Exhibit 10.27
PRIME GROUP REALTY TRUST
12,380,000 COMMON SHARES(1)
OF BENEFICIAL INTEREST
UNDERWRITING AGREEMENT
November 11, 1997
PRUDENTIAL SECURITIES INCORPORATED
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
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"), each hereby confirms its agreement with the several
underwriters named in Schedule 1 hereto (the "Underwriters"), for whom the
Company understands you have been duly authorized to act as representatives (in
such capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the several Underwriters an aggregate
of 12,380,000 Common Shares of Beneficial Interest (the "Firm Securities"), par
value $.01 per share, of the Company (the "Common Shares"). The Company also
proposes to issue and sell to the several Underwriters not more than 1,857,000
additional Common Shares if requested by the Representa-
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(1) Plus an option to purchase from Prime Group Realty Trust up to
1,857,000 additional shares to cover over-allotments.
tives as provided in Section 3 of this Agreement. Any and all Common Shares to
be purchased by the Underwriters pursuant to such option are referred to herein
as the "Option Securities," and the Firm Securities and any Option Securities
are collectively referred to herein as the "Securities."
At the request of the Company, up to 102,550 of the Common Shares to be
purchased by the Underwriters pursuant to this Agreement will be offered for
sale to certain individuals, including trustees and employees of the Company and
The Prime Group, Inc., and members of their immediate families (the "Reserved
Share Program").
2 Representations and Warranties of the Company and the Operating
Partnership. The Company and the Operating Partnership, jointly and severally,
represent and warrant to, and agree with, each of the several Underwriters that:
(a) A registration statement on Form S-11 (File No. 333-33547)
with respect to the Securities, including a prospectus subject to completion,
has been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined)
relating to the Securities, that shall identify the Preliminary Prospectus (as
hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the
Company does not rely on Rule 434 under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by the Representatives prior
to the execution of this Agreement, or (ii) if such registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement, including
a form of prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this Agreement. The
Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Securities, which registration shall be effective upon filing with
the Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule
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430A under the Act and included in the Prospectus (as hereinafter defined); the
term "Rule 462(b) Registration Statement" means any registration statement filed
with the Commission pursuant to Rule 462(b) under the Act (including the
Registration Statement (as hereinafter defined) and any Preliminary Prospectus
or Prospectus incorporated therein at the time such Registration Statement
becomes effective); the term "Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion filed with
such Registration Statement and any amendment or supplement thereto (including
the prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared effective);
the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending use of any Preliminary Prospectus. When any Preliminary Prospectus
was filed with the Commission it (i) contained all statements required to be
stated therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any Term Sheet that is a part thereof or any amendment or supplement to the
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Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or part thereof or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared effective) and
on the Firm Closing Date and any Option Closing Date (both as hereinafter
defined), the Prospectus, as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing provisions of this paragraph (b) do not
apply to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with, and
that is effective upon filing with the Commission pursuant to, Rule 462(b) and
has received confirmation of the Commission's receipt and (ii) the Company has
given irrevocable instructions for transmission of the applicable filing fee in
connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Act or the Commission has
received payment of such filing fee.
(d) The Company has been duly organized and is validly
existing as a real estate investment trust in good standing under the laws of
Maryland and is duly qualified to transact business as a foreign trust and is in
good standing under the laws of all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its subsidiaries, taken as a
whole. Each of the Company's subsidiaries which are corporations have been duly
organized and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries, taken
as a whole. Each of the Company's subsidiaries which are partnerships, including
the Property Partnerships that are partnerships (as defined in the Prospectus
or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) have been duly organized
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and are validly existing as partnerships in good standing under the laws of
their respective jurisdictions of organization and are duly qualified to
transact business as foreign partnerships and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries, taken
as a whole. Each of the Company's subsidiaries which are limited liability
companies, including the Property Partnerships that are limited liability
companies have been duly organized and are validly existing as limited liability
companies in good standing under the laws of their respective jurisdictions of
organization and are duly qualified to transact business as foreign limited
liability companies and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective properties or
the conduct of their respective businesses requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate or other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and each of the Company and the Operating Partnership
has full power (corporate or other) to enter into this Agreement and to carry
out all the terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the
Company's subsidiaries (which are corporations) have been duly authorized and
validly issued, are fully paid and nonassessable and, except as otherwise set
forth in the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus, are owned beneficially by the Company free and
clear of any security interests, liens, encumbrances, equities or claims. The
partnership agreements of the Company's subsidiaries (which are partnerships)
have been duly authorized, executed and delivered by the general partners
thereof and constitute the valid and binding obligation of the general partners
thereof. Such partnership agreements, other than the partnership agreement for
the Operating Partnership and for Professional Plaza, Ltd., a Tennessee limited
partnership, one of the Property Partnerships, reflect the Company and the
Operating Partnership, and/or one or more of the Company's subsidiaries as the
sole beneficial owners of the partnership interests in such partnerships.
(g) The Operating Partnership has been duly organized and is
validly existing as a limited partnership in good standing under the laws of its
jurisdiction of organization and is duly qualified to transact business as a
foreign limited partnership and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the
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conduct of its business requires such qualification, except where the failure to
be so qualified does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole. As of the Firm Closing Date, the
Company, the NAC General Partner (as defined in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and the
limited partners of the Operating Partnership will enter into an Amended and
Restated Agreement of Limited Partnership of the Operating Partnership,
substantially in the form of Exhibit 3.6 to the Registration Statement, with
such other nonmaterial changes and revisions as are acceptable to the
Representatives (the "Operating Partnership Agreement"), which agreement will be
in full force and effect as of the Firm Closing Date. All of the limited and
general partnership interests in the Operating Partnership (the "Common Units")
and the Preferred Units (as defined in the Prospectus, or if the Prospectus is
not in existence, the most recent Preliminary Prospectus) to be issued in
connection with the Formation Transactions (as defined in the Prospectus, or if
the Prospectus is not in existence, the most recent Preliminary Prospectus) have
been duly authorized for issuance by the Operating Partnership to the holders or
prospective holders thereof, and, at the Firm Closing Date, against the payment
of consideration therefor in accordance with the Operating Partnership
Agreement, will be validly issued, fully paid and owned in the amounts set forth
on Schedule 2 hereto, and, in the case of the Common Units and the Preferred
Units to be issued to the Company, free and clear of any security interests,
liens, encumbrances, equities or claims. Immediately after the Firm Closing
Date, 9,064,343 Common Units of limited partner interest, 13,307,100 Common
Units of general partner interest and 2,000,000 Preferred Units of the Operating
Partnership will be issued and outstanding. The Common Units and Preferred Units
conform in all material respects to the description thereof contained in the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus. The Company is, and immediately after the Firm Closing
Date will be, the managing general partner of the Operating Partnership.
(h) The authorized capital stock of the Company is as set
forth in the Prospectus or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus under the caption "Description of Shares of
Beneficial Interest" and the issued and outstanding shares of beneficial
interest of the Company, as of the Firm Closing Date, will be as set forth in
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus, under the caption "Capitalization." All of the issued
shares of beneficial interest of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. The Firm Securities and the
Option Securities have been duly authorized and at the Firm Closing Date or the
related Option Closing Date (as the case may be), after payment therefor in
accordance herewith, will be validly issued, fully paid and nonassessable. No
holders of outstanding shares of beneficial interest of the Company are entitled
as such to any preemptive or other rights to subscribe for any of the
Securities, and no holder of securities of the Company has any right which has
not been
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fully exercised or waived to require the Company to register the offer or sale
of any securities owned by such holder under the Act in the public offering
contemplated by this Agreement.
(i) The capitalization of the Company conforms to the
description thereof contained in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus.
(j) All of the issued and outstanding Common Shares of the
Company have been offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws). Except as
described in the Registration Statement and the Prospectus (or, if the
Prospectus does not exist, the most recent Preliminary Prospectus), the Company
has not issued or sold any Common Shares during the six-month period preceding
the initial filing date of the Registration Statement including any sales
pursuant to Rule 144A under, or Regulation D or S of, the Act.
(k) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), there
are no outstanding (A) securities, equity interests or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for any
beneficial interests, capital stock or other equity interests (as the case may
be) of the Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any such
beneficial interests, capital stock or other equity interests or any such
convertible or exchangeable securities, equity interests or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares of
beneficial interests, capital stock, other equity interests, any such
convertible or exchangeable securities, equity interests or obligations, or any
such warrants, rights or options.
(l) The offer, issuance and exchange of the Common Units in
connection with the Formation Transactions were or will be exempt from the
registration requirements of the Act and applicable state securities and blue
sky laws. The Company and the Operating Partnership reasonably believe that all
persons and entities to whom such Common Units have been issued or will be
issued on the Firm Closing Date were or will be at the time of issuance
"accredited investors" as that term is defined in Rule 501(a) under the Act.
(m) The pro forma condensed consolidated balance sheet and the
pro forma condensed consolidated statements of operations of the Company (in
each case, including the notes thereto) included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company at
the dates therein specified. The combined financial statements (including the
notes thereto) of the Prime Properties (as defined in the notes thereto)
included in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary
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Prospectus) fairly present the financial position, the results of operations
and cash flows and changes in financial condition of the Prime Properties, at
the date and for the periods therein specified. The combined statement of
revenues and certain expenses (including the notes thereto) of the Prime
Industrial Contribution Properties (as defined in the notes thereto) included
in the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) fairly present the
combined revenues and certain expenses of the Prime Industrial Contribution
Properties for the periods therein specified. The combined statement of
revenues and certain expenses (including the notes thereto) of the IBD
Contribution Properties (as defined in the notes thereto) included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the
combined revenues and certain expenses of the IBD Contribution Properties for
the periods therein specified. The combined statement of revenues and certain
expenses (including the notes thereto) of the NAC Contribution Properties (as
defined in the notes thereto) included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the combined revenues and certain
expenses of the NAC Contribution Properties for the periods therein
specified. The statement of revenues and certain expenses of Citibank Office
Plaza included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present revenues and certain expenses of Citibank Office Plaza for the
periods therein specified. The statement of revenues and certain expenses of
Salt Creek Office Center included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present revenues and certain expenses of Salt
Creek Office Center for the periods therein specified. The statement of
revenues and certain expenses of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ included in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present revenues
and certain expenses of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ for the periods therein
specified. The statement of revenues and certain expenses of ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present revenues and certain expenses of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for the
periods therein specified. All of the foregoing financial statements
(including the notes thereto) and schedules have been prepared in accordance
with generally accepted accounting principles consistently applied for each
of the periods presented. The selected financial data set forth under the
caption "Selected Financial Data" in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) fairly present, on
the basis stated in the Prospectus (or such Preliminary Prospectus), the
information included therein.
(n) The pro forma condensed consolidated balance sheet and the
pro forma condensed consolidated statements of operations of the Company
included in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) comply in all
material respects with the applicable requirements of Rule 11-02 of
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Regulation S-X of the Commission and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of such
information and the assumptions used in the preparation thereof are, in the
opinion of the Company, reasonable. Other than the historical and pro forma
financial statements (and schedules) included therein, no other historical or
pro forma financial statements (or schedules) are required to be included in
the Registration Statement or Prospectus.
(o) Ernst & Young LLP, who have certified certain financial
statements and schedules, and delivered their reports with respect to the
audited financial statements and schedules, included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), are independent public accountants as
required by the Act and the applicable rules and regulations thereunder.
(p) The assumptions made by the Company disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), under the caption "Distribution Policy" are reasonable
in light of the expected and intended method of operation of the Company and the
Operating Partnership.
