EXHIBIT 10.14
FORM OF
REGISTRATION RIGHTS AGREEMENT
AMONG
PRIME GROUP REALTY TRUST
PRIME GROUP REALTY, L.P.
THE PRIME GROUP, INC.
PRIMESTONE INVESTMENT PARTNERS L.P.
and
THE OTHER INVESTORS NAMED HEREIN
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This REGISTRATION RIGHTS AGREEMENT is made as of the __ day of _____, 1997
(this "Agreement"), among PRIME GROUP REALTY TRUST, a Maryland real estate
investment trust (the "Company"), PRIME GROUP REALTY, L.P., a Delaware limited
partnership (the "Partnership"), LA SALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement dated June 15, 1982 and known as
Trust No. 00-00000-00, LA SALLE NATIONAL TRUST, N.A., not personally, but solely
as Trustee under Trust Agreement dated September 7, 1994 and known as Trust No.
11-9051, LA SALLE NATIONAL TRUST, N.A., not personally, but solely as Trustee
under Trust Agreement dated March 30, 1984 and known as Trust Xx. 00-000000, XX
XXXXX NATIONAL TRUST, N.A., not personally, but solely as Trustee under Trust
Agreement dated August 1, 1986 and known as Trust No. 11-1358, LA SALLE NATIONAL
TRUST, N.A., not personally, but solely s Trustee under Trust Agreement dated
August 1, 1986 and known as Trust No. 11-1357, LA SALLE NATIONAL TRUST, N.A.,
not personally, but solely as Trustee under Trust Agreement dated January 17,
1974 and known as Trust No. 286-34, LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under Trust Agreement dated October 15, 1995
and known as Trust No. 11-9869, LA SALLE NATIONAL TRUST, N.A., not personally,
but solely as Trustee under Trust Agreement dated December 1, 1987 and known as
Trust No. 11-2868, 310 ERA LIMITED PARTNERSHIP, an Illinois limited partnership,
MAC XXXXXX DRIVE PROPERTIES, an Illinois limited partnership, CLE LIMITED
PARTNERSHIP, an Illinois limited partnership, 500 XXXXXXXX LIMITED PARTNERSHIP,
an Illinois limited partnership, 515 XXXXX LIMITED PARTNERSHIP, an Illinois
limited partnership, 555 XXXXX LIMITED PARTNERSHIP, an Illinois limited
partnership, SKY HARBOR ASSOCIATES, an
Illinois limited partnership, 1001 TECHNOLOGY WAY, LLC, an Illinois limited
liability company, THE GRANDVILLE ROAD LIMITED PARTNERSHIP, an Illinois limited
partnership, by GRANDVILLE/NORTHWESTERN MANAGEMENT CORPORATION, an Illinois
corporation, its General Partner, INDUSTRIAL BUILDING AND DEVELOPMENT COMPANY
(the foregoing other than the Company and the Partnership being hereafter
referred to collectively as a "Contributor"), PRIMESTONE INVESTMENT PARTNERS,
L.P., a Delaware limited partnership ("Primestone"), THE PRIME GROUP, INC., an
Illinois corporation ("Prime"), the affiliates of Prime set forth on Exhibit A
hereto and the Permitted Transferees (as defined below) of each of the foregoing
entities (such entities or Permitted Transferees are sometimes referred to
herein individually as an "Investor" and collectively as the "Investors").
Xxxxxxx Xxxxxxxxx is referred to herein as a "Management Investor".
W I T N E S S E T H:
-------------------
WHEREAS, the Investors and the Management Investor will hold the limited
partnership interests in the Partnership set forth in Exhibit A hereto (the
"Common Units"), which Common Units may be exchanged for common shares of
beneficial interest of the Company (the "Common Shares") pursuant to certain
exchange rights set forth on Exhibit C to that certain Amended and Restated
Agreement of Limited Partnership of Prime Group Realty, L.P., dated
____________, 1997 (the "Partnership Agreement"); and
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WHEREAS, the Company has agreed to provide the Investors and the Management
Investor with certain registration rights as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to and on the terms
and conditions herein set forth, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
-------------------
1.1. "Agreement" is defined in the first paragraph of this Agreement.
1.2. "Blackout Termination Right" is defined in Section 5.3(b) hereof.
1.3. "Business Day" means any day on which the New York Stock Exchange is
open for trading.
1.4. "Company" is defined in the first paragraph of this Agreement.
1.5. "Contributor" is defined in the first paragraph of this Agreement.
1.6. "Contributor Investor Group" means collectively the Contributor and
their Permitted Transferees.
1.7. "Effectiveness Period" is defined in Section 4.3 hereof.
1.8. "Eligible Securities" means all or any portion of the Common Shares
acquired by the Investors and the Management Investor upon exchange of the
Common Units. As to any proposed offer or sale of Eligible Securities, such
securities shall cease to be Eligible Securities with respect to such proposed
offer or sale when (i) a registration statement with respect to the sale of such
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securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement or (ii) such securities are permitted to be disposed of pursuant to
Rule 144(k) (or any successor provision to such Rule) under the Securities Act
as confirmed in a written opinion of counsel to the Company addressed to the
Investors and the Management Investor, (iii) such securities shall have been
otherwise transferred pursuant to Rule 144 (or any successor rule) or pursuant
to another applicable exemption under the Securities Act, new certificates for
such securities not bearing a legend restricting further transfer shall have
been delivered by the Company and such securities shall be freely transferable
to the public without registration under the Securities Act or (iv) such
securities are no longer outstanding.
