Exhibit 10.35
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of March 25, 1998, by and among Prime Group
Realty Trust, a Maryland real estate investment trust, Prime Group Realty, L.P.,
a Delaware limited partnership, and each of the purchasers named on the
signature pages hereof.
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.1. Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Agreement" means this Purchase Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York generally are authorized or required by law or other government actions
to close.
"Charter" means the Company's Declaration of Trust, as amended by
Articles of Amendment and Restatement and in effect on the date hereof.
"Closing" has the meaning provided therefor in Section 2.2(a).
"Closing Date" has the meaning provided therefor in Section 2.2(a).
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Shares" means the Company's common shares of beneficial
interest, par value $.01 per share.
"Company" means Prime Group Realty Trust, a Maryland real estate
investment trust.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Indemnified Parties" has the meaning provided therefor in Section
5.4(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or the
revenues or income thereon or therefrom.
"Material Adverse Change" has the meaning provided therefor in Section
3.1(f).
"Material Adverse Effect" has the meaning provided therefor in Section
3.1(a).
"NYSE" means the New York Stock Exchange.
"Operating Partnership" means Prime Group Realty, L.P., a Delaware
limited partnership.
"Person" means an individual or a corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Private Placement Memorandum" means the Company's Private Placement
Memorandum, dated March 19, 1998, together with and including all documents
designated on the face thereof as supplements or amendments thereto, with
respect to the offering of Common Shares to a limited number of "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) and
other "accredited investors" (as defined in Rule 501(a) under the Securities
Act).
"Properties" means the properties and assets owned by the Company or
its Subsidiaries.
"Purchaser" means each Person from time to time listed on the
signature pages of this Agreement, and its permitted successors and assigns as
provided herein, including any Person who becomes party hereto by executing and
delivering a signature page hereto after the date of this Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form of Exhibit 1 hereto, as
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the same may be amended, supplemented or otherwise modified in accordance with
its terms.
"Requirements" has the meaning provided therefor in Section 3.1(m).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Shares" means the Common Shares purchased by a Purchaser pursuant to
this Agreement.
"Subsidiary" means, with respect to any Person, (i) a corporation, a
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by a Subsidiary of such Person or by such Person and a Subsidiary thereof or
(ii) any other Person (other than a corporation) in which such Person, a
Subsidiary thereof or such Person and a Subsidiary thereof, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest. When used herein without reference to any Person,
"Subsidiary" means a Subsidiary of the Company.
ARTICLE II
PURCHASE OF COMMON SHARES
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Section 2.1. Purchase of Common Shares. Subject to the terms and
conditions herein set forth, the Company agrees that it will sell to each
Purchaser and each such Purchaser agrees, severally and not jointly, that it
will purchase from the Company at the Closing Date the number of Common Shares
set forth on a signature page hereto at the price per Share as set forth on such
signature page.
Section 2.2. The Closing.
(a) For each Purchaser, the purchase and sale of the Shares to be
purchased by such Purchaser will take place at a closing (each, a "Closing") to
be held at the offices Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, at 10:00 a.m., Chicago time, on the first Business Day following the
execution of this Agreement by the Company and each Purchaser. The date and time
at which a Closing is to be concluded is the "Closing Date."
(b) Delivery of the Shares to be purchased by a Purchaser pursuant to
this Agreement shall be made at the Closing by delivery to such Purchaser,
against payment of the purchase price therefor as provided herein, of a share
certificate
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representing the total number of Shares to be purchased by such Purchaser
hereunder.
(c) Payment of the agreed purchase price for the Common Shares to be
purchased hereunder shall be made by or on behalf of each Purchaser by wire
transfer of same day funds to such account of the Company as shall have been
furnished to the Purchasers on or before the first Business Day prior to the
Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 3.1. Representations and Warranties of the Company and the
Operating Partnership. Each of the Company and the Operating Partnership
represents and warrants, as of the date hereof and as of the Closing Date, as
follows:
(a) Organization and Good Standing of the Company. The Company is a
real estate investment trust, duly organized, validly existing and in good
standing under the laws of the State of Maryland. The Company is duly qualified
or licensed and in good standing and authorized to do business in each
jurisdiction in which the ownership or leasing of its properties or the
character of its operations makes such qualification necessary, except where the
failure to obtain such qualification, license, authorization or good standing
would not individually or in the aggregate reasonably be expected to have a
material adverse effect upon the financial condition, properties, assets,
business or results of operations of the Company and its Subsidiaries taken as a
whole (a "Material Adverse Effect"). The Company has all requisite trust power
and authority to own its assets and to carry on its businesses as presently
conducted and as presently proposed to be conducted except where a lack of such
power or authority would not reasonably be expected to have a Material Adverse
Effect.
