CONFIDENTIALITY AND STANDSTILL AGREEMENT
THIS CONFIDENTIALITY AND STANDSTILL AGREEMENT (this "Agreement")
is made and entered into as of the 5th day of July, 2001 by and between
PRIME GROUP REALTY, L.P., a Delaware limited partnership, (The "Company"),
and CADIM INC. (the "Recipient").
R E C I T A L S
A. The Company and/or certain of its affiliates (as applicable,
individually and collectively, "Owner") are the owners of various office,
industrial, land development, and other projects (the "Projects").
B. Recipient has expressed interest in one or more transactions relating
to the Company or its Projects. In connection therewith, the Company,
through one or more of its managing general partners and/or affiliates, may
from time to time provide certain financial statements and analyses and
other information (the "Evaluation Material") to Recipient with respect to
the Owner, the Projects, and/or the Company and other related entities.
C. SITQ Immobilier ("SITQ"), an affiliate of Recipient, and the Company
previously entered into that certain Confidentiality and Standstill Agreement
dated as of June 19, 2001 relating to the Company (the "SITQ Agreement").
A G R E E M E N T
1. USES AND AUTHORIZED PARTIES. Recipient hereby acknowledges that the
Evaluation Material furnished or that may be furnished to Recipient is
strictly confidential in nature. The Evaluation Material furnished or that
may be furnished to Recipient shall be used by Recipient solely for
Recipient's own account for the purpose defined in Recital B above.
Recipient hereby agrees to keep all Evaluation Material strictly
confidential; provided, however, that Recipient may disclose the Evaluation
Material to its advisors, directors, officers, employees, affiliates and
attorneys as is necessary to assist Recipient in evaluating the Evaluation
Material and the decision referred to in Recital B above. Recipient shall
inform all such advisors, directors, officers, employees, affiliates and
attorneys (collectively, the "Authorized Parties") of the confidential
nature of the Evaluation Material and Recipient shall direct such
Authorized Parties to treat the Evaluation material with strict confidence.
Recipient shall be liable for any of such Authorized Parties' breach of
such confidentiality.
2. NO REPRESENTATION OR WARRANTY. The Company and Owner do not make any
representation or warranty to Recipient as to the accuracy or completeness of
the Evaluation Material.
3. CONFIDENTIALITY AND STANDSTILL.
(a) Neither (i) Recipient nor (ii) any of Recipient's affiliates or
related parties who have been disclosed any of the contents of the
Evaluation Material or who are being guided by Recipient to take any such
action, shall purchase directly or indirectly any shares in Prime Group
Realty Trust ("PGRT"), the managing general partner of the Company, or
units in the Company, during the period which is two (2) years from and
after the date of this Agreement, without the prior written consent of the
Company. The provisions of this Section 3(a) shall supercede and replace
Section 3(a) of the SITQ Agreement, except to the extent such Section 3(a)
relates to SITQ.
(b) Without the Company's prior written consent, Recipient will not
disclose (except to the Authorized Parties) to anyone or make public any or
all of the Evaluation Material or any of the contents of the Evaluation
Material.
(c) Recipient's agreement to keep the Evaluation Material confidential
shall not apply to Evaluation Material which:
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(i) is now in or hereafter enters the public domain from sources
other than Recipient or any of the Authorized Parties without Recipient's
or any of the Authorized Parties' violation of this Agreement; or
(ii) is compelled to be disclosed through no fault of
Recipient or the relevant Authorized Party by a court order or
other binding order (an "Order") of a governmental authority with
jurisdiction, provided that (1) Recipient or the relevant
Authorized Party promptly notifies the Company as soon as
Recipient or the relevant Authorized Party becomes aware of the
existence, or the potential of the issuance of, any such Order and
(2) provided that Recipient and/or the relevant Authorized Party
diligently cooperates in good faith with the Company in the
Company's attempts to legally contest, before and/or after its
issuance, any such Order.
4. INDEMNIFICATION. Recipient hereby agrees to indemnify and hold
harmless the Company and Owner, and their affiliates and related parties of
any tier from and against any and all losses, damages, costs, expenses
(including but not limited to, reasonable attorneys' fees and court costs),
claims, liabilities and obligations suffered or incurred by, or asserted
against such parties by reason of a breach by Recipient or any of the
Authorized Parties of any of Recipient's covenants, agreements or
obligations set forth in this Agreement.
5. INJUNCTIVE REMEDY. In the event of a violation or threatened or
anticipated violation of this Agreement by Recipient or any of the
Authorized Parties, Recipient hereby acknowledges and agrees that, among
the legal and equitable remedies available to the Company with respect to
such violation or threatened or anticipated violation, an action for
injunctive relief may be the only effective remedy and the Company shall be
entitled to seek an injunction, without the necessity of posting bond
therefore, restraining Recipient or any Authorized Party from disclosing,
in whole or in part, any of the Evaluation Material or otherwise violating
this Agreement. Nothing herein shall be construed as prohibiting,
restricting or limiting the Company from pursuing any other remedies at law
or in equity in addition to the injunctive relief referenced above,
including, without limitation, seeking the recovery of consequential and
punitive damages.
