SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: October 17, 2000
RECKSON ASSOCIATES REALTY CORP.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGREEMENT
Dated as of October 13, 2000
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions...................................................................................1
Section 2. Appointment of Rights Agent...........................................................................5
Section 3. Issuance of Right Certificates........................................................................5
Section 4. Form of Right Certificate.............................................................................7
Section 5. Countersignature and Registration.....................................................................8
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificate..........................................................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........................................10
Section 8. Cancellation and Destruction of Right Certificates...................................................12
Section 9. Reservation and Availability of Preferred Shares.....................................................13
Section 10. Preferred Shares Record Date........................................................................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.........................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..........................................22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power................................22
Section 14. Fractional Rights and Fractional Shares.............................................................25
Section 15. Rights of Action....................................................................................27
Section 16. Agreement of Right Holders..........................................................................27
Section 17. Right Certificate Holder Not Deemed a Stockholder...................................................28
Section 18. Concerning the Rights Agent.........................................................................28
Section 19. Merger or Consolidation or Change of Name of Rights Agent...........................................29
Section 20. Duties of Rights Agent..............................................................................30
Section 21. Change of Rights Agent..............................................................................32
Section 22. Issuance of New Right Certificates..................................................................33
Section 23. Redemption and Termination..........................................................................34
Section 24. Exchange............................................................................................35
Section 25. Notice of Certain Events............................................................................36
Section 26. Notices.............................................................................................37
Section 27. Supplements and Amendments..........................................................................38
Section 28. Determination and Actions by the Board of Directors, etc............................................38
Section 29. Successors..........................................................................................39
Section 30. Benefits of this Agreement..........................................................................39
Section 31. Severability........................................................................................39
Section 32. Governing Law.......................................................................................39
Section 33. Counterparts........................................................................................40
Section 34. Descriptive Headings................................................................................40
Exhibit A - Form of Articles Supplementary
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
Defined Term Cross Reference Sheet
Term Location
Acquire Exhibit A (9)(n)
Acquiring Person Section 1(a)
Act Section 1(b)
Adjustment Shares Section 11(a)(ii)
Adjusted Number of Shares Section 11(a)(iii)
Adjusted Purchase Price Section 11(a)(iii)
Affiliate Section 1(c)
Agreement Preface
Associate Section 1(c)
Beneficial Owner Section 1(d)
Beneficial Ownership Exhibit A (9)(n)
Beneficially Own Section 1(d)
Business Day Section 1(e)
Capital Stock Exhibit A (9)(n)
Capital Stock Equivalent Section 11(a)(iii)
Charitable Beneficiary Exhibit A (9)(n)
Charter Exhibit A
Close of Business Section 1(f)
Code Exhibit A (9)(n)
Common Equity Exhibit A (9)(n)
Common Shares Section 1(g)
Common Shares Section 1(g)
Constructive Ownership Exhibit A (9)(n)
Corporation Preface
Current Market Price Exhibit A (9)(n)
Current Per Share Market Price Section 11(d)(i)
Distribution Date Section 3(a)
Documents Section 18
equivalent preferred shares Section 11(b)
Excess Shares Section 1(i)
Exchange Act Section 1(c)
Exchange Ratio Section 24(a)
Fair Market Value Exhibit A (9)(n)
Final Expiration Date Section 7(a)
Interested Stockholder Section 1(k)
IRS Exhibit A (9)(n)
Liquidation Exhibit A(3)
Nasdaq Section 11(d)(i)
Ownership Section 1(l)
Ownership Limit Exhibit A (9)(n)
Ownership Limited Holder Section 1(m)
Permitted Offer Section 1(n)
Person Section 1(o)
Preferred Shares Section 1(p)
Principal Party Section 13(b)
Proration Factor Section 11(a)(iii)
Purchase Price Section 4(a)
Purported Beneficial Transfer Exhibit A (9)(n)
Purported Record Transfer Exhibit A (9)(n)
Quarterly Dividend Payment Date Exhibit A 2(a)
Record Date Preface
Redemption Date Section 7(a)
Redemption Price Section 23(a)(i)
Right Preface
Right Certificate Section 3(a)
Rights Agent Preface
Rights Agreement Section 3(c)
Section 11(a)(ii) Event Section 11(a)(ii)
Section 13 Event Section 13(a)
Security Section 11(d)(i)
Shares Acquisition Date Section 1(t)
Series C Preferred Equity Stock Exhibit A (9)(n)
Subsidiary Section 1(u)
Summary of Rights Section 3(b)
then outstanding Section 1(d)(iii)
Trading Day Section 11(d)(i)
Transfer Exhibit A (9)(n)
Transfer Agent Exhibit A (9)(n)
Trust Exhibit A (9)(n)
Trustee Exhibit A (9)(n)
Triggering Event Section 1(v)
Voting Securities Section 13(a)
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of October 13, 2000 (this "Agreement"),
between Reckson Associates Realty Corp., a Maryland corporation (the
"Corporation"), and American Stock Transfer & Trust Company (the "Rights
Agent").
The Board of Directors of the Corporation has authorized a dividend of
one preferred share purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Corporation outstanding at the Close of Business
on October 27, 2000 (the "Record Date"), each Right representing the right to
purchase one one-thousandth of a Preferred Share (as hereinafter defined),
upon the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date (as
such terms are hereinafter defined); provided, however, that Rights may be
issued with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the
Final Expiration Date in accordance with the provisions of Section 22 of this
Agreement.
Accordingly, in consideration of the promises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the then outstanding Common Shares (other than as a
result of a Permitted Offer (as hereinafter defined)) or was such a Beneficial
Owner at any time after the date hereof, whether or not such person continues
to be the Beneficial Owner of 15% or more of the then outstanding Common
Shares. Notwithstanding the foregoing, (A) the term "Acquiring Person" shall
not include (i) the Corporation, (ii) any Subsidiary of the Corporation, (iii)
any employee benefit plan of the Corporation or of any Subsidiary of the
Corporation, (iv) any Person or entity organized, appointed or established by
the Corporation for or pursuant to the terms of any such plan, or (v) any
Person, who or which together with all Affiliates and Associates of such
Person becomes the Beneficial Owner of 15% or more of the then outstanding
Common Shares as a result of the acquisition of Common Shares directly from
the Corporation and (B) no Person shall be deemed to be an "Acquiring Person"
either (X) as a result of the acquisition of Common Shares by the Corporation
which, by reducing the number of Common Shares outstanding, increases the
proportional number of shares beneficially owned by such Person together with
all Affiliates and Associates of such Person; except that if (i) a Person
would become an Acquiring Person (but for the operation of this subclause X)
as a result of the acquisition of Common Shares by the Corporation, and (ii)
after such share acquisition by the Corporation, such Person, or an Affiliate
or Associate of such Person, becomes the Beneficial Owner of any additional
Common Shares, then such Person shall be deemed an Acquiring Person, or (Y) if
such Person became an Acquiring Person inadvertently, (i) promptly after such
Person discovers that such Person would otherwise have become an Acquiring
Person (but for the operation of this subclause Y), such Person notifies the
Board of Directors that such Person did so inadvertently and (ii) within 2
days after such notification, such Person is the Beneficial Owner of less than
15% of the outstanding Common Shares.
(b) "Act" shall mean the Securities Act of 1933, as amended and as
in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended and in effect on the
date of this Agreement (the "Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to Beneficially Own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) relating to the acquisition, holding, voting (except
to the extent contemplated by the proviso to Section 1(d)(ii)(B)) or disposing
of any securities of the Corporation.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Corporation, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, Sunday
or U.S. federal holiday. ------------
(f) "Close of Business" on any given date shall mean 5:00 P.M., New
York City, New York time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., New York City, New York time,
on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Corporation
shall mean the shares of class A common stock, par value $.01 per share, of
the Corporation or, in the event of a subdivision, combination or
consolidation with respect to such Common Shares, the Common Shares resulting
from such subdivision, combination or consolidation. "Common Shares" when used
with reference to any Person other than the Corporation shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(i) "Excess Shares" means shares of "Excess Stock" as defined in
the Corporation's Articles of Incorporation or "Class B Excess Common" as
defined in the articles supplementary establishing the rights and preferences
of the Corporation's class B common stock, par value $.01 per share.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Interested Stockholder" shall mean any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or any other Person in which any
such Acquiring Person, Affiliate or Associate has an interest, or any other
Person acting directly or indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate.
(l) "Ownership" means ownership of rights or stock of the
Corporation by a Person who is or would be treated as an owner of such rights
or stock directly or constructively through the application of (a) section 544
of the Internal Revenue Code as modified by section 856(h) of the Internal
Revenue Code or (b) section 318 of the Internal Revenue Code as modified by
section 856(d)(5) of the Internal Revenue Code. "Owner", "Own" and "Owned"
shall have correlative meanings.
(m) "Ownership Limited Holder" means any Owner of Rights who, if
such Owner exercised a Right to purchase Preferred Shares, Common Shares or
other securities, would in accordance with the terms of the Corporation's
Articles of Incorporation (including all articles supplementary) receive a
share or shares of stock of the Corporation that are, or which would
automatically be converted into, "Excess Shares" in lieu of or exchange for
such shares or other securities. To the extent an Owner of Rights may exercise
some but not all its Rights without resulting in the receipt or issuance of
Excess Shares, such Owner will not be an Ownership Limited Holder until its
Ownership level of Rights and stock of the Corporation reaches a level that
would, upon exercise of an additional Right, result in receipt or issuance of
Excess Shares.