(b) Organization and Good Standing of the Operating Partnership. The
Operating Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware Revised Uniform Limited
Partnership Act. The Operating Partnership is duly qualified or licensed and
in good standing and authorized to do business in each jurisdiction in which the
ownership or leasing of its properties or the character of its operations makes
such qualification necessary, except where the failure to obtain such
qualification, license, authorization or good standing would not individually or
in the aggregate reasonably be expected to have a Material Adverse Effect. The
Operating Partnership has all requisite partnership and authority to own its
assets and to carry on its businesses as presently conducted and as presently
proposed to be conducted except where a lack of such power or authority would
not reasonably be expected to have a Material Adverse Effect.
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(c) Organization and Good Standing of Subsidiaries. The Subsidiaries
of the Company (other than the Operating Partnership) have each been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation. The Subsidiaries of the Company
(other than the Operating Partnership) are each duly qualified or licensed and
in good standing and authorized to do business in each jurisdiction in which the
ownership or leasing of its respective properties or the character of its
respective operations makes such qualification necessary, except where the
failure to obtain such qualification, license, authorization or good standing
would not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect. Each of the Subsidiaries of the Company (other than the
Operating Partnership) has all requisite corporate, partnership or limited
liability company power and authority to own its respective assets and to carry
on its respective businesses as presently conducted and as presently proposed to
be conducted except where a lack of such power or authority would not reasonably
be expected to have a Material Adverse Effect.
(d) Authorizations. Each of the Company and the Operating
Partnership has all requisite trust or partnership power and authority to
execute, deliver and perform its obligations under this Agreement and, in the
case of the Company, the Registration Rights Agreement. The execution and
delivery by the Company and the Operating Partnership of this Agreement and by
the Company of the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by the Company and the Operating Partnership, as applicable.
(e) Capitalization. The authorized beneficial interests of the
Company consist of (i) 100 million Common Shares, (ii) 65 million excess shares
of beneficial interest, par value $.01 per share, and (iii) 30 million preferred
shares of beneficial interest, par value $.01 per share. All of the outstanding
shares of beneficial interest of the Company have been duly and validly issued,
fully paid and non-assessable and are not subject to any preemptive rights of
other shareholders. All of the issued and outstanding partnership interests of
the Operating Partnership have been duly and validly authorized and issued.
(f) No Material Adverse Change. Except as disclosed in the Private
Placement Memorandum, there has been no material adverse change in the financial
condition, properties, assets, business or results of operations of the Company
and its Subsidiaries taken as a whole (a "Material Adverse Change") subsequent
to November 11, 1997.
(g) Conflicting Agreements and Other Matters. Assuming the accuracy
of the representations and warranties of, and the performance of the agreements
of, the Purchasers set forth in
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Section 3.2 and elsewhere herein, neither the execution and delivery of this
Agreement and the Registration Rights Agreement, nor fulfillment of nor
compliance with the terms and provisions hereof or thereof, nor the issuance of
the Shares, will (i) violate any provision of any federal or state law, statute,
rule or regulation, or any order, judgment, injunction, decree, determination or
award of any federal or state court or governmental authority presently in
effect or in effect at the Closing Date having applicability to the Company or
the Operating Partnership except such violations as would not reasonably be
expected to have a Material Adverse Effect, (ii) conflict with or result in a
breach of or constitute a default under the Charter or Bylaws of the Company or
the Certificate of Limited Partnership or Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, as amended, of the Operating
Partnership, (iii) require any consent, approval or notice under, or conflict
with or result in a breach of or constitute a default under, any note, bond,
mortgage, license, indenture or loan or credit agreement, or any other agreement
or instrument, to which the Company or any of its Subsidiaries is a party or by
which any of their respective properties is bound, except such consents,
approvals or notices which if not obtained would not reasonably be expected to
have a Material Adverse Effect, and except such conflicts, breaches or defaults
as would not reasonably be expected to have a Material Adverse Effect or (iv)
result in, or require the creation or imposition of any Lien upon or with
respect to any of the properties now owned or hereafter acquired by the Company
or any of its Subsidiaries.
(h) Due Execution, etc. This Agreement constitutes, and the
Registration Rights Agreement (in the case of the Company) will constitute, when
executed and delivered by the Company and the Operating Partnership, as
applicable, on the Closing Date, a legal, valid and binding obligation of the
Company and the Operating Partnership, as applicable, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity.
