Exhibit 10.1
CONTRIBUTION AGREEMENT
BY AND BETWEEN:
EACH OF THE PARTNERSHIPS
IDENTIFIED ON SCHEDULE 1
ATTACHED HERETO
(collectively, the "CONTRIBUTING PARTIES")
and
RECKSON OPERATING PARTNERSHIP, L.P.
(the "PARTNERSHIP")
Dated: as of March 31, 1998
TABLE OF CONTENTS
Page
1. SUBJECT OF CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. TRANSFER OF PROPERTY; CONSIDERATION . . . . . . . . . . . . . . . . 8
4. DUE DILIGENCE; "AS IS" SALE . . . . . . . . . . . . . . . . . . . . 9
5. MATTERS TO WHICH THE SALE IS SUBJECT . . . . . . . . . . . . . . . . 11
6. OUTSTANDING INTEREST OR UNINSURABLE TITLE . . . . . . . . . . . . . 12
7. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8. CASUALTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9. CONDEMNATION PENDING CLOSING . . . . . . . . . . . . . . . . . . . . 17
10. THE CONTRIBUTING PARTIES' WARRANTIES AND REPRESENTATIONS . . . . . . 18
11. THE CONTRIBUTING PARTIES' INSTRUMENTS AT CLOSING . . . . . . . . . . 24
12. PARTNERSHIP'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 25
13. PARTNERSHIP'S INSTRUMENTS AT CLOSING . . . . . . . . . . . . . . . . 28
14. CONTRACT PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . 28
15. BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
16. CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . . . 30
17. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18. TAX CERTIORARI PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . 31
19. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
20. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
21. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
22. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
23. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
24. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . 35
25. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
27. ERNST & YOUNG LETTER . . . . . . . . . . . . . . . . . . . . . . . . 38
28. SALE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . 38
29. PURCHASE OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . 39
30. LIQUIDITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
31. STOCK IN RSI . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
32. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
33. SERVICE CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . 40
34. 140 GRAND DEVELOPMENT AGREEMENT . . . . . . . . . . . . . . . . . . 40
35. BOARD REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . 41
36. SUMMIT NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
37. CONFIDENTIALITY/PUBLICATION . . . . . . . . . . . . . . . . . . . . 41
38. 360 ▇▇▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
39. REPRESENTATIONS AND COVENANTS OF REIT . . . . . . . . . . . . . . . 42
SCHEDULES
---------
Schedule 1: List of Contributing Parties, Property Locations and Allocated
Values
Schedule 2: List of Personal Property
Schedule 3: List of Mortgages Encumbering the Properties
Schedule 4: List of Permitted Encumbrances
Schedule 5: Pending Zoning Changes
Schedule 6: Violations of Law
Schedule 7: Litigation
Schedule 8: Unfinished Tenant Work
Schedule 9: List of Tenant Work Performed by ▇▇▇▇▇▇▇▇ Associates
Schedule 10: Description of Redemption Notes
Schedule 11: Cash and Units to be Paid to Unit Holders
EXHIBITS
--------
Exhibit A: Description of the Land
Exhibit B: Description of the Leases and Rent Roll
Exhibit C: Partnership Agreement
Exhibit D-1: Supplement Establishing Series C Preferred Units
Exhibit D-2: Supplement Establishing Series B Preferred Units
Exhibit E: Registration Rights Agreement
Exhibit F: Operating Expense Information
Exhibit G: Service Contracts and Brokerage Agreements
Exhibit H: Investor Questionnaire
Exhibit I: Deed
Exhibit J: Assignment and Assumption Agreement
Exhibit K: FIRPTA Certificate
Exhibit L: Lock-up Agreement
Exhibit M: Tenant Estoppel
Exhibit N: Form of Guaranty
Exhibit O: Ernst & Young Letter
Exhibit P: Put/Call Agreement
Exhibit Q: Development Agreement
Exhibit R: Limited Guaranty
Exhibit S: Pledge Agreement
Exhibit T: Indemnity Agreement
Exhibit U: Easement Agreement
Exhibit V: Form of Redemption Notes
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "AGREEMENT") made as of the 31st day
of March, 1998 by and between EACH OF THE PARTNERSHIPS IDENTIFIED ON SCHEDULE
1 ATTACHED HERETO, having an address at c/o Cappelli Enterprises, Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter, each a "CONTRIBUTING
PARTY," and collectively, the "CONTRIBUTING PARTIES") and RECKSON OPERATING
PARTNERSHIP, L.P., having an address at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter, the "PARTNERSHIP").
RECITALS
A. Each of the Contributing Parties is the fee owner of the property
opposite its name on SCHEDULE 1 attached hereto and incorporated herein by
reference.
B. In consideration of the Contributing Parties' contribution to the
Partnership of the properties listed on SCHEDULE 1 attached hereto, the
Partnership has agreed to exchange with the Contributing Parties a
combination of (i) cash, (ii) common operating partnership units of the
Partnership (the "COMMON UNITS"), (iii) Series C preferred operating
partnership units in the Partnership (the "SERIES C PREFERRED UNITS") and
(iv) Series B preferred operating partnership units in the Partnership (the
"SERIES B PREFERRED UNITS"; together with the Common Units and the Series C
Preferred Units, the "UNITS").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, do hereby agree as follows:
1. SUBJECT OF CONTRIBUTION
1.1 Subject to and in accordance with the terms and conditions of this
Agreement, the Contributing Parties shall transfer and convey to the
Partnership, all of the Contributing Parties' right, title and interest in
and to the following:
(a) (i) those certain parcels of real property situate, lying and
being in the State of New York and being more particularly described on
EXHIBIT A attached hereto (the "LAND"), and (ii) all of the improvements
located on the Land (individually, a "BUILDING" and collectively, the
"IMPROVEMENTS");
(b) all rights, privileges, grants and easements appurtenant to
the Contributing Parties' interest in the Land and Improvements, including,
without limitation, all of the Contributing Parties' right, title and
interest in and to the Land lying in the bed of any public street, road or
alley, all mineral and water rights and all easements, licenses, covenants and
rights-of-way or other appurtenances used in connection with the beneficial
use and enjoyment of the Land and Improvements (the Land and Improvements and
all such rights, privileges, easements, grants and appurtenances are
sometimes referred to herein as the "REAL PROPERTY");
(c) the fixtures, machinery, equipment, and other items of
personal property owned by the Contributing Parties and used in connection
with the ownership or operation of the Real Property and, to the extent that
the value of any such items exceeds $1,000, listed on SCHEDULE 2 attached
hereto (the "PERSONAL PROPERTY");
(d) all leases and other agreements with respect to the use and
occupancy of the Real Property, together with all amendments and
modifications thereto and any guaranties provided thereunder (individually, a
"LEASE", collectively, the "LEASES") and rents, additional rents,
reimbursements, profits, income, receipts and the amount deposited
(individually, a "SECURITY DEPOSIT"; collectively, the "SECURITY DEPOSITS")
under any such Leases in the nature of security for the performance of any
tenant's obligations thereunder;
(e) the right (subject to the provisions of Section 36 hereof) to
use any names by which any of the Real Property is commonly known, and all
goodwill, if any, related to said names;
(f) all governmental permits, licenses, approvals, and
certificates relating to the Real Property and the Personal Property
(collectively, the "PERMITS AND LICENSES") and all of the Contributing
Parties' right, title and interest in and to (i) those contracts (including,
without limitation, management contracts) and agreements for the servicing,
maintenance and operation of the Real Property (the "SERVICE CONTRACTS") and
(ii) any brokerage agreements relating to the Leases (the "BROKERAGE
AGREEMENTS");
(g) all books, records, promotional material, tenant data, past
and current rent rolls, market studies, keys, plans and specifications, owned
by the Contributing Parties and which are used in connection with the use and
operation of the Real Property or Personal Property (collectively, the "BOOKS
AND RECORDS");
(h) all guaranties and warranties, to the extent transferable,
owned by the Contributing Parties received in connection with any
construction, repair or maintenance services performed with respect to the
Real Property or Personal Property (the "WARRANTIES"); and
(i) all other rights, privileges, and appurtenances owned by the
Contributing Parties, if any, and directly related to the ownership, use or
operation of the Real Property or Personal Property; excluding, however, any
rights and privileges expressly granted to the Contributing Parties by this
Agreement or any document delivered pursuant hereto.
The Real Property, the Personal Property, the Leases, the Security
Deposits, the Books and Records, and all other property interests described
in this Section 1 being conveyed hereunder are hereinafter collectively
referred to as the "PROPERTY" or the "PROPERTIES".
2. DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context clearly indicates a contrary intent:
(i) the capitalized terms defined in this Section have the
meanings assigned to them in this Section, and include the plural as
well as the singular; and
(ii) the words "herein", "hereof", and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision.
"ADDITIONAL ADJUSTMENT" shall have the meaning set forth in Section 3.6
hereof.
"AFFECTED REAL PROPERTY" shall have the meaning set forth in Section 26
hereof.
"AFFILIATE" as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 50% or more of
the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"ANTICIPATED CLOSING DATE" shall have the meaning set forth in Section 4
hereof.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the Assignment and
Assumption Agreement in the form of Exhibit J attached hereto.
"BOARD OF RA" shall have the meaning set forth in Section 35 hereof.
"BOOKS AND RECORDS" shall have the meaning set forth in Section 1.1
hereof.
"BROKERAGE AGREEMENTS" shall have the meaning set forth in Section 1.1
hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or State
of New York or federal legal holiday.
"▇▇▇▇▇▇▇▇ PARTNER" shall have the meaning set forth in Section 38
hereof.
"▇▇▇▇▇▇▇▇ PARTNERSHIP INTEREST" shall have the meaning set forth in
Section 38 hereof.
"▇▇▇▇▇▇▇▇ PARTNER CALL RIGHT" shall have the meaning set forth in
Section 38 hereof.
"▇▇▇▇▇▇▇▇ PARTNER PUT RIGHT" shall have the meaning set forth in Section
38 hereof.
"CLOSING" shall mean the closing of the transactions contemplated by
this Agreement.
"CLOSING DATE" shall mean the date when title to the Property is
conveyed to the Partnership in accordance with the terms and conditions of
this Agreement.
"COMMON UNIT VALUE" shall have the meaning set forth in Section 3.2
hereof.
"CONSENTS" shall have the meaning set forth in Section 26 hereof.
"CONSIDERATION" shall have the meaning set forth in Section 3.1 hereof.
"CONTRACT PERIOD" shall mean the period commencing on the date of this
Agreement and ending on the Closing Date.
"CONTRACT PRICE" shall have the meaning set forth in Section 38 hereof.
"DEVELOPMENT AGREEMENT" shall have the meaning set forth in Section 34
hereof.
"EASEMENT AGREEMENT" shall mean the Easement Agreement in the form of
EXHIBIT U attached hereto.
"ENVIRONMENTAL LAWS" shall mean all foreign, federal, state and local
laws, regulations, rules and ordinances relating to pollution or protection
of the environment, including, without limitation, laws relating to releases
or threatened releases of hazardous substances, oils, pollutants or
contaminants into the indoor or outdoor environment (including, without
limitation, ambient air, surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, release, transport or handling of
hazardous substances, oils, pollutants or contaminants expressly intending to
include without limitation asbestos.
"EXISTING MORTGAGES" shall mean those certain mortgages described in
SCHEDULE 3 attached hereto, which mortgages currently encumber certain of the
Properties and have the respective outstanding principal balances set forth
on SCHEDULE 3 attached hereto.
"GROSS REVENUES" shall mean the aggregate amount of rent (including base
rent, additional rent, escalations and other pass-through expenses) currently
payable under the Leases.
"GUARANTIES" shall have the meaning set forth in Section 22 hereof.
"▇▇▇▇▇▇▇▇ PARTNERSHIP" shall have the meaning set forth in Section 38
hereof.
"▇▇▇▇▇▇▇▇ PROPERTY" shall have the meaning set forth in Section 38
hereof.
"INDEMNITY AGREEMENT" shall have the meaning set forth in Section 11
hereof.
"INVESTOR QUESTIONNAIRE" shall have the meaning set forth in Section
10.12 hereof.
"LEASES" shall have the meaning set forth in Section 1.1 hereof.
"LIMITED GUARANTY" shall mean a limited guaranty executed by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ of the Contributing Parties' representations under Section 10
hereof, which limited guaranty of payment shall be in the form of Exhibit R
attached hereto.
"LOCK-UP AGREEMENT" shall have the meaning set forth in Section 11.1
hereof.
"LOSS" or "LOSSES" shall mean actual damage, loss, cost or expense
(including reasonable costs of investigation incurred in defending against
and/or settling such damage, loss, cost or expense or claim therefor and any
amounts paid in settlement thereof) imposed on, or incurred by, the
Partnership.
"MAJOR TENANTS" shall mean Towers & ▇▇▇▇▇▇, Northern Telecom, Inc., The
Prudential Insurance Company of America, Research Institute of America, Inc.
and Nynex.
"MORTGAGE HOLDERS" shall have the meaning set forth in Section 26
hereof.
"NET OPERATING INCOME" shall mean the net operating income of the
Property as reasonably determined by the Partnership.
"NYNEX LEASE" shall mean that certain lease dated as of February 11,
1986 between ▇▇▇▇▇▇▇▇ Development Corporation, as landlord and CBS Inc., as
tenant, as amended, which lease was assigned from CBS Inc. to Harcourt Brace
▇▇▇▇▇▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc. and ▇.▇. ▇▇▇▇▇▇▇▇ Company,
pursuant to that certain seventh amendment of lease dated December 1, 1986,
and from Harcourt Brace ▇▇▇▇▇▇▇▇▇▇, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, Inc.
and ▇.▇. ▇▇▇▇▇▇▇▇ Company to NYNEX, pursuant to that certain eighth
amendment of lease dated July 18, 1989.
"NYSE" shall mean the New York Stock Exchange.
"OPTION PARCEL" shall have the meaning set forth in Section 29 hereof.
"PARTNERSHIP AGREEMENT" shall mean the limited partnership agreement of
the Partnership dated June 2, 1995, a copy of which is attached hereto as
Exhibit C, as amended by the Partnership Amendment.
"PARTNERSHIP AMENDMENT" shall mean, collectively, the Supplement to the
Amended and Restated Agreement of Limited Partnership of Reckson Operating
Limited Partnership Establishing Series C Preferred Units of Limited
Partnership Interest in the form of EXHIBIT D-1 attached hereto and the
Supplement to the Amended and Restated Agreement of Limited Partnership of
Reckson Operating Limited Partnership Establishing Series B Preferred Units
of Limited Partnership Interest in the form of EXHIBIT D-2 attached hereto.
"PARTNERSHIP INTEREST" shall have the meaning set forth in Section 38
hereof.
"PERMITS AND LICENSES" shall have the meaning set forth in Section 1.1
hereof.
"PERMITTED ENCUMBRANCES" shall mean those restrictions, covenants,
agreements, easements, matters and things of record affecting title to the
Property which (a) are listed on SCHEDULE 4 attached hereto, or (b) if not so
listed, which do not adversely affect the value or use of the Real Property
in any material respect, which Permitted Encumbrances will be listed in the
title policy or policies issued at Closing in favor of the Partnership.
"PERSON" shall mean any individual, partnership, limited liability
company, corporation, trust, governmental entity or any other type of entity.
"PLEDGE AGREEMENT" shall mean the pledge agreement in the form of
EXHIBIT S attached hereto.
"PREFERRED UNITS" shall mean, collectively, the Series C Preferred Units
and the Series B Preferred Units.
"PROPERTY" shall have the meaning set forth in Section 1.1 hereof.
"PUT/CALL AGREEMENT" shall have the meaning set forth in Section 29
hereof.
"REAL ESTATE TAXES" shall mean real estate taxes and any general or
special assessments (exclusive of penalties and interest thereon, all of
which are to be paid prior to Closing by the Contributing Parties) imposed
upon the Real Property, including but not limited to any general or special
assessments of any governmental or municipal authority or tax district,
including, without limitation, any assessments levied for public benefits to
the Real Property.
"REDEMPTION NOTES" shall have the meaning set forth in Section 3.1
hereof.
"REGISTRATION RIGHTS AGREEMENT" shall mean the registration rights
agreement in the form of Exhibit E attached hereto.
"REIT" shall mean Reckson Associates Realty Corp., a Maryland
corporation.
"REIT COMMON STOCK" shall mean the common stock in the REIT that is
listed on the NYSE.
"REIT PREFERRED STOCK" shall mean the preferred stock in the REIT.
"RENTS" shall mean, collectively, all minimum rent and additional rent
(including all escalations and tax and expense pass-throughs) payable by the
Tenants under the Leases.
"REVIEW PERIOD" shall have the meaning set forth in Section 4.1 of this
Agreement.
"SECURITY DEPOSITS" shall have the meaning set forth in Section 1.1
hereof.
"SERVICE CONTRACTS" shall have the meaning set forth in Section 1.1
hereof.
"SURVIVING MORTGAGES" shall mean those certain Existing Mortgages which
the Partnership and the Contributing Parties have agreed shall not be paid
off at Closing (as indicated on SCHEDULE 2 attached); provided, however, that
the aggregate outstanding principal balance of such Surviving Mortgages shall
not exceed $45,281,557.
"TAX YEAR" shall have the meaning set forth in Section 7.1(a) hereof.
"TENANTS" shall mean all of the tenants of the Improvements listed on
Exhibit B attached hereto.
"TITLE INSURER" shall mean Commonwealth Land Title Insurance Company or
any other title company acceptable to the Partnership and the Contributing
Parties and licensed in the State of New York.
"UNIT HOLDERS" shall mean such of the following individuals and entities
as may be specified in writing by the Contributing Parties at or prior to the
Closing: (i) the Contributing Parties, (ii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, (iii) Luca ▇.
▇▇▇▇▇▇▇▇, (iv) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (v) ▇▇▇▇ ▇▇▇▇▇▇▇▇, (vi) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
(vii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and (viii) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"UNIT LOAN AMOUNT" shall have the meaning set forth in Section 30
hereof.
"WARRANTIES shall have the meaning set forth in Section 1.1 hereof.
3. TRANSFER OF PROPERTY; CONSIDERATION
3.1 (a) The Contributing Parties agree to transfer and convey to
the Partnership, and the Partnership agrees to purchase and acquire from the
Contributing Parties, subject to and in accordance with the terms,
provisions, covenants and conditions set forth in this Agreement, all of the
Contributing Parties' right, title and interest in and to the Property, and
the Partnership shall (i) deliver to the Contributing Parties the
Consideration subject to the terms and provisions hereof providing for
adjustments to the Consideration and (ii) enter into the Development
Agreement, the Put/Call Agreement and the other documents more particularly
set forth herein. For purposes of this Agreement, the "CONSIDERATION" to be
paid by the Partnership to the Contributing Parties for the Property is
$177,000,000.00. The Consideration shall be allocated among the Properties
as set forth in SCHEDULE 1. The Consideration shall be delivered by (A) the
Partnership's assumption of the Existing Mortgages (the portion of the
Consideration paid by the Partnership pursuant to this clause (A) being equal
to the outstanding principal (plus interest and other sums due, but excluding
any prepayment premium or fee with respect to the Surviving Mortgages and
including the prepayment premium or fee with respect to the other Existing
Mortgages) under the Existing Mortgages as of the Closing Date), and (B) the
Partnership's assumption of the notes (the "REDEMPTION NOTES") executed by
some or all of the Contributing Parties in favor of certain of the Unit
Holders, which Redemption Notes are described on Schedule 10 annexed hereto
and each of which Redemption Notes shall be prepayable at any time without
any prepayment premium or fee and will otherwise be in the form of, and
contain the terms set forth in, Exhibit V attached hereto, and (C) the
Partnership's delivery to the Contributing Parties of, at the Contributing
Parties' election in any combination, (i) Cash, (ii) Common Units, (iii)
Series C Preferred Units and (iv) Series B Preferred Units; provided,
however, that the Contributing Parties may not elect to receive Series B
Preferred Units having an aggregate stated value at Closing in excess of
$25,000,000. At least five (5) Business Days prior to Closing, the
Contributing Parties shall notify the Partnership as to how many Series C
Preferred Units, Series B Preferred Units and Common Units the Contributing
Parties shall elect to receive at Closing (and the allocation of such Units
among the Contributing Parties); provided, however, that the aggregate value
at Closing of all Units of each type chosen by the Contributing Parties
shall not be less than $1,000,000. Notwithstanding, the foregoing, if the
aggregate stated value of the Preferred Units elected to be received by the
Contributing Parties at Closing is less than $4,785,750, then the
Consideration received by the Contributing Parties at Closing shall decrease
by an amount equal to the product of (x) the weighted average remaining term
(expressed in number of years) of the Surviving Mortgages multiplied by (y)
the amount, if any, by which the product of (i) the value of the Preferred
Units elected to be received by the Contributing Parties at Closing
multiplied by (ii) .07 is less than $335,000.
(b) The Contributing Parties may elect to have all or a portion of
the Units delivered to the Unit Holders at Closing. In such case, all of the
documents which would otherwise be required hereunder to be executed by the
Contributing Parties, as holders of the Units, including, without limitation,
the Registration Rights Agreement, the Lock-up Agreement and the Investor
Questionnaire, shall instead be executed by the Unit Holders and, at Closing,
the Unit Holders shall make the representations set forth in Section 10.12
hereof. Notwithstanding anything herein to the contrary, the amount of cash
and Units (and the amount of each type of Unit) for each Unit Holder shall be
as set forth in Schedule 11 attached.
3.2 For purposes of this Agreement, each Common Unit to be issued
as consideration for the Property, shall have a value equal to $25.01 (the
"COMMON UNIT VALUE"). Notwithstanding the foregoing, if the average closing
price of the REIT's common stock on the NYSE for the last ten (10) trading
days prior to April 6, 1998 (or, if the Closing is adjourned in writing by
the Partnership pursuant to the terms of this Agreement, for the last ten
(10) trading days prior to the rescheduled Closing Date) (the "LAST 10 DAY
AVERAGE PRICE") is less than 90% of the Common Unit Value (subject to
adjustment to prevent dilution on account of any stock splits or other
dilution events occurring after the date hereof), then the Partnership may,
upon written notice given by the Partnership to the Contributing Parties not
later than two (2) days after such scheduled (or rescheduled) Closing Date,
elect to substitute the Last 10 Day Average Price for the Common Unit Value
for purposes of this Agreement; provided, however, that, if the Partnership
does not so elect in a timely manner, the Contributing Parties may, upon
written notice given to the Partnership, elect to terminate this Agreement,
whereupon no fees or expenses shall be payable by either party to the other
party.
3.3 The Partnership shall withhold and retain from the quarterly
distribution payable with respect to Units for the quarter in which the
Closing occurs, an amount, if any, necessary to ensure that the Contributing
Parties do not receive more or less than a "pro-rata" share of such quarterly
distribution, based on the number of days that the Contributing Parties own
the applicable Units in such quarter.
3.4 The Partnership shall reimburse the Contributing Parties for
all of the closing costs (includng, without limitation, transfer taxes and
attorneys' fees) incurred by the Contributing Parties with respect to the
Closing, up to a maximum amount of $1,000,000. Such reimbursement shall be
in addition to, and shall not be credited toward, the Consideration.
3.5 Within one year from the Closing Date, the Contributing
Parties shall have the right, on behalf of the Partnership, to negotiate a
renewal of the Nynex Lease with NYNEX, which renewal shall (i) be for a
minimum term of five (5) years, (ii) provide for a minimum annual base rent
of $27.00 per square foot, provided, however that if such minimum annual base
rent is equal to or greater than $27.00 per square foot but less than $27.50
per square foot, then one or both of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and Luca ▇. ▇▇▇▇▇▇▇▇
shall cause a Tenant controlled by one or both of them to increase its
monthly rent by an amount equal to the rent attributable to such shortfall,
provided, further that if such Tenant shall default in such payment or if
such Tenant's lease shall terminate or expire, then ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
Luca ▇. ▇▇▇▇▇▇▇▇ shall immediately pay the net present value of such
aggregate shortfalls to the Partnership, and (iii) be on terms which are
otherwise no less favorable to the Partnership than terms of leases then
being entered into by the Partnership with tenants of similar size and
stature for space in other Westchester County buildings owned by the
Partnership. If such renewal is negotiated with NYNEX, the Partnership shall
promptly execute such renewal. Upon the execution of such renewal by the
Partnership and NYNEX, the Partnership shall pay ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and Luca
▇. ▇▇▇▇▇▇▇▇ (or their designee) an aggregate fee equal to $2,000,000;
provided, however, that such amount shall be decreased dollar for dollar to
the extent the renewal costs incurred by the Partnership with respect to such
renewal (including, without limitation, any brokerage fees or tenant
improvement costs payable in connection with such renewal) exceed $5,500,000
(it being acknowledged that such renewal costs shall not include any repairs
or improvements which may currently be required to be made by the landlord
under the Nynex Lease and the Partnership agrees to assume and pay such
repair or improvement costs provided same do not exceed $200,000). In no
event shall the Partnership be obligated to enter into such renewal if such
renewal costs exceed $7,500,000. The provisions of this Section 3.5 shall
survive Closing.
4. DUE DILIGENCE; "AS IS" SALE
4.1 The Partnership shall have until April 6, 1998 (the
"ANTICIPATED CLOSING DATE"; with the period from the date hereof until the
Anticipated Closing Date, being hereinafter referred to as the "REVIEW
PERIOD") to conduct its due diligence investigation with respect to the Real
Property and the Option Parcel. If a Due Diligence Deficiency (as
hereinafter defined) shall exist with respect to the Real Property or the
Option Parcel and the Partnership does not desire to proceed with its
acquisition of the Real Property and the Option Parcel, then the
Partnership's sole right shall be, subject to Section 4.2 hereof, to
terminate this Agreement by written notice to the Contributing
Parties on or before the Anticipated Closing Date whereupon this Agreement
shall terminate and be of no further force or effect except for those
provisions of this Agreement that expressly survive the termination hereof.
In the event of such termination, the Partnership shall deliver copies of all
surveys and environmental reports which it obtained during the Review Period
to the Contributing Parties. If a Due Diligence Deficiency does not exist or
if the Partnership does not terminate this Agreement within the Review
Period, the Partnership shall not be entitled to terminate this Agreement
under this Section 4.1. As used herein, "DUE DILIGENCE DEFICIENCY" shall mean
the following:
(a) if any of the Real Property or any portion of the Option
Parcel is subject to materially adverse environmental conditions, including,
without limitation, any environmental condition that has a material adverse
effect on the value of the Real Property or the Option Parcel, on the current
use of any Real Property or the Option Parcel, on groundwater at, on, under,
about, or emanating from any Real Property or the Option Parcel;
(b) if any of the Leases, in any material respect, (i) do not
match the rent rolls attached hereto as Exhibit B or (ii) contain non-market,
non-customary provisions (except to the extent contained in the Nynex Lease);
(c) if the Improvements contain physical or structural defects
(including, without limitation, any repairs or improvements required to be
made by the landlord under the Nynex Lease) aggregating $500,000 or more;
(d) if the Property's projected Net Operating Income for the 1998
calendar year does not equal or exceed $18.0 million or if the Property's
projected Gross Revenue does not equal or exceed approximately $27.0 million;
(e) if any of the Permitted Encumbrances materially adversely
affects the operation or use of any of the Properties or materially adversely
affects the value of the Properties;
(f) if the Contributing Parties have failed to remove all non-
monetary liens (excluding the Permitted Encumbrances) which decrease the
value of the Property by an aggregate amount in excess of $100,000 or any
monetary liens (other than the Surviving Mortgages);
(g) if a material zoning issue or material violation shall exist,
which shall impair the Contributing Parties' ability to develop or operate
any of the Properties or the Option Parcel as contemplated by this Agreement;
or
(h) if any of the Contributing Parties shall lack the due
authority to effect the transaction described herein.
4.2 If a Due Diligence Deficiency shall occur, the Partnership
shall notify the Contributing Parties of the existence thereof. Upon receipt
of such notice, the Contributing Parties shall have the right (but not,
except as set forth below, the obligation) to cure such Due Diligence
Deficiency within a reasonable period of time (not to exceed 60 days) after
such notice; provided, however, that the Contributing Parties shall have the
obligation to cure any Due Diligence Deficiency relating to the environmental
condition at the Option Parcel unless the cost to cure such Due Diligence
Deficiency exceeds $2,000,000. If the Contributing Parties shall attempt to
cure such Due Diligence Deficiency, the Contributing Parties shall notify the
Partnership of such attempted cure within 3 Business Days after its receipt
of such notice. In the event that the Contributing Parties shall cure any
Due Diligence Deficiency within such 60-day period, then the Closing shall
occur within seven (7) days after the Partnership is notified that such Due
Diligence Deficiency has been cured (and time shall be of the essence with
respect to such seven (7) day period). Upon request from the Contributing
Parties, the Partnership shall deliver to the Contributing Parties a copy of
any physical inspection report or engineering inspection report relating to
the Improvements prepared by or on behalf of the Partnership in connection
with its due diligence investigation hereunder.
4.3 During the Review Period, the Partnership and its authorized
agents, employees and other representatives, upon prior reasonable notice to
the Contributing Parties and during reasonable hours, shall have the right of
access to the Property and the Option Parcel for the purpose of inspecting
the Property and the Option Parcel. Any boring tests shall be subject to the
approval of the Contributing Parties, which approval shall not be
unreasonably withheld or delayed. The Partnership shall not interfere in any
material respect with the use or operation of the Property (including the
business of any Tenant) or the Option Parcel during such inspections. The
Partnership shall indemnify, defend and hold harmless the Contributing
Parties from and against any and all loss, costs, liability, damage and
expenses, including, but not limited to, penalties, fines, court costs,
disbursements and attorney's fees incurred in connection with or arising from
injuries to persons or damage to property caused by the Partnership, its
agents, employees, representatives or independent contractors with respect to
such right of access. The provisions of this Section shall be binding upon
the Partnership regardless of whether or not the transactions contemplated
hereby are consummated and shall survive for a one-year period following the
termination of this Agreement or the Closing.
5. MATTERS TO WHICH THE SALE IS SUBJECT
Each Contributing Party shall assign and convey or cause to be assigned
and conveyed to the Partnership good and valid insurable fee title to the
Property free and clear of any and all mortgages, liens, leases, encumbrances
and easements, except:
------
5.1 All taxes, water meter and water charges and sewer rents,
accrued or unaccrued, fixed or not fixed, becoming due and payable after the
Closing Date.
5.2 All zoning laws and building ordinances, resolutions,
regulations and orders of all boards, bureaus, commissions and bodies of any
municipal, county, state or federal government.
5.3 The Leases described on Exhibit B attached hereto.
5.4 The Existing Mortgages.
5.5 The Permitted Encumbrances.
6. OUTSTANDING INTEREST OR UNINSURABLE TITLE
The Partnership's obligation to close the transactions contemplated
hereby shall be conditional upon the Title Insurer being willing to issue a
fee title policy at the Closing to the Partnership insuring title to the
Property subject only to the matters set forth in Section 5 hereof and any
encumbrance placed against the title by the Partnership. The Contributing
Parties agree to remove or discharge (including by delivery of a bond) any
existing monetary lien affecting all or a part of any Property which can be
discharged solely by the payment of money by the Contributing Parties
(excluding the Surviving Mortgages), provided that (a) the Contributing
Parties may use any cash portion of the Consideration to remove mortgages and
other monetary liens at the Closing, and (b) the Contributing Parties shall
not be required to expend in excess of $1,400,000 in the aggregate to
discharge such monetary liens.
If at the Closing it should appear that the Property is affected by any
outstanding matters of title which the Partnership is not obliged to take
subject to in accordance with the terms of this Agreement, and if such
interest or question of title may, according to reasonable expectations, be
removed as an objection to title within 60 days of the Anticipated Closing
Date, the Contributing Parties may adjourn the Closing Date for a period not
exceeding 60 days. In the event that the Contributing Parties shall remove
such objection to title within such sixty (60) day period, then the Closing
shall occur within seven (7) days after the Partnership is notified that such
objection to title shall have been cured (and time shall be of the essence
with respect to such seven (7) day period). If after any applicable
adjournment, any Contributing Party shall be unable to convey the Property
subject to and in accordance with the provisions of this Agreement, the
Partnership shall have the right to waive the defect in title and accept
such title as such Contributing Party can convey without a reduction in the
Consideration, or terminate this Agreement by written notice to the
Contributing Parties, whereupon the parties shall have no further rights or
obligations hereunder, except that the Contributing Parties shall reimburse
------ ----
the Partnership for its actual out-of-pocket due diligence costs paid to
third parties.