(n) "Permitted Offer" shall mean a tender or exchange offer which
is for all outstanding Common Shares at a price and on terms determined, prior
to the purchase of shares under such tender or exchange offer, by at least a
majority of the members of the Board of Directors who are not officers of the
Corporation and who are not Acquiring Persons or Persons who would become
Acquiring Persons as a result of the offer in question or Affiliates,
Associates, nominees or representatives of any such Person, to be adequate
(taking into account all factors that such Directors deem relevant including,
without limitation, prices that could reasonably be achieved if the
Corporation or its assets were sold on an orderly basis designed to realize
maximum value) and otherwise in the best interests of the Corporation and its
stockholders (other than the Person or any Affiliate or Associate thereof on
whose behalf the offer is being made) taking into account all factors that
such directors may deem relevant.
(o) "Person" shall mean any individual, firm, partnership,
corporation, limited liability company, trust, association, joint venture or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(p) "Preferred Shares" shall mean shares of Series C Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation.
(q) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(r) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(s) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(t) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to the Exchange Act) by the Corporation or
an Acquiring Person that an Acquiring Person has become such; provided, that,
if such Person is determined not to have become an Acquiring Person pursuant
to Section 1(a)(B)(Y) hereof, then no Shares Acquisition Date shall be deemed
to have occurred.
(u) "Subsidiary" of any Person shall mean any corporation or other
Person of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(v) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent.
The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Corporation may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable upon ten
(10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts and
omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Shares Acquisition Date or (ii)
the Close of Business on the tenth day (or such later date as may be
determined by action of the Board of Directors of the Corporation) after the
date of the commencement by any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation or
of any Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation for or pursuant to the terms of
any such plan) of, or of the first public announcement of the intention of any
Person (other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan of the Corporation or of any Subsidiary of the
Corporation or any Person or entity organized, appointed or established by the
Corporation for or pursuant to the terms of any such plan) to commence (which
intention to commence remains in effect for five Business Days after such
announcement), a tender or exchange offer the consummation of which would
result in any Person becoming an Acquiring Person (including, in the case of
both (i) and (ii), any such date which is after the date of this Agreement and
prior to the issuance of the Rights), the earlier of such dates being herein
referred to as the "Distribution Date," (x) the Rights will be represented
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of the underlying
Common Shares (including a transfer to the Corporation); provided, however,
that if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. As soon as practicable after the Distribution Date,
the Corporation will prepare and execute, the Rights Agent will countersign,
and the Corporation will send or cause to be sent by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close
of Business on the Distribution Date, at the address of such holder shown on
the records of the Corporation, a Right Certificate, substantially in the form
of Exhibit B hereto (a "Right Certificate"), representing one Right for each
Common Share so held. As of and after the Distribution Date, the Rights will
be represented solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the address
of such holder shown on the records of the Corporation. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be represented by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with such Common Shares.
As a result of the execution of this Agreement, on October 27, 2000, each
Common Share outstanding on such date shall, subject to the terms and
conditions of this Agreement, also represent one Right and shall, subject to
the terms and conditions of this Agreement, represent the right to purchase
one one-thousandth of a share of Preferred Stock.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to below in
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date, shall be
deemed also to be certificates for Rights, and shall substantially bear the
following legend:
"This certificate also represents and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Reckson
Associates Realty Corp. and American Stock Transfer & Trust Company,
dated as of October 13, 2000 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of Reckson Associates
Realty Corp. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be represented by separate certificates
and will no longer be represented by this certificate. Reckson
Associates Realty Corp. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and certain related persons, whether
currently held by or on behalf of such person or by any subsequent
holder, may become null and void."
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be represented by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Corporation purchases or acquires any Common Shares
after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so
that the Corporation shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding. The failure to print
the foregoing legend on any such Common Shares certificate or any other defect
therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 4. Form of Right Certificate.
(a) The Right Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate (which do
not affect the duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 7, Section 11 and Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a Preferred Share as shall be set forth therein at the
price per one one-thousandth of a Preferred Share set forth therein (the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void pursuant to
Section 7(e) of this Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
"The Rights represented by this Right Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby are null and void."
Provisions of Section 7(e) of this Agreement shall be operative whether or not
the foregoing legend is contained on any such Right Certificate. The
Corporation shall notify the Rights Agent to the extent that this Section 4(b)
applies.
Section 5. Countersignature and Registration.
The Right Certificates shall be executed on behalf of the Corporation by
its Chairman of the Board, its Chief Executive Officer (or any co-Chief
Executive Officer), its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Corporation's seal or a facsimile thereof, and shall be attested
by the Secretary or an Assistant Secretary of the Corporation, either manually
or by facsimile signature. The Right Certificates shall be countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Corporation who shall have signed
any of the Right Certificates shall cease to be such officer of the
Corporation before countersignature by the Rights Agent and issuance and
delivery by the Corporation, such Right Certificates may nevertheless be
countersigned by the Rights Agent and issued and delivered by the Corporation
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Corporation; and any
Right Certificate may be signed on behalf of the Corporation by any Person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Corporation to sign such Right Certificate, although at
the date of the execution of this Agreement any such Person was not such an
officer.
Following the Distribution Date and receipt by the Rights Agent of a list
of record holders of Rights, the Rights Agent will keep or cause to be kept,
at its office set forth in Section 26 hereof or offices designated as the
appropriate place for surrender of such Right Certificate or transfer, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the certificate number and the date of each of the
Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificate.
Subject to the provisions of Section 4(b), Section 7(e), Section 7(g) and
Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitle such holder
(or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office
or offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Corporation shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Corporation or the Rights Agent shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b), Section
7(e), Section 7(g) and Section 14 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Corporation may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. If the Corporation requires the payment referred to in the
immediately preceding sentence, then the Rights Agent shall not be required to
process any transaction until it receives notice from the Corporation that the
Corporation has received such payment.
Upon receipt by the Corporation and the Rights Agent of evidence
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Corporation's request,
reimbursement to the Corporation and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Corporation will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) and Section 7(g) hereof, the
registered holder of any Right Certificate may exercise the Rights represented
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office or offices of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price for the total number of one one-thousandths of a Preferred
Share (or other securities, as the case may be) as to which such surrendered
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on October 12, 2010 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption Date");
(iii) the time at which the Rights are exchanged as provided in Section 24
hereof, or (iv) the consummation of a transaction contemplated by Section
13(d) hereof.
(b) The Purchase Price for each one one-thousandth of a
Preferred Share pursuant to the exercise of a Right shall initially be $84.44,
shall be subject to adjustment from time to time as provided in the next
sentence and in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below. Anything in this Agreement to the
contrary notwithstanding, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Corporation shall (i)
declare or pay any dividend on the Common Shares payable in Common Shares or
(ii) effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case, each Common Share outstanding following such subdivision, combination or
consolidation shall continue to have one Right associated therewith and the
Purchase Price following any such event shall be proportionately adjusted to
equal the result obtained by multiplying the Purchase Price immediately prior
to such event by a fraction the numerator of which shall be the total number
of Common Shares outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event. The adjustment
provided for in the preceding sentence shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Preferred
Shares (or other securities, as the case may be) to be purchased and an amount
equal to any applicable tax or governmental charge required to be paid by the
holder of such Right Certificate in accordance with Section 6 hereof by
certified check, cashier's check or money order payable to the order of the
Corporation, the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Corporation hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Corporation, in its sole discretion, shall have elected to deposit the
Preferred Shares issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Corporation will direct the depositary agent to comply with
such requests, (ii) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt thereof, deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Corporation is
obligated to issue other securities (including Common Shares) of the
Corporation pursuant to Section 11(a) hereof, the Corporation will make all
arrangements necessary so that such other securities are available for
distribution by the Rights Agent, if and when necessary to comply with this
Agreement.
In addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii), the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii) of this
Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14 hereof, or the Rights Agent shall place an
appropriate notation on the Right Certificate with respect to those Rights
exercised.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
Beneficially Owned by (i) an Acquiring Person or an Affiliate or Associate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has a continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Corporation has determined is
part of an agreement, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Corporation shall notify the Rights Agent
when this Section 7(e) applies and shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but neither the Corporation nor the Rights Agent shall have any
liability to any holder of Right Certificates or other Person as a result of
the Corporation's failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Corporation or the Rights Agent
shall reasonably request.
(g) Notwithstanding anything in this Agreement to the contrary,
any Rights Owned by an Ownership Limited Holder shall not be exercisable to
the extent and so long as such rights are Owned by such a holder. Subject to
the other terms and conditions of this Agreement, (i) Ownership Limited
Holders shall be permitted to transfer any such Rights and (ii) Rights
transferred by Ownership Limited Holders so that they are no longer Owned by
Ownership Limited Holders will entitle the transferees of such Rights to all
of the rights and benefits described in this Agreement.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Corporation or
to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Corporation shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Corporation otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right Certificates to the
Corporation, or shall, at the written request of the Corporation, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Corporation.
