Exhibit 10.36
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 25, 1998 among the
Company (as hereinafter defined) and the Purchasers (as hereinafter defined) who
have executed this Registration Rights Agreement.
This Registration Rights Agreement is made pursuant to the Purchase
Agreement (as hereinafter defined). The execution of this Registration Rights
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement.
The parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Affiliate: means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
Agreement: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
Common Shares: The Company's common shares of beneficial interest,
par value $.01 per share.
Company: means Prime Group Realty Trust, a Maryland real estate
investment trust, and any successor entity thereto.
Effectiveness Date: The 90th day following the Closing Date under the
Purchase Agreement.
Effectiveness Period: As defined in Section 2(a).
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated pursuant thereto.
Filing Date: The 30th day following the Closing Date under the
Purchase Agreement.
Indemnified Party: As defined in Section 7(c) hereof.
Indemnifying Party: As defined in Section 7(c) hereof.
Losses: As defined in Section 7(a).
Offering Notice: As defined in Section 4(a).
Other Selling Shareholders: As defined in Section 4(a).
Piggyback Offering Rights: The rights of the Purchasers to have their
Registrable Securities offered and sold to the underwriters concurrently with an
Underwritten Company Offering by the Company with respect to the sale of
Securities by the Company or by any other securityholders of the Company in
accordance with the provisions of Section 4.
Piggyback Offering Rights Period: As defined in Section 4(a).
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
Prospectus: The prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Securities covered
by the Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: The Purchase Agreement pursuant to which the
Company has agreed to sell Common Shares and Purchasers have agreed to acquire
Common Shares pursuant to the Company's Private Placement Memorandum dated March
16, 1998. Each Purchaser is a party to the Purchase Agreement.
Purchasers: Purchasers of Common Shares pursuant to the Purchase
Agreement.
Registrable Securities: The Common Shares purchased by the Purchasers
pursuant to the Purchase Agreement, upon original issuance thereof, and at all
times subsequent thereto, until, in the case of any such Common Shares, (i) it
has been registered pursuant to the Securities Act and disposed of in accordance
with the Registration Statement covering it, (ii) it is sold by the holder
thereof pursuant to Rule 144 (or any similar provisions then in effect) or (iii)
it ceases to be outstanding.
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Registration Statement: The registration statement, contemplated by
Section 2(a), including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC having substantially the same effect as
such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC having substantially the same effect as
such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Special Counsel: Any special counsel to the holders of Registrable
Securities of whom the Company has been notified in writing.
UCO Registration Statement: As defined in Section 7(a).
Underwriter's Representative: As defined in Section 4(a).
Underwritten Company Offering: As defined in Section 4(a).
Underwritten registration or underwritten offering: A registration in
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective registration statement.
2. Shelf Registration.
(a) The Company shall prepare and file a "shelf" registration
statement with respect to all Registrable Securities then issued on any
appropriate form for an offering to be made on a continuous basis pursuant to
Rule 415 on or prior to the Filing Date and shall use its reasonable best
efforts to cause such Registration Statement to be declared effective by the SEC
on or prior to the Effectiveness Date and take all other reasonable actions
necessary to keep such Registration Statement continuously effective under the
Securities Act until the date which is two years after the Closing Date under
the Purchase Agreement, or in the event that a holder or holders of not less
than 1,300,000 Registrable Securities so request in writing not less than 30
days
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prior to the termination of such two-year period, until the date which is three
years after such Closing Date, or such shorter period ending when all
Registrable Securities covered by such Registration Statement have been sold
(the "Effectiveness Period"). The holders of Registrable Securities may withdraw
all or part of such securities from the Registration Statement prior to or after
the effective date of the Registration Statement.
(b) If the holders of a majority of the Registrable Securities so
elect, one offering of Registrable Securities pursuant to the Registration
Statement may be effected in the form of an underwritten offering. In such
event, and if the managing underwriters advise the Company and the holders of
Registrable Securities proposed to be sold in such offering in writing that in
their opinion the amount of Registrable Securities proposed to be sold in such
offering exceeds the amount of Registrable Securities which can be sold in such
offering, there shall be included in such underwritten offering the amount of
such Registrable Securities which in the opinion of such underwriters can be
sold, and such amount shall be allocated pro rata among the holders of such
Registrable Securities on the basis of the number of shares of Registrable
Securities requested to be included by such holders.
