Exhibit 10.1
STOCKHOLDERS' AGREEMENT
dated as of
December 29, 1997
by and among
INTEROFFICE SUPERHOLDINGS CORPORATION
RECKSON MANAGEMENT, INC.,
JAH I/O, LLC
and
RFIA, LLC
TABLE OF CONTENTS
Page
1. Representations and Warranties of the Stockholders........................2
2. Term of Agreement.........................................................2
3. Sale or Transfer of Common Stock..........................................2
(a) General Restrictions...............................................2
(b) Permitted Transfers of Interest....................................3
(i) Testamentary and Gift Transfers...........................3
(ii) Affiliate Transfers.......................................3
(iii) Sale to the Company.......................................3
(iv) Pledges...................................................3
(v) Syndication...............................................4
(vi) Sales to Third Parties....................................4
(vii) Conditions to a Permitted Transfer........................5
(c) Indemnity by Stockholder for Invalidly Transferred Common Stock...5
4. Right of First Refusal....................................................6
(a) Right of the Institutional Stockholders............................6
(b) Acceptance Period..................................................6
(c) FR Deposit.........................................................6
(d) Exercise of FR Right...............................................8
(e) Failure to Exercise FR Right or Failure to Close after Exercise....8
(f) FR Right Closing...................................................9
(g) Proposed Sale by ▇▇▇▇▇▇▇▇▇▇.......................................10
(i) ▇▇▇▇▇▇▇▇▇▇ Offered Shares................................10
(ii) RMI Acceptance Period....................................10
(iii) Exercise of the RMI Refusal Right........................11
(iv) Failure of RMI to Exercise the RMI Refusal Right.........11
(v) Exercise of the JAH Refusal Right........................11
(vi) Failure of JAH to Exercise the JAH Refusal Right.........12
(vii) Closing of the ▇▇▇▇▇▇▇▇▇▇ Sale...........................13
5. Tag-Along Rights.........................................................13
(a) Qualifying Sale...................................................13
(b) Notice of Transfer................................................14
(c) Exercise of Tag-Along Rights......................................14
6. Bring-Along Rights.......................................................15
(a) Sale by Institutional Stockholders................................15
7. ▇▇▇▇▇▇▇▇▇▇ Put Option....................................................16
(a) Exercise Period...................................................16
(b) Suspension of the ▇▇▇▇▇▇▇▇▇▇ Put Option...........................16
(c) Termination of the ▇▇▇▇▇▇▇▇▇▇ Put Option..........................16
(d) Manner of Exercise of the ▇▇▇▇▇▇▇▇▇▇ Put Option...................16
(e) Purchase Price of Shares..........................................16
(f) Closing of the ▇▇▇▇▇▇▇▇▇▇ Put Option..............................17
(g) Termination Date..................................................17
8. Governance...............................................................17
(a) Covenant by Each Stockholder......................................17
(b) Board of Directors................................................17
(c) Business of Company; Business of Interoffice......................18
(d) Co-Chairman of the Board of Directors.............................19
(e) Significant Decisions.............................................19
(f) Leverage of the Company and Interoffice...........................22
(g) Third Party Financing Not Available...............................22
(h) REC Call Option...................................................24
(i) Initial Acquisition Loan..........................................24
(j) Continued Efforts.................................................25
(k) Declination.......................................................25
9. Deadlock Regarding Significant Decisions; Buy/Sell Option................25
(a) Buy/Sell Right....................................................25
(b) Significant Decision Deadlock.....................................26
(c) Transfer of JAH Common Stock to a Pledgee.........................26
(d) Delivery of the Buy/Sell Notice...................................27
(e) Delivery of Response Notice.......................................27
(f) Buy/Sell Deposit..................................................28
(g) Deemed Election to Sell...........................................29
(h) Closing of the Buy/Sell Right.....................................29
(i) Failure to Close..................................................30
(j) Assumption of Obligations.........................................30
10. Additional Contributions.................................................31
(a) Capital Call......................................................31
(b) Capital Call Objectives...........................................31
(c) Determination of Number of Shares to be Issued and Sold...........32
(d) Pre-Emptive Rights; Subscription for Additional Stock.............32
(e) Notice of Subscription Deficit....................................33
(f) Number of Additional Shares.......................................34
(g) Subscription Closing..............................................34
(h) Deemed Loan by Subscribing Stockholders...........................34
(i) Capital Call Notice and Time Periods for Initial Acquisition......35
11. Opportunities; Confidentiality; Noncompetition...........................35
(a) Opportunities.....................................................35
(b) Confidentiality...................................................35
(c) Non-Competition...................................................36
(d) Specified Exclusions..............................................36
(e) Interoffice Network Agreement.....................................38
(f) Survival..........................................................38
12. Distributions............................................................39
(a) Dividends.........................................................39
(b) Assignment of Dividend Payments...................................39
13. Payment of Initial Contributions; RMI Loan to ▇▇▇▇▇▇▇▇▇▇.................39
(a) Payment of Initial Purchase Price.................................39
(b) RMI Loan to ▇▇▇▇▇▇▇▇▇▇............................................40
14. Effect of the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Act......................................41
(a) Applicability.....................................................41
(b) Covenant to File all Necessary Documents..........................41
(c) Amendment of Timing Periods.......................................42
15. Reckson Executive Office Centers Put/Call................................42
(a) Exercise Period...................................................42
(b) Manner of Exercise of the Options.................................42
(c) Purchase Price of REC Assets......................................42
(d) Closing of the Option.............................................43
(e) Conduct of Business...............................................43
(f) Termination Date..................................................43
(g) Agreement of Owners of REC Assets.................................43
16. Participation Rights.....................................................43
(a) ▇▇▇▇▇▇▇▇▇▇ Participation Right....................................44
(b) Participation Rights on Transfers to ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇ Affiliates...........................................45
17. Certain Defined Terms....................................................45
(a) Affiliate.........................................................45
(b) Appraised Value...................................................46
(c) Contingent Transfer...............................................46
(d) Deposit Defaulted Shares..........................................47
(e) Disqualified Transferee...........................................47
(f) Excused Condition.................................................47
(g) Executive Suite Business..........................................47
(h) Fair Market Value.................................................47
(i) Family Group Member...............................................48
(j) Initial Acquisition...............................................48
(k) Initial Appraised Value...........................................49
(l) Interoffice Franchise Fee.........................................49
(m) Initial Acquisition Loan..........................................49
(n) IPO...............................................................49
(o) Liens.............................................................50
(p) Person............................................................50
(q) Platform Company..................................................50
(r) Supermajority Effective Period....................................50
(s) ▇▇▇▇▇▇▇▇▇▇ Put Shares.............................................50
(t) RMI Public Shares.................................................50
(u) Syndicate Representative..........................................50
(v) Third Party Price.................................................50
18. After-Acquired Shares....................................................51
19. Stock Certificate Legend.................................................51
20. Amendment and Modification...............................................51
21. Assignment...............................................................51
22. Further Assurances.......................................................52
23. Governing Law............................................................52
24. Notices..................................................................52
25. Entire Agreement.........................................................54
26. Non-Waiver...............................................................54
27. Injunctive Relief........................................................54
28. Self Executing Procedures for Specific Performance.......................54
29. Attorneys' Fees..........................................................55
30. Consent to Jurisdiction..................................................55
31. Severability.............................................................55
32. Miscellaneous............................................................55
33. Requirement for Acquisition of Interoffice...............................56
SCHEDULE A........List of Nominated Investment Banks.
SCHEDULE B........List of Persons or Entities which are not
Disqualified Transferees.
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of December 29, 1997 (this
"Agreement"), by and among INTEROFFICE SUPERHOLDINGS CORPORATION, a Delaware
corporation (the "Company"), RECKSON MANAGEMENT GROUP, INC., a New York
corporation having an office located at c/o Reckson Associates Realty Corp.,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("RMI"), JAH I/O, LLC, a New
York limited liability company having an office located at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ("JAH" and, together with RMI, the
"Institutional Stockholders"), and RFIA, LLC, a Delaware limited liability
company, having an office located at c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇" and, together with RMI and JAH, the
"Stockholders"). Unless otherwise expressly set forth herein, all capitalized
terms used but not defined herein shall have meanings attributed to them in
Section 17.
WHEREAS, the Company has been formed for the purpose of acquiring
and holding all of the record and beneficial ownership of all of the equity
interests in Interoffice Holdings Corporation, a Virginia corporation
("Interoffice");
WHEREAS, the Company is authorized to issue 1,000,000 shares of
capital stock, all of which shares are common stock, par value $0.01 per share
(the "Common Stock");
WHEREAS, 10,000 shares of Common Stock are issued and outstanding on
the date hereof;
WHEREAS, on the date hereof: (i) RMI owns 5,937.5 shares of Common
Stock; (ii) JAH owns 2,375 shares of Common Stock; and (iii) ▇▇▇▇▇▇▇▇▇▇ owns
1,187.5 shares of Common Stock;
WHEREAS, the Stockholders desire to provide for the stability and
continuity of the management of the affairs of the Company and to impose
certain rights and restrictions with respect to the transfer or other
disposition of their shares of Common Stock upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations and Warranties of the Stockholders.
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Each Stockholder (solely with respect to such Stockholder)
represents and warrants to the Company and each other Stockholder as follows:
(i) Such Stockholder has the full power and authority to
execute, deliver and perform this Agreement;
(ii) This Agreement has been duly and validly authorized,
executed and delivered by such Stockholder and constitutes a valid
and binding obligation of such Stockholder;
(iii) The execution, delivery and performance of this
Agreement by such Stockholder do not violate or conflict with or
constitute a default under such Stockholder's certificate of
incorporation, by-laws, certificate of limited partnership,
certificate of formation, limited liability company agreement,
partnership agreement or similar charter or organizational document
or any material agreement to which it is a party or by which it or
its property is bound; and
(iv) Such Stockholder has acquired the shares of Common
Stock for investment purposes only and not with a view to the
distribution thereof in violation of any applicable state or federal
securities law; it being acknowledged and agreed, however, that each
Stockholder shall have the rights set forth herein with respect to a
Syndication (as defined by Section 3(b)) of its equity interests.
2. Term of Agreement.
-----------------
The term of this Agreement shall commence on the date hereof and
shall continue until the occurrence of any one of the following events: (i)
the cessation of the business and the filing of a Certificate of Dissolution
of the Company with the Delaware Secretary of State; (ii) the ownership of the
Common Stock by only one stockholder who is a party to this Agreement; or
(iii) an IPO by the Company of at least twenty (20%) percent of the then
issued and outstanding shares of Common Stock on a fully diluted basis after
giving effect to such IPO.
3. Sale or Transfer of Common Stock.
--------------------------------
(a) General Restrictions. Subject to the terms and provisions of
--------------------
Section 3(b), during the term of this Agreement, without the prior written
consent of each other Stockholder, no Stockholder shall, directly or
indirectly, sell, pledge, hypothecate, give, devise, transfer, create a
security interest in or lien on, place in trust (voting or otherwise), assign
or in any other way encumber or dispose of (each, a "Transfer") any of the
shares of Common Stock now or hereafter at any time owned by him or it, or any
interest therein, or the stock certificate or certificates representing any
such shares of Common Stock (each, a "Transfer of Interest"). Without limiting
the generality of the foregoing, a Transfer of Interest by a Stockholder shall
include the direct or indirect Transfer of any equity interest in such
Stockholder and with respect to any such Transfer, a Permitted Transfer (as
defined by Section 3(b)) shall pertain to any Transfer by a holder of such
equity interests as if the transferor were a Stockholder and the interest
being Transferred were shares of Common Stock). Any Transfer of Interest
effected or purported or attempted to be effected: (i) not in accordance with
the terms and conditions of this Agreement; (ii) to an individual younger than
18 years of age or who has been adjudged incompetent or insane; or (iii) to a
person prohibited by law from holding any shares of Common Stock, shall be
void ab initio and shall not bind the Company or any Stockholder.
(b) Permitted Transfers of Interest. Notwithstanding the
-----------------------------------
provisions of Section 3(a) hereof and subject to Section 3(b)(vii), a
Stockholder may, without the consent of any other Stockholder, effect a
Transfer of Interest as follows (each, a "Permitted Transfer"); provided,
however that no Stockholder may effect a Transfer of Interest to any
Disqualified Transferee:
(i) Testamentary and Gift Transfers. Each Stockholder that
-------------------------------
is an individual may effect a Transfer of Interest by gift, devise,
will or the laws of descent and distribution to any Family Group
Member of such Stockholder;
(ii) Affiliate Transfers. Each Stockholder may effect a
--------------------
Transfer of Interest to an Affiliate of such Stockholder and, with
respect to RMI, RMI may effect a Transfer of Interest to Reckson
Service Industries, Inc. ("RS");
(iii) Sale to the Company. Any Stockholder may sell any
--------------------
shares of Common Stock to the Company pursuant to this Agreement or
otherwise;
(iv) Pledges. Each Stockholder may grant a security
-------
interest in ("Pledge") any of its shares of Common Stock now or
hereafter owned by it and an Affiliate of a Stockholder may Pledge
any equity interest in such Stockholder to secure its indebtedness
(or the indebtedness or the guarantee of indebtedness of any of its
Affiliates that is incurred for general purposes) owing to a bank,
financial institution, third party lender or other Person (a
"Pledgee") if the Pledgee is not a Disqualified Transferee;
provided, however, that in the event a Pledgee or its successor
succeeds to the interest of such Stockholder, then such Stockholder
and such Pledgee shall deliver a notice to the Company and each
other Stockholder of such succession and at any time within three
(3) months after the earlier to occur of (x) delivery of such notice
or (y) actual knowledge of such succession: (A) JAH, if the
Stockholder which Pledged any of its shares of Common Stock is RMI,
or RMI, if the Stockholder which Pledged any of its shares of Common
Stock is JAH, may elect to exercise a Buy/Sell Right between such
Stockholders as if there were a Deadlock (as defined by Section 9)
with respect to a Significant Decision (as defined by Section 9) in
accordance with the terms and provisions of Section 9 but without
the requirement of providing a Warning Notice (as defined by Section
9); or (B) the Company, if the Stockholder which Pledged any of its
shares of Common Stock is ▇▇▇▇▇▇▇▇▇▇, may elect to redeem all of
such shares of Common Stock of ▇▇▇▇▇▇▇▇▇▇ at the Fair Market Value
of such shares;
(v) Syndication. A Stockholder may syndicate its shares of
-----------
Common Stock by a Transfer of the equity interests in such
Stockholder in any transaction or series of related transactions
(each, a "Syndication"); provided, that (A) no Stockholder shall
effect any Syndication which (together with all prior Syndications)
would result in the Syndication of eighty (80%) percent or more of
the equity interests of such Stockholder (provided that RMI may
effect a Transfer of Interest in RMI by the sale of RMI Public
Shares); (B) no direct or indirect subscriber, participant or
Transferee of any such interest shall be a Disqualified Transferee;
(C) such Stockholder shall remain the sole and exclusive record
owner of all of the shares of Common Stock issued to such
Stockholder; (D) such Stockholder and each such subscriber,
participant or Transferee shall be subject to, and shall submit to,
the jurisdiction of the Delaware Court of Chancery, the New York
State Courts in New York County, and all federal courts; (E) with
respect to any Syndication by JAH or ▇▇▇▇▇▇▇▇▇▇, the Syndicate
Representatives of such Stockholder shall be the exclusive
representatives of such Stockholder and the shares of Common Stock,
business and affairs of such Stockholder; (F) no such transaction
shall relieve such Stockholder from any of its obligations under
this Agreement; and (G) with respect to any Syndication by JAH, at
the time of any such Syndication, the Family Group Members of JAH
shall, collectively, own at least one-third of the beneficial
economic interests in JAH Realties, L.P., a New York limited
partnership which presently owns 100% of the equity interests in
JAH;
(vi) Sales to Third Parties. Any Stockholder may sell any
----------------------
shares of Common Stock to another Stockholder or any third party
purchaser who is not an Affiliate of such Stockholder subject to the
provisions of this Agreement, including Sections 4, 5, 6, 7, 8, 9,
10 or 16;
(vii) Conditions to a Permitted Transfer. Notwithstanding
-----------------------------------
the provisions of this Section 3(b), no Transfer of Interest shall
be a Permitted Transfer unless, in each case, such Transfer of
Interest (A) does not require the registration of any shares of
Common Stock or any other security issued or issuable by the Company
under the Securities Act of 1933, as amended (the "1933 Act"), or
any state securities or "Blue Sky" laws (other than notice filings
in connection with a transaction exempt from the registration
requirements of the 1933 Act ("Notice Filings")); (B) complies with
all applicable federal and state securities and "Blue Sky" laws; (C)
does not relieve such Stockholder from any of its obligations under
this Agreement and (D) prior to the consummation of any Permitted
Transfer (x) the Company and each Stockholder shall have received a
notice from the Stockholder proposing such Transfer of Interest
stating the provision herein which permits such Transfer of
Interest, the identity of such permitted assignee or transferee (any
such person, regardless of the method of Transfer, being referred to
herein as a "Transferee"), the expected closing date for such
Transfer of Interest, (y) the Company shall have received the
opinion of its counsel or counsel reasonably acceptable to the
Company that such Transfer of Interest does not require registration
under the 1933 Act or any applicable state securities or "Blue Sky"
laws (other than Notice Filings) together with all documentation
reasonably requested by the Company to evidence that such Transfer
of Interest is permitted hereunder and to otherwise disclose the
identity and financial condition of such Transferee and (z) any
Transferee not a party hereto shall execute an appropriate document
confirming that such Transferee takes such shares of Common Stock
subject to the terms and conditions of this Agreement and assumes
all of the obligations of the Stockholder effecting such Transfer of
Interest hereunder and with respect to such shares of Common Stock.
The Company shall not give effect on its books to any Transfer or
purported Transfer of shares of Common Stock held or owned by any
Stockholder to any Transferee unless each and all of the conditions
hereof affecting such Transfer shall have been complied with to the
Company's reasonable satisfaction.
(c) Indemnity by Stockholder for Invalidly Transferred Common
------------------------------------------------------------
Stock. In the event that any Stockholder effects or purports to effect any
-----
Transfer of Interest other than a Permitted Transfer, then such Stockholder
shall indemnify and hold harmless the Company and each other Stockholder from
and against any and all liabilities or damages to such party by reason of such
act including, without limitation, reasonable attorneys' fees and
disbursements incurred by any such indemnified party in connection with any
such act as and when such liabilities or damages are determined and such
expenses are incurred.