(q) The execution and delivery of this Agreement have been
duly authorized by the Company and the Operating Partnership and this Agreement
has been duly executed and delivered by the Company and the Operating
Partnership, and is the valid and binding agreement of each of the Company and
the Operating Partnership, enforceable against the Company and the Operating
Partnership in accordance with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization and similar laws
relating to creditors' rights generally and to the application of equitable
principles in any proceeding, whether at law or in equity.
(r) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and are not
described therein, and to the best of the Company's knowledge, no such
proceedings have been threatened against the Company or any of its subsidiaries
or with respect to any of their respective properties; and no contract or other
document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that is
not described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or filed as required.
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(s) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company and the Operating Partnership with the other provisions of this
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws and,
if the registration statement filed with respect to the Securities (as amended)
is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act,
or (ii) conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, material lease or other material agreement or material instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties are bound, or
the charter documents or by-laws or certificate of limited partnership or
partnership agreement (as the case may be) of the Company or any of its
subsidiaries, or any statute or any judgment, decree, order, rule or regulation
of any court or other governmental authority or any arbitrator applicable to the
Company or any of its subsidiaries.
(t) Each of the Company and its subsidiaries has full power
(corporate or other) to enter into and deliver (as applicable) the agreements
set forth on Schedule 4 hereto and all other agreements and other documents
related to the Formation Transactions (collectively, the "Transaction
Documents") to which each is party and to carry out all the terms and provisions
thereof to be carried out by each, respectively. The execution and delivery of
each of the Transaction Documents have been duly authorized by the Company and
its subsidiaries (as applicable) and the Transaction Documents have been or will
be on the Firm Closing Date duly executed and delivered by the Company and its
subsidiaries (as applicable), and each is the valid and binding agreement of the
Company and its subsidiaries (as applicable), enforceable against the Company
and its subsidiaries (as applicable) in accordance with its terms, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally and to
the application of equitable principles in any proceeding, whether at law or in
equity.
(u) The execution and delivery of the Transaction Documents,
the compliance by the Company and its subsidiaries (as applicable) with their
respective obligations under the Transaction Documents and the consummation of
the Formation Transactions do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
state securities or blue sky laws and, if the Registration Statement filed with
respect to the Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or result in
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a breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage (except that (i) in connection with
certain mortgages to be assumed concurrently with the Closing as described in
the Prospectus, consents from the mortgage holders will be required as a
condition of Closing, and (ii) in connection with mortgages to be repaid
concurrently with the Closing as described in the Prospectus, an agreement to
contribute may be a violation of such mortgages, but such mortgages will be
repaid concurrently with the Closing), deed of trust, material lease or other
material agreement or material instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of their respective properties are bound, or the charter documents or
by-laws or certificate of limited partnership or partnership agreement (as the
case may be) of the Company or any of its subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
subsidiaries.
(v) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and there has not
been any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of operations of the Company and its
subsidiaries, taken as a whole, except in each case as described in or
contemplated by the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(x) The Company has not distributed and, prior to the later of
(i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or other materials, if any, permitted by the Act.
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(y) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (1) the Company
and its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (2) the Company has not purchased any shares of its
outstanding beneficial interests, nor declared, paid or otherwise made any
dividend or distribution of any kind on its shares of beneficial interests,
other than as described in Item 32 of Part II of the Registration Statement; and
(3) there has not been any material change in the beneficial interests, capital
stock or partnership interests (as the case may be), short-term debt or
long-term debt of the Company and its consolidated subsidiaries, except in each
case as described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(z) Upon consummation of the Formation Transactions
(including, for purposes of this Agreement, the consummation of the issuance and
sale of the Firm Securities pursuant to Section 3 hereof), or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), and the
application of the proceeds from such issuance and sale and such borrowings
(which application shall occur concurrently with such issuance and sale) as set
forth under the caption "Use of Proceeds" in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the Company or its subsidiaries will have obtained
title insurance policies insuring good and marketable title in fee simple to all
items of real property comprising part of the Properties, including the
Acquisition Properties and the Contribution Properties (as such terms are
defined in the Registration Statement and the Prospectus, or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and, based upon UCC
searches and representations from the sellers of the Acquisition Properties,
marketable title to all personal property comprising part of the Properties, in
each case free and clear of any security interests, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely affect the value of such property and do not interfere in any material
respect with the use made or proposed to be made of such property by the Company
or such subsidiary, and any real property and buildings comprising part of the
Properties held under lease by the Company or any such subsidiary are held under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such subsidiary, in each case except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(aa) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or, to the best of the Company's
knowledge, imminent that
12
could result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(bb) Upon consummation of the Formation Transactions, the
Company and its subsidiaries will own or possess, or will be able to acquire on
reasonable terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other confidential
information currently employed or proposed to be employed by them in connection
with the business now operated or proposed to be operated by them as described
in the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), and neither the Company nor any such subsidiary has
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(cc) Upon consummation of the Formation Transactions, the
Company and each of its subsidiaries will own or possess all contract rights
that are material to the businesses now operated or proposed to be operated by
them taken as a whole as such businesses are described in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus),
including all such contract rights referred to in the Prospectus. The Company
has not received any written notices that any of such contracts are not in full
force and effect, and neither the Company nor any such subsidiary has received
written notice of any material breach by any party under any of such contracts.
(dd) As of the Firm Closing Date, the Company and each of its
subsidiaries will be insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are or will be engaged as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus); and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew such insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
materially and adversely affect the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
13
(ee) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary's capital stock or partnership
interests, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(ff) The Company and its subsidiaries will possess as of the
Firm Closing Date all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any such
subsidiary has received any written notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, would result in a material adverse change in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(gg) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act of 1940, as amended, and the Formation Transactions and
other transactions contemplated by this Agreement will not cause the Company to
become an investment company subject to registration under such act.
(hh) Each of the Company and its subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(ii) Neither the Company nor any of its subsidiaries is in
violation of any applicable federal or state law or regulation relating to
occupational safety and health or to the storage, handling or transportation of
hazardous or toxic materials and the Company and its subsidiaries have received
all permits, licenses or other approvals required of them under
14
applicable federal and state occupational safety and health and environmental
laws and regulations to conduct their respective businesses or the businesses
proposed to be conducted by them as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), and the
Company and each such subsidiary is in compliance with all terms and conditions
of any such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries, taken as
a whole, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or the
environmental site assessments and engineering inspection reports listed on
Schedule 3 hereto.
(jj) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters on the Firm
Closing Date or on the Option Closing Date shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
(kk) Except for the shares of capital stock of, or partnership
interests in (as applicable), each of the subsidiaries owned by the Company and
such subsidiaries, neither the Company nor any such subsidiary owns any shares
of stock or any other equity securities of any corporation or has any equity
interest in any firm, partnership, association or other entity, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(ll) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with management's
general or specific authorizations; (2) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3) access
to assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(mm) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease, partnership agreement or other agreement or
instrument to which the Company or
15
any of its subsidiaries is a party and will continue to be a party after the
Firm Closing Date or by which the Company or any of its subsidiaries or any of
their respective properties is bound and will continue to be bound after the
Firm Closing Date or may be affected in any material adverse respect with regard
to property, business or operations of the Company and its subsidiaries, taken
as a whole.
(nn) The Securities have been approved for listing on the New
York Stock Exchange, subject to official notice of issuance.
(oo) Except as otherwise disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus),
since January 1, 1990 no foreclosures have been instituted and, to the best of
the Company's knowledge, none are currently threatened with respect to any
property or assets directly or indirectly owned (whether now or in the past) by
The Prime Group, Inc. or the Company or any of its subsidiaries. Except for the
assets of The Prime Group, Inc. that will not be transferred to the Company in
the Formation Transactions that are described under the heading "Business and
Properties--Prime Assets Not Acquired by the Company" in the Prospectus, or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus (the
"Excluded Properties"), neither The Prime Group, Inc. nor any affiliate of The
Prime Group, Inc. owns or operates any office or industrial real property other
than the real properties comprising part of the Properties.
(pp) Except as otherwise described in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus), (i)
no proceeding or filing of a petition seeking relief under Title 11 of the
United States Code or any other federal, state or foreign bankruptcy,
insolvency, liquidation or similar law has been commenced or instituted (whether
voluntary or involuntary) by or with respect to The Prime Group, Inc. or any of
its affiliates, (ii) neither The Prime Group, Inc. nor any of its affiliates has
applied for or consented to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for any such persons or for a substantial part
of any such persons' property or assets and (iii) neither The Prime Group, Inc.
nor any of its affiliates has made a general assignment for the benefit of its
creditors.
(qq) No relationship, direct or indirect, exists between or
among the Company or the Operating Partnership on the one hand, and the
directors, officers, shareholders (in the case of the Company), partners (in the
case of the Operating Partnership), tenants, customers or suppliers of the
Company or the Operating Partnership on the other hand, which is required to be
described in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) which is not so described.
(rr) The transfer of interests or other assets pursuant to the
agreements and instruments set forth on Schedule 5 hereto (the "Transfer
Documents") does not violate the articles or certificate of incorporation,
by-laws, limited liability company operating agreement, declaration
16
of trust, certificate of limited partnership, partnership agreement or other
organizational documents, as the case may be, of The Prime Group, Inc. or any of
its affiliates. The Transfer Documents are sufficient to effect the transfer to
the Operating Partnership, the Company or its subsidiaries of all direct or
indirect interests in the Properties and other assets specified therein upon
payment of the specified consideration therefor. Pursuant to the Transfer
Documents, the Properties and other assets specified therein will be transferred
to the Company or its subsidiaries directly and not by way of a transfer of
interests in partnerships or other types of entities which, immediately prior to
the transfer, own the Properties and such other assets, except in the case of
the Prime Properties and certain other Properties encumbered by tax-exempt bonds
and in the case of the Prime Contribution Properties, in which cases the
Transfer Documents provide that the interests in the Property Partnerships
subject to such encumbrances will be transferred to the Company or its
subsidiaries.
(ss) Commencing with the Firm Closing Date, after giving
effect to the Formation Transactions, the Company will be organized in
conformity with the requirements for qualification as a real estate investment
trust (a "REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), and will have no earnings and profits accumulated in a non-REIT year
within the meaning of Section 857(a)(3)(B) of the Code, and the proposed method
of operation of the Company and its subsidiaries will enable the Company to meet
the requirements for taxation as a REIT under the Code beginning with its
taxable year ending December 31, 1997 and for its subsequent taxable years. All
statements in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) regarding the Company's qualification as a
REIT are true, complete and correct in all material respects.
(tt) Except as disclosed in physical inspection reports,
leases, environmental reports and other written materials previously provided by
the Company to the Representatives and their counsel, (i) the Company has not
received any written notice that any of the Properties is not in compliance with
all applicable codes, laws, ordinances and regulations (including, without
limitation, building and zoning codes and laws and regulations relating to
access to the Properties) and deed restrictions or other covenants, except for
such failures to comply that would not materially impair the value of any of the
Properties or would not result in a forfeiture or reversion of title; (ii)
neither the Company nor any of its subsidiaries has knowledge of any pending or
threatened litigation, moratorium, condemnation proceedings, zoning change, or
other similar proceeding or action that could in any manner affect the size of,
use of, improvements on, construction on, access to or availability of utilities
or other necessary services to, the Properties, except such proceedings or
actions which are not reasonably expected to, singly or in the aggregate, result
in a material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole; (iii) all liens, charges, encumbrances, claims,
or restrictions on or affecting the properties
17
and assets (including the Properties) of the Company or any of its subsidiaries
that are required to be disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) are disclosed therein;
(iv) to the best of the Company's knowledge, neither the Company, any of its
subsidiaries nor any tenant of any portion of any of the Properties is in
default under any of the ground leases (as lessor), space leases (as lessor or
lessee, as the case may be) or other occupancy or license agreement relating to,
or under any of the mortgages which will remain in effect after the Closing or
other security documents or other agreements encumbering or otherwise recorded
against, the Properties and there is no event which, but for the passage of time
or the giving of notice or both, would constitute a default under any of such
documents or agreements, except such defaults that would not, singly or in the
aggregate, result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole; and (v) except as described in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and except as otherwise provided by law, upon
consummation of the Formation Transactions, no tenant under any lease pursuant
to which the Company or any of its subsidiaries will lease the Properties will
have an option or right of first refusal to purchase the premises leased
thereunder or the building of which such premises are a part.