(c) If any of the Registrable Securities are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the holders of
a majority of the Registrable Securities included in such offering. No person
may participate in any underwritten offering hereunder unless such person (a)
agrees to sell such person's Registrable Securities on the basis provided in any
underwriting agreements approved by the persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
3. This Section is Intentionally Left Blank.
4. Piggyback Offering Rights.
(a) If, at any time during the period that commences one day after
the date which is six months after the date of this Agreement and ends on the
last day of Effectiveness Period (the "Piggyback Offering Rights Period"), (i)
any underwritten primary equity offering is proposed to be initiated by the
Company (other than any registration by the Company on Form S-4 or Form S-8, or
a successor or substantially similar form, of (A) an employee share option,
share purchase, share incentive or compensation plan or of securities issued or
issuable pursuant to any such plan, or (B) a dividend reinvestment plan) or (ii)
any underwritten equity offering is proposed to be initiated by holders of
equity securities (other than the Registrable Securities) of the Company (the
"Other Selling Shareholders") pursuant to registration rights
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granted by the Company prior to the date hereof or otherwise pursuant to that
certain Registration Rights Agreement of the Company dated as of December 15,
1997 (an "Underwritten Company Offering"), the Company shall, not later than 20
days prior to the date of such proposed offering, give written notice (an
"Offering Notice") of such proposed offering to the Purchasers, which notice
shall describe in detail the proposed plan of distribution. During the
Piggyback Offering Rights Period, Purchasers may elect, by written notice to the
Company (which notice shall specify the aggregate number of Registrable
Securities proposed to be offered and sold by such Purchaser to the underwriters
concurrently with the Underwritten Company Offering) given within 15 days after
receipt of the Offering Notice from the Company, to have any and all of the
Registrable Securities owned by it included as selling shareholders with the
shares to be sold by the Company and/or the applicable Other Selling
Shareholders to the underwriters in connection with the Underwritten Company
Offering, and the Company shall use its best efforts to cause the underwriters
to so purchase such Registrable Securities. If the representative of the
managing underwriters (the "Underwriter's Representative") should reasonably
determine that the inclusion of such Registrable Securities would adversely
affect the offering as contemplated by the Company and/or the applicable Other
Selling Shareholders, and based on such determination recommends inclusion in
such offering of fewer or none of the Registrable Securities proposed to be sold
by all Purchasers, then (x) the number of Registrable Securities of the
Purchasers included in such offering shall be reduced pro-rata among such
Purchasers (based upon the number of Registrable Securities requested to be
included in the offering), if the Company and/or the applicable Other Selling
Shareholders, as appropriate, after consultation with the Underwriter's
Representative recommends the inclusion of fewer Registrable Securities, or (y)
none of the Registrable Securities of the Purchasers shall be included in such
offering, if the Company and/or the applicable Other Selling Shareholders, as
appropriate, after consultation with the Underwriter's Representative recommends
the inclusion of none of such Registrable Securities. The rights of the
Purchasers under this Section 4 are in addition to the rights of the Purchasers
under Section 2 (it being understood that the exercise of the piggyback rights
by the Purchasers under this Section 4 will not eliminate the Purchasers' rights
to a single demand registration under Section 2(b)).
(b) Each Purchaser so proposing to sell Registrable Securities to the
underwriters in an Underwritten Company Offering pursuant to this Section 4
shall execute and deliver an underwriting agreement and such other documents and
instruments in form and substance satisfactory to the Underwriter's
Representative. In addition, each Purchaser selling Registrable Securities to
such underwriters shall be liable for any and all underwriting discounts and
commissions with respect to its Registrable Securities included in such
offering.
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(c) The rights of the Purchasers under this Section 4 are solely
piggyback in nature, and nothing in this Section 4 shall prevent the Company
and/or the applicable Other Selling Shareholders, as appropriate, from reversing
a decision to consummate an Underwritten Company Offering.
5. Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall:
(a) Prepare and file with the SEC a Registration Statement on the
appropriate form available for the sale of the Registrable Securities by the
holders thereof in accordance with the method or methods of distribution thereof
as specified by the holders thereof, and cause the Registration Statement to
become effective and remain effective as provided herein; provided, however,
that no less than three days prior to the filing of the Registration Statement
or any related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall furnish to the holders of the Registrable
Securities, their Special Counsel and the managing underwriters, if any, copies
of all such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the
review of such holders, their Special Counsel and such underwriters, if any; the
Company shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the holders of a majority of the
Registrable Securities, their Special Counsel or the managing underwriters, if
any, shall reasonably object, in writing, on a timely basis, and the Company
shall use its reasonable best efforts to satisfy any such objection and
thereafter make such filing.
(b) Prepare and file with the SEC such amendments, including post-
effective amendments, to the Registration Statement as may be necessary to keep
the Registration Statement continuously effective for the applicable time
period; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions than in force) under the Securities Act; and comply
with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all securities covered by the Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented;
(c) Notify the holders of Registrable Securities to be sold, their
Special Counsel and the managing underwriters, if any, promptly (and in the case
of (i) (A) below in this paragraph in no event less than three days prior to
such filing) and (if requested by any such person) confirm such notice in
writing no later than one Business Day following the day (i) (A) when a
Prospectus or any
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Prospectus supplement or post-effective amendment to the Registration Statement
is proposed to be filed and, (B) with respect to the Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any proceedings for that purpose, (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction within the United States, or the initiation or threatening of
any proceeding or such purpose and (iv) upon the occurrence of any event which
makes any statement in the Registration Statement or Prospectus untrue in any
material respect;
(d) If requested by the managing underwriters, if any, or the holders
of a majority of the Registrable Securities being sold in connection with an
underwritten offering, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
managing underwriters, if any, and such holders reasonably agree should be
included therein, and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; provided, however, that the
Company shall not be required to take any action pursuant to this Section 5(d)
that would, in the opinion of counsel for the Company, violate applicable law;
(e) Furnish to each holder of Registrable Securities, their Special
Counsel, each managing underwriter, if any, and each exchange on which the
Common Share are traded, without charge, such number of conformed copies as such
persons or entities may reasonably request, of each Registration Statement and
each amendment or supplement thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested by such person (including
those previously furnished or incorporated by reference) as soon as practicable
after the filing of such documents with the SEC;
(f) Deliver to each holder of Registrable Securities, their Special
Counsel, and the underwriters, if any, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such persons reasonably request; and the
Company hereby consents thereto by each of the selling holders of Registrable
Securities and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any amendment
or supplement thereto;
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(g) Prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the holders of
Registrable Securities to be sold, the underwriters, if any, and their
respective counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of all
jurisdictions within the United States, keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and do any and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by a Registration Statement; provided, however, that the Company shall
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject;
(h) Cooperate with the holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold and to enable
such Registrable Securities to be in such denominations and registered in such
names as the managing underwriters, if any, or holders may request at least two
Business Days prior to any sale of Registrable Securities;
(i) Promptly file all documents required to be filed under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act during any period when the
Prospectus is required to be delivered under the Securities Act;
(j) If the Prospectus contains an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, prepare a supplement or amendment, including a post-
effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document, in each case
promptly after the discovery by the Company or the Company's receipt of notice,
of any such misstatement or omission, so that, as thereafter delivered, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(k) Cause all Registrable Securities relating to such Registration
Statement to be listed on each securities exchange, if any, on which similar
securities issued by the Company are then
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listed and make all other necessary or appropriate filings with each such
securities exchange;
(l) Enter into such agreements (including an underwriting agreement
in form, scope and substance as is customary in underwritten offerings) and take
all such other actions in connection therewith (including those reasonably
requested by the managing underwriters, if any, or the holders of a majority of
the Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities, and in such connection in the event
of an underwritten offering, whether or not an underwriting agreement is entered
into, (i) make such representations and warranties to the holders of such
Registrable Securities and the underwriters, if any, with respect to the
business of the Company, its subsidiaries, and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, in form, substance and scope as are customarily
made by issuers to underwriters in underwritten offerings, and confirm the same
if and when requested; (ii) obtain opinions of counsel to the Company (which
counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the managing underwriters, if any, and Special Counsel to the