4. Right of First Refusal.
----------------------
(a) Right of the Institutional Stockholders. If, at any time,
-----------------------------------------
either Institutional Stockholder has a written bona fide offer, including an
offer which is a result of solicitation by such Institutional Stockholder, for
a Contingent Transfer other than a Transfer to another stockholder, for any or
all of its shares of Common Stock (collectively, the "Third Party Offered
Shares") and such Institutional Stockholder (the "Selling Institutional
Stockholder") desires to accept such offer, such Selling Institutional
Stockholder shall give prompt notice regarding such proposed Contingent
Transfer (a "Notice of Offer") to the other Institutional Stockholder (the "FR
Stockholder") and each other Stockholder which notice shall contain: (i) a
true and complete copy of such offer; (ii) the number of shares of Common
Stock (and percentage of such shares to the total number of shares of Common
Stock owned by such Stockholder) proposed to be sold; (iii) the identity of
such third party purchaser and its controlling Affiliates; (iv) reasonable and
sufficient evidence that such third party purchaser has a financial net worth
sufficient to consummate the proposed Permitted Transfer (it being
acknowledged and agreed that if the FR Stockholder does not dispute the
reasonableness and sufficiency of such information by delivering a notice to
the Selling Institutional Stockholder to such effect within ten (10) business
days after the delivery of the Notice of Offer that such information shall be
deemed to satisfy the requirements of this clause (iv)); (v) the proposed
Third Party Price; and (vi) the other material terms and conditions of such
offer including, without limitation, any promissory notes included in such
Third Party Price and the proposed date of closing.
(b) Acceptance Period. For a period of ten (10) business days
------------------
after receipt of the Notice of Offer (the "FR Acceptance Period") the FR
Stockholder shall have the right, but not the obligation (the "FR Right"), to
purchase all, but not less than all, of the Third Party Offered Shares from
the Selling Institutional Stockholder in accordance with the provisions of
this Section 4 at a purchase price per share equal to the Third Party Price.
The FR Stockholder may exercise its FR Right by providing a notice (the "FR
Acceptance Notice") to such effect to the Selling Institutional Stockholder
and ▇▇▇▇▇▇▇▇▇▇ on or prior to the expiration of the FR Acceptance Period and
specifying the proposed date for the closing of the purchase and sale of the
Third Party Offered Shares (the "FR Closing Date") which date shall not be
later than (x) sixty (60) days after the date that the Notice of Offer is
delivered, if the FR Stockholder is RMI, or (y) one hundred and eighty (180)
days after the date that the Notice of Offer is delivered, if the FR
Stockholder is JAH.
(c) FR Deposit. Upon exercise of its FR Right, the FR
-----------
Stockholder shall pay and deliver a deposit (the "FR Deposit") to the Selling
Institutional Stockholder on or prior to five (5) business days after the
delivery of the FR Acceptance Notice, which deposit shall be as set forth
below:
(i) if JAH is the FR Stockholder, the FR Deposit shall
equal the greater of (x) 5% of the aggregate Third Party Price or
(y) $300,000 (but not in excess of the aggregate Third Party Price).
The FR Deposit shall consist of (x) a certified check (the "Cash
Deposit") payable to the order of RMI in an amount equal to not less
than the lesser of the amount of the FR Deposit or $2,000,000 and
(y) either (A) a first priority security interest in, and pledge of,
the number of JAH's shares of Common Stock such that the product of
the Third Party Price multiplied by such number of shares of Common
Stock is equal to 1.5 times the amount that the FR Deposit exceeds
the amount of the Cash Deposit, if any, or (B) a second priority
security interest in, and pledge of, all of the shares of Common
Stock of the FR Stockholder, if the amount of the FR Deposit is
greater than the amount of the Cash Deposit actually paid.
(ii) if RMI is the FR Stockholder, the FR Deposit shall
equal 5% of the aggregate Third Party Price for the Third Party
Offered Shares consisting of (x) a Cash Deposit payable to the order
of JAH in an amount equal to not less than the lesser of the amount
of the FR Deposit or $3,000,000 and (y) either (A) a first priority
security interest in and pledge of the number of RMI's shares of
Common Stock such that the product of the Third Party Price
multiplied by such number of shares of Common Stock is equal to 1.5
times the amount that the FR Deposit exceeds the amount of the Cash
Deposit, if any, or (B) a second priority security interest in, and
pledge of, all of the shares of Common Stock of the FR Stockholder,
if the amount of the FR Deposit is greater than the amount of the
Cash Deposit actually paid.
(iii) if an FR Stockholder is required to deliver to the
Selling Institutional Stockholder a security interest in, and pledge
of, any of its shares of Common Stock, it will execute and deliver
such documents (including, without limitation, UCC Financing
Statements and stock powers) as reasonably required by the Selling
Institutional Stockholder and deliver the stock certificates
representing such shares to the Selling Institutional Stockholder at
the address specified in Section 24. It is acknowledged and agreed
that any security interest in, and pledge of, shares of Common Stock
as collateral security provided in this Section shall be limited for
the purpose of providing collateral for the amount of the FR Deposit
which is in excess of the Cash Deposit, if any. Accordingly, the
Selling Institutional Stockholder's right and interest in the FR
Stockholder's shares of Common Stock shall be limited to the Deposit
Defaulted Shares of such Stockholder.
(iv) it is acknowledged and agreed that, except as
expressly provided below, the FR Deposit is intended to be a
non-refundable deposit to secure the obligations of the FR
Stockholder. Accordingly, if the FR Stockholder fails to purchase
the Third Party Offered Shares on the FR Closing Date, other than as
a result of an Excused Condition, then: (A) the Selling
Institutional Stockholder shall retain the Cash Deposit and the
Deposit Defaulted Shares as liquidated damages for the harm (which
harm is acknowledged to not be readily measurable in damages) caused
by the failure of the FR Stockholder to timely conclude such
purchase and, to the extent that a portion of the FR Deposit
constituted a pledge of shares of Common Stock, the Deposit
Defaulted Shares shall be transferred to the Selling Institutional
Stockholder and any shares of Common Stock included in the FR
Deposit other than the Deposit Defaulted Shares shall be returned to
the FR Stockholder; and (B) the FR Stockholder shall promptly upon
request vote all of its shares of Common Stock in favor of a
transaction for the sale of the entire Company (whether by a merger,
consolidation, recapitalization, sale of assets or shares of Common
Stock or otherwise) to be consummated within 180 days after the FR
Closing Date at a value per share of not less than ninety-five (95%)
percent of the Third Party Price if the Selling Institutional
Stockholder votes its shares of Common Stock (or causes the
directors designated by the Selling Institutional Stockholder to
vote) in favor of such transaction.
(d) Exercise of FR Right. Subject to Section 16, upon exercise
--------------------
of its FR Right, the Selling Institutional Stockholder shall be obligated to
sell all, but not less than all, of the Third Party Offered Shares to the FR
Stockholder, and the FR Stockholder shall be obligated to purchase all, but
not less than all, of: (i) the Third Party Offered Shares from the Selling
Institutional Stockholder; and (ii) the ▇▇▇▇▇▇▇▇▇▇ Tag-Along Shares (as
defined by Section 5(a)), if any, simultaneously on the FR Closing Date, in
each case, at a price per share equal to the Third Party Price; provided,
that, at the sole discretion of the FR Stockholder, the payment of the
aggregate Third Party Price may be on the terms and conditions stated in the
Notice of Offer including by the issuance of any promissory notes described
therein ("FR Notes"). Each Stockholder shall use all commercially reasonable
efforts to secure any approvals required to be obtained by such Stockholder
for the consummation of the purchase and sale of such shares.
(e) Failure to Exercise FR Right or Failure to Close after
-----------------------------------------------------------
Exercise. In addition to the rights granted to the Selling Institutional
--------
Stockholder under Section 4(c)(iv), if the FR Stockholder: (i) does not
exercise its FR Right hereunder with respect to all, but not less than all, of
the Third Party Offered Shares within the FR Acceptance Period; (ii) does not
deliver the FR Deposit to the Selling Institutional Stockholder in accordance
with Section 4(c); or (iii) otherwise fails to purchase such shares of Common
Stock on or prior to the FR Closing Date other than as a result of an Excused
Condition, then:
(A) If an FR Acceptance Notice was not delivered, the
Selling Institutional Stockholder shall be free (subject to any
Tag-Along Rights of the Stockholders as provided for in Section
5) to sell the Third Party Offered Shares at the price and upon
the terms specified in the Notice of Offer within sixty (60)
days after the expiration of the FR Acceptance Period and in
compliance with the provisions of Section 3;
(B) If an FR Acceptance Notice was delivered but the FR
Deposit was not delivered to the Selling Institutional
Stockholder in accordance with Section 4(c), the Selling
Institutional Stockholder shall be free (subject to any
Tag-Along rights of the Stockholders as provided for in Section
5) to sell the Third Party Offered Shares at a price not less
than ninety-five (95%) percent of the Third Party Price within
one hundred twenty (120) days after the five (5) business days
specified in Section 4(c) and in compliance with the provisions
of Section 3; and
(C) If an FR Acceptance Notice and the FR Deposit was
delivered, the Selling Institutional Stockholder shall be free
(subject to any Tag-Along Rights of the Stockholders as provided
for in Section 5) to sell the Third Party Offered Shares at a
price not less than ninety-five (95%) percent of the Third Party
Price within one hundred eighty (180) days after the earlier to
occur of (x) the date a notice is delivered by the FR
Stockholder to the Selling Institutional Stockholder specifying
that the FR Stockholder will not purchase the Third Party
Offered Shares on the FR Closing Date or (y) the proposed FR
Closing Date and in compliance with the provisions of Section 3.
If the Selling Institutional Stockholder does not consummate the
sale of the Third Party Offered Shares within the applicable time period
specified above, then the provisions of this Section 4 shall again apply, and
no sale of shares of Common Stock shall be made otherwise than in accordance
with the terms of this Agreement.
(f) FR Right Closing. On the FR Closing Date at the offices of
-----------------
the Company: (i) the FR Stockholder shall pay the aggregate Third Party Price
less the Cash Deposit actually received by the Selling Institutional
Stockholder (or, if the Notice of Offer permits FR Notes, an amount equal to
the sum of cash and the principal amount of the FR Notes equal to the Third
Party Price less the Cash Deposit actually received by the Selling
Institutional Stockholder) to the Selling Institutional Stockholder by wire
transfer of immediately available funds; and (ii) the Selling Institutional
Stockholder shall deliver to the FR Stockholder (x) the stock certificate or
certificates representing all of the Third Party Offered Shares free and clear
of any Liens (but such shares of Common Stock shall continue to be subject to
the terms and provisions of this Agreement) duly endorsed in blank, or
accompanied by stock powers duly executed in blank, together with all required
stock transfer tax stamps affixed and (y) the release of the non-cash portion
of the FR Deposit and all documents delivered to it in connection therewith.
If ▇▇▇▇▇▇▇▇▇▇ has exercised its Tag-Along Right in accordance with Section 5,
then on the FR Closing Date at the offices of the Company simultaneously with
the closing of the purchase of the Third Party Offered Shares (x) the FR
Stockholder shall pay an amount of cash (or, if the Notice of Offer permits FR
Notes, an amount equal to the sum of cash and the principal amount of the FR
Notes), equal to the Third Party Price multiplied by the number of ▇▇▇▇▇▇▇▇▇▇
Tag Along Shares by wire transfer of immediately available funds and (y)
▇▇▇▇▇▇▇▇▇▇ shall deliver the to the FR Stockholder the stock certificate or
certificates representing all of the ▇▇▇▇▇▇▇▇▇▇ Tag Along Shares free and
clear of any Liens (but such shares of Common Stock shall continue to be
subject to the terms and provisions of this Agreement) duly endorsed in blank,
or accompanied by stock powers duly executed in blank, together with all
required stock transfer tax stamps affixed.
(g) Proposed Sale by ▇▇▇▇▇▇▇▇▇▇.
---------------------------
(i) ▇▇▇▇▇▇▇▇▇▇ Offered Shares. If, at any time, ▇▇▇▇▇▇▇▇▇▇
-------------------------
has a bona fide written offer, including an offer which is a result
of solicitation by ▇▇▇▇▇▇▇▇▇▇, to effect a Contingent Transfer
(other than pursuant to the ▇▇▇▇▇▇▇▇▇▇ Put Option pursuant to
Section 7) for any or all of its shares of Common Stock
(collectively, the "▇▇▇▇▇▇▇▇▇▇ Offered Shares") and ▇▇▇▇▇▇▇▇▇▇
desires to accept such offer, ▇▇▇▇▇▇▇▇▇▇ shall promptly give a
Notice of Offer (which shall include the items set forth in clauses
(a)(i) through (vi), inclusive, of Section 4) to each Institutional
Stockholder.
(ii) RMI Acceptance Period. For a period of ten (10)
-----------------------
business days after receipt of the Notice of Offer (the "RMI
Acceptance Period"), RMI shall have the right, but not the
obligation (the "RMI Refusal Right"), to purchase all, but not less
than all, of the ▇▇▇▇▇▇▇▇▇▇ Offered Shares in accordance with this
Section 4 at a purchase price per share equal to the Third Party
Price specified by ▇▇▇▇▇▇▇▇▇▇ in its Notice of Offer. RMI may
exercise its RMI Refusal Right by providing a notice to such effect
(the "RMI Acceptance Notice") to ▇▇▇▇▇▇▇▇▇▇ on or prior to the
expiration of the RMI Acceptance Period together with a cash deposit
(the "ROS Deposit") in an amount equal to five (5%) percent of the
aggregate purchase price for the ▇▇▇▇▇▇▇▇▇▇ Offered Shares (such
deposit to be retained by ▇▇▇▇▇▇▇▇▇▇ as liquidated damages in the
event that RMI fails to timely consummate the purchase of such
shares for any reason other than an Excused Condition).
(iii) Exercise of the RMI Refusal Right. Upon exercise of
----------------------------------
its RMI Refusal Right and delivery of the cash deposit specified
above, ▇▇▇▇▇▇▇▇▇▇ shall be obligated to sell all, but not less than
all, of the ▇▇▇▇▇▇▇▇▇▇ Offered Shares to RMI, and RMI shall be
obligated to purchase all, but not less than all, of the ▇▇▇▇▇▇▇▇▇▇
Offered Shares on to the date that is specified in the Notice of
Offer, but in any event not earlier than sixty (60) days after the
date that the RMI Acceptance Notice is delivered (the "RMI Closing
Date") at a price per share equal to the Third Party Price. Each
such Stockholder shall use all commercially reasonable efforts to
secure any approvals required to be obtained by such Stockholder for
the consummation of the purchase and sale of such shares.
(iv) Failure of RMI to Exercise the RMI Refusal Right;
-----------------------------------------------------
Failure to Close after Exercise by RMI. If RMI does not exercise its
--------------------------------------
RMI Refusal Right hereunder with respect to all, but not less than
all, of the ▇▇▇▇▇▇▇▇▇▇ Offered Shares within the RMI Acceptance
Period, or if it otherwise fails to purchase such shares of Common
Stock on or prior to the RMI Closing Date (other than by reason of
an Excused Condition), then during the ten (10) business days
following the (x) RMI Acceptance Period, if RMI did not exercise its
RMI Refusal Right or (y) the proposed RMI Closing Date, if RMI
exercised its RMI Refusal Right, JAH shall have the right, but not
the obligation (the "JAH Refusal Right") to purchase all, but not
less than all, of the ▇▇▇▇▇▇▇▇▇▇ Offered Shares in accordance with
this Section 4 at a purchase price per share equal to the Third
Party Price. JAH may exercise its JAH Refusal Right by providing a
notice to such effect (the "JAH Acceptance Notice") to ▇▇▇▇▇▇▇▇▇▇ on
or prior to the expiration of such ten (10) business day period
together with the ROS Deposit (such deposit to be retained by
▇▇▇▇▇▇▇▇▇▇ as liquidated damages in the event that JAH fails to
timely consummate the purchase of such shares for any reason other
than an Excused Condition).
(v) Exercise of the JAH Refusal Right. Upon exercise of its
---------------------------------
JAH Refusal Right and delivery of the cash deposit specified above,
▇▇▇▇▇▇▇▇▇▇ shall be obligated to sell all, but not less than all of
the ▇▇▇▇▇▇▇▇▇▇ Offered Shares to JAH, and JAH shall be obligated to
purchase all, but not less than all, of the ▇▇▇▇▇▇▇▇▇▇ Offered
Shares on or prior to the date that is sixty (60) days after the
date that the JAH Acceptance Notice is delivered (the "JAH Closing
Date") and at a price per share equal to the Third Party Price. Each
such Stockholder shall use all commercially reasonable efforts to
secure any approvals required to be obtained by such Stockholder for
the consummation of the purchase and sale of such shares.
(vi) Failure of JAH to Exercise the JAH Refusal Right;
-----------------------------------------------------
Failure to Close after Exercise by JAH. If JAH does not exercise its
--------------------------------------
JAH Refusal Right hereunder with respect to all, but not less than
all, of the ▇▇▇▇▇▇▇▇▇▇ Offered Shares within the ten (10) business
day period specified in Section 4(g)(iv), or if it otherwise fails
to purchase such shares of Common Stock on or prior to the JAH
Closing Date, then
(A) if JAH did not exercise its JAH Refusal Right,
then ▇▇▇▇▇▇▇▇▇▇ shall be free to sell the ▇▇▇▇▇▇▇▇▇▇
Offered Shares at the price and upon the terms specified in
the Notice of Offer within sixty (60) days after the
expiration of such ten (10) business day period and in
compliance with the provisions of Section 3;
(B) if a JAH Acceptance Notice was delivered but the
ROS Deposit was not delivered to ▇▇▇▇▇▇▇▇▇▇ in accordance
with Section 4(g)(ii) within the ten (10) business day
period specified in Section 4(g)(iv), then ▇▇▇▇▇▇▇▇▇▇ shall
be free to sell the ▇▇▇▇▇▇▇▇▇▇ Offered Shares at a price
not less than ninety-five (95%) percent of the Third Party
Price within one hundred twenty (120) days after the
expiration of such ten (10) business day period and in
compliance with the provisions of Section 3; and
(C) if a JAH Acceptance Notice was delivered and the
ROS Deposit was delivered to ▇▇▇▇▇▇▇▇▇▇ in accordance with
Section 4(g)(ii), then ▇▇▇▇▇▇▇▇▇▇ shall be free to sell the
▇▇▇▇▇▇▇▇▇▇ Offered Shares at the price not less than
ninety-five (95%) percent of the Third Party Price within
one hundred and eighty (180) days after the expiration of
such ten (10) business day period and in compliance with
the provisions of Section 3.
If ▇▇▇▇▇▇▇▇▇▇ does not consummate the sale within the applicable
period specified above, then the provisions of this Section 4 shall again
apply, and no sale of shares of the Common Stock shall be made otherwise than
in accordance with the terms of this Agreement.
(vii) Closing of the ▇▇▇▇▇▇▇▇▇▇ Sale. On the date specified
for the closing of the purchase and sale of the ▇▇▇▇▇▇▇▇▇▇ Offered
Shares at the offices of the Company (x) the Institutional
Stockholder purchasing the ▇▇▇▇▇▇▇▇▇▇ Offered Shares shall pay the
aggregate Third Party Price (less the ROS Deposit actually paid by
such Institutional Stockholder to ▇▇▇▇▇▇▇▇▇▇) for the ▇▇▇▇▇▇▇▇▇▇
Offered Shares to ▇▇▇▇▇▇▇▇▇▇ by wire transfer of immediately
available funds and (y) ▇▇▇▇▇▇▇▇▇▇ shall deliver to such
Institutional Stockholder the stock certificate or certificates
representing all of the ▇▇▇▇▇▇▇▇▇▇ Offered Shares free and clear of
any Liens (but such shares of Common Stock shall continue to be
subject to the terms and provisions of this Agreement) duly endorsed
in blank, or accompanied by stock powers duly executed in blank,
together with all required stock transfer tax stamps affixed.