7. ADJUSTMENTS
7.1 Apportionments and Payments. With respect to each Property, the
---------------------------
following shall be apportioned between the Contributing Parties and the
Partnership on a property by property basis as of the day immediately
preceding the Closing Date and the net amount thereof shall either be paid by
the Partnership to the Contributing Parties, or credited by the Contributing
Parties against the Consideration on a property by property basis in
accordance with the allocation of the Consideration set forth on Schedule 1
----------
hereto, as the case may be, at the Closing:
(a) Taxes. Real Estate Taxes upon the Properties shall be
-----
adjusted and prorated, on a property by property basis, as of the Closing
Date on the basis of the fiscal year for such taxes and assessments (the
"Tax Year"). If the Closing shall occur before the real property tax rate
--------
for the Tax Year is fixed, the apportionment of taxes shall be made on the
basis of the taxes assessed for the immediately preceding Tax Year. After
the Real Estate Taxes are finally fixed for the Tax Year in which the
Closing occurs, the Partnership and the Contributing Parties shall make a
recalculation of the apportionment of such taxes, and the Partnership or
Contributing Parties, as the case may be, shall make an appropriate payment
to the other based on such recalculation. To the extent that either the
Contributing Parties or the Partnership shall obtain any real estate tax
abatement with respect to any Property which is applicable to the year in
which the Closing occurs, the amount of the net proceeds of such tax
abatement shall be prorated through the Closing Date if, as and when such
proceeds are paid by the applicable governmental authority (it being
understood that to the extent any Tenant shall be entitled to any portion of
such tax abatement, that such portion shall be turned over to the Partnership
to remit to such Tenant and shall be deducted from any tax abatement proceeds
in connection with calculating the net proceeds thereof). If the Partnership
receives any real estate tax refund applicable to any year prior to the year
in which the Closing occurs, then the Partnership shall immediately remit any
such refund to the applicable Contributing Party.
(b) Rents. Rents shall be adjusted and prorated as of the Closing
-----
Date as follows:
(i) With respect to prepaid Rents received by the
Contributing Parties prior to the Closing Date relating to the calendar month
in which the Closing occurs, such Rents shall be adjusted at the closing
between the Contributing Parties and the Partnership.
(ii) With respect to delinquent Rents, to the extent that the
Partnership receives Rents under the Leases (including monthly payments of
escalation rents and "pass throughs") within six (6) months following the
Closing Date, the Partnership shall render an accounting to the Contributing
Parties with respect thereto, and the amount of such Rents shall be applied
in the following order of priority: (i) first, to the calendar month in which
the Closing occurred, (ii) then to the calendar month immediately preceding
the calendar month in which the Closing occurred, (iii) then to the calendar
months following the calendar month in which the Closing occurred until such
Tenant is current on all post-Closing Rents and (iv) then to the payment of
any remaining delinquent Rents. Notwithstanding the foregoing, the
Contributing Parties shall have the right, prior to or within thirty (30)
days after the Closing, to negotiate an agreement (a "Settlement Agreement"),
--------------------
on behalf of the Partnership, with Dynamedics (a Tenant at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇) and/or MGW Realty (a Tenant at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇) with respect to
delinquent rents owed by such Tenants to the Contributing Parties for the
period prior to the Closing Date provided such Settlement Agreement (i)
provides that all payments made thereunder shall be paid directly to the
Partnership and (ii) does not impose any affirmative obligations (other than
obligations of a de minimis or ministerial nature) on the Partnership in
----------
favor of such Tenants. The Partnership hereby assigns all of its interest in
the Settlement Agreements to the Contributing Parties subject to the terms of
the next sentence. In the event that the Partnership enters into such a
Settlement Agreement, then any amounts paid thereunder by such Tenants shall,
provided such Tenants are not more than one month delinquent in the payment
of post-Closing Rents, be paid by the Partnership to the Contributing Parties
within three (3) Business Days after receipt thereof by the Partnership. The
Contributing Parties shall be identified as third party beneficiaries of the
Settlement Agreements and the Partnership shall not enter into any agreements
or amendments with such Tenants which would adversely affect the Contributing
Parties' interest therein.
(iii) Not later than ninety (90) days after the end of the
fiscal year in which the Closing occurs with respect to which escalation
rents and "pass throughs" are payable under each Lease, there shall be a
calculation of the portion of such rents to which a Contributing Party shall
be entitled, which portions shall be equal to a fraction, the numerator of
which is the number of days in said fiscal year with respect to each such
Lease which elapsed prior to the Closing Date and the denominator of which is
the total number of days in said fiscal year, and the Partnership shall be
entitled to the remaining portion of such Rents. If a Contributing Party has
received escalation rents and/or "pass throughs" with respect to any Lease
for such fiscal year in excess of the amount to which it is entitled pursuant
hereto, such excess shall be paid by such Contributing Parties to the
Partnership within thirty (30) days after the date of such calculation. If
the Partnership has received escalation rents and "pass throughs" with
respect to any Lease for such fiscal year in excess of the amount to which it
is entitled pursuant hereto, such excess shall be paid by the Partnership to
the appropriate Contributing Party within thirty (30) days after the date of
such calculation. Notwithstanding anything herein to the contrary, the
apportionment of "pass throughs" shall be as set forth above only to the
extent the item which is the subject of the "pass through" was adjusted at
Closing.
(iv) If, for a period of 12 months subsequent to Closing, any
Tenant shall dispute the calculation of any escalation rents or "pass
throughs" relating to the period prior to the Closing Date, or there shall be
a reconciliation of such amounts and such dispute or reconciliation shall
result in a rent credit being owed to any such Tenant, then the applicable
Contributing Party shall remit such amount to the Partnership and such
Contributing Party shall indemnify and hold the Partnership harmless from any
and all claims, suits, actions, damages and expenses resulting from such
Contributing Party's failure to remit such sums.
(v) Subject to Section 7.1(b)(ii) hereof, (i) any Rents
received by any Contributing Party prior to the Closing Date which Rents
relate to the period subsequent to the Closing Date shall be credited to the
Partnership as an adjustment on the Closing Date, and (ii) any Rents received
by any Contributing Party after the Closing Date shall immediately be
remitted to the Partnership and disbursed in accordance with the terms of
this Section 7.1(ii).
(vi) the Partnership shall ▇▇▇▇ Tenants for escalation
payments and "pass throughs" as required by the Leases. The Partnership
shall use commercially reasonable efforts to collect any and all Rents due
pursuant to the Leases, but in no event shall the Partnership be obligated to
initiate legal proceedings to collect such Rents. Contributing Parties shall
have no right to commence any legal proceedings to collect any amounts which
may be owed by any Tenants, except with respect to those amounts described in
the second sentence of Section 7.1(b)(ii) hereof.
(vii) The provisions of this Section 7.1(b) shall survive
Closing (subject to any specific survival periods set forth in any
subparagraph of this Section 7.1(b)).
(c) Fuel Oil. Fuel oil at the Property shall be apportioned as of
--------
the Closing Date at Contributing Parties' cost therefor.
(d) License/Permit Fees. Annual license, permit and inspection
-------------------
fees, provided that Contributing Parties' rights thereunder (or with respect
thereto) are transferable and are transferred to the Partnership shall be
apportioned as of the Closing Date.
(e) Supplies. The Partnership shall reimburse Contributing Party,
--------
at Contributing Parties' cost, for Contributing Parties' inventory of
supplies used in the operation and maintenance of each Property. At the
Closing, Contributing Parties shall furnish the Partnership with an inventory
of such supplies.
(f) Other Expenses. Charges and assessments for sewer and water
--------------
and other utilities, including charges for consumption of electricity, steam
and gas; current operating expenses, including, without limitation,
obligations under any service, maintenance, management, consulting or similar
contracts; payroll and related expenses; insurance and bond premiums; and any
other charges incident to the ownership, use and/or occupancy of the Property
shall be adjusted and prorated as of the Closing Date.
(g) Other Apportionments. Except as otherwise provided for
--------------------
herein, the Customs In Respect to Title Closings recommended by The Real
Estate Board of New York, Inc. shall apply with respect to all apportionments
under this Agreement.
7.2 Security Deposits. An amount equal to all Security Deposits and
-----------------
interest accrued thereon, if any as of the Closing Date, held by, or required
to be held by, Contributing Party and any other amounts due Tenants with
respect to such Security Deposits shall be paid over to the Partnership at
the Closing and the appropriate notice of such transfer shall be delivered to
the applicable Tenant.
7.3 Escrow Amounts. At the Closing, the Contributing Parties shall
--------------
receive a credit for any amounts held, on the Closing Date, in any real
estate tax escrow account, tenant improvement reserve account or other escrow
or reserve account established pursuant to a Surviving Mortgage.
7.4 Timing of Calculations; Cooperation. Contributing Party and the
-----------------------------------
Partnership agree to use reasonable efforts to reconcile, prorate and adjust
any of the foregoing items which shall have been apportioned at the Closing
on the basis of estimates within sixty (60) days after the Closing Date. In
the event any adjustments or prorations made at the Closing pursuant to this
Agreement are, subsequent to the Closing, found to be erroneous, then either
party hereto who is entitled to additional amounts shall invoice the other
party for such additional amounts as may be owing, and such amounts shall be
paid promptly by the other party upon receipt of invoice. Such invoice shall
be accompanied by reasonable substantiating evidence. The provisions of this
Section 7.4 shall survive the Closing.
8. CASUALTY
(a) If, on or prior to the date of the Closing, all or a
"MATERIAL PART" (as defined below) of any of the Improvements shall be
damaged or destroyed by fire or other casualty, then, in any such event, the
Partnership may, at its option, upon written notice given by the Partnership
to the Contributing Parties within fifteen (15) days after the Partnership is
notified of any such fire or other casualty either (i) cancel this Agreement
with respect solely to the affected Improvement, and the Consideration shall
be modified proportionately based upon the allocation of the Consideration as
set forth in Schedule 1 hereto, or (ii) proceed to close the transactions
contemplated by this Agreement with respect to all of the Real Property, in
which event all of the provisions of subsection 8(b)(i) and subsection
8(b)(ii) below shall apply. Notwithstanding the foregoing, upon written
notice given by the Partnership to the Contributing Parties prior to the
Closing and in any event not later than fifteen (15) days after the
Partnership is notified of any such fire or other casualty, the Partnership
may cancel this Agreement if a material part of more than one (1) Improvement
is damaged or destroyed by fire or other casualty.
(b) If, on or prior to the date of the Closing, less than a
material part of an Improvement shall be destroyed or damaged by fire or
other casualty (and no material part of any other Improvement has been
destroyed or damaged by fire or other casualty), the Partnership shall
nevertheless close title to all of the Property pursuant to all the terms and
conditions of this Agreement, subject to the following: (i) No Contributing
Party shall (a) adjust and settle any insurance claims, or (b) enter into any
construction or other contract for the repair or restoration of the Property
without the Partnership's prior written consent, which consent shall not be
unreasonably withheld or delayed, and (ii) at the Closing, the Contributing
Parties shall (1) pay over to the Partnership the amount of any insurance
proceeds, to the extent collected by any Contributing Party in connection
with such casualty, less the amount of the actual expenses incurred by such
Contributing Party in connection with the collection of such insurance
proceeds and in connection with making any repairs to the Property occasioned
by such casualty pursuant to any contract (provided that such contract was
reasonably approved by the Partnership as required by this Section), (2)
assign to the Partnership all of the Contributing Parties' right, title and
interest in and to any insurance proceeds that are uncollected at the time of
the Closing and that may be paid in respect of such casualty, subject to the
payment of the Consideration by the Partnership to the Contributing Parties,
and (3) pay to the Partnership the amount of any policy deductibles pursuant
to the insurance policies covering such fire or other casualty and maintained
by any Contributing Party with respect to the applicable Improvements (as
opposed to insurance or self-insurance maintained by tenants of the
Property). The Contributing Parties shall reasonably cooperate with the
Partnership in the collection of such proceeds, which obligation shall
survive the Closing.
(c) For the purpose of this Section, the phrase "A MATERIAL
PART" of an Improvement shall mean (i) a portion of such Improvement in
excess of ten 10% of the rentable square footage of such Improvement shall be
destroyed or damaged or (ii) a Tenant occupying space in excess of 10% of the
applicable Improvement shall have the right to cancel its Lease as a result
of such fire or other casualty.
9. CONDEMNATION PENDING CLOSING
9.1 If, prior to the Closing Date, condemnation or eminent domain
proceedings shall be commenced by any competent public authority against the
Real Property or any part thereof, the Contributing Parties shall promptly
give the Partnership written notice thereof. After notice of the
commencement of any such proceedings (from the Contributing Parties or
otherwise) and in the event that the taking of such property is Material (as
hereinafter defined), the Partnership shall have the right (i) to accept
title to the Property subject to the proceedings, and pay to the Contributing
Parties the full Consideration, whereupon any award payable to the
Contributing Parties shall be paid to the Partnership and the Contributing
Parties shall deliver to the Partnership at the Closing all assignments and
other documents reasonably requested by the Partnership to vest such award in
the Partnership, or (ii) upon written notice given by the Partnership to the
Contributing Parties prior to the Closing and in any event not later than 15
days after receipt by the Partnership of such notice, to cancel this
Agreement with respect solely to the affected Real Property, and the
Consideration shall be modified proportionately based upon the allocation of
the Consideration as set forth in Schedule 1 hereto. A taking shall be
deemed to be Material if said taking would either (i) materially interfere
with the use and operation of any of the Properties for the contemplated use
thereof, or (ii) reduce the estimated value of the Property (as reasonably
determined by an independent M.A.I. appraiser chosen by the Partnership and
reasonably satisfactory to the Contributing Parties) by $1,000,000 or more or
(iii) entitle any Tenant occupying in excess of percent (10%) of square feet
at the Improvements to cancel its Lease; provided, however, that in no event
shall a single lane road widening at a Property (other than the property
located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇) be considered a
Material taking. Notwithstanding the foregoing, upon written notice given by
the Partnership to the Contributing Parties prior to the Closing and in any
event not later than fifteen (15) days after the Partnership is notified of
such condemnation or eminent domain proceedings, the Contributing Party may
cancel this Agreement if condemnation or eminent domain proceedings are
commenced against two (2) or more Real Properties and such taking would (x)
materially interfere with the use and operation of both of such Real
Properties for the contemplated use thereof, (y) reduce the estimated value
of the Real Properties (determined as aforesaid) by more than $3,540,000 in
the aggregate or (z) Tenants occupying more than ten percent (10%) of square
feet in two or more of the Improvements shall have the right to cancel its
Lease as a result of such condemnation; provided, however, that in no event
shall a single lane road widening at a Property (other than the property
located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇) be considered a
"condemnation or eminent domain proceeding," for purposes of this sentence.
9.2 In the event of a non-Material taking of any part of the Real
Property, the Partnership shall accept the Real Property subject to the
proceedings and pay to the Contributing Parties the full Consideration,
whereupon any award payable to any Contributing Party shall be paid to the
Partnership and such Contributing Party shall deliver to the Partnership at
the Closing all assignments and other documents reasonably requested by the
Partnership to vest such award in the Partnership.
10. THE CONTRIBUTING PARTIES' WARRANTIES AND REPRESENTATIONS
To induce the Partnership to enter into this Agreement and to accept the
Property from the Contributing Parties, the Contributing Parties make the
following representations and warranties, all of which the Contributing
Parties represent are true in all material respects as of the date hereof and
shall be true in all material respects as of the Closing Date and shall be
deemed remade as of that date:
10.1 (a) Fee title to the Property is owned by the Contributing
Party listed on SCHEDULE 1, subject to only those matters set forth in
Section 5 of this Agreement.
(b) The Contributing Parties own the Personal Property, free
and clear of any liens or encumbrances.
10.2 (a) The execution, delivery and performance of this Agreement
and consummation of the transaction hereby contemplated in accordance with
the terms of this Agreement will not violate any material contract,
agreement, commitment, order, judgment or decree to which any Contributing
Party is a party or by which it or the Property is bound (other than the
Surviving Mortgages).
(b) Each Contributing Party has the full right, power and
authority to sell and convey its portion of the Property to the Partnership
and each such Contributing Party has the full right, power and authority to
sell and convey such Property to the Partnership as provided herein and to
carry out such Contributing Party's obligations hereunder. Each Contributing
Party shall deliver reasonable proof of same to the Partnership at Closing.
(c) Upon execution, this Agreement shall be the valid and
binding obligation of each Contributing Party, enforceable against such
Contributing Party in accordance with the terms hereof.
10.3 Except as set forth on Schedule 5 hereto, there is no
outstanding or pending written request or application by or on behalf of any
Contributing Party for any zoning change or variance with respect to the
Property.
10.4 Except as set forth on Schedule 6 hereto, no Contributing
Party has received written notice, and no Contributing Party has actual
knowledge, of any violation of any applicable federal, state or local law,
and there are no pending or threatened appeals, revocations or suspensions of
any permits, approvals or consents, relating to the current use or proposed
use of the Real Property.
10.5 (a) The Contributing Parties have heretofore made available
to the Partnership true and complete copies of all environmental studies in
the Contributing Parties' possession relating to the Real Property.
(b) Except as set forth on Schedule 6, there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice of
violation, investigation or proceeding, pending relating to any Contributing
Party or any portion of the Property or, to the actual knowledge of each
Contributing Party, threatened against any Contributing Party or any portion
of the Property relating in any way to the Environmental Laws or any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder.
(c) Except as set forth on Schedule 6 hereto, no Contributing
Party has, and to the best of each Contributing Party's actual knowledge, no
other person has, released, buried or dumped any hazardous substances, oils,
pollutants or contaminants or any other wastes produced by, or resulting
from, any business, commercial, or industrial activities, operations or
processes on, beneath or adjacent to any portion of the Property, except in
accordance with applicable laws and regulations.
10.6 Except as set forth on Schedule 7 attached hereto, there are
no claims against the Contributing Parties or condemnations or sales in lieu
thereof with respect to any aspect of the Property nor, to the knowledge of
each Contributing Party, have any actions, suits, condemnations, proceedings
or claims been threatened or asserted.
10.7 Exhibit B attached is a complete listing of all Leases with
respect to the Property; none of such Leases have been modified or amended
except as indicated on Exhibit B; true and correct copies of all of such
Leases have been delivered or made available to the Partnership; no tenant
under any of the Leases is in default of its Lease except as set forth on
Exhibit B; except as set forth on Exhibit B attached, no Contributing Party
has received any notice from any Tenant that Contributing Party is in default
of any Lease. Except as set forth on Exhibit B, no Tenant has prepaid rent
in excess of one month in advance. Exhibit B lists all Security Deposits
currently being held by the Contributing Parties. To the actual knowledge of
the Contributing Parties, none of the Tenants are the subject of bankruptcy
proceedings. Except as set forth in Schedule 8 attached hereto, all tenant
improvements required to be made by the Contributing Parties under the
Leases have been substantially completed.
10.8 No Contributing Party is a "foreign person" as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended, and the income
tax regulations thereunder.
10.9 Except as set forth on Schedule 7 attached hereto, there is no
action, suit or proceeding pending or, to any Contributing Party's knowledge,
threatened against the Contributing Parties and or relating to or arising out
of the ownership, management or operation of the Property, in any court or
before any federal, state or municipal department, commission, board, bureau
or other governmental instrumentality. The Contributing Parties are pursuing
those tax certiorari proceedings with respect to the Property identified on
SCHEDULE 1 attached hereto, and true and correct copies of the material
papers filed in such proceeding have been delivered or made available to the
Partnership.
10.10 The operating expense information with respect to the
Property previously delivered to the Partnership (a copy of which is attached
hereto as EXHIBIT F) is true and correct in all material respects. Except as
previously delivered to the Partnership, the Contributing Parties have not
received any written notice of any increased Real Estate Taxes or any
increase in the assessments relating to the Real Estate Taxes.
The Contributing Parties have previously delivered to the Partnership true
and complete copies of all notes and mortgages relating to the Surviving
Mortgages and, to the knowledge of the Contributing Parties, no default by
the borrower exists under any of such documents.
10.11 Attached hereto as Exhibit G is a list of all Service
Contracts entered into by the Contributing Parties (or their Affiliates or
agents) which affect the Property and, except as indicated on Exhibit G, all
of which are cancelable upon not more than thirty (30) days prior notice.
Attached hereto as Exhibit G is a list of all brokers who, to the best of the
Contributing Parties' actual knowledge, were a procuring cause with respect
to, or were otherwise involved in, the leasing of space to tenants at the
Property.
10.12 (a) Upon the issuance of Units to the Unit Holders, the
Unit Holders shall become subject to, and shall be bound by, the terms and
provisions of the Partnership Agreement, including the terms of any power of
attorney contained therein, as the Partnership Agreement may be amended from
time to time in accordance with its terms.
(b) Each Contributing Party understands the risks of, and
other considerations relating to, the acquisition of the Units. Each
Contributing Party, by reason of its business and financial experience,
together with the business and financial experience
of those persons, if any, retained by it to represent or advise it with
respect to its investment in the Units, (i) has such knowledge,
sophistication and experience in financial and business matters and in making
investment decisions of this type that it is capable of evaluating the merits
and risks of an investment in the Partnership and of making an informed
investment decision, (ii) is capable of protecting its own interest or has
engaged representatives or advisors to assist it in protecting its interests
and (iii) is capable of bearing the economic risk of such investment. If any
Contributing Party retained a person to represent or advise it with respect
to the investment in Units then, at the Partnership's request, such
Contributing Party shall, prior to or at the Closing Date, (i) acknowledge in
writing such representation and (ii) cause such representative or advisor to
deliver a certificate to the Partnership containing such representations as
are reasonably requested by the Partnership.
(c) Each Contributing Party understands that an investment in
the Partnership involves substantial risks. Each Contributing Party has been
given the opportunity to make a thorough investigation of the proposed
activities of the Partnership and has been furnished with materials relating
to the Partnership and its proposed activities (including, but not limited
to, the Form 10-K of the REIT for the year ended December 31, 1996, the Form
10-Q of the REIT for the quarter ended September 30, 1997 and all reports
subsequently filed with the Securities and Exchange Commission pursuant to
Section 13 of the Securities Act of 1934). Each Contributing Party has been
afforded the opportunity to obtain any additional information deemed
necessary by such Contributing Party to verify the accuracy of any
representations made or information conveyed to such Contributing Party. The
Contributing Parties confirm that all documents, records, and books
pertaining to their investment in the Partnership and requested by the
Contributing Parties have been made available or delivered to the
Contributing Parties. Each Contributing Party has had an opportunity to ask
questions of and receive answers from the Partnership, or from a person or
persons acting on the Partnership's behalf, concerning the terms and
conditions of this investment.
(d) The Units to be issued to the Unit Holders will be
acquired by the Unit Holders for their own accounts for investment only and
not with a view to, or with any intention of, a distribution or resale
thereof, in whole or in part, or the grant of any participation therein,
without prejudice, however, to the Unit Holders' right (subject to the terms
of the Units) at all times to sell or otherwise dispose of all or any part of
its Units under an exemption from such registration available under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and applicable
state securities laws, and subject, nevertheless, to the disposition of its
assets being at all times within its control. No Contributing Party was
formed for the specific purpose of acquiring an interest in the Partnership.
(e) The Unit Holders acknowledge that (i) the Units to be
issued to the Unit Holders have not been registered under the Securities Act
or state securities laws by reason of a specific exemption or exemptions from
registration under the Securities Act and applicable state securities laws
and, if such Units are represented by certificates, such certificates will
bear a legend to such effect, (ii) the REIT's and the Partnership's reliance
on such exemptions is predicated in part on the accuracy and completeness of
the representations and warranties of the Contributing Parties contained
herein, (iii) such Units, therefore, cannot be resold unless registered under
the Securities Act and applicable state securities laws, or unless an
exemption from registration is available, (iv) there is no public market for
such Units, and (v) the Partnership has no obligation or intention to
register such Units for resale under the Securities Act or any state
securities laws or to take any action that would make available any exemption
from the registration requirements of such laws. The Contributing Parties
hereby acknowledge that because of the restrictions on transfer or assignment
of such Units to be issued hereunder which are set forth in the Partnership
Agreement and the Lock-up Agreement, the Contributing Parties may have to
bear the economic risk of the investment commitment evidenced by this
Agreement and any Units acquired hereby for an indefinite period of time,
although (i) under the terms of the Lock-up Agreement, the Contributing
Parties will agree, during the one year period following the Closing Date,
not to present the Units for redemption pursuant to the Partnership Agreement
or otherwise to sell, transfer, exchange, pledge or dispose of Units without
the express written consent of the Partnership and (ii) under the terms of
the Registration Rights Agreement, the holder of any Common Stock issued upon
a presentation of Units for redemption will be afforded certain rights to
have such Common Stock registered for resale under the Securities Act or
applicable state securities laws.
(f) The information set forth in the investor questionnaire a
form of which is attached hereto as Exhibit H (the "INVESTOR QUESTIONNAIRE")
which has been completed and executed by the Contributing Parties and
delivered to the Partnership on the date hereof is true, correct and
complete.
For purposes of this Agreement, the "actual knowledge" of the
Contributing Parties shall mean the actual knowledge of any of the following
individuals: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
or ▇▇▇ ▇▇▇▇▇▇▇▇.
The Partnership acknowledges and agrees that, except as set forth in
this Agreement, the Partnership is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of the Contributing
Parties. The Partnership acknowledges that, except as set forth in this
Agreement, the Partnership has not relied and is not relying on any
information, document, reports, sales brochure or other literature, maps or
sketches, financial information, projections, pro formas or statements, that
may have been given by or made by or on behalf of the Contributing Parties.
The Partnership further acknowledges and agrees that, except as set forth
herein, it is not entitled to, and does not, rely on the Contributing Parties
or their agents as to (i) the quality, nature, adequacy or physical
condition, whether latent or patent, of the Real Property,
including but not limited to, the structural elements,
foundation, roof, appurtenances, access, landscaping
parking facilities or the electrical, mechanical, HVAC, plumbing, sewage or
utility system, facilities or appliances at or in connection with the Real
Property, if any; (ii) the existence, quality, nature, adequacy, physical
condition, or location of any utilities serving the Real Property; (iii) the
development potential of the Real Property, its habitability, merchantability
or fitness, suitability or adequacy of the Real Property for an particular
purpose; (iv) the zoning or other legal status of the Real Property or the
potential use of the Real Property; (v) the Real Property's or its
operations' compliance with any applicable codes, laws, building codes, fire
codes, regulations, statutes, ordinances, covenants, conditions or
restrictions of, or agreements with any governmental or quasi-governmental
entity or of any other person or entity; (vi) the quality of any labor or
materials relating in any way to the Real Property; (vii) the condition of
title to the Real Property or the nature, status and extent of any right,
encumbrance, license, reservation, covenant, condition, restriction or any
other matter affecting title to the Real Property.
All representations, warranties and covenants of the Contributing
Parties contained in this Agreement (the "CP REPS") or in any affidavit or
other document delivered in connection herewith shall be true and correct in
all material respects at Closing, provided, however, that the CP Reps
contained in Sections 10.1(b) (but only with respect to the property listed
on Schedule 2 attached), 10.2, 10.4, 10.6, 10.9, 10.10 (with respect to the
first sentence only and only to the extent that such CP Reps were wilfully or
intentionally misrepresented) and Section 10.11 of this Agreement shall
survive the Closing for one (1) year, while the CP Reps contained in Section
10.10 (with respect to the second and third sentence only and only to the
extent that such CP Reps were wilfully or intentionally misrepresented) and
Sections 10.3 and 10.5 of this Agreement shall survive the Closing for six
(6) months, and the CP Reps contained in Section 10.7 of this Agreement shall
survive the Closing for nine (9) months (except to the extent that the
Partnership receives an estoppel certificate from a Tenant with respect to
the subject matter of a CP Rep contained in such Section 10.7, in which case
such CP Rep, as it relates to such subject matter, shall not survive the
Closing). Except as set forth in this paragraph, no representations or
warranties of the Contributing Parties shall survive the Closing.
If (x) any of the representations and warranties set forth above prove
to have been false when made and such falsity is asserted in a writing
delivered by the Partnership to the Contributing Parties during the
applicable survival period, and (y) the Partnership incurs a Loss as a result
of such falsity, then the Partnership shall be entitled to recover such Loss
through all remedies available at law or in equity, subject to the
limitations set forth in this paragraph. If such false representation or
warranty was not intentional or willful, then the Contributing Parties shall
have no obligation to reimburse the Partnership for any Losses of the
Partnership with respect to such falsity unless and until such time as all
Losses exceed, in the aggregate, $500,000 at which time all such Losses
exceeding $500,000 shall, to the extent of such excess, be paid by the
Contributing Parties, it being further understood and agreed that the first
$500,000 of Losses shall be borne 100% by the Partnership; provided, further,
that the obligations of the Contributing Parties for any Losses under this
paragraph shall be limited to $5,000,000 in the aggregate so that no more
than $5,000,000 may be collected in the aggregate from the Contributing
Parties with respect to such representations and warranties. Such $5,000,000
potential liability shall be a non-recourse obligation of the Contributing
Parties so long as the Contributing Parties grant a first lien in favor of
the Partnership on $5,000,000 worth of Units pursuant to the Pledge Agreement
set forth in Exhibit S attached. The Contributing Parties acknowledge that
the $500,000 threshold amount set forth above shall not apply if such false
representation or warranty was intentionally or wilfully known to be false.
Notwithstanding anything to the contrary in this Section 10, the
Contributing Parties shall have no liability for the inaccuracy of any
representation or warranty set forth in this Section 10 if the correct
information was contained in the following documents or materials made
available by the Contributing Parties to the Partnership: (a) the Leases; (b)
the rent roll for the Real Property; (c) the Service Contracts; (d) the
Brokerage Agreements; and (e) any environmental reports or audits regarding
the Real Property and/or the Option Property.
11. THE CONTRIBUTING PARTIES' INSTRUMENTS AT CLOSING
11.1 The Contributing Parties shall execute, or where applicable,
cause the following to be delivered to the Partnership on the Closing Date:
(a) a deed in the form of Exhibit I hereto; and
(b) assignments or other instruments in recordable form
transferring and assigning to the Partnership each Contributing Party's
interest in the Property (other than the Real Estate) in the form of Exhibit
J hereto; and
(c) customary affidavits of title as may be reasonably
required by the Title Insurer; and
(d) a certificate from the Contributing Parties stating that
all representations and warranties made by the Contributing Parties in this
Agreement are true in all material respects as of the Closing Date as if made
on such date; and
(e) duly executed New York State real estate transfer tax
forms for the Real Property. The Contributing Parties shall at Closing pay
all real estate transfer and conveyance taxes payable to the appropriate
state and/or local governmental and/or municipal authorities; and
(f) a duly executed affidavit as may be required pursuant to
Section 1445 of the Internal Revenue Code in the form of Exhibit K hereto;
and
(g) the plans with respect to the buildings on the Property
to the extent in the Contributing Parties' possession; and
(h) a lock-up agreement (the "LOCK-UP AGREEMENT") in the form
attached hereto as Exhibit L attached; and
(i) the Investor Questionnaire; and
(j) the Limited Guaranty, the Pledge Agreement and the
Put/Call Agreement; and
(k) the Registration Rights Agreement; and
(l) the Easement Agreement and the Development Agreement; and
(m) an indemnity agreement (the "INDEMNITY AGREEMENT") from
the Contributing Parties in the form of EXHIBIT T attached, with respect to
certain New York State transfer taxes;
(n) such other documents, instruments, resolutions and other
material reasonably requested by the Partnership as may be necessary to
effect the transfer of title hereunder or as may be reasonably requested by
the Title Insurer; and
(o) the documents set forth in Section 22 hereof.
12. PARTNERSHIP'S REPRESENTATIONS AND WARRANTIES
To induce the Contributing Parties to enter into this Agreement, the
Partnership makes the following representations and warranties, all of which
the Partnership represents are true in all material respects as of the date
hereof and shall be true in all material respects as of the Closing Date and
shall be deemed to be made as of that date.
(a) The Partnership is and at the Closing shall be a limited
partnership duly organized and validly existing and in good standing under
the laws of the State of Delaware with full power and authority to own and
purchase the Property and to take all actions required by this Agreement.
The REIT is and at the Closing shall be (i) a corporation duly organized and
wholly existing and in good standing under the laws of the State of Maryland
and (ii) qualified as a real estate investment trust under Section 856 of the
Code. The Partnership qualifies as a partnership for Federal income tax
purposes.
(b) The execution, delivery and performance of this Agreement
and consummation of the transaction hereby contemplated in accordance with
the terms of this Agreement will not violate the Partnership Agreement or any
material contract, agreement, commitment, order, judgment or decree to which
Partnership is a party or by which it is bound, and the Partnership has
obtained (or will, by the Closing, have obtained) all consents necessary
(whether from a governmental authority or other third party) in order for it
to consummate the transactions contemplated hereby.
(c) The party or parties executing this Agreement on behalf
of the Partnership have been duly authorized and are empowered to bind the
Partnership to this Agreement and to take all actions required by this
Agreement.
(d) Upon execution, this Agreement shall be the binding
obligation of the Partnership, enforceable against the Partnership in
accordance with the terms hereof.