Section 9. Reservation and Availability of Preferred Shares.
At all times prior to the occurrence of a Section 11(a)(ii) Event, the
Corporation will cause to be reserved and kept available out of its authorized
and unissued Preferred Shares, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights and, after
the occurrence of a Section 11(a)(ii) Event, shall, to the extent reasonably
practicable, so reserve and keep available a sufficient number of Common
Shares (and/or other securities) which may be required to permit the exercise
in full of the Rights pursuant to this Agreement.
So long as the Preferred Shares (and, after the occurrence of a Section
11(a)(ii) Event, Common Shares or any other securities) issuable upon the
exercise of the Rights may be listed on any national securities exchange, the
Corporation shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
The Corporation will take all such action as may be necessary to ensure
that all Preferred Shares (or Common Shares and/or other securities, as the
case may be) delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares or other securities (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and non-assessable shares or securities.
The Corporation will pay when due and payable any and all U.S. federal
and state taxes and charges (other than taxes and charges based on income)
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Corporation
shall not, however, be required to pay any tax or other charge which may be
payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Shares (or Common Shares and/or other securities,
as the case may be) in a name other than that of, the registered holder of the
Right Certificate representing Rights surrendered for exercise, or to issue or
to deliver any certificates or depositary receipts for Preferred Shares (or
Common Shares and/or other securities, as the case may be) upon the exercise
of any Rights, until any such tax or other charge shall have been paid (any
such tax or other charge being payable by the holder of such Right Certificate
at the time of surrender) or until it has been established to the
Corporation's reasonable satisfaction that no such tax or other charge is due.
The Corporation shall use its best efforts to (i) file, as soon as
practicable following the Shares Acquisition Date, a registration statement
under the Act, with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the rights provided by Section
11(a)(ii). The Corporation will also take such action as may be appropriate
under the blue sky laws of the various states.
Section 10. Preferred Shares Record Date.
Each Person in whose name any certificate for Preferred Shares (or Common
Shares and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares (or Common Shares and/or other securities,
as the case may be) represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable taxes
and other governmental charges) was made; provided, however, that, if the date
of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of
the Corporation are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Corporation are
open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights.
The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its stock in a reclassification of
the Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a),
Section 7(e) and Section 7(g) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of stock which, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Corporation were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of stock of
the Corporation issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, then proper
provision shall be made so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall, for a period of 60 days after the
later of the occurrence of any such event or the effective date of an
appropriate registration statement under the Act pursuant to Section 9 hereof,
have a right to receive, upon exercise thereof at a price equal to the then
current Purchase Price, in accordance with the terms of this Agreement, such
number of Common Shares (or, in the discretion of the Board of Directors, one
one-thousandths of a Preferred Share) as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and
dividing that product by (y) 50% of the then current per share market price of
the Corporation's Common Shares (determined pursuant to Section 11(d) hereof)
on the date of such first occurrence (such number of shares being referred to
as the "Adjustment Shares"); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13 hereof
shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii);
(iii) In the event that there shall not be sufficient
authorized but unissued (and unreserved) Common Shares to permit the exercise
in full of the Rights in accordance with the foregoing subparagraph (ii) and
the Rights become so exercisable (and the Board of Directors of the
Corporation has determined to make the Rights exercisable into fractions of a
Preferred Share), notwithstanding any other provision of this Agreement, to
the extent necessary and permitted by applicable law, each Right shall
thereafter represent the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, (x) a
number of (or fractions of) Common Shares (up to the maximum number of Common
Shares which may permissibly be issued) and (y) a number of (or fractions of)
one one-thousandths of a Preferred Share or a number of (or fractions of)
other equity securities of the Corporation (or, in the discretion of the Board
of Directors, debt) which the Board of Directors of the Corporation has
determined to have the same aggregate current market value (determined
pursuant to Section 11(d)(i) and (ii) hereof, to the extent applicable) as one
Common Share (such number of, or fractions of, Preferred Shares, debt, or
other equity securities or debt of the Corporation being referred to as a
"stock equivalent") equal in the aggregate to the number of Adjustment Shares;
provided, however, if sufficient Common Shares and/or stock equivalents are
unavailable, then the Corporation shall, to the extent permitted by applicable
law, take all such action as may be necessary to authorize additional Common
Shares or stock equivalents for issuance upon exercise of the Rights,
including the calling of a meeting of stockholders; and provided, further,
that if the Corporation is unable to cause sufficient Common Shares and/or
stock equivalents to be available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent the right to receive the
Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as
such terms are hereinafter defined). As used herein, the term "Adjusted Number
of Shares" shall be equal to that number of (or fractions of) Common Shares
(and/or stock equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of which is the number of
Common Shares (and/or stock equivalents) available for issuance upon exercise
of the Rights and the denominator of which is the aggregate number of
Adjustment Shares otherwise issuable upon exercise in full of all Rights
(assuming there were a sufficient number of Common Shares available) (such
fraction being referred to as the "Proration Factor"). The "Adjusted Purchase
Price" shall mean the product of the Purchase Price and the Proration Factor.
The Board of Directors may, but shall not be required to, establish procedures
to allocate the right to receive Common Shares and stock equivalents upon
exercise of the Rights among holders of Rights.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Preferred Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Preferred Shares (or
shares having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred Share
or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d) hereof) on such record date, the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current per share market price, and the denominator of which
shall be the number of Preferred Shares outstanding on such record date plus
the number of additional Preferred Shares and/or equivalent preferred shares
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of stock of the
Corporation issuable upon exercise of one Right. In case such subscription
price may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be determined in good
faith by the Board of Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights. Preferred Shares owned by
or held for the account of the Corporation shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including any
such distribution made in connection with a consolidation or merger in which
the Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price (as
determined pursuant to Section 11(d) hereof) of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall
be such current per share market price of the Preferred Shares; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of stock of
the Corporation to be issued upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security") that is
publicly traded for the purpose of this Section 11(d)(i) on any date shall be
deemed to be the average of the daily closing prices per share of such
Security for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to and not including such date;
provided, however, that in the event that the current per share market price
of the Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of thirty (30) Trading Days after and not including
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices as
reported on the Nasdaq Stock Market ("Nasdaq") or such other market or system
then in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Security selected by the
Board of Directors of the Corporation. If on any such date no such market
maker is making a market in the Security, the fair value of the Security on
such date as determined in good faith by the Board of Directors of the
Corporation shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, a Business Day. Subject to Section 11(d)(ii), if any Security is not
publicly traded, "current per share market price" of such Security shall mean
the fair market value per share as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares if they are publicly traded
shall be determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares as determined pursuant
to Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied
by one thousand (1,000). If neither the Common Shares nor the Preferred Shares
are publicly listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Corporation, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one one-thousandth of a Preferred
Share or one one-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which mandates such
adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of stock of the
Corporation other than Preferred Shares, thereafter the number of other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Preferred Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Corporation subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Corporation shall have exercised its election so
provided in Section 11(i) hereof, upon adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and 11(c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the Adjusted Purchase Price,
that number of one one-thousandths of a Preferred Share calculated to the
nearest one one-thousandth of a Preferred Share) obtained by (i) multiplying
(A) the number of Preferred Shares covered by a Right immediately prior to
this adjustment of the Purchase Price by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Corporation shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made, a copy of
which public announcement shall promptly be delivered to the Rights Agent.
This record date may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Right Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Corporation shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Corporation, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number of
one one-thousandths of a Preferred Share, Common Shares or other securities
issuable upon exercise of the Rights, the Corporation shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that
the Corporation may validly and legally issue such number of fully paid and
non-assessable one one-thousandths of a Preferred Share, Common Shares or
other securities at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Corporation may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the Preferred Shares, Common Shares or other securities of the
Corporation, if any, issuable upon such exercise over and above the Preferred
Shares, Common Shares or other securities of the Corporation, if any, issuable
upon exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares or other securities, as the case may
be, upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that (i) any consolidation or subdivision
of the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at
less than the current market price, (iii) issuance wholly for cash of
Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Corporation to holders of its Preferred Shares shall not be taxable to
such stockholders.
(n) The Corporation shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Corporation in a transaction which does not violate Section
11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Corporation in a transaction which does not violate Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Corporation and/or any of its Subsidiaries in one or
more transactions each of which does not violate Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger, sale or
transfer there are any charter or bylaw provisions or any rights, warrants or
other instruments or securities outstanding or agreements in effect or other
actions taken, which would materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale, the stockholders
of the Person who constitutes, or would constitute, the Principal Party for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates. The
Corporation shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Corporation and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).
(o) The Corporation, after the Distribution Date, will not,
except as permitted by Section 23, Section 24 or Section 27 hereof, take (or
permit any Subsidiary to take) any action the purpose of which is to, or if at
the time such action is taken it is reasonably foreseeable that the effect of
such action is to, materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the rights represented by the Rights
under this Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares.