(i) Litigation, Proceedings, etc. Except as disclosed in the Private
Placement Memorandum, there is no action, suit, notice of violation, proceeding
or investigation pending or, to the best knowledge of the Company and the
Operating Partnership, threatened against or affecting the Company, the
Operating Partnership or any of their Subsidiaries or any of their respective
properties before or by any court, governmental or administrative agency or
regulatory authority (federal, state, county or local) which (i) challenges the
legality, validity or enforceability of this Agreement or the Registration
Rights Agreement or the legality or validity of the Shares, (ii) would
reasonably be expected to have a Material Adverse Effect or (iii) would impair
the ability of
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the Company or the Operating Partnership to perform fully on a timely basis any
obligations which it has under this Agreement or, in the case of the Company,
the Registration Rights Agreement.
(j) No Default or Violation. None of the Company, the Operating
Partnership or any of their Subsidiaries (i) is in violation of its respective
charter, bylaws, partnership agreement, limited liability company agreement or
other organizational document, (ii) is in breach of or in default under any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound, except
such breaches or defaults as would not reasonably be expected to have a Material
Adverse Effect, (iii) is in violation of any order, decree, judgment or
injunction of any court, arbitrator or governmental body, except for such
violations as would not reasonably be expected to have a Material Adverse
Effect, or (iv) is in violation of any statute, rule or regulation of any
governmental authority which would (y) adversely affect the legality, validity
or enforceability of this Agreement or the Registration Rights Agreement or (z)
reasonably be expected to have a Material Adverse Effect.
(k) Status of Shares. The issuance and sale of the Shares have been
duly authorized by all necessary trust action on the part of the Company and
such Shares, when delivered to the Purchasers at the Closing against payment
therefor as provided herein, will be validly issued, fully paid and
nonassessable, and the issuance and sale of such Shares is not and will not be
subject to preemptive rights, subscription rights, conversion rights or any
other encumbrances or other contractual rights of any other shareholder of the
Company.
(l) Governmental Consents. Except as may be required by any state or
foreign securities or blue sky laws or as disclosed in or contemplated by the
Private Placement Memorandum or as may be required under any applicable law in
connection with the performance by the Company of its obligations under the
Registration Rights Agreement, and assuming the accuracy of the representations
and warranties of, and the performance of the agreements of, the Purchasers set
forth in Section 3.2 and elsewhere herein, no authorization, consent, approval
or waiver, nor any filing, qualification or registration with, any court,
governmental agency or regulatory authority or any securities exchange is
required in connection with the execution, delivery or performance by the
Company and the Operating Partnership of this Agreement and the issuance, sale
or delivery of the Shares.
(m) Conduct of Business. The Company, the Operating Partnership and
each of their Subsidiaries have obtained all permits, licenses, franchises and
authorizations (collectively "Requirements") from any government or governmental
agency, department, commission, board, bureau, instrumentality or body or
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any governmental official, body or tribunal, to own or lease their respective
properties and to conduct their respective facilities and businesses as now
being conducted and as proposed to be conducted in the future as described in
the Private Placement Memorandum except where failure to do so would not
reasonably be expected to have a Material Adverse Effect. All such
Requirements, the failure of which to obtain would have a Material Adverse
Effect, are in full force and effect and not the subject of any pending or, to
the Company's and the Operating Partnership's knowledge, threatened attack by
appeal or direct proceeding or otherwise.
(n) Private Placement Memorandum. The Private Placement Memorandum
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(o) Registration Under Exchange Act. The Company has filed a
registration statement on Form 8-A under the Exchange Act with respect to the
Common Shares, and such registration statement complied in all material respects
when filed with the rules and regulations of the Commission under the Exchange
Act.
(p) Financial Statements; Exchange Act Compliance. The financial
statements and supporting schedules included in the Company's periodic filings
filed pursuant to the Exchange Act are complete and correct in all material
respects and present fairly the consolidated financial position of the Company
and its consolidated Subsidiaries as of the dates specified and the consolidated
results of their operations for the periods specified, in each case, in
conformity with generally accepted accounting principles applied on a consistent
basis during the periods involved, except as indicated therein or in the notes
thereto. The Company has timely filed all documents required to be filed with
the Commission pursuant to the Securities Act and the Exchange Act. All such
documents, when so filed, complied in form with such Acts and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(q) Compliance with Laws. The Company, the Operating Partnership and
their Subsidiaries are in compliance in all material respects with all
applicable laws and regulations in all jurisdictions in which the Company, the
Operating Partnership and their Subsidiaries are presently doing business and
where the failure to effect such compliance would reasonably be expected to have
a Material Adverse Effect.