6. NOTICES. Any written notice desired to be given hereunder shall be
delivered personally, or by Canadian and United States mail (postage
prepaid, registered or certified, with return receipt requested), or by
delivery service at the address specified below each parties' signature.
Any party may change the address to which written notices are to be given
by giving the other party written notice as herein provided.
7. NO COPIES AND REQUIRED RETURN OF EVALUATION MATERIAL. Recipient
agrees not to make any copies or written summaries whatsoever of the
Evaluation Material except for use by Recipient and the Authorized Parties
for the purposes herein permitted. Recipient agrees (a) to return, and
cause all Authorized Parties to return, the Evaluation Material to the
Company and (b) destroy all copies and written summaries of the Evaluation
Material at the request of the Company.
8. TERM. This Agreement shall be in full force and effect until the
second anniversary of the date hereof.
9. MISCELLANEOUS. This Agreement shall be interpreted and enforced in
accordance with the internal laws of the State of Illinois. Use of
paragraph headings and of singular or plural, masculine, feminine or neuter
nouns and pronouns are for convenience only and shall be liberally
construed. The invalidity or unenforceability of any provision hereof shall
not affect, modify, or impair the validity and enforceability of all other
provisions hereof. This Agreement shall be binding on and shall inure to
the benefit of the parties hereto and their representatives, heirs,
legatees, successors, and assigns; provided Recipient shall have no rights
whatsoever to assign its interest under this Agreement and any such
attempted assignment shall automatically be null and void and of no force
and effect whatsoever, and shall be deemed a breach by Recipient of its
obligations hereunder. No failure or delay by the Company in exercising any
right, power or privilege hereunder shall operate as a wavier thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement has been executed as of the day
and year first written above.
Addresses for Notices to the Company: COMPANY:
-------
Prime Group Realty Trust PRIME GROUP REALTY, L.P., a
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000 Delaware Limited Partnership
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
With a copy to: By: Prime Group Realty Trust,
a Maryland real estate
Prime Group Realty Trust investment trust and its
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000 managing general partner
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Executive Vice President
----------------------------
Address for Notices To Recipient: RECIPIENT:
---------
Cadim Inc. CADIM INC.
000 Xxxxxx Xxxxxxxx
Xxxxx 0000 By: /s/ Xxxxx Xxxxxx
X.X. Xxx 000 Name: Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx X0X0X0 Title: President
Attention: Xx. Xxxxx Xxxxxx
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President, Legal Affairs
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FIRST AMENDMENT
TO
CONFIDENTIALITY AND STANDSTILL AGREEMENT
THIS FIRST AMENDMENT TO CONFIDENTIALITY AND STANDSTILL AGREEMENT (this
"Amendment") is made and entered into as of the 12th day of October, 2001
by and among PRIME GROUP REALTY, L.P., a Delaware limited partnership (the
"Company"), PRIME GROUP REALTY TRUST, a Maryland real estate investment
trust ("PGRT") and CADIM INC. (the "Recipient").
R E C I T A L S
A. The Company and Recipient have entered into that certain
Confidentiality and Standstill Agreement (the "Agreement") dated as of July
5, 2001, and the Company, PGRT, The Prime Group, Inc. ("PGI") and Recipient
have entered into that certain Amended and Restated Support and Standstill
Agreement (the "SSA") dated as of September 14, 2001.
B. Recipient has informed PGRT and the Company that it does not intend
to proceed with the transaction contemplated in the SSA and representatives
of PGRT, the Company, PGI and Recipient are presently continuing their
discussions regarding a possible transaction pursuant to a different
timetable and terms.
C. Recipient has requested that the Company and PGRT enter into this
Amendment in order to, among other things, amend the Agreement and provide a
consent and waiver under the SSA to allow Recipient to contact certain third
parties regarding a possible strategic transaction relating to the Company
and/or PGRT.
A G R E E M E N T
1. DEFINED TERMS AND ADDITION OF PGRT AS A PARTY. Initially capitalized
terms used in this Amendment which are not defined herein and which are
defined in the Agreement shall have the same meaning as provided in the
Agreement. PGRT is hereby added as a party to the Agreement upon the same
terms as the Company. All references in the Agreement and this Amendment to
the Company shall be deemed to include the Company and PGRT individually
and collectively.