1.9. "Information Blackout" is defined in Section 5.3(a) hereof.
1.10. "Investor Group" means any of the Contributor Investor Group, the
Primestone Investor Group or the Prime Investor Group.
1.11. "Investor" means any of the Contributors, the Primestone Investor
Group and the Prime Investor Group, and any of their Permitted Transferees.
1.12. "IPO" means the Company's initial public offering of Common
Shares and any other capital stock of the Company offered simultaneously with
the Common Shares.
1.13. "IPO Date" means the date of the final prospectus used by the
Company in the IPO.
1.14. "Lock-Up Agreements" means (i) the Lock-Up Agreement, dated
_________, 1997, among the Prime Investor Group and the Underwriter, (ii) the
Lock-Up Agreement, dated__________, 1997, among the Contributor and the
Underwriter, (iii) the Lock-Up Agreement,
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dated ________, 1997, among the Management Investor and the Underwriter, and
(iv) the Lock-Up Agreement, dated ________, 1997 among Primestone Investor Group
and the Underwriter.
1.15. "Management Investor" is defined in the first paragraph of this
Agreement.
1.16. "Partnership" is defined in the first paragraph of this
Agreement.
1.17. "Partnership Agreement" means that certain Amended and Restated
Agreement of Limited Partnership of Prime Group Realty, L.P., dated ________,
1997.
1.18. "Participating Investor" is defined in Section 3.3(a) hereof.
1.19. "Person" means an individual, a partnership (general or limited),
corporation, real estate investment trust, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a quasi-
governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
1.20. "Permitted Transferees" with respect to each Investor means the
Persons which qualify as Qualified Transferees under the Partnership Agreement.
1.21. "Prime" is defined in the first paragraph of this Agreement.
1.22. "Primestone" is defined in the first paragraph of this Agreement.
1.23. "Prime Investor Group" means collectively Prime, the affiliates
of Prime set forth on Exhibit A hereto and their Permitted Transferees.
1.24. "Primestone Investor Group" mean collectively Primestone and its
Permitted Transferees.
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1.25. "Primestone Registration" means at any time after the occurrence of
the Twelve Month Date the request for registration under the Securities Act and
the subsequent registration of all of the Eligible Securities requested by
Primestone to be registered.
1.26. "Registration Date" is defined in Section 2.1 hereof.
1.27. "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the registration requirements set
forth in this Agreement including, without limitation, the following: (i) the
fees, disbursements and expenses of the Company's counsel(s) (United States and
foreign), accountants and experts in connection with the registration of
Eligible Securities to be disposed of under the Securities Act; (ii) all
expenses in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to the underwriters and dealers; (iii) the cost
of printing or producing any agreement(s) among underwriters, underwriting
agreement(s) and blue sky or legal investment memoranda, any selling agreements
and any other documents in connection with the offering, sale or delivery of
Eligible Securities to be disposed of; (iv) all expenses in connection with the
qualification of Eligible Securities to be disposed of for offering and sale
under state securities laws, including the fees and disbursements of counsel for
the underwriters in connection with such qualification and in connection with
any blue sky and legal investment surveys; (v) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of Eligible Securities to be disposed of; and (vi)
fees and expenses incurred in connection with the listing of Eligible Securities
on each securities exchange or quotation system
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on which the Common Shares are then listed; provided, however, that Registration
Expenses with respect to any registration pursuant to this Agreement shall not
include underwriting discounts or commissions attributable to Eligible
Securities, SEC or blue sky registration fees attributable to Eligible
Securities or transfer taxes applicable to Eligible Securities.
1.28. "Requesting Investor" means an Investor requesting registration of
its Eligible Securities in accordance with the terms hereof.
1.29. "Sales Blackout Period" is defined in Section 5.3(a)(iii) hereof.
1.30. "SEC" means the United States Securities and Exchange Commission.
1.31. "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the relevant time.
1.32. "Selling Investor" means the Requesting Investor and each
Participating Investor or any Investor or Management Investor who has requested
registration pursuant to Section 4.1 hereof, as applicable.
1.33. "Shelf Registration Statement" is defined in Section 4.3 hereof.
1.34. "Twelve Month Date" means the date that is twelve months after
the IPO Date, and if such date is not a Business Day, the next succeeding date
that is a Business Day.
1.35. "Underwriter" means Prudential Securities Incorporated.
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ARTICLE II
EFFECTIVENESS OF REGISTRATION RIGHTS
------------------------------------
SECTION 2.1 Effectiveness of Registration Rights. This Agreement
shall become effective on the date hereof, provided, however, that the
registration of any Eligible Securities pursuant to Articles 3 and 4 hereof by
the Investors and Management Investor prior to the Twelve- Month Date (each such
dates being hereinafter referred to as a "Registration Date"), shall be subject
to the prior receipt of the written consent of the Company and the Underwriter
to the waiver of the restrictions on transfer of the Common Shares held by the
Investors or the Management Investor requesting such consent under the terms of
the Partnership Agreement and their respective Lock-Up Agreements.