holders of the Registrable Securities being sold), addressed to each selling
holder of Registrable Securities and each of the underwriters, if any, covering
the matters customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such Special Counsel
and underwriters; (iii) obtain "cold comfort" letters and updates thereof from
the independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data is, or is required to be, included in the
Registration Statement), addressed to each selling holder of Registrable
Securities and each of the underwriters, if any, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings; (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions and
procedures no less favorable to the selling holders and the underwriters, if
any, than those set forth in Section 6 hereof (or such other provisions and
procedures acceptable to holders of a majority of Registrable Securities
participating in such underwritten offering and the managing underwriters, if
any); and (v) deliver such documents and certificates as may be reasonably
requested by the holders of a majority of the Registrable Securities being sold,
their Special Counsel and the managing underwriters, if any, to evidence the
continued validity of the representations and warranties made pursuant to clause
(i) above and to evidence compliance with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company;
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(m) After filing any document incorporated by reference into a
Registration Statement deliver a copy of such document to each holder of
Registrable Securities upon request during the period the Company is obligated
to maintain an effective Registration Statement hereunder;
(n) Make reasonably available to a representative of the holders of
Registrable Securities being sold, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant,
auditor or investment advisor retained by such selling holders or underwriters
that information which such parties would customarily require to satisfy their
due diligence obligations with respect to the offering and sale of the
Registrable Securities; provided, however, that any information that is
designated by the Company in writing as confidential at the time of delivery of
such information shall be kept confidential by such persons (and each such
holder or underwriter, as the case may be, shall be liable for any such person's
failure to so keep such information confidential), unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities or self-regulatory organizations
(provided that in any such case, five Business Days' prior written notice is
given to the Company prior to any such disclosure of such information), (ii)
disclosure of such information, in the opinion of counsel to such person, is
required by law or pursuant to this Agreement (provided that in any such case,
five Business Days' prior written notice is given to the Company prior to any
such disclosure of such information), (iii) such information becomes generally
available to the public other than as a result of a disclosure or failure to
safeguard by such person, or (iv) such information becomes available to such
person from a source other than the Company and such source is not bound by a
confidentiality agreement; and
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act), no later than 45
days after the end of any 12-month period (or 90 days after the end of any 12-
month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of the Registration
Statement, which statement shall cover said 12-month period, or shorter periods
as is consistent with the requirements of Rule 158.
The Company may require each seller of Registrable Securities to
furnish to the Company such information regarding the distribution of such
Registrable Securities as is required by law to be disclosed in the Registration
Statement and the Company may
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exclude from such registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each holder of Registrable Securities agrees that such holder will not
offer or sell any Registrable Securities or exercise such holder's rights
hereunder in violation of any foreign or domestic, federal, state or local law,
order, rule or ordinance, other than such violations that occur as a result of
any breach by the Company of any of its obligations hereunder.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c) (ii), 5(c) (iii) or
5(c) (iv) or any other event as a result of which the Company has determined
that the holders of Registrable Securities should discontinue disposition
thereof, such holder will forthwith discontinue disposition of such Registrable
Securities pursuant to the applicable Prospectus until such holder is advised in
writing by the Company that the use of the applicable Prospectus may be resumed,
and, in either case, has received copies of any additional, or supplemental
filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement.
6. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not the Registration Statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to the
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the SEC, the National Association of Securities
Dealers, Inc. and any securities exchange and (B) in compliance with state
securities or Blue Sky laws (including, without limitation, reasonable and
customary fees and disbursements of counsel for the underwriters or holders in
connection with Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions in the United States of America as the
managing underwriters, if any, or holders of a majority of Registrable
Securities may designate), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing a reasonable number of prospectuses if the printing of prospectuses is
requested by the managing underwriters, if any, of the Registrable Securities
included in the Registration Statement), (iii) fees and disbursements of counsel
for the Company, (iv) fees and disbursements of all independent certified public
accountants referred to in Section 5(l) (iii) (including, without limitation,
the expenses of any special audit and "cold comfort" letters
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required by or incident to such performance) and (v) fees and expenses of all
other persons retained by the Company. In addition, the Company shall pay the
fees and expenses incurred in connection with the listing of the Registrable
Securities on the New York Stock Exchange. Except as provided above, the
holders of Registrable Securities shall pay all of their own fees and expenses
in connection with the transaction referred to in or contemplated by this
Agreement, including without limitation, all legal and advisory fees and
expenses and all discounts, commissions, fees and expenses of underwriters
(including underwriters' counsel) involved in the offer and sale of Registrable
Securities whether in an Underwritten Company Offering or otherwise.