(uu) Except as otherwise disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus), the
mortgages and deeds of trust encumbering the properties and assets described in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) which will remain in effect after the Closing are not
convertible and neither the Company, any of its subsidiaries nor any person
affiliated therewith holds a participating interest therein, and such mortgages
and deeds of trust are not cross-defaulted or cross-collateralized to any
property not owned directly or indirectly by the Company or any of its
subsidiaries.
(vv) To the best knowledge of the Company, each of the
Properties is in substantial compliance with all presently applicable provisions
of the Americans with Disabilities Act and no failure of the Company or any of
its subsidiaries to comply with all presently applicable provisions of the
Americans with Disabilities Act would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole.
(ww) Except as otherwise disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) or
the environmental site assessments and engineering inspection reports listed on
Schedule 3 hereto, and except as would not be reasonably likely to result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, taken
18
as a whole, (i) neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, any other owners of the Properties at any time or any
other party has at any time, handled, stored, treated, transported,
manufactured, spilled, leaked, or discharged, dumped, transferred or otherwise
disposed of or dealt with, Hazardous Materials (as hereinafter defined) on, to
or from the Properties, other than by any such action taken in compliance with
all applicable Environmental Statutes; (ii) neither the Company nor any of its
subsidiaries intends to use the Properties or any subsequently acquired
properties for the purpose of handling, storing, treating, transporting,
manufacturing, spilling, leaking, discharging, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials, except as necessary
for the conduct of business and in compliance with applicable environmental
statutes; (iii) neither the Company nor any of its subsidiaries knows of any
seepage, leak, discharge, release, emission, spill, or dumping of Hazardous
Materials into waters on or adjacent to the Properties or any other real
property owned or occupied by any such party, or onto lands from which Hazardous
Materials might seep, flow or drain into such waters; (iv) neither the Company
nor any of its subsidiaries has received written notice of, or has any knowledge
of any occurrence or circumstance which, with notice or passage of time or both,
would give rise to a claim under or pursuant to any federal, state or local
environmental statute or regulation or under common law, pertaining to Hazardous
Materials on or originating from any of the Properties or any assets described
in the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or any other real property owned or occupied by the
Company or its subsidiaries or arising out of the conduct of the Company or its
subsidiaries, including without limitation a claim under or pursuant to any
Environmental Statute (as hereinafter defined); (v) none of the Properties is
included or, to the best of the Company's knowledge, proposed for inclusion on
the National Priorities List issued pursuant to CERCLA (as hereinafter defined)
by the United States Environmental Protection Agency (the "EPA") or, to the best
of the Company's knowledge, proposed for inclusion on any similar list or
inventory issued pursuant to any other Environmental Statute or issued by any
other Governmental Authority (as hereinafter defined).
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, toxic substances, asbestos or any hazardous
materials as defined by any federal, state or local environmental law,
ordinance, rule or regulation in effect as of the date hereof and as of the
Firm Closing Date, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended,
42 U.S.C. Sections 9601-9675 ("CERCLA"), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Sections 1801-1819, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Sections 6901-6992K, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Sections 11001-11050, the Toxic Substances Control Act, 15 U.S.C. Sections
2601-2671, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Sections 136-136y, the Clean Air Act, 42 U.S.C. Sections 7401-7642, the Clean
Water Act
19
(Federal Water Pollution Control Act), 33 U.S.C. Sections 1251-1387, the Safe
Drinking Water Act, 42 U.S.C. Sections 300f-300j-26, and the Occupational
Safety and Health Act, 29 U.S.C. Sections 651-678, and in the regulations
promulgated pursuant to each of the foregoing (individually, an
"Environmental Statute") or by any federal, state or local governmental
authority having or claiming jurisdiction over the properties and assets
described in the Prospectus (a "Governmental Authority").
(xx) None of the environmental consultants which prepared
environmental and asbestos inspection reports with respect to any of the
Properties (including, for purposes of this paragraph, the Excluded Properties),
the engineering consultants which prepared engineering inspection reports with
respect to any of the Properties or ▇▇▇▇▇ Consulting Group, real estate
advisors, which prepared regional economic overviews and market analysis for The
Prime Group, Inc., dated October 10, 1997, were employed for such purpose on a
contingent basis or has any substantial interest in the Company or any of its
subsidiaries and none of them or any of their directors, officers or employees
is connected with the Company or any of its subsidiaries as a promoter, selling
agent, voting trustee, director, officer or employee.
(yy) Except as set forth in the environmental site assessments
and engineering inspection reports prepared with respect to the Properties
listed on Schedule 3 hereto, neither the Company nor the Operating Partnership
is aware of any environmental or engineering condition at any of the Properties
that would result in a material adverse change in the condition (financial or
otherwise) or business prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole.
(zz) Except as disclosed in the Prospectus, no real estate
transfer or similar taxes are or will become due and payable by the Company or
any of its subsidiaries as a result of the acquisition by the Company or any of
its subsidiaries of any direct or indirect interest in any Property in
connection with the Formation Transactions, other than customary documentary
transfer taxes which will be paid in full on or prior to the Firm Closing Date.
(aaa At the firm Closing Date, the Company or its subsidiaries
will have obtained title insurance on the Properties which constitute real
property (including ground leasehold estates) in an amount (the "Insured Title
Amount") at least equal to the sum of (i) the purchase price, in the case of the
Acquisition Properties, (ii) $308.5 million and (iii) the costs of the other
Properties, in the amount reasonably determined by the Company.
(bbb At or prior to the Firm Closing Date, each of the
transactions constituting the Formation Transactions will have occurred in the
manner described in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus),
20
including, without limitation, the acquisition of all of the Acquisition
Properties and the Contribution Properties and the execution and delivery of the
Credit Facility.
(ccc All of the representations and warranties of the Company,
the Operating Partnership, The Prime Group, Inc. and, to the best of the
Company's knowledge, the other limited partners of the Operating Partnership
contained in the Transaction Documents are true and correct in all material
respects.
Each reference in this Section 2 to "the condition (financial or
otherwise), management, business prospects, net worth, or results of operations
of the Company and its subsidiaries" means the condition (financial or
otherwise), management, business prospects, net worth, or results of operations
of the Company and its subsidiaries, taken as a whole, upon consummation of the
Formation Transactions.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price of $18.75 per Common Share, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule 1 hereto. One or more
certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company to the Representatives
for the respective accounts of the Underwriters, against payment by or on behalf
of the Underwriters of the purchase price therefor by wire transfer in same-day
funds (the "Wired Funds") to the account of the Company. Such delivery of and
payment for the Firm Securities shall be made at the offices of Winston &
▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at 8:30 A.M., Chicago time, on
November 17, 1997, or at such other place, time or date as the Representatives
and the Company may agree upon or as the Representatives may determine pursuant
to Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date." The Company will make such certificate
or certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least 24
hours prior to the Firm Closing Date.
(b For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus, the Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, the Option Securities. The
purchase price to be paid for any Option Securities shall be the same price
21
per share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 3, plus, if the purchase and sale of any Option
Securities takes place after the Firm Closing Date and after the Firm Securities
are trading "ex-dividend", an amount equal to the dividends payable on such
Option Securities. The option granted hereby may be exercised as to all or any
part of the Option Securities from time to time within thirty days after the
date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading). The Underwriters shall not be under any obligation to
purchase any of the Option Securities prior to the exercise of such option. The
Representatives may from time to time exercise the option granted hereby by
giving notice in writing or by telephone (confirmed in writing) to the Company
setting forth the aggregate number of Option Securities as to which the several
Underwriters are then exercising the option and the date and time for delivery
of and payment for such Option Securities. Any such date of delivery shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and date
set forth in such notice, or such other time on such other date as the
Representatives and Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c The Company hereby acknowledges that the wire transfer by
or on behalf of the Underwriters of the purchase price for any Securities does
not constitute closing of a purchase and sale of the Securities. Only execution
and delivery of a receipt for Securities by the Underwriters indicates
completion of the closing of a purchase of the Securities from the Company.
Furthermore, in the event that the Underwriters wire the Wired Funds to the
Company prior to the completion of the closing of a purchase of Securities, the
Company hereby acknowledges that until the Underwriters execute and deliver a
receipt for the Securities, by facsimile or otherwise, the Company will not be
entitled to the Wired Funds and shall return the
22
Wired Funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Securities is not completed and the Wired Funds are not returned by the Company
to the Underwriters on the same day the Wired Funds were received by the
Company, the Company agrees to pay to the Underwriters in respect of each day
the Wired Funds are not returned by it, in same-day funds, interest on the
amount of such Wired Funds in an amount representing the Underwriters' cost of
financing as reasonably determined by Prudential Securities Incorporated.
(d It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. Each of the Company and the Operating
Partnership covenants and agrees with each of the Underwriters that:
(a The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term Sheet
that constitutes a part thereof and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the rules and
regulations of the Commission thereunder to the extent necessary to permit the
continuance of sales of or dealings in the Securities in accordance with the
provisions hereof and of the Prospectus, as then amended or supplemented, and
(ii) will not file with the Commission the Prospectus, Term Sheet or the
amendment referred to in the second sentence of Section 2(a) hereof, any
amendment or supplement to such Prospectus, Term Sheet or any amendment to the
Registration Statement or any Rule 462(b) Registration Statement of which the
Representatives previously have been advised and furnished with a copy for a
reasonable period of time prior to the proposed filing and as to which filing
the Representatives shall not have given their consent. The Company will prepare
and file with the Commission, in accordance with the rules and regulations of
the Commission, promptly upon request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement or amendments or
supplements to
23
the Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(b The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing the Prospectus or for additional
information. The Company will use its best efforts to prevent the issuance of
any such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
(c The Company will promptly from time to time take such
action as the Representatives may reasonably request to qualify the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may reasonably request and will continue to
comply with such laws for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to take any action that would subject it to
income taxation in such jurisdictions, to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d If, at any time prior to the later of (i) the final date
when a prospectus relating to the Securities is required to be delivered under
the Act or (ii) the Option Closing Date, any event occurs as a result of which
the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if for any other reason it is necessary at
any time to amend or supplement the Prospectus to comply with the Act or the
rules or regulations of the Commission thereunder, the Company will promptly
notify the Representatives thereof and, subject to Section 5(a) hereof, will
prepare and file with the Commission, at the Company's expense, an amendment to
the
24
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 P.M., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to 10:00
A.M., New York City time, on such date or (B) 2:00 P.M., New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City time, on
such date, will deliver to the Underwriters, without charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Firm Closing Date.
(f The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus.
(h The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any Common Shares or other shares of beneficial
interest of the Company or Common Units or other partnership interests of the
Operating Partnership, or any securities convertible into, or exchangeable or
exercisable for, Common Shares or other shares of beneficial interest of the
Company or Common Units or other partnership interests of the Operating
Partnership, for a period of 180 days after the date hereof, except (i) pursuant
to this
25
Agreement, (ii) pursuant to a dividend reinvestment plan of the Company, (iii)
pursuant to the Company's Share Incentive Plan, and (iv) in connection with the
acquisition by the Company or the Operating Partnership of real property or
interests in entities holding real property, provided that the recipient or
transferee of such securities or interests agrees in writing to be subject to
the lock-up contained in this Section 5(h) (without giving effect to clauses
(i), (ii), (iii) and (iv)) for a period ending on the date that is 180 days
after the date hereof.