ARTICLE III
REGISTRATION REQUEST
--------------------
SECTION 3.1 Request. Upon written request from an Investor
requesting that the Company effect the registration under the Securities Act of
all or part of the Eligible Securities held by such Investor, which notice may
be delivered at any time within three months prior to the Registration Date for
the applicable Investor Group and which notice shall specify the intended method
or methods of disposition of such Eligible Securities, the Company will use all
reasonable efforts to effect (at the earliest possible date) the registration,
under the Securities Act, of such Eligible Securities for disposition in
accordance with the intended method or methods of disposition stated in such
request; provided that:
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3.1. if the Company shall have previously effected a registration
with respect to Eligible Securities pursuant to Article 4 hereof, the
Company shall not be required to effect a registration pursuant to this
Article 3 until a period of one hundred twenty (120) days shall have
elapsed from the effective date of the most recent such previous
registration;
3.2. if, upon receipt of a registration request pursuant to this
Article 3, the Company is advised in writing (with a copy to the Selling
Investors) by a nationally recognized independent investment banking firm
selected by the Company to act as lead underwriter in connection with a
public offering of securities by the Company that, in such firm's opinion,
a registration at the time and on the terms requested would materially
adversely affect such public offering of securities by the Company (other
than an offering in connection with employee benefit and similar plans) (a
"Company Offering") that prior to the receipt of the notice by the
Requesting Investor had been contemplated by the Company's Board of
Trustees to be filed (and which is in fact filed) within sixty (60) days of
receipt of the notice by the Requesting Investors, the Company shall not be
required to effect a registration pursuant to this Article 3 until the
earliest of (i) three months after the completion of such Company Offering,
(ii) the termination of any blackout period, if any, required by the
underwriters to be applicable to the Selling Investors in connection with
such Company Offering and agreed to in writing by the Selling Investors,
(iii) promptly after abandonment of such Company Offering or (iv) four
months after the date of written notice requesting registration from the
Investor who initially requested registration;
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3.3. if, while a registration request is pending pursuant to this
Article 3, the Company determines in the good faith judgment of the Board
of Trustees of the Company, with the advice of counsel, that the filing of
a registration statement would require the disclosure of non-public
material information the disclosure of which would have a material adverse
effect on the Company or would otherwise adversely affect a material
financing, acquisition, disposition, merger or other comparable
transaction, the Company shall deliver a certificate to such effect signed
by its Chief Executive Officer, President, or any Executive Vice President
to the Selling Investors, and the Company shall not be required to effect a
registration pursuant to this Article 3 until the earlier of (i) the date
upon which such material information is disclosed to the public or ceases
to be material or (ii) 60 days after the Company makes such good faith
determination; and
3.4. the Company shall not be required to effect (i) more than two
registrations pursuant to this Article 3 in any calendar year per each
Investor Group and (ii) a registration of Eligible Securities, the Fair
Market Value of which on the date of the registration request (determined
as set forth in the Partnership Agreement) is less than $_______ million.
No registration of Eligible Securities under this Article 3 shall relieve
the Company of its obligation (if any) to effect registrations of Eligible
Securities pursuant to Article 4 hereof.
SECTION 3.2 Registration Expenses. With respect to the registrations
requested pursuant to this Article 3 and any registration arising from an
exercise of a Blackout Termination Right (as defined below), the Company shall
pay all Registration Expenses.
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SECTION 3.3 Other Investor Shares. (a) Upon receipt of the written notice
from a Requesting Investor, the Company shall give written notice to each other
Investor and to the Management Investor. Subject to Section 3.3(b) hereof, the
Company shall be required to cause the registration of securities for sale for
the account of any Investor or the Management Investor (the "Participating
Investor") in any registration of Eligible Securities requested pursuant to this
Article 3 who has delivered written notice to the Company within fifteen (15)
Business Days of the date of receipt by such Participating Investor of the
above-referenced written notice from the Company (which notice from the
Participating Investor to the Company shall specify the number of shares to be
disposed of and the intended method of disposition); provided, that the Company
shall not be required to cause the registration of all of the securities
requested to be registered by Participating Investors if the Requesting Investor
is advised in writing (with a copy to the Company) by a nationally recognized
independent investment banking firm selected by the Requesting Investors (or as
determined by Section 3.3(c)) that, in such firm's opinion, registration of all
of such securities would materially adversely affect the offering and sale of
Eligible Securities then contemplated by the Requesting Investor.