(r) Properties. (i) The Company, the Operating Partnership and their
Subsidiaries own fee simple title to all real
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property owned by them and have good title to all other property and assets
owned by them, in each case free and clear of all Liens other than (1) those
described in the Private Placement Memorandum and (2) those which are not
material in amount; (ii) each of the Properties that is real property complies
with all applicable codes and zoning laws and regulations, except for such
failures to comply which would not individually or in the aggregate reasonably
be expected to have a Material Adverse Effect; and (iii) neither the Company nor
the Operating Partnership has any knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on, or access
to the Properties that are real properties, except such proceedings or actions
that would not reasonably be expected to have a Material Adverse Effect.
(s) Insurance. The Company, the Operating Partnership and each of
their Subsidiaries carries or is entitled to the benefits of insurance in such
amounts and covering such risks as is reasonably sufficient in the circumstances
or is customary in the industry and all such insurance is in full force and
effect.
(t) Hazardous Materials. Except as disclosed in the Private
Placement Memorandum, neither the Company nor the Operating Partnership has any
knowledge of (a) the unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials (collectively, "Hazardous
Materials") on any of the Properties that are real properties or (b) any
unlawful spills, releases, discharges or disposal of Hazardous Materials that
have occurred or are presently occurring from such properties as a result of any
construction on or operation and use of such properties, in either case which
presence or occurrence would reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the Private Placement Memorandum, in connection
with the construction on or operation and use of the Properties that are real
properties, each of the Company and the Operating Partnership represents that,
as of the date of this Agreement, it has no knowledge of any material failure by
it to comply with all applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and disposal of
any Hazardous Materials.
(u) Investment Company Act. None of the Company, the Operating
Partnership or their Subsidiaries is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and none of the Company, the
Operating Partnership or any of their Subsidiaries intends after the date hereof
to be an "investment company" within the meaning of such Act.
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Section 3.2. Representations and Warranties of the Purchasers.
(a) Investment Intent. Each Purchaser, severally and not jointly and
as to itself only, represents and warrants to the Company and the Operating
Partnership that the Shares to be acquired by it hereunder are being acquired
for its own account and with no intention of distributing or reselling such
Shares or any part thereof or interest therein in any transaction which would be
in violation of the securities laws of the United States of America or any State
or any foreign country or jurisdiction.
(b) Transfer Restrictions. If a Purchaser should decide to dispose
of any of the Shares to be purchased by it, such Purchaser covenants and agrees
that it shall do so only pursuant to an effective registration statement under
the Securities Act or pursuant to an exemption from registration under the
Securities Act. In connection with any offer, resale, pledge or other transfer
(individually and collectively, a "Transfer") of any Shares other than pursuant
to an effective registration statement, the Company may require that the
transferor of such Shares provide to the Company an opinion of counsel
experienced in the area of applicable securities laws selected by the
transferor, which counsel shall be and the form and substance of which opinion
shall be, reasonably satisfactory to the Company, to the effect that such
Transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act or any State or
foreign securities laws. Each Purchaser agrees to the imprinting, so long as
appropriate, of the following legend on certificates representing the Shares:
THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT
IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER THE SHARES
EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT SUCH AS THE EXEMPTION SET
FORTH IN RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE).
The legend set forth above may be removed if and when the Shares
represented by such certificate are disposed of pursuant to an effective
registration statement under the Securities Act or in the opinion of counsel to
the Company experienced in the area of applicable securities laws such legend is
no longer required under applicable securities laws. The share certificates
shall also bear any other legends required by applicable federal, state or
foreign securities laws, which legends may be removed when, in the opinion of
counsel to the Company experienced in the applicable securities
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laws, the same are no longer required under the applicable requirements of such
securities laws. The Company agrees that it will provide each Purchaser, upon
request, with a substitute share certificate or certificates not bearing such
legend at such time as such legend is no longer applicable. Each Purchaser
agrees that, in connection with any Transfer of Shares by it pursuant to an
effective registration statement under the Securities Act, such Purchaser will
comply with all prospectus delivery requirements of the Securities Act. The
Company makes no representation, warranty or agreement as to the availability of
any exemption from registration under the Securities Act with respect to any
resale of Shares. No opinion of counsel will be required to be rendered
pursuant to this subsection with respect to the Transfer of any Shares on which
the restrictive legend has been removed in accordance with the foregoing
provisions.