(i The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(j The Company will obtain the lock-up agreements described in
Section 7(f) hereof prior to the Firm Closing Date.
(k If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the Option
Closing Date, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after notice from you advising
the Company to the effect set forth above, forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(l If the Company elects to rely on Rule 462(b), the Company
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on
the date of this Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(m The Company will cause the Securities to be duly authorized
for listing by the New York Stock Exchange prior to the Firm Closing Date,
subject to official notice of issuance.
(n The Company will use its best efforts to meet the
requirements to qualify, commencing with the taxable year ending December 31,
1997, as a REIT under the Code.
26
(o The Company will cause the Operating Partnership to operate
as a limited partnership in accordance with the requirements of Delaware law.
6. Expenses. The Company will pay all costs and expenses incident to
the performance of its and the Operating Partnership's obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 11 hereof, including all
costs and expenses incident to (i) the printing or other production of documents
with respect to the transactions, including any costs of printing the
registration statement originally filed with respect to the Securities and any
amendment thereto, any Rule 462(b) Registration Statement, any Preliminary
Prospectus and the Prospectus and any amendment or supplement thereto, this
Agreement and any blue sky memoranda, (ii) all arrangements relating to the
delivery to the Underwriters of copies of the foregoing documents, (iii) the
fees and disbursements of the counsel, the accountants and any other experts or
advisors retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association of Securities Dealers, Inc.
relating to the Securities, (vii) any listing of the Securities on the New York
Stock Exchange, (viii) any meetings with prospective investors in the Securities
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters) and (ix) advertising relating to the offering
of the Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11 hereof or because of
any failure, refusal or inability on the part of the Company or the Operating
Partnership to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all reasonable out-of pocket expenses (including reasonable counsel
fees and disbursements) that shall have been incurred by them in connection with
the proposed purchase and sale of the Securities. The Company shall in no event
be liable to any of the Underwriters for the loss of anticipated profits from
the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Operating Partnership
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's
27
officers made pursuant to the provisions hereof, to the performance by the
Company and the Operating Partnership of their respective covenants and
agreements hereunder and to the following additional conditions:
(a If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Original Registration Statement or such
amendment and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have been declared effective not later than
the earlier of (i) 11:00 A.M., New York time, on the date on which the amendment
to the registration statement originally filed with respect to the Securities or
to the Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been filed
with the Commission and (ii) the time confirmations are sent or given as
specified by Rule 462(b)(2), or with respect to the Original Registration
Statement, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes
a part thereof and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period required by Rules
434 and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the
Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b The Representatives shall have received an opinion, dated
the Firm Closing Date, of Winston & ▇▇▇▇▇▇, counsel for the Company and its
subsidiaries, to the effect that:
(i the Company has been duly formed and is validly existing as
a real estate investment trust in good standing under the laws of the
State of Maryland and is duly qualified to transact business as a
foreign business trust and is in good standing under the laws of all
other jurisdictions where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where
the failure to be so qualified does not subject the Company and the
Subsidiaries (as defined below), taken as a whole, to a material
liability or disability. The Operating Partnership has been duly
organized and is validly existing as a limited partnership in good
standing under the laws of the State of Delaware and is duly qualified
to transact business as a foreign limited partnership and is in good
standing under the laws of all other jurisdictions where the ownership
or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does
not subject the Company and
28
the Subsidiaries, taken as a whole, to a material liability or
disability. Each of the subsidiaries of the Company, all of which have
been identified on an exhibit to such opinion (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
organized and is validly existing as a corporation, partnership or as a
limited liability company, as appropriate, in good standing under the
laws of its respective jurisdiction of organization and is duly
qualified to transact business as a foreign corporation, partnership or
limited liability company, as appropriate, and is in good standing (to
the extent applicable) under the laws of all other jurisdictions where
the ownership or leasing of their respective properties or the conduct
of their respective businesses requires such qualification, except
where the failure to be so qualified does not subject the Company and
the Subsidiaries, taken as a whole, to a material liability or
disability.
(ii the Company and each of the Subsidiaries have the
requisite real estate investment trust, corporate, partnership or
limited liability company power (as applicable) to own or lease their
respective properties and conduct their respective businesses as
described in the Registration Statement and the Prospectus, and each of
the Company and the Operating Partnership has the requisite real estate
investment trust or partnership power (as applicable) to enter into
this Agreement and to perform its obligations hereunder;
(iii the issued and outstanding shares of capital stock or
partnership interests, as the case may be, of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and, except as otherwise set forth in the Prospectus, are
owned beneficially by the Company free and clear of any perfected
security interests or any other security interests, liens,
encumbrances, equities or claims known to such counsel;
(iv the authorized, issued and outstanding capitalization of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; all necessary and proper real estate investment trust
proceedings have been taken in order to authorize validly the Common
Shares referred to therein; all outstanding Common Shares (including
the Firm Securities, when issued and paid for by the Underwriters in
accordance with the terms of this Agreement) have been (or, in the case
of the Firm Securities, will be) duly and validly issued, are fully
paid and nonassessable, were not issued in violation of or subject to,
under the Company's charter or Maryland law or any agreement to which
the Company is a party and which is known to such counsel, any
preemptive rights or other rights to subscribe for or purchase any
securities, and conform to the description thereof contained in the
Prospectus; no holders of outstanding shares of capital stock of the
Company are entitled under the Company's charter or Maryland law or any
agreement to which the Company is a party and which is known to such
counsel, as such, to any
29
preemptive or other rights to subscribe for any of the Firm
Securities; and no holders of securities of the Company are entitled to
have such securities registered under the Registration Statement;
(v the Common Units and Preferred Units to be issued in
connection with the Formation Transactions, including, without
limitation, the Common Units and Preferred Units issued to the Company,
were duly authorized for issuance by the Operating Partnership to the
holders thereof; the Common Units and Preferred Units issued to the
Company, upon contribution of cash in the amount specified in the
Operating Partnership Agreement, will be validly issued; the Common
Units issued to the NAC General Partner and the Limited Partners in
connection with the Formation Transactions, upon delivery of the
consideration specified in the Formation Agreement (identified on
Schedule 4 hereto), will be validly issued. Each of the issuances of
the Common Units to the NAC General Partner and the Limited Partners at
or prior to the Firm Closing Date as contemplated in the Formation
Agreement and the issuance of the Convertible Preferred Shares to
Security Capital Preferred Growth Incorporated as contemplated in the
Prospectus, is or was (as the case may be) exempt from registration
under the Act. The terms of the Common Units and Preferred Units
conform in all material respects to (x) the description thereof
contained in the Prospectus and (y) all statements related thereto
contained in the Prospectus. The issuances of securities described in
Items 31 and 32 of the Registration Statement were not at the time of
issue, and are not as of the Firm Closing Date, required to be
registered under the Act;
(vi except as disclosed in the Registration Statement and the
Prospectus, to the knowledge of such counsel there are no outstanding
(A) securities, equity interests or obligations of the Company or any
of the Subsidiaries convertible into or exchangeable for any capital
stock or equity interests (as the case may be) of the Company or any
such Subsidiary, (B) warrants, rights or options to subscribe for or
purchase from the Company to any such Subsidiary any such capital stock
or equity interests or any such convertible or exchangeable securities,
equity interests or obligations, or (C) obligations of the Company or
any such Subsidiary to issue an shares of capital stock, equity
interests, any such convertible or exchangeable securities, equity
interests or obligations, or any such warrants, rights or options;
(vii the statements in the Prospectus set forth under the
headings "Business and Properties-Legal Proceedings," "Description of
Shares of Beneficial Interest," "Structure and Formation of the
Company," "Certain Relationships and Related Transactions,"
"Partnership Agreement," "Certain Provisions of Maryland Law and of the
Company's Declaration of Trust and Bylaws," "Partnership Agreement,"
"Shares Eligible
30
for Future Sale," "Certain Federal Income Tax Consequences"
and "ERISA Considerations," insofar as such statements describe
statutes, rules or regulations, legal conclusions with respect to their
application or provisions of the organizational documents of the
Company, the Operating Partnership or the Services Company, are
accurate in all material respects and fairly present the information
required to be disclosed therein;
(viii the execution and delivery of this Agreement have been
duly authorized by all necessary real estate investment trust or
partnership (as applicable) action of the Company and the Operating
Partnership, and this Agreement has been duly executed and delivered by
the Company and the Operating Partnership;
(ix (A) to such counsel's knowledge and other than as set
forth in the Prospectus, no legal or governmental proceedings are
pending to which the Company or any of the Subsidiaries is a party or
to which the property of the Company or any of the Subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and to such counsel's
knowledge, no such proceedings have been threatened against the Company
or any of the Subsidiaries or with respect to any of their respective
properties and (B) to such counsel's knowledge, no contract or other
document of a character required to be disclosed in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement is not disclosed therein or filed as required;
(x the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company and the Operating Partnership with the other provisions
of this Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except the registration under the Act of the Securities and such as
have been obtained and such as may be required under state securities
or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, material lease
or other material agreement or material instrument known to such
counsel to which the Company or any of the Subsidiaries is a party or
by which the Company or any of the Subsidiaries or any of their
respective properties are bound (the "Material Agreements"), or the
charter documents or by-laws or certificate of limited partnership or
partnership agreement or other organizational document (as applicable)
of the Company or any of the Subsidiaries, or any provision of any
statute, rule or regulation applicable to the Company or the
Subsidiaries, or any judgment, decree or order of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or the Subsidiaries;
31
(xi each of the Company and the Subsidiaries has the requisite
real estate investment trust, corporate, partnership or limited
liability company power (as applicable) to enter into and deliver (as
applicable) the agreements and instruments set forth on Schedule 6
hereto (the "Operative Documents") to which it is party and to perform
its obligations thereunder. The execution and delivery of the Operative
Documents have been duly authorized by the Company and the Subsidiaries
(as applicable) and the Operative Documents have been or will be on the
Firm Closing Date duly executed and delivered by the Company and the
Subsidiaries (as applicable), and each such Operative Document is the
valid and binding agreement of the Company and the Subsidiaries (as
applicable), enforceable against the Company and the Subsidiaries (as
applicable) in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws relating to creditors' rights generally
and to the application of equitable principles in any proceeding,
whether at law or in equity;
(xii the execution and delivery of the Operative Documents,
the compliance by the Company and the Subsidiaries (as applicable) with
their respective obligations under the Operative Documents and the
consummation of the Formation Transactions do not (A) require the
consent, approval, authorization, registration or qualification of or
with any governmental authority, except the registration under the Act
of the Securities and such as have been obtained and such as may be
required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any Material Agreement, or the charter
documents or by-laws or certificate of limited partnership or
partnership agreement or other organizational document (as applicable)
of the Company or any of the Subsidiaries, or any provision of any
statute, rule or regulation applicable to the Company or the
Subsidiaries, or any judgment, decree or order of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or the Subsidiaries;
(xiii the Company is not, and (assuming the application by the
Company of the proceeds of the issue and sale of the Securities as
described in the Prospectus under "Use of Proceeds") after giving
effect to the Formation Transactions and the other transactions
contemplated by this Agreement will not be, an "investment company" or
a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
32
(xiv the transfer of interests or other assets pursuant to the
Transfer Documents does not violate the articles or certificate of
incorporation, by-laws, limited liability company agreement,
declaration of trust, certificate of limited partnership, partnership
agreement or other organizational documents, as the case may be, of
either of The Prime Group, Inc. or Prime Group Limited Partnership;
each of the Transfer Documents has been duly authorized, executed and
delivered by The Prime Group, Inc. and Prime Group Limited Partnership
and is a valid and binding agreement of The Prime Group, Inc. and Prime
Group Limited Partnership, enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws relating to creditors'
rights generally and to the application of equitable principles in any
proceeding, whether at law or in equity;
(xv the Registration Statement has become effective under the
Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required thereby;
and to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been instituted or threatened by the
Commission;
(xvi the Registration Statement originally filed with respect
to the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than the
financial statements and related notes thereto and the other financial,
statistical and accounting data included therein or omitted therefrom,
as to which such counsel need express no opinion) appeared on their
face to be appropriately responsive in all material respects to the
applicable requirements of the Act and the rules and regulations of the
Commission thereunder; and
(xvii upon completion of the Formation Transactions, the
Company will be organized in conformity with the requirements for
qualification as a real estate investment trust under the Code, and the
proposed method of operation of the Company and the Operating
Partnership as described in the Registration Statement and the
Prospectus and a certificate of a responsible officer of the Company
will enable the Company to meet the requirements for taxation as a real
estate investment trust under the Code beginning with the year ended
December 31, 1997.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the Underwriters, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and, although
such
33
counsel is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and has not made any independent check
or verification thereof, during the course of such participation (relying as to
the factual matters upon the statements of officers and other representatives of
the Company and public officials) no facts came to the attention of such counsel
that caused such counsel to believe that the Registration Statement, at the time
it became effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of its date or as
of the Firm Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; it being
understood that such counsel need express no belief with respect to the
financial statements and related notes thereto and the other financial,
statistical and accounting data included in the Registration Statement or the