Whenever an adjustment is made as provided in Sections 11 or 13 hereof,
the Corporation shall promptly (a) prepare a certificate setting forth such
adjustment and a brief reasonably detailed statement of the facts and
computations accounting for such adjustment, (b) file with the Rights Agent
and with each transfer agent for the Common Shares and the Preferred Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect to and shall
not be deemed to have knowledge of such adjustment unless and until it shall
have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, on or following the Shares Acquisition
Date, directly or indirectly, (x) the Corporation shall consolidate with, or
merge with and into, any Interested Stockholder or, if in such merger or
consolidation all holders of Common Shares are not treated alike, any other
Person, (y) the Corporation shall consolidate with, or merge with, any
Interested Stockholder or, if in such merger or consolidation all holders of
Common Shares are not treated alike, any other Person, and the Corporation
shall be the continuing or surviving corporation of such consolidation or
merger (other than, in a case of any transaction described in (x) or (y), a
merger or consolidation which would result in all of the securities generally
entitled to vote in the election of directors ("voting securities") of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into securities of the
surviving entity) all of the voting securities of the Corporation or such
surviving entity outstanding immediately after such merger or consolidation
and the holders of such securities not having changed as a result of such
merger or consolidation), or (z) the Corporation shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any Interested
Stockholder or Stockholders or, if in such transaction all holders of Common
Shares are not treated alike, any other Person (other than the Corporation or
any Subsidiary of the Corporation in one or more transactions each of which
does not violate Section 11(n) hereof), then, and in each such case (except as
provided in Section 13(d) hereof), proper provision shall be made so that (i)
each holder of a Right, except as provided in Section 7(e) or Section 7(g)
hereof, shall thereafter have the right to receive, upon the exercise thereof
at a price equal to the then current Purchase Price, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of freely
tradable Common Shares of the Principal Party (as hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing that product by
(B) 50% of the then current per share market price of the Common Shares of
such Principal Party (determined pursuant to Section 11(d) hereof) on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Corporation pursuant to this
Agreement; (iii) the term "Corporation" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which Common Shares of the Corporation are converted in
such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation (including, if
applicable, the Corporation if it is the surviving corporation); and (ii) in
the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such transaction or
transactions; provided, however, that in any of the foregoing cases, (1) if
the Common Shares of such Person are not at such time and have not been
continuously over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Shares having the greatest aggregate market value; and (3) in case
such Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a Subsidiary of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have
a sufficient number of its authorized Common Shares which have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Corporation and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger, sale or transfer mentioned in
paragraph (a) of this Section 13, the Principal Party at its own expense
shall:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. The rights under this
Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if: (i) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a Permitted Offer (or
a wholly owned Subsidiary of any such Person or Persons); (ii) the price per
Common Share offered in such transaction is not less than the price per Common
Share paid to all holders of Common Shares whose shares were purchased
pursuant to such Permitted Offer; and (iii) the form of consideration offered
in such transaction is the same as the form of consideration paid pursuant to
such Permitted Offer. Upon consummation of any such transaction contemplated
by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates which represent fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices as reported on
NASDAQ or such other market or system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Corporation. If on any
such date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue fractions of
Preferred Shares (other than fractions which are one one-thousandth or
integral multiples of one one-thousandth of a Preferred Share) upon exercise
of the Rights or to distribute certificates which represent fractional
Preferred Shares (other than fractions which are one one-thousandth or
integral multiples of one one-thousandth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Corporation, be represented by depositary
receipts, pursuant to an appropriate agreement between the Corporation and a
depositary selected by it; provided that such agreement shall provide that the
holders of such depositary receipts shall have the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, the Corporation shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Preferred Share. For the purposes of this Section 14(b),
the current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to receive Common
Shares, stock equivalents (other than Preferred Shares) or other securities
upon the exercise of a Right, the Corporation shall not be required to issue
fractions of shares or units of such Common Shares, stock equivalents or other
securities upon exercise of the Rights or to distribute certificates which
represent fractions of such Common Shares, stock equivalents or other
securities. In lieu of fractional shares or units of such Common Shares, stock
equivalents or other securities, the Corporation may pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of a share or unit of such Common Shares, stock equivalents or other
securities. For purposes of this Section 14(c), the current market value shall
be determined in the manner set forth in Section 11(d) hereof for the Trading
Day immediately prior to the date of such exercise and, if such stock
equivalent is not traded, each such stock equivalent shall have the value of
one one-thousandth of a Preferred Share.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
share upon exercise of a Right (except as provided above). The Rights Agent
shall not be deemed to have knowledge of, and shall have no duty in respect
of, the issuance of fractional Rights or fractional shares until it shall have
received instructions from the Corporation concerning the issuance of the
fractional Rights or fractional shares upon which instructions the Rights
Agent may conclusively rely.
Section 15. Rights of Action.
All rights of action in respect of this Agreement, excepting the rights
of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Shares), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Corporation to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate (or, prior to the Distribution
Date, of the Common Shares) in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders.
Every holder of a Right, by accepting the same, consents and agrees with
the Corporation and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate form fully executed;
(c) subject to Section 7(f) hereof, the Corporation and the
Rights Agent may deem and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Right
Certificate or the associated Common Shares certificate made by anyone other
than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, judgment,
decree or ruling (whether interlocutory or final) issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Corporation
must use its best efforts to have any such order, judgment, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
Preferred Shares or any other securities of the Corporation which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as provided in
Section 25 hereof), or to receive dividends or other distributions or to
exercise any preemptive or subscription rights, or otherwise, until the Right
or Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
The Corporation agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the preparation, execution, delivery, amendment,
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Corporation also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
damage, judgment, fine, penalty, claim, demand, settlement, cost or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for any action taken, suffered or omitted by the Rights
Agent in connection with the acceptance and administration of this Agreement,
including, without limitation, the costs and expenses of defending against any
claim of liability in the premises. The indemnity provided for herein shall
survive the expiration of the Rights and the termination of this Agreement.
The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of, any action taken, suffered or omitted by it
in connection with its acceptance and administration of this Agreement in
reliance upon any Right Certificate or certificate for Common Shares or for
other securities of the Corporation, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document (collectively, "Documents")
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons. The Rights Agent
shall not be deemed to have knowledge of, and shall have no duty in respect
of, any such Documents, until it receives notice or instructions in respect
thereof. In no case will the Rights Agent be liable for special, indirect,
punitive, incidental or consequential loss or damage of any kind whatsoever,
even if the Rights Agent has been advised of the likelihood of such loss or
damage.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
Any Person into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the stock transfer or all
or substantially all of the stockholder services business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement. In case at any time the name of
the Rights Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes only those duties and obligations expressly
imposed by this Agreement (and no implied duties or obligations) upon the
following terms and conditions, by all of which the Corporation and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for, or in respect of, any
action taken, suffered or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of an Acquiring Person
and the determination of the current market price of any Security) be proved
or established by the Corporation prior to taking, suffering or omitting any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, the Chief Executive Officer (or any co-Chief Executive Officer),
the President, any Vice President, the Treasurer or the Secretary of the
Corporation and delivered to the Rights Agent; and such certificate shall be
full authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability in respect of any action taken, suffered or omitted
in good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for, or by reason of
any liability in respect of, the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its countersignature on
such Right Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Corporation only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or
in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 7(e) hereof) or any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of the
certificate described in Section 12 hereof); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
or Common Shares will, when issued, be validly authorized and issued, fully
paid and non-assessable.
(f) The Corporation will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer (or any
co-Chief Executive Officer), the President, any Vice President, the Treasurer
or the Secretary of the Corporation, and to apply to such officers for advice
or instructions in connection with its duties, and such instructions shall be
full authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in good faith or lack of action in accordance with instructions
of any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions
from the Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be taken or
suffered or such omission shall be effective. The Rights Agent shall not be
liable or responsible for any action taken or suffered by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than five Business Days after the date any officer of the Corporation actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instruction from any one of the Chairman of the Board, the
Chief Executive Officer (or any co-Chief Executive Officer), the President,
any Vice President, the Treasurer or the Secretary of the Corporation in
response to such application specifying the action to be taken, suffered or
omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Corporation or become pecuniarily interested
in any transaction in which the Corporation may be interested, or contract
with or lend money to the Corporation or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Corporation or for any other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Corporation or any other
Person resulting from any such act, default, neglect or misconduct, absent
gross negligence, bad faith or willful misconduct in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
not been completed, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with
the Corporation.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days' notice
in writing mailed to the Corporation and to each transfer agent of the Common
Shares or Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Corporation may remove the
Rights Agent or any successor Rights Agent upon sixty (60) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a
successor to the Rights Agent. If the Corporation shall fail to make such
appointment within a period of sixty (60) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Corporation), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Corporation or by such a court, shall be a Person organized
and doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such Person is
authorized to do business in the State of New York), in good standing, having
an office in the State of New York, and which is subject to supervision or
examination by federal or state authority. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Corporation shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Corporation may, at its option, issue new Right
Certificates representing Rights in such form as may be approved by its Board
of Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Corporation (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Corporation, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) the Corporation shall not be obligated to issue
any such Right Certificates if, and to the extent that, the Corporation shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or the Person to whom
such Right Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) (i) The Corporation may, at its option, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price"), at any time prior to the earlier of (x) the occurrence of a Section
11(a)(ii) Event or (y) the Final Expiration Date.