(b) If the Company cannot, pursuant to the terms of this Section 3.3,
register all of the shares requested to be registered, the Company shall
register the Maximum Amount (as defined below), and, other than for a Primestone
Registration, such amount shall be allocated between the Contributor Investor
Group, the Primestone Investor Group and the Prime Investor Group, pro rata
according to the number of shares for which registration was initially requested
by each Investor Group without giving any effect to any shares requested to be
registered by the
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Management Investor. The amount allocated to each Investor Group shall be
further allocated to each Selling Investor within such Investor Group pro rata
according to the number of shares for which registration was initially requested
by each Selling Investor within such Investor Group. Solely for purposes of the
preceding sentence, the Management Investor shall be treated as a Selling
Investor within the Prime Investor Group. Notwithstanding the foregoing, in the
event the Requesting Investor is Primestone requesting a Primestone
Registration, then the amount of Eligible Securities which the Contributor
Investor Group, Prime Investor Group and the Management Investor shall be
allowed to register shall be the Maximum Amount less the number of Eligible
Securities requested to be registered by Primestone in the Primestone
Registration. For purposes of this Section 3.3, "Maximum Amount" shall mean the
largest number of shares (if any) that, in the opinion of the nationally
recognized underwriter selected by the Requesting Investor (or as determined by
Section 3.3(c) hereof), for purposes of Section 3.3(a) hereof, could be offered
to the public without materially adversely affecting the offering and sale of
Eligible Securities as then contemplated by the Selling Investors.
(c) In the event that more than one Investor exercises registration
rights on the same day, the Investor who requested a registration of the larger
number of shares on such day shall be entitled to select the lead underwriter
for such registered offering (if such offering will be underwritten). In all
other cases, the first Investor to exercise registration rights with respect to
any particular registration demand shall be entitled to select the lead
underwriter for such registered offering (if such offering will be
underwritten).
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Notwithstanding this Article 3, each Selling Investor may elect, in
writing prior to the effective date of the registration statement filed in
connection with a registration under this Article 3, not to register its
Eligible Securities in connection with such registration; provided, that if such
Selling Investor is one of the Requesting Investors, such Selling Investor will
be deemed to have used one of the two rights each year to request registration
of Eligible Securities under this Article 3 allocated to the Investor Group of
which it is a member pursuant to Section 3.1(d) hereof.
ARTICLE IV
INCIDENTAL REGISTRATION
-----------------------
SECTION 4.1 Notice and Registration. If the Company proposes to
register any Common Shares, any equity securities exercisable for, convertible
into or exchangeable for Common Shares, or other securities issued by it having
terms substantially similar to Eligible Securities ("Other Securities") for
public sale under the Securities Act (whether proposed to be offered for sale by
the Company or by any other Person) on a form and in a manner which would permit
registration of Eligible Securities for sale to the public under the Securities
Act, it will give prompt written notice to the Investors and the Management
Investor of its intention to do so, and upon the written request of any Investor
or the Management Investor delivered to the Company within fifteen (15) Business
Days after the giving of any such notice (which request shall specify the number
of Eligible Securities intended to be disposed of by such Investor or Management
Investor and the intended method of disposition thereof), the Company will use
all reasonable efforts to effect, in connection with the registration of the
Other Securities, the registration under the Securities Act of all Eligible
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Securities which the Company has been so requested to register by the Selling
Investor(s), to the extent required to permit the disposition (in accordance
with the intended method or methods thereof as aforesaid) of Eligible Securities
so to be registered; provided that:
4.1. if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date
of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register the Other
Securities, the Company may, at its election, give written notice of such
determination to the Investors and the Management Investor and thereupon
the Company shall be relieved of its obligation to register such Eligible
Securities in connection with the registration of such Other Securities
(but not from its obligation to pay Registration Expenses to the extent
incurred in connection therewith as provided in Section 4.2 hereof),
without prejudice, however, to the rights (if any) of the Investors
immediately to request that such registration be effected as a registration
under Article 3 hereof;
4.2. The Company will not be required to effect any registration
pursuant to this Article 4 if the Company shall have been advised in
writing (with a copy to the Selling Investors) by a nationally recognized
independent investment banking firm selected by the Company to act as lead
underwriter in connection with the public offering of securities by the
Company that, in such firm's opinion, a registration of Eligible Securities
requested to be registered at that time would materially and adversely
affect the Company's own scheduled offering of Other Securities; provided,
however, that if an offering of some but not all of the Eligible Securities
requested to be registered by the Investor(s) and the
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Management Investor would not materially adversely affect the Company's
offering of Other Securities, the aggregate number of Eligible Securities
requested to be included in such offering by the Investors and the
Management Investor shall be reduced pro rata according to the total number
of Eligible Securities requested to be registered by such Persons;
4.3. The Company shall not be required to effect any registration of
Eligible Securities under this Article 4 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange
offers, subscription offers, dividend reinvestment plans or share options
or other employee benefit plans.
4.4. Notwithstanding any request under Section 4.1(a) hereof, a
Selling Investor may elect in writing prior to the effective date of a
registration under this Article 4, not to register its Eligible Securities
in connection with such registration.
4.5. No registration of Eligible Securities effected under this
Article 4 shall relieve the Company of its obligation (if any) to effect
registrations of Eligible Securities pursuant to Article 3 hereof.
SECTION 4.2 Registration Expenses. The Company shall be responsible for
the payment of all Registration Expenses in connection with any registration
pursuant to this Article 4.
SECTION 4.3 Shelf Registration Statement
(a) Shelf Registration Statement. The Company shall as promptly as
reasonably practicable subsequent to the Twelve Month Date file with the SEC a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Eligible Securities (the "Shelf Registration
Statement"). If the Shelf Registration Statement shall be on the appropriate
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form permitting registration of such Eligible Securities for resale by Investors
in the manner or manners designated by them (including, without limitation, one
or more underwritten offerings). The Company will notify each Investor when such
Shelf Registration Statement has become effective.