5. Tag-Along Rights.
----------------
(a) Qualifying Sale. If one or more Stockholders proposes to
effect a Contingent Transfer of any or all of its shares of Common Stock then,
each other Stockholder shall have such rights (the "Tag-Along Rights") as are
set forth below:
(i) If either Institutional Stockholder is the Stockholder
effecting Contingent Transfer, ▇▇▇▇▇▇▇▇▇▇ (but not any other
Stockholder) may require, and the selling Institutional Stockholder
shall cause, such third party purchaser (or the purchasing
Institutional Stockholder) to purchase from ▇▇▇▇▇▇▇▇▇▇ the number of
shares of Common Stock (the "▇▇▇▇▇▇▇▇▇▇ Tag-Along Shares") equal to
(x) the total number of shares of Common Stock owned by ▇▇▇▇▇▇▇▇▇▇
(y) multiplied by a fraction, the numerator of which is the number
of shares of Common Stock proposed to be sold by such Institutional
Stockholder and the denominator of which is the total number of
shares of Common Stock owned by such Institutional Stockholder
immediately prior to such sale; or
(ii) If a Stockholder (the "Selling Stockholder") proposes
to effect a Contingent Transfer of more than 50% of his or its
shares of Common Stock either in one transaction or series of
related transactions (other than a Transfer of shares of Common
Stock pursuant to Section 7) (a "Majority Sale"), each other
Stockholder may require such purchaser to purchase from him or it
the number of shares of Common Stock equal to (x) the total number
of shares of Common Stock owned by such other Stockholder
immediately prior to such sale (y) multiplied by a fraction, the
numerator of which is the number of shares of Common Stock proposed
to be sold by such Selling Stockholder and the denominator of which
is the total number of shares of Common Stock owned by such Selling
Stockholder immediately prior to such sale.
(iii) An Institutional Stockholder with Tag-Along Rights
with respect to a Third Party Offer with respect to which it
exercised its FR Right (a "Specified Sale") and either: (A) failed
to deliver the applicable FR Deposit in accordance with Section
4(c); or (B) otherwise failed to purchase all of such Third Party
Offered Shares on the FR Closing Date other than as a result of an
Excused Condition, shall have a Tag-Along Right with respect to the
sale of such Third Party Offered Shares (e.g., the shares of Common
Stock applicable to the Specified Sale) if (1) such Third Party
Offered Shares are sold by the Selling Stockholder in accordance
with Section 4(e)(B) or Section 4(e)(C) and (2) if the Selling
Stockholder in connection with Specified Sale did not receive the
applicable FR Deposit, at the closing of the sale of such Third
Party Offered Shares the Selling Stockholder is paid an amount equal
to the sum of (I) the Cash Deposit applicable to the Specified Sale
and (II) the amount of the cash equal to the Deposit Defaulted
Shares applicable to the Specified Sale, if any, valued at the
purchase price of the Third Party Offered Shares sold by the Selling
Stockholder in accordance with Section 4(e)(B) or 4(e)(C).
(iv) It is acknowledged and agreed that the Tag-Along
Rights provided by this Section 5 do not limit or restrict the
Participation Rights provided by Section 16.
(b) Notice of Transfer. A Selling Stockholder shall deliver a
------------------
notice to the Company and each other Stockholder of each proposed sale of
shares of Common Stock (the "Notice of Transfer") at least fifteen (15)
business days prior to the closing of such purchase and sale. A Notice of
Transfer shall contain the information required to be included in a Notice of
Offer and a statement that the third party purchaser has been informed of the
Tag-Along Rights provided for in this Section 5 and has agreed in writing to
purchase the shares of Common Stock in accordance with the terms of this
Agreement including, without limitation, the Tag-Along Rights provided by this
Section 5.
(c) Exercise of Tag-Along Rights. A Tag-Along Right may be
------------------------------
exercised by a Stockholder by delivery of a notice to the Company and the
Selling Stockholder to such effect (the "Tag-Along Notice") within ten (10)
business days after receipt of the Notice of Transfer. The Tag-Along Notice
shall state the number of Shares of such Stockholder to be sold to such third
party purchaser or the purchasing Institutional Stockholder. Any Shares
purchased from a Stockholder pursuant to this Section 5 shall be at a price
and upon such other terms which are no less favorable to such Stockholder than
that contained in the Notice of Transfer.
6. Bring-Along Rights.
------------------
(a) Sale by Institutional Stockholders. If the Institutional
------------------------------------
Stockholders propose to sell all or a pro rata portion of their respective
shares of Common Stock to the same third party purchaser(s) or its Affiliates
(which, in each case are not an Affiliate of either Institutional Stockholder
and whether resulting from the exercise of their respective Tag-Along Rights
or otherwise), including a proposed sale of the Company by the sale or
exchange of all or substantially all the Stockholders' shares of Common Stock,
a merger, consolidation, recapitalization or otherwise, such third party
purchaser and each Institutional Stockholder shall have the right, but not the
obligation (the "Bring-Along Right") upon five (5) business days' prior
notice, to require ▇▇▇▇▇▇▇▇▇▇ to participate in such sale in the same manner,
at the same purchase price per share, on the same closing date and on the same
other terms and conditions as the Institutional Stockholders, as follows:
(i) if the proposed sale of shares of Common Stock is a
sale of all shares of Common Stock held by the Institutional
Stockholders, the third party purchaser or the Institutional
Stockholders may require ▇▇▇▇▇▇▇▇▇▇ to sell all, but not less than
all, of its shares of Common Stock to such third party purchaser;
(ii) if the proposed sale of shares of Common Stock is a
sale of less than all of the shares of Common Stock owned by the
Institutional Stockholders, the third party purchaser or the
Institutional Stockholders may require ▇▇▇▇▇▇▇▇▇▇ to sell the same
percentage, but not less than the same percentage, of its shares of
Common Stock as the Institutional Stockholders propose to sell to
such third party purchaser; and
(iii) on the closing date specified for the purchase and
sale of ▇▇▇▇▇▇▇▇▇▇' shares of Common Stock pursuant to the exercise
by such third party purchaser or an Institutional Stockholder of its
Bring-Along Right at the offices of the Company (x) the party
purchasing such shares of Common Stock shall pay the aggregate
purchase price for such shares to ▇▇▇▇▇▇▇▇▇▇ on the same terms and
conditions as regards the other Stockholders by wire transfer of
immediately available funds and (y) ▇▇▇▇▇▇▇▇▇▇ shall deliver to such
purchaser the stock certificate or certificates representing all
such shares free and clear of any Liens (but such shares of Common
Stock shall continue to be subject to the terms and provisions of
this Agreement) duly endorsed in blank, or accompanied by stock
powers duly executed in blank, together with all required stock
transfer tax stamps affixed.
7. ▇▇▇▇▇▇▇▇▇▇ Put Option. Subject to the limitations set forth in
this ▇▇▇▇▇▇▇ ▇, ▇▇▇ hereby grants ▇▇▇▇▇▇▇▇▇▇ the right and option, but not the
obligation (the "▇▇▇▇▇▇▇▇▇▇ Put Option"), to require RMI to purchase all, but
not less than all, of the ▇▇▇▇▇▇▇▇▇▇ Put Shares (as defined by Section 23)
which have not been subsequently Transferred as follows:
(a) Exercise Period. At any time during the period commencing on
---------------
the date that is one year after the date hereof and ending on the date that is
five (5) years after the date hereof, ▇▇▇▇▇▇▇▇▇▇ shall have the ▇▇▇▇▇▇▇▇▇▇ Put
Option with respect to all, but not less than all, of the ▇▇▇▇▇▇▇▇▇▇ Put
Shares.
(b) Suspension of the ▇▇▇▇▇▇▇▇▇▇ Put Option. In the event that
----------------------------------------
the purchase of shares of Common Stock pursuant to ▇▇▇▇▇▇▇▇▇▇ Put Option
would: (i) violate applicable law; or (ii) conflict with the Bring-Along Right
provided for in Section 6, the ▇▇▇▇▇▇▇▇▇▇ Put Option shall be suspended;
provided, however, that when applicable law or the Bring-Along Right no longer
prohibits the purchase of such shares of Common Stock, the ▇▇▇▇▇▇▇▇▇▇ Put
Option shall be reinstated with the same effect as if it had become
exercisable on the date such suspension had become effective.
(c) Termination of the ▇▇▇▇▇▇▇▇▇▇ Put Option. Notwithstanding
-----------------------------------------
the provisions of Section 2, the ▇▇▇▇▇▇▇▇▇▇ Put Option shall terminate the
earlier of date that: (i) RMI is obligated to sell all of its shares of Common
Stock in accordance with Sections 4, 5 or 9, or otherwise in a bona fide
transaction; provided that a notice of such proposed sale is delivered to
▇▇▇▇▇▇▇▇▇▇ at least fifteen (15) business days prior to the closing of such
purchase and sale (in the event such sale is not consummated the ▇▇▇▇▇▇▇▇▇▇
Put Option shall continue); or (ii) the date of an IPO by the Company of not
less than fifty (50%) percent of the then issued and outstanding shares of
Common Stock on a fully diluted basis after giving effect to such IPO.
(d) Manner of Exercise of the ▇▇▇▇▇▇▇▇▇▇ Put Option. The
-----------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ Put Option shall be exercised by ▇▇▇▇▇▇▇▇▇▇ delivering to RMI a
notice to such effect which notice shall specify the date for the closing of
the purchase and sale of ▇▇▇▇▇▇▇▇▇▇'▇ shares of Common Stock, which date shall
be not less than ten (10) nor more than fifteen (15) business days after the
date such notice is delivered to RMI.
(e) Purchase Price of Shares. The aggregate purchase price at
-------------------------
which shares of Common Stock shall be purchased pursuant to the ▇▇▇▇▇▇▇▇▇▇ Put
Option shall be the Fair Market Value of such shares determined in accordance
with Section 17 (which definition does not apply a minority interest discount
to such shares).
(f) Closing of the ▇▇▇▇▇▇▇▇▇▇ Put Option. On the closing date
--------------------------------------
specified in accordance with Section 7(d) at the offices of the Company: (i)
RMI shall pay the aggregate purchase price of the shares of Common Stock to be
purchased pursuant to the ▇▇▇▇▇▇▇▇▇▇ Put Option by wire transfer of
immediately available funds; and (ii) ▇▇▇▇▇▇▇▇▇▇ shall deliver to RMI the
stock certificate or certificates representing all the shares of Common Stock
to be purchased pursuant to the ▇▇▇▇▇▇▇▇▇▇ Put Option free and clear of any
Liens (but such shares of Common Stock shall continue to be subject to the
terms and provisions of this Agreement) duly endorsed in blank, or accompanied
by stock powers duly executed in blank, together with all required stock
transfer tax stamps affixed.
(g) Termination Date. The provisions of this Section 7 shall
-----------------
survive the termination of this Agreement.
8. Governance.
----------
(a) Covenant by Each Stockholder. Each Stockholder hereby agrees
----------------------------
to take at any time and from time to time all action necessary (including,
without limitation, voting the shares of Common Stock owned by him or it (in
person or by proxy), calling special meetings of stockholders and executing
and delivering written consents in lieu thereof) to effect the provisions of
this Section 8:
(b) Board of Directors.
------------------
(i) Subject to the provisions of this Agreement, the Board
of Directors shall manage the business and affairs of the Company in
accordance with the Certificate of Incorporation and By-Laws of the
Company and the Delaware General Corporation Law (the "DGCL").
(ii) During the Supermajority Effective Period, the
requirements for a quorum for the transaction of any business at any
meeting of the Board of Directors of Interoffice, any direct or
indirect subsidiary of Interoffice, and of the Company shall be a
majority of the entire Board of Directors (but including at least
one (1) RMI Designee (as defined below) and one (1) JAH Designee (as
defined below)) and, subject to Section 8(e) and 8(f), requirements
for action of, or by, each of the Board of Directors as aforesaid
shall be a majority of the directors of the entire Board of
Directors at a meeting duly called and held and at which a quorum is
present; alternatively each of the Board of Directors may act by
unanimous written consent. Any meeting of each of the Board of
Directors may be held by telephone conference call so long as the
applicable quorum requirements are met.
(iii) Subject to Section 8(b)(iv) and (v), the Board of
Directors of Interoffice, any direct or indirect subsidiary of
Interoffice, and of the Company shall consist of three designees of
RMI (the "RMI Designees") and two designees of JAH ("JAH
Designees"). On the date hereof, one of the JAH Designees shall be
▇▇▇ ▇. ▇▇▇▇▇▇▇ and one of the RMI Designees shall be ▇▇▇▇▇ ▇▇▇▇▇▇▇.
(iv) During the Supermajority Effective Period, from time
to time, the Board of Directors may be expanded by a majority vote
of the entire Board of Directors to provide for 3:2 proportionate
representation of the RMI and JAH Stockholder constituencies, and
each Stockholder agrees to vote all of his or its shares of Common
Stock for the election of the designee or designees of each
constituency; provided, that the size of the Board of Directors
shall be subject to the reasonable limitations fixed from time to
time by RMI and JAH.
(v) During the Supermajority Effective Period, if a third
party investor in the Company requires a designee on the Board of
the Directors and such investment is approved in accordance with
Section 8(e), if applicable, and Section 8(b)(iv), then the Board of
Directors shall be expanded so as to include such third party
investor designee and provide for 3:2 proportionate representation
of the RMI and JAH Stockholder constituencies, and each Stockholder
agrees to vote all of his or its shares of Common Stock for the
election of such designees.
(vi) If at any time, RMI or JAH desires to remove any or
all of its respective designees, with or without cause, upon notice
of such determination, each Stockholder shall vote all of his or its
shares of Common Stock to remove such designees. If at any time RMI
or JAH desires to elect a successor to any of its respective
designees, including any designee who has been removed with or
without cause, each Stockholder shall vote all of his or its shares
of Common Stock for the election of such successor or successors.
(c) Business of Company; Business of Interoffice. The business
---------------------------------------------
of the Company shall be limited to holding the record and beneficial ownership
of all of the equity interests in Interoffice and the management of such
investment. The Company shall cause the Board of Directors of Interoffice and
all subsidiaries of Interoffice or any other subsidiary, direct or indirect,
of the Company to include each of the directors of the Company and only such
directors. The membership of any committee of the Board of Directors of
Interoffice and all subsidiaries of Interoffice or any other subsidiary,
direct or indirect, of the Company shall initially include ▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇ and shall include such other individuals mutually agreeable to
the RMI Designees and the JAH Designees. The Company shall not permit
Interoffice or any subsidiary of Interoffice or any other subsidiary of the
Company to issue and sell any security or other equity interest (including
phantom interests) in Interoffice or other such subsidiary or grant any
option, warrant or right which is or may be converted or exchanged into any
such security or interest. The Company shall not sell or otherwise Transfer
any interest in its shares of common stock of Interoffice or any subsidiary of
Interoffice or any other subsidiary of the Company except in accordance with
Section 8(e)(xi). The Company shall cause the business and commercial
activities of Interoffice to be limited to the Executive Suite Business unless
otherwise modified in accordance with Section 8(e).
(d) Co-Chairman of the Board of Directors. The initial
------------------------------------------
Co-Chairman of the Board of Directors of each of the Company and Interoffice
shall be ▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇. During the Supermajority Period,
the successor to ▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be a JAH Designee and the successor to
▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be a RMI Designee. Subject to Section 8(e), the
Co-Chairmen or the executive officers, as directed by the Board of Directors
of the Company and Interoffice and in accordance with the By-Laws of the
Company or Interoffice, as the case may be, shall have the full authority to
direct and carry on the day-to-day business, activities and operations of the
Company and Interoffice, including, without limitation, the hiring of
employees, the authorization, execution and delivery of contracts in the name
and stead of the Company, retention of consultants, agents and accountants,
develop policies and procedures, propose business plans and develop business
strategies; provided, however, that the selection of accountants and all
financial reporting and tax matters pertaining to the Company shall be subject
to the approval of RMI, which approval shall not be unreasonably withheld. The
Co-Chairmen shall act collectively and each shall be vested with the customary
powers granted to a chairman of a corporation. Subject to the terms and
conditions of this Agreement, the Co-Chairmen shall implement the policies and
directives of the Company, its business plans, budgets and actions, all as
established by the Board of Directors from time to time, and in connection
therewith shall direct the chief executive officer and the officers of the
Company with respect to such implementation and with respect to the day-to-day
operations of the Company and Interoffice (and all the direct and indirect
subsidiaries of the Company). In connection therewith the Co-Chairmen shall
also each be officers of the Company (and of all the direct or indirect
Subsidiaries of the Company).