2. CONSENT TO CONTACT THIRD PARTIES. Notwithstanding the terms and
conditions of the SSA and the Agreement, the Company hereby consents to
Cadim contacting and having discussions with the following parties relating
to a possible strategic transaction involving the Company, pursuant to the
terms of this Amendment: (i) K Capital Offshore Master Fund (U.S. Dollar)
and Special K Capital Offshore Master Fund (U.S. Dollar) (individually and
collectively, "K Capital"), (ii) Xxxxxxx Equities, Inc. ("Xxxxxxx"), (iii)
Praedium Performance Fund IV, L.P. ("Praedium") and (iv) any other third
party approved in writing by the Company in its sole and absolute
discretion (an "Additional Approved Party"). K Capital, Xxxxxxx, Praedium
and any Additional Third Parties shall be referred to in this Amendment
individually as an "Approved Party" and collectively as the "Approved
Parties". In connection with such discussions, the Recipient shall have the
right to make available or provide any such Approved Party with copies of
the Evaluation Material (including Evaluation Material as defined in the
SSA), provided that Recipient and each such Approved Party comply with the
terms and conditions contained in the Agreement, as modified by this
Amendment. Except as provided in this Amendment, Recipient agrees that, for
the remaining duration of the standstill period contained in Section 3(a)
of the Agreement, without the prior written consent of the Company, neither
Recipient nor any of Recipient's affiliates or related parties who have
been disclosed any of the contents of the Evaluation Material or who are
being guided by Recipient (an "Informed Affiliate") will, directly or
indirectly, (a) enter into or publicly propose to enter into any agreement,
arrangement or understanding, or any discussions which might lead to such
agreement, arrangement or understanding, with any person or entity
regarding a possible transaction involving the Company including, (i) any
tender or exchange offer, merger or other business combination involving
the Company or any of its subsidiaries; (ii) any recapitalization,
restructuring, liquidation, dissolution or other extraordinary transaction
with respect to the Company or any of its subsidiaries; or (iii) any
"solicitation" of "proxies" (as such terms are used in the proxy rules of
the Securities and Exchange Commission) or consents to vote any voting
securities of the Company; (b) form, join or in any way participate in a
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"group" (as defined under the 1934 Act); (c) otherwise act, alone or in
concert with others, to seek to control or influence the management, board
of trustees or policies of the Company; (d) take any action which might
force the Company to make a public announcement regarding any of the types
of matters set forth in (a) above; or (e) enter into any discussions or
arrangements with any third party with respect to any of the foregoing
(other than discussions and arrangements with an Approved Party which are
not publicly disclosed and pursuant to which written agreements are not
entered into without the prior written consent of the Company). You also
agree during such period not to publicly request the Company (or its
trustees, officers, employees or agents), directly or indirectly, to amend
or waive any provision of this paragraph (including this sentence).
Notwithstanding the foregoing provisions of this Section 2, in the event
the Recipient and the Company, or the Company and a third party, have
entered into a definitive agreement for the acquisition of all or
substantially all of the Company's assets or securities (a "Global
Transaction"), or related to business combinations, mergers, tender offers,
exchange offers or similar transactions constituting a Global Transaction,
then, without the prior written consent of the Company, Recipient may
engage in the above activities.
3. CONDITIONS. Recipient agrees that Recipient shall not commence
discussions or negotiations with any Approved Party in connection with a
transaction relating to the Company or its securities, or provide such
Approved Party with any of the Evaluation Material, unless either:
(a) In the event such Approved Party and the Company have not previously
entered into a confidentiality and standstill agreement relating to a
possible strategic transaction involving the Company (a "CSA"), such
Approved Party and the Company enter into a CSA in a form and substance
reasonably acceptable to the Company and the Company notifies Recipient in
writing that it has entered into a CSA with such Approved Party and that
Recipient may commence discussions with such Approved Party; or
(b) In the event such Approved Party and the Company have previously
entered into a CSA, such Approved Party and the Company enter into a
reaffirmation of such CSA in a form and substance reasonably acceptable to
the Company (which reaffirmation may include an extension of any standstill
period contained in such CSA if in the Company's reasonable discretion such
standstill period does not have a sufficient period left to run), if the
Company has determined that such a reaffirmation is necessary, and the
Company notifies Recipient in writing either that that it has entered into
such reaffirmation with such Approved Party, or that it has determined that
no Reaffirmation is necessary, and that Recipient may commence discussions
with such Approved Party.
Recipient shall have the right to contact any Approved Party to coordinate
compliance with the terms of this Section 3 prior to the satisfaction of
the requirements contained in this Section 3.
4. MISCELLANEOUS. Except as modified by this Amendment, the Agreement
shall remain in full force and effect in accordance with its terms as
modified by this Amendment. All of the provisions of the Agreement, except
to the extent the context clearly requires otherwise, shall apply to this
Amendment.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first written above.
Addresses for Notices to the
Company and PGRT: COMPANY:
-------
Prime Group Realty Trust PRIME GROUP REALTY, L.P.,
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000 a Delaware Limited Partnership
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
By: Prime Group Realty Trust,
With a copy to: a Maryland real estate
investment trust and its
Prime Group Realty Trust managing general partner
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 By: ______________________________
Attention: Xxxxx X. Xxxxxxx Name: ______________________________
Title: ______________________________
PGRT:
----
PRIME GROUP REALTY TRUST,
a Maryland Real Estate Investment Trust
By: ______________________________
Name: ______________________________
Title: ______________________________
Address for Notices To Recipient: RECIPIENT:
---------
Cadim Inc. CADIM INC.
000 Xxxxxx Xxxxxxxx By: ______________________________
Suite 4400 Name: ______________________________
X.X. Xxx 000 Title: ______________________________
Xxxxxxxx, Xxxxxx X0X0X0
Attention: Xx. Xxxxx Xxxxxx By: ______________________________
Name: ______________________________
Title: ______________________________
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