The Company shall use its best efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act as promptly as
practicable after the filing of the Shelf Registration Statement and (subject to
compliance with the restrictions on registrations set forth in Articles III and
IV hereof which shall be applicable with respect to the Shelf Registration) to
keep the Shelf Registration Statement continuously effective under the
Securities Act until the date which is two and one half years from the date of
its initial effectiveness ("Effectiveness Period"), or such period ending when
all Eligible Securities covered by the Shelf Registration Statement have been
sold in the manner set forth and as contemplated in the Shelf Registration
Statement.
(b) Withdrawal of Stop Orders. If the Shelf Registration Statement
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the securities registered
thereunder), the Company shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.
(c) Supplement and Amendments. The Company shall promptly supplement
and amend the Shelf Registration Statement if required by the rules, regulations
or instructions applicable to the registration form used for such Shelf
Registration Statement, if required by the Securities Act.
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ARTICLE V
REGISTRATION PROCEDURES
-----------------------
SECTION 5.1 Registration and Qualification. If and whenever the
Company is required to use all reasonable efforts to effect the registration of
any Eligible Securities under the Securities Act as provided in Articles 3 or 4
hereof, the Company will, as promptly as is practicable:
5.1. prepare, file and use all reasonable efforts to cause to become
effective a registration statement under the Securities Act regarding the
Eligible Securities to be offered;
5.2. prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to the
disposition of all Eligible Securities until the earlier of such time as
all of such Eligible Securities have been disposed of in accordance with
the intended methods of disposition by the Selling Investors set forth in
such registration statement or the expiration of twelve months after such
Registration Statement becomes effective;
5.3. furnish to the Selling Investors and to any underwriter of such
Eligible Securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included
in such registration statement (including each preliminary prospectus and
any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such
registration statement or
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prospectus, and such other documents as the Selling Investors or such
underwriter may reasonably request;
5.4. use all reasonable efforts to register or qualify all Eligible
Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Selling Investors
or any underwriter of such Eligible Securities shall reasonably request,
and do any and all other acts and things which may be reasonably requested
by the Selling Investors or any underwriter to consummate the disposition
in such jurisdictions of the Eligible Securities covered by such
registration statement, except the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it is not so qualified, or to subject itself to
taxation in any jurisdiction where it is not then subject to taxation, or
to consent to general service of process in any jurisdiction where it is
not then subject to service of process;
5.5. use all reasonable efforts to list the Eligible Securities on
each national securities exchange or quotation system on which the Common
Shares are then listed, if the listing of such securities is then permitted
under the rules of such exchange;
5.6. (i) furnish to the Selling Investors an opinion of counsel for
the Company, addressed to them, dated the date of the closing under the
underwriting agreement, and (ii) upon such Selling Investor's request, use
all reasonable efforts to furnish to the Selling Investors a "comfort
letter" signed by the independent public accountants who have certified the
Company's financial statements included in such registration statement,
addressed to them; provided that with respect to such opinion and "comfort
letter," the following shall
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apply: (A) the opinion and "comfort letter" shall cover substantially the
same matters with respect to such registration statement (and the
prospectus included therein) as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Selling Investors may reasonably request; and (B) the "comfort letter" also
shall cover events subsequent to the date of such financial statements; and
5.7. notify the Selling Investors immediately upon the happening of
any event as a result of which a prospectus included in a registration
statement, relating to a registration pursuant to Article 3 or 4 hereof, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, and at the request of the Selling Investors
prepare and furnish to the Selling Investors as many copies of a supplement
to or an amendment of such prospectus as the Selling Investors reasonably
request so that, as thereafter delivered to the purchasers of such Eligible
Securities, such prospectus shall not include 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.
The Company may require the Selling Investors to furnish the Company such
information regarding the Selling Investors and the distribution of such
securities as the Company may from time to time reasonably request in writing
and as shall be required by law or by the SEC in connection with any
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registration. Failure of the Selling Investors to provide such information will
relieve the Company of its obligation to register such Selling Investor's
Eligible Securities.
SECTION 5.2 Underwriting. (a) If requested by the underwriters for any
underwritten offering of Eligible Securities pursuant to a registration
described in this Agreement, the Company will enter into and perform its
obligations under an underwriting agreement with such underwriters for such
offering, such agreement to contain such representations and warranties by the
Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect and to the extent
provided in Article 7 hereof and the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section 5.1(f)
hereof. The holders of Eligible Securities on whose behalf Eligible Securities
are to be distributed by such underwriters shall be parties to any such
underwriting agreement and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Eligible Securities.
(b) In the event that any registration pursuant to Article 4 hereof
shall involve, in whole or in part, an underwritten offering, the Company may
require Eligible Securities requested to be registered pursuant to Article 4
hereof to be included in such underwriting on the same terms and conditions as
shall be applicable to the Other Securities being sold through underwriters
under such registration. In such case, the holders of Eligible Securities on
whose behalf Eligible Securities are to be distributed by such underwriters
shall be parties to any such underwriting agreement. Such agreement shall
contain such representations and warranties by the Company and the Selling
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Investors and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect and to the extent
provided in Article 7 hereof. The representations and warranties in such
underwriting agreement by, and the other agreements on the part of, the Company
to and for the benefit of such underwriters shall also be made to and for the
benefit of such holders of Eligible Securities.