(ii) In addition, the Corporation may, at its option, at
any time following the occurrence of a Section 11(a)(ii) Event and the
expiration of any period during which the holder of Rights may exercise the
rights under Section 11(a)(ii) but prior to any Section 13 Event, redeem all
but not less than all of the then outstanding Rights at the Redemption Price
(x) in connection with any merger, consolidation or sale or other transfer (in
one transaction or in a series of related transactions) of assets or earning
power aggregating 50% or more of the earning power of the Corporation and its
subsidiaries (taken as a whole) in which all holders of Common Shares are
treated alike and not involving (other than as a holder of Common Shares being
treated like all other such holders) an Interested Stockholder or (y)(aa) if
and for so long as the Acquiring Person is not thereafter the Beneficial Owner
of 15% of the Common Shares, and (bb) at the time of redemption no other
Persons are Acquiring Persons.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the date for redemption set forth (or determined in
the manner specified) in a resolution of the Board of Directors of the
Corporation ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. In the case of a redemption permitted
only under Section 23(a)(ii), the right to exercise the Rights will terminate
and represent only the right to receive the Redemption Price upon the later of
ten (10) Business Days following the giving of such notice or the expiration
of any period during which the rights under Section 11(a)(ii) may be
exercised. The Corporation shall promptly give public notice and notify the
Rights Agent of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after such date for redemption set forth in a
resolution of the Board of Directors ordering the redemption of the Rights,
the Corporation shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither the
Corporation nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
(c) The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Shares, and upon such action, all
outstanding Rights and Right Certificates shall be null and void without any
further action by the Corporation.
Section 24. Exchange.
(a) The Corporation may, at its option, at any time after
the time that any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e)
hereof) for Common Shares of the Corporation at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Corporation shall not be empowered to
effect such exchange at any time after any Person (other than the Corporation,
any Subsidiary of the Corporation, any employee benefit plan of the
Corporation or any such Subsidiary, any Person organized, appointed or
established by the Corporation for or pursuant to the terms of any such plan
or any trustee, administrator or fiduciary of such a plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Corporation ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of the holders of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The
Corporation shall promptly give public notice and notify the Rights Agent of
any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The
Corporation promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e), held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Corporation, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for some or
all of the Common Shares exchangeable for Rights, at the initial rate of one
one-thousandth of a Preferred Share (or equivalent preferred share) for each
Common Share, as appropriately adjusted to reflect adjustments in the voting
rights of the Preferred Shares pursuant to the terms thereof, so that the
fraction of a Preferred Share delivered in lieu of each Common Share shall
have the same voting rights as one Common Share.
(d) The Board of Directors of the Corporation shall not
authorize any exchange transaction referred to in Section 24(a) hereof unless
at the time such exchange is authorized there shall be sufficient Common
Shares or Preferred Shares issued but not outstanding, or authorized but
unissued, to permit the exchange of Rights as contemplated in accordance with
this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred Shares
or to make any other distribution to the holders of its Preferred Shares
(other than a regularly quarterly cash dividend), (ii) to offer to the holders
of its Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Corporation in a
transaction which does not violate Section 11(n) hereof), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer) in one or more transactions, of 50% or more of the
assets or earning power of the Corporation and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Corporation and/or any
of its Subsidiaries in one or more transactions each of which does not violate
Section 11(n) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Corporation, then, in each such case, the Corporation shall
give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action and file a
certificate with the Rights Agent to that effect, which shall specify the
record date for the purposes of such stock dividend, or distribution of rights
or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least twenty
(20) days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other action,
at least twenty (20) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Preferred
Shares, whichever shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the
Corporation shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph (a) to Preferred
Shares shall be deemed thereafter to refer also to Common Shares and/or, if
appropriate, other securities of the Corporation.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made
by the Rights Agent or by the holder of any Right Certificate to or on the
Corporation shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, New York 11747
Attention: Jason Barnett
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Corporation or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Corporation) as
follows:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
Attention: Paula Caroppoli
Notices or demands authorized by this Agreement to be given or made by
the Corporation or the Rights Agent to the holder of any Right Certificate or,
if prior to the Distribution Date, to the holder of certificates representing
Common Shares shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Corporation.
Section 27. Supplements and Amendments.
Except as set forth in the penultimate sentence of this Section 27, prior
to the Distribution Date, the Corporation may and the Rights Agent shall, if
the Corporation so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing
Common Shares. From and after the Distribution Date, the Corporation may and
the Rights Agent shall, if the Corporation so directs, supplement or amend
this Agreement without the approval of any holders of Right Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any manner which the
Corporation may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless any such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or
the benefits to, the holders of Rights. Upon the delivery of a certificate
from an appropriate officer of the Corporation which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27,
and if requested by the Rights Agent an opinion of counsel, the Rights Agent
shall execute such supplement or amendment, provided that such supplement or
amendment does not adversely affect the rights or obligations of the Rights
Agent under Section 18 or Section 20 of this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
Section 28. Determination and Actions by the Board of Directors,
etc.
The Board of Directors of the Corporation shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Corporation, or
the Corporation, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend the Agreement and whether any proposed amendment adversely
affects the interests of the holders of Right Certificates). For all purposes
of this Agreement, any calculation of the number of Common Shares or other
securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to
the foregoing) which are done or made by the Board of Directors of the
Corporation in good faith (and the Rights Agent shall be able to assume that
the Board of Directors of the Corporation acted in such good faith), shall (x)
be final, conclusive and binding on the Corporation, the Rights Agent, the
holders of the Right Certificates and all other Persons, and (y) not subject
the Board of Directors of the Corporation to any liability to the holders of
the Right Certificates.
Section 29. Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Corporation or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
Section 31. Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 32. Governing Law.
This Agreement, each Right and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Maryland
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State; except that all provisions regarding the rights, duties and
obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the date and year first above written.
RECKSON ASSOCIATES REALTY CORPORATION
Attest:
By By:
-------------------------------- --------------------------------------
Name: Name:
----------------------------- ------------------------------------
Title: Title:
---------------------------- -----------------------------------
AMERICAN STOCK TRANSFER & TRUST COMPANY
Attest:
By By:
-------------------------------- --------------------------------------
Name: Name:
----------------------------- ------------------------------------
Title: Title:
---------------------------- -----------------------------------
Exhibit A
---------
RECKSON ASSOCIATES REALTY CORP.
FORM OF
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A CLASS OF SHARES OF PREFERRED STOCK
Reckson Associates Realty Corp., a Maryland corporation (the
"Corporation"), certifies to the State Department of Assessments and Taxation
of Maryland that:
FIRST: Pursuant to the authority expressly vested in the board of
directors of the Corporation (the "Board of Directors") by Article VI of its
charter, as heretofore amended and restated (which, as hereafter restated or
amended from time to time, is together with these Articles Supplementary
herein called the "Charter"), the Board of Directors has, by resolution, duly
classified 100,000 shares of the preferred stock, par value $.01 per share, of
the Corporation into a series designated Series C Junior Participating
Preferred Stock and has provided for the issuance of such series.
SECOND: The preferences, rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption of the shares of such series of Preferred Stock, which upon any
restatement of the Charter shall be included as part of Article VI of the
Charter with any necessary or appropriate relettering or renumbering, are as
follows:
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Number.
A series of Preferred Stock of the Corporation, classified the
"Series C Junior Participating Preferred Stock" (the "Series C Preferred
Stock") is hereby established. The number of shares of the Series C Preferred
Stock shall be 100,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors and by the filing of articles
supplementary pursuant to the provisions of the Maryland General Corporation
Law stating that such increase of reduction has been so authorized; provided,
however, that no decrease shall reduce the number of shares of Series C
Preferred Stock to a number less than that of the shares then outstanding plus
the number of shares of Series C Preferred Stock issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
2. Dividends and Distributions.
(a) The holders of shares of Series C Preferred Stock shall
be entitled to receive, when, as and if authorized by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in
cash January 31, April 30, July 31 and October 31 in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance (the
"First Issuance") of a share or fraction of a share of Series C Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $10.00 and (ii) 1,000 times the aggregate per share amount of
all cash dividends and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
or distribution payable in shares of class A common stock, par value $.01 per
share, of the Corporation ("Common Shares") or by way of a subdivision of the
outstanding Common Shares (by reclassification or otherwise), declared on the
Common Shares, since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series C Preferred
Stock. In the event the Corporation shall at any time after the First Issuance
declare or pay any dividend on the Common Shares payable Common Shares, or
effect a subdivision or combination or consolidation of the outstanding Common
Shares (by reclassification or otherwise than by payment of a dividend in
Common Shares) into a greater or lesser number of Common Shares, then in each
such case the amount to which holders of shares of Series C Preferred Stock
were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that
were outstanding immediately prior to such event.
(b) On or after the First Issuance, no dividend on Common
Shares shall be declared unless concurrently therewith a dividend or
distribution is declared on the Series C Preferred Stock as provided in
paragraph (a) above; and the declaration of any such dividend on the Common
Shares shall be expressly conditioned upon payment or declaration of and
provision for a dividend on the Series C Preferred Stock as above provided. In
the event no dividend or distribution shall have been declared on the Common
Shares during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per
share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Whenever quarterly dividends or other dividends payable
on the Series C Preferred Stock as provided in paragraph (a) above are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series C Preferred Stock
outstanding shall have been paid in full, the Corporation shall not redeem or
purchase or otherwise acquire for consideration shares of any stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series C Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (as to
dividends and upon dissolution, liquidation or winding up) to the Series C
Preferred Stock.