(e) Significant Decisions. Notwithstanding any provisions
-----------------------
contained in this Agreement to the contrary, during the Supermajority
Effective Period, no act shall be taken, sum expended, decision made, or
obligation incurred by on or behalf of the Company except with the affirmative
consent (a "Supermajority Vote") of at least one of the RMI Designees and one
of the JAH Designees with respect to any of the following matters (each, a
"Significant Decision"), unless JAH shall have consummated a Syndication which
violates the terms and provisions of Section 3(b)(v):
(i) The voluntary liquidation or dissolution (including the
filing of a Certificate of Dissolution with the Delaware Secretary
of State) of the Company or Interoffice or the winding-up the
business of the Company or Interoffice;
(ii) Any transaction between the Company or Interoffice (on
the one hand) and RMI or JAH or any of their respective Affiliates
(on the other hand) which requires the Company or Interoffice to pay
or distribute any cash amounts or incur any indebtedness or
obligation for the payment or money or transfer of any material
amount (individually or in the aggregate) of goods or services other
than (I) dividend distributions made in accordance with Section 12,
(II) such other transactions in which RMI or JAH or any such
Affiliate is acting solely in its capacity as a stockholder of the
Company or exercising its stockholder rights under the DGCL or this
Agreement (including the payment of the fees and disbursements of
Nominated Investment Banks in connection with the determination of
the fair market value of the Company or the shares of Common Stock
of any Stockholder) or (III) any transaction or transactions which
during a fiscal year of the Company requires a payment, distribution
or incurrence by the Company or Interoffice or any such Affiliate of
an aggregate amount of not more than $20,000; provided, that the
Company shall reimburse RMI and JAH for all costs and disbursements
related to the acquisition of Interoffice promptly upon presentment
of appropriate documentation evidencing payment of such costs or
disbursement;
(iii) The issuance and sale of any securities or other
equity interests (including phantom interests) in the Company or the
grant of any options, warrants, rights or other equity interests or
debt obligations which are or may be converted or exchanged for any
such securities or interests other than in accordance with Section
10, which (x) with respect to any separate and distinct transaction
exceeds 15% of the shares of Common Stock on a fully diluted basis
immediately prior to such transaction or (y) with respect to all
such transactions exceeds in the aggregate 25% of the shares of
Common Stock on a fully diluted basis immediately prior to the first
of such transactions;
(iv) The expansion of the Board of Directors of the Company
or Interoffice other than pursuant to Sections 8(b)(iv) or 8(c);
(v) The hiring (but not terminating) of the (x) Chief
Executive Officer or Chief Operating Officer (whichever office has
superior authority and responsibilities) or (y) the Chief Financial
Officer of the Company;
(vi) Commencing any business or line of business other than
the Executive Suite Business or which is inconsistent with the
business plan of the Company or Interoffice or making any material
changes to (x) the nature of the business of the Company or (y) the
certificate of incorporation or by-laws of the Company or
Interoffice;
(vii) Changing the name of the Company;
(viii) The incurrence of any indebtedness of the Company or
Interoffice or the refinancing of any such indebtedness which, on a
pro forma basis including any such proposed transaction, results in
a consolidated ratio of total debt to total equity that is less than
50% or more than 75% at the time of any such event or transaction;
(ix) The filing of a registration statement with the
Securities and Exchange Commission registering any shares of Common
Stock or other equity securities of the Company or any of its direct
or indirect subsidiaries;
(x) The recapitalization, change in number of shares of
Common Stock, exchanges, conversions or redemption of the equity of
the Company or Interoffice other than in accordance with the terms
and provisions of this Agreement, including Sections 4, 5, 6, 7, 9
or 10;
(xi) The merger, consolidation or sale of all or
substantially all of the assets of the Company or Interoffice, other
than the merger of Interoffice with and into the Company or the sale
or exchange of any shares of common stock or other equity securities
of Interoffice; provided, however, that if JAH shall have at any
time prior to the date of such proposed transaction (x) exercised
its FR Right or Buy/Sell Right and (y) failed to purchase RMI's
shares of Common Stock with respect to such FR Right or Buy/Sell
Right other than as a result of an Excused Condition, then such
transaction may be approved by a majority vote of the Board of
Directors, excluding the votes of JAH Designees;
(xii) Any transaction which results in the Stockholders (as
a group) no longer controlling (by ownership of voting securities,
contract or otherwise) the management and affairs of the Company and
of Interoffice whether by the ownership of equity securities,
contract or otherwise;
(xiii) The approval of any capital expenditures (as defined
by generally accepted accounting principles) by the Company or
Interoffice which shall be incurred with the reasonable expectation
that such expenditure will cause an increase in the consolidated net
operating income thereof and which is generally considered by real
estate investment industry professionals as an "incremental capital
expenditure" (each, an "Incremental Expenditure");
(xiv) The approval of any capital expenditures which are
not Incremental Expenditures but which are extraordinary costs or
are in excess of an amount that is then customary and reasonable for
the replacement of capitalized assets of the Company or Interoffice
resulting from reasonably estimated wear and tear and depreciation;
(xv) The equity investment in, or the acquisition of any
business including, without limitation, any executive office center
which will be managed and serviced by Interoffice in a manner
consistent with past practices; and
(xvi) The merger or incorporation of all or part of the
operations of the Company or of Interoffice or any direct or
indirect subsidiary of the Company, including, without limitation,
bookkeeping and accounting operations, into the operations of RMI or
any of its Affiliates.
(f) Leverage of the Company and Interoffice. It is acknowledged
---------------------------------------
and agreed that prior to the date that the Securities and Exchange Commission
declares effective a registration statement that registers any shares of
Common Stock or other equity securities of the Company or Interoffice under
the 1933 Act, the Stockholders intend, to the extent commercially reasonable,
that the Company and Interoffice shall be leveraged with third party
non-recourse debt financing (except for recourse as to the Company or
Interoffice itself) at a consolidated ratio of assets to liabilities of not
greater than 50%. Accordingly, prior to such date, the Company shall use its
commercially reasonable efforts to obtain such non-recourse financing (whether
unsecured, secured by asset based financing, securitization, sale-leaseback
transactions or otherwise) on all transactions by Interoffice and the Company
in an amount of debt equal to a minimum of 50% of the net purchase price
(including taxes, fees, installation and other related fees and disbursements)
of the assets so purchased (the amount of such financing provided to the
Company on a non-recourse basis being referred to herein as the "Subsequent
Acquisition Financing").
(g) Third Party Financing Not Available. In the event that
---------------------------------------
within thirty (30) days after the approval by the Board of Directors of a
transaction or acquisition requiring Subsequent Acquisition Financing, RMI is
unable to identify a third party that is ready, willing and able to execute
definitive documents to fund such Subsequent Acquisition Financing on
commercially reasonable terms, then commencing on the fifth (5th) business day
after such thirty (30) day period (unless RMI provides a notice that it has
obtained such Subsequent Acquisition Financing) each of JAH and ▇▇▇▇▇▇▇▇▇▇
shall have the right, but not the obligation, within a further thirty (30) day
period to obtain a commitment letter from a third party lender that is ready,
willing and able to execute definitive documents and fund such Subsequent
Acquisition Financing within thirty (30) days after the date of such
commitment letter. In the event that JAH or ▇▇▇▇▇▇▇▇▇▇ obtains such commitment
letter from a third party lender for such Subsequent Acquisition Financing and
within ten (10) business days after the delivery thereof to the Company RMI
does not approve such financing transaction (i.e., does not approve the
execution and delivery by the Company of such commitment letter), then the
Company shall deliver a Capital Call Notice (as defined by Section 10) in
accordance with the terms and provisions of Section 10 for an aggregate amount
equal to the net aggregate amount that would have been received from such
third party lender and RMI shall, or shall cause an Affiliate of RMI to, loan
to each of JAH and ▇▇▇▇▇▇▇▇▇▇, on the same terms and conditions as JAH or
▇▇▇▇▇▇▇▇▇▇, as the case may be, would have received from such third party
lender, an amount of cash sufficient for such Stockholder to purchase one
hundred percent (100%) of its respective amount of the Additional Shares to be
purchased by such Stockholder pursuant to Section 10 (such Capital Call being
referred to herein as a "Subsequent Acquisition Financing Call"). In the event
that JAH and ▇▇▇▇▇▇▇▇▇▇ are unable to provide such commitment letter from a
third party lender for such Subsequent Acquisition Financing within such
thirty (30) day period, then the Company shall deliver a Subsequent
Acquisition Financing Call and RMI shall loan to each of JAH and ▇▇▇▇▇▇▇▇▇▇ an
amount of cash sufficient to purchase one hundred percent (100%) of their
respective amount of such Additional Shares; such loan shall have an interest
rate equal to twelve (12%) per annum, compounded monthly, and a maturity date
of six (6) months after the date such loan is funded; provided, that
▇▇▇▇▇▇▇▇▇▇ may, in its sole discretion, elect to finance its original purchase
of Common Stock through a Initial Capital Loan pursuant to the provisions of
Section 13(b). Each of JAH and ▇▇▇▇▇▇▇▇▇▇ agrees to use the proceeds of such
loan solely to purchase such Additional Shares. Each such loan by RMI shall be
evidenced by a promissory note which limits the recourse of RMI to such
Additional Shares. Each of JAH and ▇▇▇▇▇▇▇▇▇▇ shall execute and deliver such
promissory note, a security agreement and such other documentation as
reasonably requested by RMI to evidence and perfect such loan and security
interest. In the event that JAH or ▇▇▇▇▇▇▇▇▇▇, as the case may be, defaults on
the payment terms of any such loan (that is, unless the entire principal
balance and interest of the loan is paid in full on or prior to the maturity
date of such loan), then such Stockholder shall Transfer to RMI the Additional
Shares so purchased on the maturity date of such loan resulting in the
dilution of such defaulting Stockholder on a fair market value basis in
accordance with the provisions of Section 10. It is acknowledged and agreed
that: (i) during the time that any such Stockholder has an outstanding
obligation under this Section 8 owed to RMI, distributions of dividends shall
be made in accordance with Section 12(b); and (ii) the provisions of this
Section 8(g) do not in any way limit or restrict the provisions of Section 13.
(h) REC Call Option. Notwithstanding any provisions contained in
---------------
this Agreement to the contrary, the Board of Directors of the Company may
approve the exercise of the REC Call Option by the vote or consent of the JAH
Designees without the vote or consent of any of the RMI Designees and RMI
hereby agrees to waive the requirements of quorum for the approval or consent
of the exercise of the REC Call Option.
(i) Initial Acquisition Loan. It is acknowledged and agreed that
------------------------
the Company intends to obtain third-party financing for not less than fifty
percent (50%) of the Stockholder's pro rata share (with respect to each, its
"Initial Acquisition Loan Portion") of the Aggregate Acquisition Price (as
defined in Section 13). Accordingly, RMI shall use its commercially reasonable
efforts to identify a third party willing and able to execute definitive
documents to provide such financing to each Stockholder on commercially
reasonable terms on or prior to December 31, 1997 (such financing of
approximately fifty (50%) percent of the Aggregate Acquisition Price pursuant
to this Section 8(i) being referred to herein as the "Initial Acquisition
Loan"). In the event that RMI is unable to identify a third party willing and
able to execute definitive documents to fund the Initial Acquisition Loan on
commercially reasonable terms, then each of JAH and ▇▇▇▇▇▇▇▇▇▇ shall have the
right, but not the obligation, on or prior to January 29, 1998, to obtain a
commitment letter from a third party lender that is ready, willing and able to
execute definitive documents and fund the Initial Acquisition Loan on or prior
to the Funding Date (as defined by Section 13). In the event that JAH or
▇▇▇▇▇▇▇▇▇▇ obtains such commitment letter from a third party lender for the
Initial Acquisition Loan and on or prior to the Funding Date RMI does not
approve such financing transaction, then RMI shall, or shall cause an
Affiliate of RMI to, loan to each of JAH and ▇▇▇▇▇▇▇▇▇▇, on the same terms and
conditions as JAH or ▇▇▇▇▇▇▇▇▇▇, as the case may be, would have received from
such third party lender, an amount of cash sufficient for such Stockholder to
fund its Initial Acquisition Loan Portion to the Company in accordance with
the provisions of this Section. In the event that JAH and ▇▇▇▇▇▇▇▇▇▇ are
unable to so provide such commitment letter from a third party lender for the
Initial Acquisition Loan, then RMI shall loan to each of JAH and ▇▇▇▇▇▇▇▇▇▇ an
amount of cash equal to their respective Initial Acquisition Loan Portion
(assuming a loan of 50% of the Aggregate Acquisition Price); such loan shall
have an interest rate equal to twelve (12%) per annum, compounded monthly, and
a maturity date of July 29, 1998; provided, that ▇▇▇▇▇▇▇▇▇▇ may, in its sole
discretion, elect to finance its original purchase of Common Stock through an
Initial Capital Loan pursuant to the provisions of Section 13(b). Each of JAH
and ▇▇▇▇▇▇▇▇▇▇ agrees to use their respective proceeds of the Initial
Acquisition Loan (whether funded by a third party lender or RMI or any of its
Affiliates) solely to contribute such funds to the Company as a capital
contribution. If the Initial Acquisition Loan is made by RMI, then such loan
shall be evidenced by a promissory note which limits the recourse of RMI to
the number of shares of Common Stock (the "Initial Pledged Shares") of such
Stockholder equal to the number of shares of Common Stock owned on the date
hereof multiplied by a fraction, the numerator of which is the amount of the
Initial Acquisition Loan funded by RMI (or such Affiliate) to such Stockholder
and the denominator of which is equal to such Stockholder's Initial
Acquisition Loan Portion. Each of JAH and ▇▇▇▇▇▇▇▇▇▇ shall execute and deliver
such promissory note, a security agreement and such other documentation as
reasonably requested by RMI to evidence and perfect such loan and security
interest. In the event that JAH or ▇▇▇▇▇▇▇▇▇▇, as the case may be, defaults on
the payment terms of any such loan (that is, unless the entire principal
balance and interest of the loan is paid in full on or prior to the maturity
date of such loan), then such Stockholder shall Transfer on the maturity date
of such loan to RMI the number of shares of Common Stock equal to the number
of Initial Pledged Shares resulting in the dilution of such defaulting
Stockholder on a capital contribution basis. It is acknowledged and agreed
that on or prior to the Funding Date JAH and ▇▇▇▇▇▇▇▇▇▇ shall also be entitled
to exercise their respective Loan Options pursuant to Section 10(h) and
Section 10(i) hereof with respect to their pro rata share of the Aggregate
Acquisition Price not financed by the Initial Acquisition Loan Portion on or
prior to the Funding Date; (ii) during the time that any such Stockholder has
an outstanding obligation under this Section 8(i) owed to RMI, distributions
of dividends shall be made in accordance with Section 12(b); and (iii) the
provisions of this Section 8(i do not in any way limit or restrict the
provisions of Section 13.
(j) Continued Efforts. Notwithstanding anything set forth in
------------------
Section 8 to the contrary, in the event that JAH and ▇▇▇▇▇▇▇▇▇▇ are unable to
procure a commitment letter for the Subsequent Acquisition Financing or the
Initial Acquisition Loan, as the case may be, (or close such loan) from a
third party lender, and regardless of whether JAH or ▇▇▇▇▇▇▇▇▇▇ accepts a loan
pursuant to the provisions hereof, RMI and the Company shall continue to
exercise all commercially reasonable efforts to obtain the Subsequent
Acquisition Financing or the Initial Acquisition Loan. Upon procuring such
third party financing, the proceeds thereof shall be used to refinance and
retire the loan made by RMI pursuant to this Section 8 (or return any equity
contributed by JAH or ▇▇▇▇▇▇▇▇▇▇ if the same is utilized in lieu of such loan
pursuant to this Section 8).
(k) Declination. Notwithstanding anything in this Agreement, any
-----------
Stockholder may decline the right to receive from RMI either Subsequent
Acquisition Financing or the funding of its Initial Acquisition Loan Portion.
9. Deadlock Regarding Significant Decisions; Buy/Sell Option.
---------------------------------------------------------
(a) Buy/Sell Right. (i) Each Institutional Stockholder shall
--------------
have the right (the "Buy/Sell Right") to cause (x) the sale of all of such
Institutional Stockholder's shares of Common Stock or (y) the purchase of all
of the other Institutional Stockholder's shares of Common Stock in the event
of a Deadlock (as defined by Section 9(b) but other than an Affiliate
transaction in accordance with Section 8(e)(ii) or a change in the name of the
Company in accordance with Section 8(e)(vii)) regarding a Significant
Decision; and (ii) RMI (but not JAH) shall have a Buy/Sell Right in the event
of a Transfer of Interest to a Pledgee other than a limited security interest
in JAH's shares of Common Stock as, and to the extent permitted by Section
3(b), in each case, upon the terms and conditions set forth in this Section 9.
(b) Significant Decision Deadlock. If an Institutional
---------------------------------
Stockholder (the "Initiating Stockholder") requests the approval of a
Significant Decision by the other Institutional Stockholder (the "Deciding
Stockholder") in accordance with the terms hereof or the By-laws of the
Company and such Significant Decision is not approved because the Deciding
Member did not vote (or execute and deliver a written consent) in favor of
such Significant Decision by the Supermajority Vote on or prior to five (5)
business days after such request (a "Deadlock"), whether at a meeting of the
Board of Directors duly called in accordance with the By-Laws of the Company
or by an action by written consent in lieu thereof, then on or prior to thirty
(30) days after the expiration of such five (5) business day period the
Initiating Stockholder shall be entitled to deliver a notice (the "Warning
Notice") to the Deciding Stockholder specifying in such notice the Significant
Decision that is the subject of such Deadlock and that the Initiating
Stockholder intends to deliver to the Deciding Stockholder a notice (the
"Buy/Sell Notice") requiring the Deciding Stockholder to (x) purchase all, but
not less than all, of the shares of Common Stock of the Initiating Stockholder
or (y) sell to the Initiating Stockholder all, but not less than all, of the
shares of Common Stock of the Deciding Stockholder, in each case, at a stated
cash purchase price per share (the "Buy/Sell Price") specified in such
Buy/Sell Notice to be paid on the Buy/Sell Closing Date (as defined by Section
9(h)); provided, that concurrently with the delivery of a Warning Notice, the
Initiating Stockholder shall provide a notice (the "Sealed Price Notice") to
an investment bank listed on Schedule A attached hereto (each, a "Nominated
Investment Bank") specifying the Buy/Sell Price determined by the Initiating
Stockholder, in its sole discretion, it being acknowledged and agreed that the
Nominated Investment Bank shall be instructed to: (i) read the Sealed Price
Notice for the limited purpose of verifying that such notice has included a
Buy/Sell Price; (ii) promptly provide a notice to each Institutional
Stockholder if such notice does not include such Buy/Sell Price; (iii) hold
such Buy/Sell Price and all other information included in the Sealed Price
Notice in strict confidence; and (iv) not disclose such Buy/Sell Price to the
Deciding Stockholder except pursuant to Section 9(d).
(c) Transfer of JAH Common Stock to a Pledgee. In the event JAH
-----------------------------------------
effects a Transfer of Interest to a Pledgee other than as permitted pursuant
to the terms of Section 3(b)(iv), RMI shall have the right, but not the
obligation, to deliver a Buy/Sell Notice to JAH and such Pledgee (without the
requirement to deliver a Warning Notice or a Sealed Price Notice) at any time
prior to the date that is three (3) months after the date RMI receives notice
of such Transfer of Interest. For the purposes of this Agreement, if RMI so
deliverers a Buy/Sell Notice to JAH, RMI shall be the Initiating Stockholder
and the Pledgee or JAH (or both, whichever person has record ownership to such
shares of Common Stock) shall be the Deciding Stockholder.
(d) Delivery of the Buy/Sell Notice. Upon receipt of a Warning
--------------------------------
Notice, the Deciding Stockholder shall have three (3) business days to approve
such Significant Decision or otherwise amicably resolve such Deadlock. In the
event that at the close of business at the end of such three (3) business day
period, the Deadlock has not been resolved by a writing signed and delivered
by both Institutional Stockholders, the Initiating Stockholder shall deliver a
Buy/Sell Notice to the Deciding Stockholder which notice shall specify a
Buy/Sell Price (which shall be equal to the Buy/Sell Price specified in the
Sealed Price Notice) and, if a Buy/Sell Notice is so delivered, instruct the
Nominated Investment Bank which received the Sealed Price Notice to deliver by
telecopier and First Class U.S. Mail such Sealed Price Notice to the Deciding
Stockholder. In the event that the Deadlock which is the subject of the
Warning Notice has been amicably resolved within such three (3) business day
period, then the Initiating Stockholder shall not have the right to deliver a
Buy/Sell Notice with respect to such Deadlock and shall, instruct the
Nominated Investment Bank which received the Sealed Price Notice to return or
destroy such notice. In the event the Significant Decision is not amicably
resolved within such three (3) business day period and the Buy/Sell Notice is
not actually delivered for any reason, it nonetheless shall be deemed
delivered by the prior delivery of the Sealed Price Notice to the Nominated
Investment Banker and the Nominated Investment Bank shall deliver the Sealed
Price Notice to the Deciding Stockholder promptly upon the request of the
Deciding Stockholder (with the date of such delivery of the Sealed Price
Notice to the Deciding Stockholder being deemed the date of delivery of the
Buy/Sell Notice to the Deciding Stockholder).