SECTION 5.3 Blackout Periods. (a) At any time when a registration
statement effected pursuant to Article 3 hereof relating to Eligible Securities
is effective, upon written notice from the Company to the Selling Investors that
the Company determines in the good faith judgment of the Board of Trustees of
the Company, with the advice of counsel, that the Selling Investors' sale of
Eligible Securities pursuant to the registration statement would require
disclosure of non-public material information the disclosure of which would have
a material adverse effect on the Company (an "Information Blackout"), the
Selling Investors shall suspend sales of Eligible Securities pursuant to such
registration statement until the earliest of:
(b) the date upon which such material information is disclosed to
the public or ceases to be material;
(c) 60 days after the Company makes a good faith determination
that such material information ceases to be material; and
(d) such time as the Company notifies the Selling Investors that
sales pursuant to such registration statement may be resumed.
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(The number of days from such suspension of sales by the Selling Investors until
the day when such sales may be resumed under clause (i), (ii) or (iii) hereof is
hereinafter called a "Sales Blackout Period".)
(b) Any delivery by the Company of notice of an Information Blackout
during the 90 days immediately following effectiveness of any registration
statement effected pursuant to Article 3 hereof shall give the Investors the
right, by written notice to the Company within 20 Business Days after the end of
such Sales Blackout Period, to cancel such registration and obtain one
additional registration right during such calendar year (a "Blackout Termination
Right") under Article 3 hereof.
(c) If there is an Information Blackout and if the Investors do not
exercise their cancellation right, if any, pursuant to Section 5.3(b) hereof,
or, if such cancellation right is not available, the time period set forth in
Section 5.1(b) hereof shall be extended for a number of days equal to the number
of days in the Sales Blackout Period.
SECTION 5.4 Qualification for Rule 144 Sales. The Company will take all
actions reasonably necessary to comply with the filing requirements described in
Rule 144(c)(1) so as to enable the Investors or the Management Investor to sell
Eligible Securities without registration under the Securities Act and, upon the
written request of any Investor or the Management Investor, the Company will
deliver to such Investor or Management Investor a written statement as to
whether it has complied with such filing requirements.
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ARTICLE VI
PREPARATION; REASONABLE INVESTIGATION
-------------------------------------
SECTION 6.1 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement registering Eligible
Securities under the Securities Act, the Company will give the Selling Investors
and the underwriters, if any, and their respective counsel and accountants,
drafts of such registration statement for their review and comment prior to
filing and such reasonable and customary access to its books and records and
such opportunities to discuss the business of the Company with its officers,
counsel and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of the Selling Investors and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
ARTICLE VII
INDEMNIFICATION AND CONTRIBUTION
--------------------------------
SECTION 7.1 Indemnification. (a) In the event of any registration of
Eligible Securities hereunder, the Company and the Partnership jointly and
severally will, and hereby do, indemnify and hold harmless, each Selling
Investor, its respective directors, trustees, officers, partners, agents,
employees and affiliates and each other person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any, who controls each such Selling Investor or any such underwriter within the
meaning of the Securities Act, against any and all losses, claims, damages,
expenses or liabilities, joint or several, actions or proceedings (whether
commenced or
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threatened) in respect thereof, to which each such indemnified party may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages, expenses or liabilities (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company and the
Partnership will reimburse each such Selling Investor and each such director,
trustee, officer, partner, agent, employee or affiliate, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
expense, liability, action, or proceeding; provided, however, that (i) the
Company and the Partnership shall not be liable in any such case to the extent
that any such loss, claim, damage, expense or liability (or action or proceeding
in respect thereof) arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by or on behalf of such Selling Investor or underwriter specifically
stating that it is for use in the preparation thereof and (ii) the Company and
the Partnership shall not be liable to any person who participates as an
underwriter in the offering
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or sale of Eligible Securities or any other person, if any, who controls or is
controlled by such underwriter within the meaning of the Securities Act, in any
such case to the extent that any such loss, claim, damage, expense or liability
(or action or proceeding in respect thereof) arises out of such underwriter's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Eligible Securities to such person if such statement
or omission was corrected in such final prospectus.
(b) Each Selling Investor severally will, and hereby does, indemnify
and hold harmless the Company, its trustees, its officers who sign the
registration statement, each Person who participates as an underwriter in the
offering or sale of such securities, and each Person, if any, who controls the
Company or any such underwriter within the meaning of the Securities Act against
any and all losses, claims, damages, expenses or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in respect thereof, to
which each such indemnified party may become subject under the Securities Act or
otherwise insofar as such losses, claims, damages, expenses or liabilities (or
actions or proceedings, whether commenced or threatened in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact in or omission or alleged omission to state a material fact
in such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
but only to the extent that such statement or omission was made in reliance upon
and in conformity with written information furnished by such Selling Investor to
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the Company through an instrument duly executed by or on behalf of such Selling
Investor specifically stating that it is for use in preparation thereof.
