agreement or
any other Loan Document. If any amount shall be paid to
Pledgors in violation of the preceding sentence and the Secured
Obligations shall not have been finally paid and performed in full,
such amount shall be deemed to have been paid to Pledgors for the
benefit of, and held in trust for, the Lender, and shall
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immediately be paid to the Lender to
be credited and applied, at Lender’s option, against the
Secured Obligations, whether matured or unmatured in such order as
the Lender shall determine.
3.
Representations and Warranties . As of the date hereof
Pledgors represent and warrant as follows:
(a)
Organization; Authorization . Each Pledgor has been
duly formed and is validly existing and in good standing under the
laws of the state of formation. Each Pledgor has full power
and authority to execute this Agreement and to undertake and
consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed by or on behalf of
each Pledgor and constitutes the legal, valid and binding
obligation of Pledgors and is enforceable against Pledgors in
accordance with its terms, subject, as to enforceability, to the
effect of applicable bankruptcy, insolvency and other similar laws
limiting the enforcement of creditors’ rights generally and
to general principles of equity.
(b)
Agreement Will Cause No Defaults . The execution,
delivery and performance of this Agreement by Pledgors does not and
will not violate, or contravene (i) any term or provision of the
organizational documents of Pledgors or any resolution or vote of
Pledgors, (ii) any existing license, indenture or other material
contract or agreement binding upon Pledgors or (iii) any existing
law, statute, regulation, order, decree or judgment applicable to
Pledgors or its property.
(c)
Ownership, No Liens, etc . Pledgors are the legal,
record and beneficial owner of, and have good and marketable title
to the Collateral in which it grants a security interest to Lender
under this Agreement, free and clear of all liens, security
interests, options or other charges or encumbrances, other than the
security interest granted pursuant hereto. Pledgors are the
sole partners in Mortgagor.
(d)
As to Pledged Interest . The Pledged Interest is duly
authorized and validly issued, and are fully paid and
non-assessable and constitute all of the issued and outstanding
membership interests in Mortgagor. The Pledged Interest (i)
is not “financial assets” (within the meaning of
Section 8-102(a)(9) of the UCC) and (ii) is not credited to a
“securities account” within the meaning of
Section 8-501(a) of the UCC.
(e)
Perfection . Upon the filing of the UCC Financing
Statements referred to in Section 2(c)(iv) in the places required
under the UCC for perfection of security interests in the classes
of collateral included in the Collateral, the security
interestgranted pursuant to this Agreement will constitute a valid,
perfected first priority security interest in all of the Collateral
and related proceeds in which a security interest can be perfected
by filing, enforceable against all creditors of Pledgors and any
persons purporting to purchase any Collateral or receive any
related proceeds from Pledgors, subject to the limitations in the
UCC.
(f)
Authorization, Approval, etc . No authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority, regulatory body or any
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other person (other than any that
have been obtained and provided to Lender) is required
either:
(i)
for the executions, delivery, and
performance of this Agreement by Pledgors (other than any
authorizations and approvals that have already been received or
actions that have already been taken), or
(ii)
for the exercise by the Lender of
(1) the voting and other rights provided for in this Agreement or
(2) except as may be required in connection with a disposition of
the Pledged Interest by laws relating to the offering and sale of
securities generally, the remedies provided for in respect of the
Collateral pursuant to this Agreement.
4.
Covenants .
(a)
Protect Collateral . Pledgors agree that they will own
at all times during the term of the Loan one hundred percent (100%)
of the ownership interests in Mortgagor. Pledgors agree that
they shall not sell, assign, transfer, pledge or encumber in any
other manner the Collateral (except for the pledge to Lender
hereunder or an assignment to Lender or its designee pursuant to
the Assignment of Partnership Interests). Pledgors shall
warrant and, at Pledgors’ expense, defend the right and title
herein granted unto the Lender in and to the Collateral (and all
right, title and interest represented by the Collateral) against
the claims and demands of all persons whomsoever.
(b)
Further Assurances . Pledgors shall, at
Pledgors’ expense (i) promptly execute and deliver, and cause
the Mortgagor to promptly execute and deliver, all further writings
(including instruments of transfer or control) reasonably requested
by Lender, and (ii) promptly take all further action, and cause the
Mortgagor to promptly take all further action, that the Lender may
reasonably request; in each case, in order to perfect and protect
and maintain the perfection and priority of any security interest
granted or purported to be granted hereby or to enable the Lender
to exercise and enforce its rights and remedies hereunder with
respect to any Collateral, including the rights and remedies under
Section 7(b) .
(c)
Organizational Documents . Pledgors agree that they
shall not and shall not permit any other person to amend or restate
the certificate of formation of Mortgagor without Lender’s
consent including but not limited to changing the location of its
principal place of business or chief executive office, its name or
reorganizing under the laws of another jurisdiction.
(d)
Consents . Pledgors shall execute and deliver to
Lender, upon its request at the time Lender exercises its remedies,
any document required under the organizational documents of
Pledgors or otherwise reasonably deemed necessary by Lender in
order to evidence Pledgors’ consent to the Lender’s
exercising of its remedies under this Agreement, including those
set forth in Section 7(a) hereof wherein Lender becomes the
record, legal and beneficial owner of the Collateral pledged under
this Agreement.
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(e)
Pledged Interest . The Pledged Interest (i) will not
become “financial assets” (within the meaning of
Section 8-101(a)(9) of the UCC) and (ii) will not be credited to a
“securities account” (within the meaning of Section
8-501(a) of the UCC). The parties agree that the Pledged
Interest constitutes “general intangibles” (as defined
in Section 9-102 of the UCC); and Pledgors agree that the Pledged
Interest is not and will not be investment compan