(e) No action, suit or proceeding is pending or, to the best
of the Partnership's knowledge, threatened against the Partnership which
would materially affect the Partnership's ability to fully perform its
obligations pursuant to this Agreement.
(f) The Units to be issued to the Unit Holders or the
Contributing Parties, as the case may be, are duly authorized and, when
issued by the Partnership, will be fully paid and non-assessable, free and
clear of any mortgage, pledge, lien, encumbrance, security interest, claim or
rights of interest of any third party of any nature whatsoever. The shares
of Common Stock to be issued upon redemption of the Units, the Common Units
and/or shares of REIT Preferred Stock to be issued upon conversion or
exchange, as applicable, of the Series C Preferred Units, and the Common
Units, Series C Preferred Units and/or shares of REIT Preferred Stock to be
issued upon conversion or exchange, as applicable, of the Series B Preferred
Units, are authorized and, upon such issuance, will be fully paid and non-
assessable, free and clear of any mortgage, pledge, lien, encumbrance,
security interest, claim or rights of interest of any third party of any
nature whatsoever.
(g) The Partnership has furnished to the Contributing Parties
a true and complete copy of the Partnership Agreement and all amendments,
modifications and supplements thereto.
(h) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending
or, to the best of the Partnership's knowledge, threatened, at law or in
equity, against the Partnership before or by any court or federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality which would prevent the Partnership from performing its
obligations pursuant to this Agreement. There are no judgments, decrees or
orders entered on a suit or proceeding against the Partnership, an adverse
decision which might, or which judgment, decree or order does, adversely
affect the Partnership's ability to perform its respective obligations
pursuant to, or the Contributing Parties' rights under, this Agreement, or
which seeks to restrain, prohibit, invalidate, set aside, rescind, prevent or
make unlawful this Agreement or the carrying out of this Agreement or the
transactions contemplated hereby.
(i) The execution and delivery of this Agreement and the
performance by the Partnership of its obligations hereunder do not and will
not conflict with or violate any law, rule, judgment, regulation, order,
writ, injunction or decree of any court or governmental or quasi-governmental
entity with jurisdiction over the Partnership, including, without limitation,
the United States of America, the State of New York or any political
subdivision of any of the foregoing, or any decision or ruling of any
arbitrator to which the Partnership is a party or by which the Partnership is
bound or affected and no consent of any governmental agency is required.
(j) As of the second business day immediately preceding the
date hereof: (A) the authorized capital stock of the REIT consisted of
100,000,000 shares of Common Stock, 25,000,000 shares of Preferred Stock and
75,000 shares of excess stock; (B) the issued and outstanding shares of
capital stock of the REIT consisted of 38,867,815 shares of Common Stock; (C)
no shares of Preferred Stock were outstanding; and (D) all the outstanding
shares of capital stock of the REIT have been duly and validly issued and are
fully paid and non-assessable.
(k) The 10-Ks and the 10-Qs referred to in Section 10.12 (c)
hereof are true and correct in all material respects, and the financial
statements included in such reports have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis for
the period(s) covered thereby (except as may be indicated in the notes
thereto or, in the case of any unaudited financial statements included in the
10-Qs, as permitted by Form 10-Q) and present fairly the financial position
of the REIT at the dates thereof and the results of operations and cash flows
for the periods then ended.
(l) Except for the Partnership Agreement, this Agreement and
the organizational documents of the REIT, no other agreement executed by the
Partnership or the REIT relates to the sale or voting of the Units, the REIT
Common Stock into which such Units are convertible or exchangeable, as
applicable or the REIT Preferred Stock into which such Units are convertible
or exchangeable, as applicable.
All representations, warranties and covenants of the Partnership and the
REIT contained in this Agreement or in any affidavit or other document
delivered in connection herewith shall be true and correct in all material
respects at Closing and shall survive the Closing for one (1) year.
13. PARTNERSHIP'S INSTRUMENTS AT CLOSING
On the Closing Date, the Partnership shall deliver the Consideration to
the Contributing Parties. Additionally, on the Closing Date, the Partnership
shall execute and deliver to the Contributing Parties the following:
(a) a certificate of an officer of the REIT stating that all
representations and warranties made by Partnership and the REIT in this
Agreement are true as of the Closing Date as if made on such date;
(b) the Assignment and Assumption Agreement in the form of
Exhibit J attached hereto;
(c) the Registration Rights Agreement;
(d) the Development Agreement;
(e) the Partnership Amendment;
(f) the Put/Call Agreement;
(g) the Easement Agreement; and
(h) such other documents, instruments, resolutions and other
material necessary to effect the transfer of title hereunder and reasonably
requested by the Contributing Parties or the Title Insurer.
14. CONTRACT PERIOD
14.1 Throughout the Contract Period, the Contributing Parties shall
continue to operate the Property in substantially the same manner as it is
currently being operated by the Contributing Parties. The Contributing
Parties shall maintain replacement cost casualty insurance throughout the
Contract Period. Except as set forth in Sections 14.2 and 14.5 hereof,
during the Contract Period, no Contributing Party shall enter into any new
lease agreement or any other form of commitment which will bind the
Partnership without the written consent of the Partnership, which consent
shall not be unreasonably withheld, and which consent shall be deemed given,
if the Partnership does not respond in writing to any proposed lease
agreement or any other form of commitment within two (2) Business Days of the
Partnership's receipt of such notice provided such notice states as follows:
"RECKSON'S FAILURE TO OBJECT IN WRITING TO SUCH NEW LEASE WITHIN TWO (2)
BUSINESS DAYS OF RECKSON'S RECEIPT HEREOF SHALL BE CONSTRUED AS RECKSON'S
APPROVAL OF SUCH LEASE."
14.2 During the Contract Period, no Contributing Party shall,
without the written consent of the Partnership, which consent shall not be
unreasonably withheld, enter into any agreements relating to the ownership
and operation of the Property unless such contract(s) shall be fully
cancelable or terminable prior to the Closing Date.
14.3 During the Contract Period, no Contributing Party shall allow
any interest in the Property to be liened, encumbered or transferred.
14.4 During the Contract Period, the Partnership may, upon
reasonable prior notice to the Contributing Parties, show the Property to
prospective tenants.
14.5 (a) During the Contract Period, the Contributing Parties may
amend or extend Leases aggregating up to 30,000 square feet, without the
Partnership's consent, provided that (i) no single Lease, as amended or
extended, shall be for more than 10,000 square feet of space, and (ii) any
such amendment or extension shall be on market terms, and will not adversely
affect the Partnership's return on investment (taking into account any
reimbursables paid to the Contributing Parties pursuant to this Section).
(b) Notwithstanding anything contained herein to the contrary, during
the period that this Agreement shall be in effect, the Contributing Parties
shall not amend or extend any Lease or execute any new Lease after the
expiration of the Review Period, without first obtaining the consent of the
Partnership pursuant to Section 14.1 hereof.
15. BROKERAGE
(a) The Partnership and the Contributing Parties represent and warrant
to each other that no broker or person was in any way instrumental or had any
part in bringing about this transaction. The Partnership agrees that, should
any claim be made for commissions by any broker or person arising by, through
or on account of any act of the Partnership or the Partnership's
representatives, the Partnership shall indemnify and hold the Contributing
Parties harmless from and against any and all claim, liability, cost or
expense (including reasonable attorneys' fees) in connection therewith. The
Contributing Parties agree that should any claim be made for commissions by
any broker or person arising by, through or on account of any act of any
Contributing Party or such Contributing Party's representatives, such
Contributing Party shall indemnify and hold the Partnership harmless from and
against any and all claim, liability, cost or expense (including reasonable
attorneys' fees) in connection therewith. The provisions of this paragraph
shall survive delivery of the deed, but the provisions hereof shall not be
deemed or construed as a covenant for the benefit of any third party.
(b) The Contributing Parties shall indemnify the Partnership for any
costs, losses, liabilities or expenses arising from any claim by any
commercial broker, pursuant to a written agreement with one of the
Contributing Parties, for any brokerage fee or commission, in connection with
any renewal or extension of a Lease, that is excess of the market commission
for such a renewal or extension as of the date of such brokerage agreement.
Additionally, the Contributing Parties shall pay (and hereby indemnifies the
Partnership against) all brokerage commissions relating to any existing
Leases for the base lease term set forth on the rent roll. The provisions of
this paragraph shall survive Closing.
16. CONDITIONS PRECEDENT TO CLOSING
(a) The Partnership's obligations to close title under this Agreement on
the Closing Date shall be subject to the satisfaction of the following
conditions precedent on or prior to the Closing Date:
(i) all of the Contributing Parties' representations and
warranties made in this Agreement shall be true and correct in all
material respects as of the Closing Date as if they were made on that
date;
(ii) the Partnership shall have received estoppel certificates
substantially in the form attached hereto as EXHIBIT M (all estoppel
certificates shall contain information reasonably satisfactory to the
Partnership), or in the form (if any) required under the applicable
Lease, from (A) each of the five Major Tenants and (B) other Tenants
aggregating at least 50% of the aggregate square footage of the
Improvements leased to Tenants other than Major Tenants; provided,
however, that the Contributing Parties shall initially send out
estoppels in the form of EXHIBIT M; provided, further, that if the
appropriate amount of estoppel certificates are not available at
Closing, the Partnership shall be obligated to consummate the
transaction contemplated hereby if the Partnership shall have received
estoppel certificates from (1) each of the five Major Tenants, (2) other
Tenants aggregating at least fifty percent (50%) of the aggregate square
footage of the Improvements leased to Tenants, including the Major
Tenants, and (3) landlord estoppel certificates from the appropriate
Contributing Party (containing information substantially similar to that
contained in the tenant estoppel certificates) such that the aggregate
square footage of the Improvements (excluding the Major Tenants) covered
by the tenant estoppel certificates received in (2) above and the
landlord estoppel certificates received in (3) above is not less than
fifty percent (50%); and provided, further, that if the required number
of tenant and landlord estoppels have not been provided at Closing, the
Partnership shall have the right, at its option, to adjourn the Closing
for a fifteen (15) day period in order to obtain such required number of
tenant estoppels. The Contributing Parties' statements contained in
such landlord estoppels shall be deemed representations of the
Contributing Parties and the Contributing Parties' liability for any
inaccuracy contained therein shall be limited as set forth in the
penultimate paragraph of Section 10 hereof except that the information
made by the Contributing Parties in such landlord estoppels shall
survive the Closing for a period of two years, provided that (i) the
representations made by the Contributing Parties in any particular
landlord estoppel shall in no event survive after the date the
Partnership receives such information from the relevant tenant pursuant
to a tenant estoppel and (ii) none of the representations made by any of
the Contributing Parties in the landlord estoppels shall in any event
survive the date the Partnership receives the amount of tenant estoppels
referred to clause (B) above (except to the extent such tenant estoppels
reveal any inaccuracy in the information contained in the landlord
estoppels);
(iii) the Contributing Parties shall have performed all
material obligations and agreements undertaken by them herein to be
performed at or prior to the Closing Date;
(iv) the receipt of the Consents except as otherwise set
forth in Section 26 hereof; and
(v) except as set forth in Exhibit G attached, all of the
Service Contracts shall have been terminated.
(vi) the Existing Mortgages (other than the Surviving
Mortgages) shall be prepayable at any time with or without a prepayment
premium.
(b) The Contributing Parties' obligations to close title under this
Agreement on the Closing Date shall be subject to the satisfaction of the
following conditions precedent on or prior to the Closing Date:
(i) all of the Partnership's representations and warranties
made in this Agreement shall be true and correct in all material
respects as of the Closing Date as if they were made on that date;
(ii) the Partnership shall have performed all material
obligations and agreements undertaken by it herein to be performed at or
prior to the Closing Date; and
(iii) at Closing, the Partnership shall reimburse the
Contributing Parties for any tenant improvement costs or leasing
commissions which the Contributing Parties may have incurred in
connection with the amendment or extension of a Lease approved by the
Partnership or any new Lease approved by the Partnership as provided in
Section 14 hereof or any other tenant improvement work hereafter
approved by the Partnership with respect to any other Leases.
Additionally, ▇▇▇▇▇▇▇▇ Associates or a related party will be performing
the tenant work with respect to the four (4) Tenants listed on Schedule
9 attached. Upon the completion of such tenant work, the Partnership
shall pay ▇▇▇▇▇▇▇▇ Associates or such related party, as applicable, the
amounts set forth in such Schedule 9.
17. CLOSING
The closing of title to the Property (the "CLOSING") shall take place at
10:00 a.m. on April 6, 1998 at a mutually agreed upon location; provided,
however, that, subject to any express adjournment rights provided for
hereunder, either party may adjourn the Closing for up to fifteen (15) days
(with time being of the essence with respect to such 15-day extension
period).
18. TAX CERTIORARI PROCEEDINGS
18.1 The Contributing Parties are pursuing tax certiorari
proceedings with respect to the Properties indicated on SCHEDULE 1 attached,
which tax certiorari proceedings shall be continued by the Contributing
Parties and the Partnership subsequent to the Closing. No tax certiorari
proceedings shall be prosecuted, terminated or settled without the consent of
the Contributing Parties. Any monies received by the Partnership in
connection with such tax certiorari proceedings (less the actual, out-of-
pocket costs and expenses paid by the Partnership to third parties in
connection with such proceedings) shall be promptly paid by the Partnership
to the Contributing Parties to the extent such monies relate to the period of
time prior to Closing. The provisions of this Section 18 shall survive the
Closing.
19. NOTICES
All notices, requests and demands to be made hereunder to the parties
hereto shall be in writing (at the addresses set forth below) and shall be
given by any of the following means: (a) personal delivery (including,
without limitation, overnight delivery, courier or messenger services); (b)
telecopying (if confirmed in writing sent by registered or certified,
first-class mail, postage prepaid, return receipt requested), or (c)
registered or certified, first-class United States mail, postage prepaid,
return receipt requested. Notice by a party's counsel shall be deemed to be
notice by such party. All notices to the Contributing Parties shall be sent
c/o Cappelli Enterprises, Inc. at the address set forth below. Such
addresses may be changed by notice to the other parties given in the same
manner as provided above. Any notice, demand or request sent (x) pursuant to
subsection (a) shall be deemed received upon such personal delivery, (y)
pursuant to subsection (b) shall be deemed received on the day it is
dispatched by telecopier and (z) pursuant to subsection (c) shall be deemed
received five (5) days following deposit in the mail.
If to any Contributing Party:
c/o Cappelli Enterprises, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Luca ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Partnership: c/o Reckson Associates
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇ & Wood LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
20. DEFAULT
20.1 Partnership's Default. If the Partnership shall be in default for
---------------------
more than ten (10) calendar days after receipt of written notice of any
obligations imposed upon the Partnership by this Agreement (except for a
default by the Partnership for failure to close within the time period
described in Section 17 hereof, for which no grace period shall be
applicable), and the Contributing Parties have performed or have offered to
perform their obligations hereunder, then the Contributing Parties shall have
the right to treat this Agreement as having been breached by the Partnership
and the Contributing Parties' remedy on account of such breach shall be the
right to terminate this Agreement by written notice to the Partnership or the
Partnership's attorney. Upon such termination (a) the Partnership shall pay,
immediately after written demand therefor, the sum of $4,000,000 to the
Contributing Parties and (b) the Partnership shall also pay to the
Contributing Parties, immediately after written demand therefor, the actual
out-of-pocket expenses (up to a maximum amount of $350,000) incurred by the
Contributing Parties in connection with this Agreement. The Contributing
Parties and the Partnership hereby agree that payment of such $4,000,000 and
such expenses to the Contributing Parties shall be deemed to be fair and
adequate, but not excessive, liquidated damages based upon the following
considerations which the Contributing Parties and the Partnership agree would
constitute damages to the Contributing Parties for any default by the
Partnership but which are impossible to quantify, to wit: (i) the removal of
the Property from the real estate market together with the uncertainty of
obtaining a new purchaser at the same or greater purchase price; (ii) the
expenses incurred by the Contributing Parties, including (but not by way of
limitation) attorneys' fees, taxes, mortgage interest, and other items
incidental to the maintenance of the Property until it is eventually sold;
and (iii) all other expenses incurred by the Contributing Parties as a result
of the Partnership's default.
In the event of such termination, the Partnership shall immediately
return its executed copy of this Agreement to the Contributing Parties for
cancellation together with all due diligence material, reports and studies
delivered to the Partnership by the Contributing Parties (without the
Partnership retaining copies thereof).
20.2 The Contributing Party's Default. In the event any Contributing
--------------------------------
Party is in default by reason of any Contributing Party's failure or refusal
to comply with any terms of this Agreement for more than ten (10) calendar
days after receipt of written notice thereof has been given to the
Contributing Parties (except for a default by the Contributing Parties to
close within the time period described in Section 17 hereof, for which no
grace period shall be applicable unless otherwise expressly set forth
herein), the Partnership's remedies shall be (a) the cancellation of this
Agreement, whereupon except as set forth below neither party shall have any
further rights or obligations hereunder, or (b) an action to specifically
enforce this Agreement to compel the Contributing Parties to perform the
terms and conditions of this Agreement. The Contributing Parties agree that
the Contributing Parties shall also pay all actual out-of-pocket costs and
expenses incurred by the Partnership as a result of the Contributing Party's
default hereunder, including reasonable attorneys' fees.
21. ASSIGNMENT
This Agreement and the Partnership's rights hereunder may not be
assigned by the Partnership without the prior written consent of the
Contributing Parties. The Contributing Parties may not assign any or all of
their rights hereunder without the consent of the Partnership.
22. GUARANTY
(a) At Closing, the Unit Holders will, at their option, execute (i) an
amendment (the "AMENDMENT"), in the form of EXHIBIT N, of an existing
guaranty of Partnership indebtedness, and (ii) guaranties of the indebtedness
secured by the Surviving Mortgages (the "Guaranties"). The initial amount of
the Amendment shall be $32,000,000. The initial aggregate amount of the
Guaranties shall be $28,000,000 and the provisions of each of the Guaranties
shall be such that (i) there will be no liability thereunder until the holder
of the related Surviving Mortgage shall have suffered losses under such
Surviving Mortgage of an amount, the aggregate of such amounts for both of
the Surviving Mortgages to total $7,000,000, and (ii) the amount of potential
liability under the related Surviving Mortgage will not be reduced as a
result of the first repayments of amounts of principal thereunder, the
aggregate of such amounts for both Surviving Mortgages to total $10,000,000.
As a partner contributing property to the Partnership in exchange for Units,
the Unit Holders will receive annually from the Partnership, Form 1065,
Schedule K-1, Partner's Share of Income, Credits, Deductions, etc. Such Form
will also be part of the tax return filed by the Partnership with the
Internal Revenue Service. The Partnership represents that the Schedule K-1
submitted to the Unit Holders and included in its tax return will reflect
that the Unit Holders, as partners, have a share of liabilities which
includes the amount the Unit Holders guaranteed under the Amendment and the
Guaranties. The Partnership shall have the right to pay off all or a portion
of the indebtedness secured by the Amendment and the Guaranties (including by
means of regularly scheduled amortization payments); provided, however, that,
if such payoff occurs within fifteen (15) years of the Closing Date, then,
prior to such payoff, the Partnership shall give the Unit Holders the
opportunity to guarantee other indebtedness of the Partnership in an amount
which (i) is at least equal to the principal amount of the indebtedness which
is scheduled to be paid off, and (ii) leaves the Unit Holders in the same tax
position as the guaranty with respect to the indebtedness which is scheduled
to be paid off with respect to their shares of Partnership liabilities, such
amount to be reduced for any Unit Holder pro rata based on the portion, if
any, of the Units originally issued to such Unit Holder which have been
subject to a taxable transfer or exchange or other event resulting in an
increase in tax basis to reflect fair market value.
(b) The Partnership shall not, and shall not permit any other person
to, assume any risk of loss with respect to any portion of the Surviving
Mortgages, within the meaning of Section 752 of the Code.
(c) In the event that the Partnership breaches any of the covenants set
forth in the final sentence of paragraph (a) above or in paragraph (b) above,
the Partnership shall make payments to ▇▇▇▇▇▇▇▇ Associates II or ▇▇▇▇▇▇▇▇
Associates VI or the partners thereof consistent with the principles set
forth in Section 28 with respect to any taxable gain under Section 731(a) of
the Code resulting from such breach.
(d) In the event of the death of a Unit Holder, or the transfer or
exchange of Units which results in an adjustment to the federal tax basis in
the Units to reflect fair market value, the Partnership may, at its option,
require the transferring Unit Holder or the successor of the deceased Unit
Holder to terminate or assign to other parties designated by the Partnership
the guaranties pursuant to the Amendment or the Guaranties referred to in
paragraph (a) above.
(e) The provisions of this Section shall survive Closing.
23. COUNTERPARTS
This Agreement may be executed in counterparts. The signatures of the
parties who sign different counterparts of this Agreement or any of the
instruments executed to effectuate the purposes of this Agreement shall have
the same effect as if those parties had signed the same counterparts of this
Agreement or of any such instrument.
24. FURTHER ASSURANCES
The Partnership and the Contributing Parties each agree to execute and
deliver to the other such further documents or instruments as may be
reasonable and necessary in furtherance of the performance of the terms,
covenants and conditions of this Agreement. This paragraph shall survive the
Closing Date.
25. MISCELLANEOUS
25.1 In connection with the transfer of the Property pursuant to
this Agreement, the Partnership agrees to pay the fees and disbursements of
the title company for searches, surveys, title reports and title insurance
and recording fees.
25.2 Subject to Section 21 hereof, this Agreement shall be binding
upon and shall inure to the benefit of the Contributing Parties and the
Partnership and their respective successors and assigns. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and the Unit Holders are intended third-party beneficiaries of the provisions
of this Agreement which relate to them, and shall be entitled to rely upon
and enforce such provisions to the same extent as if they were parties
signatory to this Agreement.
25.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. This Agreement shall be
construed without regard to any presumption or other rule requiring
construction against the party causing this Agreement to be drafted. If any
words or phrases in this Agreement shall have been stricken out or otherwise
eliminated, whether or not any other words or phrases have been added, this
Agreement shall be construed as if the words or phrases so stricken out or
otherwise eliminated were never included in this Agreement and no implication
or inference shall be drawn from the fact that said words or phrases were so
stricken out or otherwise eliminated. All terms and words used in this
Agreement, regardless of the number or gender in which they are used, shall
be deemed to include any other number and any other gender as the context may
require.
25.4 The headings of the several Sections contained in this
Agreement are inserted only as a matter of convenience and for reference and
in no way define, limit or describe the scope of this Agreement or the intent
of any provision thereof.
25.5 The invalidity or unenforceability of any provision of this
Agreement shall not affect or impair any other provision of this Agreement.
25.6 This Agreement contains the entire agreement between the
Contributing Parties and the Partnership, and any and all prior
understandings and dealings heretofore had are merged herein and any
agreement hereafter made shall be ineffective to change, modify or discharge
this Agreement in whole or in part unless such agreement hereafter made is in
writing and signed by the Contributing Parties and the Partnership.
25.7 The Partnership shall have no right to record this Agreement
or a memorandum hereof. If the Partnership shall so record this Agreement or
a memorandum, the Partnership shall be in default of the terms and conditions
of this Agreement.
25.8 The Partnership agrees that the acceptance by the Partnership
of the deed for the Real Property shall be deemed to be a full performance
and discharge of every covenant, condition, agreement and obligation on the
part of the Contributing Parties hereunder, and no representation, warranty,
agreement, covenant or condition, express or implied, of the Contributing
Parties shall survive the Closing, except those which are herein specifically
stated to survive the Closing.
26. SURVIVING MORTGAGES
(a) From and after the execution of this Agreement, the Contributing
Parties shall use commercially reasonable efforts to obtain the consent (the
"CONSENTS") of the holders of the Surviving Mortgages (the "MORTGAGE
HOLDERS") to the transfer of the applicable Property to the Partnership
subject to the lien of the applicable Surviving Mortgage. The Partnership
shall cooperate in all reasonable respects with the Contributing Parties in
obtaining such consent and will execute any documents reasonably requested by
the Mortgage Holders.
(b) If the Contributing Parties fail to obtain the Consents by the
Closing Date, then the Partnership shall, within five Business Days after the
scheduled Closing Date, elect one of the following options:
(i) The Partnership may elect to adjourn the Closing for a thirty day
period, during which time the Partnership shall use commercially reasonable
efforts to obtain the Consents. If the Partnership fails to obtain such
Consents, then the Partnership shall be entitled to elect one of its options
set forth in clauses (ii) through (v) below.
(ii) The Partnership may elect to close upon all of the Properties other
than the Real Property encumbered by the applicable Surviving Mortgage (the
"AFFECTED REAL PROPERTY"), and the Consideration shall be modified
proportionately based upon the allocation of the Consideration as set forth
in Schedule 1 hereto. In such case, the Partnership will be obligated to
close upon the Affected Real Property if the Contributing Parties obtain the
applicable Consent within six months after the Closing Date. In any event,
the Partnership may elect, subject to the delivery of the indemnity set forth
in clause (iv) below, to close upon the Affected Real Property at any time
during such six month period even if such Consent has not been obtained, in
which case the Consideration allocated to the Affected Real Property shall be
paid to the Contributing Parties. If an Affected Real Property is not
acquired by the Partnership, then the Amendment and Guaranty amounts set
forth in Section 22 hereof shall be adjusted by the Partnership and the Unit
Holders in such a manner and to such an extent as shall be required in order
to effectuate the original intent of the provisions thereof.
(iii) The Partnership may elect to cancel this Agreement in full,
whereupon neither party shall have any further obligations to each other,
except for the obligations expressly stated herein to survive termination of
this Agreement.
(iv) The Partnership may elect to accept all of the Real Properties
even though all of the Consents have not been obtained. In such case, the
Partnership shall deliver an indemnity agreement in favor of the Contributing
Parties wherein the Partnership indemnifies the Contributing Parties and
their Affiliates against all loss, cost and expense incurred by the
Contributing Parties and their Affiliates as a result of (i) any claim for
any principal, interest or prepayment fees due under the relevant loan and
(ii) any claim resulting from the transfer of the Affected Real Property to
the Partnership.
(v) The Partnership may pay off either Surviving Mortgage at Closing,
in which case (i) Unit Holders shall be given the opportunity to guarantee
additional indebtedness of the Partnership in an amount equal to the amount
of the Guaranty in effect with respect to any Surviving Mortgage that is
paid off at Closing and (ii) if the Partnership paid a prepayment premium,
then the distributions payable with respect to the Preferred Units shall be
decreased in accordance with the applicable provisions of the Partnership
Amendment.
(c) If the Partnership assumes the obligations under the Surviving
Mortgages, then the Partnership shall use commercially reasonable efforts to
get the Contributing Parties (and their Affiliates) released from any
recourse indebtedness or liabilities they may have with respect to such
Surviving Mortgages.
(d) The provisions of this Section 26 shall survive the Closing.
27. ERNST & YOUNG LETTER
Within five (5) Business Days of the Partnership's written request, each
Contributing Party shall execute and deliver to Ernst & Young a letter in the
form of Exhibit O attached hereto and deliver or otherwise make available to
Ernst & Young any financial information requested by Ernst & Young. The
Contributing Parties' obligations under this paragraph shall survive until
April 15, 1999.
28. SALE OF PROPERTY
Without the prior written consent of the Unit Holders, the Partnership
shall not sell, exchange, transfer, convey or otherwise dispose of any of the
Properties for a period of fifteen (15) years from the Closing Date in a
transaction (including, without limitation, a merger, consolidation,
combination or tax terminating event under Section 708 of the Code) which
results in the recognition of taxable gain to the Partnership and the
allocation under Section 704(c) of the Internal Revenue Code of 1986 (the
"CODE") of any portion of such taxable gain (the "SECTION 704(c) GAIN") to
any of the Unit Holders, except (a) in connection with a wholly tax-free
exchange, or other transaction, in either case with no boot and which would
result in no taxes being incurred by the Unit Holders, (b) in connection with
a sale of all or substantially all of the assets of the Partnership or
another transaction which results in a change-in-control of the REIT or the
Partnership, provided the Unit Holders receive the same relative tax
treatment as the most favorable treatment received by any of the Rechler
family members who on the date hereof are executive officers of the REIT and,
in all cases, the Partnership shall, consistent with the Partnership's
economic objectives in connection with such transaction and the REIT's
fiduciary obligations to all of the Partnership's limited partners, use its
best efforts to structure the transaction so as to avoid the incurrence of
taxes by the original holders of the Series B Preferred Units, or (c) in the
event of (i) the death of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or the other Unit Holders, or
(ii) the transfer or exchange of the Units issued to the Unit Holders which
(in the case of either (i) or (ii)) results in an adjustment to the federal
income tax basis of the applicable Property such that the sale of the
applicable Property will not result in the recognition of Section 704(c) Gain
to any of the Unit Holders. Nothing contained herein shall prohibit the
Partnership from selling, exchanging (including, without limitation, an
exchange pursuant to Section 1031 of the Code) or otherwise disposing of the
Property in violation of the restrictions set forth above in which case the
Partnership shall pay each Unit Holder with respect to whom federal income
tax basis in the applicable Property has not been, as of the time of the
disposition, adjusted as described in clause (c) above, any federal, state
and local income tax liability suffered by it with respect to its share of
any Section 704(c) Gain allocated to it upon such disposition plus an
additional payment such that after payment by the affected Unit Holder of all
taxes (including penalties and interest) on amounts received hereunder, the
affected Unit Holder retains an amount equal to the taxes due on its share of
Section 704(c) Gain. Subsequent to the Closing, the Partnership shall use
the traditional method under Section 704(c) of the Code and Treasury
Regulation 1.704-3(b) in connection with allocations relating to the
Property. The provisions of this Section 28 shall survive Closing.
29. PURCHASE OPTION
At Closing, the Partnership shall enter into an option agreement (the
"Put/Call Agreement") in the form of EXHIBIT P attached hereto with respect
to the property set forth therein (the "OPTION PARCEL").
30. LIQUIDITY
The Partnership shall use its contacts and resources, and shall use
reasonable commercial efforts, to assist the Unit Holders in obtaining a non-
recourse loan (the "Unit Loan") from a third party secured by the Units,
which loan shall be in an amount equal to the Unit Loan Amount. As used
herein, the "UNIT LOAN AMOUNT" shall mean an amount equal to the sum of (a)
85% of the value of the Preferred Units received by the Contributing Parties
at Closing plus 85% of the value of the Preferred Units (the "Extra Preferred
----
Units") received by the ▇▇▇▇▇▇▇▇ Partner from the sale of the ▇▇▇▇▇▇▇▇
Partnership Interest in the ▇▇▇▇▇▇▇▇ Partnership pursuant to Section 38
hereof and (b) 60% of the value of the Common Units received by the
Contributing Parties at Closing plus 60% of the value of the Common Units
----
(the "Extra Common Units") received by the ▇▇▇▇▇▇▇▇ Partner from the sale of
the ▇▇▇▇▇▇▇▇ Partnership Interest in the ▇▇▇▇▇▇▇▇ Partnership pursuant to
Section 38 hereof; provided, however, that the aggregate value of the Extra
Preferred Units and the Extra Common Units to be included in the Unit Loan
Amount (the value of each Extra Preferred Unit being its stated value and the
value of each Extra Common Unit being determined in the manner provided in
the last sentence of Section 38(d)) shall not exceed the aggregate amount of
cash and the aggregate principal amount of the Redemption Notes received by
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ at or prior to Closing. To the extent required, the
Partnership shall deliver credit enhancement to such third party lender with
respect to the Unit Loan, which credit enhancement shall be in form and
amounts satisfactory to the Partnership and such third party lender. If the
Partnership delivers credit enhancement to such third party, such credit
enhancement shall be secured by the Units. If the Partnership's delivery of
such credit enhancement would be counted as debt under any credit facility
then in place with respect to the Partnership, then the Partnership shall
have the right of first refusal to make the Unit Loan on the same terms
(including the interest rate) as offered by such third party lender. If the
Unit Holders (or the Partnership on behalf of the Contributing Parties) are
not able to obtain the Unit Loan within six (6) months of Closing, then, at
the request of the Unit Holders, the Partnership shall make a loan to the
Unit Holders in an amount equal to the Unit Loan Amount, at a 10.5% interest
rate, on a non-recourse basis and upon terms similar to those required by
third party lenders. Notwithstanding the foregoing, provided the Partnership
is given seven (7) Business Days prior notice, at the Unit Holders' option,
the Partnership will loan $20,000,000 (or such lesser amount as the Unit
Holders may specify) of the Unit Loan Amount to the Unit Holders on that date
which is thirty (30) days after the Closing Date (or on such later date as
the Unit Holders specify, provided such date is not later than six (6) months
after the Closing Date), on the terms described in the preceding sentence.