(c) Stop Transfer Instruction. Each Purchaser agrees that the
Company shall be entitled to make a notation on its records and give
instructions to any transfer agent of the Common Shares in order to implement
the restrictions on transfer set forth in this Agreement.
(d) Purchaser Status. Each Purchaser, severally and not jointly and
as to itself only, represents and warrants to, and covenants and agrees with,
the Company and the Operating Partnership that (i) at the time it was offered
the Shares, it was, (ii) at the date hereof, it is, and (iii) at the Closing
Date, it will be, either a "qualified institutional buyer" as defined in Rule
144A under the Securities Act or an "accredited investor" as defined in Rule
501(a) under the Securities Act, and has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Common Shares, and has
so evaluated the merits and risks of such investment, and is able to bear the
economic risk of such investment and is able to afford a complete loss of such
investment, and further covenants and agrees that it will provide the Company
with financial and other information the Company may request to substantiate the
accuracy of the foregoing.
(e) Authority. Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company and the Operating
Partnership that (i) the purchase of the Shares to be purchased by it has been
duly and properly authorized and this Agreement has been duly executed and
delivered by it or on its behalf and constitutes the valid and legally binding
obligation of such Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity; and (ii) the purchase of
the Shares to be purchased by it does not conflict with or violate its charter,
bylaws or other
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organizational document, or any law, regulation or court order applicable to it
or its properties or assets.
(f) Access to Information. Each Purchaser acknowledges receipt of
the Private Placement Memorandum, and further acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Common Shares and the merits and
risks of investing in the Common Shares; (ii) access to information about the
Company, the Operating Partnership and their Subsidiaries and the financial
condition, results of operations, business, properties, management and prospects
of the Company, the Operating Partnership and their Subsidiaries sufficient to
enable it to evaluate its investment in the Common Shares; and (iii) the
opportunity to obtain such additional information which the Company or the
Operating Partnership possesses or can acquire without unreasonable effort or
expense that is necessary to verify the accuracy and completeness of the
information contained in the Private Placement Memorandum.
(g) Reliance. Each Purchaser also understands and acknowledges and
agrees that (i) the Common Shares are being offered and sold without
registration under the Securities Act in a transaction that is exempt from the
registration provisions of the Securities Act and (ii) the availability of such
exemption, depends in part on, and that the Company, and for purposes of the
opinions to be delivered to the Purchasers pursuant to Section 4.1(a), Winston &
Xxxxxx and Miles & Stockbridge, will rely upon, the accuracy and truthfulness of
the foregoing representations and such Purchaser hereby consents to such
reliance.
(h) Broker. Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company and the Operating
Partnership that it has dealt with no broker, finder, placement agent or any
other person or entity acting in a similar capacity with respect to the
transactions contemplated by this Agreement.
(i) Prohibited Transactions. Except as set forth in Exhibit 2
hereto, each Purchaser, severally and not jointly and as to itself only,
represents and warrants that the Shares being purchased by it are not being
acquired, directly or indirectly, with the assets of any "employee benefit plan"
covered by the Employee Retirement Income Security Act of 1974, as amended.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
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Section 4.1. Conditions Precedent to Obligations of the Purchasers. The
obligation of each Purchaser to purchase the
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Shares to be purchased by it hereunder is subject, at the Closing Date, to the
prior or simultaneous satisfaction or waiver of the following conditions:
(a) Such Purchaser shall have received an opinion, addressed to it
and dated the Closing Date, of (i) Winston & Xxxxxx, counsel for the Company,
substantially in the form of Exhibit 3-A hereto, and (ii) Miles & Stockbridge,
Maryland counsel for the Company, substantially in the form of Exhibit 3-B
hereto. In rendering the foregoing opinions, such counsel may rely as to factual
matters upon certificates or other documents furnished by officers and trustees
of the Company and by government officials, and upon such other documents as
such counsel deem appropriate as a basis for such opinion.
(b) The representations and warranties made by the Company and the
Operating Partnership herein shall be true and correct in all material respects
on and as of the Closing Date with the same effect as though such
representations and warranties has been made on and as of the Closing Date after
giving effect to the sale of the Shares hereunder and the other documents
executed in connection with the transactions contemplated herein and the Company
and the Operating Partnership shall have complied in all material respects with
all agreements hereunder required to be performed by them at or prior to the
Closing Date.
(c) Except as disclosed in the Private Placement Memorandum, there
shall not have occurred any Material Adverse Change subsequent to the date of
the Private Placement Memorandum.