(c) Promptly after receipt by any indemnified party hereunder of
notice of the commencement of any action or proceeding involving a claim
referred to in paragraphs (a) or (b) of this Section 7.1, the indemnified party
will notify the indemnifying party in writing of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
under paragraphs (a) or (b) of this Section 7.1.
(d) If for any reason the indemnity under this Section 7.1 is
unavailable or is insufficient to hold harmless any indemnified party under
paragraphs (a) or (b) of this Section 7.1, then the indemnifying parties shall
contribute to the amount paid or payable to the indemnified party as a result of
any loss, claim, expense, damage or liability (or actions or proceedings,
whether commenced or threatened, in respect thereof), and legal or other
expenses reasonably incurred by the indemnified party in connection with
investigating or defending any such loss, claim, expense, damage, liability,
action or proceeding, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Investor and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. If, however, the allocation provided
in the second preceding sentence is not permitted by
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applicable law, or if the allocation provided in the second preceding sentence
provides a lesser sum to the indemnified party than the amount hereinbefore
calculated, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party in such proportion as is appropriate to reflect
not only such relative fault but also the relative benefits of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this paragraph (d) of Section 7.1 were to
be determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
preceding sentences of this paragraph (d) of Section 7.1.
(e) Indemnification and contribution similar to that specified in this
Section 7.1 (with appropriate modifications) shall be given by the Company and
the Partnership and the Selling Investors with respect to any required
registration or other qualification of securities under any federal, state or
blue sky law or regulation of any governmental authority other than the
Securities Act.
(f) Notwithstanding any other provision of this Section 7.1, to the
extent that any director, trustee, officer, partner, agent, employee, affiliate,
or other representative (current or former) of any indemnified party is a
witness in any action or proceeding, the indemnifying party agrees to pay to the
indemnified party all expenses reasonably incurred by, or on the behalf of, the
indemnified party and such witness in connection therewith.
(g) All legal and other expenses incurred by or on behalf of any
Selling Investor in connection with investigating or defending any loss, claim,
expense, damage, liability, action or
C-27
proceeding shall be paid by the Company or the Partnership in advance of the
final disposition of such investigation, defense, action or proceeding within
twenty days after the receipt by the Company or the Partnership of a statement
or statements from the Selling Investor requesting from time to time such
payment, advance or advances. The entitlement of each Selling Investor to such
payment or advancement of expenses shall include those incurred in connection
with any action or proceeding by the Selling Investor seeking an adjudication or
award in arbitration pursuant to this Section 7.1. Such statement or statements
shall reasonably evidence such expenses incurred by the Selling Investor in
connection therewith.
(h) The termination of any proceeding by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, adversely affect the rights of any indemnified party to
indemnification hereunder or create a presumption that any indemnified party
violated any federal or state securities laws.
(i) (i) In the event that advances are not made pursuant to this
Section 7.1 or payment has not otherwise been timely made, each indemnified
party shall be entitled to seek a final adjudication in an appropriate court of
competent jurisdiction of the entitlement of the indemnified party to
indemnification or advances hereunder.
(ii) The Company, the Partnership and the Selling Investors agree
that they shall be precluded from asserting that the procedures and presumptions
of this Section 7.1 are not valid, binding and enforceable. The Company, the
Partnership and the Selling Investors further agree to stipulate in any such
court that the Company, the Partnership, and the Selling Investors are
C-28
bound by all the provisions of this Section 7.1 and are precluded from making
any assertion to the contrary.
(iii) To the extent deemed appropriate by the court, interest
shall be paid by the indemnifying party to the indemnified party at a reasonable
interest rate for amounts which the indemnifying party has not timely paid as
the result of its indemnification and contribution obligations hereunder.
(j) In the event that any indemnified party is a party to or
intervenes in any proceeding in which the validity or enforceability of this
Section 7.1 is at issue or seeks an adjudication to enforce the rights of any
indemnified party under, or to recover damages for breach of, this Section 7.1,
the indemnified party, if the indemnified party prevails in whole in such
action, shall be entitled to recover from the indemnifying party and shall be
indemnified by the indemnifying party against, any expenses incurred by the
indemnified party. If it is determined that the indemnified party is entitled to
indemnification for part (but not all) of the indemnification so requested,
expenses incurred in seeking enforcement of such partial indemnification shall
be reasonably prorated among the claims, issues or matters for which the
indemnified party is entitled to indemnification and for such claims, issues or
matters for which the indemnified party is not so entitled.
(k) The indemnity agreements contained in this Section 7.1 shall be
in addition to any other rights (to indemnification, contribution or otherwise)
which any indemnified party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless
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of any investigation made or omitted by or on behalf of any indemnified party
and shall survive the transfer of any Eligible Securities by any Investor or the
Management Investor.