Such $20,000,000 loan shall be secured by any combination of Units; provided,
however, that the sum of (a) 85% of the value of the Preferred Units pledged
for such loan and (b) 60% of the value of the Common Units pledged for such
loan, shall not be less than $20,000,000. All documents and certificates
executed in connection with such $20,000,000 loan shall be satisfactory to
the Partnership, in the exercise of its reasonable discretion. The provisions
of this Section 30 shall survive Closing.
Notwithstanding anything appearing to the contrary in the Partnership
Agreement or the Partnership Amendment, the Partnership and the REIT hereby
consent to any pledge of Units made to secure the Unit Loan, and any transfer
of Units to the lender in connection with its realization upon its security
for the Unit Loan, whether by foreclosure or assignment-in-lieu of
foreclosure.
31. STOCK IN RSI
If the Closing occurs prior to the record date for the spin-off
distribution of shares of Reckson Services Industries Inc. ("RSI"), Units
held by the Unit Holders shall be entitled to receive such distribution, it
being understood that the holders of the Preferred Units shall be entitled to
receive the amount of RSI Stock which they otherwise would have been entitled
to if such Preferred Units were converted into Common Units on the Closing
Date in accordance with the Partnership Amendment (irrespective of whether
under the terms of the Partnership Amendment the Unit Holders would have been
entitled to effect such conversion as of such date). If the Closing occurs
subsequent to such record date, the valuation of any consideration to be
received by the Contributing Parties in Common Units and the price at which
the Series C Preferred Units and Series B Preferred Units are exchangeable
into Common Units, shall be adjusted on the same basis as the adjustment (the
"RSI ADJUSTMENT") made to the exercise price of outstanding employee stock
options of the REIT in respect of REIT Common Stock. In addition, if such
Closing occurs subsequent to such record date due to an adjournment of the
Closing by the Partnership (other than an adjournment by the Partnership
caused by the Contributing Parties), the Partnership shall pay to the
Contributing Parties, at the Closing, an additional amount equal to the RSI
Adjustment times the number of shares of RSI that the Contributing Parties
would have received had the Closing occurred prior to such record date.
Upon the request of the Contributing Parties, the Partnership shall advise
the Contributing Parties as to the timing and status of the RSI spin-off.
The provisions of this paragraph shall survive the Closing.
32. INDEMNITY
The Contributing Parties hereby agree to indemnify the Partnership
against all loss, cost and expense incurred by the Partnership as a result of
any claim or proceeding set forth on Schedule 7 attached; provided, however,
that such indemnity shall be terminated upon the Partnership's receipt of
evidence reasonably satisfactory to it that the claimants set forth in such
proceeding have (i) withdrawn such proceeding with prejudice or (ii) settled
such proceeding with the Contributing Parties (it being understood that the
obligations of the Contributing Parties under any such settlement agreements
shall not be assumed by the Partnership).
33. SERVICE CONTRACTS
Except with respect to the Service Contracts with Sartron Company and
Quadlogic, each of the Service Contracts shall be cancelled as of the
Closing. If there are any cancellation fees payable by the Contributing
Parties as a result of the cancellation of the Service Contracts, the
Contributing Parties shall pay the first $50,000 of such fees, the
Partnership shall pay the next $50,000 of such fees (provided, however, that
the Partnership shall in no event be obligated to pay any fees to any
Affiliates of any Contributing Party) and, thereafter, the Contributing
Parties shall pay any fees in excess thereof. The provisions of this Section
shall survive the Closing.
34. 140 GRAND DEVELOPMENT AGREEMENT
At Closing, the Partnership and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Realty Associates shall
enter into a development agreement substantially in the form of EXHIBIT Q
attached hereto (the "DEVELOPMENT AGREEMENT").
35. BOARD REPRESENTATION
The Partnership shall nominate ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ to the Board of
Directors of the REIT (the "BOARD OF RA") for a two-year term for election by
the Board of RA commencing August 1, 1998. The Partnership shall cause the
members of the REIT's senior management that serve on the Board of RA to give
their reasonable support to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇'▇ election. Subsequent to
Closing and prior to August 1, 1998, the Partnership shall cause ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ to be invited to attend each meeting of the Board of RA. If, at any
time, the Unit Holders are no longer the record holder of at least 65% of the
Units issued to the Unit Holders at Closing, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall, at the
REIT's option, resign from the Board of RA. While he is on the Board of RA
or elects to attend Board of RA meetings, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall notify a
designee of the Board of RA (which at the outset shall be ▇▇▇▇▇ ▇▇▇▇▇▇▇) of
any transaction which he is pursuing which might reasonably be viewed as
competitive with the Partnership, the REIT, or any of their Affiliates. Upon
receipt of such notice, the Board of RA shall notify ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as to
whether such transaction does in fact compete or have the potential to
compete with Reckson. If the RA Board determines that such transaction does
or might so compete, then ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall recuse himself from any
board discussions or vote with respect to such matter. The provisions of
this Section shall survive the Closing.
36. SUMMIT NAME
Neither the Contributing Parties nor ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall use the
name "Summit" in the name of any commercial building it directly or
indirectly owns in Westchester, New York, other than (a) any buildings owned
by a Contributing Party, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or an Affiliate thereof on the
real property referred to in the Put/Call Agreement, and (b) any improvements
now or hereafter constructed on the real property adjacent to ▇▇▇▇▇▇▇ Avenue
in Mount Pleasant, New York that is currently owned by ▇▇▇▇▇▇▇▇ Associates V.
The provisions of this Section shall survive Closing.
37. CONFIDENTIALITY/PUBLICATION
(a) Except as may be required by law or as may be necessary to
effectuate the contemplated transaction or except as set forth below, both
Contributing Party and the Partnership, individually and on behalf of their
representatives, agree that they and their respective representatives shall
hold both the terms and conditions of this Agreement and its existence as
confidential information and will not disclose such terms, conditions or
existence or the fact that the negotiations are taking place, to any third
party without the other's consent. This Section shall constitute a binding
and enforceable agreement under applicable law.
(b) The Partnership shall have the right with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇'▇
reasonable consent to make such public announcements or filings with respect
to the transaction as the Partnership may deem reasonably prudent (provided
that prior to any such announcement or filing, the Partnership shall submit
the text of the announcement or filing to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ for his
reasonable approval). The Partnership agrees that it will not issue any such
announcement, or make any such filing without the prior reasonable approval
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, provided, however, that the Partnership shall be
entitled to make such filings or announcements without such approval if (i)
such action is required by applicable law based on advice of counsel and (ii)
after consultation by the Partnership with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ regarding such
filing or announcement, the Partnership shall reasonably determine that ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇'▇ approval of such filing or announcement is being unreasonably
withheld or delayed and the Partnership, at least five (5) Business Days
prior to making such announcement or filing, shall have given ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ written notice of its intent to proceed without his consent.
Similarly, the Contributing Parties shall not make any public announcements
or filings with respect to the transaction without the consent of the
Partnership, which shall not be unreasonably withheld.
38. 360 ▇▇▇▇▇▇▇▇
------------
(a) An Affiliate of ▇▇▇▇▇▇▇▇ Associates (the "▇▇▇▇▇▇▇▇ PARTNER") and the
Partnership are currently members in the limited liability company (the
"▇▇▇▇▇▇▇▇ PARTNERSHIP") which owns the building located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "▇▇▇▇▇▇▇▇ PROPERTY"). From and after the
Closing Date, the ▇▇▇▇▇▇▇▇ Partnership shall continue to operate, develop and
market the ▇▇▇▇▇▇▇▇ Property in accordance with the operating agreement of
the ▇▇▇▇▇▇▇▇ Partnership; provided, however, that during the sixty (60) day
period immediately following the Closing Date, the Partnership shall not
enter into any leases with respect to the ▇▇▇▇▇▇▇▇ Property without the
consent of the ▇▇▇▇▇▇▇▇ Partner.
(b) Between the Closing Date and January 15, 1999, the ▇▇▇▇▇▇▇▇ Partner
shall have the right (the "▇▇▇▇▇▇▇▇ PARTNER PUT RIGHT") to notify the
Partnership that the ▇▇▇▇▇▇▇▇ Partner wants to sell all of its right, title
and interest in the ▇▇▇▇▇▇▇▇ Partnership (the "▇▇▇▇▇▇▇▇ PARTNERSHIP
INTEREST") to the Partnership. Within thirty (30) days after its receipt of
such notice, the Partnership shall purchase the ▇▇▇▇▇▇▇▇ Partnership Interest
from the ▇▇▇▇▇▇▇▇ Partner at a purchase price (the "▇▇▇▇▇▇▇▇ PURCHASE PRICE")
equal to the sum of (i) $6,000,000 plus (ii) all capital invested by the
▇▇▇▇▇▇▇▇ Partner in the ▇▇▇▇▇▇▇▇ Partnership (which on the date hereof is
approximately $1,317,000), together with interest on such capital at an
annual rate of 10% from the date or dates such capital was invested. The
▇▇▇▇▇▇▇▇ Partner may not exercise the ▇▇▇▇▇▇▇▇ Partner Put Right if the
Partnership has previously exercised its right under Section 38(c) hereof.
(c) At any time from the date which is one-hundred twenty (120) days
after the Closing Date through January 15, 1999, the Partnership shall have
the right to notify the ▇▇▇▇▇▇▇▇ Partner that the Partnership wants to
purchase the ▇▇▇▇▇▇▇▇ Partnership Interest at a purchase price equal to the
▇▇▇▇▇▇▇▇ Purchase Price. Within thirty (30) days after its delivery of such
notice, the Partnership shall purchase the ▇▇▇▇▇▇▇▇ Partnership Interest;
provided however that if the Partnership exercises its right hereunder prior
to January 1, 1999, then the ▇▇▇▇▇▇▇▇ Partner shall have the right to defer
such closing until after January 1, 1999 (but such closing shall take place
prior to January 15, 1999), in which event the documents needed for such
closing shall be delivered in escrow to the Title Insurer (or other
satisfactory escrow agent) within thirty (30) days after the Partnership
shall have notified the ▇▇▇▇▇▇▇▇ Partner of its desire to purchase the
▇▇▇▇▇▇▇▇ Partnership Interest. The Partnership may not exercise its rights
hereunder if the ▇▇▇▇▇▇▇▇ Partner has previously exercised the ▇▇▇▇▇▇▇▇
Partner Put Right or the ▇▇▇▇▇▇▇▇ Partner Call Right.
(d) Simultaneously with any purchase of the ▇▇▇▇▇▇▇▇ Partnership
Interest, the Partnership shall either (i) obtain a release of the ▇▇▇▇▇▇▇▇
Partner or any Affiliate thereof from any existing loan guaranties and other
recourse obligations or (ii) indemnify the ▇▇▇▇▇▇▇▇ Partner or such Affiliate
from any liability it incurs under any existing loan guaranties and other
recourse obligations. Notwithstanding anything herein to the contrary, the
▇▇▇▇▇▇▇▇ Partner may, at its election, receive all or a portion of the
purchase price paid by the Partnership for the ▇▇▇▇▇▇▇▇ Partnership Interest
under this Section 38 in any combination of (i) cash, (ii) Common Units or
(iii) Series C Preferred Units. At least five (5) Business Days prior to the
date of such closing, the ▇▇▇▇▇▇▇▇ Partner shall notify the Partnership as to
how many Series C Preferred Units and Common Units the ▇▇▇▇▇▇▇▇ Partner shall
elect to receive; provided, however, that the value of each type of Unit
chosen by the ▇▇▇▇▇▇▇▇ Partner shall not be less than $1,000,000. For
purposes of this Section, each Common Unit to be issued hereunder shall have
a value equal to the average closing price on the New York Stock Exchange of
a share of common stock of the REIT for the forty five (45) day period
immediately preceding the exercise of the Partnership's call right pursuant
to Section 38(c) or the ▇▇▇▇▇▇▇▇ Partner Put Right pursuant to Section 38(b),
unless the ▇▇▇▇▇▇▇▇ Partner shall defer the closing pursuant to the proviso
of the second sentence of Section 38(c), in which event the applicable period
for determining the value of the Common Units shall be the forty five (45)
day period immediately preceding the day which is six (6) Business Days prior
to such closing.
(e) If the Partnership purchases the ▇▇▇▇▇▇▇▇ Partnership Interest
pursuant to this Section 38, then, with respect to the leasing of space in
the ▇▇▇▇▇▇▇▇ Property (it being understood that ▇▇▇▇▇▇▇▇ Associates' rights
under this paragraph shall not apply to leases which relate to any space
which has been previously leased by the ▇▇▇▇▇▇▇▇ Partnership to a tenant
which has taken occupancy of such space and commenced paying rent under its
lease), the Partnership shall cause the ▇▇▇▇▇▇▇▇ Partnership to offer
▇▇▇▇▇▇▇▇ Associates (which term, as used in this Section 38(e), shall include
any Affiliate of ▇▇▇▇▇▇▇▇ Associates or of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇) the opportunity
to work as the general contractor for any tenant work required to be
performed by the ▇▇▇▇▇▇▇▇ Partnership under leases exceeding 50,000 square
feet of space. If it elects to perform such work, then ▇▇▇▇▇▇▇▇ Associates
shall perform such work pursuant to a lump sum contract (it being understood
that such lump sum contract shall obligate ▇▇▇▇▇▇▇▇ Associates to pay for all
costs of completing the applicable work to the extent such costs exceed such
lump sum and to retain such lump sum even if the costs of completing such
work are less than such lump sum) and the amount payable to ▇▇▇▇▇▇▇▇
Associates thereunder (the "CONTRACT PRICE") shall be equal to the sum of (i)
the cost of completing such tenant work as determined by the Partnership and
▇▇▇▇▇▇▇▇ Associates by bidding out such tenant work plus (ii) 5% of such cost
(excluding the general conditions). The parties acknowledge that there could
be a good faith disagreement as to the cost of completing such tenant work
based on the validity of bids received in bidding out such tenant work. If
▇▇▇▇▇▇▇▇ Associates reasonably determines that a bid with respect to any
portion of such tenant work is unrealistically low and cannot be performed,
then such bid shall not be used in determining the cost of completing such
tenant work unless the Partnership is able to receive another bid with
respect to such portion of such tenant work from a reputable subcontractor
within ten percent (10%) of the disputed bid, if the disputed
bid is less than $1,000,000, or within five percent (5%) of the disputed bid,
if the disputed bid is equal to or greater than $1,000,000. If the
Partnership reasonably determines that a bid with respect to any portion of
such tenant work is too high and the Partnership is able to receive a new bid
with respect to such portion of such tenant work from a reputable contractor
which is at least ten percent (10%) lower than the disputed bid, if the
disputed bid is less than $1,000,000 or within five percent (5%) of the
disputed bid, if the disputed bid is equal to or greater than $1,000,000,
then such lower bid shall be used in determining the cost of completing such
tenant work unless ▇▇▇▇▇▇▇▇ Associates reasonably determines that hiring such
new contractor would be disruptive to the construction of the tenant work.
Within ten (10) days from the date hereof, ▇▇▇▇▇▇▇▇ Associates shall have the
right to deliver a list of contractors whom it deems unacceptable and bids
from such contractors shall not be used by the Partnership in determining the
cost of completing such tenant work. ▇▇▇▇▇▇▇▇ Associates shall notify the
Partnership within three (3) Business Days after it is notified of the
Contract Price and the scope of the work to be performed as to whether it
will perform such work. If ▇▇▇▇▇▇▇▇ Associates elects not to perform such
work, the ▇▇▇▇▇▇▇▇ Partnership shall be free to hire any other contractor to
perform such work.
(f) At any time between the Closing Date and 120 days thereafter, the
▇▇▇▇▇▇▇▇ Partner shall have the right (the "▇▇▇▇▇▇▇▇ PARTNER CALL RIGHT") to
notify the Partnership that the ▇▇▇▇▇▇▇▇ Partner wants to purchase all of the
Partnership's right, title and interest in the ▇▇▇▇▇▇▇▇ Partnership (the
"PARTNERSHIP INTEREST"); provided, however, that the ▇▇▇▇▇▇▇▇ Partner may
only exercise the ▇▇▇▇▇▇▇▇ Partner Call Right in connection with a
transaction involving the construction of a courthouse on the ▇▇▇▇▇▇▇▇
Property. Within fifteen (15) days after its receipt of such notice, the
Partnership shall elect to either (i) remain a partner in the ▇▇▇▇▇▇▇▇
Partnership, in which case the ▇▇▇▇▇▇▇▇ Partner shall no longer have the
▇▇▇▇▇▇▇▇ Partner Put Right and the Partnership shall no longer have the
obligation to purchase the ▇▇▇▇▇▇▇▇ Partnership Interest pursuant to any of
the provisions of this Section 38, or (ii) require the ▇▇▇▇▇▇▇▇ Partner to
purchase the Partnership Interest for a purchase price equal to the sum of
(x) $10,000,000 plus (y) all capital theretofore invested by the Partnership
in the ▇▇▇▇▇▇▇▇ Partnership, together with interest on such capital at an
annual rate of 10% from the date or dates such capital was invested. If the
Partnership fails to give written notice of its election to the ▇▇▇▇▇▇▇▇
Partner within such fifteen (15) day period, then the Partnership shall be
conclusively deemed to have made the election described in clause (ii) of the
preceding sentence. If the Partnership elects to require the ▇▇▇▇▇▇▇▇
Partner to purchase the Partnership Interest pursuant to such clause (ii),
then the closing of such Partnership Interest shall occur within fifteen (15)
days after the Partnership notifies the ▇▇▇▇▇▇▇▇ Partner of such election.
If the Partnership elects to remain a partner in the ▇▇▇▇▇▇▇▇ Partnership
pursuant to clause (i) above, then the ▇▇▇▇▇▇▇▇ Partner shall have the right
to thereafter admit one or more additional partners to the ▇▇▇▇▇▇▇▇
Partnership provided (1) none of such other partners is a real estate
investment trust which regularly invests in suburban office or industrial
buildings in Westchester County, (2) the admission of such additional
partner(s) shall reflect a bona fide transaction and (3) the admission of
such third party will dilute the Partnership's and the ▇▇▇▇▇▇▇▇ Partner's
interest in the ▇▇▇▇▇▇▇▇ Partnership equally.
(g) The ▇▇▇▇▇▇▇▇ Partner Call Right shall be terminated and no longer
in effect if, at any time after sixty (60) days after the Closing Date (but
before the ▇▇▇▇▇▇▇▇ Partner Call Right shall have been exercised in
accordance with Section 38(f) hereof), the ▇▇▇▇▇▇▇▇ Partnership enters into a
lease or letter of intent with a tenant for over 75,000 square feet of space
with respect to the ▇▇▇▇▇▇▇▇ Property.
(h) Any partnership interest transferred pursuant to the terms of this
Section 38 shall be transferred free and clear of all interests or liens of
any third parties.
(i) The provisions of this Section 38 shall survive Closing.
39. Representations and Covenants of REIT. The REIT represents,
-------------------------------------
warrants, and covenants to the Contributing Parties that (i) it has operated,
and shall continue to operate, its business in such a manner as to qualify as
a real estate investment trust under the Code and Treasury Regulations, and
(ii) it has not taken, or omitted to take, any action which would reasonably
be expected to result in a challenge to its status as a real estate
investment trust under the Code and Treasury Regulations, and no such
challenge is pending or, to the REIT's knowledge, threatened.
40. Mortgage Loans.
--------------
(a) On April 6, 1998, the Partnership shall make a loan (the
"First Loan") in the amount of $10,000,000 to ▇▇▇▇▇▇▇▇ Associates IV (the
"▇▇▇▇▇▇▇▇ Borrower") by wire transfer of immediately available funds to an
account specified in writing by the ▇▇▇▇▇▇▇▇ Borrower. Interest on the First
Loan shall be payable monthly at an annual rate of 10%. The First Loan shall
mature on April 14, 1999, shall be evidenced by a promissory note executed by
the ▇▇▇▇▇▇▇▇ Borrower in favor of the Partnership, shall be secured by a
mortgage encumbering the Option Parcel and shall be fully guaranteed by ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and Luca ▇. ▇▇▇▇▇▇▇▇. The First Loan shall be prepayable at any
time, at the option of the ▇▇▇▇▇▇▇▇ Borrower, without any prepayment premium
or fee.
(b) On the Closing Date, the Partnership shall make an additional
loan (the "Second Loan") in the amount of $10,000,000 to the ▇▇▇▇▇▇▇▇
Borrower. Interest on the Second Loan shall be payable at an annual rate of
10%. The Second Loan shall mature on April 14, 1999 and shall be secured by
a mortgage encumbering the Option Parcel (but shall not be guaranteed by
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or Luca ▇. ▇▇▇▇▇▇▇▇). The Second Loan shall be prepayable
at any time, at the option of the ▇▇▇▇▇▇▇▇ Borrower, without any prepayment
premium or fee.
(c) The Option Parcel is currently encumbered by a mortgage (the
"Existing Option Parcel Mortgage") in the outstanding principal amount of
approximately $3,400,000. Except for the Existing Option Parcel Mortgage, no
other mortgage encumbers the Option Parcel and no other mortgage or lien
shall be recorded encumbering the Option Parcel while any sums remain unpaid
under the First Loan or the Second Loan. The ▇▇▇▇▇▇▇▇ Borrower shall pay off
the Existing Option Parcel Mortgage on the Closing Date.
(d) The Partnership may, at its option, record any or both of the
mortgages securing the First Loan and the Second Loan. All mortgage
recording taxes, filing fees and title insurance premiums shall be paid by
the Partnership. The ▇▇▇▇▇▇▇▇ Borrower shall reimburse the Partnership for
any and all such mortgage recording tax if any of the following events shall
occur: (1) if the First Loan and the Second Loan is not paid in full by July
14, 1998, (2) if an event of default shall occur under the First Loan or the
Second Loan, (3) if a mortgage encumbering all or a portion of the Option
Parcel in favor of another lender (the "Take-out Lender") is executed
simultaneous with the payoff of the First Loan or Second Loan, in which event
the Partnership shall assign its mortgage and note to the Take Out Lender or
(4) if the Closing Date does not occur as a result of the Contributing
Parties failure to satisfy any of the conditions set forth in Section 16(a)
hereof.
(e) As set forth in the Put/Call Agreement, the Partnership shall,
at the request of the ▇▇▇▇▇▇▇▇ Borrower on that date which is sixty (60) days
after the Closing Date (or on such later date as the ▇▇▇▇▇▇▇▇ Borrower may
specify), cause a bank acceptable to the ▇▇▇▇▇▇▇▇ Partner to issue an
irrevocable letter of credit in favor of the ▇▇▇▇▇▇▇▇ Borrower or its
designee in the amount of $20,125,000 to secure the Partnership's obligations
under the Put/Call Agreement. All sums due under the First Loan and the
Second Loan shall be paid in full at or prior to the delivery of such letter
of credit to the ▇▇▇▇▇▇▇▇ Borrower or its designee.
(f) It is specifically acknowledged that the Partnership shall not
have the obligation to make (i) the Second Loan or cause the issuance of the
letter of credit referred to above if the Closing fails to occur or (ii) the
First Loan if the Partnership shall have given notice to the Contributing
Parties that a Due Diligence Deficiency exists and that the Partnership does
not desire to proceed with its acquisition of the Real Property.
(g) The provisions of this Section 40 shall survive the Closing.
IN WITNESS WHEREOF, the Contributing Parties and the Partnership
have executed this Agreement as of the day and year first above written.
▇▇▇▇▇▇▇▇ ASSOCIATES I
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
▇▇▇▇▇▇▇▇ ASSOCIATES II
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
▇▇▇▇▇▇▇▇ ASSOCIATES III
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
▇▇▇▇▇▇▇▇ ASSOCIATES VI
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ REALTY ASSOCIATES
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
COLUMBUS AVENUE REALTY ASSOCIATES
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
The undersigned hereby consents to the provisions
contained in Section 36 and Section 3.5 hereof
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The undersigned is not a Contributing Party, but has executed this
Agreement as of the date hereof solely for the purpose of evidencing its
obligations with respect to the covenants and agreements of the "▇▇▇▇▇▇▇▇
Borrower" set forth in Section 40 hereof and its agreement to deliver the
Put/Call Agreement set forth in Section 29 hereof.
▇▇▇▇▇▇▇▇ ASSOCIATES IV
By:
---------------------------------
Luca ▇. ▇▇▇▇▇▇▇▇, General Partner
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
PARTNERSHIP:
-----------
RECKSON OPERATING PARTNERSHIP, L.P.
By: RECKSON ASSOCIATES REALTY CORP.
Its General Partner
By:
---------------------------------
Name:
Title:
REIT:
----
The undersigned has executed this Agreement as of
the date hereof solely with respect to the
representations, warranties and covenants of the
undersigned set forth in Section 39 of this
Agreement.
RECKSON ASSOCIATES REALTY CORP.
By:
---------------------------------
Name:
Title:
STATE OF NEW YORK)
) ss.:
COUNTY OF )
-------
On the day of , 1998, personally appeared
------- ---------------
, to me known to be the person who executed the foregoing
--------------------
instrument and who, being duly sworn, did depose and say that he executed the
foregoing instrument before me.
---------------------------------
Notary Public
My Commission Expires:
Commissioner of the Superior Court
STATE OF NEW YORK )
) ss.:
COUNTY OF SUFFOLK )
On the day of , 1998, personally appeared
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, to me known to be the person who executed the foregoing instrument and
who, being duly sworn, did depose and say that he is a of
-----------------
Reckson Associates Realty Corp., general partner of Reckson Operating
Partnership L.P., that he executed the foregoing instrument and that he had
authority to sign the same, and he acknowledged that it was his free act and
deed and the free act and deed of Reckson Associates Realty Corp., before me.
---------------------------------
Notary Public
My Commission Expires:
Commissioner of the Superior Court
SCHEDULE 1
List of Contributing Parties; Location and Allocated Value
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CONTRIBUTING PARTY LOCATION ALLOCATED VALUE TAX CERTIORARI
------------------ -------- --------------- --------------
PROCEEDING
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▇▇▇▇▇▇▇▇ Associates I
▇▇▇▇▇▇▇▇ Associates II
▇▇▇▇▇▇▇▇ Associates III
▇▇▇▇▇▇▇▇ Associates IV
▇▇▇▇▇▇▇▇ Associates VI
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Realty
Associates
Columbus Avenue Realty
Associates
SCHEDULE 2
List of Personal Property
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SCHEDULE 3
List of Mortgages Encumbering the Properties
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SURVIVING
OUTSTANDING PREPAYMENT MORTGAGE:
PROPERTY BORROWER LENDER PRINCIPAL PENALTY YES/NO
-------- -------- ------ ----------- ---------- ---------
SCHEDULE 4
List of Permitted Encumbrances
------------------------------
SCHEDULE 5
Pending Zoning Charges
----------------------
SCHEDULE 6
Violations of Law
-----------------
SCHEDULE 7
Litigation
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SCHEDULE 8
Unfinished Tenant Work
----------------------
SCHEDULE 9
Management Personnel and Terms of Employment
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Exhibit A: Description of the Land
(TO BE SUPPLIED BY SELLER)
Exhibit B: Description of the Leases and Rent Roll
Exhibit C: Partnership Agreement
B&W Draft 3/31/98
Exhibit D-1: Partnership Amendment
SUPPLEMENT TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
RECKSON OPERATING PARTNERSHIP, L.P.
ESTABLISHING
SERIES C PREFERRED UNITS
OF
LIMITED PARTNERSHIP INTEREST
In accordance with Sections 4.2 and 14.1 B(3) of the Amended and
Restated Agreement of Limited Partnership, dated as of June 2, 1995, as
amended on December 6, 1995 (the "Partnership Agreement"), the Partnership
Agreement is hereby supplemented to establish a series of preferred
--------
units (subject to increase as set forth below) of limited partnership
interest of Reckson Operating Partnership, L.P. (the "Company") which shall
be designated "Series C Preferred Units" having the rights, preferences,
powers, privileges and restrictions, qualifications and limitations granted
to or imposed upon the Series C Preferred Units (referred to hereinafter
sometimes as the "Designations") as set forth below and which shall be issued
to the parties and in the amounts set forth on Schedule A hereto. The
Company may issue the Series B Preferred Units pursuant to the Supplement to
the Amended and Restated Agreement of Limited Partnership Establishing Series
B Preferred Units of Limited Partnership Interest of even date herewith
("Series B Preferred Units," and, together with the Series C Preferred Units,
the "Preferred Units") and, subject to the limitations set forth below, other
additional series of Preferred Units whose rights, preferences, powers,
privileges and restrictions, qualifications and limitations regarding
Distributions (as hereinafter defined) and/or liquidation that are either
subordinate to, or pari passu with, the Designations of the Series C
Preferred Units. Additional Series C Preferred Units shall be issuable in
connection with the conversion of Series B Preferred Units. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth
in the Partnership Agreement.
1. STATED VALUE. The stated value of the Series C Preferred
Units shall be one thousand dollars ($1,000.00) per unit (the "Stated
Value").
2. DISTRIBUTIONS.
(a) Subject to Section 2(b) below, commencing from the date of
initial issuance of Series C Preferred Units (the "Date of Issuance"),
distributions (the "Distributions") on each Series C Preferred Unit shall be
payable in arrears quarterly, in an amount equal to the greater of: (i)
$(17.50) (as such amount may be adjusted pursuant to Section 2(c) hereof) or
(ii) the quarterly distribution attributable to each Series C Preferred Unit
if such unit had been converted into Common Units (as hereinafter defined),
pursuant to Section 4 hereof, except that the Preferred Conversion Factor to
be utilized for this purpose shall be (subject to adjustment as
-----------
provided in Section 4(iv) hereof) in lieu of the Preferred Conversion Factor
set forth in Section 4; provided, however, that the Distribution to be made
on Series C Preferred Units to any holder thereof on the Distribution Payment
Date (as defined below) immediately following the Date of Issuance shall be
made on a pro rata basis based upon the number of days during that calendar
quarter preceding that initial Distribution Payment Date that Series C
Preferred Units were held by such holder. The Distributions shall be
declared and payable whenever distributions on the Common Units are declared
and paid but no less frequently than once every three months (a "Distribution
Payment Date"). If on any Distribution Payment Date the Company shall not be
permitted under Delaware law to pay all or a portion of any such declared
Distributions, the Company shall take such action as may be lawfully
permitted in order to enable the Company to the extent permitted by
Delaware law, lawfully to pay such Distributions. Distributions shall be
cumulative from the Date of Issuance, whether or not in any Distribution
period such Distribution shall be declared or there shall be funds of the
Company legally available for payment of such Distributions. No
Distributions shall be declared or paid on any class of Common Units or any
other class or series of Preferred Units, other than Distributions declared
and paid on the Series B Preferred Units and, subject to the limitations set
forth in Section 7(b)(ii), any other series of Preferred Units which, by the
terms of such series are pari passu with the Series C Preferred Units with
respect to payment of distributions and distribution of assets upon
liquidation (such Preferred Units hereinafter referred to as "Qualifying
Preferred Units"), until all Distributions, if any, due and legally payable
on the Series C Preferred Units have been paid to the holders of such units.
The record date for the payment of Distributions on the Series C Preferred
Units on any Distribution Payment Date shall be the day immediately prior to
such Distribution Payment Date.
(b) Reduction of Distribution Amount Due to Pre-Payment Premiums.
Notwithstanding the provisions of Section 2(a), during any period that those
certain mortgage loans between ▇▇▇▇▇▇▇▇ Associates II and M&T Real Estate,
Inc. dated March 27, 1997, (the "M&T Note") and between ▇▇▇▇▇▇▇▇ Associates
VI and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Capital Corp., dated December 19, 1995 (the "▇▇▇▇▇▇▇
Hastings Note," and together with the M&T Note, the "Mortgage Loans"), remain
subject to the prepayment premium or prepayment penalty set forth in Section
of the M&T Note or Section of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Note (the "Pre-
-- ----
Payment Premiums"), the quarterly Distribution payable on each Series C
Preferred Unit shall be reduced to ($15.625) (the "Reduced Rate"); provided,
however (i) that the Reduced Rate shall only apply to such Preferred Units,
having an aggregate stated value of $44,667,000 or less, as may be designated
in writing by (▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇) on behalf of the holders of the Preferred
Units, and the Reduced Rate shall not be applicable to any other Preferred
Units, and (ii) in no event shall the Reduced Rate be applicable, or the
provisions of this Section 2(b) be effective, subsequent to April 1, 2007.