(d) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series C
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series C Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. The Board of
Directors may fix a record date for the determination of holders of shares of
Series C Preferred Stock entitled to receive payment of a dividend
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
3. Dissolution, Liquidation and Winding Up.
In the event of any voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation (hereinafter
referred to as a "Liquidation"), the holders of Series C Preferred Stock shall
be entitled to receive the greater of (a) $10.00 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment and (b) the aggregate amount per
share equal to 1,000 times the aggregate amount to be distributed per share to
holders of Common Shares. In the event the Corporation shall at any time after
the First Issuance declare or pay any dividend on the Common Shares payable in
Common Shares, or effect a subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by payment of
a dividend in shares of Common Shares) into a greater or lesser number of
Common Shares, then in each such case the aggregate amount to which holders of
shares of Series C Preferred Stock were entitled immediately prior to such
event under the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Shares outstanding immediately after such event and the denominator of which
is the number of Common Shares that were outstanding immediately prior to such
event.
The liquidation preference of the outstanding shares of
Series C Preferred Stock will not be added to the liabilities of the
Corporation for the purpose of determining whether under the Maryland General
Corporation Law a distribution may be made to stockholders of the Corporation
whose preferential rights upon dissolution of the Corporation are junior to
those of Series C Preferred Stock.
4. Voting Rights.
The holders of shares of Series C Preferred Stock shall have
the following voting rights:
(a) Each share of Series C Preferred Stock shall entitle the
holder thereof to one thousand (1,000) votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation
shall at any time after the First Issuance declare or pay any dividend on the
Common Shares payable in Common Shares, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
aggregate number of votes to which holders of shares of Series C Preferred
Stock were entitled immediately prior to such event under the preceding
sentence shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common Shares
that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, or by law, the
Corporation's charter (as heretofore amended and restated, and as hereafter
amended or restated from time to time, together with these Articles
Supplementary, the "Charter") or the bylaws of the Corporation (as heretofore
amended and restated, and as hereafter amended or restated from time to time,
the "Bylaws"), the holders of shares of Series C Preferred Stock and the
holders of Common Shares (and holders of shares of class B common stock, par
value $.01 per share, of the Corporation) shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(c) If and whenever dividends on the Series C Preferred
Stock shall be in arrears in an amount equal to six quarterly dividend
payments, then and in such event the holders of the Series C Preferred Stock,
voting separately as a class (subject to the provisions of subparagraph (d)
below), shall be entitled at the next annual meeting of the stockholders or at
any special meeting to elect two (2) directors. Each share of Series C
Preferred Stock shall be entitled to one vote, and holders of fractional
shares shall have the right to a fractional vote. Upon election, such
directors shall become additional directors of the Corporation and the
authorized number of directors of the Corporation shall thereupon be
automatically increased by such number of directors. Such right of the holders
of Series C Preferred Stock to elect directors may be exercised until all
dividends in default on the Series C Preferred Stock shall have been paid in
full, and when so paid and set apart, the right of the holders of Series C
Preferred Stock to elect such number of directors shall cease, the term of
such directors shall thereupon terminate, and the authorized number of
directors of the Corporation shall thereupon return to the number of
authorized directors otherwise in effect, but subject always to the same
provisions for the vesting of such special voting rights in the case of any
such future dividend default or defaults. The fact that dividends have been
paid and set apart as required by the preceding sentence shall be evidenced by
a certificate executed by the President and the Chief Financial Officer of the
Corporation and delivered to the Board of Directors. The directors so elected
by holders of Series C Preferred Stock shall serve until the certificate
described in the preceding sentence shall have been delivered to the Board of
Directors or until their respective successors shall be elected or appointed
and qualify.
At any time when such special voting rights have been so
vested in the holders of the Series C Preferred Stock, the Secretary of the
Corporation may and, upon the written request of the holders of record of 10%
or more of the number of shares of the Series C Preferred Stock then
outstanding addressed to such Secretary at the principal office of the
Corporation in the State of New York, shall call a special meeting of the
holders of the Series C Preferred Stock for the election of the directors to
be elected by them as hereinabove provided, to be held in the case of such
written request within forty (40) days after delivery of such request, and in
either case to be held at the place and upon the notice provided by law and in
the Bylaws of the Corporation for the holding of meetings of stockholders;
provided, however, that the Secretary shall not be required to call such a
special meeting (i) if any such request is received less than ninety (90) days
before the date fixed for the next ensuing annual or special meeting of
stockholders or (ii) if at the time any such request is received, the holders
of Series C Preferred Stock are not entitled to elect such directors by reason
of the occurrence of an event specified in the third sentence of subparagraph
(d) below.
(d) If, at any time when the holders of Series C Preferred
Stock are entitled to elect directors pursuant to the foregoing provisions of
this paragraph 4, the holders of any one or more additional series of
Preferred Stock are entitled to elect directors by reason of any default or
event specified in the Charter, as in effect at the time of the articles
supplementary for such series, and if the terms for such other additional
series so permit, the voting rights of the two or more series then entitled to
vote shall be combined (with each series having a number of votes proportional
to the aggregate liquidation preference of its outstanding shares). In such
case, the holders of Series C Preferred Stock and of all such other series
then entitled so to vote, voting as a class, shall elect such directors. If
the holders of any such other series (if designated) have elected such
directors prior to the happening of the default or event permitting the
holders of Series C Preferred Stock to elect directors, or prior to a written
request for the holding of a special meeting being received by the Secretary
of the Corporation from the holders of not less than 10% of the then
outstanding shares of Series C Preferred Stock, then such directors so
previously elected will be deemed to have been elected by and on behalf of the
holders of Series C Preferred Stock as well as such other series, without
prejudice to the right of the holders of Series C Preferred Stock to vote for
directors if such previously elected directors shall resign, cease to serve or
fail to stand for reelection while the holders of Series C Preferred Stock are
entitled to vote. If the holders of any such other series are entitled to
elect in excess of two (2) directors, the Series C Preferred Stock shall not
participate in the election of more than two (2) such directors, and those
directors whose terms first expire shall be deemed to be the directors elected
by the holders of Series C Preferred Stock; provided that, if at the
expiration of such terms the holders of Series C Preferred Stock are entitled
to vote in the election of directors pursuant to the provisions of this
paragraph 4, then the Secretary of the Corporation shall call a meeting (which
meeting may be the annual meeting or special meeting of stockholders referred
to in subparagraph (c)) of holders of Series C Preferred Stock for the purpose
of electing replacement directors (in accordance with the provisions of this
paragraph 4) to be held on or prior to the time of expiration of the terms
referred to above.
(e) Except as otherwise set forth herein or required by law,
the Charter or the Bylaws, holders of Series C Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Shares as set forth
herein) for the taking of any corporate action. No consent of the holders of
outstanding shares of Series C Preferred Stock at any time outstanding shall
be required in order to permit the Board of Directors to: (i) increase the
number of authorized shares of Series C Preferred Stock or to decrease such
number to a number not below the sum of the number of shares of Series C
Preferred Stock then outstanding and the number of shares with respect to
which there are outstanding rights to purchase; or (ii) issue Preferred Stock
which is senior to the Series C Preferred Stock, junior to the Series C
Preferred Stock or on a parity with the Series C Preferred Stock.
5. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the Common Shares are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series C Preferred Stock shall
at the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
Common Shares is changed or exchanged. In the event the Corporation shall at
any time after the First Issuance declare or pay any dividend on the Common
Shares payable in Common Shares, or effect a subdivision or combination or
consolidation of the outstanding Common Shares (by reclassification or
otherwise than by payment of a dividend in Common Shares) into a greater or
lesser number of Common Shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series C Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the Common Shares
that were outstanding immediately prior to such event.
6. Redemption.
The shares of Series C Preferred Stock shall not be
redeemable.
7. Conversion Rights.
The Series C Preferred Stock is not convertible into Common
Shares or any other security of the Corporation.
8. Ranking.
The Series C Preferred Stock shall rank junior to all other
classes and series of the Corporation's Preferred Stock as to payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
9. Ownership Limitations.
Notwithstanding Article VII of the Charter, the provisions of this
Section 9 shall apply with respect to the limitations on the ownership and
Acquisition of shares of Series C Preferred Stock.