(e) Delivery of Response Notice. Within ten (10) business days
----------------------------
after the delivery of a Buy/Sell Notice (including the deemed delivery to the
Stockholder by the delivery to the Nominated Investment Bank), the Deciding
Stockholder shall deliver a notice (the "Response Notice") to the Initiating
Stockholder specifying either that:
(i) the Deciding Stockholder has elected to sell all, but
not less than all, of its shares of Common Stock to the Initiating
Stockholder at the all cash price specified in the Buy/Sell Notice,
in which case, subject to Section 16, the Deciding Stockholder shall
sell all, but not less than all, of the Deciding Stockholder's
shares of Common Stock to the Initiating Stockholder at the Buy/Sell
Price specified in the Buy/Sell Notice and the Initiating
Stockholder shall purchase all, but not less than all, of the
Deciding Stockholder's shares of Common Stock, and all, but not less
than all, of the ▇▇▇▇▇▇▇▇▇▇ Tag-Along Shares, if any, at a price per
share equal to the Buy/Sell Price; or
(ii) the Deciding Stockholder has elected to purchase all,
but not less than all, of the Initiating Stockholder's shares of
Common Stock at the Buy/Sell Price specified in the Buy/Sell Notice,
in which case, subject to Section 16, the Initiating Stockholder
shall sell all, but not less than all, of the Initiating
Stockholder's shares of Common Stock to the Deciding Stockholder at
the Buy/Sell Price specified in the Buy/Sell Notice and the Deciding
Stockholder shall purchase all, but not less than all of the
Initiating Stockholder's shares Common Stock for cash, and all, but
not less than all of the ▇▇▇▇▇▇▇▇▇▇ Tag-Along Shares, if any, at a
cash price per share equal to the Buy/Sell Price.
(f) Buy/Sell Deposit. Upon exercise of the Buy/Sell Right, the
-----------------
purchasing Institutional Stockholder shall be irrevocably obligated to pay and
deliver a deposit (the "Buy/Sell Deposit") to the selling Institutional
Stockholder on or prior to five (5) business days after the delivery of the
Response Notice, which deposit shall be as set forth below:
(i) if JAH is the purchasing Stockholder, the Buy/Sell
Deposit shall equal the greater of (x) 5% of the aggregate Buy/Sell
Price or (y) $300,000 (but not in excess of the aggregate Buy/Sell
Price). The Buy/Sell Deposit shall consist of (x) a Cash Deposit
payable to the order of RMI in the amount equal to not less than the
lesser of the amount of the Buy/Sell Deposit or $2,000,000 and (y)
either (A) a first priority security interest in, and pledge of,
that number of JAH's shares of Common Stock such that the product of
the Buy/Sell Price multiplied by such number of shares of Common
Stock is equal to 1.5 times the amount that the Buy/Sell Deposit
exceeds the amount the Cash Deposit, if any, or (B) a second
priority security interest in, and a pledge of, all the shares
Common Stock of the purchasing Institutional Stockholder, if the
amount of the Buy/Sell Deposit is greater than the amount of the
Cash Deposit actually paid.
(ii) if RMI is the purchasing Stockholder, the Buy/Sell
Deposit shall equal 5% of the aggregate Buy/Sell Price consisting of
(x) a Cash Deposit payable to the order of JAH in the amount equal
to the lesser of the Buy/Sell Deposit or $3,000,000 and (y) either
(A) a first priority security interest, and pledge of, that number
of RMI's shares of Common Stock shares of Common Stock such that the
product of the Buy/Sell Price multiplied by such number of shares of
Common Stock is equal to 1.5 times the amount that the Buy/Sell
Deposit exceeds the Cash Deposit if any, or (B) a second priority
security interest in, and pledge of, all the shares of the Common
Stock of the purchasing Institutional Stockholder, if the amount of
the Buy/Sell Deposit is greater than the amount of the Cash Deposit
actually paid.
(iii) if a Stockholder is required to deliver a security
interest in, and pledge of, any of its shares of Common Stock, it
will execute and deliver to the selling Stockholder such documents
(including, without limitation, UCC Financing Statements and stock
powers) as are reasonably required by the selling Institutional
Stockholder to evidence and perfect such security interest and
deliver the stock certificates representing such shares at the
address specified in Section 24. It is acknowledged and agreed that
any such security interest in, and pledge of, shares of Common Stock
as collateral security provided in this Section shall be for the
limited purpose of providing collateral for the amount of the
Buy/Sell Deposit which is in excess of the Cash Deposit, if any.
Accordingly, the selling Institutional Stockholder's right and
interest in the purchasing Institutional Stockholder's shares of
Common Stock shall not exceed the Deposit Defaulted Shares of the
purchasing Institutional Stockholder.
(g) Deemed Election to Sell. Notwithstanding any provision
-------------------------
contained herein to the contrary, in the event that the Deciding Stockholder
has not delivered a Response Notice within the ten (10) business day period
provided above, or has delivered a Response Notice exercising its right to
purchase but has not delivered the Buy/Sell Deposit within the five (5)
business day period provided above, then for purposes of this Agreement, the
Deciding Stockholder shall be deemed to have made the election to sell all,
but not less than all, of its shares of Common Stock and thereafter, subject
to Section 16, the Deciding Stockholder shall sell all of its shares of Common
Stock to the Initiating Stockholder at the Buy/Sell Price specified in the
Buy/Sell Notice.
(h) Closing of the Buy/Sell Right. Subject to Section 16, on the
----------------------------
date (the "Buy/Sell Closing Date") that is (x) sixty (60) days, if RMI is the
purchasing Institutional Stockholder or (y) six (6) months, if JAH is the
purchasing Institutional Stockholder, in each case, after the date the
Buy/Sell Notice is delivered, at the offices of the Company: (i) the
purchasing Institutional Stockholder shall pay the aggregate Buy/Sell Price
(less the amount of the cash portion of the Buy/Sell Deposit actually received
by the selling Institutional Stockholder) to the selling Institutional
Stockholder by wire transfer of immediately available funds; and (ii) the
selling Institutional Stockholder shall deliver to the purchasing
Institutional Stockholder (x) the stock certificate or certificates
representing all of its shares of Common Stock free and clear of any Liens
(but such shares of Common Stock shall continue to be subject to the terms and
provisions of this Agreement) duly endorsed in blank, or accompanied by stock
powers duly executed in blank, together with all required stock transfer tax
stamps affixed and (y) the non-cash portion of the Buy/Sell Deposit and all
documents delivered to it in connection therewith. If ▇▇▇▇▇▇▇▇▇▇ has exercised
its Tag-Along Right to sell in accordance with Section 5, then on the Buy/Sell
Closing Date at the offices of the Company simultaneously with the closing
under the Buy/Sell Right (x) the purchasing Institutional Stockholder shall
pay to ▇▇▇▇▇▇▇▇▇▇ an amount of cash equal to the Buy/Sell Price multiplied by
the number of ▇▇▇▇▇▇▇▇▇▇ Tag Along Shares by wire transfer of immediately
available funds and (y) ▇▇▇▇▇▇▇▇▇▇ shall deliver to the purchasing
Institutional Stockholder the stock certificate or certificates representing
all of the ▇▇▇▇▇▇▇▇▇▇ Tag Along Shares free and clear of any Liens (but such
shares of Common Stock shall continue to be subject to the terms and
provisions of this Agreement) duly endorsed in blank, or accompanied by stock
powers duly executed in blank, together with all required stock transfer tax
stamps affixed.
(i) Failure to Close. (A) It is acknowledged and agreed that the
----------------
Buy/Sell Deposit is intended to be a non-refundable deposit to secure the
obligations of the purchasing Institutional Stockholder. Accordingly, if the
Institutional Stockholder which pursuant to the terms hereof has elected to
purchase or has become obligated to purchase the shares of Common Stock of the
other Institutional Stockholder fails to close in accordance with Section 9(h)
for any reason other than an Excused Condition the Buy/Sell Deposit shall be
retained by the selling Institutional Stockholder as liquidated damages for
the harm (which harm is acknowledged to not be readily measurable in damages)
caused by the failure of the buying Institutional Stockholder to timely
conclude its purchase and, to the extent that a portion of the Buy/Sell
Deposit constituted a pledge of shares of Common Stock, the Deposit Defaulted
Shares shall be transferred to the selling Institutional Stockholder. If the
buying Institutional Stockholder that so fails to close is JAH, then: (i) RMI
may, at any time within thirty (30) days after the Buy/Sell Closing Date,
elect to buy JAH's entire remaining interest in the Company at the Buy/Sell
Price specified in the prior Buy/Sell Notice, with the closing thereon to
occur in accordance with Section 9(h) sixty (60) days after RMI delivers
notice of its election to buy JAH's shares of Common Stock; or (ii)
alternatively, RMI may, at any time within thirty (30) days after the Buy/Sell
Closing Date, elect to sell the Company by the sale or exchange of the shares
of Common Stock, a merger, consolidation, recapitalization, asset sale or
otherwise, for an aggregate value per share not less than ninety-five (95%)
percent of the Buy/Sell Price and on such other terms and conditions as are
approved by the Board of Directors of the Company without the vote of the JAH
Designees.
(B) If the Institutional Stockholder which pursuant to the
terms hereof has elected to sell or has become obligated to sell its shares of
Common Stock to the other Institutional Stockholder fails to close in
accordance with Section 9(h) for any reason other than an Excused Condition,
the other Institutional Stockholder shall have the remedy set forth in Section
28.
(j) Assumption of Obligations. Any Institutional Stockholder who
-------------------------
purchases all of the remaining shares of another Institutional Stockholder
pursuant to this Section 9, shall assume all of the liabilities and
obligations of the selling Institutional Stockholder with regard to the
Company and Interoffice, including, without limitation, any recourse
obligations of such Stockholder to the Company (other than an obligation to
pay to the Company the purchase price of shares of Common Stock).
10. Additional Contributions.
------------------------
(a) Capital Call. Subject to Section 11, it is acknowledged and
------------
agreed that all future equity investments by the Stockholders in the Executive
Suite Business of the Company or Interoffice shall be made through the
Company. If, at any time and from time to time, the Board of Directors
determines that the Company should contribute Necessary Funds (as defined
below) to Interoffice or that the Company requires Necessary Funds, then a
notice shall be given to all Stockholders (a "Capital Call Notice") stating
the amount of the Necessary Funds required, the total number of Additional
Shares (as defined by Section 10(c)) to be issued and sold and the NF per
Share (as defined by Section 10(c)). For purposes of this Agreement, the term
"Necessary Funds" means the amount of paid-in-capital, as determined by the
Board of Directors in its reasonable discretion, required for the acquisition
of Interoffice or for any equity investment in, or the acquisition or
development of, an executive office center which will be managed and serviced
by Interoffice in a manner consistent with past practices including, without
limitation, all costs, fees, expenses, disbursements and expenditures for: (i)
acquiring, leasing or renting real property, equipment, furnishings or other
assets; (ii) brokerage commissions or other acquisition fees; (iii) legal fees
and disbursements; (iv) relocation fees and moving and storage expenses; and
(v) improvements.
(b) Capital Call Objectives. The Stockholders acknowledge and
-----------------------
agree that each Stockholder shall be provided the opportunity to contribute up
to its pro rata share of Necessary Funds to the Company and that Stockholders
who do not contribute their respective pro rata share in full shall have their
equity interest in the Company (as represented by their shares of Common
Stock) diluted on a fair market value basis in accordance with the provisions
of this Section 10. The following example illustrates the method by which the
fair market dilution of equity interests shall be determined for the purposes
of this Agreement:
(i) Assume that there are 1,000 issued and outstanding
shares of Common Stock; that a Stockholder owns a 10% equity
interest in the Company (100 shares); that the Fair Market Value of
the Company determined in accordance with this Agreement prior to
the Capital Call and the contribution of Necessary Funds is
$4,000,000; that the Capital Call is for an aggregate contribution
of Necessary Funds of $1,000,000; that such Stockholder does not
contribute any Necessary Funds; and that each other Stockholder has
contributed such Stockholder's portion of the Necessary Funds on a
pro rata basis.
(ii) The provisions of this Section 10 would result in a
dilution of such Stockholder as follows, subject to readjustment as
a result of the operation of Section 10(h) below:
(A) The amount of the Capital Call applicable to the
Stockholder (10% * 1,000,000 or $100,000) divided by the
fair market value of the Company prior to the Capital Call
plus the amount of the Capital Call, assuming that the
other Stockholders contribute the total amount of Necessary
Funds ($4,000,000 fair market value plus the $1,000,000
contribution of Necessary Funds or $5,000,000); which
equals 100,000 / 5,000,000 or 0.02 or 2%.
(B) The equity interest of such Stockholder after the
dilution caused by it not contributing Necessary Funds is
the equity percentage of such Stockholder prior to the
Capital Call less the amount of such dilution, that is: 10%
less 2%, which results in an equity percentage equal to 8%
after the dilution of such Stockholder.
(c) Determination of Number of Shares to be Issued and Sold. The
-------------------------------------------------------
Company shall obtain the Necessary Funds by the issue and sale of shares of
Common Stock (the "Additional Shares"). The maximum number of Additional
Shares which may be issued and sold shall be determined on the basis of the
Fair Market Value of the issued and outstanding shares of Common Stock and
shall equal: (i) the number of shares of Common Stock issued and outstanding
prior to the Capital Call; (ii) multiplied by a fraction, the numerator of
which is the aggregate amount of the Necessary Funds and the denominator of
which is the Fair Market Value of the Company. Using the above illustration,
the number of Additional Shares would equal 1,000 * ($1,000,000 / $4,000,000)
or 250 shares. The purchase price per Additional Share (the "NF per Share")
shall equal the aggregate amount of Necessary Funds to be contributed in
accordance with the Capital Call Notice divided by the aggregate number of
Additional Shares. Using the above illustration, the NF per Share would equal
$1,000,000 / 250 or $4,000 per share. Accordingly, if all Additional Shares
were issued and sold at the NF per Share the Company would obtain the total
amount of the Necessary Funds.
(d) Pre-Emptive Rights; Subscription for Additional Stock.
----------------------------------------------------------
Within thirty (30) days after the date that a Capital Call Notice is delivered
(the "Subscription Acceptance Period"), each Stockholder shall have the right,
but not the obligation, to subscribe for the purchase of Additional Shares on
a pro rata basis; that is up to the number of Additional Shares equal to: (i)
the number of shares of Common Stock held by such Stockholder immediately
prior to the Capital Call; (ii) multiplied by a fraction, the numerator of
which is the number of Additional Shares and the denominator of which is the
total number of issued and outstanding shares of Common Stock immediately
prior to the Capital Call. The Company shall offer Additional Shares to the
Stockholders in the manner stated in the Capital Call Notice at a purchase
price per share equal to the NF per Share. Any Stockholder who provides the
Company with a notice prior to the expiration of the Subscription Acceptance
Period that it shall purchase all of the Additional Shares offered to such
Stockholder in accordance with the terms and conditions stated in such Capital
Call Notice is herein called a "Fully Subscribing Stockholder" and each other
Stockholder is herein referred to as a "Non-Fully Subscribing Stockholder".
Each Non-Fully Subscribing Stockholder who provides the Company with a notice
prior to the expiration of the Subscription Acceptance Period that it will
purchase some, but not all, of the Additional Shares offered to it is herein
called a "Partly Subscribing Stockholder", and together with the Fully
Subscribing Stockholder, the "Subscribing Stockholders".
(e) Notice of Subscription Deficit. Promptly after the
-----------------------------------
expiration of the Subscription Acceptance Period, the Company shall give
notice to each Stockholder setting forth: (i) the name of each Non-Fully
Subscribing Stockholder; (ii) the number of Additional Shares which each
Non-Fully Subscribing Stockholder did not subscribe to purchase in accordance
with the applicable Capital Call Notice; and (iii) the aggregate amount of
Additional Shares which all of the Non-Fully Subscribing Stockholders declined
to purchase pursuant to such Capital Call Notice (such total amount as the
same may be reduced by any shares purchased by the Fully Subscribing
Stockholders in the manner hereinafter set forth is herein called the
"Additional Subscription Shares"). Within ten (10) business days after the
giving of such notice (the "Subscription Deficit Contribution Period"), the
Fully Subscribing Stockholders shall have the right, but not the obligation,
to subscribe for the purchase of the Additional Subscription Shares on a pro
rata basis. Those Fully Subscribing Stockholders electing to subscribe for the
purchase of Additional Subscription Shares shall provide a notice to the
Company to such effect on or prior to the expiration of the Subscription
Deficit Contribution Period. In the event that: (i) the Subscribing
Stockholders subscribe for the purchase of all, but not less than all, of the
Additional Shares; or (ii) the Subscribing Stockholders subscribe for a
purchase of some, but not all, of the Additional Shares such that the
aggregate proceeds from the issuance and sale of such Additional Shares
together with any third party financing (which is approved in accordance with
Section 8(e)(viii)) and the net proceeds from the issue and sale of shares of
equity securities of the Company (which is approved in accordance with Section
8(e)(iii)) is sufficient, in the discretion of the Board of Directors, to
consummate the transaction or acquisition which is the subject of such Capital
Call Notice, then the Company shall provide a notice to each Subscribing
Stockholder specifying the aggregate number of Additional Shares to be issued
and sold and the name of each Subscribing Stockholder and the number of
Additional Shares to be issued and sold to each such Subscribing Stockholder.
Notwithstanding any provision of this Section 10 to the contrary, in the event
that either JAH or RMI is a Non-Fully Subscribing Stockholder, then Additional
Shares shall be issued and sold only with the consent of an RMI Designee and a
JAH Designee.
(f) Number of Additional Shares. It is acknowledged and agreed
----------------------------
that for the purposes of determining the dilution pursuant to this Section 10,
the number of Additional Shares shall equal the number of Additional Shares
actually issued and sold with respect to the applicable Capital Call.
(g) Subscription Closing. On the date (the "Subscription Due
---------------------
Date") that the Additional Shares are issued and sold by the Company to the
Subscribing Stockholders in accordance with the procedures described in the
Capital Call Notice at the offices of the Company, the Company shall issue and
deliver to each Subscribing Stockholder a stock certificate representing the
number of Additional Shares which such Subscribing Stockholder subscribed for
and such Stockholder shall pay to the Company by a wire transfer of
immediately available funds an amount equal to such Additional Shares
(including Additional Subscription Shares) multiplied by the NF per Share
price.
