EXHIBIT NO.99.3
AMENDMENT NO. 1
TO THE SECURITIES PURCHASE AND EXCHANGE AGREEMENT
This AMENDMENT NO. 1 TO THE SECURITIES PURCHASE AND EXCHANGE AGREEMENT
(this "Agreement") is made as of July 16, 2002 by and among Security Capital
Preferred Growth Incorporated, a Maryland corporation (the "Lender"), Prime
Group Realty Trust, a Maryland real estate investment trust (the "Company"), and
Prime Group Realty, L.P., a Delaware limited partnership (the "Operating
Partnership").
The Lender, the Company, the Operating Partnership and certain guarantors
are parties to the Securities Purchase and Exchange Agreement dated as of June
13, 2002 (the "Purchase Agreement"). All capitalized terms used without
definition in this Agreement will have the respective meanings provided in the
Purchase Agreement.
1. Amendment to Section 3F(i) of the Purchase Agreement. The parties hereto
agree that Section 3F(i) of the Purchase Agreement is hereby amended by
restating it to read as follows:
"(i) other than dividends or distributions by the Operating Partnership
or any Subsidiary of the Company to the Company and by any Subsidiary of
the Operating Partnership to the Operating Partnership or to any
Wholly-Owned Subsidiary of the Operating Partnership, directly or
indirectly declare or pay any dividends or make any distributions upon
(including acquisitions and redemptions of) any of the Capital Stock or
other equity securities of any of them (including preferred securities),
except for exchanges of common units of the Operating Partnership for
Common Shares pursuant to Section 8.6 of the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership, dated as
of November 17, 1997, as amended, such dividends as are necessary (in
the written opinion of tax counsel to the Company) for the Company to be
treated as a real estate investment trust pursuant to Sections 856
through 860 of the IRC and, after September 30, 2002, dividends by the
Company not to exceed $2,250,000 per calendar quarter to the holders of,
and in respect of, the Company's Series B Preferred Shares; provided,
that such dividends on the Series B Preferred Shares shall only be
permitted if, simultaneous with the declaration thereof, the Operating
Partnership repays principal on the Notes in an amount equal to (or such
smaller portion if the then outstanding aggregate amounts outstanding
under the Notes are less than the amount of such Series B Preferred
Share dividends) such Series B Preferred Share dividend (such
prepayments to be applied first to the Exchangeable Note and then to the
New Note); provided further that, notwithstanding anything contained in
this Agreement to the contrary, if an Event of Default or Potential
Event of Default has occurred and is continuing, neither the Company nor
the Operating Partnership shall directly or indirectly declare or pay
any dividends or make any distributions upon any of its Capital Stock or
other equity securities (including preferred securities) other than
dividends or distributions by the Operating Partnership or any
Subsidiary of the Company to the Company and by any Subsidiary of the
Operating Partnership to the Operating Partnership or to any
Wholly-Owned Subsidiary of the Operating Partnership and except for
exchanges of common units of the Operating Partnership for Common Shares
pursuant to Section 8.6 of the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated as of November 17, 1997,
as amended; the Company shall, however, declare and pay or set apart for
payment dividends on the Series B Preferred Shares for the first, second
and third quarterly dividend periods of 2002 so as to permit the
consummation of the Transactions and no Note prepayment (or a prepayment
of a portion thereof) shall be required with respect thereto;"
2. Addition of Section 3S to the Purchase Agreement. The parties hereto
agree that Section 3 of the Purchase Agreement is hereby amended by adding new
Section 3S thereto as follows:
"3S. Mandatory Prepayment upon Sale of Assets. In connection with any
sale, issuance, transfer, assignment or other disposition (whether
voluntary or involuntary or by operation of law and whether direct or
indirect) of any interest in any Subsidiary or any of the Company
Properties, the Operating Partnership shall prepay principal of the
Notes in an amount equal to the net proceeds realized from such sale,
issuance, transfer, assignment or other disposition (provided, that net
proceeds shall be calculated net of all indebtedness, including mortgage
debt or mezzanine debt on such Subsidiary or Company Property, for
purposes of this paragraph), plus all accrued and unpaid interest (with
such prepayment being applied first to the Exchangeable Note and then to
the New Note), subject to a maximum principal prepayment pursuant to
this Section 3S of $5,000,000 in the aggregate; provided, that any
prepayment with regard to Dearborn Center or 000 X. XxXxxxx shall be
counted toward this $5,000,000 maximum principal prepayment. The parties
agree that nothing in this Section 3S shall be deemed to limit or reduce
the Operating Partnership's other obligations to prepay the Notes that
are contained in any other Section of this Agreement, the Notes or any
other agreement, document or instrument contemplated by this Agreement."