(a) (i) Except as provided in Section 9(h), no Person shall
Beneficially Own or Constructively Own any shares of Series C Preferred Stock
such that such Person would Beneficially Own or Constructively Own Capital
Stock in excess of the Ownership Limit;
(ii) Except as provided in Section 9(h), any
Transfer (whether or not such Transfer is the result of a transaction entered
into through the facilities of the New York Stock Exchange, Inc. (the "NYSE")
that, if effective, would result in any Person Beneficially Owning Series C
Preferred Stock in excess of the Ownership Limit shall be void ab initio as to
the Transfer of such Series C Preferred Stock which would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit; and the
intended transferee shall Acquire no rights in such Series C Preferred Stock;
(iii) Except as provided in Section 9(h), any
Transfer (whether or not such Transfer is the result of a transaction entered
into through the facilities of the NYSE) that, if effective, would result in
any Person Constructively Owning Series C Preferred Stock in excess of the
Ownership Limit shall be void ab initio as to the Transfer of such Series C
Preferred Stock which would be otherwise Constructively Owned by such Person
in excess of the Ownership Limit; and the intended transferee shall Acquire no
rights in such Series C Preferred Stock; and
(iv) Notwithstanding any other provisions contained
in this Section 9, any Transfer (whether or not such Transfer is the result of
a transaction entered into through the facilities of the NYSE) or other event
that, if effective, would result in the Corporation being "closely held"
within the meaning of section 856(h) of the Code, or would otherwise result in
the Corporation failing to qualify as a real estate investment trust (a
"REIT") under the Code (including, but not limited to, a Transfer or other
event that would result in the Corporation owning (directly or Constructively)
an interest in a tenant that is described in section 856(d)(2)(B) of the Code
if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of section
856(c) of the Code) shall be void ab initio as to the Transfer of the Series C
Preferred Stock or other event which would cause the Corporation to be
"closely held" within the meaning of section 856(h) of the Code or would
otherwise result in the Corporation failing to qualify as a REIT; and the
intended transferee or owner or Constructive or Beneficial Owner shall Acquire
or retain no rights in such Series C Preferred Stock.
(b) If, notwithstanding the other provisions contained in
this Section 9, at any time after the date on which shares of Series C
Preferred are first issued (the "Series C Issue Date"), there is a purported
Transfer (whether or not such Transfer is the result of a transaction entered
into through the facilities of the NYSE), change in the capital structure of
the Corporation or other event such that one or more of the restrictions on
ownership and transfers described in Section 9(a), above, has been violated,
then the Series C Preferred Stock being Transferred (or in the case of an
event other than a Transfer, the Series C Preferred Stock owned or
Constructively Owned or Beneficially Owned or, if the next sentence applies,
the Series C Preferred Stock identified in the next sentence) which would
cause the restriction on ownership or transfer to be violated (rounded up to
the nearest whole share) shall be automatically converted into an equal number
of shares of Series C Preferred Excess Stock ("Series C Excess Preferred"). If
at any time of such purported Transfer any of the shares of the Series C
Preferred Stock are then owned by a depositary to permit the trading of
beneficial interests in fractional shares of Series C Preferred Stock, then
shares of Series C Preferred Stock that shall be converted to Series C Excess
Preferred shall be first taken from any Series C Preferred Stock that is not
in such depositary that is Beneficially Owned or Constructively Owned by the
Person whose Beneficial Ownership or Constructive Ownership would otherwise
violate the restrictions of Section 9(a) prior to converting any shares in
such depositary. Any conversion pursuant to this subparagraph shall be
effective as of the close of business on the Business Day prior to the date of
such Transfer or other event.
(c) If the Board of Directors or its designee shall at any
time determine in good faith that a Transfer or other event has taken place in
violation of Section 9(a) or that a Person intends to Transfer or Acquire, has
attempted to Transfer or Acquire or may Transfer or Acquire direct ownership,
beneficial ownership (determined without reference to any rules of
attribution), Beneficial Ownership or Constructive Ownership of any shares of
the Corporation in violation of Section 9(a), the Board of Directors or its
designee shall take such action as it deems advisable to refuse to give effect
to or to prevent such Transfer, Acquisition or other event, including, but not
limited to, causing the Corporation to purchase such shares for Fair Market
Value upon the terms and conditions specified by the Board of Directors in its
sole discretion, refusing to give effect to such Transfer, Acquisition or
other event on the books of the Corporation or instituting proceedings to
enjoin such Transfer, Acquisition or other event; provided, however, that any
Transfer or Acquisition (or, in the case of events other than a Transfer or
Acquisition, ownership or Constructive Ownership or Beneficial Ownership) in
violation of Section 9(a) shall automatically result in the conversion
described in Section 9(b), irrespective of any action (or non-action) by the
Board of Directors.
(d) Any Person who Acquires or attempts to Acquire or
Beneficially Owns or Constructively Owns shares of Series C Preferred Stock in
excess of the aforementioned limitations, or any Person who is or attempts to
become a transferee such that Series C Excess Preferred results under Section
9(b), shall immediately give written notice or, in the event of a proposed or
attempted Transfer, give at least 15 days prior written notice to the
Corporation of such event and shall provide to the Corporation such other
information as it may request in order to determine the effect of any such
Transfer on the Corporation's status as a REIT.
(e) From and after the First Issuance, each Person who is a
Beneficial Owner or Constructive Owner of Series C Preferred Stock and each
Person (including the stockholder of record) who is holding Series C Preferred
Stock for a Beneficial Owner or Constructive Owner shall provide to the
Corporation such information with respect to the direct, indirect and
constructive ownership of Series C Preferred Stock as the Corporation may
request, in good faith, in order to comply with the provisions of the Code
applicable to REITs, to comply with the requirements of any taxing authority
of governmental agency or to determine such compliance.
(f) Nothing contained in this Section 9 (but subject to
Section 9(l)) shall limit the authority of the Board of Directors to take such
other action as it deems necessary or advisable to protect the Corporation and
the interests of its stockholders by preservation of the Corporation's status
as a REIT.
(g) In the case of an ambiguity in the application of any of
the provisions of this Section 9, including any definition contained herein,
the Board of Directors shall have the power to determine the application of
the provisions of this Section 9 with respect to any situation based on the
facts known to it (subject, however, to the provisions of Section 9(1)).
(h) (i) Subject to Section 9(a)(iv), the Board of Directors,
in its sole and absolute discretion, with the advice of the Corporation's tax
counsel, may exempt a Person from the limitation on a Person Beneficially
Owning Series C Preferred Stock in excess of the Ownership Limit if such
Person is not an individual for purposes of Section 542(a)(2) of the Code and
the Board of Directors obtains such representations and undertakings from such
Person as are reasonably necessary to ascertain that no individual's
Beneficially Owning Series C Preferred Stock will violate the Ownership Limit
and such Person agrees that any violation of such representations or
undertaking (or other action which is contrary to the restrictions contained
in this Section 9) or attempted violation will result in such Series C
Preferred Stock Beneficially Owned in excess of the Ownership Limit being
exchanged for Series C Excess Preferred in accordance with Section 9(b).
(ii) Subject to Section 9(a)(iv), the Board of
Directors of the Corporation, in its sole and absolute discretion, with advice
of the Corporation's tax counsel, may exempt a Person from the limitation on a
Person Constructively Owning Series C Preferred Stock in excess of the
Ownership Limit if such Person does not and represents that it will not own,
directly or constructively (by virtue of the application of Section 318 of the
Code, as modified by section 856(d)(5) of the Code), more than a 9% interest
(as set forth in section 856(d)(2)(B) of the Code) in a tenant of the
Corporation and the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain this
fact and such Person agrees that any violation or attempted violation will
result in such Series C Preferred Stock Constructively Owned in excess of the
Ownership Limit being exchanged for Excess Stock in accordance with Section
9(b).
(iii) Prior to granting any exception pursuant to
Section 9(h)(i) or 9(h)(ii), the Board of Directors may require a ruling from
the IRS, or an opinion of counsel, in either case in form and substance
satisfactory to the Board of Directors, in its sole discretion as it may deem
necessary or advisable in order to determine or ensure the Corporation's
organization and operation in conformity with the requirements for
qualification as a REIT under the Code; provided, however, that obtaining a
favorable ruling or opinion shall not be required for the Board of Directors
to grant an exception hereunder.
(i) Notwithstanding anything herein to the contrary, Article
VII, Section 9 of the Charter shall apply to this Section 9.
(j) Each Certificate for Series C Preferred Stock shall bear
substantially the following legend:
The Corporation will furnish to any stockholder, on request
and without charge, a full statement of the information
required by section 2-211(d) of the Maryland General
Corporation Law with respect to the designations and any
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other
distributions, qualifications, and terms and conditions of
redemption of the shares of each class of stock which the
Corporation has authority to issue and, if the Corporation
is authorized to issue any preferred or special class in
series, (i) the differences in the relative rights and
preferences between the shares of each series to the extent
set, and (ii) the authority of the Board of Directors to set
such rights and preferences of subsequent series. The
following summary does not purport to be complete and is
subject to and qualified in its entirety by reference to the
charter of the Corporation including all amendments and
supplements thereto (the "Charter"), a copy of which,
including restrictions on transfer, will be sent without
charge to each stockholder who so requests. Such request
must be made to the Secretary of the Corporation at its
principal office or to the Transfer Agent. All capitalized
terms in this legend have the meanings defined in the
Charter.
The securities represented by this certificate are subject
to restrictions on ownership and transfer for the purpose of
the Corporation's maintenance of its status as a real estate
investment trust under the Internal Revenue Code of 1986, as
amended. Except as otherwise provided pursuant to the
Charter of the Corporation, no Person may Beneficially Own
or Constructively Own any shares of Series C Preferred Stock
such that such Person would Beneficially Own or
Constructively Own Common Equity in excess of 9% in value of
the aggregate of the outstanding shares of Common Equity of
the Corporation. Any Person who Acquires or attempts to
Acquire or Beneficially Owns or Constructively Owns shares
of Series C Preferred Stock in excess of the aforementioned
limitation, or any Person who is or attempts to become a
transferee such that Series C Excess Preferred would result
under the provisions of the Charter, shall immediately give
written notice or, in the event of a proposed or attempted
Transfer, give at least 15 days prior written notice to the
Corporation of such event and shall provide to the
Corporation such other information as it may request in
order to determine the effect of any such Transfer on the
corporation's status as a REIT. Transfers in violation of
the restrictions described above shall be void ab initio. If
the restrictions on ownership and transfer are violated, the
securities represented hereby will be designated and treated
as shares of Series C Excess Preferred which will be
transferred, by operation of law, to the trustee of a trust
for the exclusive benefit of one or more charitable
organizations.