If there shall be less than an aggregate of $44,667,000 in stated value of
Preferred Units outstanding while any Pre-Payment Premiums remain payable (or
while any Pre-Payment Premiums are treated as continuing as provided in this
Section 2(b) after having been paid by the Company) the Reduced Rate shall be
further reduced so as to result in an annual aggregate reduction in
Distributions in respect of Preferred Units of $335,000 per annum (or a
proportionately lesser amount, as described below, if only one of the
Mortgage Loans remains outstanding and subject to a Prepayment Premium) from
the annual aggregate distributions that would otherwise have been payable
pursuant to Section 2(a) hereof. If the Mortgage Loans mature or may be
repaid prior to their maturity without the incurrence of any Pre-Payment
Premium, or if the holder of any Preferred Units deposits with the Company an
amount of cash equal to the then current Pre-Payment Premium with the Company
upon five (5) days notice by such holder to the Company of such holder's
intention to deposit such amount, then thereafter the Distribution payable in
respect of Preferred Units shall be as provided in Section 2(a) herein. If
the Company repays one or both of the Mortgage Loans and, in connection
therewith, incurs a Pre-Payment Premium, the reduced Distribution payable
with respect to the Preferred Units provided for in this Section 2(b) shall
continue in effect as if the Mortgage Loans remained outstanding subject to
the Pre-Payment Premiums until such time as such repaid Mortgage Loans would
have matured (in accordance with their terms as in effect on the date hereof)
or could have been repaid without the incurrence of Pre-Payment Premiums, or
until such time as a holder of Preferred Units deposits an amount of cash
with the Company equal to the Pre-Payment Premiums that would have existed at
the time of such deposit had one or both (as the case may be) of the Mortgage
Loans not been repaid by the Company. If one of the Mortgage Loans matures
or may be prepaid prior to maturity without the incurrence of a Pre-Payment
Premium or a holder of Preferred Units has deposited with the Company in cash
an amount equal to the Pre-Payment Premium in respect of one of the Mortgage
Loans, and the other Mortgage Loan remains outstanding and subject to a Pre-
Payment Premium, the reduction in the Distribution provided for in this
Section 2(b) shall be reduced by (x) $145,000 in the event the M&T Note
matures or may be prepaid prior to maturity without the incurrence of a Pre-
Payment Premium or a holder of Preferred Units has deposited with the Company
in cash an amount equal to the Pre-Payment Premium in respect of such Note or
(y) $190,000 in the event the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Note matures or may be prepaid
prior to maturity without the incurrence of a Pre-Payment Premium or a holder
of Preferred Units has deposited with the Company in cash an amount equal
to the Pre-Payment Premium in respect of such Note. Any reduction made in
accordance with the prior sentence shall be promptly confirmed in a written
notice given by the Company to each holder of Series C Preferred Units that
are subject to the reduction in Distribution provided for in this Section
2(b).
(c) Adjustment of Distribution Amount due to Changes in Dividends
on Common Stock. Commencing two years subsequent to the date hereof, the
Distribution set forth in Section 2(a)(i), as such Distribution may be
reduced pursuant to Section 2(b), shall be increased or decreased by an
amount equal to (i) the Distribution Amount immediately prior to such
increase or decrease, multiplied by (ii) that percentage which is equal to
50% of the percentage increase or decrease, as the case may be, in the dollar
amount of the regular quarterly dividend on the common stock of RA, par value
$0.01 ("RA Common Stock"), subject to a maximum increase as a result of the
provisions of this Section 2(c), for any one fiscal year of the Company, of
5% of the Distribution for the Series C Preferred Units for the immediately
preceding fiscal year of the Company. Subsequent to any such fiscal year,
any increase that would have been made to the Distribution in such fiscal
year but was not made due to the foregoing 5% limit, shall be made up to an
amount that does not exceed a 5% increase over the Distribution on the Series
C Preferred Units during the immediately preceding fiscal year of the
Company. In each year thereafter, the excess, if any, over the preceding
year's 5% limit shall be carried forward and increase the then current
Distribution, but in no event shall any such increase exceed a 5% increase
during any one year period. In no event shall the distribution be decreased
as a result of this Section 2(c) to less than the Distribution provided for
in Section 2(a) or, if such Distribution has been reduced pursuant to the
terms of Section 2(b), to less than such reduced Distribution.
(d) For purposes of this Supplement, "Business Day" shall mean any
day, excluding Saturday, Sunday and any other day on which commercial banks
in New York are authorized or required by law to close.
3. LIQUIDATION. The Series C Preferred Units shall be preferred
as to assets over any class of Common Units and over any other class of
preferred units of the Company, other than the Series B Preferred Units and
any other Qualifying Preferred Units, such that in the event of the voluntary
or involuntary liquidation, dissolution or winding up of the Company, the
holders of the Series C Preferred Units shall be entitled to have set apart
for them, or to be paid out of the assets of the Company, before any
distribution is made to or set apart for the holders of the common units or
any other series of preferred units or any other capital interest heretofore
or hereafter issued, other than the Series B Preferred Units and any other
Qualifying Preferred Units and any other class or series of preferred units,
the authorization, creation and issuance of which shall have been approved by
the requisite percentage of outstanding Series C Preferred Units, as provided
in Section 7(a)(ii) hereof, an amount in cash equal to the Stated Value per
unit plus any "Accrued Distributions" (as defined below) as of such date of
payment. "Accrued Distributions" shall mean, as of any date of
determination, an amount equal to the amount of Distributions, determined at
the rate fixed for the payment of Distributions on the Series C Preferred
Units on such date as provided in Section 2 hereof, which would be paid on
the Series C Preferred Units for the period of time elapsed from the most
recent actual Distribution Payment Date to the date of determination
(including any amounts cumulating from prior Distribution periods in
accordance with Section 2(a) hereof and any amounts carried forward from
prior Distribution periods in accordance with Section 2(c) hereof). If the
assets or surplus funds to be distributed to the holders of the Series C
Preferred Units are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally
available for distribution shall be distributed ratably among the holders of
the Series C Preferred Units, the Series B Preferred Units and any other
Qualifying Preferred Units in proportion to the full preferential amount each
such holder is otherwise entitled to receive.
4. CONVERSION OR EXCHANGE OF Series C PREFERRED UNITS.
The holders of Series C Preferred Units shall have the
following conversion and exchange rights:
(i) Right to Convert or Exchange. Each Series C Preferred
Unit, at the option of the holder as set forth below, shall be (a)
convertible at any time and at the Conversion Price set forth below, into
common units of limited partnership interests of the Company ("Common Units")
and (b) exchangeable at any time for shares of preferred stock of RA ("RA
Preferred Stock") (subject to the Company's right to redeem Series C
Preferred Units presented for conversion into RA Preferred Stock for cash as
set forth below).
(ii) Mechanics of Conversion or Exchange. Each holder of
Series C Preferred Units who desires to convert the same into Common Units or
to exchange the same for RA Preferred Stock shall provide notice to the
Company in the form of the Notice of Conversion or Exchange attached as
Schedule B hereto (a "Conversion Notice") via telecopy, hand delivery or
other mail or messenger service. The original Conversion Notice and the
certificate or certificates representing the Series C Preferred Units for
which conversion is elected (the "Original Certificate") shall be delivered
to the Company by nationally recognized courier, duly endorsed. The date
upon which a Conversion Notice is initially received by the Company shall be
a "Notice Date."
The Company shall issue and deliver within fourteen (14) Business
Days after the Notice Date, to such holder of Series C Preferred Units at the
address of the holder on the books of the Company, (i) a certificate or
certificates for the number of Common Units or RA Preferred Stock (as the
case may be) to which the holder shall be entitled as set forth herein, and
(ii) if the Series C Preferred Units represented by the Original Certificate
have been converted only in part, a new certificate evidencing the Series C
Preferred Units not subject to the conversion or exchange; provided that the
Original Certificate representing the Series C Preferred Units to be
converted is received by the transfer agent or the Company within three
Business Days after the Notice Date and the person or persons entitled to
receive the Common Units or RA Preferred Stock (as the case may be) issuable
upon such conversion or exchange shall be treated for all purposes as the
record holder or holders of such shares of Common Units on such date such
Original Certificate is received (the "Conversion Date"). If the Original
Certificate representing the Series C Preferred Units to be converted or
exchanged is not received by the transfer agent or the Company within three
Business Days after the Notice Date, the Conversion Notice shall become null
and void.
(iii) Conversion into Common Units. Each Series C Preferred
Unit shall be convertible into a number of Common Units or fraction of Common
Units (such number or fraction, as the case may be, being referred to
hereinafter as the "Preferred Conversion Factor") determined in accordance
with the following formula as of the relevant Conversion Date:
Redemption Price
Preferred Conversion Factor = ----------------
Conversion Price
where
Redemption Price = For each Series C Preferred Unit for
which conversion is elected, such
Series C Preferred Unit's Stated
Value, plus any Accrued
Distributions; and
Conversion Price = $
--------------------
(iv) Adjustment to Preferred Conversion Factor. The
-----------------------------------------
Preferred Conversion Factor shall be initially, and shall be subject
--------
to adjustment from time to time hereafter as follows:
(a) In case the Company shall, at any time or from time to time
prior to conversion of all Series C Preferred Units, (A) pay a dividend or
make a distribution on the outstanding Common Units, in Common Units, (B)
split or subdivide the outstanding Common Units into a larger number of
Common Units, (C) effect a reverse unit split or otherwise combine the
outstanding Common Units into a smaller number of Common Units or (D) issue
by reclassification of the Common Units any units of partnership interest in
the Company, then, and in each such case, the Preferred Conversion Factor in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted so that the holder of any Series C Preferred
Units thereafter surrendered for conversion shall be entitled to receive the
number of Common Units or other securities of the Company which such holder
would have owned or have been entitled to receive after the happening of any
of the events described above, had such Series C Preferred Units been
surrendered for conversion immediately prior to the happening of such event
or the record date therefor, whichever is earlier. An adjustment made
pursuant to this Section 4(iv)(a) shall become effective (x) in the case of
any such dividend or distribution, immediately after the close of business on
the record date for the determination of holders of Common Units entitled to
receive such dividend or distribution, or (y) in the case of any such
subdivision, reclassification, reverse unit split or combination, at the
close of business on the day upon which such Company action becomes
effective.
(b) In case the Company shall, at any time or from time to time
prior to conversion of all Series C Preferred Units, declare, order, pay or
make a dividend or other distribution (including, without limitation, any
distribution of units or other securities or property or rights or warrants
to subscribe for securities of the Company entitling holders thereof to
subscribe for or purchase such securities at a price per share less than the
fair market value of such securities, by way of dividend or spinoff), on its
Common Units, other than (A) regular and customary quarterly distributions by
the Company of Available Cash, or (B) dividends or distributions of Common
Units which are referred to in Section 4(iv)(a) hereof, then, and in each
such case, the Preferred Conversion Factor shall be adjusted so that the
holder of each Series C Preferred Unit shall be entitled to receive, upon the
conversion thereof, the number of Common Units determined by multiplying (1)
the applicable Preferred Conversion Factor on the day immediately prior to
the record date fixed for the determination of Common Unit holders entitled
to receive such dividend or distribution by (2) a fraction, the numerator of
which shall be the Deemed Market Price (as hereinafter defined) of a Common
Unit on such record date, and the denominator of which shall be such Deemed
Market Price per Common Unit less the fair market value (as determined in
good faith by the Board of Directors of the General Partner) of such dividend
or distribution allocable to one Common Unit. An adjustment made pursuant to
this Section 4 (iv) (b) shall be made upon the opening of business on the
next Business Day following the date on which any such dividend or
distribution is made and shall be effective retroactively immediately after
the close of business on the record date fixed for the determination of
Common Unit holders entitled to receive such dividend or distribution. For
purposes of this Section 4(iv), "Deemed Market Price" shall mean, as of any
date, (a) the "daily market value" of a REIT Share determined in the manner
provided in the definition of "Value", as of such date, multiplied by (b) the
Conversion Factor (as such term is defined in Article 1 of the Partnership
Agreement) in effect as of such date.
(c) In case the Company shall, at any time or from time to time
prior to conversion of all Series C Preferred Units, issue Common Units to
then existing Holders of Common Units (or securities convertible into or
exchangeable for Common Units, whether or not the rights to convert or
exchange such securities are then exercisable) at a price per Common Unit (or
having a conversion price per Common Unit, as applicable) less than the then
current market value of RA Common Stock, as of the date of issuance of such
Common Units or of such convertible securities, as the case may be, then, and
in each such case, the Preferred Conversion Factor shall be adjusted so that
the holder of each Series C Preferred Unit shall be entitled to receive, upon
conversion thereof, the number of Common Units determined by multiplying (A)
the Preferred Conversion Factor on the day immediately prior to such date by
(B) a fraction, the numerator of which shall be the sum of (1) the number of
Common Units outstanding on such date and (2) the number of additional Common
Units issued (or into which the convertible securities may convert), and the
denominator of which shall be the sum of (x) the number of Common Units
outstanding on such date and (y) the number of Common Units which the
aggregate consideration receivable by the Company for the total number of
Common Units so issued (or into which the convertible securities may convert)
would purchase at the then fair market value of the RA Common Stock on such
date. Any adjustment made pursuant to this Section 4(iv)(c) shall be made
and become effective on the next Business Day following the date on which
any such issuance is made and shall be effective retroactively immediately
after the close of business on such date. For purposes of this Section
4(iv)(c):
(I) if the Company shall issue Common Units for consideration
other than cash, the price per Common Unit at which such Common
Units are issued shall be deemed to be the fair market value (as
determined in good faith by the Board of Directors of the General
Partner) of the portion of such non-cash consideration allocable to
one Common Unit; and
(II) the aggregate consideration receivable by the Company in
connection with the issuance of Common Units or of securities
convertible into Common Units shall be deemed to be equal to the
sum of the aggregate offering price (before deduction of
underwriting discounts or commissions and expenses payable to third
parties) of all such securities plus the minimum aggregate amount,
if any, payable upon conversion of any such convertible securities
into Common Units.
(d) In case the Company shall, at any time or from time to time
prior to conversion of all Series C Preferred Units, make a tender offer or
exchange offer for Common Units at a price per Common Unit greater than the
Adjusted Conversion Price (as hereinafter defined) as of the date of such
repurchase (the number of Common Units so repurchased, multiplied by the
amount by which such price per Common Unit exceeds the Adjusted Conversion
Price, being referred to in this Section 4(iv)(c) as the "Excess Amount"),
then, and in each such case, the Preferred Conversion factor shall be
adjusted, in accordance with the applicable provisions of Sections 4(iv)(a)
and 4(iv)(b) above, as if, in lieu of such repurchase, the Company had (x)
made a distribution of property having a fair market value (as determined in
good faith by the Board of Directors of the General Partner) equal to the
Excess Amount, with such distribution made to holders of Common Units
(including holders of Common Units so repurchased) on the date of such
repurchase, and (y) effected a reverse split of the Common Units in the
proportion required to reduce the number of Common Units outstanding by the
number of Common Units repurchased by the Company in such repurchase. As
used herein, "Adjusted Conversion Price" shall mean, as of any date, a price
per Common Unit equal to the quotient obtained by dividing $1,000 by the
Preferred Conversion Ratio as of such date.
(e) For purposes of this Section 4(iv), the number of Common Units
at any time outstanding shall not include any Common Units then owned or held
by or for the account of the Company.
(f) In case of any capital reorganization, recapitalization or
reclassification of outstanding Common Units (other than a recapitalization
or reclassification covered by Section 4(iv)(a) hereof), or in case of any
consolidation or merger of the Company with or into another entity, or in
case of any sale or conveyance to another entity of the property of the
Company as an entirety or substantially as an entirety (each of the foregoing
being referred to as a "Transaction"), each Series C Preferred Unit then
outstanding shall thereafter be convertible into, in lieu of the Common Units
issuable upon such conversion prior to consummation of such Transaction, the
kind and amount of units of partnership interest and other securities and
property (including cash) receivable upon the consummation of such
Transaction by a holder of that number of Common Units into which one Series
C Preferred Unit was convertible immediately prior to such Transaction
(including, on a pro rata basis, the cash, securities or property received by
--- ----
holders of Common Units in any tender or exchange offer that is a step in
such Transaction). In any such case, if necessary, appropriate adjustment
(as reasonably determined by the Board of Directors of the General Partner)
shall be made in the application of the provisions set forth in this Section
4 with respect to rights and interests thereafter of the holders of Series C
Preferred Units, to the end that the provisions set forth herein for the
protection of the conversion rights of the Series C Preferred Units shall
thereafter be applicable, as nearly as possible, to any such other units and
other securities and property deliverable upon conversion of the Series C
Preferred Units remaining outstanding (with such adjustments in the
conversion price and number of units issuable upon conversion and such other
adjustments in the provisions hereof as the Board of Directors of the General
Partner shall reasonably determine to be appropriate). In case securities or
property other than Common Units shall be issuable or deliverable upon
conversion as aforesaid, then all references in this Section 4(iv)(d) shall
be deemed to apply, so far as appropriate and as nearly as possible, to such
other securities or property.
(g) Notwithstanding anything contained herein to the contrary, the
Company will not effect any Transaction unless, prior to the consummation
thereof, the entity which will be the surviving entity as a result of such
Transaction (the "Surviving Entity") shall assume, by written instrument
mailed to each holder of Series C Preferred Units, the obligation to deliver
to such holder all cash, Surviving Entity common units or other securities to
which, in accordance with the foregoing provisions, such holder is entitled.
(h) If any adjustment under this Section 4(iv) would create a
fractional Common Unit or a right to acquire a fractional Common Unit, such
fractional Common Units shall be issued by the Company.
(v) Exchange for RA Preferred Stock. Each Series C
Preferred Unit shall be exchangeable, at the option of the holder of such
Series C Preferred Unit, for shares of RA Preferred Stock with a stated value
equal to the stated value of the Series C Preferred Units and otherwise with
the same terms as the Series C Preferred Units other than the conversion and
exchange rights provided for in this Section 4, provided that the Company
may, in respect of any Conversion Notice regarding such an exchange, elect to
redeem all of the Series C Preferred Units that are the subject of such
Conversion Notice for cash in an amount equal to the stated value of such
Series C Preferred Units plus any accrued distributions thereon.
(vi) Reservation of Common Units/Preferred Stock Issuable
Upon Conversion or Exchange. The Company shall at all times reserve and keep
available out of its authorized but unissued Common Units, and RA shall at
all times reserve and keep available out of its authorized but unissued
shares of RA Preferred Stock, solely for the purpose of effecting the
conversion or exchange of the Series C Preferred Units, such number of Common
Units as shall from time to time be sufficient to effect the conversion or
exchange of all then outstanding Series C Preferred Units; and if at any time
the number of authorized but unissued Common Units or RA Preferred Stock
shall not be sufficient to effect the conversion or exchange of all then
outstanding Series C Preferred Units, the Company and/or RA (as the case may
be) will take such action as may be necessary to increase its authorized but
unissued Common Units and/or RA Preferred Stock to such number of units or
shares as shall be sufficient for such purpose.
(vii) No Impairment. The Company will not, by amendment of
-------------
the Partnership Agreement or this Supplement or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, and will at all times in good faith assist in the
carrying out of all of the provisions of this Section 4 and in the taking of
all such action as may be necessary or appropriate in order to protect the
conversion rights of the Series C Preferred Units hereunder against
impairment. Without limiting the generality of the foregoing, if any event
occurs as to which the foregoing provisions of this Section 4 are not
strictly applicable or, if strictly applicable, would not, in the good faith
judgment of the Board of Directors of the General Partner, fairly protect the
conversion rights of the Series C Preferred Units in accordance with the
essential intent and principles of such provisions, the Company shall make
such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in
the good faith opinion of the Board of Directors of the General Partner, to
protect such conversion rights as aforesaid.
5. STATUS OF CONVERTED UNITS. In the event any Series C Preferred
Units shall be converted or exchanged as contemplated by this Supplement, the
units so converted or exchanged shall be canceled, and shall not be issuable
by the Company as Series C Preferred Units.
6. DISTRIBUTIONS ON CONVERTED OR EXCHANGED UNITS. The initial
distribution to be made with respect to Common Units or RA Preferred Stock
received pursuant to the conversion or exchange of Series C Preferred Units
shall be prorated based upon the number of days during the quarter that such
Common Units or shares of RA Preferred Stock were outstanding.
7. VOTING RIGHTS. (a) Except as otherwise specifically provided
by the Revised Uniform Limited Partnership Act of the State of Delaware or as
otherwise provided herein, the holders of Series C Preferred Units shall be
entitled to vote on any matters required or permitted to be submitted to the
holders of Common Units for their approval, and such holders of Series C
Preferred Units, Series B Preferred Units and holders of Common Units shall
vote as a single class with the holders of Series C Preferred Units having a
number of votes equal to the number of Series C Preferred Units then
outstanding multiplied by the Preferred Conversion Ratio in effect as of the
date of such vote.
(b) In addition to, and not in limitation of, the provisions
of Section 7(a) above (and notwithstanding anything appearing to the contrary
in the Partnership Agreement), the Company shall not, without the affirmative
consent of the holders of at least sixty-six and two-thirds percent (66-2/3%)
of the then outstanding Series C Preferred Units:
(i) increase (other than in respect of conversions of
Series B Preferred Units) or decrease (other than by conversion or exchange)
the total number of authorized units of Series C Preferred Units;
(ii) in any manner authorize, create or issue any
additional preferred units or any class or series of capital interests, in
either case (A) ranking, either as to payment of distributions or
distribution of assets, prior to the Series C Preferred Units or (B) which in
any manner adversely affects the holders of Series C Preferred Units;
(iii) in any manner alter, change, modify, amend or
supplement the designations or the powers, preferences or rights (including,
without limitation, conversion and exchange rights), or the qualifications,
limitations or restrictions of the Series C Preferred Units or any other
terms or provisions of this Supplement or otherwise take any action in
contravention of the rights of the holders of Series C Preferred Units as set
forth in this Supplement; and
(iv) reclassify the Common Units or any other units of
any class or series of capital interests hereafter created junior to the
Series C Preferred Units into units or other interests of any class or series
(A) ranking, either as to payment of distributions or distribution of assets
prior to the Series C Preferred Units, or (B) which in any manner adversely
affects the holders of Series C Preferred Units.
8. NOTICE OF CERTAIN EVENTS. If at any time, to the extent
permitted hereunder, the Company and/or RA proposes:
(a) to pay any distribution or dividend payable in securities
(of any class or classes) or any obligations, stock or units
convertible into or exchangeable for Common Units or the RA Common
Stock upon either of their capital securities, including, without
limitation (i) Common Units or RA Common Stock or (ii) a cash
distribution other than its customary quarterly cash distribution
(collectively, an "Extraordinary Distribution");
(b) to grant to the holders of its Common Units or Common
Stock generally any rights or warrants (excluding any warrants or
other rights granted to any employee, director, officer, contractor
or consultant of the Company or RA pursuant to any plan approved by
the general partner of the Company or the Board of Directors of the
RA) (a "Rights Distribution");
(c) to effect any capital reorganization or reclassification
of capital securities of the Company or RA;
(d) to consolidate with, or merge into, any other company or
to transfer its property as an entirety or substantially as an
entirety; or
(e) to take any other action, or to consummate any other
transaction, which could result in an adjustment of the Preferred
Conversion Factor pursuant to Section 4(iv) hereof; or
(f) to effect the liquidation, dissolution or winding up of
the Company or RA,
then, in any one or more of the foregoing cases, the Company shall give, by
certified or registered mail, postage prepaid, addressed to the holders of
Series C Preferred Units at the address of such holders as shown on the
record books of the Company, (i) at least thirty (30) days' prior written
notice of the date on which the books of the Company shall close or of a
record date fixed for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at least
thirty (30) days prior written notice of the date when the same shall take
place, and (iii) in the case of any other action or transaction that could
result in an adjustment of the Preferred Conversion Ration, at least 30 days'
prior written notice of the date when such adjustment shall first become
effective. Any notice given in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or option
rights, the date on which the holders of any class of capital securities
shall be entitled thereto.
9. RANK AND LIMITATIONS OF PREFERRED UNITS. All Series C
Preferred Units shall rank equally with each other unit of Series C Preferred
Units and shall be identical in all respects.
10. PARTNERSHIP AGREEMENT. (i) The term "transfer" as used as
Article 11 of the Partnership Agreement shall not include (a) any conversion
of Series C Preferred Units into Common Units or (b) any exchange of Series C
Preferred Units for RA Preferred Stock.
(ii) For purposes of Article 11 of the Partnership
Agreement, RA (and any successor general partner under the Partnership
Agreement) shall hereby be deemed to have consented to the pledge of Series C
Preferred Units by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (or any related party) and to any
related subsequent transfer of Series C Preferred Units to the pledgee in
connection with a foreclosure on such Units or an assignment-in-lieu of
foreclosure on such pledge.
11. COVENANT OF THE COMPANY AND RA. So long as any Series C
Preferred Units are outstanding, the Company and RA agree to (i) (a) maintain
the one-to-one equivalence of a share of Common Stock and a Common Unit or
(b) maintain the provisions set forth in the Partnership Agreement as of the
date hereof regarding adjustments to the Conversion Factor (as such term is
defined in the Partnership Agreement) and (ii) not issue any capital stock or
other capital interest which would cause any capital interest in the
Partnership to be senior to the Series C Preferred Units in respect of
payment of distributions or distribution of assets, except as set forth in
Section 7(b)(ii) herein.
IN WITNESS WHEREOF, the parties hereto have executed this Supplement to
the Partnership Agreement as of the day of , 1998.
-- -------------
GENERAL PARTNER
RECKSON ASSOCIATES REALTY CORP.
By:
---------------------------------
Name:
Title:
EXISTING LIMITED PARTNERS
By: Reckson Associates Realty Corp.
as Attorney-in-Fact for the Limited Partners
By:
---------------------------------
Name:
Title:
SERIES C PREFERRED UNIT HOLDERS
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Schedule A
Name and Address Number of Series C Preferred Units (stated value $1,000)
---------------- --------------------------------------------------------
SCHEDULE B
NOTICE OF CONVERSION OR EXCHANGE
The undersigned holder of Series C Preferred Units hereby irrevocably
requests Reckson Operating Partnership, L.P., a Delaware limited partnership
(the "Partnership") to (check one):
/ / convert into common units of limited partnership interest of the
Partnership; or
/ / exchange for shares of Preferred Stock of Reckson Associates Realty
Corp. ("RA")
Series C Preferred Units in accordance with the terms of the
---------------
Amended and Restated Agreement of Limited Partnership of the Partnership and
the Supplement thereto establishing the Series C Preferred Units; and the
undersigned irrevocably (i) surrenders such units and all right, title and
interest therein; and (ii) directs that the common units of the
Partnership/preferred stock of RA or, in lieu thereof in respect of an
exchange for shares of Preferred Stock of RA, cash, deliverable in accordance
with this Notice be delivered to the address specified below, and in the
name(s) and at the address(es) specified below. The undersigned hereby
represents, warrants, and certifies that the undersigned (a) has good and
unencumbered title to the Series C Preferred Units that are the subject of
this Notice, free and clear of the rights or interests of any other person or
entity; (b) has the full right, power, and authority to request the
conversion or exchange requested herein; and (c) has obtained the consent or
approval of all person or entities, if any, having the right to consent or
approve such conversion or exchange of units.
Dated:
----------
Name:
---------------------------------
(Please Print)
---------------------------------
(Signature)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (Zip Code)
If applicable, common units/preferred stock is to be issued to:
Name:
--------------------
Please indicate social security number:
--------------------
B&W Draft 3/31/98
Exhibit D-2: Partnership Amendment
SUPPLEMENT TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
RECKSON OPERATING PARTNERSHIP, L.P.
ESTABLISHING
SERIES B PREFERRED UNITS
OF
LIMITED PARTNERSHIP INTEREST
In accordance with Sections 4.2 and 14.1 B(3) of the Amended and
Restated Agreement of Limited Partnership, dated as of June 2, 1995, as
amended on December 6, 1995 (the "Partnership Agreement"), the Partnership
Agreement is hereby supplemented to establish a series of preferred
--------
units of limited partnership interest of Reckson Operating Partnership, L.P.
(the "Company") which shall be designated "Series B Preferred Units" having
the rights, preferences, powers, privileges and restrictions, qualifications
and limitations granted to or imposed upon the Series B Preferred Units
(referred to hereinafter sometimes as the "Designations") as set forth below
and which shall be issued onto the parties and in the amounts set forth on
Schedule A hereto. The Company may issue the Series C Preferred Units
pursuant to the Supplement to the Amended and Restated Agreement of Limited
Partnership Establishing Series C Preferred Units of Limited Partnership
Interest of even date herewith ("Series C Preferred Units," and together with
the Series B Preferred Units, the "Preferred Units") and, subject to the
limitations set forth below, other additional series of Preferred Units whose
rights, preferences, powers, privileges and restrictions, qualifications and
limitations regarding Distributions (as hereinafter defined) and/or
liquidation that are either subordinate to, or pari passu with, the
Designations of the Series B Preferred Units. Capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Partnership
Agreement.
1. STATED VALUE. The stated value of the Series B Preferred
Units shall be one thousand dollars ($1,000.00) per unit (the "Stated
Value").
2. DISTRIBUTIONS.
(a) Subject to Section 2(b) below, commencing from the date of
initial issuance of Series B Preferred Units (the "Date of Issuance"),
distributions (the "Distributions") on each Series B Preferred Unit shall be
payable in arrears quarterly, in an amount equal to the greater of: (i)
$(17.50) (as such amount may be adjusted pursuant to Section 2(c) hereof) or
(ii) the quarterly distribution attributable to each Series B Preferred Unit
if such unit had been converted into Common Units (as hereinafter defined),
pursuant to Section 4 hereof, except that the Preferred Conversion Factor to
be utilized for this purpose shall be $ (subject to adjustment as
--------
provided in Section 4(iv) hereof) in lieu of the Preferred Conversion Factor
set forth in Section 4; provided, however, that the Distribution to be made
on Series B Preferred Units to any holder thereof on the Distribution Payment
Date (as defined below) immediately following the Date of Issuance shall be
made on a pro rata basis based upon the number of days during that calendar
quarter preceding that initial Distribution Payment Date that Series B
Preferred Units were held by such holder. The Distributions shall be
declared and payable whenever distributions on the Common Units are declared
and paid but no less frequently than once every three months (a "Distribution
Payment Date"). If on any Distribution Payment Date the Company shall not be
permitted under Delaware law to pay all or a portion of any such declared
Distributions, the Company shall take such action as may be lawfully
permitted in order to enable the Company to the extent permitted by
Delaware law, lawfully to pay such Distributions. Distributions shall be
cumulative from the Date of Issuance, whether or not in any Distribution
period such Distribution shall be declared or there shall be funds of the
Company legally available for payment of such Distributions. No
Distributions shall be declared or paid on any class of Common Units or any
other class or series of Preferred Units, other than Distributions declared
and paid on the Series C Preferred Units and, subject to the limitations set
forth in Section 7(b)(ii), any other series of Preferred Units which, by the
terms of such series are pari passu with the Series B Preferred Units with
respect to payment of distributions and distribution of assets upon
liquidation (such Preferred Units hereinafter referred to as "Qualifying
Preferred Units"), until all Distributions, if any, due and legally payable
on the Series B Preferred Units have been paid to the holders of such units.
The record date for the payment of Distributions on the Series B Preferred
Units on any Distribution Payment Date shall be the day immediately prior to
such Distribution Payment Date.
(b) Reduction of Distribution Amount Due to Pre-Payment Premiums.
Notwithstanding the provisions of Section 2(a), during any period that those
certain mortgage loans between ▇▇▇▇▇▇▇▇ Associates II and M&T Real Estate,
Inc., dated March 27, 1997 (the "M&T Note"), and between ▇▇▇▇▇▇▇▇ Associates
VI and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Capital Corp., dated December 19, 1995 (the "▇▇▇▇▇▇▇
Hastings Note," and together with the M&T Note, the "Mortgage Loans"), remain
subject to the prepayment premium or prepayment penalty set forth in Section
of the M&T Note or Section of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Note (the "Pre-Payment
Premiums")), the quarterly Distribution payable on each Series B Preferred
Unit shall be reduced to ($15.625) (the "Reduced Rate"); provided, however,
(i) that the Reduced Rate shall only apply to such Preferred Units, having an
aggregate stated value of $44,667,000 or less, as may be designated in
writing by (▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇) on behalf of the holders of the Preferred
Units, and the Reduced Rate shall not be applicable to any other Preferred
Units, and (ii) in no event shall the Reduced Rate be applicable, or the
provisions of this Section 2(b) be effective, subsequent to April 1, 2007.