Prospectus or omitted therefrom.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, the Operating Partnership and public officials and, as
to matters involving the application of laws of any jurisdiction other than the
State of Illinois, the State of New York, the Delaware General Corporation Law
and the Delaware Revised Limited Partnership Act or the United States, to the
extent satisfactory in form, and scope to counsel for the Underwriters, upon the
opinion of Miles and Stockbridge, a Professional Corporation, as to Maryland
law. Copies of such local counsel opinions shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c The Representatives shall have received an opinion, dated
the Firm Closing Date, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
the Underwriters, with respect to the issuance and sale of the Firm Securities,
the Registration Statement and the Prospectus, and such other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d The Representatives shall have received from Ernst & Young
LLP, a letter or letters dated, respectively, the date hereof and the Firm
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i they are independent accountants with respect to the
Company and its consolidated subsidiaries and the Prime Properties, the
Contribution Properties and the
34
Acquisition Properties within the meaning of the Act and the
applicable rules and regulations thereunder;
(ii in their opinion, the audited consolidated financial
statements and schedules and pro forma financial statements examined by
them and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(iii on the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company,
the Prime Properties, the Contribution Properties and the Acquisition
Properties, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
trustees and any committees thereof of the Company and inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters, nothing came to their attention that caused
them to believe that:
(A0 at a specific date (not more than five business days prior
to the date of such letter), there were any increases in debt
or accumulated deficit of the Prime Properties or any
decreases in total assets of the Prime Properties, in each
case as compared with amounts shown in the June 30, 1997
combined balance sheet included in the Registration Statement
and the Prospectus, or for the period from July 1, 1997 to
September 30, 1997, there were any decreases, as compared with
the corresponding period of the previous year, in rental
income, total revenues or net income (as applicable) of the
Prime Properties, the Acquisition Properties and the
Contribution Properties, except in all instances for changes,
increases or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur; and
(B0 at a specific date (not more than five business days prior
to the date of such letter), with respect to the Prime
Properties, there were any increases in borrowings as compared
with amounts shown in the June 30, 1997 balance sheet included
in the Registration Statement and the Prospectus, except in
all instances for changes or increases which the Registration
Statement and the Prospectus disclose have occurred or may
occur.
(iv they have carried out certain specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information identified by
35
the Representatives that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are
included in the Registration Statement and the Prospectus and have
compared such amounts, percentages and financial information with such
records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation; and
(v on the basis of a reading of the unaudited pro
forma condensed consolidated financial statements included in the
Registration Statement and the Prospectus, carrying out certain
specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(v), inquiries of certain officials of the Company and its consolidated
subsidiaries who have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited pro
forma condensed consolidated financial statements, nothing came to
their attention that caused them to believe that the unaudited pro
forma condensed consolidated financial statements do not comply in form
in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
such statements.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters under this Agreement that (A) such letters shall
be accompanied by a written explanation of the Company as to the significance
thereof, unless the Representatives deem such explanation unnecessary, and (B)
such changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to proceed with the purchase
and delivery of the Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (d) with respect to either letter referred to above shall include
any amendment or supplement thereto at the date of such letter.
(e The Representatives shall have received a certificate,
dated the Firm Closing Date, of the chief executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i the representations and warranties of the Company
and the Operating Partnership in this Agreement are true and correct as
if made on and as of the Firm Closing Date; the Registration Statement,
as amended as of the Firm Closing Date, does
36
not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and each of the Company and the Operating
Partnership has performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to
the Firm Closing Date;
(ii no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to
the best of the Company's or the Operating Partnership's knowledge, are
contemplated by the Commission; and
(iii subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
and its subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Registration Statement and the
Prospectus (exclusive of any amendment or supplement thereto).
(f The Representatives shall have received from (i) each
Limited Partner an agreement to the effect that such person will not,
directly or indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise
sell or dispose (or announce any offer, sale, offer of sale, contract of
sale, pledge, grant of an option to purchase or other sale or disposition) of
any Common Shares or other shares of beneficial interest of the Company or
Common Units or other partnership interests of the Operating Partnership, or
any securities convertible into, or exchangeable or exercisable for, Common
Shares or other shares of beneficial interest of the Company or Common Units
or other partnership interests of the Operating Partnership, for a period of
(w) two years after the date of this Agreement in the case of The Prime
Group, Inc., (x) two years after the date of this Agreement in the case of
the Primestone Joint Venture (as defined in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) with
respect to the Common Units contributed by The
37
Prime Group, Inc. (except, in the event of a Dividend Reduction (as defined
in the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), one year), (y) one year after the date of this
Agreement in the case of the Primestone Joint Venture with respect to the
Common Units purchased by the Primestone Joint Venture and (z) one year after
the date of this Agreement in the case of the other Limited Partners and (ii)
each of the purchasers of Common Shares from the Underwriters in the Reserved
Share Program an agreement to the effect that such person will not, directly
or indirectly, offer, sell, offer to sell, contract to sell, transfer,
assign, pledge, hypothecate, grant any option to purchase or otherwise sell
or dispose of any Common Shares for a period of three months from the date of
this Agreement.
(g On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(h Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance.
(i The Formation Transactions shall have been consummated or
shall occur simultaneously with the closing of the purchase and sale of the Firm
Securities hereunder.
(j On or before the Firm Closing Date, all necessary consents
to the Formation Transactions shall have been obtained.
(k On or before the Firm Closing Date, the Company and the
Operating Partnership shall have delivered to you with respect to each of the
Properties copies of:
(i an owner policy or polices of title insurance insuring that
each of the Property Partnerships owns fee simple title to the real
property (other than the land in which the applicable Property
Partnership is acquiring a ground leasehold estate) comprising part of
the related Property and owns and holds a valid ground leasehold estate
in the land comprising part of the related Property in which such
Property Partnership is acquiring a ground leasehold estate, in an
amount at least equal to the Insured Title Amount, which policies shall
be issued by a title insurance company or companies as previously
disclosed to you and your counsel (any such person or persons, the
"Title Company"), and contain as exceptions to title only those
exceptions acceptable to the Representatives;
(ii an as-built survey of each of the Properties in form
satisfactory to you;
38
(iii all assignments of tenant leases, service
contracts and similar rights owned, immediately prior to the Closing,
(i) by Prime, in the case of the Prime Properties and the Prime
Contribution Properties, (ii) by the NAC Contributors, in the case of
the NAC Contribution Properties, (iii) by the IBD Contributors, in the
case of the IBD Contribution Properties, and (iv) the respective
sellers of the Acquisition Properties, in the case of the Acquisition
Properties;
(iv all tenant estoppels, third party consents,
waivers, licenses, permits, authorizations, agreements, certificates
and the like required to be delivered to the Company pursuant to the
applicable acquisition, contribution or formation agreements;
(v all certificates of occupancy in the Company's
possession, zoning compliance letters and evidence of utility
availability for each of the Properties, to the extent not included in
the title insurance policies and surveys delivered pursuant to clauses
(i) and (ii);
(vi policies or certificates of insurance (including
earthquake insurance) relating to each of the Properties evidencing
coverages and in amounts as are prudent and customary in the businesses
in which they are or will be engaged;
(vii UCC, judgment and tax lien searches confirming
that the personal property comprising part of the Properties is subject
to no liens, charges, encumbrances, claims or restrictions;
(viii) checks payable to the appropriate public
officials in payment of all recording costs and transfer taxes (or
checks or wire transfers to the Title Company in respect of such
amounts) due in respect of the recording of any instruments to be
recorded in connection with the Formation Transactions, together with a
check or wire transfer for the Title Company in payment of the Title
Company's premium, search and examination charges, survey costs and any
other amounts due in connection with the issuance of its policy (or
commitment); and
(ix) if any of the Properties is subject to an
existing mortgage which is contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
to be paid and satisfied in full concurrently with the Closing , a
current payoff letter from the holder of such existing mortgage
indicating the principal amount required to satisfy all amounts then
secured by such existing mortgage and the
39
additional amount required for each day after the date of such letter
necessary to satisfy all obligations secured thereby.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm Securities,
except that all references to the Firm Securities and the Firm Closing Date
shall be deemed to refer to such Option Securities and the related Option
Closing Date, respectively.
8. Indemnification and Contribution. (a) Each of the Company
and the Operating Partnership, jointly and severally, agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934 (the "Exchange Act"), against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company or the Operating Partnership in Section 2 of this
Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amend-
40
ment or supplement thereto, or any Application a material fact required
to be stated therein or necessary to make the statements therein not
misleading or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including, without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither the Company nor the
Operating Partnership will be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that neither the Company
nor the Operating Partnership will be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company or the
Operating Partnership with Section 5(d) and (e) of this Agreement. This
indemnity agreement will be in addition to any liability which the Company or
the Operating Partnership may otherwise have. Neither the Company nor the
Operating Partnership will, without the prior written consent of the Underwriter
or Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its trustees (including any
person who, with his or her consent,
41
is named in the Registration Statement as about to become a trustee of the
Company), each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such trustee, officer or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or any Application or (ii) the omission or the alleged omission to
state therein a material fact required to be stated in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or any Application or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein; and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such trustee,
officer or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have. No Underwriter will, without the prior written consent of
the Company, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Company, any of its
trustees or officers who signed the Registration Statement or any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional release
of the Company, its trustees and officers who signed the Registration Statement
and such controlling persons from all liability arising out of such claim,
action, suit or proceeding.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
(i) any liability which it may have to any indemnified party under this Section
8 except to the extent that the indemnifying party has been materially
prejudiced as a result thereof or (ii) any liability which it may have to any
indemnified party otherwise than under this Section 8. In case any such action
is brought against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party
42
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Representatives in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action or actions) or
(ii) the indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits
43
received by the Company and the Operating Partnership on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering of the Securities (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties 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
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Operating Partnership and the Underwriters agree that it would not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
the Company and the Operating Partnership shall be deemed one party and jointly
and severally liable for any obligations to contribute hereunder and each
director of the Company, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company and the Operating Partnership.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Securities or Option Securities
hereunder and the aggregate number of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or less
of the aggregate number of Firm Securities or Option Securities to be purchased
by all of the Underwriters at such time hereunder, the other Underwriters may
make arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related
44
Option Closing Date, as the case may be, the other Underwriters shall be
obligated severally in proportion to their respective commitments hereunder to
purchase the Firm Securities or Option Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase. If one or more
Underwriters so default with respect to an aggregate number of Securities that
is more than ten percent of the aggregate number of Firm Securities or Option
Securities, as the case may be, to be purchased by all of the Underwriters at
such time hereunder, and if arrangements satisfactory to the Representatives are
not made within 36 hours after such default for the purchase by other persons
(who may include one or more of the non-defaulting Underwriters, including the
Representatives) of the Securities with respect to which such default occurs,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Operating Partnership other
than as provided in Section 10 hereof. In the event of any default by one or
more Underwriters as described in this Section 9, the Representatives shall have
the right to postpone the Firm Closing Date or the Option Closing Date, as the
case may be, established as provided in Section 3 hereof for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm Securities
or Option Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Operating Partnership and the several Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, the Operating Partnership, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole discretion
of the Representatives by notice to the Company given prior to the Firm Closing
Date or the related Option Closing Date, respectively, in the event that the
Company or the Operating Partnership shall have failed, refused or been unable
to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Firm Closing Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall
have, in the sole judgment of the Representatives, sustained any
material loss or interference with their respective
45
businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding or there shall
have been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a
change in management or control of the Company), in the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, taken as whole, except
in each case as described in or contemplated by the Registration
Statement and the Prospectus (exclusive of any amendment or supplement
thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading
in securities generally on the New York Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on
such exchange;
(iii) a banking moratorium shall have been declared
by New York, Illinois or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political or
financial conditions having an effect on the U.S. financial markets
that, in the sole judgment of the Representatives, makes it impractical
or inadvisable to proceed with the public offering or the delivery of
the Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Sections 6 and 10 hereof.
12. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(b) and 8 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Equity Transactions Group; and if sent to the Company,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to the Company at ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, with a copy to the Company
at ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel (facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇).
14. Successors. This Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Company, the Operating
Partnership and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company and the Operating
Partnership contained in Section 8 of this Agreement shall also be for the
benefit of any person or persons who control any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Underwriters contained in Section 8 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All
judicial proceedings arising out of or relating to this Agreement may be brought
in any state or federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement, each of the Company and
the Operating Partnership accepts for itself and in connection with its
properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waives any defense of forum non conveniens and irrevocably
agrees to be bound by any judgment rendered thereby in connection with this
Agreement. The Company designates and appoints The Corporation Trust Inc. and
the Operating Partnership designates and appoints The Corporation Trust Company,
and such other persons as may hereafter be selected by each of the Company and
the Operating Partnership irrevocably agreeing in writing to so serve, as its
agent to receive on its behalf service of all process in any such proceedings in
any such court, such service being hereby acknowledged by each of the Company
and the Operating Partnership to be effective and
47
binding service in every respect. A copy of any such process so served shall be
mailed by registered mail to each of the Company and the Operating Partnership
at its address provided in Section 13 hereof; provided, however, that, unless
otherwise provided by applicable law, any failure to mail such copy shall not
affect the validity of service of such process. If any agent appointed by the
Company or the Operating Partnership refuses to accept service, each of the
Company and the Operating Partnership hereby agrees that service of process
sufficient for personal jurisdiction in any action against the Company or the
Operating Partnership in the State of New York may be made by registered or
certified mail, return receipt requested, to the Company or the Operating
Partnership at its address provided in Section 13 hereof, and each of the
Company and the Operating Partnership hereby acknowledges that such service
shall be effective and binding in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of any Underwriter to bring proceedings against each of the Company and
the Operating Partnership in the courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
48
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the
Company, the Operating Partnership and each of the several Underwriters.
Very truly yours,
PRIME GROUP REALTY TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
PRIME GROUP REALTY, L.P.
By: Prime Group Realty Trust,
its managing general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By: /s/ ▇▇▇▇-▇▇▇▇▇▇ Canfin
--------------------------
Name: ▇▇▇▇-▇▇▇▇▇▇ Canfin
Title: Managing Director
For itself and on behalf of the Representatives as
Representatives of the other several Underwriters
named in Schedule I hereto
SCHEDULE 1
UNDERWRITERS
Number of
Firm Securities
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated.................. 1,923,125
▇▇▇▇▇▇▇▇, Billlings, ▇▇▇▇▇▇ & Co., Inc.............. 1,923,125
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.................................... 1,923,125
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc........................ 1,923,125
ABN AMRO Chicago Corporation........................ 250,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc............................. 250,000
BT ▇▇▇▇ ▇▇▇▇▇ Incorporated.......................... 250,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated................ 250,000
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp............................... 250,000
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation. 250,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc............................ 250,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co................................. 250,000
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated. 250,000
▇▇ ▇▇▇▇▇▇ Securities Inc............................ 250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated................... 250,000
PaineWebber Incorporated............................ 250,000
Advest, Inc......................................... 125,000
Everen Securities, Inc.............................. 125,000
▇▇▇▇▇▇ ▇▇▇▇ LLC..................................... 125,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Securities, Inc................... 125,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Securities Inc........................ 125,000
The Ohio Company.................................... 125,000
Principal Financial Securities, Inc................. 125,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc..................... 125,000
Sutro & Co. Incorporated............................ 125,000
1-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated......................... 125,000
▇▇▇▇▇▇▇▇ & Partners, L.P............................ 62,500
Chatsworth Securities LLC........................... 62,500
Home ▇▇▇▇▇▇ Investments Inc......................... 62,500
Prime Charter Ltd................................... 62,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Inc............................ 62,500
Sands Brothers & Co., Inc........................... 62,500
The ▇▇▇▇▇▇▇▇ Capital Group, L.P..................... 62,500
------
Total............................................... 12,380,000
----------
----------
1-2
SCHEDULE 2
PARTNERS OF OPERATING PARTNERSHIP
Number of Percentage of
Managing General Partner Common Units All Units
------------------------ ------------ ---------
Prime Group Realty Trust 12,380,000 55.3%
General Partner
The ▇▇▇▇▇ Group, L.L.C 927,100 4.1
Limited Partners
Prime Group Limited Partnership 90,000 0.5
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 110,000 0.5
Primestone Investment Partners, L.P. 7,944,893 35.5
IBD Contributors(2) 919,450 4.1
---------- -----
Total 22,371,443.00 100.0%
------------- -----
------------- -----
--------------
(2) The IBD Contributors consist of the following persons or entities:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Dated May 22, 1992, Grandville/Northwestern
Management Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Dated May 21, 1992,
▇▇▇▇ ▇▇▇▇▇▇▇▇ 1991 Trust, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1991 Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Grandville Road Property, Inc. and Sky Harbor
Associates. Allocations of Common Units among the IBD Contributors are
subject to certain adjustments and will be made at the Firm Closing
Date.
2-1
SCHEDULE 3
ENVIRONMENTAL SITE ASSESSMENTS AND ENGINEERING REPORTS
------------------------------------------------------
A. Environmental Site Assessments:
1. ▇▇▇▇▇, Level I Site Assessment, Hilton Parking Garage, ▇▇▇
▇▇▇▇▇▇ ▇▇▇., Knoxville, June 5, 1997.
2. ▇▇▇▇▇, Level I Site Assessment, One Center Square Office
Building, 620 Market Street, Knoxville, June 5, 1997.
3. ▇▇▇▇▇, Level I Site Assessment, Two Center Square Office
Building, 625 Gay Street, Knoxville, June 5, 1997.
4. ▇▇▇▇▇, Level I Site Assessment, Suntrust Bank Building, 201
Fourth Ave, North, Nashville, June 5, 1997. No issues. Also
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ I.
5. ▇▇▇▇▇, Level I Site Assessment, The Weston, 4823 Old
Kingston Pike, Knoxville, June 12, 1997.
6. ▇▇▇▇ & ▇▇▇ ▇▇▇▇, Summary Environmental Report, Chicago
Enterprise Center, Nov. 1995.
7. Versar, Phase I, ▇▇▇▇▇▇▇ Enterprise Center, Nov. 1995.
8. ▇▇▇▇▇▇▇▇ & Northstar, Underground Tank Removal Report,
Citibank ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇,
Aug. 6, 1996.
9. Certified Engineering & Testing Co., Asbestos Audit Report and
Transformer Survey, Citicorp Office Building, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, Mar. 17, 1989.
10. Environmental Hazard Control, Closeout Document, Vinyl
Asbestos Floor Tile and Mastic Removal, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇, July 26, 1994.
11. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇., Citicorp Office
Plaza, June 22, 1997.
12. Chicago Flameproof, Meta Caulk Fire Stopping Proposal,
Mar. 13, 1997.
13. Environmental Remediation and Indemnity Agreement,
May 20, 1996.
14. STS, Environmental Reconnaisance and Subsurface Exploration,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇▇.
15. ▇▇▇▇▇▇▇ Environmental, Revised Phase I Environmental
Assessment, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, May 20, 1997.
16. ▇▇▇▇▇▇▇ Environmental, Inc., Phase I of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇, May 28, 1997.
17. ▇▇▇▇▇▇▇ Environmental, Limited Subsurface Soil Investigation
Proposal, Gurnee, IL, July 9, 1997.
3-1
18. Pioneer Environmental, Phase I Environmental Site Assessment,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇, July 11, 1996.
19. ▇▇▇▇▇▇▇ Environmental, Phase I Assessment Update, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇, May 2, 1997.
20. Green Environmental Group, Phase I of vacant property in
McHenry, IL, July 1994.
21. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, May 2, 1997.
22. Heritage, ▇▇▇▇▇▇▇ Enterprise Center Remediation Work Plan,
Feb. 28, 1997.
23. Heritage, East Chicago Enterprise Center Remediation Work
Plan, Feb. 28, 1997.
24. ▇▇▇▇▇▇▇ & Niple, Phase I Environmental Site Assessments,
Columbus Portfolio Properties, April 1997.
25. ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇ ▇ Environmental Site Assessment of
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ (▇▇▇-▇▇▇▇), June 1977.
26. ▇▇▇▇▇▇▇ & Niple, Letter regarding soil testing of AutoGlass
site, 4849 Grovepoint, Obetz, OH, July 15, 1997.
27. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, Oct. 13, 1997.
28. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇. 13, 1997.
29. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, Oct. 13, 1997.
30. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇. 13, 1997
31. ▇▇▇▇▇▇, Environmental Assessment of North Western Proviso
Center, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, May 31, 1994.
32. ▇▇▇▇▇▇▇ Environmental, Draft Phase I, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇, Oct. 16, 1997.
33. ▇▇▇▇▇▇▇, Phase I Environmental Assessment, ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇, Mar. 25, 1994.
34. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Report,
▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇. 16, 1997.
35. ▇▇▇▇▇▇▇, Phase I Environmental Assessment, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇, Mar. 25, 1994.
36. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
3-2
37. ▇▇▇▇▇▇, Phase I of ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇.
38. ▇▇▇▇▇▇▇, Draft Phase I Environmental Assessment, ▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇. 16, 1997.
39. ▇▇▇▇▇▇, Phase I of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇,
Nov. 15, 1993.
40. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment
of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
41. ▇▇▇▇▇▇, Environmental Inspection of Narco-Elmhurst Center, ▇▇▇
▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇, May 31, 1990.
42. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇, Oct. 16, 1997.
43. ▇▇▇▇▇▇▇ Environmental, Phase I Environmental Assessment of
Vacant Parcel, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇. May 21, 1996.
44. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Site
Assessment, ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇. 17, 1997.
45. ▇▇▇▇▇▇▇ Environmental, Phase I Environmental Assessment of ▇▇▇
▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇. ▇▇, July 10, 1996.
46. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇. 16, 1997.
47. ▇▇▇▇▇▇, Environmental Assessment of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇, June 3, 1992.