3. Amendment to Section 5A of the Purchase Agreement. The parties hereto
agree that clause (vi) of the first sentence of the definition of "Authorized
Refinancings" in Section 5A of the Purchase Agreement is hereby amended by
restating it to read as follows:
"(vi) if such Refinancing Indebtedness is an aggregate principal amount
that is greater than the aggregate principal amount of the Indebtedness
being refinanced, extended or modified, and if the lender of such
Refinancing Indebtedness does not specifically require such excess, as a
material condition to entering into the Refinancing Indebtedness, to be
designated for specific uses relating to any asset encumbered by such
Refinancing Indebtedness, an amount equal to such excess shall have been
paid immediately upon the consummation of such refinancing, extension or
modification as a mandatory prepayment under the Notes, first to the
repayment of the Exchangeable Note and then the New Note; provided,
however, that no such mandatory prepayment shall be required with
respect to Refinancing Indebtedness of up to $5,000,000 of additional
mezzanine debt relating to the real property commonly known as IBM Plaza
at 000 Xxxxx Xxxxxx Xxx., Xxxxxxx, Xxxxxxxx."
4. Amendment to Section 7A of the Purchase Agreement. The parties hereto
agree that Section 7A of the Purchase Agreement is hereby amended by replacing
the amount "$300,000" in the first sentence of Section 7A with the amount
"$400,000".
5. Other Amendments to Purchase Agreement. The parties hereto agree that
the Purchase Agreement is further amended as follows:
(a) Notice to Manager of Plumcor/Thistle, L.L.C. On the date hereof or
within one (1) Business Day hereafter, the Operating Partnership shall cause
Phoenix Office, L.L.C. ("Phoenix Office") to send the written notice, in form
and substance reasonably satisfactory to the Lender, to the manager of
Plumcor/Thistle, L.L.C. ("Plumcor") that is required by the operating agreement
of Plumcor in connection with the Guarantee Joinder and Collateral Assignment of
Distributions referred to below.
(b) Guarantee Joinder and Collateral Assignment of Distributions. On July
30, 2002, the Operating Partnership shall cause Phoenix Office to execute and
deliver the Guarantee Joinder and Collateral Assignment of Distributions, in the
form attached hereto as Exhibit A.
6. Amendments to Schedules. The parties hereto agree that the following
Schedules to the Purchase Agreement are hereby amended by replacing each of them
with the Schedule of the same name attached hereto: (1) Real Estate Asset Sales
Schedule; (2) Capital Expenditure Schedule; (3) Contracts Schedule; (4)
Liabilities Schedule; (5) Capital Stock Liens Schedule; (6) Developments
Schedule; (7) Restrictions Schedule; (8) Taxes Schedule; (9) Properties
Schedule; (10) Indebtedness Schedule; (11) Subsidiaries Schedule; and (12)
Litigation Schedule.
7. Effect on Purchase Agreement. Except as expressly provided in this
Agreement, the Purchase Agreement and each of the agreements, documents or
instruments contemplated by the Purchase Agreement will continue and be in full
force and effect as originally executed and delivered by the parties.
8. Miscellaneous.
(a) Counterparts. This Agreement may be executed in more than one
counterpart with the same effect as if the parties executing the several
counterparts had all executed one counterpart. Any person or entity agreeing in
writing to be bound by the provisions of this Agreement shall be deemed to have
executed a counterpart of this Agreement for all purposes hereof.
(b) Successors. This Agreement shall be binding on the executors,
administrators, estates, heirs, legal representatives, successors and permitted
assigns of the parties.
(c) Governing Law. This Agreement and the rights of the parties hereunder
shall be interpreted in accordance with the laws of the State of Illinois, and
all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
* * * * * *
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
SECURITY CAPITAL PREFERRED GROWTH INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
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Its: Senior Vice President
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PRIME GROUP REALTY TRUST
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Its: Co-President
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PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust, its managing
general partner
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Its: Co-President
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Schedules intentionally omitted.