(d) At the Closing Date, such Purchaser shall have received a
certificate, dated the Closing Date, signed by the President and Chief Financial
Officer of the Company in their respective capacities and not individually to
the effect set forth in Sections 4.1(b) and (c), and stating that the conditions
specified in this Section 4.1 have been satisfied at the Closing Date.
(e) At the Closing Date, such Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company in such capacity and not individually and certifying
(i) that attached thereto is a true, correct and complete copy of (A) the
Company's Charter and Bylaws, (B) the Operating Partnership's Certificate of
Limited Partnership and Amended and Restated Agreement of Limited Partnership,
as amended, (C) resolutions duly adopted by the Board of Trustees of the Company
authorizing the execution and delivery of this Agreement by the Company for
itself and on behalf of the Operating Partnership and the Registration Rights
Agreement by the Company and the issuance and sale of the Shares and (D) that
no proceedings looking toward the liquidation, dissolution or reorganization of
the Company are pending or contemplated, except
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as otherwise described in the Private Placement Memorandum; (ii) the incumbency
of officers executing this Agreement and the Registration Rights Agreement; and
(iii) that attached thereto is a specimen of the share certificate for the
Common Shares.
(f) Such Purchaser shall have received a share certificate in
accordance with Section 2.2(b).
(g) The Company shall have entered into the Registration Rights
Agreement for the benefit of the Purchasers, and the Purchasers shall have
received copies of such Registration Rights Agreement duly executed by the
Company in favor of such Purchasers.
Section 4.2. Conditions Precedent to Obligations of the Company. The
obligation of the Company to issue and sell the Shares hereunder is subject, as
to each Purchaser severally and not jointly, at the Closing Date, to the prior
or simultaneous satisfaction or waiver of the following conditions:
(a) The representations and warranties made by such Purchaser herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties have been
made on and as of the Closing Date and the Purchaser shall have provided such
evidence thereof as the Company may reasonably request.
(b) The sale of the Common Shares hereunder shall not be prohibited
or enjoined (temporarily or permanently) by any applicable law or governmental
regulation.
(c) Such Purchaser shall have delivered payment to the Company in
accordance with Section 2.2(c).
ARTICLE V
COVENANTS
---------
Section 5.1. Listing of Common Shares; Furnishing of Information.
(a) For so long as any Purchaser or Purchasers own, in the aggregate,
not less than 1,300,000 Shares, the Company covenants to use its best efforts to
continue to be a company required to file reports under Section 13(a) or 15(d)
of the Exchange Act and cause the Shares to be listed on the NYSE.
(b) For so long as a Purchaser owns Shares, the Company covenants to
timely file (or obtain valid extensions in respect thereof) all reports required
to be filed by the Company after the date hereof pursuant to Section 13(a) or
15(d) of the Exchange Act. If the Company is not at the time required to file
reports pursuant to such sections, it will prepare and furnish to each Purchaser
-14-
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act in the time period that
such filings would have been required to have been made under the Exchange Act.
Section 5.2. Broker's or Finder's Commissions. The Company and the
Operating Partnership agree to indemnify and hold harmless each Purchaser from
and against any and all claims, demands or liabilities for broker's, finder's,
placement agent's or other similar fees or commissions payable or incurred or
alleged to have been incurred by the Company, the Operating Partnership or any
of their Subsidiaries or any Person acting or alleged to have been acting on the
Company's or the Operating Partnership's behalf, in connection with this
Agreement or the issuance or sale of the Shares.
Section 5.3. Fees and Expenses. The Company, the Operating Partnership
and each Purchaser shall pay all costs and expenses incurred by it or on its
behalf in connection with this Agreement and the transactions contemplated
hereby including, without limitation, fees and expenses of its financial
consultants, accountants and counsel.
Section 5.4. Indemnification by the Company.
(a) The Company agrees to indemnify, defend and hold harmless each
Purchaser and its officers, employees, agents, advisors, directors and
affiliates, and each other person, if any, controlling such person
(collectively, the "Indemnified Parties") from and against any and all losses,
claims, damages or liabilities (or actions in respect thereof), including costs
of defense other than costs of counsel referred to in the following paragraph,
of the Indemnified Parties (as incurred) as a result of, or based upon, relating
to or arising out of, directly or indirectly, the transactions contemplated
hereby or by the Registration Rights Agreement, as a consequence of (i) any
inaccuracy in, or breach or nonperformance of, any of the representations,
warranties, covenants or agreements made by Company in, or pursuant to this
Agreement, or (ii) any pending or threatened action brought by the Company's
shareholders or creditors or any other Person other than the Indemnified Parties
or their creditors relating to, or arising out of or in connection with,
directly or indirectly, the transactions contemplated under this Agreement;
provided, however, that the Company shall not be obligated to indemnify, defend
or hold harmless any of the Indemnified Parties for any claims based solely on
actions taken by any of the Indemnified Parties other than the performance of
the covenants and agreements to be undertaken by Purchasers pursuant to the
terms and conditions of this Agreement and any other action authorized in
writing by the Company.