If there shall be less than an aggregate of $44,667,000 in stated value of
Preferred Units outstanding while any Pre-Payment Premiums remain payable (or
while any Pre-Payment Premiums are treated as continuing as provided in this
Section 2(b) after having been paid by the Company) the Reduced Rate shall be
further reduced so as to result in an annual aggregate reduction in
Distributions in respect of Preferred Units of $335,000 per annum (or
proportionately lesser amount, as described below, if only one of the
Mortgage Loans remains outstanding and subject to a Prepayment Premium) from
the annual aggregate distributions that would otherwise have been payable
pursuant to Section 2(a) hereof. If the Mortgage Loans mature or may be
repaid prior to their maturity without the incurrence of any Pre-Payment
Premium, or if the holder of any Preferred Units deposits with the Company in
cash an amount equal to the then current Pre-Payment Premium with the Company
upon five (5) days notice by such holder to the Company of such holder's
intention to deposit such amount, then thereafter the Distribution payable in
respect of Preferred Units shall be as provided in Section 2(a) herein. If
the Company repays one or both of the Mortgage Loans and, in connection
therewith, incurs a Pre-Payment Premium, the reduced Distribution payable
with respect to the Preferred Units provided for in this Section 2(b) shall
continue in effect as if the Mortgage Loans remained outstanding subject to
the Pre-Payment Premiums until such time as such repaid Mortgage Loans would
have matured (in accordance with their terms as in effect on the date hereof)
or could have been repaid without the incurrence of Pre-Payment Premiums, or
until such time as a holder of Preferred Units deposits an amount of cash
with the Company equal to the Pre-Payment Premiums that would have existed at
the time of such deposit had one or both (as the case may be) of the Mortgage
Loans not been repaid by the Company. If one of the Mortgage Loans matures
or may be prepaid prior to maturity without the incurrence of a Pre-Payment
Premium or a holder of Preferred Units has deposited with the Company in cash
an amount equal to the Pre-Payment Premium in respect of one of the Mortgage
Loans, and the other Mortgage Loan remains outstanding, and subject to a Pre-
Payment Premium, the reduction in the Distribution provided for in this
Section 2(b) shall be reduced by (x) $145,000 in the event the M&T Note
matures or may be prepaid prior to maturity without the incurrence of a Pre-
Payment Premiums or a holder of Preferred Units has deposited with the
Company in cash an amount equal to the Pre-Payment Premium in respect of such
Note or (y) $190,000 in the event the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Note matures or may be
prepaid prior to maturity without the incurrence of a Pre-Payment Premium or
a holder of Preferred Units has deposited with the Company in cash an amount
equal to the Pre-Payment Premium in respect of such Note. Any reduction made
in accordance with the prior sentence shall be promptly confirmed in a
written notice given by the Company to each holder of Series B Preferred
Units that are subject to the reduction of distribution amount pursuant to
this Section 2(b).
(c) Adjustment of Distribution Amount due to Changes in Dividends
on Common Stock. Commencing two years subsequent to the date hereof, the
Distribution set forth in Section 2(a)(i), as such Distribution may be
reduced pursuant to Section 2(b), shall be increased or decreased by an
amount equal to (i) the Distribution amount immediately prior to such
increase or decrease multiplied by (ii) that percentage which is equal to 50%
of the percentage increase or decrease, as the case may be, in the dollar
amount of the regular quarterly dividend on in respect of the common stock of
RA, par value $0.01 ("RA Common Stock"), subject to a maximum increase as a
result of the provisions of this Section 2(c), for any one fiscal year of the
Company, of 5% of the Distribution for the Series B Preferred Units for the
immediately preceding fiscal year of the Company for any one year period.
Subsequent to any such fiscal year, any increase that would have been made to
the Distribution in such fiscal year but was not made due to the foregoing 5%
limit, shall be made up to an amount that does not exceed a 5% increase over
the Distribution paid on the Series B Preferred Units during the immediately
preceding fiscal year of the Company. In each year thereafter, the excess,
if any, over the preceding year's 5% limit shall be carried forward and
increase the then current distribution, but in no event shall any such
increase exceed a 5% increase during any one year period. In no event shall
the Distribution be decreased as a result of this Section 2(c) to less than
the distribution provided for in Section 2(a) or, if such Distribution has
been reduced pursuant to the terms of Section 2(b), to less than such reduced
Distribution.
(d) For purposes of this Supplement, "Business Day" shall mean any
day, excluding Saturday, Sunday and any other day on which commercial banks
in New York are authorized or required by law to close.
3. LIQUIDATION. The Series B Preferred Units shall be preferred
as to assets over any class of Common Units and over any other class of
preferred units of the Company, other than the Series C Preferred Units and
any new Qualifying Preferred Units, such that in the event of the voluntary
or involuntary liquidation, dissolution or winding up of the Company, the
holders of the Series B Preferred Units shall be entitled to have set apart
for them, or to be paid out of the assets of the Company, before any
distribution is made to or set apart for the holders of the common units or
any other series of preferred units or any other capital interest heretofore
or hereafter issued, other than Qualifying Preferred Units and any other
class or series of preferred units, the authorization, creation and issuance
of which shall have been approved by the requisite percentage of outstanding
Series B Preferred Units, as provided in Section 7(a)(ii) hereof, an amount
in cash equal to the Stated Value per unit plus any "Accrued Distributions"
(as defined below) as of such date of payment. "Accrued Distributions" shall
mean, as of any date of determination, an amount equal to the amount of
Distributions, determined at the rate fixed for the payment of Distributions
on the Series B Preferred Units on such date as provided in Section 2 hereof,
which would be paid on the Series B Preferred Units for the period of time
elapsed from the most recent actual Distribution Payment Date to the date of
determination (including any amounts cumulating from prior Distribution
periods in accordance with Section 2(a) hereof and any amounts carried
forward from prior Distribution periods in accordance with Section 2(c)
hereof). If the assets or surplus funds to be distributed to the holders of
the Series B Preferred Units are insufficient to permit the payment to such
holders of their full preferential amount, the assets and surplus funds
legally available for distribution shall be distributed ratably among the
holders of the Series B Preferred Units, the Series C Preferred Units and any
other Qualifying Preferred Units in proportion to the full preferential
amount each such holder is otherwise entitled to receive.
4. CONVERSION OR EXCHANGE OF SERIES B PREFERRED UNITS.
The holders of Series B Preferred Units shall have the
following conversion and exchange rights:
(i) Right to Convert or Exchange. Each Series B Preferred Unit,
at the option of the holder as set forth below, shall be (a) convertible at
any time and at the Conversion Price set forth below, into common units of
limited partnership interests of the Company ("Common Units") and (b)
exchangeable at any time for shares of preferred stock of RA ("RA Preferred
Stock") (subject to the Company's right to redeem Series B Preferred Units
presented for conversion into RA Preferred Stock for cash as set forth below)
or (iii) exchangeable at any time on or prior to the date which is two years
after the date hereof, into units of Series C Preferred Units.
(ii) Mechanics of Conversion or Exchange. Each holder of Series B
Preferred Units who desires to convert the same into Common Units or Series C
Preferred Units or to exchange the same for RA Preferred Stock shall provide
notice to the Company in the form of the Notice of Conversion or Exchange
attached as Schedule B hereto (a "Conversion Notice") via telecopy, hand
delivery or other mail or messenger service. The original Conversion Notice
and the certificate or certificates representing the Series B Preferred Units
for which conversion is elected (the "Original Certificate"), shall be
delivered to the Company by nationally recognized courier, duly endorsed.
The date upon which a Conversion Notice is initially received by the Company
shall be a "Notice Date."
The Company shall issue and deliver within fourteen (14) Business
Days after the Notice Date, to such holder of Series B Preferred Units at the
address of the holder on the books of the Company, (i) a certificate or
certificates for the number of Common Units, Series C Preferred Units or RA
Preferred Stock (as the case may be) to which the holder shall be entitled as
set forth herein, and (ii) if the Series B Preferred Units represented by the
Original Certificate have been converted only in part, a new certificate
evidencing the Series B Preferred Units not subject to the conversion or
exchange; provided that the Original Certificate representing the Series B
Preferred Units to be converted is received by the transfer agent or the
Company within three Business Days after the Notice Date and the person or
persons entitled to receive the Common Units, Series C Preferred Units or RA
Preferred Stock (as the case may be) issuable upon such conversion or
exchange shall be treated for all purposes as the record holder or holders of
such shares or units on such date such Original Certificate is received (the
"Conversion Date"). If the Original Certificate representing the Series B
Preferred Units to be converted or exchanged is not received by the transfer
agent or the Company within three Business Days after the Notice Date, the
Conversion Notice shall become null and void.
(iii) Conversion into Common Units. Each Series B Preferred Unit
shall be convertible into a number of Common Units or fraction of Common
Units (such number or fraction, as the case may be, being referred to
hereinafter as the "Preferred Conversion Factor") determined in accordance
with the following formula as of the relevant Conversion Date:
Redemption Price
Preferred Conversion Factor = ----------------
Conversion Price
where
Redemption Price = For each Series B Preferred Unit for
which conversion is elected, such
Series B Preferred Unit's Stated Value,
plus any Accrued Distributions; and
Conversion Price = $ .
-----------
provided, however, that if the closing price of RA Common Stock (the "Current
Price") on the New York Stock Exchange (or, if not then traded on the New
York Stock Exchange, on the primary market on which RA Common Stock is then
traded, or, if not then traded on a market, then at the average of the
closing bid and asked prices in over the counter trading) on the date a
Conversion Notice is received by the Company (or if not a trading date, then
the next succeeding trading date) is less than or equal to ($ ) (the
"Average Price"), then the Conversion Price shall be equal to the Average
Price; and provided, further, that in no event shall the number of Common
Units (or fraction thereof) into which a Series B Preferred Unit is
convertible be less than that number which, when multiplied by the Current
Price, equals 80% of the Redemption Price.
(iv) Adjustment to Preferred Conversion Factor. The Preferred
-----------------------------------------
Conversion Factor shall be initially, and shall be subject to
-----
adjustment from time to time hereafter as follows:
(a) In case the Company shall, at any time or from time to
time prior to conversion of all Series B Preferred Units, (A) pay a dividend
or make a distribution on the outstanding Common Units, in Common Units, (B)
split or subdivide the outstanding Common Units into a larger number of
Common Units, (C) effect a reverse unit split or otherwise combine the
outstanding Common Units into a smaller number of Common Units or (D) issue
by reclassification of the Common Units any units of partnership interest in
the Company, then, and in each such case, the Preferred Conversion Factor in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted so that the holder of any Series B Preferred
Units thereafter surrendered for conversion shall be entitled to receive the
number of Common Units or other securities of the Company which such holder
would have owned or have been entitled to receive after the happening of any
of the events described above, had such Series B Preferred Units been
surrendered for conversion immediately prior to the happening of such event
or the record date therefor, whichever is earlier. An adjustment made
pursuant to this Section 4(iv)(a) shall become effective (x) in the case of
any such dividend or distribution, immediately after the close of business on
the record date for the determination of holders of Common Units entitled to
receive such dividend or distribution, or (y) in the case of any such
subdivision, reclassification, reverse unit split or combination, at the
close of business on the day upon which such Company action becomes
effective.
(b) In case the Company shall, at any time or from time to
time prior to conversion of all Series B Preferred Units, declare, order, pay
or make a dividend or other distribution (including, without limitation, any
distribution of units or other securities or property or rights or warrants
to subscribe for securities of the Company entitling holders thereof to
subscribe for or purchase such securities at a price per share less than the
fair market value of such securities, by way of dividend or spinoff), on its
Common Units, other than (A) regular and customary quarterly distributions of
Common Units which are referred to in Section 4(iv)(a) hereof, then, and in
each such case, the Preferred Conversion Factor shall be adjusted so that the
holder of each Series B Preferred Unit shall be entitled to receive, upon the
conversion thereof, the number of Common Units determined by multiplying (1)
the applicable Preferred Conversion Factor on the day immediately prior to
the record date fixed for the determination of Common Unit holders entitled
to receive such dividend or distribution by (2) a fraction, the numerator of
which shall be the Deemed Market Price (as hereinafter defined) of a Common
Unit on such record date, and the denominator of which shall be such Deemed
Market Price per Common Unit less the fair market value (as determined in
good faith by the Board of Directors of the General Partner) of such dividend
or distribution allocable to one Common Unit. An adjustment made pursuant to
this Section 4(iv)(b) shall be made upon the opening of business on the next
Business Day following the date on which any such dividend or distribution is
made and shall be effective retroactively immediately after the close of
business ont he record date fixed for the determination of Common Unit
holders entitled to receive such dividend or distribution. For purposes of
this Section 4(iv), "Deemed Market Price" shall mean, as of any date, (a) the
"daily market value" of a REIT Share, determined in the manner provided in
the definition of "Value", as of such date, multiplied by (b) the Conversion
Factor (as such term is defined in Article 1 of the Partnership Agreement) in
effect as of such date.
(c) In case the Company shall, at any time or from time to
time prior to conversion of all Series C Preferred Units, issue Common Units
to then existing Holders of Common Units (or securities convertible into or
exchangeable for Common Units, whether or not the rights to convert or
exchange such securities are then exercisable) at a price per Common Unit (or
having a conversion price per Common Unit, as applicable) less than the then
current market value of RA Common Stock, as of the date of issuance of such
Common Units or of such convertible securities, as the case may be, then, and
in each such case, the Preferred Conversion Factor shall be adjusted so that
the holder of each Series C Preferred Unit shall be entitled to receive, upon
conversion thereof, the number of Common Units determined by multiplying (A)
the Preferred Conversion Factor on the day immediately prior to such date by
(B) a fraction, the numerator of which shall be the sum of (1) the number of
Common Units outstanding on such date and (2) the number of additional Common
Units issued (or into which the convertible securities may convert), and the
denominator of which shall be the sum of (x) the number of Common Units
outstanding on such date and (y) the number of Common Units which the
aggregate consideration receivable by the Company for the total number of
Common Units so issued (or into which the convertible securities may convert)
would purchase at the then fair market value of the RA Common Stock on such
date. Any adjustment made pursuant to this Section 4(iv)(c) shall be made
and become effective on the next Business Day following the date on which any
such issuance is made and shall be effective retroactively immediately after
the close of business on such date. For purposes of this Section 4(iv)(c):
(I) if the Company shall issue Common Units for consideration
other than cash, the price per Common Unit at which such Common
Units are issued shall be deemed to be the fair market value (as
determined in good faith by the Board of Directors of the General
Partner) of the portion of such non-cash consideration allocable to
one Common Unit; and
(II) the aggregate consideration receivable by the Company in
connection with the issuance of Common Units or of securities
convertible into Common Units shall be deemed to be equal to the
sum of the aggregate offering price (before deduction of
underwriting discounts or commissions and expenses payable to third
parties) of all such securities plus the minimum aggregate amount,
if any, payable upon conversion of any such convertible securities
into Common Units.
(d) In case the Company shall, at any time or from time to
time prior to conversion of all Series C Preferred Units, make a tender offer
or exchange offer for Common Units at a price per Common Unit greater than
the Adjusted Conversion Price (as hereinafter defined) as of the date of such
repurchase (the number of Common Units so repurchased, multiplied by the
amount by which such price per Common Unit exceeds the Adjusted Conversion
Price, being referred to in this Section 4(iv)(c) as the "Excess Amount"),
then, and in each such case, the Preferred Conversion factor shall be
adjusted, in accordance with the applicable provisions of Sections 4(iv)(a)
and 4(iv)(b) above, as if, in lieu of such repurchase, the Company had (x)
made a distribution of property having a fair market value (as determined in
good faith by the Board of Directors of the General Partner) equal to the
Excess Amount, with such distribution made to holders of Common Units
(including holders of Common Units so repurchased) on the date of such
repurchase, and (y) effected a reverse split of the Common Units in the
proportion required to reduce the number of Common Units outstanding by the
number of Common Units repurchased by the Company in such repurchase. As
used herein, "Adjusted Conversion Price" shall mean, as of any date, a price
per Common Unit equal to the quotient obtained by dividing $1,000 by the
Preferred Conversion Ratio as of such date.
(e) For purposes of this Section 4(iv), the number of Common
Units at any time outstanding shall not include any Common Units then owned
or held by or for the account of the Company.
(f) In case of any capital reorganization, recapitalization
or reclassification of outstanding Common Units (other than a
recapitalization or reclassification covered by Section 4(iv)(a) hereof), or
in case of any consolidation or merger of the Company with or into another
entity, or in case of any sale or conveyance to another entity of the
property of the Company as an entirety or substantially as an entirety (each
of the foregoing being referred to as a "Transaction"), each Series B
Preferred Unit then outstanding shall thereafter be convertible into, in lieu
of the Common Units issuable upon such conversion prior to consummation of
such Transaction, the kind and amount of units of partnership interest and
other securities and property (including cash) receivable upon the
consummation of such Transaction by a holder of that number of Common Units
into which one Series B Preferred Unit was convertible immediately prior to
such Transaction (including, on a pro rata basis, the cash, securities or
property received by holders of Common Units in any tender or exchange offer
that is a step in such Transactions). In any such case, if necessary,
appropriate adjustment (as reasonably determined by the Board of Directors of
the General Partner) shall be made in the application of the provisions set
forth in this Section 4 with respect to rights and interests thereafter of
the holders of Series B Preferred Units, to the end that the provisions set
forth herein for the protection of the conversion rights of the Series B
Preferred Units shall thereafter be applicable, as nearly as possible, to any
such other units and other securities and property deliverable upon
conversion of the Series B Preferred Units remaining outstanding (with such
adjustments in the conversion price and number of units issuable upon
conversion and such other adjustments in the provisions hereof as the Board
of Directors of the General Partner shall reasonably determine to be
appropriate). In case securities or property other than Common Units shall
be issuable or deliverable upon conversion as aforesaid, then all references
in this Section 4(iv)(d) shall be deemed to apply, so far as appropriate and
as nearly as possible, to such other securities or property.
(g) Notwithstanding anything contained herein to the
contrary, the Company will not effect any Transaction unless, prior to the
consummation thereof, the entity which will be the surviving entity as a
result of such Transaction (the "Surviving Entity") shall assume, by written
instrument mailed to each holder of Series B Preferred Units, the obligation
to deliver to such holder all cash, Surviving Entity common units or other
securities to which, in accordance with the foregoing provisions, such holder
is entitled.
(f) If any adjustment under this Section 4(iv) would create a
fractional Common Unit or a right to acquire a fractional Common Unit, such
fractional Common Units shall be issued by the Company.
(v) Exchange for RA Preferred Stock. Each Series B Preferred
Unit shall be exchangeable, at the option of the holder of such Series B
Preferred Unit, for shares of RA Preferred Stock with a stated value equal to
the stated value of the Series B Preferred Units and otherwise with the same
terms as the Series B Preferred Units other than the conversion and exchange
rights provided for in this Section 4, provided that the Company may, in
respect of any Conversion Notice regarding such an exchange, elect to redeem
all of the Series B Preferred Units that are the subject of such Conversion
Notice for cash in an amount equal to the stated value of such Series B
Preferred Units plus any accrued distributions thereon.
(vi) Conversion into Series C Preferred Units. At any time prior
to the date which is two years from the date hereof, each Series B Preferred
Unit shall be exchangeable for a Series C Preferred Unit with an identical
stated value.
(vii) Reservation of Units/Preferred Stock Issuable Upon
Conversion or Exchange. The Company shall at all times reserve and keep
available out of its authorized but unissued Common Units and Series C
Preferred Units, and RA shall at all times reserve and keep available out of
its authorized but unissued shares of RA Preferred Stock, solely for the
purpose of effecting the conversion or exchange of the Series B Preferred
Units, such number of units or shares as shall from time to time be
sufficient to effect the conversion or exchange of all then outstanding
Series B Preferred Units; and if at any time the number of authorized but
unissued Common Units, Series C Preferred Units or RA Preferred Stock shall
not be sufficient to effect the conversion or exchange of all then
outstanding Series B Preferred Units, the Company and/or RA (as the case may
be) will take such action as may be necessary to increase its authorized but
unissued Common Units, Series C Preferred Units and/or RA Preferred Stock to
such number of units or shares as shall be sufficient for such purpose.
(viii) No Impairment. The Company will not, by amendment of the
-------------
Partnership Agreement or this Supplement or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, and will at all times in good faith assist in the
carrying out of all of the provisions of this Section 4 and in the taking of
all such action as may be necessary or appropriate in order to protect the
conversion rights of the Series B Preferred Units hereunder against
impairment. Without limiting the generality of the foregoing, if any event
occurs as to which the foregoing provisions of this Section are not strictly
applicable or,if strictly applicable, would not, in the good faith judgment
of the Board of Directors of the General Partner, fairly protect the
conversion rights of the Series B Preferred Units in accordance with the
essential intent and principles of such provisions, the Company shall make
such adjustments in the application of such provision, in accordance with
such essential intent and principles, as shall be reasonably necessary, in
the good faith opinion of the Board of Directors of the General Partner, to
protect such conversion rights as aforesaid.
5. STATUS OF CONVERTED UNITS. In the event any Series B Preferred
Units shall be converted or exchanged as contemplated by this Supplement, the
units so converted or exchanged shall be canceled, and shall not be issuable
by the Company as Series B Preferred Units.
6. DISTRIBUTIONS ON CONVERTED OR EXCHANGED UNITS. The initial
distribution to be made with respect to Common Units, Series C Preferred
Units or RA Preferred Stock received pursuant to the conversion or exchange
of Series B Preferred Units shall be prorated based upon the number of days
during the quarter that such Common Units, Series C Preferred Units or shares
of RA Preferred Stock were outstanding.
7. VOTING RIGHTS. (a) Except as otherwise specifically provided
by the Revised Uniform Limited Partnership Act of the State of Delaware or as
otherwise provided herein, the holders of Series B Preferred Units shall be
entitled to vote on any matters required or permitted to be submitted to the
holders of Common Units for their approval, and such holders of Series B
Preferred Units, holders of Series C Preferred Units and holders of Common
Units shall vote as a single class with the holders of Series B Preferred
Units having a number of votes equal to the number of Series B Preferred
Units then outstanding, multiplied by the Preferred Conversion Ratio in
effect as of the date of such vote.
(b) In addition to, and not in limitation of, the provisions of
Section 7(a) above (and notwithstanding anything appearing to the contrary in
the Partnership Agreement), the Company shall not, without the affirmative
consent of the holders of at least sixty-six and two-thirds percent (66-2/3%)
of the then outstanding Series B Preferred Units:
(i) increase or decrease (other than by conversion) the total
number of authorized units of Series B Preferred Units;
(ii) in any manner authorize, create or issue any additional
preferred units or any class or series of capital interests, in either case
(A) ranking, either as to payment of distributions or distribution of assets,
prior to the Series B Preferred Units or (B) which in any manner adversely
affects the holders of Series B Preferred Units;
(iii) in any manner alter, change, modify, amend or supplement
the designations or the powers, preferences or rights (including, without
limitation, conversion rights), or the qualifications, limitations or
restrictions of the Series B Preferred Units or, any other terms or
provisions of this Supplement or otherwise take any action in contravention
of the rights of the holders of Series B Preferred Units as set forth in
this Supplement; and
(iv) reclassify the Common Units or any other units of any
class or series of capital interests hereafter created junior to the Series B
Preferred Units into units or other interests of any class or series of
capital interests (A) ranking, either as to payment of distributions or
distribution of assets prior to the Series B Preferred Units, or (B) which in
any manner adversely affects the holders of Series B Preferred Units.
8. NOTICE OF CERTAIN EVENTS. If at any time, to the extent
permitted hereunder, the Company and/or RA proposes:
(a) to pay any distribution or dividend payable in securities
(of any class or classes) or any obligations, stock or units
convertible into or exchangeable for Common Units, Series C
Preferred Units or RA Common Stock upon either of their capital
securities, including, without limitation, (i) Common Units, Series
C Preferred Units or Common Stock or (ii) a cash distribution other
than its customary quarterly cash distribution (collectively, an
"Extraordinary Distribution");
(b) to grant to the holders of its Common Units, Series C
Preferred Units or Common Stock generally any rights or warrants
(excluding any warrants or other rights granted to any employee,
director, officer, contractor or consultant of the Company or RA
pursuant to any plan approved by the general partner of the Company
or the Board of Directors of the RA) (a "Rights Distribution");
(c) to effect any capital reorganization or reclassification
of capital securities of the Company or RA;
(d) to consolidate with, or merge into, any other company or
to transfer its property as an entirety or substantially as an
entirety; or
(e) to take any other action, or to consummate any other
transaction, which could result in an adjustment of the Preferred
Conversion Factor pursuant to Section 4(iv) hereof; or
(f) to effect the liquidation, dissolution or winding up of
the Company or RA,
then, in any one or more of the foregoing cases, the Company shall give, by
certified or registered mail, postage prepaid, addressed to the holders of
Series B Preferred Units at the address of such holders as shown on the
record books of the Company, (i) at least thirty (30) days' prior written
notice of the date on which the books of the Company shall close or of a
record date fixed for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at least
thirty (30) days prior written notice of the date when the same shall take
place, and (iii) in the case of any other action or transaction that could
result in an adjustment of the Preferred Conversion Ration, at least 30 days'
prior written notice of the date when such adjustment shall first become
effective. Any notice given in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or option
rights, the date on which the holders of any class of capital securities
shall be entitled thereto.
9. RANK AND LIMITATIONS OF PREFERRED UNITS. All Series B
Preferred Units shall rank equally with each other unit of Series B Preferred
Units and shall be identical in all respects.
10. PARTNERSHIP AGREEMENT. (i) The term "transfer" as used in
Article 11 of the Partnership Agreement shall not include (a) any conversion
of Series B Preferred Units into Common Units, (b) any exchange of Series B
Preferred Units for shares of RA Preferred Stock or (c) any conversion of
Series B Preferred Units into Series C Preferred Units.
(ii) For purposes of Article 11 of the Partnership
Agreement, RA (and any successor general partner under the Partnership
Agreement) shall hereby be deemed to have consented to the pledge of Series B
Preferred Units by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (or any related party) and to any
related subsequent transfer of Series B Preferred Units to the respective
pledgee in connection with a foreclosure on such Units or an assignment-in-
lieu of foreclosure on such pledge.
11. COVENANT OF THE COMPANY AND RA. So long as any Series B
Preferred Units are outstanding, the Company and RA agree to (i) (a) maintain
the one-to-one equivalence of a share of Common Stock and a Common Unit or
(b) maintain the provisions set forth in the Partnership Agreement as of the
date hereof regarding adjustments to the Conversion Factor (as such term is
defined in the Partnership Agreement) and (ii) not issue any capital stock or
other capital interest which would cause any capital interest in the
Partnership to be senior to the Series B Preferred Units in respect of
payment of distributions or distribution of assets, except as set forth in
Section 7(b)(ii) herein.
IN WITNESS WHEREOF, the parties hereto have executed this Supplement to
the Partnership Agreement as of the day of , 1998.
-- --------------
GENERAL PARTNER:
RECKSON ASSOCIATES REALTY CORP.
By:
---------------------------------
Name:
Title:
EXISTING LIMITED PARTNERS
By: Reckson Associates Realty Corp.
as Attorney-in-Fact for the
Limited Partners
By:
---------------------------------
Name:
SERIES B PREFERRED UNIT HOLDERS
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Title:
Schedule A
Number of units (stated value $1,000) of
Name and Address Series B Preferred Units
---------------- ----------------------------------------
Schedule B
Notice of Conversion or Exchange
The undersigned holder of Series B Preferred Units hereby irrevocably
requests Reckson Operating Partnership, L.P., a Delaware limited partnership
(the "Partnership") to (check one):
/ / convert into units of Series C Preferred Units of the Partnership;
/ / convert into common units of limited partnership interest of the
Partnership; or
/ / exchange for shares of Preferred Stock of Reckson Associates Realty
Corp. ("RA")
Series B Preferred Units in accordance with the terms of the
---------------
Amended and Restated Agreement of Limited Partnership of the Partnership and
the Supplement thereto establishing the Series B Preferred Units; and the
undersigned irrevocably (i) surrenders such units and all right, title and
interest therein; and (ii) directs that the Series C Preferred Units of the
Partnership/the common units of the Partnership/preferred stock of RA or, in
lieu thereof in respect of an exchange for Shares of Preferred Stock of RA,
cash, deliverable in accordance with this Notice be delivered to the address
specified below, and in the name(s) and at the address(es) specified below.
The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has good and unencumbered title to the Series B Preferred
Units that are the subject of this Notice, free and clear of the rights or
interests of any other person or entity; (b) has the full right, power, and
authority to request the conversion or exchange requested herein; and (c) has
obtained the consent or approval of all person or entities, if any, having
the right to consent or approve such conversion or exchange of units.
Dated:
----------
Name:
---------------------------------
(Please Print)
---------------------------------
(Signature)
---------------------------------
(Street Address)
---------------------------------
(City) (State)(Zip Code)
If applicable, units/preferred stock is to be issued to:
Name:
--------------------
Please indicate social security number:
--------------------
Exhibit E
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of , 1998 by and between RECKSON
---------------------
ASSOCIATES REALTY CORP., a Maryland corporation (the "Company"), and the
holders of Units listed on Schedule A hereto (individually, a "Holder"),
attached hereto.
WHEREAS, on the date hereof, the Holders are receiving units of
limited partnership interest ("Units") in Reckson Operating Partnership, L.P.
(the "Partnership");
WHEREAS, in connection therewith, the Company has agreed to grant
to Holders the Registration Rights (as defined in Section 1 hereof);
WHEREAS, the Partnership and each Holder has entered into a Lock-up
Agreement, dated , 1998 (the "Lock-up Agreement"), pursuant to
------------
which each Holder has agreed not to, among other things, present Units for
redemption during the one year period following the issuance of such Units to
each Holder; and
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, hereby agree as follows:
SECTION 1. REGISTRATION RIGHTS
If Holder receives shares of common stock ("Common Stock") of the
Company upon redemption of Units (the "Redemption Shares") pursuant to the
terms of the agreement of limited partnership of the Partnership, as amended
(the "Partnership Agreement"), Holder shall be entitled to offer for sale
pursuant to a shelf registration statement the Redemption Shares, subject to
the terms and conditions set forth herein (the "Registration Rights").
1.1(a) Registration Procedure. Subject to Sections 1.1(c)
----------------------
and 1.2 hereof, if Holder desires to exercise its Registration Rights with
respect to the Redemption Shares, Holder shall deliver to the Company a
written notice (a "Registration Notice") informing the Company of such
exercise and specifying the number of shares to be offered by Holder (such
shares to be offered being referred to herein as the "Registrable
Securities"). Such notice may be given at any time on or after the date a
notice of redemption is delivered by Holder to the Partnership pursuant to
the Partnership Agreement, but must be given at least ten (10) business days
prior to the consummation of the sale of Registrable Securities. Upon
receipt of the Registration Notice, the Company, if it has not already caused
the Registrable Securities to be included as part of an existing shelf
registration statement and related prospectus (the "Shelf Registration
Statement") that the Company then has on file with the Securities and
Exchange Commission (in which event the Company shall be deemed to have
satisfied its registration obligation under this Section 1.1), will cause to
be filed with the Securities and Exchange Commission (the "SEC") as soon as
reasonably practicable after receiving the Registration Notice a new
registration statement and related prospectus (a "New Registration
Statement") that complies as to form in all material respects with applicable
SEC rules providing for the sale by Holder of the Registrable Securities, and
agrees (subject to Section 1.2 hereof) to use its best efforts to cause such
New Registration Statement to be declared effective by the SEC as soon as
practicable. (As used herein, "Registration Statement" and "Prospectus"
refer to the Shelf Registration Statement and related prospectus (including
any preliminary prospectus) or the New Registration Statement and related
prospectus (including any preliminary prospectus), whichever is utilized by
the Company to satisfy Holder's Registration Rights pursuant to this Section
1, including in each case any documents incorporated therein by reference).
Holder agrees to provide in a timely manner information regarding the
proposed distribution by Holder of the Registrable Securities and such other
information reasonably requested by the Company in connection with the
preparation of and for inclusion in the Registration Statement. The Company
agrees (subject to Section 1.2 hereof) to use its best efforts to keep the
Registration Statement effective (including the preparation and filing of any
amendments and supplements necessary for that purpose) until the earlier of
(i) the date on which Holder consummates the sale of all of the Registrable
Securities registered under the Registration Statement, or (ii) the date on
which all of the Registrable Securities are eligible for sale pursuant to
Rule 144(k) (or any successor provision) or in a single transaction pursuant
to Rule 144(e) (or any successor provision) under the Securities Act of 1933,
as amended (the "Act"). The Company agrees to provide to Holder a reasonable
number of copies of the final Prospectus and any amendments or supplements
thereto.
1.1(b) Offers and Sales. All offers and sales by Holder
----------------
under the Registration Statement referred to in this Section 1.1 shall be
completed within the period during which the Registration Statement is
required to remain effective pursuant to Section 1.1(a), and upon expiration
of period Holder will not offer or sell any Registrable Securities under the
Registration Statement. If directed by the Company, Holder will return all
undistributed copies of the Prospectus in its possession upon the expiration
of such period.