(h) Deemed Loan by Subscribing Stockholders. Notwithstanding
------------------------------------------
anything in this Section 10 to the contrary, it is acknowledged and agreed
that each of JAH and ▇▇▇▇▇▇▇▇▇▇ shall have the right to have the amount of
Necessary Funds relating to such Non-Fully Subscribing Stockholder that was
paid by RMI as the Subscribing Stockholder treated as a loan. Accordingly, to
provide the economic effect of the foregoing, each of JAH and ▇▇▇▇▇▇▇▇▇▇ shall
have the right, but not the obligation (the "Loan Option"), to at any time, on
or prior to the date that is six (6) months after the Subscription Due Date to
purchase all, but not less than all, of the Additional Subscription Shares
relating to such Non-Fully Subscribing Stockholder actually purchased by RMI
from RMI pro rata in accordance with the number of such Additional
Subscription Shares purchased by such Subscribing Stockholders at a price per
share equal to the NF per Share plus interest accruing from the Subscription
Due Date to the closing date for the purchase and sale under the Loan Option
at a rate equal to 12% per annum, compounded monthly. Each Non-Fully
Subscribing Stockholder may exercise its Loan Option by notice to such effect
to each Subscribing Stockholder, which notice shall specify the closing date
for the purchase and sale under the Loan Option. On such closing date, the
Non-Fully Subscribing Stockholder shall pay to each such Subscribing
Stockholder the aggregate purchase price for Additional Subscription Shares
(including interest) purchased in accordance with the Loan Option by wire
transfer of immediately available funds to the account designated by such
Subscribing Stockholder and each such Subscribing Stockholder shall deliver a
stock certificate or certificates representing such Additional Subscription
Shares to such Non-Fully Subscribing Stockholder free and clear of any Liens
(but such shares of Common Stock shall continue to be terms and provisions of
this Agreement) duly endorsed in blank, or accompanied by stock powers duly
executed in blank, together with all required stock transfer tax stamps
affixed. This Section 10(h) shall not apply to any Necessary Funds required in
connection with the exercise of the REC Call Option.
(i) Capital Call Notice and Time Periods for Initial
----------------------------------------------------------
Acquisition. Notwithstanding any provision of this Section 10 to the contrary,
-----------
it is acknowledged and agreed that solely with respect to the acquisition of
Interoffice by the Company, with respect to such initial acquisition and Loan
Option, any Non-Fully Subscribing Stockholder shall be entitled to exercise
its Loan Option with respect to any portion of the Aggregate Acquisition Price
that has not been financed with an Initial Acquisition Loan and to purchase
all of the shares of Common Stock actually purchased by the Subscribing
Stockholders which such Non-Fully Subscribing Stockholder would have been
entitled to purchase with respect to the Capital Call Notice, if any, issued
by the Company in connection with the acquisition of Interoffice as if it had
fully subscribed for the Additional Shares issued in connection with such
Capital Call Notice. With respect to such initial acquisition and Loan Option,
the Capital Call Notice and all periods of time specified above with respect
to the Subscription Acceptance Period, Subscription Deficit Contribution
Period and the Subscription Due Date shall be deemed to have occurred or
expired on and as of the Funding Date (as defined in Section 13(a)).
11. Opportunities; Confidentiality; Noncompetition.
(a) Opportunities. Each Stockholder (other than RMI), on behalf
-------------
of itself and its respective Affiliates, hereby transfers to the Company all
right, title and interest that such Stockholder or its Affiliates currently
has or may have in all business opportunities in the Executive Suite Business.
RMI on behalf of itself and its respective Affiliates, hereby transfers to the
Company all right, title and interest that such Stockholder or its Affiliates
currently has or may have in all business opportunities in the Executive Suite
Business other than the REC Assets (as defined by Section 15). In furtherance
of the foregoing, subject to Section 11(d), each Stockholder, on behalf of
itself and its respective Affiliates, covenants and agrees that such
Stockholder and such Stockholder's Affiliates shall conduct the Executive
Suite Business solely for the benefit of the Company through Interoffice.
(b) Confidentiality. Each Stockholder shall retain in strict
---------------
confidence, and shall not use for any purpose whatsoever, or divulge,
disseminate or disclose to any third party (other than in furtherance of the
business purposes of Interoffice and the Company or as may be required by law)
any proprietary or confidential information relating to the business of
Interoffice and the Company, including, without limitation, information
regarding real property interests, financial information, real property space
availability, development plans, distribution or franchising methods and
channels, pricing information, business methods, management information
systems and software, customer lists, supplier lists, leads, solicitations and
contacts, know-how, show-how, inventions, improvements, specifications, trade
secrets, agreements, research and development, business plans and marketing
plans of Interoffice and the Company, whether or not any of the foregoing are
copyrightable or patentable provided, that a Stockholder may in connection
with a Syndication provide financial and other information with respect to the
Company which is reasonably requested by any proposed Transferee in such
Syndication and reasonably required for the evaluation of such financial
investment if such person executes and delivers to the Company a
confidentiality agreement in form and substance reasonably acceptable to the
Company.
(c) Non-Competition. Subject to Section 11(d), each of the
---------------
Stockholders, on behalf of itself and its respective Affiliates, hereby
severally warrants, covenants and agrees with the Company and each other
Stockholder that neither it nor its Affiliates will, during the applicable
Restrictive Covenant Period (as defined below), directly or indirectly,
without the prior written consent of the Company and each other Stockholder,
engage in or be interested in any business which business is competitive with
the business of Interoffice or the Company (i.e., the Executive Suite
Business) in the countries where the Company or Interoffice has active
operations, nor during such period shall it or its Affiliates retain or hire
(on behalf of itself or any other person) any person who is or was an
employee, consultant or agent of Interoffice or the Company (other than any
such person whose duties do not include activities that are material to the
management, administration or operations of such company's business) unless
that person was in the employ of, or a consultant to or agent of, the
Stockholder or any of its Affiliates prior to being so for Interoffice or the
Company). For the purposes of this Agreement, a party shall be deemed to be
directly or indirectly interested in a business if such party is or shall be
engaged or affiliated directly or indirectly with such business as a
stockholder, director, officer, employee, salesman, sales representative,
agent, broker, partner, member, individual proprietor, lender, investor,
consultant or otherwise, unless such interest is limited solely to the passive
investment or beneficial ownership of twenty percent (20%) or less of the
equity or debt of any company, as the case may be. For purposes of this
Agreement, the "Restrictive Covenant Period" shall mean the period that
commences on the date hereof and expires the earlier of the date that is: (i)
one (1) year after the date that such Stockholder no longer owns, or has any
beneficial interest in, any shares of Common Stock; or (ii) the date of an IPO
of not less than twenty (20%) percent of the issued and outstanding shares of
Common Stock on a fully diluted basis after giving effect to such IPO.
(d) Specified Exclusions. The provisions of this Section 11
---------------------
shall not apply to RMI, JAH or any of their respective Affiliates as follows:
(i) Section 11 shall not apply to RMI with respect to
executive office suite centers owned, leased, developed, operated or
managed by Reckson Associates Realty Corp. ("Reckson"), RS or any of
their respective Affiliates on the date hereof, provided, that
Reckson, RS and RMI agree that any such executive office suite
center shall be included in the Interoffice Network of executive
office suites by assuming the trade dress and being operated as an
Interoffice executive office suite center; provided, further, that
Reckson, RSI, RMI or any of their respective Affiliates may provide
services in addition to the customary and usual services provided by
(A) Interoffice to the Interoffice executive office suite centers or
(B) RMI, Reckson or RS or any applicable Affiliate thereof to any
executive office suite centers, subject, in each case, to the right
of first refusal of Interoffice to provide such additional services
at the then prevailing market cost, terms and conditions.
(ii) If any JAH Designee does not vote (or execute and
deliver a consent) in favor of the acquisition of or other
investment in an executive office suite center by Interoffice or the
Company (and such action results in such acquisition or investment
not being approved), then RMI, Reckson, RSI or any of their
respective Affiliates may effect such acquisition or investment and
the provisions of this Section 11 shall not apply to such
transaction; provided, that (x) such executive office suite center
shall be included in the Interoffice Network of executive office
suites by assuming the trade dress and being operated as an
Interoffice executive office suite center, with RMI, Reckson, RS or
such Affiliate paying to Interoffice the Interoffice Franchise Fee
and (y) Interoffice provides such executive office suite center with
all services similar to the services then provided by Interoffice to
its executive office suite centers at the then prevailing market
cost, terms and conditions; provided further, that Reckson, RSI or
any of their respective Affiliates may provide services in addition
to the customary and usual services provided by Interoffice to the
Interoffice executive office suite centers subject to the right of
first refusal of Interoffice to provide such additional services at
the then prevailing market cost, terms and conditions.
(iii) If any RMI designee votes against the acquisition of
an executive office suite center by Interoffice or the Company, then
JAH or any of its Affiliates may acquire such executive office suite
center and the provisions of this Section 11 shall not apply to such
acquisition; provided, that (x) such executive office suite center
shall be included in the Interoffice Network of executive office
suites by assuming the trade dress and being operated as an
Interoffice executive office suite center with JAH or such Affiliate
paying to Interoffice the Interoffice Franchise Fee and (y)
Interoffice provides such executive office suite center with all
services similar to the services then provided by Interoffice to its
executive office suite centers at the then prevailing market cost,
terms and conditions; provided, further, that JAH or any of its
Affiliates may provide services in addition to the customary and
usual services provided by Interoffice to the Interoffice executive
office suite centers subject to the right of first refusal of
Interoffice to provide such additional services at the then
prevailing market cost, terms and conditions.
(iv) With respect to executive office suite centers not
owned, leased, developed, operated or managed by RMI, Reckson, RSI
or any of their respective Affiliates on the date hereof, RMI,
Reckson, RSI or such Affiliate may open such a new executive office
suite center in any building located within the New York City
Tri-State metropolitan region now or hereafter owned, leased,
operated or managed by RMI, Reckson, RSI or any of their respective
Affiliates unless on any future date that such building is so
acquired or leased Interoffice operates an executive office suite
center in such building; provided, that if Interoffice ceases to
operate an executive office suite center in such building owned or
leased by RMI, Reckson, RSI (or any of their respective Affiliates),
except if RMI, Reckson or RSI has refused to permit Interoffice to
renew Interoffice's lease on the prevailing market terms and
conditions, then RMI, Reckson, RSI or any of their respective
Affiliates may open an executive office suite center in such
building (subject to paragraph 11(d)(i) above).
(e) Interoffice Network Agreement. Subject to any Interoffice
-------------------------------
network agreement that may be executed with either Institutional Stockholder
or any of their respective Affiliates, the provisions of this Section 11 shall
terminate on the day immediately following the first (1st) anniversary of the
expiration of the Restrictive Covenant period; provided, however, that in the
event the Restrictive Covenant Period has expired due to the failure of either
Institutional Stockholder to own any shares of Common Stock, or any beneficial
interest therein, the Institutional Stockholder, if any, that continues to
hold shares of Common Stock, or a beneficial interest therein, may elect to
terminate the provisions of this Section 11 and release from the Interoffice
network any executive office suite centers purchased by the former
Institutional Stockholder. Such election shall be made upon thirty (30) days'
prior written notice to the former Institutional Stockholder, and shall be
effective not earlier than six (6) months from the date upon which such
Institutional Stockholder Transferred its last shares of Common Stock, or
beneficial interest therein. Notwithstanding anything in this Agreement to the
contrary, however, in the event that the Restrictive Covenant Period expires
due to the failure of an Institutional Stockholder to hold any shares of
Common Stock, or beneficial interest therein, and such failure is the result
of a Pledgee or its successor succeeding to the interest of said Institutional
Stockholder, then, in such event, the provisions of this Section 11 shall
survive the termination of this Agreement.
(f) Survival. The provisions of this Section 11 shall survive
--------
the termination of this Agreement.
12. Distributions.
(a) Dividends. The Company shall cause Interoffice to distribute
---------
by dividend to the Company, and the Company shall distribute by dividend to
its stockholders, at such times as the Board of Directors shall determine, but
not less than quarterly, an amount equal to all annual cash revenues less the
amount of (i) cash payments for expenses, capital expenditures and investments
and (ii) reserves for the current and future expenses for the operations of
such corporation and its subsidiaries or liabilities in connection therewith
over the ensuing twelve (12) month period and the current and future capital
expenditures and investments for such twelve (12) month period taking in
consideration anticipated revenues for such twelve (12) month period, in each
case, determined in the reasonable discretion of the applicable Board of
Directors in good faith. All costs associated with the acquisition of
Interoffice shall be paid in full prior to any dividends being distributed.
(b) Assignment of Dividend Payments. Each of JAH and ▇▇▇▇▇▇▇▇▇▇
-------------------------------
hereby transfers, conveys and assigns to RMI all of such Stockholder's right,
title and interest to the amount of any and all dividends receivable from the
Company attributable to Additional Shares for which RMI made such Stockholder
a loan in the amount such Stockholder owes to RMI pursuant to the terms and
conditions of Sections 8(g), 8(i) or 13, and hereby irrevocably directs the
Company to pay any such amounts to the order of RMI for the payment of such
obligation: (i) first to the payment of accrued and unpaid interest; and (ii)
then to the payment of the outstanding principal amount; provided, however,
that deducted from the dividends to be paid to RMI shall be an amount
sufficient to pay the combined federal, state or local income tax liability of
the Stockholder who has taxable income as a result of such dividend (it being
acknowledged and agreed that the state and local tax liability reduces the
federal tax liability) computed at the highest marginal federal, state and
local income tax rates without regard to the income, losses or deductions of
the Stockholder which deduction for taxes shall be paid to the Stockholder who
would have otherwise been entitled to such dividend.
13. Payment of Initial Contributions; RMI Loan to ▇▇▇▇▇▇▇▇▇▇.
--------------------------------------------------------
(a) Payment of Initial Purchase Price. Subject to Section 13(b),
---------------------------------
each Stockholder hereby covenants and agrees to pay and deliver to the Company
on the date that the Company acquires Interoffice (the "Funding Date")
pursuant to the Stock Purchase Agreement dated as of October 20, 1997 by and
between Interoffice and the Company the percentage of the aggregate net
purchase price of the shares of Common stock of Interoffice including, without
limitation, related taxes, fees, expenses and disbursements (the "Aggregate
Acquisition Price"), but less any amount of the Aggregate Acquisition Price
financed in accordance with Section 8 and Section 10(h), set forth opposite
its name below as additional paid-in-capital for the shares of Common Stock
owned by such Stockholder on the date hereof by wire transfer of immediately
available funds:
-------------------------------------- ---------------
Stockholder Percentage of the Aggregate
----------- ---------------------------
Acquisition Price
------------------
------------------------ -----------------------------
RMI 59.375%
------------------------ -----------------------------
JAH 23.750%
------------------------ -----------------------------
▇▇▇▇▇▇▇▇▇▇ 11.875%
------------------------ -----------------------------
TOTAL 95.000%
------------------------ -----------------------------
It is acknowledged and agreed that the aggregate amount of the contributions
by the Stockholders party hereto shall equal 95% of the unfinanced Aggregate
Acquisition Price and that, unless otherwise agreed by the partes hereto,
▇▇▇▇▇▇ ▇▇▇▇▇▇ or his Affiliate shall on or prior to the Funding Date pursuant
to the terms and conditions of a separate agreement contribute to the capital
of the Company (as additional paid-in-capital) an amount equal to 5% of the
unfinanced Aggregate Acquisition Price. In the event that ▇▇▇▇▇▇ ▇▇▇▇▇▇ or
such Affiliate does not so contribute 5% of the unfinanced Aggregate
Acquisition Price on or prior to the Funding Date, then subject to Section 8
and Section 10(h) and 10(i), the parties hereto shall contribute such amount
pro rata in accordance with the Percentage of the Aggregate Acquisition Price
set forth above.
(b) RMI Loan to ▇▇▇▇▇▇▇▇▇▇. RMI hereby agrees to loan ▇▇▇▇▇▇▇▇▇▇
-----------------------
on the Funding Date (the "Initial Capital Loan") an amount equal to: (i)
▇▇▇▇▇▇▇▇▇▇'▇ aggregate subscription price set forth above (such amount, at the
sole option of ▇▇▇▇▇▇▇▇▇▇, to be computed without regard to any amount which
may be loaned to ▇▇▇▇▇▇▇▇▇▇ by RMI in connection with the Initial Acquisition
Loan); (ii) multiplied by a fraction, the numerator of which is 950 and the
denominator of which is 1,187.5. Such loan shall accrue interest at a rate
equal to twelve (12%) per annum, compounded annually and shall mature ten (10)
years after the Funding Date. ▇▇▇▇▇▇▇▇▇▇ acknowledges and agrees that the
accrued interest on the Initial Capital Loan shall be paid, in part, by the
assignment of dividend payments pursuant to Section 12(b). The principal
amount of the Initial Acquisition Loan together with accrued and unpaid
interest thereon shall be due and payable by ▇▇▇▇▇▇▇▇▇▇ on the maturity date
of such loan. RMI acknowledges and agrees that there shall be no personal
liability of ▇▇▇▇▇▇▇▇▇▇ for a default in the payment of the interest or
principal of the Initial Capital Loan other than the 950 shares of Common
Stock of ▇▇▇▇▇▇▇▇▇▇. The Initial Capital Loan shall be evidenced by a
promissory note which limits the recourse of RMI to 950 of ▇▇▇▇▇▇▇▇▇▇'▇ shares
of Common Stock. On the Funding Date, ▇▇▇▇▇▇▇▇▇▇ shall execute and deliver to
RMI a promissory note, a security agreement and such other documentation as
reasonably requested by RMI to evidence and perfect such loan and security
interest. In the event that ▇▇▇▇▇▇▇▇▇▇ does not pay the principal amount of
the Initial Capital Loan and the accrued and unpaid interest thereon on the
maturity date of such loan, then ▇▇▇▇▇▇▇▇▇▇ shall Transfer a number of shares
of Common Stock on the maturity date of such loan so that the Fair Market
Value of such shares is equal to the amount of the unpaid principal of the
Initial Capital Loan and the unpaid accrued interest thereon. Notwithstanding
the provisions of Section 8(i), if ▇▇▇▇▇▇▇▇▇▇ elects to receive an Initial
Capital Loan pursuant to the provisions of this Section 13(b), then ▇▇▇▇▇▇▇▇▇▇
shall not receive its Initial Acquisition Loan from RMI pursuant to the
provisions of Section 8(i).
14. Effect of the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Act.
------------------------------------
(a) Applicability. Each Stockholder hereby acknowledges and
-------------
agrees that the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act")
may be applicable to the purchase and sale of Common Stock as contemplated by
this Agreement, including the purchase by JAH of all of RMI's shares of Common
Stock in accordance with the Buy/Sell Right and the exercise of the REC Call
Option or REC Put Option. In addition, the HSR Act may be applicable to the
Interoffice acquisition depending upon the aggregate consideration paid to the
sellers of Interoffice.