-15-
(b) If any claim, demand or liability is asserted by any third party
against any Indemnified Party, the Company shall have the right, unless
otherwise precluded by applicable law, to conduct and control the defense,
compromise or settlement of any action or threatened action brought against the
Indemnified Party in respect of matters embraced by the indemnity set forth in
this Section 5.4. The Indemnified Party shall have the right to employ counsel
separate from counsel employed by the Company in connection with any such action
or threatened action and to participate in the defense thereof, but the fees and
expenses of such counsel employed by the Indemnified Party shall be at the sole
expense of the Indemnified Party unless (i) the Company shall have elected not
or, after reasonable written notice of any such action or threatened action,
shall have failed to assume or participate in the defense thereof, (ii) the
employment thereof has been specifically authorized by the Company in writing,
or (iii) the parties to any such action or threatened action (including any
impleaded parties) include both the Company and the Indemnified Party and the
Indemnified Party shall in good faith determine that there may be one or more
defenses available to the Indemnified Party that are not available to the
Company or legal conflicts of interest pursuant to applicable rules of
professional conduct between the Company and the Indemnified Party (in any which
case, the Company shall not have the right to assume the defense of such action
on behalf of the Indemnified Party), in either of which events referred to in
clauses (i), (ii) and (iii) the fees and expenses of such counsel employed by
the Indemnified Party shall be at the expense of the Company (as incurred). The
Company shall not, without the written consent of the Indemnified Party, settle
or compromise any such action or threatened action or consent to the entry of
any judgment which does not include as an unconditional term thereof the giving
by the claimant or the plaintiff to the Indemnified Party a release from all
liability in respect of such action or threatened action. Unless the Company
shall have elected not or shall have after reasonable written notice of any such
action or threatened action failed, to assume or participate in the defense
thereof, the Indemnified Party may not settle or compromise any action or
threatened action without the written consent of the Company. If, after
reasonable written notice of any such action or threatened action, the Company
neglects to defend the Indemnified Party, a recovery against the latter suffered
by it in good faith, is conclusive in its favor against the Company; provided,
however, that no such conclusive presumption shall be made if the Company has
not received reasonable written notice of the action against the Indemnified
Party. The indemnity set forth in this Section 5.4 shall survive the Closing or
termination of this Agreement.
-16-
ARTICLE VI
MISCELLANEOUS
-------------
Section 6.1. Survival of Provisions. The representations, warranties
and covenants of the Company, the Operating Partnership and the Purchasers made
herein and any statements contained in any certificate or other written
instrument delivered pursuant to this Agreement shall remain operative and in
full force and effect regardless of (a) any investigation made by or on behalf
of any Purchaser, the Company or the Operating Partnership, as the case may be,
(b) acceptance of any of the Shares and payment by the Purchasers therefor or
(c) any termination of this Agreement.
Section 6.2. Termination. This Agreement may be terminated (as
between the party electing so to terminate it and the counterparts to which
termination is directed) by giving written notice of termination to the
applicable counterparty:
(a) By the Company at any time prior to the Closing Date; or
(b) By any Purchaser if any of the conditions specified in Section
4.1 has not been met or waived by such Purchaser pursuant to the terms of
this Agreement by the Closing Date.
Section 6.3. No Waiver; Modifications in Writing. No failure or delay on
the part of the Company or any Purchaser in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further remedy. The remedies provided for herein are cumulative and are not
exclusive of any remedies that may be available to the Company, the Operating
Partnership or any Purchaser at law or in equity. No waiver of or provision of
this Agreement shall be effective unless signed in writing by the party entitled
to the benefit thereof, provided that notice of any such waiver shall be given
to each party hereto as set forth below. Except as otherwise provided herein,
no amendment, modification or termination of any provision of this Agreement
shall be effective unless signed in writing by or on behalf of the Company, the
Operating Partnership and each Purchaser. Any amendment, supplement or
modification of or to any of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on any party hereto in any
case shall entitle the other party hereto to any other or further notice or
demand in similar or other circumstances.