1.1(c) Limitations on Registration Rights. Each exercise of
----------------------------------
a Registration Right shall be with respect to a minimum of the lesser of (i)
Fifty Thousand (50,000) shares of Common Stock or (ii) the total number of
Redemption Shares held by Holder at such time plus the number of Redemption
Shares that may be issued upon redemption of Units by Holder. The right of
Holder to deliver a Registration Notice commences upon the date a Holder is
permitted to redeem Units pursuant to the Partnership Agreement and the Lock-
up Agreement. The right of Holder to deliver a Registration Notice shall
expire on the date on which all of the Redemption Shares held by Holder or
issuable upon redemption of Units held by Holder are eligible for sale
pursuant to Rule 144(k) (or any successor provision) or in a single
transaction pursuant to Rule 144(e) (or any successor provision) under the
Securities Act of 1933, as amended (the "Securities Act"). The Registration
Rights granted pursuant to this Section 1.1 may not be exercised in
connection with any underwritten public offering by the Company or by Holder
without the prior written consent of the Company.
1.2 Suspension of Offering. Upon any notice by the Company,
----------------------
either before or after a Holder has delivered a Registration Notice, that a
negotiation or consummation of a transaction by the Company or its
subsidiaries is pending or an event has occurred, which negotiation,
consummation or event would require additional disclosure by the Company in
the Registration Statement of material information which the Company has a
bona fide business purpose for keeping confidential and the nondisclosure of
---- ----
which in the Registration Statement might cause the Registration Statement to
fail to comply with applicable disclosure requirements (a "Materiality
Notice"), Holder agrees that it will immediately discontinue offers and sales
of the Registrable Securities under the Registration Statement until Holder
receives copies of a supplemented or amended Prospectus that corrects the
misstatement(s) or omission(s) referred to above and receives notice that any
post-effective amendment has become effective; provided, that the Company may
delay, suspend or withdraw the Registration Statement for such reason for no
more than sixty (60) days after delivery of the Materiality Notice at any one
time. If so directed by the Company, Holder will deliver to the Company all
copies of the Prospectus covering the Registrable Securities current at the
time of receipt of such notice.
1.3 Expenses. The Company shall pay all expenses incident to
--------
the performance by it of its registration obligations under this Section 1,
including (i) all stock exchange, SEC and state securities registration,
listing and filing fees, (ii) all expenses incurred in connection with the
preparation, printing and distributing of the Registration Statement and
Prospectus, and (iii) fees and disbursements of counsel for the Company and
of the independent public accountants of the Company. Holder shall be
responsible for the payment of any brokerage and sales commissions, fees and
disbursements of Holder's counsel, and any transfer taxes relating to the
sale or disposition of the Registrable Securities by Holder.
1.4 Qualification. The Company agrees to use its best efforts
-------------
to register or qualify the Registrable Securities by the time the applicable
Registration Statement is declared effective by the SEC under all applicable
state securities or "blue sky" laws of such jurisdictions as Holder shall
reasonably request in writing, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be kept effective or during the period offers or sales are being
made by Holder after delivery of a Registration Notice to the Company,
whichever is shorter, and to do any and all other acts and things which may
be reasonably necessary or advisable to enable Holder to consummate the
disposition in each such jurisdiction of the Registrable Securities owned by
Holder; provided, however, that the Company shall not be required to (x)
-------- -------
qualify generally to do business in any jurisdiction or to register as a
broker or dealer in such jurisdiction where it would not otherwise be
required to qualify but for this Section 1, (y) subject itself to taxation in
any such jurisdiction, or (z) submit to the general service of process in any
such jurisdiction.
1.5 Common Stock. The Company represents to the Holder that the
------------
Redemption Shares will be validly issued, fully paid and non-assessable, free
and clear of any mortgage, pledge, lien, encumbrance, security interest,
claim or rights of any third party of any nature whatsoever.
SECTION 2. INDEMNIFICATION; PARTNERSHIP
2.1 Indemnification by the Company. The Company agrees to
------------------------------
indemnify and hold harmless each Holder and each person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act or Section
20 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto)
pursuant to which the Registrable Securities were registered under
the Securities Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of or based
upon any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement
thereto), including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent
of the Company; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case
whether or not a party, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under
subparagraph (a) or (b) above;
provided, however, that the indemnity provided pursuant to this Section 2.1
-------- -------
does not apply to any Holder with respect to any loss, liability, claim,
damage or expense to the extent arising out of (i) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto), or (ii) such
Holder's failure to deliver an amended or supplemental Prospectus provided by
the Company to the Holder for such purpose if such loss, liability, claim,
damage or expense would not have arisen had such delivery occurred.
2.2 Indemnification by Holder. Holder (and each permitted
-------------------------
assignee of Holder, on a several basis) agrees to indemnify and hold harmless
the Company, and each of its directors and officers (including each director
and officer of the Company who signed a Registration Statement), and each
person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto)
pursuant to which the Registrable Securities were registered under
the Securities Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of or based
upon any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement
thereto) including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent
of Holder: and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel),
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case
whether or not a party, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under
subparagraph (a) or (b) above;
provided, however, that the indemnity provided pursuant to this Section 2.1
-------- -------
shall only apply with respect to any loss, liability, claim, damage or
expense to the extent arising out of (i) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by Holder expressly for use
in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto), or (ii) Holder's failure to deliver
an amended or supplemental Prospectus provided by the Company to the Holder
for such purpose if such loss, liability, claim, damage or expense would not
have arisen had such delivery occurred. Notwithstanding the provisions of
this Section 2.2, Holder and any permitted assignee shall not be required to
indemnify the Company, its officers, directors or control persons with
respect to any amount in excess of the amount of the total proceeds to Holder
or such permitted assignee, as the case may be, from sales of the Registrable
Securities of Holder under the Registration Statement, and no Holder shall be
liable under this Section 2.2 for any statements or omissions of any other
Holder.
2.3 Conduct of Indemnification Proceedings. The indemnified
--------------------------------------
party shall give reasonably prompt notice to the indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify the indemnifying party (i)
shall not relieve it from any liability which it may have under the indemnity
agreement provided in Section 2.1 or 2.2 above, unless and to the extent it
did not otherwise learn of such action and the lack of notice by the
indemnified party results in the forfeiture by the indemnifying party of
substantial rights and defenses, and (ii) shall not, in any event, relieve
the indemnifying party from any obligations to the indemnified party other
than the indemnification obligation provided under Section 2.1 or 2.2 above.
If the indemnifying party so elects within a reasonable time after receipt of
such notice, the indemnifying party may assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by
the indemnifying party and approved by the indemnified party, which approval
shall not be unreasonably withheld; provided, however, that the indemnifying
-------- -------
party will not settle any such action or proceeding without the written
consent of the indemnified party unless, as a condition to such settlement,
the indemnifying party secures the unconditional release of the indemnified
party; and provided further, that if the indemnified party reasonably
-------- -------
determines that a conflict of interest exists where it is advisable for the
indemnified party to be represented by separate counsel or that, upon advice
of counsel, there may be legal defenses available to it which are different
from or in addition to those available to the indemnifying party, then the
indemnifying party shall not be entitled to assume such defense and the
indemnified party shall be entitled to separate counsel at the indemnifying
party's expense. If the indemnifying party is not entitled to assume the
defense of such action or proceeding as a result of the proviso to the
preceding sentence, the indemnifying party's counsel shall be entitled to
conduct the indemnifying party's defense and counsel for the indemnified
party shall be entitled to conduct the defense of the indemnified party, it
being understood that both such counsel will cooperate with each other to
conduct the defense of such action or proceeding as efficiently as possible.
If the indemnifying party is not so entitled to assume the defense of such
action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party
will pay the reasonable fees and expenses of counsel for the indemnified
party. In such event, however, the indemnifying party will not be liable for
any settlement effected without the written consent of the indemnifying
party. If an indemnifying party is entitled to assume, and assumes, the
defense of such action or proceeding in accordance with this paragraph, the
indemnifying party shall not be liable for any fees and expenses of counsel
for the indemnified party incurred thereafter in connection with such action
or proceeding.
2.4 Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for
in this Section 2 is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the
Company and Holder shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and Holder, (i) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
Holder on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
fault of but also the relative benefits to the Company on the one hand and
Holder on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information
supplied by, the indemnifying party or the indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 2.4 were determined by pro-rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 2.4, Holder shall
not be required to contribute any amount in excess of the amount of the total
proceeds to Holder from sales of the Registrable Securities of Holder under
the Registration Statement.
Notwithstanding the foregoing, 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. For purposes of this Section 2.4, each person,
if any, who controls Holder within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as Holder, and each
director of the Company, each officer of the Company who signed a
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Company.
SECTION 3. RULE 144 COMPLIANCE
The Company covenants that it will use its best efforts to timely
file the reports required to be filed by the Company under the Securities Act
and the Securities Exchange Act of 1934, as amended, so as to enable each
Holder to sell Registrable Securities pursuant to Rule 144 under the
Securities Act. In connection with any sale, transfer or other disposition
by Holder of any Registrable Securities pursuant to Rule 144 under the
Securities Act, the Company shall cooperate with Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any Securities Act legend, and enable
certificates for such Registrable Securities to be for such number of shares
and registered in such names as Holder may reasonably request at least ten
(10) business days prior to any sale of Registrable Securities hereunder.
SECTION 4. MISCELLANEOUS
4.1 Integration; Amendment. This Agreement constitutes the
----------------------
entire agreement among the parties hereto with respect to the matters set
forth herein and supersedes and renders of no force and effect all prior oral
or written agreements, commitments and understandings among the parties with
respect to the matters set forth herein. Except as otherwise expressly
provided in this Agreement, no amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by the Company and Holder.
4.2 Waivers. No waiver by a party hereto shall be effective
-------
unless made in a written instrument duly executed by the party against whom
such waiver is sought to be enforced, and only to the extent set forth in
such instrument. Neither the waiver by any of the parties hereto of a breach
or a default under any of the provisions of this Agreement, nor the failure
of any of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder
shall thereafter be construed as a waiver of any subsequent breach or default
of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.
4.3 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the successors and assigns of the Company.
This Agreement may not be assigned by any Holder (other than to a member of
Holder's immediate family, trust established for the benefit of such Holder
or immediate family member(s) of such Holder, a beneficiary of Holder, or a
partnership or corporation controlled by Holder, a beneficiary of Holder or
immediate family member(s) of Holder) and any attempted assignment hereof by
any Holder will be void and of no effect and shall terminate all obligations
of the Company hereunder with respect to such Holder.
4.4 Notices. All notices called for under this Agreement shall
-------
be in writing and shall be deemed given upon receipt if delivered personally
or by facsimile transmission and followed promptly by mail, or mailed by
registered or certified mail (return receipt requested), postage prepaid, to
the parties at the addresses set forth opposite their names in Schedule A
----------
hereto, or to any other address or addressee as any party
entitled to receive notice under this Agreement shall designate, from time to
time, to others in the manner provided in this Section 4.4 for the service of
notices; provided, however, that notices of a change of address shall be
-------- -------
effective only upon receipt thereof. Any notice delivered to the party
hereto to whom it is addressed shall be deemed to have been given and
received on the day it was received; provided, however, that if such day is
-------- -------
not a business day then the notice shall be deemed to have been given and
received on the business day next following such day. Any notice sent by
facsimile transmission shall be deemed to have been given and received on the
business day next following the transmission
4.5 Specific Performance. The parties hereto acknowledge that
--------------------
the obligations undertaken by them hereunder are unique and that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to (i) compel specific performance of the obligations, covenants and
agreements of any other party under this Agreement in accordance with the
terms and conditions of this Agreement and (ii) obtain preliminary injunctive
relief to secure specific performance and to prevent a breach or contemplated
breach of this Agreement in any court of the United States or any State
thereof having jurisdiction.
4.6 Governing Law. This Agreement, the rights and obligations
-------------
of the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of
Maryland, but not including the choice of law rules thereof.
4.7 Headings. Section and subsection headings contained in this
--------
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof
4.8 Pronouns. All pronouns and any variations thereof shall be
--------
deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the person or entity may require.
4.9 Execution in Counterparts. To facilitate execution, this
-------------------------
Agreement may be executed in as many counterparts as may be required. It
shall not be necessary that the signature of or on behalf of each party
appears on each counterpart, but it shall be sufficient that the signature of
or on behalf of each party appears on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not
be necessary in any proof of this Agreement to produce or account for more
than a number of counterparts containing the respective signatures of or on
behalf of all of the Parties.
4.10 Severability. If fulfillment of any provision of this
------------
Agreement, at the time such fulfillment shall be due, shall transcend the
limit of validity prescribed by law, then the obligation to be fulfilled
shall be reduced to the limit of such validity; and if any clause or
provision contained in this Agreement operates or would operate to invalidate
this Agreement, in whole or in part, then such clause or provision only shall
be held ineffective, as though not herein contained, and the remainder of
this Agreement shall remain operative and in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first hereinabove
set forth.
COMPANY:
Address: RECKSON ASSOCIATES REALTY CORP.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
------------------------------
Name:
--------------------------
Title:
--------------------------
HOLDERS:
By:
------------------------------
Name:
--------------------------
Title: Attorney-in-Fact
SCHEDULE A
HOLDERS
-------
Name and Address:
( )
Exhibit F: Operating Information
(TO BE SUPPLIED BY SELLER)
Exhibit G: Service Contract, Brokerage
Agreements and other Contracts
None
Exhibit H
SUITABILITY QUESTIONNAIRE
This Suitability Questionnaire is to be
completed by the prospective subscriber
Please type or print in ink.
All changes must be initialled by the subscriber.
TO: Reckson Operating Partnership, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
1. REASON FOR THIS QUESTIONNAIRE
The undersigned understands that the issuance to the undersigned of
units of limited partnership interest ("Units") of Reckson Operating
Partnership L.P., a Delaware limited partnership (the "Operating
Partnership"), pursuant to the contribution agreement, dated ,
-------- --
1998, between the Operating Partnership and
------------------------------
(the "Contribution Agreement"), will not be registered under the Securities
Act of 1933 (the "Act"), but, rather, will be made pursuant to the "private
placement" exemption provided in Section 4(2) of the Act. The undersigned
understands that the information the undersigned is furnishing in this
Questionnaire is intended to enable the Operating Partnership, Reckson
Associates Realty Corp., its general partner (the "General Partner"), and
their counsel to determine whether the undersigned meets the suitability
standards on which the private placement exemption is conditioned.
Recognizing that the Operating Partnership, the General Partner and their
counsel will rely upon the information, the undersigned hereby represents to
the Operating Partnership, the General Partner and their counsel that:
1.1 The undersigned has personally furnished the information set forth
herein, such information is complete and accurate, and the Operating
Partnership, the General Partner and their counsel are justified in relying
upon such information; and
1.2 The undersigned will notify the Operating Partnership and the
General Partner immediately if, prior to the issuance to the undersigned of
the Units, there is any material change in the information furnished in this
Questionnaire.
The undersigned realizes that this Questionnaire does not constitute an
offer by the Operating Partnership or General Partner to sell or exchange the
Units, but is merely a request for information.
2. COMPLETING THIS QUESTIONNAIRE
THIS SECTION 2 IS TO BE COMPLETED ONLY IF THE PROSPECTIVE INVESTOR IN UNITS
(THE "SUBSCRIBER") IS A CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY WHICH
QUALIFIES AS AN "ACCREDITED INVESTOR" AS DEFINED BELOW IN SECTION 2.2.
2.1 GENERAL INFORMATION
Address of Principal Place of Business:
--------------------------------------
(Number and Street; P.O. Box Unacceptable)
------------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number:
------------------------------------------------------------
(Area Code) (Number)
Facsimile Number:
------------------------------------------------------------
(Area Code) (Number)
Jurisdiction of Formation:
---------------------------------------------------
Date of Formation:
-----------------------------------------------------------
I.R.S. Taxpayer Identification Number:
---------------------------------------
Fiscal Year:
-----------------------------------------------------------------
Number of Partners, Shareholders or Beneficiaries:
---------------------------
Total assets shown on most recent financial statements: $
----------
Total assets on the date hereof: $
----------
2.2 QUALIFICATION AS AN "ACCREDITED INVESTOR"
If the subscriber qualifies as an "accredited investor" under this
Section 2.2, the requested financial information should be furnished only
with respect to the subscriber as an entity, and not with respect to any or
all of the owners of the beneficial interest therein. If a corporation,
partnership, trust or other entity does not qualify as an "accredited
investor" under this Section 2.2 below, it will also qualify as an
"accredited investor" if each owner of an equity interest in the corporation,
partnership, trust or other entity is an "accredited investor" in his, her or
its own right. In such instance, the corporation, partnership, trust or
other entity must complete Section 2.2(b) below.
A corporation, partnership, trust or other entity is an "accredited
investor" under Regulation D of the Act if it is an entity described in
Section 2.2(a) below or if all of its stockholders or all of the owners of an
equity interest in it are "accredited investors". A natural person is an
"accredited investor" under Regulation D only if such individual (i) has a
net worth (or joint net worth with spouse) in excess of $1,000,000 or (ii)
had individual income of more than $200,000 in each of 1996 and 1997 and
reasonably expects to have income of more than $200,000 in 1998 or (iii) had
joint income with his or her spouse in excess of $300,000 in each of 1996 and
1997 and reasonably expects to have joint income in excess of $300,000 in
1998.
2.2(a) Please check applicable description if the undersigned is an
entity described below:
/ / An organization defined in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring
the securities offered, with total assets in excess of $5,000,000.
/ / A trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose
purchase is directed by a person who has such knowledge and
experience in financial business matters that such person is
capable of evaluating the merits and risks of the prospective
investment.
/ / A bank as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended (the "Act") or a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Act whether
acting in its individual or fiduciary capacity.
/ / A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
/ / An insurance company as defined in Section 2(13) of the Act.
/ / An investment company registered under, or a business development
company as defined in Section 2(a)(48) of the Investment Company
Act of 1940.
/ / A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
/ / A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000.
/ / An employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA") if the
investment decision with respect to this investment is made by a
plan fiduciary, as defined in Section 3(21) of ERISA, which is
either a bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000, or if a self-directed plan,
with investment decisions made solely by persons that are
accredited investors.
/ / A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
If the subscriber is a trust described in the first subparagraph of this
paragraph or an employee benefit plan described in the ninth subparagraph of
this paragraph, the investment decision is made, or the purchase is directed,
by .
-------------------------------------------------------------------------
2.2(b) If the corporation, partnership or trust is not an "accredited
investor" because it is not an entity described in paragraph (i) above, the
subscriber must complete the following:
The names of all of the owners of an equity interest in the undersigned
(that is, all shareholders of a corporation or all partners of a partnership
and the grantor of a grantor trust, but not the beneficiaries of a true
trust) and their respective interests in the undersigned are as follows:
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
3. COMPLETING THIS QUESTIONNAIRE
THIS SECTION 3 IS TO BE COMPLETED ONLY IF SUBSCRIBER(S) INTENDS TO HOLD
THE UNITS AS AN INDIVIDUAL, JOINT TENANTS, TENANTS IN-COMMON, TENANTS BY THE
ENTIRETY OR AS COMMUNITY PROPERTY
If subscribers are subscribing as joint tenants or tenants-in-common and
such subscribers are husband and wife or are close relatives and have the
same principal residence, the requested information in this Section 3 should
be completed for one subscriber alone (the subscriber who is an "accredited
investor" under Regulation D) unless otherwise indicated. If such
subscribers are not husband and wife or close relatives who have the same
principal residence, separate Suitability Questionnaires should be completed
for each subscriber in order to furnish the requested information separately
for each subscriber.
A natural person is an "accredited investor" under Regulation D only if
such individual (i) has a net worth (or joint net worth with spouse) in
excess of $1,000,000 or (ii) had individual income of more than $200,000 in
each of 1996 and 1997 and reasonably expects to have income of more than
$200,000 in 1998 or (iii) had joint income with his or her spouse in excess
of $300,000 in each of 1996 and 1997 and reasonably expects to have joint
income in excess of $300,000 in 1998 (the "Regulation D Standard")
3.1 PLEASE INDICATE TYPE OF OWNERSHIP:
( ) Individual
( ) Joint tenants with right of survivorship
( ) Tenants-in-common
( ) Tenants by the entirety
( ) Community property
3.2 GENERAL INFORMATION
Name(s) of Subscriber(s):
---------------------------------------------------
Social Security Number:
--------------------
Joint Subscriber's Social Security Number:
--------------------
Date of Birth: Citizenship:
-------------------- --------------------
Residence Address:
----------------------------------------------------------
(Number and Street; Post Office Box Unacceptable)
-----------------------------------------------------------------------------
(City) (State) (Zip Code)
Address of Record for purposes of the Fund's records:
-----------------------------------------------------------------------------
(Number and Street)
-----------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number:
------------------------------------------------------------
(Area Code) (Number)
Facsimile Number:
------------------------------------------------------------
(Area Code) (Number)
3.3 EMPLOYMENT INFORMATION
Occupation or Profession:
----------------------------------------------------
Current Position or Title:
---------------------------------------------------
Name of Employer:
------------------------------------------------------------
Business Address:
------------------------------------------------------------
(Number and Street)
-----------------------------------------------------------------------------
(City) (State) (Zip Code)
Business Telephone Number:
---------------------------------------------------
(Area Code) (Number)
Facsimile Number:
------------------------------------------------------------
(Area Code) (Number)
D. FINANCIAL INFORMATION
I hereby certify to the Operating Partnership, the General Partner and
their counsel that my individual net worth*, or my joint net worth with my
spouse (in each case, excluding residences and related mortgages, home
furnishings and personal automobiles), is at least four times the amount of
my investment and that I satisfy the Regulation D Standard.
[FN]
--------------------
* For purposes of this paragraph, you may consider your joint net worth
with your spouse even if you are not purchasing jointly with your
spouse. Net worth includes all of your assets, liquid or illiquid
(including, in addition to home, home furnishings and automobiles,
such items as restricted securities, ownership in a business, assets
in a pension or retirement plan, stocks and bonds, real estate, etc.,
but not including mere expectancies, such as anticipated revenues),
less any liabilities (including home mortgages and other debts and
obligations).
4. ATTESTATIONS BY SUBSCRIBER
THIS SECTION 4 IS TO BE COMPLETED BY ALL SUBSCRIBERS
4.1 By initialling in the margin beside this paragraph, the undersigned
acknowledges that the subscriber understands that no private placement
memorandum is being produced in connection with the issuance of the Units,
but that the subscriber has received such financial, operational or other
information regarding the Operating Partnership or the General Partner which
the subscriber has deemed necessary to allow it to evaluate and understand
the risks involved in an investment in the Operating Partnership.
--------------
(Initial here)
4.2 By initialling in the margin beside the paragraph, the undersigned
confirms that the subscriber understands the risks of, and other
considerations relating to, the purchase of the Units. Such subscriber, by
reason of its business and financial experience, together with the business
and financial experience of those persons, if any, retained by it to
represent or advise it with respect to its investment in the Units, has such
knowledge, sophistication and experience in financial and business matters
and in making investment decisions of this type that it is capable of
evaluating the merits and risks of an investment in the Operating Partnership
and of making an informed investment decision, (ii) is capable of protecting
its own interest or has engaged representatives or advisers to assist it in
protecting its interests and (iii) is capable of bearing the economic risk of
such investment. If such subscriber retained a person to represent or advise
it with respect to the investment in Units that may be made hereby then, at the
Operating Partnership's request, such subscriber shall, prior to or at the
issuance of the Units, (i) acknowledge in writing such representation and (ii)
cause such representative or adviser to deliver a certificate to the Operating
Partnership containing such representations as are reasonably requested by
subscriber.
--------------
(Initial here)
4.3 By initialling beside this paragraph, the undersigned confirms that
the subscriber understands that (i) the Units to be issued to the subscriber
have not been registered under the Securities Act or state securities laws by
reason of a specific exemption or exemptions from registration under the
Securities Act and applicable state securities laws, (ii) the Operating
Partnership's and the General Partner's reliance on such exemptions is
predicated in part on the accuracy and completeness of the representations
and warranties of the subscriber contained herein, (iii) such Units,
therefore, cannot be resold unless registered under the Securities Act and
applicable state securities laws, or unless an exemption from registration is
available, (iv) there is no public market for such Units, and (v) the
Operating Partnership has no obligation or intention to register such Units
for resale under the Securities Act or any state securities laws or to take
any action that would make available any exemption from the registration
requirements of such laws.
--------------
(Initial here)
4.4 By initialling in the margin beside this paragraph, the undersigned
confirms that the subscriber acknowledges that because of the restrictions on
transfer or assignment of the Units to be issued to the subscriber which are
set forth in the Amended and Restated Agreement of Limited Partnership of the
Operating Partnership dated June 2, 1995, as amended (the "Partnership
Agreement") and in the Lock-up Agreement, dated , 1998, between the
---------
undersigned and the General Partner, the subscriber may have to bear the
economic risk of the Units to be issued to the subscriber pursuant to the
Contribution Agreement for an indefinite period of time.
--------------
(Initial here)
4.5 By initialling in the margin beside this paragraph, the undersigned
confirms that except for the information that the subscriber or its advisers,
if any, have requested as described in Section 4.6 below, neither the
subscriber nor its advisers have been furnished any offering material or
literature by the Operating Partnership, the General Partner or any
affiliates of either of them.
--------------
(Initial here)
4.6 By initialling in the margin beside this paragraph, the undersigned
confirms that the subscriber understands that an investment in the Operating
Partnership involves substantial risks. The subscriber has been given the
opportunity to make a thorough investigation of the activities of the
Operating Partnership and the General Partner and has been furnished with
materials relating to the Operating Partnership and the General Partner and
their activities. The subscriber has been afforded the opportunity to obtain
any additional information deemed necessary by the subscriber to verify the
accuracy of any representations made or information conveyed to the
subscriber. The subscriber confirms that all documents, records, and books
pertaining to its investment in the Operating Partnership and requested by
the subscriber have been made available or delivered to the subscriber. The
subscriber has had an opportunity to ask questions of and receive answers
from Operating Partnership, or from a person or persons acting on the
Operating Partnership's behalf, concerning the terms and conditions of this
investment. The subscriber has relied and is making its investment decision
upon written information provided to the subscriber by or on behalf of
Operating Partnership.
--------------
(Initial here)
4.7 By initialling in the margin beside this paragraph, the undersigned
confirms that the subscriber understands that none of the Operating
Partnership, or the General Partners or any associate or affiliate of either
of them is guaranteeing the success of, or any return from, the Operating
Partnership.
--------------
(Initial here)
4.8 By initialling in the margin beside this paragraph, the undersigned
certifies, represents and warrants that the subscriber's net worth, or joint
net worth with a spouse (in each case, excluding residences and related
mortgages, home furnishings and personal automobiles), is at least four times
the amount of the subscriber's investment in the Partnership.
--------------
(Initial here)
4.9 By initialling in the margin beside this paragraph, the undersigned
certifies, represents and warrants that the Units to be issued to the
subscriber will be acquired by the subscriber for its own account (or if the
subscriber is a trustee, for a trust account) for investment only and not
with a view to, or with any intention of, a distribution or resale thereof,
in whole or in part, or the grant of any participation therein, without
prejudice, however, to the subscriber's right (subject to the terms of the
Units) at all times to sell or otherwise dispose of all or any part of its
Units under an exemption from such registration available under the
Securities Act of 1933, as amended, and applicable state securities laws, and
subject, nevertheless, to the disposition of its assets being at all times
within its control.
--------------
(Initial here)
4.10 THROUGH 4.14 NEED ONLY TO BE COMPLETED IF SUBSCRIBER IS A CORPORATION,
PARTNERSHIP, TRUST OR OTHER ENTITY WHICH QUALIFIES AS AN "ACCREDITED
INVESTOR" AS DEFINED HEREIN.
4.10 By initialling in the margin beside this paragraph, the undersigned
certifies, represents and warrants that the subscriber has been duly formed
and is validly existing in good standing under the laws of the jurisdiction
of its formation with full power and authority to enter into the transactions
contemplated by the Contribution Agreement and this Suitability
Questionnaire.
--------------
(Initial here)
4.11 By initialling in the margin beside this paragraph, the undersigned
confirms that the undersigned has full power and authority to execute and
deliver the Contribution Agreement in such capacity and on behalf of the
subscribing corporation, partnership, trust, estate, or other entity for whom
such individual is executing the Contribution Agreement, and such
corporation, partnership, trust, estate, or other entity has full right and
power to perform pursuant to the Contribution Agreement and become a limited
partner in the Operating Partnership pursuant to the Partnership Agreement.
--------------
(Initial here)
4.12 By initialling in the margin beside this paragraph, the undersigned
certifies, represents and warrants that the subscriber has attached hereto a
complete copy of (i) articles or certificate of incorporation and by-laws and
a copy (certified by the secretary or other authorized officer) of
appropriate corporate resolutions authorizing this specific investment, (ii)
partnership agreement, or (iii) trust agreement, as the case may be, as in
effect on the date hereof.
--------------
(Initial here)
4.13 By initialling in the margin beside this paragraph, the undersigned
certifies, represents and warrants that the subscriber has not been formed,
reformed or recapitalized for the specific purpose of purchasing the Units.
--------------
(Initial here)
4.14 By initialling in the margin beside this paragraph, the undersigned
certifies, represents and warrants that the Contribution Agreement of the
subscriber has been duly and validly authorized, executed and delivered by
the subscriber and the agreements therein constitute the valid, binding and
enforceable agreements of the subscriber.
--------------
(Initial here)
IN WITNESS WHEREOF, the undersigned has executed this Suitability
Questionnaire this day of , 1998.
----
-----------------------------------------------------------------------------
Type or Print Name of Corporation, Partnership, Trust or other Entity
----------------------------------- --------------------------------
Signature of Individual Signing Type or Print Name of Individual
on Behalf of Corporation, Signing on Behalf of Corporation,
Partnership, Trust or other Entity Partnership, Trust or other
Entity
-----------------------------------------------------------------------------
Type or Print Name of Individual Signing on behalf of
Corporation, Partnership, Trust or other Entity
-----------------------------------------------------------------------------
Capacity of Individual Signing on Behalf of
Corporation, Partnership, Trust or other Entity
Exhibit I
BARGAIN AND SALE DEED,
WITHOUT COVENANT AGAINST GRANTOR'S ACTS
THIS INDENTURE, made the day of , 1998, BETWEEN
---- ------ --------------
, party of the first part, and
-----------------------------------------
Reckson Operating Partnership, L.P., located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, party of the second part,
WITNESSETH, that the party of the first part, in consideration of Ten
and No/100ths dollars, in lawful money of the United States, paid by the
party of the second part, does hereby grant and release unto the party of the
second part, the successors and assigns of the party of the second part
forever.
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situated, lying and being in the
TOWN OF , COUNTY OF WESTCHESTER,
------------------
STATE OF NEW YORK, AS MORE PARTICULARLY
DESCRIBED ON EXHIBIT A ATTACHED HERETO
---------
AND MADE A PART HEREOF.
TOGETHER with all right, title and interest, if any, of the party of the
first part to and to any streets and roads abutting the above described
premises to the center lines thereof.
TOGETHER with the appurtenances and all the estate and rights of the
party of the first part in and to said premises.
TO HAVE AND TO HOLD the premises herein granted unto the party of the
second part, the successors and assigns of the party of the second part
forever.
AND the party of the first part, in compliance with Section 13 of the
Lien Law, covenants that the party of the first part will receive the
consideration for this conveyance and will hold the right to receive such
consideration as a trust fund to be applied first for the purpose of paying
the cost of the improvement and will apply the same first to the payment of
the cost of the improvement before using any part of the same for any other
purpose.
The word "party" shall be construed as if it read "parties" whenever the
sense of this indenture so requires.
IN WITNESS WHEREOF, the party of the first part has duly executed this
deed the day and year first above written.
(Contributing Party)
(Acknowledgement)
Exhibit J
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
THIS ASSIGNMENT (this "Assignment"), dated this day of ,
---- ----------
1998, is made by and among (the "Assignor") and
-------------------------
RECKSON OPERATING PARTNERSHIP, L.P. (the "Assignee").
WHEREAS, Assignee has this day purchased Assignor's interest in the real
property legally described on the attached Exhibit A (the "Property"); and
---------
WHEREAS, the execution and delivery of this Assignment is a condition
precedent to the purchase by the Assignee of the Property;
NOW, THEREFORE, in consideration of the purchase and sale of the
Property, and for other good and valuable consideration, Assignor agrees as
follows (unless otherwise defined, all capitalized terms shall have the
meanings set forth in the Contribution Agreement dated as of March 31, 1998
between Assignor and Assignee (the "Contribution Agreement"));
1. Assignor hereby grants, transfers and assigns to Assignee and
Assignee accepts from Assignor all the right, title and interest of Assignor
in and to the following:
(i) all service contracts, brokerage agreements and other
contracts relating to the Property listed on Exhibit B, permits and
licenses, certificates of occupancy, approvals, dedications, subdivision
maps or plats and entitlements issued, approved or granted by federal,
state or municipal authorities or otherwise in connection with the
Property and its renovation, construction, use, maintenance, repair,
leasing and operation; and all licenses, consents, easements, rights of
way and approvals required from private parties to make use of
utilities, to insure pedestrian ingress and egress to the Property and
to insure continued use of any vaults under public rights-of-way
presently used in the operation of the Property;
(ii) subject to the provisions of Section 36 of the Contribution
Agreement, the use of any names by which any of the Property is commonly
known, and all goodwill, if any related to said names;
(iii) all Security Deposits, all Leases, and all correspondence
with the tenants under Leases, all booklets and manuals relating to the
maintenance and operation of the Property; and
(iv) the Books and Records, Warranties and Personal Property.