48. ▇▇▇▇▇▇▇, Draft Phase I Environmental Assessment, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇., ▇▇▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
49. ▇▇▇▇▇▇▇, Draft Phase I of Nine Vacant Lots, Carol Stream, IL,
Oct. 16, 1997.
50. ▇▇▇▇▇▇, Environmental Assessment of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇,
▇▇, Mar. 29, 1989.
51. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇, ▇▇, Oct. 15, 1997.
52. ▇▇▇▇▇▇, Environmental Assessment of 4250-4300 Madison,
Hillside, IL, Feb. 29, 1992.
53. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
54. ▇▇▇▇▇▇, Environmental Assessment of ▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇,
▇▇, Mar. 1, 1990.
55. ▇▇▇▇▇▇▇, Draft Phase I Environmental Assessment, ▇▇▇▇
▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
56. ▇▇▇▇▇▇, Phase I Environmental Audit of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. May 31, 1991.
57. ▇▇▇▇▇▇▇, Draft Phase I Environmental Assessment, ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
3-3
58. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇. ▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇, ▇▇▇. 15, 1997.
59. ▇▇▇▇▇▇, Phase I of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, Nov. 26,
1991.
60. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, Oct. 16, 1997.
61. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇, Oct. 16, 1997.
62. ▇▇▇▇▇▇▇, Draft Phase I Environmental Assessment, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇, Oct. 15, 1997.
63. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇-▇▇▇ ▇. ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇. 16, 1997.
64. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇./▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇, ▇▇, May
9, 1997.
65. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇., ▇/▇/▇▇; and addendum, June 5,
1997.
66. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇, May 2, 1997, addendum, May
28, 1997.
67. ▇▇▇▇▇▇▇ Environmental, Phase I Environmental Assessment, Salt
Creek Office Center, Schaumburg, IL, Aug. 22, 1997.
68. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
4160-4190 Madison, Hillside, IL, Oct. 17, 1997.
69. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, Oct. 17, 1997.
70. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Site
Assessment, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇, Oct. 16,
1997.
71. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
Two Vacant Lots, Batavia, IL, Oct. 17, 1997.
72. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment
of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇, Oct. 21, 1997.
73. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment
of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇, ▇▇, Oct. 21, 1997.
74. ▇▇▇▇▇▇▇ Environmental, Phase I Environmental Assessment Update
of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Oct. 21,
1997.
3-4
75. ▇▇▇▇▇▇▇ Environmental, Phase I Environmental Assessment, 77
West ▇▇▇▇▇▇ Drive, August 20, 1997, plus correspondence dated
November 11, 1997.
76. ▇▇▇▇▇▇▇ Environmental, Draft Phase I Environmental Assessment,
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
77. ▇▇▇▇▇▇▇ Environmental, Removal Site Evaluation and Preliminary
Assessment Event and Work Plan (1/97) and Event and Report
(4/97), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇, ▇▇.
B. Engineering Reports;
1. Wiss, Janney Engineering Report for the following Properties
to be contributed by NAC Contributors:
a. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
1. 4211 Madison
2. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇ ▇▇▇▇▇ ▇▇.
4. 4300 Madison
5. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
6. 961 ▇▇▇▇▇▇
7. 4100-4190 Madison
8. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
9. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
10. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
11. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
12. ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇.
2. Wiss, Janney, Walkthrough Inspection of Eight Industrial
Properties of the Brazos Industrial Portfolio, 4/17/97, for
the following Properties:
1. 4849 Groveport
2. ▇▇▇▇ ▇▇▇▇▇ ▇▇.
3. ▇▇▇▇ ▇▇▇▇▇ ▇▇.
4. ▇▇▇▇ ▇▇▇▇▇
5. 4411 Marketing
6. 5160 Blazer
7. 341 Enterprise
8. ▇▇▇ ▇▇▇▇▇▇ ▇▇.
3-5
3. ▇▇▇▇, ▇▇▇▇▇, Draft 3 Engineering Walkthrough for Citibank
Office Plaza and Salt Creek Office Center, 7/14/97.
4. ▇▇▇▇, ▇▇▇▇▇, Draft Engineering Walkthrough for the following
IBD Industrial Properties:
1. ▇▇▇ ▇▇▇▇▇ ▇▇.
2. ▇▇▇ ▇▇▇▇▇ ▇▇.
3. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
4. 306-310 Era
5. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
6. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
7. 1301 Ridgeview
3-6
SCHEDULE 4
TRANSACTION DOCUMENTS
Amended and Restated Agreement of Limited Partnership of Prime Group
Realty, L.P.
Formation Agreement, to be dated as of November 17, 1997, by and among
Prime Group Realty Trust, Prime Group Realty, L.P., Prime Group Realty Services,
Inc., The Prime Group, Inc., Prime Group Limited Partnership and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇.
Subscription Agreement dated as of November 11, 1997 by and between
Prime Group Realty, L.P. and Primestone Investment Partners, L.P.
Series A Preferred Securities Purchase Agreement dated as of November
11, 1997 among Security Capital Preferred Growth Incorporated, Prime Group
Realty Trust and Prime Group Realty, L.P.
Credit Agreement to be dated as of November 17, 1997 (the "Credit
Facility") among Prime Group Realty, L.P., Prime Group Realty Trust, BankBoston,
N.A., as agent and the certain financial institutions from time to time parties
thereto as lenders (the "Lenders").
Promissory Notes to be dated November 17, 1997 in the amount of
$225,000,000 issued by Prime Group Realty, L.P. to the Lenders.
Mortgage Security Agreement and Financing Statement to be dated
November 17, 1997 by 77 West ▇▇▇▇▇▇ Limited Partnership in favor of BankBoston,
N.A. as agent for the Lenders.
Loan Agreement dated as of November 11, 1997 between Prime Group
Realty, L.P. and Prudential Securities Credit Corporation relating to the New
Mortgage Notes.
Guaranty dated November 17, 1997 from 77 West ▇▇▇▇▇▇ Limited
Partnership, enterprise Center I, L.P., Enterprise Center II, L.P., Enterprise
Center III, L.P., Enterprise Center IV, L.P., Enterprise Center V, L.P.,
Enterprise Center VI, L.P., Enterprise Center VII, L.P., Enterprise Center VIII,
L.P., Enterprise Center IX, L.P., Enterprise Center X, L.P., Arlington Heights
I, L.P., Arlington Heights II, L.P., Arlington Heights III, L.P., East Chicago
Enterprise Limited Partnership, ▇▇▇▇▇▇▇ Enterprise Center Limited Partnership,
Nashville Office Building I, Ltd., Old Kingston Properties, Ltd., Centre Square
II, Ltd., Triad Parking Company, Ltd. in favor of BankBoston, N.A., as agent for
the Lenders.
Indemnification Agreement between Prime Group Realty Trust and each if
its trustees.
Right of First Offer Agreement to be dated as of November 17, 1997
between Prime Group Realty, L.P., and The Prime Group, Inc.
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
4-1
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
Employment Agreement by and between Prime Group Realty Trust, Prime
Group Realty, L.P. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
Consulting Agreement by and between Prime Group Realty Trust and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
Option Agreement by and between Prime Group Realty, L.P. and ▇▇▇ ▇.
▇▇▇▇▇▇▇, L.L.C. to be dated as of November 17, 1997.
Registration Rights Agreement to be dated November 17, 1997 among Prime
Group Realty Trust, Prime Group Realty, L.P., The Prime Group, Inc., Primestone
Investment Partners L.P. and other investors named therein.
Registration Rights Agreement to be dated November 17, 1997 between
Prime Group Realty Trust and Security Capital Preferred Growth Incorporated.
Environmental Remediation and Indemnification Agreement to be dated
November 17, 1997 by and between Prime Group Realty, L.P. and The Prime Group,
Inc.
Non-Competition and Restriction Agreement to be dated November 17, 1997
by and among Prime Group Realty Trust, The Prime Group, Inc. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
Tax Indemnification Agreement to be dated November 17, 1997 by and
between Prime Group Realty, L.P. and IBC Contributors.
Tax Indemnification Agreement to be dated November 17, 1997 by and
between Prime Group Realty, L.P. and certain of the NAC Contributors.
Tax Indemnification Agreement to be dated November 17, 1997 by and
between The Prime Group, Inc. and Prime Group Realty, L.P.
Contribution Agreement dated as of October 20, 1997 by and among The
Prime Group, Inc., Prime Group Realty, L.P., Prime Group Realty Trust, Narco
River Business Center, Narco Tower Road Associates, Olympian Office Center,
Tri-State Industrial Park Joint Venture, ▇▇▇▇▇ Stream Industrial Park Joint
Venture, Narco Enterprises, Inc., The ▇▇▇▇▇ Group Ltd., Narco construction Inc.,
▇▇▇▇▇ & Co., ▇▇▇▇▇ Asset Management, Inc. and ▇▇▇▇▇ Architectural, Inc.
4-2
Asset Purchase Agreement by and among Continental Offices, Ltd.
Continental Offices Ltd. Realty and Prime Group Realty, L.P.
All instruments of transfer and conveyance related to the Formation
Transactions, including, without limitation, bills of sale, deeds and assignment
agreements.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the Credit Facility.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the New Mortgage Notes.
4-3
SCHEDULE 5
TRANSFER DOCUMENTS
Formation Agreement, to be dated as of November 17, 1997, by and among
Prime Group Realty Trust, Prime Group Realty, L.P., Prime Group Realty Services,
Inc., The Prime Group, Inc., Prime Group Limited Partnership and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇.
Right of First Offer Agreement to be dated as of November 17, 1997
between Prime Group Realty, L.P., and The Prime Group, Inc.
Option Agreement by and between Prime Group Realty, L.P. and ▇▇▇ ▇.
▇▇▇▇▇▇▇, L.L.C. to be dated as of November 17, 1997.
Contribution Agreement dated as of October 20, 1997 by and among The
Prime Group, Inc., Prime Group Realty, L.P., Prime Group Realty Trust, Narco
River Business Center, Narco Tower Road Associates, Olympian Office Center,
Tri-State Industrial Park Joint Venture, ▇▇▇▇▇ Stream Industrial Park Joint
Venture, Narco Enterprises, Inc., The ▇▇▇▇▇ Group Ltd., Narco construction Inc.,
▇▇▇▇▇ & Co., ▇▇▇▇▇ Asset Management, Inc. and ▇▇▇▇▇ Architectural, Inc.
Option to Purchase Partnership Interests dated as of June 17, 1994 by
and between KILICO Realty Corporation, and The Prime Group, Inc., as amended by
that certain First Amendment to Option Purchase Partnership Interests dated as
of January 21, 1997 by and between KILICO Realty Corporation and The Prime
Group, Inc., as further amended by that certain Second Amendment to Option to
Purchase Partnership Interests dated as of July 15, 1997 by and between KILICO
Realty Corporation and The Prime Group, Inc.
Contribution Agreement dated as of July 8, 1997, as amended, by and
among LaSalle National Trust, N.A., not personally, but solely as Trustee under
Trust Agreement dated June 15, 1982 and known as trust No. ▇▇-▇▇▇▇▇-▇▇, LaSalle
National Trust, N.A., not personally, but solely as Trustee under Trust
Agreement dated September 7, 1994 and known as Trust No. 11-9051, LaSalle
National Trust, N.A., not personally, but solely as Trustee under Trust
Agreement March 30, 1984 and known as Trust No. 11-107825, LaSalle National
Trust, N.A., not personally, but solely as Trustee under Trust Agreement dated
August 1, 1986 and known as Trust No. 11-a1358, LaSalle National Trust, N.A.,
not personally but solely as Trustee under Trust Agreement dated August 1, 1986
and known as Trust No. 11-1357, LaSalle National Trust N.A., not personally, but
solely as Trustee under Trust Agreement dated January 17, 1974 and known as
Trust No. 286-34, LaSalle National Trust, N.A., not personally, but solely as
Trustee under Trust Agreement dated October 15, 1995 and known as Trust No.