7. Indemnification
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(a) Indemnification by the Company. The Company shall,
notwithstanding termination of this Agreement and without limitation as to time,
indemnify and hold harmless each holder of Registrable Securities, the officers,
directors, agents, investment advisors and employees of each of them, each
person who controls any such holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of each such controlling person, to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and reasonable attorneys'
fees) and expenses (collectively, "Losses"), arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus, any form of Prospectus or in any
preliminary Prospectus, or the registration statement in connection with an
Underwritten Company Offering that includes Registrable Securities (the "UCO
Registration Statement"), any prospectus included therein, any form of such
prospectus or in any such preliminary prospectus, or arising out of or based
upon any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
that such are based upon information regarding such holder furnished in writing
to the Company by or on behalf of such holder or any underwriter expressly for
use therein, which information was reasonably relied on by the Company in the
preparation thereof or upon information reviewed and expressly approved in
writing by such holder or underwriter expressly for use therein.
(b) Indemnification by Holder of Registrable Securities. In
connection with the Registration Statement and each UCO Registration Statement,
each holder of Registrable Securities shall furnish to the Company in writing
such information as the Company reasonably requests for use in connection with
the Registration Statement or any Prospectus and the UCO Registration Statement
and any prospectus included therein and agrees, severally and not
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jointly, to indemnify and hold harmless the Company, its trustees, officers,
agents and employees, each person who controls the Company (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act), and the
officers, directors, agents and employees of each such controlling person, to
the fullest extent lawful, from and against all Losses arising out of or based
upon any untrue statement of a material fact contained in the Registration
Statement, any Prospectus, any form of Prospectus or any preliminary Prospectus,
or any UCO Registration Statement, any prospectus included therein, any form of
such prospectus or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent that such untrue statement or omission is contained in any information so
furnished expressly for inclusion in such registration statement and is
furnished in writing to the Company by or on behalf of such holder included in
the Registration Statement, such Prospectus, or any UCO Registration Statement,
any prospectus included therein, any form of such prospectus or any such
preliminary prospectus, or to the extent that such information relates to such
holder or such holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such holder
expressly for use in the Registration Statement, such Prospectus, such form of
Prospectus or such preliminary Prospectus, or any UCO Registration Statement,
any prospectus included therein, any form of such prospectus or any such
preliminary prospectus; provided, however, that such holder shall not be
obligated to provide such indemnification to the extent liability resulted from
the Company's failure to amend or take action promptly to correct or supplement
the Registration Statement, such Prospectus, any form of Prospectus or any
preliminary Prospectus, or any UCO Registration Statement, any prospectus
included therein, any form of such prospectus or any such preliminary
prospectus, after receiving written notice from such holder of such untrue
statement or omission. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation. Notwithstanding anything in this
Section 7(b), no trustee, shareholder, officer, employee or agent of any holder
(i) that is a Massachusetts business trust and (ii) established pursuant to a
Declaration of Trust (a copy of which, together with all amendments thereto
(collectively, the "Declaration"), is on file in the office of the Secretary of
the Commonwealth of Massachusetts) provided that the name of such holder trust
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally, shall be held to any personal liability hereunder,
and no resort shall be had to their private property (other than as specifically
provided in such Declaration) for the satisfaction of any indemnification
obligation hereunder, but only to the assets and estate of such holder trust.
-13-
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall so notify the person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided that the
failure of any Indemnified Party to give prompt notice shall not relieve the
Indemnifying Party of its obligations pursuant to this Agreement, except to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have prejudiced the Indemnifying Party.
Any such Indemnified Party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed to pay such fees and expenses; or (2) the Indemnifying Party shall
have failed to assume the defense of such action, claim or proceeding; or (3)
the named parties to any such action, claim or proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party), it being
understood, however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for all Indemnified Parties (other than counsel for which the
Indemnifying Party has agreed to pay under clause (1) above), which firm shall
be designated in writing by the Indemnified Parties. The Indemnifying Party
shall not be liable for any settlement of any such Proceeding effected without
its prior written consent. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
proceeding in respect of which any Indemnified Party is a party and is entitled
to indemnity hereunder, unless such settlement includes an unconditional release
of such Indemnified Party from all liability on claims that are the subject
matter of such proceeding.