ARTICLE VIII
BENEFITS OF REGISTRATION RIGHTS
-------------------------------
SECTION 8.1 Benefits of Registration Rights. Subject to the limitations of
Sections 3.1 and 4.1 hereof, each member of the Contributor Investor Group and
the Prime Investor Group, and their Permitted Transferees of Eligible Securities
may severally or jointly exercise the registration rights hereunder in such
proportion as they shall agree among themselves. No consent of any Investor
shall be required for Permitted Transferees to exercise registration rights
under this Agreement or otherwise to be entitled to the benefits of this
Agreement as applicable to all Investors. The Management Investor may not
transfer his rights under this Agreement to any other Person. The Company agrees
that monetary damages would not compensate the Investors and Management Investor
for a breach by the Company hereof and the Investors and the Management Investor
shall be entitled to specific performance of this Agreement.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.1 Captions. The captions or headings in this Agreement are for
convenience and reference only, and in no way define, describe, extend or limit
the scope or intent of this Agreement.
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SECTION 9.2 Severability. If any clause, provision or section of this
Agreement shall be invalid or unenforceable, the invalidity or unenforceability
of such clause, provision or section shall not affect the enforceability or
validity of any of the remaining clauses, provisions or sections hereof to the
extent permitted by applicable law.
SECTION 9.3 Governing Law. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Maryland, without
reference to its rules as to conflicts or choice of laws.
SECTION 9.4 Modification and Amendment. This Agreement may not be
changed, modified, discharged or amended, except by an instrument signed by all
of the parties hereto.
SECTION 9.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
SECTION 9.6 Entire Agreement. This Agreement constitutes the entire
agreement and understanding among the parties and supersedes any prior
understandings and/or written or oral agreements among them respecting the
subject matter herein.
SECTION 9.7 Notices. All notices, requests, demands, consents and other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and delivered by hand, by overnight courier delivery service
or by certified mail, return receipt requested, postage prepaid. Notices shall
be deemed given when actually received, which shall be deemed to be not later
than the next Business Day if sent by overnight courier or after five (5)
Business Days if sent by mail. Notice to Investors and Management Investor shall
be made to the address listed on the share transfer records of the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the day and year first above written.
PRIME GROUP REALTY TRUST
By:
-------------------------------------
Name:
Title:
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust
its general partner
By:
-------------------------------------
Name:
Title:
THE PRIME GROUP, INC.
By:
-------------------------------------
Name:
Title:
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PRIME GROUP LIMITED PARTNERSHIP
By:
-------------------------------------
Name:
Title:
PRIMESTONE INVESTMENT PARTNERS, L.P.
By:
-------------------------------------
Its: Managing General Partner
By:
-------------------------------------
Its:
------------------------------------
LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated June 15, 1982
and known as Trust No. 00-00000-00
By:
-------------------------------------
Name:
Title:
LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated September 7, 1994
and known as Trust No. 11-9051
By:
-------------------------------------
Name:
Title:
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LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated March 30, 1984
and known as Trust No. 11-107825
By:
-------------------------------------
Name:
Title:
LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated August 1, 1986 and
known as Trust No. 11-1358
By:
-------------------------------------
Name:
Title:
LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated August 1, 1986 and
known as Trust No. 11-1357
By:
-------------------------------------
Name:
Title:
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LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated January 17, 1974
and known as Trust No. 286-34
By:
-------------------------------------
Name:
Title:
LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated October 15, 1995
and known as Trust No. 11-9869
By:
-------------------------------------
Name:
Title:
LA SALLE NATIONAL TRUST, N.A., not
personally, but solely as Trustee under
Trust Agreement dated December 1, 1987
and known as Trust No. 11-2868
By:
-------------------------------------
Name:
Title:
310 ERA LIMITED PARTNERSHIP, an
Illinois limited partnership
By:
-------------------------------------
Name:
Title:
X-00
XXX XXXXXX XXXXX PROPERTIES, an
Illinois limited partnership
By:_____________________________
Name:
Title:
CLE LIMITED PARTNERSHIP, an
Illinois limited partnership
By:_____________________________
Name:
Title:
500 XXXXXXXX LIMITED PARTNERSHIP,
an Illinois limited partnership
By:_____________________________
Name:
Title:
515 XXXXX LIMITED PARTNERSHIP,
an Illinois limited partnership
By:_____________________________
Name:
Title:
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555 XXXXX LIMITED PARTNERSHIP,
an Illinois limited partnership
By:_____________________________
Name:
Title:
SKY HARBOR ASSOCIATES, an
Illinois limited partnership
By:_____________________________
Name:
Title:
0000 XXXXXXXXXX XXX, LLC, an
Illinois limited liability company
By:_____________________________
Name:
Title:
THE GRANDVILLE ROAD LIMITED PARTNERSHIP, an
Illinois limited partnership
by GRANDVILLE/NORTHWESTERN
MANAGEMENT CORPORATION,
an Illinois corporation, its
General Partner
By:_____________________________
Name:
Title:
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INDUSTRIAL BUILDING AND
DEVELOPMENT COMPANY
By:_____________________________
Name:
Title:
_____________________________
Xxxxxxx Xxxxxxxxx
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EXHIBIT A
---------
The Prime Group, Inc. ___ Common Units
Prime Group Limited Partnership ___ Common Units
CONTRIBUTOR ___ Common Units
Xxxxxxx Xxxxxxxxx ___ Common Units
Primestone Investment Partners, L.P. ___ Common Units
[Other Prime Affiliates] ___ Common Units
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