(b) Covenant to File all Necessary Documents. Each Stockholder
-----------------------------------------
hereby covenants and agrees that if and when the HSR Act is applicable to a
transaction, it will use its commercially reasonable efforts to: (i) promptly
and timely file the Notification and Report Form For Certain Mergers and
Acquisition as required under the HSR Act; (ii) request early termination of
the waiting period under the HSR Act; (iii) take all other actions necessary
or desirable to obtain a termination of the waiting period under the HSR Act;
(iv) provide a copy, subject to an appropriate agreement regarding
confidentiality, of all documents submitted in connection with the HSR Act;
and (v) coordinate and consult with each other party with respect to such
filing. The purchasers of shares of Common Stock in a transaction and the
Company in the event it exercises its REC Call Option, if the HSR Act is
applicable, shall pay all reasonable fees and disbursements in connection with
such filings. Each Stockholder hereby agrees that if such Stockholder effects
any transaction hereunder or contemplated hereby which causes the HSR Act to
be applicable, such Stockholder shall pay the fees, costs or expenses incurred
by each other Stockholder as the result of the applicability of the HSR Act to
the transaction; provided, however, that notwithstanding the foregoing, such
effecting Stockholder shall not be responsible for any fees, costs or expenses
of any other Stockholder that elects to exercise any right to purchase
pursuant to Sections 4, 5, 9, or 16, or solely with respect to the REC Call
Option, Section 15. It is acknowledged and agreed that RMI shall pay all fees
with respect to the filings or notices under the HSR Act which are applicable
to the acquisition by the Company of Interoffice.
(c) Amendment of Timing Periods. Wherever this Agreement
------------------------------
provides that a Stockholder may purchase the shares of Common Stock of another
Stockholder or exercise the REC Call Option or REC Put Option (as defined by
Section 15) and the HSR Act is applicable to such transaction, if this
Agreement provides that the closing of such transaction shall occur within a
specified period of time, the expiration of such period shall be stayed for
the waiting period of the HSR Act, but in any event not later than forty-five
(45) days.
15. Reckson Executive Office Centers Put/Call. Subject to the
---------------------------------------------
limitations set forth in this Section 15: (i) RMI, Reckson and RSI on behalf
of themselves and their respective Affiliates, hereby grants the Company the
right and option, but not the obligation (the "REC Call Option"), to require
RMI, Reckson, RSI and each of their respective Affiliates to sell, transfer
and convey all of their respect right, title and interest in and to all assets
(tangible and intangible) used or useful by RMI, Reckson, RSI or such
Affiliate in the operation of the Reckson Executive Office Centers
(collectively, the "REC Assets") including all real property interests, trade
names and other intangibles, trade dress, confidential information and leases
(including equipment leases), in each case, to the full extent that such
assets may be transferred or assigned; and (ii) the Company hereby grants to
RMI, on behalf of Reckson, RSI and each of their respective Affiliates, the
right and option, but not the obligation (the "REC Put Option"), to require
the Company to purchase from RMI, Reckson, RSI and their respective Affiliates
all of the REC Assets, in each case, as follows:
(a) Exercise Period.
---------------
(i) The REC Call Option may be exercised at any time during
the period which is five (5) years after the second anniversary of
the Funding Date; and
(ii) The REC Put Option may be exercised at any time during
the period which is seven (7) years after the Funding Date.
(b) Manner of Exercise of the Options. The REC Call Option shall
---------------------------------
be exercised by the Company by delivering to RMI a notice to such effect which
notice shall specify the date for the closing of the purchase and sale of the
REC Assets, which date shall be not less than ninety (90) days nor more one
hundred and eighty (180) days after the date such notice is delivered to RMI.
The REC Put Option shall be exercised by RMI by delivering to the Company a
notice to such effect which notice shall specify the date for the closing of
the purchase and sale of the REC Assets, which date shall be not less than
ninety (90) days nor more one hundred and eighty (180) days after the date
such notice is delivered to RMI.
(c) Purchase Price of REC Assets. The aggregate purchase price
----------------------------
at which shares of Common Stock shall be purchased pursuant to the REC Call
Option or the REC Put Option shall be the Appraised Value of such assets
determined in accordance with Section 17.
(d) Closing of the Option. On the closing date specified in
----------------------
accordance with Section 15(b) at the offices of the Company: (i) RMI, Reckson,
RSI and their respective Affiliates shall deliver to the Company a ▇▇▇▇ of
sale, estoppel certificates contract and lease assignments and such other
documents reasonably requested by the Company to sell, convey and transfer the
REC Assets; and (ii) the Company shall pay the aggregate purchase price of the
REC Assets to RMI by wire transfer of immediately available funds.
(e) Conduct of Business. Notwithstanding the REC Call Option and
-------------------
REC Put Option, RMI, Reckson, RSI and their respective Affiliates shall be
free to operate the Reckson Executive Office Centers in such fashion as they
deem appropriate in their sole discretion which may be arbitrary until the
date the REC Call Option or the REC Put Option is exercised and thereafter
shall operate such business in the best interests of the Reckson executive
office centers as reasonably determined by RMI, Reckson, RSI and their
respective Affiliates. From and after the date the REC Call Option or the REC
Put Option is exercised, RMI, Reckson, RSI and their respective Affiliates
shall keep the Company reasonably informed of all developments with respect to
the Reckson executive office centers and the REC Assets.
(f) Termination Date. The provisions of this Section 15 shall
-----------------
survive the termination of this Agreement.
(g) Agreement of Owners of REC Assets. Each of RMI, Reckson and
---------------------------------
RSI hereby agrees to deliver to the Company on or prior to thirty (30) days
after the date hereof appropriate documentation demonstrating that the holders
of one hundred (100%) percent of the ownership of the REC Assets agree to be
bound by the terms and provisions of this Section 15. In the event that such
documentation is not delivered on or prior to such date then: (A)
notwithstanding the provisions of this Section 15 to the contrary, the REC
Call Option and the REC Put Option shall apply to the economic interest of
RMI, Reckson, RSI and their respective Affiliates in and to the REC Assets;
(B) each of RMI, Reckson, RSI and their respective Affiliates agrees to not
allow ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ or any entity in which he has any direct or indirect
interest or consulting or employment arrangement (any such Person, a "▇▇▇▇▇▇
Entity") to own, lease, operate or manage any executive office center in any
building owned, leased, operated or managed by RMI, Reckson, RSI or any of
their respective Affiliates not already owned, leased, operated or managed by
▇▇. ▇▇▇▇▇▇ or a ▇▇▇▇▇▇ Entity as of the date hereof; and (C) RMI, Reckson, RSI
and their respective Affiliates agree that they will not invest or in any way
finance ▇▇. ▇▇▇▇▇▇ or a ▇▇▇▇▇▇ Entity with respect to owning, operating,
leasing or managing any executive office center other than those existing as
of the date hereof.
16. Participation Rights.
--------------------
(a) ▇▇▇▇▇▇▇▇▇▇ Participation Right. In the event that an
--------------------------------
Institutional Stockholder exercises its FR Right or its Buy/Sell Right or
otherwise Transfers or acquires shares of Common Stock to or from the other
Institutional Stockholder, ▇▇▇▇▇▇▇▇▇▇ shall have the right, but not the
obligation, which right is contingent upon the consummation of such other
transaction (the "Participation Right") to participate with the purchasing
Institutional Stockholder in the purchase of such shares of Common Stock on a
pro rata basis with the purchasing Institutional Stockholder or to participate
with the Selling Institutional Stockholder on a pro rata basis in the sale of
such shares (▇▇▇▇▇▇▇▇▇▇'▇ right to participate shall be based on the number of
shares of Common Stock owned by the purchasing or selling Institutional
Stockholder, as the case may be, and ▇▇▇▇▇▇▇▇▇▇) at the same Third Party Price
or Buy/Sell Price per share and on the same other terms and conditions as the
purchasing or selling Institutional Stockholder, as the case may be.
▇▇▇▇▇▇▇▇▇▇ may exercise its Participation Right by notice to such effect to
the purchasing Institutional Stockholder within ten (10) business days after
▇▇▇▇▇▇▇▇▇▇ has received notice of such Transfer. If ▇▇▇▇▇▇▇▇▇▇ has exercised
its Participation Right in accordance with this Section 16, then contingent
upon the consummation of such Transfer between the Institutional Stockholders:
(A) if ▇▇▇▇▇▇▇▇▇▇ has elected to purchase, (i) ▇▇▇▇▇▇▇▇▇▇ shall
be obligated to purchase, and the selling Institutional Stockholder
shall be obligated to sell, the number of shares ▇▇▇▇▇▇▇▇▇▇ is
purchasing under its Participation Right; and (ii) on the closing
date for the Transfer of shares of Common Stock between the
Institutional Stockholders at the offices of the Company,
simultaneously with the such closing (x) ▇▇▇▇▇▇▇▇▇▇ shall pay an
amount of cash equal to the Third Party Price or Buy/Sell Price, as
the case may be, multiplied by the number of shares ▇▇▇▇▇▇▇▇▇▇ is
purchasing under its Participation Right by wire transfer of
immediately available funds to the selling Institutional Stockholder
and (y) the selling Institutional Stockholder shall deliver to
▇▇▇▇▇▇▇▇▇▇ a stock certificate representing all of the shares so
purchased by ▇▇▇▇▇▇▇▇▇▇ under the Participation Right free and clear
of any Liens (but such shares of Common Stock shall continue to be
subject to the terms and provisions of this Agreement) duly endorsed
in blank, or accompanied by stock powers duly executed in blank,
together with all required stock transfer tax stamps affixed. To the
extent that this Participation Right is exercised, the number of
shares of Common Stock to be purchased by the purchasing
Institutional Stockholder (and all of such Stockholder's obligations
in connection therewith) shall be reduced by the number of shares of
Common Stock of ▇▇▇▇▇▇▇▇▇▇ under the Participation Right; provided,
that if ▇▇▇▇▇▇▇▇▇▇ shall default in its obligation to so purchase
such shares of Common Stock, then the purchasing Institutional
Stockholder shall have the obligation to purchase such shares of
Common Stock; or
(B) if ▇▇▇▇▇▇▇▇▇▇ has elected to sell, (i) ▇▇▇▇▇▇▇▇▇▇ shall be
obligated to sell, and the purchasing Institutional Stockholder
shall be obligated to purchase, the number of shares ▇▇▇▇▇▇▇▇▇▇ is
selling under its Participation Right; and (ii) on the closing date
for the Transfer of shares of Common Stock between the Institutional
Stockholders at the offices of the Company, simultaneously with the
such closing (x) the purchasing Institutional Stockholder shall pay
an amount of cash equal to the Third Party Price or Buy/Sell Price,
as the case may be, multiplied by the number of shares ▇▇▇▇▇▇▇▇▇▇ is
selling under its Participation Right by wire transfer of
immediately available funds to ▇▇▇▇▇▇▇▇▇▇ and (y) ▇▇▇▇▇▇▇▇▇▇ shall
deliver to the purchasing Institutional Stockholder a stock
certificate representing all of the shares so sold by ▇▇▇▇▇▇▇▇▇▇
under the Participation Right free and clear of any Liens (but such
shares of Common Stock shall continue to be subject to the terms and
provisions of this Agreement) duly endorsed in blank, or accompanied
by stock powers duly executed in blank, together with all required
stock transfer tax stamps affixed.
(b) Participation Rights on Transfers to ▇▇▇▇▇▇▇▇▇▇ and
----------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ Affiliates. In the event that either Institutional Stockholder
----------------------
intends to Transfer any of its Common Stock to ▇▇▇▇▇▇▇▇▇▇ or any Affiliate of
▇▇▇▇▇▇▇▇▇▇, such Institutional Stockholder shall give the Company and
▇▇▇▇▇▇▇▇▇▇ ten (10) days' prior written notice of such proposed Transfer and
such other Institutional Stockholder (or an Affiliate of such Stockholder) may
elect to purchase a pro rata portion of the shares of Common Stock that is the
subject of such proposed Transfer. The pro rata portion of shares which such
other Institutional Stockholder shall be entitled to purchase shall be
calculated based on the relative proportions of shares of Common Stock in the
Company held by such Institutional Stockholder and by ▇▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇
and the other Institutional Stockholder, if it so elects to purchase shall
have at least sixty (60) days from receipt of the transferor's notice of
intention to close on such purchase. Such election shall be made in writing by
such Institutional Stockholder within five (5) days of receipt of such notice
by the Institutional Stockholder proposing to transfer its shares of Common
Stock, the failure to deliver such notice by the other Institutional
Stockholder being deemed an election not to so purchase.
17. Certain Defined Terms. For the purposes of this Agreement, the
---------------------
following terms used herein shall be defined as follows:
(a) Affiliate. With respect to any Person means: (i) any person
---------
at the time directly or indirectly controlling, controlled by or under direct
or indirect common control (whether by ownership of voting securities,
contract or otherwise) with such person; (ii) any executive officer, senior
employee or director (or a person with similar responsibilities) of such
person; and (iii) when used with respect to an individual, shall include the
Family Group of such individual. Notwithstanding the provisions of this
Section 17(a), an Affiliate of RMI shall include Reckson, RSI, REC and any
Platform Company.
(b) Appraised Value. The average of the two valuations of the
----------------
REC Assets, as determined by two Nominated Investment Bankers (one selected by
an RMI Designee and the other selected by a JAH Designee) as of the date of
the exercise of the REC Call Option or REC Put Option, as the case may be,
using the same methodology and considerations as were used in evaluating the
REC Assets to derive the Initial Appraised Value, however determined, taking
into consideration any liabilities or obligations encumbering such assets and
making such adjustments and modifications to the valuation process as such
Nominated Investment Banker determines is consistent with the valuation of
similar companies operating in the same industry; provided, that if the
difference between the two valuations is greater than ten (10%) of the higher
valuation, then the Company shall select the next available Nominated
Investment Bank (in the order of appearance of such firms on such schedule)
and the Appraised Value shall equal the average of all three such valuations;
provided, further, that if the Appraised Value on the date of exercise of the
REC Call Option or the REC Put Option is greater than the Initial Appraised
Value, then the Appraised Value as of the date of exercise of the REC Call
Option or the REC Put Option shall be reduced by twenty five (25%) percent of
such difference. Whenever the Appraised Value is to be determined, the (x)
Company, in connection with a REC Call Option, or (y) RMI, in connection with
a REC Put Option shall pay all fees and disbursement of such Nominated
Investment Banks and shall require that each Nominated Investment Bank to (1)
confirm in writing that it is independent with respect to, and not conducting
any business with, any Stockholder or their respective Affiliates other than
stock or commodity or similar brokerage or broker/dealer activities for
reasonable and customary commissions or discounts and (2) report its valuation
within thirty (30) days after the date of such assignment. It is acknowledged
and agreed that the procedures described above are to determine the specified
valuation with administrative efficiency and expediency. Accordingly, no party
hereto shall have a right, and no Nominated Investment Bank shall be required,
to hold any hearing, presentation or other advocacy proceeding with respect to
the preparation of such valuation and the determination of such value in
accordance with the terms hereof shall be final and binding on the parties
hereto.
(c) Contingent Transfer. A Transfer of Interest of shares of
--------------------
Common Stock other than a Transfer permitted by, and as described in, Sections
3(b)(i) (Testamentary and Gift Transfers), (ii) (Affiliate Transfers), (iii)
(Sale to the Company), (iv) (Pledges) and (v) (Syndications) or Section 9
(Buy/Sell).
(d) Deposit Defaulted Shares. Means those shares of Common Stock
------------------------
sufficient in number to equal in value (as valued at the Third Party Price or
Buy/Sell Price, as the case may be) the amount of the FR Deposit or Buy/Sell
Deposit, as the case may be, less the amount of the Cash Deposit actually paid
by such Stockholder.
(e) Disqualified Transferee. (A) With respect to any Stockholder
-----------------------
other than RMI, means unless waived by RMI, other than the Persons listed on
Schedule B hereto, any company, association or entity that is: (i) a real
estate investment trust or similar investment vehicle, real estate investor or
developer which actively and directly (by itself or one or more of its
Affiliates), competes with Reckson, RSI or any of their respective Affiliates
in the geographic locations in which either of them or any such Affiliate is
then actively engaged in the real estate investment or management business or
(ii) actively and directly (by itself or one or more of its Affiliates)
competes in the same business or any line of business of Interoffice or any
other Platform Company of Reckson, RSI or their respective Affiliates;
provided, however, that notwithstanding the foregoing to the contrary, in no
event shall a Disqualified Transferee include any pension fund or trust or any
financial investor, including without limitation those set forth on Schedule B
hereto, whose primary activity is investment in entities or businesses
(including real estate businesses); or (B) with respect to RMI, means, unless
waived by JAH, any company, association or entity that actively and directly
(by itself or one or more of its Affiliates) competes in the same business or
any line of business of Interoffice or the Company.
(f) Excused Condition. With respect to any Stockholder which
------------------
will purchase shares of Common Stock of any other Stockholder hereunder, means
a breach or default on the part of the selling Stockholder or the failure of a
condition precedent to the specified purchase of the shares of Common Stock
unless such failure is the result of a breach or default on the part of the
purchasing Stockholder.
(g) Executive Suite Business. The executive office suite center
------------------------
business of Interoffice (or the Company), to wit: with respect to providing
lessees with furnished separate office space and use of on-site administrative
support services, such as receptionists, word processing or secretarial
assistance, office management, conference facilities, telecommunication
services, sundries, as such business is conducted on a specified date by
Interoffice (or the Company) and as planned or projected to be conducted
during the annual period after such date.
(h) Fair Market Value. With respect to the valuation of the
------------------
Company for the purposes of this Agreement shall mean the fair market
valuation of the equity of the Company determined by valuing the Company on a
consolidated basis with Interoffice as a going concern without any discount
for loss of liquidity determined by mutual agreement of RMI and JAH (or
▇▇▇▇▇▇▇▇▇▇, as applicable) or, if after ten (10) business days such parties do
not agree upon such determination, the average of such fair market valuations
of the Company (provided, that in connection with a Capital Call Notice the
acquisition or investment that is the subject of such notice shall be valued
at the proposed cost to the Company) as determined in good faith by two
Nominated Investment Banks selected by the Company in the order of appearance
of such firms on Schedule A; provided, that if the difference between such
valuations is greater than ten (10%) of the higher valuation, then the Company
shall select the next available Nominated Investment Bank (in the order of
appearance of such firms on such schedule) and the "Fair Market Value" shall
equal the average of all three such valuations. Whenever the Fair Market Value
of the Company is to be determined, the Company shall pay all fees and
disbursement of such Nominated Investment Banks and shall require that each
Nominated Investment Bank to (x) confirm in writing that it is independent
with respect to, and not conducting any business with, any Stockholder or
their respective Affiliates other than stock or commodity or similar brokerage
or broker/dealer activities for reasonable and customary commissions or
discounts and (y) report its valuation within thirty (30) days after the date
of such assignment. The "Fair Market Value" of any shares of Common Stock held
by any Stockholder shall be the Fair Market Value of the Company, as
determined above, multiplied by a fraction, the numerator of which is the
number of such shares of Common Stock and the denominator of which is the
number of issued and outstanding shares of Common Stock on a fully diluted
basis on the date of such determination. Accordingly, the Fair Market Value of
such shares is without regard to a premium or discount for a majority or
minority interest. It is acknowledged and agreed that the procedures described
above are to determine the specified valuation with administrative efficiency
and expediency. Accordingly, no party hereto shall have a right, and no
Nominated Investment Bank shall be required to, or shall, hold any hearing,
presentation or other advocacy proceeding with respect to the preparation of
such valuation and the determination of such value in accordance with the
terms hereof shall be final and binding on the parties hereto.