11-9869, LaSalle 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, MacArthur Drive Properties, CLE Limited Partnership,
500 Lindeberg Limited Partnership, 515 ▇▇▇▇▇ Limited Partnership, 555 ▇▇▇▇▇
Limited Partnership, Sky Harbor Associates, 1001 Technology Way, LLC, The
Grandville Road Limited Partnership, Industrial Building and Development Company
and The Prime Group, Inc., as amended by the First Amendment to the Contribution
Agreement dated as of August 12, 1997, by and between The Prime Group, Inc., an
Illinois corporation, and LaSalle National Trust, NA, t/u/t ▇▇-▇▇▇▇▇-▇▇ dated
June 15, 1982, LaSalle National Trust, NA, t/u/t 11-9051 dated September 7,
1994; LaSalle National Trust, NA t/u/t 11-107825 dated March 30, 1984; LaSalle
National Trust, NA/t/u/t 11-1358 dated August 1, 1986; LaSalle National Trust,
NA, t/u/t 11-1357 dated August 1, 1986; LaSalle National Trust, NA, t/u/t 286-34
dated January 17, 1974; LaSalle National Trust, NA, t/u/t 11-9869 dated October
15, 1995; and LaSalle National Trust, NA, t/u/t 11-2868 dated December 1, 1987.
5-1
Asset Purchase Agreement by and among Continental Offices, Ltd.
Continental Offices Ltd. Realty and Prime Group Realty, L.P.
Amended and Restated Agreement dated as of July 15, 1997 by and among
▇▇▇▇▇▇ Investors Life Insurance Company, Federal ▇▇▇▇▇▇ Life Assurance Company,
KILICO Realty Corporation, FKLA Realty Corporation, KR 77 Fitness Center, Inc.,
77 West ▇▇▇▇▇▇ Limited Partnership, K/77 Investors Limited Partnership, The
Prime Group, Inc., Prime Group Limited Partnership and Prime 77 Fitness Center,
Inc.
Agreement dated as of July 18, 1997 by and among the Prime Group, Inc.,
KILICO Realty Corporation, KFC Portfolio Corp. and ▇▇▇▇▇▇ Investors Life
Insurance Company.
Agreement to Contribute dated as of August 12, 1997 by and between
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and The Prime Group, Inc.
Agreement to Contribute dated as of August 12, 1997 by and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and The Prime Group, Inc.
Option Agreement dated as of August 4, 1997 by and between Lumbermens
Mutual Casualty Company and The Prime Group, Inc.
Agreement for Purchase or Exchange dated June 13, 1997 by and between
Sun Annex Partners and Salt Creek Partners, Ltd. and The Prime Group, Inc.
Assignment and Assumption of Real Estate Purchase and Sale Agreement
dated November 16, 1997 by and between The Prime Group, Inc. and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, L.L.C. and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, L.L.C.
Purchase and Sale Agreement dated October, 1997, by and between The
Mutual Life Insurance Company of New York, a New York mutual life insurance
company, and The Prime Group, Inc.
Contract of Sale dated October 13, 1997 between MGI Properties
(formerly known as Mortgage Growth Investors), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Seller) and The Prime Group, Inc., 77 West ▇▇▇▇▇▇ Limited
Partnership (Purchaser).
Purchase and Sale Agreement and Joint Escrow instructions dated October
1, 1977 by and between Mission Land Company and The Prime Group, Inc.
All instruments of transfer and conveyance related to the Formation
Transactions, including, without limitation, bills of sale, deeds and assignment
agreements.
5-2
SCHEDULE 6
OPERATIVE DOCUMENTS
Amended and Restated Agreement of Limited Partnership of Prime Group
Realty, L.P.
Formation Agreement, to be dated as of November 17, 1997, by and among
Prime Group Realty Trust, Prime Group Realty, L.P., Prime Group Realty Services,
Inc., The Prime Group, Inc., Prime Group Limited Partnership and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇.
Subscription Agreement dated as of November 11, 1997 by and between
Prime Group Realty, L.P. and Primestone Investment Partners, L.P.
Series A Preferred Securities Purchase Agreement dated as of November
11, 1997 among Security Capital Preferred Growth Incorporated, Prime Group
Realty Trust and Prime Group Realty, L.P.
Credit Agreement to be dated as of November 17, 1997 (the "Credit
Facility") among Prime Group Realty, L.P., Prime Group Realty Trust, BankBoston,
N.A., as agent and the certain financial institutions from time to time parties
thereto as lenders (the "Lenders").
Promissory Notes to be dated November 17, 1997 in the amount of
$225,000,000 issued by Prime Group Realty, L.P. to the Lenders.
Mortgage Security Agreement and Financing Statement to be dated
November 17, 1997 by 77 West ▇▇▇▇▇▇ Limited Partnership in favor of BankBoston,
N.A. as agent for the Lenders.
Loan Agreement dated as of November 11, 1997 between Prime Group
Realty, L.P. and Prudential Securities Credit Corporation relating to the New
Mortgage Notes.
Guaranty dated November 17, 1997 from 77 West ▇▇▇▇▇▇ Limited
Partnership, enterprise Center I, L.P., Enterprise Center II, L.P., Enterprise
Center III, L.P., Enterprise Center IV, L.P., Enterprise Center V, L.P.,
Enterprise Center VI, L.P., Enterprise Center VII, L.P., Enterprise Center VIII,
L.P., Enterprise Center IX, L.P., Enterprise Center X, L.P., Arlington Heights
I, L.P., Arlington Heights II, L.P., Arlington Heights III, L.P., East Chicago
Enterprise Limited Partnership, ▇▇▇▇▇▇▇ Enterprise Center Limited Partnership,
Nashville Office Building I, Ltd., Old Kingston Properties, Ltd., Centre Square
II, Ltd., Triad Parking Company, Ltd. in favor of BankBoston, N.A., as agent for
the Lenders.
Right of First Offer Agreement to be dated as of November 17, 1997
between Prime Group Realty, L.P., and The Prime Group, Inc.
Option Agreement by and between Prime Group Realty, L.P. and ▇▇▇ ▇.
▇▇▇▇▇▇▇, L.L.C. to be dated as of November 17, 1997.
Registration Rights Agreement to be dated November 17, 1997 among Prime
Group Realty Trust, Prime Group Realty, L.P., The Prime Group, Inc., Primestone
Investment Partners L.P. and other investors named therein.
6-1
Registration Rights Agreement to be dated November 17, 1997 between
Prime Group Realty Trust and Security Capital Preferred Growth Incorporated.
Environmental Remediation and Indemnification Agreement to be dated
November 17, 1997 by and between Prime Group Realty, L.P. and The Prime Group,
Inc.
Non-Compete Agreement to be dated November 17, 1997 by and among Prime
Group Realty Trust, The Prime Group, Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
Tax Indemnification Agreement to be dated November 17, 1997 by and
between Prime Group Realty, L.P. and IBD Contributors.
Tax Indemnification Agreement to be dated November 17, 1997 by and
between Prime Group Realty, L.P. and certain of the NAC Contributors.
Tax Indemnification Agreement to be dated November 17, 1997 by and
between The Prime Group, Inc. and Prime Group Realty, L.P.
Contribution Agreement dated as of October 20, 1997 by and among The
Prime Group, Inc., Prime Group Realty, L.P., Prime Group Realty Trust, Narco
River Business Center, Narco Tower Road Associates, Olympian Office Center,
Tri-State Industrial Park Joint Venture, ▇▇▇▇▇ Stream Industrial Park Joint
Venture, Narco Enterprises, Inc., The ▇▇▇▇▇ Group Ltd., Narco construction Inc.,
▇▇▇▇▇ & Co., ▇▇▇▇▇ Asset Management, Inc. and ▇▇▇▇▇ Architectural, Inc.
Option to Purchase Partnership Interests dated as of June 17, 1994 by
and between KILICO Realty Corporation, and The Prime Group, Inc., as amended by
that certain First Amendment to Option Purchase Partnership Interests dated as
of January 21, 1997 by and between KILICO Realty Corporation and The Prime
Group, Inc., as further amended by that certain Second Amendment to Option to
Purchase Partnership Interests dated as of July 15, 1997 by and between KILICO
Realty Corporation and The Prime Group, Inc.
6-2
LaSalle National Trust, NA, t/u/t 11-1357 dated August 1, 1986; LaSalle National
Trust, NA, t/u/t 286-34 dated January 17, 1974; LaSalle National Trust, NA,
t/u/t 11-9869 dated October 15, 1995; and LaSalle National Trust, NA, t/u/t
11-2868 dated December 1, 1987.
Asset Purchase Agreement by and among Continental Offices, Ltd.
Continental Offices Ltd. Realty and Prime Group Realty, L.P.
Amended and Restated Agreement dated as of July 15, 1997 by and among
▇▇▇▇▇▇ Investors Life Insurance Company, Federal ▇▇▇▇▇▇ Life Assurance Company,
KILICO Realty Corporation, FKLA Realty Corporation, KR 77 Fitness Center, Inc.,
77 West ▇▇▇▇▇▇ Limited Partnership, K/77 Investors Limited Partnership, The
Prime Group, Inc., Prime Group Limited Partnership and Prime 77 Fitness Center,
Inc.
Agreement dated as of July 18, 1997 by and among the Prime Group, Inc.,
KILICO Realty Corporation, KFC Portfolio Corp. and ▇▇▇▇▇▇ Investors Life
Insurance Company.
Agreement to Contribute dated as of August 12, 1997 by and between
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and The Prime Group, Inc.
Agreement to Contribute dated as of August 12, 1997 by and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and The Prime Group, Inc.
Option Agreement dated as of August 4, 1997 by and between Lumbermens
Mutual Casualty Company and The Prime Group, Inc.
Agreement for Purchase or Exchange dated June 13, 1997 by and between
Sun Annex Partners and Salt Creek Partners, Ltd. and The Prime Group, Inc.
Assignment and Assumption of Real Estate Purchase and Sale Agreement
dated November 16, 1997 by and between The Prime Group, Inc. and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, L.L.C. and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, L.L.C.
Purchase and Sale Agreement dated October 1997, by and between The
Mutual Life Insurance Company of New York, a New York mutual life insurance
company, and The Prime Group, Inc.
Contract of Sale dated October 13, 1997 between MGI Properties
(formerly known as Mortgage Growth Investors), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Seller) and The Prime Group, Inc., 77 West ▇▇▇▇▇▇ Limited
Partnership (Purchaser).
Purchase and Sale Agreement and Joint Escrow instructions dated October
1, 1977 by and between Mission Land Company and The Prime Group, Inc.
All instruments of transfer and conveyance related to the Formation
Transactions, including, without limitation, bills of sale, deeds and assignment
agreements.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the Credit Facility.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the New Mortgage Notes.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the Primestone Credit Facility.
6-3
Contract of Sale dated October 13, 1997 between MGI Properties
(formerly known as Mortgage Growth Investors), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Seller) and The Prime Group, Inc., 77 West ▇▇▇▇▇▇ Limited
Partnership (Purchaser).
Purchase and Sale Agreement and Joint Escrow instructions dated
October 1, 1977 by and between Mission Land Company and The Prime Group, Inc.
All instruments of transfer and conveyance related to the Formation
Transactions, including, without limitation, bills of sale, deeds and assignment
agreements.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the Credit Facility.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the New Mortgage Notes.
The loan agreements, mortgages, security agreements, promissory notes
and other documents executed by Prime Group Realty Trust and/or its subsidiaries
in connection with the Primestone Credit Facility.
6-4