-17-
Section 6.4. Communications. All notices and demands provided for
hereunder shall be in writing, and shall be given by registered or certified
mail, return receipt requested, telecopy, courier service or personal delivery,
and, if to any Purchaser, addressed to such Purchaser as shown on the signature
pages hereof or to such other address as such Purchaser may designate to the
Company in writing and, if to any other holder of Shares, at such address as
such holder shall have furnished to the Company in writing and, if to the
Company, addressed to the Company at: Prime Group Realty Trust, 00 Xxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: President, with a copy to
Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Xxxxx X. Xxxxxx, or to such other address as the Company may designate in
writing, and shall be deemed given when received.
Section 6.5. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same agreement.
Section 6.6. Binding Effect; No Assignment. The rights and obligations of
the Purchasers under this Agreement may not be assigned without the prior
written consent of the Company, which consent may be withheld in its sole
discretion. Except as expressly provided in this Agreement, this Agreement shall
not be construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement, and their respective successors and permitted
assigns. This Agreement shall be binding upon the Company and the Operating
Partnership and each Purchaser, and their respective successors and permitted
assigns.
Section 6.7. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. By execution of this Agreement, each Purchaser
agrees for the benefit of the Company and the Operating Partnership that any
action or proceeding relating to this Agreement or the Common Shares shall be
brought in the courts of the State of New York or of the United States sitting
in New York City, the Borough of Manhattan, and each Purchaser agrees to submit
to the jurisdiction of such courts in any such action or proceeding.
Section 6.8. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
-18-
Section 6.9. Headings. The Articles and Section headings used or
contained in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
Section 6.10. Integration. This Agreement (including the exhibits hereto)
constitutes the entire agreement among the parties with respect to the purchase
and sale of the Shares and supersedes all prior agreements and understandings
between the parties hereto with respect to the transactions contemplated hereby,
and there are no promises or undertakings with respect to the purchase and sale
of the Shares relative to the subject matter hereof not expressly set forth or
referred to herein or in the Registration Rights Agreement.
[signature pages follow]
-19-
PURCHASE AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
PRIME GROUP REALTY TRUST
By: /s/ Xxxxxxx X. Xxxxxx
_____________________________
Xxxxxxx X. Xxxxxx,
Executive Vice President and
Chief Financial Officer
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust,
its managing general partner
By: /s/ Xxxxxxx X. Xxxxxx
_____________________________
Xxxxxxx X. Xxxxxx,
Executive Vice President and
Chief Financial Officer
S-1
PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and Agreed as of
the date first above written
By: XXXXX & STEERS CAPITAL MANAGEMENT, INC.,
as agent for each of the Purchasers listed below on this signature page
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr. Vice President
Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Number of Shares: 1,520,800
Price Per Share: $19.375
Aggregate Purchase Price: $19.375 Per Share
times 1,520,800 Shares
Please register Shares as follows:
Name: See Attached
Address: See Attached
Tax I.D. number of Person in whose name
the Shares are to be registered:
--------------------------------------
PURCHASERS:
Xxxxx & Steers Realty Shares, Inc.
Xxxxx & Steers Equity Income Fund
Xxxxx & Steers Special Equity Fund
Xxxxx & Steers Realty Income Fund
Xxxxx & Steers Total Return Realty Fund
IBM Retirement Fund
S-2
PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and Agreed as of
the date first above written
By: XXXXXX XXXXXXX ASSET MANAGEMENT, INC., as
attorney-in-fact for each of the Purchasers
listed below on this signature page
By: /s/ XXXXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Number of Shares: 774,194
Price Per Share: $19.375
Aggregate Purchase Price: $19.375 Per Share
times 774,194 Shares
Please register Shares as follows:
Name: See Attached
Address: 1221 Avenue of the Americas
22nd Floor Attn: Xxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Tax I.D. number of Person in whose name
the Shares are to be registered:
See Attached
PURCHASERS:
MS Real Estate Special Situations Inc.
Xxxxxx Xxxxxxx Real Estate Special Situations Investors, L.P.
The Xxxxxx Xxxxxxx Real Estate Special Situations Fund I, L.P.
The Xxxxxx Xxxxxxx Real Estate Special Situations Fund II, L.P.
Stichting Bedrijfspensioenfonds Voor De Metaalnijverheid
Stichting Pensioenfonds ABP
MS Special Funds Pte Ltd
S-2
Exhibit 1
---------
Form of Registration Rights Agreement
Exhibit 2
---------
Purchasers that are "employee benefit plans" covered by the Employee
Retirement Income Security Act of 1974, as amended.
None
Exhibit 3-A
-----------
Form of Opinion of Winston & Xxxxxx
Exhibit 3-B
-----------
Form of Opinion of Miles & Stockbridge