-14-
(d) Contribution. If a claim by an Indemnified Party for
indemnification under Section 7(a) or 7(b) is found unenforceable by a court of
competent jurisdiction (even though the express provisions hereof provide for
indemnification in such case), then each applicable Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 7(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or Proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(d), an Indemnifying Party that
is a holder of Registrable Securities shall not be required to contribute any
amount in excess of the amount of the proceeds actually received by such
Indemnifying Party from the sale of the Registrable Securities subject to the
Proceeding. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. Rule 144. The Company shall use its reasonable best efforts to file
the reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner and, if at any time the Company is not required to file
such reports, they will, upon the request of any holder of Registrable
Securities, make publicly available other information so long as necessary to
permit sales of its securities pursuant to Rule 144. The Company further
covenants that it will take such further action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144.
-15-
9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a holder
of Registrable Securities, of any of their obligations under this Agreement,
each holder of Registrable Securities or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each holder of Registrable Securities
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the holders of at least a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of holders of Registrable Securities and that does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities to which
such waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(c) Notices. All notices and other communications provided for
herein shall be made in writing by hand-delivery, next-day air courier,
certified first class mail, return receipt requested, or facsimile to:
(i) If to the Company, at: Prime Group Realty Trust, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President (telecopier
no.: (▇▇▇) ▇▇▇-▇▇▇▇) with a copy to: Winston & ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (telecopier no.:
(▇▇▇) ▇▇▇-▇▇▇▇);
(ii) If to the Purchaser, at the address specified below its name on
the signature pages hereof; or
(iii) If to any other person who is then the registered holder of any
Registrable Securities, to the address of such holder as it appears in the
stock transfer books of the Company.
-16-
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered, one Business Day after being delivered to a reputable
overnight delivery service for delivery on the next Business Day; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties. If any transferee of Registrable Securities shall acquire
Registrable Securities in a manner permitted under the Purchase Agreement, such
Registrable Securities shall be held subject to all of the terms and conditions
of this Agreement and shall receive all of the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. By execution of this Agreement, each Purchaser agrees for the
benefit of the Company that any action or proceeding relating to this Agreement
or the Common Shares shall be brought in the courts of the State of New York or
of the United States sitting in New York City, the Borough of Manhattan, and
each Purchaser agrees to submit to the jurisdiction of such courts in any such
action or proceeding.
(g) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereunder declared invalid, illegal, void or
unenforceable.
-17-
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Further Assurances. From and after the date hereof, the Company
and each of the Purchasers each covenants and agrees to execute and deliver all
such agreements, instruments and documents and to take all such further actions
as any such respective party may reasonably deem necessary from time to time (at
the requesting party's expense) to carry out the intent and purposes of this
Agreement and to consummate and fully effect the transactions contemplated
hereby.
(j) Entire Agreement; Integration. This Agreement contains the
entire agreement of the parties hereto with respect to its subject matter and
there are no promises or undertakings with respect thereto relative to the
subject matter hereof not expressly set forth or referred to in this Agreement.
(k) Enforceability. The Company hereby represents that it is not a
party to any agreement which would adversely affect the legality, validity or
enforceability of this Agreement.
[signature pages follow]
-18-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PRIME GROUP REALTY TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President
and Chief Financial Officer
S-1
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
--------------------------------------------
BY: ▇▇▇▇▇ & STEERS CAPITAL MANAGEMENT, INC.,
as agent for each of the Purchasers listed below on this signature page
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PURCHASERS:
▇▇▇▇▇ & Steers Realty Shares, Inc.
▇▇▇▇▇ & Steers Equity Income Fund
▇▇▇▇▇ & Steers Special Equity Fund
▇▇▇▇▇ & Steers Realty Income Fund
▇▇▇▇▇ & Steers Total Return Realty Fund
IBM Retirement Fund
S-2
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC., as
attorney-in-fact for each of the Purchasers
listed below on this signature page
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PURCHASERS:
MS Real Estate Special Situations Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Real Estate Special Situations Investors, L.P.
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Real Estate Special Situations Fund I, L.P.
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Real Estate Special Situations Fund II, L.P.
Stichting Bedrijfspensioenfonds Voor De Metaalnijverheid
Stichting Pensioenfonds ABP
MS Special Funds Pte Ltd
S-2