The foregoing are collectively referred to herein as the "Assigned
Assets". The foregoing assignment is made without recourse, and on an "as-
is, where-is, with all faults" basis, without any representation or warranty
by Assignor except as may be expressly set forth in the Contribution
Agreement.
2. Assignor shall retain full responsibility for all the obligations
under the Assigned Assets accruing prior to the date hereof and Assignor
agrees to indemnify and hold Assignee harmless from any claims, liabilities
or costs arising from Assignor's failure to perform said obligations.
3. Assignee agrees to assume full responsibility for all the
obligations under the Leases and the contracts described on Exhibit B
attached accruing on or after the date hereof and Assignee agrees to
indemnify and hold Assignor harmless from any claims, liabilities or costs
arising from Assignee's failure to perform said obligations.
4. This instrument may be executed in counterparts, each of which
shall constitute an original and all of which, taken together, shall
constitute one and the same instrument.
5. This Assignment shall be governed by and construed in accordance
with the laws of the State of New York. This Assignment shall be construed
without regard to any presumption or other rule requiring construction
against the party causing this Agreement to be drafted.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first written above.
ASSIGNOR: ASSIGNEE:
( )
-------------------------------
By: ( )
--------------------------
By:
-----------------------------
Authorized Representative
(EXHIBIT A)
---------
Legal Description
(same as Exhibit A to this Agreement)
Exhibit K
FIRPTA CERTIFICATE
------------------
Section 1445 of the Internal Revenue Code provides that a transferee of
a U.S. real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not
required upon the disposition of a U.S. real property interest by
("Contributing Party"), Contributing Party hereby certifies
--------------
the following:
1. Contributing Party is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. Contributing Party's U.S. employer identification number is
( ) and
---------------------
3. Contributing Party's principal place of business is
( ).
-------------------------------
Contributing Party understands that this certification may be disclosed
to the Internal Revenue Service by transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of Contributing Party.
( )
----------------------------------
By:
By:
-----------------------------------------------
Authorized Representative
Subscribed and sworn to
before me this day of
----
.
----------------
------------------------------
Notary Public
Exhibit L
---------
, 1998
-------- --
RECKSON OPERATING PARTNERSHIP, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Pursuant to Section 10.12(e) of the CONTRIBUTION AGREEMENT, dated as of
March 31, 1998, by and among (collectively,
--------------------------------
the "Contributing Parties") and Reckson Operating Partnership, L.P. (the
"Partnership"), the Contributing Parties hereby agree that the Contributing
Parties will not, during the one year period following the date hereof,
present any preferred or common units of limited partnership interest
("Units") in Reckson Operating Partnership, L.P. (the "Operating
Partnership") for redemption into common or preferred stock of Reckson
Associates Realty Corp. pursuant to the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership dated as of June 2, 1995, as
amended, without the express written consent of the Partnership.
This agreement shall be binding on the Contributing Parties and their
respective successors, heirs, personal representatives and assigns; provided,
however, that a pledgee holding a security interest in any Units shall not be
bound by the provisions of this agreement if such pledgee is not an Affiliate
(as defined in the Contribution Agreement) of the Contributing Parties.
This agreement 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.
Very truly yours,
(Name of the Contributing Parties)
By:
By:
------------------------------------------------
Name:
Title:
Exhibit M: Form of Tenant Estoppel
ESTOPPEL CERTIFICATE
, 1998
-----------------------
(Building Owner Landlord)
c/o Cappelli Associates
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: (Building Address)
Gentlemen:
Reference is made to that certain lease described in EXHIBIT A attached
hereto and made a part hereof (the "LEASE") by and between the undersigned as
lessee ("TENANT") and (LANDLORD) ("LANDLORD"), for space (the "PREMISES") in
the above referenced property (the "PROPERTY").
The undersigned hereby certifies, as of the date hereof, for the benefit
of and with the intent and understanding that such will be relied upon by
third parties and their successors and assigns, that:
1. The Lease has not been amended, modified or supplemented and constitutes
the entire agreement between Landlord and Tenant except as described on
EXHIBIT A. Tenant has accepted the Premises and commenced payment of
rent under the Lease.
2. The Lease is in full force and effect, and there exists no default by
Tenant under the Lease, and there exists no default by Landlord under
the Lease, nor any grounds for set-offs, counterclaims or defenses, or
for ceasing or reducing the payment of rentals, or for cancellation or
termination of the Lease.
3. The current monthly fixed rent and additional rent is $ as
-------------
shown on Exhibit A and Tenant has paid fixed rent and all of the
additional rent which is due and payable through the date set forth on
Exhibit A. Except as shown on EXHIBIT A, Tenant has not made any
prepayment of rent or other charges more than one month in advance. The
security deposit in the amount set forth in EXHIBIT A has been paid, and
Tenant has no knowledge of any claim made by Landlord against the
security deposit. The Lease provides that (i) Tenant's percentage share
of common area expenses is , as shown on Exhibit A and (ii)
-------
Tenant is to pay its proportionate share of increase in taxes in excess
of the base year as shown on Exhibit A.
4. Except as shown in EXHIBIT A, as of the date hereof, (i) all allowances,
rental abatements and other sums to be paid by Landlord to Tenant
pursuant to the Lease have been paid and no free rent period, rental
credit or abatement is outstanding, (ii) Tenant has no right to or claim
for the refund of any rents, or other sums heretofore paid to Landlord
(except, prepaid rent, if any, or to the extent provided in the Lease,
the right to a refund of any security deposit paid by Tenant and refunds
of payments made on account of operating expenses and taxes in excess of
amounts actually owed); (iii) Landlord has completed any and all
improvements to the Premises required pursuant to the Lease; and (iv)
Tenant has not assigned or sublet the Premises.
5. Except as set forth in EXHIBIT A, there are no provisions for, and
Tenant has no rights with respect to, renewal or extension of the
initial term of the Lease, occupying additional space or surrendering
all or any portion of the Premises or purchasing the Premises or
Property.
6. The information set forth on EXHIBIT A is true and correct in all
respects.
7. Except as set forth on EXHIBIT A, no action, voluntary or involuntary,
is pending against Tenant under federal bankruptcy or insolvency law.
8. Except for the Lease, Tenant does not have any other agreements with
Landlord or any of Landlord's affiliates with respect to the occupancy
or purchasing of any other space at the Property or any other property.
A purchaser and its lenders, together with their respective successors
and assigns, are or will be relying upon this certificate in connection with
an acquisition of the Property and such financing, notwithstanding that this
letter may not be addressed to them.
Very truly yours,
(TENANT)
By:
--------------------------------------
Name:
Title:
EXHIBIT A
---------
A. Date of Lease:
----------------------------------------
B. Parties:
1. Landlord:
------------------------------
2. Tenant:
--------------------------------
C. Building:
D. Approximate Square Footage of Premises: rentable square feet
-------
E. Modifications, Assignments, Supplements or Amendments to Lease:
(DESCRIPTION OF DOCUMENTS TO BE FILLED IN BY LANDLORD)
F. Commencement Date:
--------------------
G. Expiration Date of Current Term:
-----------
H. Security Deposit Paid to Landlord:
------------
I. 1. Current Monthly Rent:
------------------
2. Current Monthly Operating Expenses/Real Estate Taxes:
----------
3. Other Rent:
----------------
J. Future Free Rent or Rent Abatement Periods:
-------------------------
K. Outstanding Allowances and Other Sums to be Paid by Landlord to Tenant:
-----------------------------------------------------------------------
L. Claims for Refunds from Landlord:
-------------------------------------
M. Outstanding Improvement Work to be Completed by Landlord:
-------------
N. Subleases or Assignments:
---------------------------------------------
O. Remaining Renewal or Extension Options: renewal options for
---- ---
years at $ .
----------
P. Purchase Options:
-----------------------------------------------------
Q. Expansion Options:
-----------------------------------------------------
R. Termination/Surrender Options:
-----------------------------------------
S. Pending Bankruptcy Actions against Tenant:
-----------------------------
Exhibit N: Guaranty
Exhibit O
ERNST & YOUNG LETTER
, 1998
--------------
Ernst & Young L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
In connection with your audit of the statement of revenues and certain
expenses of the Properties situated in the ,
--------------------------------
commonly known as a portion of the (the
---------------------------------
"Property"), for the year ended (the "Operating Statement "),
----------
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission, the undersigned ("Seller") makes the
following limited, qualified and specific representations, which are true to
Seller's knowledge (as such phrase is hereinafter defined):
1. Seller has made available to Reckson Operating Partnership L.P.
("Buyer"), or its representatives, Seller's financial records and
files in Seller's actual possession pertaining to the operation of
the Property (such records and files being collectively referred to
herein as the "Files").
2. Except as disclosed in the Files, Seller is not aware of any events
or transactions which have occurred since and prior
---------------
to the date hereof that would have a material effect on the
Operating Statement for the period then ended.
3. We recognize that, as the Owner of the Property, we are responsible
for directing the fair representation of the Operating Statement.
We believe the Operating Statement is fairly presented in
conformity with generally accepted real estate accounting
practices.
Notwithstanding any provision in this letter to the contrary, Seller is
executing this letter solely as an accommodation to and at the request of
Buyer and, except to the extent Seller is liable to Buyer for representations
and warranties expressly set forth in that certain Contribution Agreement
dated , 1998, by and between Seller and Buyer (the "Sale
-----------
Agreement"), this letter is subject to the condition that Seller shall not be
liable or responsible to Buyer, any parent, subsidiary or other affiliate of
Buyer, or any officer, director, employee, agent, representative,
shareholder, partner or principal of Buyer or any such parent, subsidiary or
other affiliate thereof or any accountant or other professionals engaged by
or on behalf of any of the foregoing, including, without limitation, Ernst &
Young L.L.P. (all of the foregoing being collectively referred to herein as
the "Buyer Parties"), or any other individual or entity whatsoever, as a
result of the fact that any of the statements made herein are in any way
inaccurate, untrue or incorrect. By the acceptance of this letter, except
for rights and remedies that Buyer may have under the Contribution Agreement
with respect to representations and warranties expressly set forth in the
Contribution Agreement, each of the Buyer Parties shall be deemed to have
waived any and all rights and remedies that any of them may have against
Seller, whether at law or in equity, as a result of the fact that any of the
statements made herein are in any way inaccurate, untrue or incorrect.
Seller has executed this letter for the limited purposes set forth
herein, and for the use of Ernst & Young L.L.P. only. No other parties may
rely on the statements set forth herein.
Very truly yours,
By:
-----------------------
By:
-----------------------
Name:
Title:
By:
-----------------------
-----------------------
Name:
Title: Its Authorized Representative
EXHIBIT P
PURCHASE PUT/CALL AGREEMENT
---------------------------
THIS PURCHASE PUT/CALL AGREEMENT (this "Agreement") is dated the day
---
of April, 1998 (the "Effective Date"), between
--------------------
, a (the "Seller"),
--------------------------- ---------- -----------------
and RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the
"Buyer").
W I T N E S S E T H:
1. Grant of Option. In consideration of the sum of Ten and No/100
---------------
Dollars ($10.00) and other good and valuable consideration paid by the Buyer
to the Seller, the receipt and sufficiency of which are hereby acknowledged
by the Seller, the Seller hereby grants to the Buyer the exclusive and
irrevocable series of options (individually, an "Option"; collectively, the
"Options") to purchase all or a portion of the Seller's right, title and
interest in the following described property (hereinafter collectively called
the "Option Parcel"):
1.1 Land. All of the land described in Schedule "A" attached
----
hereto;
1.2 Improvements. All improvements and fixtures situated on the
------------
above described land, if any; and
1.3 Intangible Personal Property. All intangible personal
----------------------------
property owned by the Seller and used in the ownership, operation and
maintenance of the aforesaid land and improvements, including, without
implied limitation, all contract rights, instruments, documents of title,
general intangibles, development rights, transferable licenses and goodwill
pertaining to the ownership, operation and management of the aforesaid land
and improvements, if any.
2. Term of Option.
--------------
(a) The Options may be exercised by the Buyer at any time on or before
five (5) years from the Effective Date (the "Expiration Date"). To the
extent the Options have not been fully exercised prior to the Expiration
Date, all of the rights of the Buyer under this Agreement will expire and
this Agreement will terminate at 11:59 p.m. on the Expiration Date.
3. Exercise of an Option.
---------------------
(a) The Buyer may exercise an Option by notice to the Seller, which
notice (the "Option Notice") shall (x) inform the Seller of the Buyer's
decision to exercise an Option, (y) specify the Land or portion thereof which
the Buyer desires to purchase (such land, the "Lot") and (z) state the
purchase price of the Lot (which purchase price shall be calculated in
accordance with Section 4 below). The Buyer may not exercise an Option if
the exercise of such Option will cause the remaining portion of the Option
Parcel owned by the Seller (i) to be landlocked, (ii) to be in violation of
the applicable zoning or subdivision ordinances or (iii) is in a
configuration which is not developable.
(b) It is specifically acknowledged that there is no limit as to the
number of Options which the Buyer may exercise.
(c) Seller, at any time subsequent to the second anniversary of the
Effective Date, may, upon thirty (30) days written notice to Buyer (a "Put
Notice"), compel Buyer to exercise an Option to purchase the entire Option
Parcel. Such Put Notice shall (x) inform the Buyer of the Seller's decision
to compel Buyer to exercise such Option and (y) state the purchase price of
the Option Parcel (which purchase price shall be calculated in accordance
with Section 4 below).
4. Development Rights and Purchase Price.
-------------------------------------
(a) The parties to this Agreement acknowledge that the Option Parcel
consists of acres of land and that the existing zoning code entitles
-----
Seller to construct approximately 875,000 square feet of space on the Option
Parcel. Thus, there are square feet of development rights (the
-------
"Average Number") attributable to each one acre portion of the Option Parcel.
If Buyer shall elect to purchase a Lot pursuant to an Option Notice
contemplated by Section 3(a) of this Agreement, the purchase price for such
Lot shall be equal to the product of (i) the number of acres of land being
acquired pursuant to such Option multiplied by (ii) the Average Number
multiplied by (iii) $25.00. If Seller shall compel Buyer to purchase the
Option Parcel pursuant to a Put Notice contemplated by Section 3(c) of this
Agreement, the purchase price for such Lot shall be equal to the product of
(i) the number of developable square feet then applicable to the Option
Parcel (not to exceed 875,000) multiplied by (ii) the Put Price (as
hereinafter defined). As used herein, "Put Price" shall mean $22.90 at any
time prior to the third anniversary of the Effective Date, $24.50 at any time
subsequent to the third anniversary of the Effective Date but prior to the
fourth anniversary of the Effective Date, and $25.00 at any time subsequent
to the fourth anniversary of the Effective Date.
(b) Seller, in receiving the purchase price, may elect to receive any
combination of (i) cash, (ii`) common operating partnership units of Buyer
("Common Units"), (iii) Series C preferred operating partnership units of
Buyer ("Series C Preferred Units") and (iv) Series B preferred operating
partnership units of Buyer ("Series B Preferred Units"; together with the
Common Units and the Series C Preferred Units, the "Units"), provided,
however, that the Contributing Parties may not elect to receive more than
$25,000,000 worth of Series B Preferred Units (in the aggregate) pursuant to
the transactions contemplated by this Agreement and that certain contribution
agreement between Buyer and various affiliates of Seller dated as of March
, 1998 (the "Contribution Agreement"). At least five (5) business days
-----
prior to Closing, the Seller shall notify the Buyer as to how many Series C
Preferred Units, Series B Preferred Units and Common Units the Seller shall
elect to receive at Closing provided, however, that the value of each type of
Unit chosen by the Seller shall not be less than $1,000,000. For purposes of
this Agreement, each Common Unit to be issued as consideration for the Lot,
shall have a value equal to the average closing price on the New York Stock
Exchange of a share of common stock of the Reckson Associates Realty
Corp. for the forty-five (45) day period immediately preceding the day which
is six (6) business days prior to the Closing.
(c) The Buyer and the Seller shall negotiate in good faith with respect
to any disputes regarding the calculation of the purchase prices set forth
above. If, after such negotiations, the parties are still unable to agree as
to a purchase price with respect to a Lot, then such disagreement shall be
submitted to an independent arbitrator, which independent arbitrator shall be
selected by the Buyer and shall be subject to the consent of the Seller. The
Buyer and the Seller shall submit their respective determinations of the
purchase prices to the arbitrator. After hearing whatever evidence the
arbitrator determines is necessary, the arbitrator shall choose either the
purchase price requested by the Seller or the purchase price chosen by the
Buyer. The purchase price chosen by the arbitrator shall be final, binding
and non-appealable. If the arbitrator chooses the Seller's determination of
the purchase price, then the Buyer shall not be required to consummate the
purchase of the applicable Lot, provided, however, that the Buyer shall
reimburse the Seller for all of its reasonable out-of-pocket costs in
connection with such arbitration.
5. Title. The Buyer acknowledges receipt from the Seller of the
-----
following: (a) the marked-up Commitment for Title Insurance No.
----------
(the "Title Commitment") from (the "Title Insurer"), dated
--------------
, 1998 and (b) a copy of all instruments (the "Exception Documents")
---------
listed as Nos. and in the Title Commitment. The
------------ -----------
Buyer hereby specifically approves the Title Commitment, the Title Insurer
and the Exception Documents. As to any Lot which the Buyer elects, or is
required, to purchase, the Seller agrees (x) to use reasonable efforts to
satisfy the requirements (the "Title Requirements") which are conditions
precedent to issuance of a title policy (the "Title Policy") to the extent
set forth in the Title Commitment and (y) to cure any defect in title (a
"Title Defect") other than (i) the Exception Documents and (ii) dedications,
easements and other exceptions specifically consented to by the Buyer. The
Exception Documents do not include the mortgages which currently encumber the
Option Parcel. The Seller specifically acknowledges that it shall be the
Seller's responsibility to convey the Lots to the Buyer free and clear of
such mortgages.
6. Seller Representations. The Seller represents and warrants to the
----------------------
Buyer as follows:
(a) The Seller is a (limited partnership), duly formed in its state of
formation, and in good standing in the State of New York. The execution and
delivery of this Agreement and the performance by the Seller of its
obligations hereunder will not violate or constitute an event of default
under the terms and provisions of any agreement, document or instrument to
which the Seller is a party or by which the Seller is bound.
(b) This Agreement is a valid and binding obligation of the Seller.
(c) The Seller has not received notice from any governmental authority
that any portion of the Option Parcel is not in full compliance with all
applicable laws.
(d) (OTHER REPRESENTATION, TO BE TAKEN FROM CONTRIBUTION AGREEMENT)
Each of the foregoing representations are true and correct on the
Effective Date and shall be true and correct on each Closing Date hereafter
occurring.
7. Closing. The Buyer and the Seller agree that the purchase of a Lot
-------
will be consummated as follows:
7.1 Closing Date. The sale of a Lot will close from time to time
------------
during the term of this Agreement on the Closing Date. The closing of the
Lots will take place at the offices of ▇▇▇▇▇ & ▇▇▇▇ LLP in New York City,
with the exact time for closing to be designated by the Buyer by written
notice to the Seller and approved by the Seller.
7.2 Seller's Instruments. On the Closing Date, the Seller will
--------------------
deliver or cause to be delivered to the Buyer the following items (all
documents will be duly executed and acknowledged where required):
7.2.1 Bargain and Sale Deed. A bargain and sale deed with
---------------------
covenant against grantor's acts in the form of Schedule "C" attached hereto
executed by the Seller conveying the Lot to the Buyer, subject to the
Approved Title Exceptions and any other exceptions to title approved by the
Buyer;
7.2.2 Assignment. An assignment in substantially the form
----------
of Schedule "D" attached hereto assigning to the Buyer all of the development
rights allocated to the Lot, together with all of the Seller's rights under
the contracts and other intangible personal property, if any, relating to the
Lot;
7.2.3 Title Affidavits. Such affidavits and other
----------------
documents as might be reasonably requested by the Title Insurer to issue the
Title Policy in accordance with the terms of the Title Commitment;
7.2.5 Transfer Taxes. The transfer tax, if any, due and
--------------
payable for the transfer of the Lot;
7.2.6 Contracts. Copies of all contracts to which the Lot
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is otherwise bound;
7.2.7 Evidence of Authority. A certificate of authority
---------------------
executed on behalf of the Seller authorizing the sale of the Lot to the
Buyer, together with such other evidence of the authority of the person or
persons executing the documents contemplated by this Agreement on behalf of
the Seller as the Title Insurer might reasonably request;
7.2.8 Non-Foreign Affidavit. An affidavit executed by the
---------------------
Seller in substantially the form of Schedule "E" attached hereto confirming
that the Seller is not a foreign person with in the purview of 26 U.S.C.
Section1445 and the regulations issued thereunder; and
7.2.9 Additional Documents. Such additional documents as
--------------------
might be reasonably requested by the Buyer or the Title Insurer to consummate
the sale of the Lot to the Buyer.
7.3 Buyer's Instruments. On the Closing Date the Buyer will
-------------------
deliver to the Seller the following items (all documents will be duly
executed and acknowledged where required):
7.3.1 Payment. Any certificates issued in connection with
-------
the transfer or delivery of any Common Units, Series C Preferred Units, or
Series B Preferred Units or the payment of the purchase price by certified or
cashier's check or by wire transfer (as applicable), pursuant to Section 4 of
this Agreement;
7.3.2 Evidence of Authority. Such resolutions,
---------------------
certificates of good standing and incumbency certificates and other evidence
of authority with respect to the Buyer, any nominee of the Buyer acting under
this Agreement and the person or persons acting on behalf of the Buyer or the
Buyer's nominee as might be reasonably requested by the Seller or the Title
Insurer; and
7.3.3 Additional Documents. Such additional documents as
--------------------
might be reasonably requested by the Seller or the Title Insurer to
consummate the sale of the Lot to the Buyer.
7.4 Possession. Possession of the Lot will be delivered by the
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Seller to the Buyer on the Closing Date, free from all parties claiming
rights to possession of or having claims against the Lot other than the
Exception Documents or any other exception to title approved by the Buyer.
Effective on the delivery of the deed conveying title to the Lot by the
Seller to the Buyer, beneficial ownership and the risk of loss of the Lot
will pass from the Seller to the Buyer.
7.5 Costs. The Seller will pay the following closing costs: the
-----
Seller's attorneys' fees; and all real estate transfer taxes imposed by the
jurisdictions in which the Lots are located, if any. The Buyer will pay the
following closing costs: the Buyer's attorneys' fees; the costs of recording
all documents; and all premium expense, closing fees and other charges
related to the issuance of the Title Policy.
8. Physical Condition. The Seller will be obligated to deliver
------------------
possession to the Buyer on the Closing Dates in substantially the same
condition (normal wear and tear and casualty loss excepted) as existed on the
date hereof and the Buyer agrees to accept possession of each of the Lots on
the Closing Dates in "as is" condition. During the term of this Agreement,
the Buyer may, upon reasonable advance notice to Seller, inspect all or any
portion of the Option Parcel.
9. Adjustments; Prorations. All receipts and disbursements relating
-----------------------
to the Lots will be prorated on the Closing Date as of 11:59 p.m. on the day
preceding the Closing Date and the purchase price will be adjusted on the
following basis:
9.1 Receipts. Any rents or other sums receivable with respect to
--------
the Lots earned and attributable to the period prior to the Closing Date will
be paid to the Seller to the extent that such sums have been collected on or
before the Closing Date; amounts earned and attributable to the period
beginning on the Closing Date and thereafter will be paid to the
Buyer. Upon receipt after the Closing Date by the Buyer of accounts
receivable with respect to the Lots which such sums were earned prior to the
Closing Date, the same will be promptly paid to the Seller; provided,
however, that the Buyer will have no obligation to enforce collection of such
sums.
9.2 Disbursements. All sums due for accounts payable which were
-------------
owing or incurred in connection with the Lots prior to the Closing Date will
be paid by the Seller. The Buyer will promptly furnish to the Seller any
bills for such period received after the Closing Date for payment and the
Buyer will have no further obligation with respect thereto.
9.3 Property Taxes. All real and personal property ad valorem
--------------
taxes, installments of special assessments and other taxes, if any, for the
calendar years preceding the year in which the Closing Date occurs will be
paid by the Seller. All real and personal property ad valorem taxes,
installments of special assessments and other taxes, if any, whether payable
in installments or not, for the calendar year in which the Closing Date
occurs will be prorated to the Closing Date, based on the latest available
tax rate and assessed valuation; provided, however, the Buyer shall be
responsible for all farmland rollback taxes, if any, assessed against the
Lot.
9.4 Insurance. The Seller will terminate all existing insurance
---------
policies on the Closing Date and the Buyer will be responsible for placing
all insurance coverage desired by the Buyer. Any prepaid insurance premiums
will be retained by the Seller.
10. Condemnation. If the Option Parcel is taken or condemned in whole
------------
or in part for any public purpose by right of eminent domain (with or without
litigation) or is transferred by agreement in lieu of or under threat of
condemnation, the Buyer agrees that such taking will terminate this Agreement
to the extent of the portion of the Option Parcel which is so taken. All
awards arising from such taking will be paid solely to the Seller and the
Buyer will have no claim with respect thereto.
11. Default; Remedy. In the event that either party fails to perform
---------------
such party's obligations hereunder (except as excused by the other party's
default), the party claiming default will make written demand for
performance. If the Seller fails to comply with such written demand within
ten (10) days after receipt thereof, the Buyer will have the option to waive
such default or to enforce all of its rights provided by law, including,
without limitation, the right to demand specific performance. If the Buyer
fails to comply with such written demand within ten (10) days after receipt
thereof, the Seller will have the option to waive such default or to enforce
all of its rights provided by law.
12. Miscellaneous. It is further agreed as follows:
-------------
12.1 Time. TIME IS OF THE ESSENCE WITH RESPECT TO EACH PROVISION
----
OF THIS AGREEMENT.
12.2 Notices. Any notice, demand or communication required or
-------
permitted to be given by any provision of this Agreement will be in writing
and will be deemed to have been given when delivered personally or by
facsimile, receipt confirmed, to the party designated to receive such notice,
or on the date following the day sent by a nationally recognized overnight
courier, or on the third (3rd) business day after the same is sent by
certified mail, postage and charges prepaid, directed to the following
addresses or to such other or additional addresses as any party might
designate by written notice to the other party:
To the Seller: c/o Cappelli Associates
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
With Copy To: Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
To the Buyer: Reckson Operating Partnership, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With Copy To: ▇▇▇▇▇ & Wood LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
12.3 Survival. All representations and warranties of the Seller
--------
and the Buyer contained in this Agreement with respect to each Lot will
survive the Closing Date for a period of six (6) months.
12.4 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the Buyer and the Seller relating to the sale of the Lots.
This Agreement supersedes, in all respects, all prior written or oral
agreements, if any, between the parties relating to the Options and there are
no agreements, understandings, warranties or representations between the
Buyer and the Seller except as set forth herein.
12.5 Binding Effect. This Agreement will inure to the benefit of
--------------
and bind the respective successors and permitted assigns of the Buyer and the
Seller.
12.6 Attorneys' Fees. If either party institutes an action or
---------------
proceeding against the other relating to the provisions of this Agreement or
any default hereunder, the unsuccessful party to such action or proceeding
will reimburse the successful party therein, for the reasonable expenses of
attorneys' fees, disbursements and other litigation expenses incurred by the
successful party.
12.7 Severability. If any provision of this Agreement is
------------
determined by a court having jurisdiction to be illegal, invalid or
unenforceable under any present or future law, the remainder of this
Agreement will not be affected thereby. It is the intention of the parties
that if any provision is so held to be illegal, invalid or unenforceable,
there will be added in lieu thereof a provision as similar in terms to such
provision as is possible that is legal, valid and enforceable.
12.8 Counterpart Execution. This Agreement may be executed in
---------------------
counterparts, each of which will be deemed an original document, but all of
which will constitute a single document. This document will not be binding
on or constitute evidence of a contract between the parties until such time
as a counterpart of this document has been executed by each party and a copy
thereof delivered to the other party to this Agreement.
12.9 Assignment. The rights of the Buyer under this Agreement
----------
may be assigned in whole or in part to any other party without the consent of
the Seller. The Seller may pledge all of its right, title and interest in
this Agreement to any institutional lender as collateral for a loan made by
such institutional lender. The Buyer will cooperate with the Seller in
obtaining such loan.
12.10 Amendment. Neither this Agreement nor any of the provisions
---------
hereof can be changed, waived, discharged or terminated, except by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
12.11 Governing Law. This Agreement is being executed, delivered
-------------
and is intended to be performed in New York and the substantive laws of New
York will govern the validity, construction and enforcement of this
Agreement. The parties consent to the venue and jurisdiction of any federal
or state court sitting in Westchester County, New York in any action brought
to enforce the terms of this Agreement. The parties irrevocably and
unconditionally submit to the jurisdiction (both subject matter and personal)
of any such court and irrevocably and unconditionally waive: (a) any
objection any party might now or hereafter have to the venue in any such
court; and (b) any claim that any action or proceeding brought in any such
court has been brought in an inconvenient forum.
12.12 Brokerage. The Seller and the Buyer represent and warrant
---------
to each to the other that: (a) the sales of the Lots will be made without
liability for any finder's, realtor's, broker's, agent's or other similar
commission; and (b) the parties mutually agree to indemnify and hold each
other harmless from claims for commissions asserted by any party as a result
of dealings claimed to give rise to such commissions.
12.13 Sale by the Buyer. Prior to purchasing a particular Lot,
-----------------
the Buyer may enter into an agreement with a third party wherein the Buyer
agrees that such Lot will be sold to such third party. In such case, at the
request of the Buyer, the Seller will sell the Lot directly to such third
party (and not to the Buyer) in accordance with the terms of this Agreement.
The purchase price paid to the Seller by such third party shall be delivered
to the Buyer to the extent such purchase price exceeds the purchase price
which the Seller is otherwise entitled to receive pursuant to Section 4
above. If the purchase price paid by such third party is less than the
purchase price which the Seller is otherwise entitled to receive pursuant to
Section 4 above, then the Buyer shall pay the Seller such deficiency
simultaneously with the sale of such Lot to such third party.
12.14 Headings. The headings used in this Agreement are for ease
--------
in reference only and are not intended to affect the interpretation of this
Agreement in any way.
12.15 Construction. The parties acknowledge that each party and
------------
each party's counsel have reviewed and revised this Agreement and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party will not be employed in the
interpretation of this Agreement or any amendments or schedules hereto.
* * * * *
IN WITNESS WHEREOF, this instrument has been executed by the
parties on the dates hereafter indicated to be effective on the date first
above written.
(SELLER)
By:
---------------------------------
Name:
Title:
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associate Realty Corp.
By:
-----------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF SUFFOLK )
On the day of , 1998, personally appeared ,
------ ---- -------------------
to me known to be the person who executed the foregoing instrument and
who, being duly sworn, did depose and say that he is a of
-----------------
Reckson Associates Realty Corp., general partner of Reckson Operating
Partnership L.P., that he executed the foregoing instrument and that he had
authority to sign the same, and he acknowledged that it was his free act and
deed and the free act and deed of Reckson Associates Realty Corp., before me.
--------------------------------
Notary Public
(Notarial Stamp)
State of New York )
) ss.:
County of New York )
On the day of March in the year 1998 before me, the undersigned, a
----
Notary Public in and for said State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
personally known to me or proved to me on the basis of satisfactory evidence
to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual or the person upon behalf of
which the individual acted, executed the instrument.
---------------------------------
Notary Public
SCHEDULE "A"
DESCRIPTION OF LAND
-------------------
SCHEDULE "B"
TITLE COMMITMENT
----------------
SCHEDULE "C"
DEED
----
SCHEDULE "D"
ASSIGNMENT
----------
SCHEDULE "E"
AFFIDAVIT OF NON-FOREIGN STATUS
-------------------------------
EXHIBIT Q
Development Agreement
RIDER C
If the Partnership elects to remain a partner in the ▇▇▇▇▇▇▇▇ Partnership
pursuant to clause (i) above, then the ▇▇▇▇▇▇▇▇ Partner shall have the right
to thereafter admit another partner to the ▇▇▇▇▇▇▇▇ Partnership provided (1)
such other partner is not a competitor of the Partnership, (2) the value of
the partnership interest granted to such third party is not in excess of the
value contributed to the ▇▇▇▇▇▇▇▇ Partnership by such third party and (3) the
admission of such third party will dilute the Partnership's and the ▇▇▇▇▇▇▇▇
Partner's interest in the Partnership equally.