(i) Family Group Member. Means with respect to (i) (I) JAH, ▇▇▇
-------------------
▇▇▇▇▇▇▇; (II) ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or (III) RMI, ▇▇▇▇▇ ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; (ii) the parents grandparents, brothers, sisters, spouse and
descendants (whether natural or adopted) of any person described in clause (i)
above; (iii) any spouse or descendant of any person described in clauses (i)
and (ii) above; (iv) any trust created solely for the benefit of any person
described in clauses (i) through (iii) above; (v) any executor or
administrator for any of the persons described in clauses (i) through (iv)
above; (vi) any partnership solely of persons described in clauses (i) through
(v) above; and (vii) any corporate foundation created by any of the persons
described in clauses (i) through (v) above for charitable purposes.
(j) Initial Acquisition. The initial acquisition of Interoffice
-------------------
by the Company.
(k) Initial Appraised Value. Means the value of the REC Assets
------------------------
as of December 31, 1997 agreed by the Institutional Stockholders on or prior
to date which is thirty (30) days after the date on which this Agreement is
executed and delivered. If the Institutional Stockholders do not agree as to
such value on or prior to such date, then the Initial Appraised Value shall
equal the average of the valuations of the REC Assets, as of December 31,
1997, as a going concern without any discount for loss of liquidity as
determined in good faith by two (2) Nominated Investment Banks selected by the
Company in the order of the appearance of such firms on Schedule A, it being
acknowledged and agreed that such Nominated Investment Banks shall use the
same methodology and considerations as were used in evaluating the initial
acquisition of Interoffice by the Company. In determining the Initial
Appraised Value, the existing leases constituting a part of the REC Assets
shall be deemed to exclude any percentage rent provisions and the base or
fixed rents under such leases shall be adjusted where necessary to equal base
or fixed rents at fair market value. Notwithstanding the foregoing mechanism
for valuation by the two (2) Nominated Investment Banks, if the difference
between such valuations is greater than ten (10%) of the higher valuation,
then the Company shall select the next available Nominated Investment Bank (in
the order of appearance of such firms on Schedule A and the "Initial Appraised
Value" shall equal the average of all three (3) such valuations.
(l) Interoffice Franchise Fee. Means the then prevailing market
--------------------------
franchise fee charged by Interoffice to its franchisees of executive office
suite centers (or if there are no franchises of Interoffice, then the
prevailing market rate in the industry); provided, that such fee shall not be
greater than the amount charged to any franchisee and shall include only the
types of fees charged to franchisees generally.
(m) Initial Acquisition Loan. Means a loan by RMI or any of its
-------------------------
Affiliates to any other Stockholder for the purpose of funding the initial
acquisition of Interoffice by the Company pursuant to Section 8(i) or Section
10(h) or 10(i).
(n) IPO. Means an initial public offering of the Common Stock or
---
other equity security of the Company which is registered with the Securities
and Exchange Commission under the provisions of the 1933 Act; provided, that
not less than twenty percent (20%) of the issued and outstanding shares of the
Common Stock (on a fully diluted basis after giving effect to the sale of
Common Stock in such IPO) shall be issued in such offering (or any
substantially similar transaction, including without limitation, the transfer
of the Company's assets to a subsidiary and the sale of such subsidiary's
stock in an offering of the type described in this subsection with respect to
the Company).
(o) Liens. Means any lien, encumbrance, claim, charge or
-----
restriction on or with respect to the shares of Common Stock other than a
lien, encumbrance or restriction imposed by this Agreement or which either (A)
was granted in order to secure any obligation of the Company or any guaranty
of any obligation of the Company at the request of the Company or (B) is
fully, absolutely and irrevocably released on the day of a Transfer of such
shares of Common Stock.
(p) Person. Any individual and any corporation, partnership,
------
trust or other entity.
(q) Platform Company. Interoffice and any other company or
-----------------
entity, or any division thereof, in which RMI, Reckson, RSI or any of their
respective Affiliates directly or indirectly invests and has rights to direct
or significantly influence the management and control thereof.
(r) Supermajority Effective Period. Means the period of time
--------------------------------
commencing the date hereof and ending on the date that: (A) (i) JAH has the
record and beneficial ownership of less than 11.875% of the issued and
outstanding shares of Common Stock on a fully diluted basis; and (ii) at such
time the number of shares of Common Stock of RMI is less than the number of
shares required for the ratio of RMI to JAH shares to be at least 3:2 (e.g. if
JAH has 1,000 shares of Common Stock then if RMI has less than 1,500 shares of
Common Stock, the Supermajority Period shall not have expired) or (B) the date
of any default in the repayment of the Initial Acquisition Loan by JAH.
(s) "▇▇▇▇▇▇▇▇▇▇ Put Shares". Means the sum of (i) the shares of
-----------------------
Common Stock initially issued to ▇▇▇▇▇▇▇▇▇▇ and (ii) any shares of Common
Stock purchased by ▇▇▇▇▇▇▇▇▇▇ pursuant to the provisions of Section 10
(Additional Contributions) other than Additional Subscription Shares .
(t) RMI Public Shares. Means any common stock or other equity
------------------
securities of RMI, RS or Reckson or any of their respective Affiliates sold in
an offering registered under the 1933 Act or pursuant to the provisions of
Rule 144A thereunder.
(u) Syndicate Representative. Means: (i) any individual who is
-------------------------
ultimately at the direction of JAH Realties, L.P. in the case of a Syndication
of the shares of Common Stock owned by JAH; or (ii) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, in
the event of a Syndication of the shares of Common Stock owned by ▇▇▇▇▇▇▇▇▇▇.
(v) Third Party Price. Means a proposed or offered price per
------------------
share of Common Stock equal to: (i) cash; (ii) cash equivalents; and (iii)
stated principal amount of any promissory notes included in any such proposal
or offer; provided, however, that if there is no interest rate, or a nominal
interest rate, the stated principal amount shall be discounted in accordance
with generally accepted accounting principles; provided, further, that any
such note shall be included in the Third Party Price only if the obligor (or
guarantor) of such note has a minimum financial net worth of at least
$5,000,000 on a pro forma basis, assuming the Third Party Offered Shares are
purchased in accordance with the terms stated in the Notice of Offer.
18. After-Acquired Shares.
---------------------
(i) Each Transferee of any shares of Common Stock shall, as a
condition precedent to such Transfer being effective, become signatories to,
and shall have all the benefits and obligations provided by, this Agreement
without any further action of any party hereto and each such Transferee shall
upon execution and delivery of this Agreement, be a Stockholder for the
purposes of this Agreement.
(ii) This Agreement shall apply to all of the shares of Common
Stock now owned or which may be issued or transferred hereafter to a
Stockholder or to his or its permitted Transferees as a consequence of any
additional issuance, purchase, exchange or reclassification of shares of
Common Stock, corporate reorganization, or any other form of recapitalization,
or consolidation, or merger, or share split, or share dividend, or which are
acquired by a Stockholder in any other manner.
19. Stock Certificate Legend. A copy of this Agreement shall be
--------------------------
filed with the Secretary of the Company and kept with the records of the
Company. Each certificate representing shares of Common Stock owned by the
Stockholder shall bear upon its face the following legend:
THE TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED UNDER THE TERMS OF A STOCKHOLDERS'
AGREEMENT ENTERED INTO AS OF THE 26TH DAY OF DECEMBER, 1997, A
COPY OF WHICH IS ON FILE AT THE OFFICE OF THE CORPORATION.
20. Amendment and Modification. No change or modification of this
---------------------------
Agreement shall be valid, binding or enforceable as against: (i) the Company
unless the same shall be in writing and signed by the Company; (ii) any of the
Stockholders unless the same shall be in writing and signed by such
Stockholder.
21. Assignment. This Agreement and all of the provisions hereof
----------
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, assigns, executors, administrators or successors, but,
except as otherwise provided in Section 3, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. This
Agreement is not intended to confer upon any other person except the parties
hereto and their permitted successors and assigns any rights or remedies
hereunder. In the event that any shares of Common Stock are Transferred by
RMI, JAH or ▇▇▇▇▇▇▇▇▇▇ to an Affiliate of such Stockholder, such Transferee
shall be deemed to be included in each reference to RMI, JAH or ▇▇▇▇▇▇▇▇▇▇, as
the case may be; provided, that notices shall only be required to be sent to,
and shall only be sent by, RMI, JAH or ▇▇▇▇▇▇▇▇▇▇, as the case may be, for as
long as such party is a Stockholder hereunder.
22. Further Assurances. Each party hereto shall do and perform or
-------------------
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
23. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware governing agreements made
wholly within the State of Delaware.
24. Notices. All notices given pursuant to this Agreement shall be
-------
in writing and shall be made by hand-delivery, first-class mail (registered or
certified, return receipt requested), telex, telecopier, or overnight air
courier guaranteeing next business day delivery:
(a) if to the Company:
c/o Reckson Management, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
and
c/o JAH Realties, L.P.
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
General Counsel
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and
Battle ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
and
JAH Realties, L.P.
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
General Counsel
and
Pryor, Cashman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(b) if to the Stockholder, to him or it at his or its address as
reflected in the stock records of the Company or as the Stockholder shall
designate to the Company in writing, such designation to be effective only
upon receipt.
(c) Except as otherwise provided in this Agreement, each such
notice shall be deemed given at the time delivered by hand, if personally
delivered; five business days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next business day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next business day delivery.
25. Entire Agreement. This Agreement supersedes and terminates all
----------------
prior agreements between any of the parties hereto with respect to the subject
matter contained herein, and this Agreement embodies the entire understanding
between the parties relating to such subject matter, and any and all prior
correspondence, conversations and memoranda are merged herein and shall be
without effect hereon. No promises, covenants or representations of any kind,
other than those expressly stated herein, have been made to induce any party
to enter into this Agreement. In the event a party hereto is in material
breach of any of the terms and provisions of this Agreement, then such party
shall not be entitled to the benefits of this Agreement including without
limitation the Supermajority Vote provided in Section 8.
26. Non-Waiver. No delay on the part of any party in exercising any
----------
right hereunder shall operate as a waiver thereof, nor shall any waiver,
express or implied, by any party of any right hereunder or of any failure to
perform or breach hereof by any other party constitute or be deemed a waiver
of any other right hereunder or of any other failure to perform or breach
hereof by the same or any other Stockholder, whether of a similar or
dissimilar nature thereof.
27. Injunctive Relief. Each of the parties hereto hereby
------------------
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that in the event of such
a breach hereof the aggrieved party may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach hereof without the requirement
of posting any bond or security or proving and special damages. By seeking or
obtaining any such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled (including,
without limitation, the right to retain a FR Deposit, Buy/Sell Deposit or
other deposit as liquidated damages in addition to obtaining injunctive relief
on specific performance).
28. Self Executing Procedures for Specific Performance. Each
-------------------------------------------------------
Stockholder agrees that irreparable damage would occur in the event of a
breach of or default under any of the provisions contemplating a Transfer of
shares of Common Stock between the Stockholders including as a result of the
FR Right, Buy/Sell Right, forfeiture of the FR Deposit or the Buy/Sell Deposit
or Bring-Along Right and that each of the Stockholders entitled under any such
provision to purchase or otherwise acquire shares of Common Stock shall be
entitled to specific performance of such terms and provisions, in addition to
any other remedy at law or equity. The Stockholders further agree that time is
of the essence with respect to any time periods set forth in this Agreement
with respect to any such Transfer contemplated by this Agreement. In order to
insure the consummation of the Transfer of the shares of Common Stock pursuant
to any such provision, each Stockholder hereby appoints the Company as
attorney-in-fact, and the Company hereby accepts such appointment, for the
purpose of executing and delivering such documents reasonably requested by the
purchasing or acquiring Stockholder and which are necessary or desirable to so
Transfer the shares of Common Stock, including, without limitation, stock
powers and lost certificate affidavits. Further, to permit the purchasing or
acquiring Stockholder to consummate the closing of any such Transfer of shares
of Common Stock in the event that the transferring or assigning Stockholder
does not attend such closing, each Stockholder hereby appoints the Company as
escrow agent, and the Company hereby accepts such appointment, to hold the
aggregate purchase price, if any, for the shares of Common Stock to be
Transferred pursuant to any such provision for the benefit of the Stockholder
transferring or assigning his or its shares of Common Stock, it being
acknowledged and agreed that the Company, as escrow agent, shall deposit such
amounts in a separate interest bearing account at any bank selected by the
Company, in its sole discretion, and that such transferring or assigning
Stockholder shall hold the Company harmless for any loss of such amount.
29. Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees and all disbursements in addition to any other
available remedy.
30. Consent to Jurisdiction. All actions and proceedings arising out
-----------------------
of, or relating to, this Agreement shall be heard and determined in any state
or federal court sitting in Delaware (including without limitation the Court
of Chancery) or New York. The undersigned, by execution and delivery of this
Agreement, expressly and irrevocably consent and submit to the personal
jurisdiction of any of such courts in any such action or proceeding; (ii)
consent to the service of any complaint, summons, notice or other process
relating to any such action or proceeding by delivery thereof to such party by
hand or by certified mail, delivered or addressed as set forth in Section 24
of this Agreement; and (iii) waive any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper venue
or forum non conveniens or any similar basis.
31. Severability. If any provision of this Agreement or the
------------
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to the other parties or circumstances shall not
be affected thereby and shall be enforced to the greatest extent permitted by
applicable law.
32. Miscellaneous.
-------------
(a) Notwithstanding any provision of this Agreement to the
contrary, a Transferee of a Permitted Transfer shall take the shares of Common
Stock Transferred in such sale or transaction subject to the terms and
provisions of this Agreement including, without limitation, the Tag-Along and
Participation Rights of the Stockholders provided herein.
(b) Section headings are for convenience of reference only and
shall not be used to construe the meaning of any provision of this Agreement.
(c) This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one agreement.
(d) Any word or term used in this Agreement in any form shall be
masculine, feminine, neuter, singular or plural, as proper reading requires.
The words "herein", "hereof", "hereby" or "hereto" shall refer to this
Agreement unless otherwise expressly provided. Any reference herein to a
Section or any exhibit or schedule shall be a reference to a Section of, and
an exhibit or schedule to, this Agreement unless the context otherwise
requires. Any reference herein to a "business day" shall mean a day in which
the New York branch of the Federal Reserve Bank is open for business during
its normal hours of operation.
(e) In the event the terms and conditions of any Buy/Sell Notice
or Notice of Transfer are inconsistent with the terms and conditions of this
Agreement, the terms and conditions of this Agreement shall supersede the
terms and conditions of any such notice.
(f) This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors, assigns and
permitted Transferees (to the extent otherwise permitted by this Agreement).
(g) Notwithstanding any provision of this Agreement to the
contrary, from and after the Funding Date no action shall be taken by
Interoffice or any direct or indirect subsidiary of Interoffice that is not
taken in accordance with the governance and other provisions of this
Agreement.
33. Requirement for Acquisition of Interoffice.
------------------------------------------
(a) Notwithstanding any provision of this Agreement to the
contrary, this Agreement shall be void ab initio and shall not bind the
Company or any Stockholder or any other party hereto or any of their
respective Affiliates if the Funding Date (as defined by section 13 of this
Agreement) shall not have occurred on or prior to May 1, 1998, time being of
the essence.
(b) Notwithstanding any provision of this Agreement to the
contrary, until the Funding Date: (i) no Stockholder shall permit any Transfer
of Interest with respect to the shares of Common Stock owned by such
Stockholder and (ii) no Stockholder shall have any obligations under this
Agreement, except as provided in section 11 and by this section 33.
(c) Notwithstanding any provision of this Agreement to the
contrary, the acquisition of Interoffice and the payment of the Aggregate
Acquisition Price shall require the unanimous consent of the Board of
Directors.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, this Agreement has been signed by each of
the parties hereto as of the date first written above.
INTEROFFICE SUPERHOLDINGS
CORPORATION
By: ______________________________
Name:
Title:
RECKSON MANAGEMENT GROUP, INC.
By: _____________________________,
Name:
Title:
JAH I/O, LLC
By: ______________________________,
its Managing Member
By: ______________________________
Name:
Title:
RFIA, LLC
By: ______________________________
Name:
Title:
ACCEPTED AND AGREED AS TO
SECTIONS 11(d), 11(e) and 15
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its general partner
By: ______________________________
Name:
Title:
RECKSON SERVICE INDUSTRIES CORP.
By: ______________________________
Name:
Title:
SCHEDULE A
Nominated Investment Banks
A list of not less than ten (10) Nominated Investment Banks shall be provided
by each of RMI and JAH prior to the selection of any Nominated Investment Bank
and such list shall be ordered in random order.
SCHEDULE B
Exceptions to Disqualified Transferees
A. Developers
Capelli
B. Financial Investors
▇▇▇▇▇ Funds
Apollo Funds
NorthStar Funds
STATE OF NEW YORK )
) SS.:
COUNTY OF )
On the ____ day of December, before me personally came
______________ to me known, who being duly sworn, did depose and say that he
resides at _________________ __________________________, that he is the
officer of INTEROFFICE SUPERHOLDINGS CORPORATION, the corporation described in
and which executed the foregoing instrument; that he signed his name thereto
by order of the board of directors of such corporation.
----------------------------------
Sworn to before me this
___ day of December, 1997
---------------------------
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF )
On the ____ day of December, before me personally came
______________ to me known, who being duly sworn, did depose and say that he
resides at _________________ __________________________, that he is the
officer of RECKSON MANAGEMENT GROUP, INC., the corporation described in and
which executed the foregoing instrument; that he signed his name thereto by
order of the board of directors of such corporation.
----------------------------------
Sworn to before me this
___ day of December, 1997
---------------------------
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF )
On the ____ day of December, before me personally came
______________ to me known, who being duly sworn, did depose and say that he
resides at _________________ __________________________, that he is the
officer of ______________________________, which is the managing member of
RFIA, LLC, a limited liability company, and that he executed the foregoing
instrument in the name of such __________ on behalf of such limited liability
company and that he had authority to sign the same, and he acknowledged that
he executed the same as the act and deed of the said __________ as the
managing member of said limited liability company.
----------------------------------
Sworn to before me this
___ day of December, 1997
---------------------------
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF )
On the ____ day of December, before me personally came
_________________ to me known, and who executed the foregoing instrument and,
who being by me duly sworn, did depose and say that he is the duly authorized
officer of JAH REALTY MANAGEMENT SERVICES, INC., which is the general partner
of the limited partnership that is the managing member of JAH I/O, LLC, a
limited liability company, and that he executed the foregoing instrument in
the name of such corporation on behalf of such limited partnership on behalf
of said limited liability company and that he had authority to sign the same,
and he acknowledged that he executed the same as the act and deed of the said
corporation as the general partner of said limited partnership.
----------------------------------
Sworn to before me this
___ day of December, 1997
---------------------------
Notary Public