(k) If any provision of this Section 9 or any application of
any such provision is determined to be invalid by any federal or state court
having jurisdiction, the validity of the remaining provisions shall not be
affected and other applications of such provision shall be affected only to
the extent necessary to comply with the determination of such court.
(l) (i) Upon any purported Transfer (whether or not such
Transfer is the result of a transaction entered into through the facilities of
the NYSE) that results in the issuance of Series C Excess Preferred pursuant
to Section 9(b), such Series C Excess Preferred shall be deemed to have been
transferred to the Trustee of a Trust for the exclusive benefit of one or more
Charitable Beneficiaries. The Trustee shall be appointed by the Corporation,
and shall be a person unaffiliated with the Corporation, any Purported
Beneficial Transferee or any Purported Record Transferee. By written notice to
the Trustee, the Corporation shall designate one or more non-profit
organizations to be the Charitable Beneficiary(ies) of the interest in the
Trust representing the Series C Excess Preferred such that (a) the shares of
Series C Preferred Stock from which the shares of Series C Excess Preferred
held in the Trust were so converted would not violate the restrictions set
forth in paragraph (a) of this Section 9 in the hands of such Charitable
Beneficiary and (b) each Charitable Beneficiary is an organization described
in sections 170(b)(1)(a), 170(c)(2) and 501(c)(3) of the Code. The Trustee of
the Trust will be deemed to own the Series C Excess Preferred for the benefit
of the Charitable Beneficiary on the date of the purported Transfer or other
event that results in Series C Excess Preferred pursuant to paragraph (b) of
this Section 9 Series C Excess Preferred so held in trust shall be issued and
outstanding shares of stock of the Corporation. The Purported Record
Transferee shall have no rights in such Series C Excess Preferred except the
right to designate a transferee of such Series C Excess Preferred upon the
terms specified in Section 9(l)(v). The Purported Beneficial Transferee shall
have no rights in such Series C Excess Preferred except as provided in this
Section 9.
(ii) Series C Excess Preferred will be entitled to
dividends and distributions authorized and declared with respect to the Series
C Preferred Stock from which the Series C Excess Preferred was converted and
will be payable to the Trustee of the Trust in which such Series C Excess
Preferred is held, for the benefit of the Charitable Beneficiary. Dividends
and distributions will be authorized and declared with respect to each share
of Series C Excess Preferred in an amount equal to the dividends and
distributions authorized and declared on each share of Series C Preferred
Stock from which the Series C Excess Preferred was converted. Any dividend or
distribution paid to a Purported Record Transferee prior to the discovery by
the Corporation that Series C Preferred Stock has been transferred in
violation of the provisions of this Section 9 shall be repaid by the Purported
Record Transferee to the Trustee upon demand. The Corporation shall rescind
any dividend or distribution authorized and declared but unpaid as void ab
initio with respect to the Purported Record Transferee, and the Corporation
shall pay such dividend or distribution when due to the Trustee of the Trust
for the benefit of the Charitable Beneficiary.
(iii) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any other distribution of all or
substantially all of the assets of the Corporation, each holder of shares of
Series C Excess Preferred shall be entitled to receive, ratably with each
other holder of Series C Preferred Stock and Series C Excess Preferred
converted from Series C Preferred Stock, any distribution or payment made to
all holders of Common Shares.
Any liquidation distributions to be distributed with respect to
Series C Excess Preferred shall be distributed in the same manner as proceeds
from the sale of Series C Excess Preferred are distributed as set forth in
Section 9(l)(iv).
(iv) Series C Excess Preferred shall not be
transferable. In its sole discretion, the Trustee of the Trust may transfer
the interest in the Trust representing shares of Series C Excess Preferred to
any Person if the shares of Series C Excess Preferred would not be Series C
Excess Preferred in the hands of such Person. If such transfer is made, the
interest of the Charitable Beneficiary in the Series C Excess Preferred shall
terminate and the proceeds of the sale shall be payable by the Trustee to the
Purported Record Transferee and to the Charitable Beneficiary as herein set
forth. The Purported Record Transferee shall receive from the Trustee the
lesser of (i) the price paid by the Purported Record Transferee for its shares
of Series C Preferred Stock that were converted into Series C Excess Preferred
or, if the Purported Record Transferee did not give value for such shares
(e.g. the stock was received through a gift, devise or other transaction), the
average closing price for the class of shares from which such shares of Series
C Excess Preferred were converted for the ten trading days immediately
preceding such sale or gift, and (ii) the price received by the Trustee from
the sale or other disposition of the Series C Excess Preferred held in trust.
The Trustee may reduce the amount payable to the Purported Record Transferee
by the amount of dividends and distributions which have been paid to the
Purported Record Transferee and are owed by the Purported Record Transferee to
the Trustee pursuant to Section 9(l)(ii). Any proceeds in excess of the amount
payable to the Purported Record Transferee shall be paid by the Trustee to the
Charitable Beneficiary. Upon such transfer of an interest in the Trust, the
corresponding shares of Series C Excess Preferred in the Trust shall be
automatically exchanged for an equal number of shares of Series C Preferred
Stock and such shares of Series C Preferred Stock shall be transferred of
record to the transferee of the interest in the Trust if such shares of Series
C Preferred Stock would not be Series C Excess Preferred in the hands of such
transferee. Prior to any transfer of any interest in the Trust, the
Corporation must have waived in writing its purchase rights under Section
9(l)(vi).
(v) Any vote cast by a Purported Record Transferee
of Series C Excess Preferred prior to the discovery by the Corporation that
Series C Preferred Stock has been transferred in violation of the provisions
of this Section 9 shall be void ab initio. While the Series C Excess Preferred
is held in trust, the Purported Record Transferee will be deemed to have given
an irrevocable proxy to the Trustee to vote the shares of Series C Preferred
Stock which have been converted into shares of Series C Excess Preferred for
the benefit of the Charitable Beneficiary.
(vi) Notwithstanding the provisions of Section
9(l)(iv), shares of Series C Excess Preferred shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share
equal to the lesser of (A) the price per share in the transaction that
required the issuance of such Series C Excess Preferred (or, if the Transfer
or other event that resulted in the issuance of Series C Excess Preferred was
not a transaction in which the Purported Beneficial Transferee gave full value
for such Series C Excess Preferred, a price per share equal to the Market
Price on the date of the purported Transfer or other event that resulted in
the issuance of Series C Excess Preferred) and (B) the Market Price on the
date the Corporation, or its designee, accepts such offer. The Corporation
shall have the right to accept such offer for a period of ninety (90) days
after the later of (x) the date of the Transfer or other event which resulted
in the issuance of such shares of Series C Excess Preferred and (y) the date
the Board of Directors determines in good faith that a Transfer or other event
resulting in the issuance of shares of Series C Excess Preferred has occurred,
if the Corporation does not receive a notice of such Transfer or other event
pursuant to Section 9(d). The Corporation may appoint a special trustee of the
Trust for the purpose of consummating the purchase of Series C Excess
Preferred by the Corporation. In the event that the Corporation's actions
cause a reduction in the number of shares of Series C Preferred Stock
outstanding and such reduction results in the issuance of Series C Excess
Preferred, the Corporation is required to exercise its option to repurchase
such shares of Series C Excess Preferred if the Beneficial Owner notifies the
Corporation that it is unable to sell its right to such Series C Excess
Preferred.
(m) Nothing in this Section 9 shall preclude the settlement
of any transaction entered into through the facilities of the NYSE.
(n) For purposes of the provisions included in Article VII
of the Charter as a result of the Articles Supplementary adopted and filed in
connection with the classification of the Series C Preferred Stock:
"Acquire" shall mean the acquisition of Beneficial Ownership or
Constructive Ownership of shares of Preferred Equity Stock by any means
including, without limitation, a Transfer, the exercise of or right to
exercise any rights under any option, warrant, convertible security, pledge or
other security interest or similar right to acquire shares, but shall not
include the acquisition of any such rights unless, as a result, the acquiror
would be considered a Beneficial Owner or Constructive Owner, as defined below
and shall not include Beneficial Ownership or Constructive Ownership that does
not result from an acquisition. The term "Acquisition" shall have the
correlative meaning.
"Affiliate" shall have the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Beneficial Ownership" shall mean ownership of Series C Preferred
Stock or Series C Excess Preferred by a Person who is or would be treated as
an owner of such Series C Preferred Stock or Series C Excess Preferred either
directly or constructively through the application of section 544 of the Code,
as modified by section 856(h)(1)(B) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in The
City of New York are authorized or required by law, regulation or executive
order to close.
"Capital Stock" shall mean all classes of series of stock of the
Corporation, including, without limitation, Common Equity and Series C
Preferred Equity Stock.
"Charitable Beneficiary" shall mean a beneficiary of the Trust as
determined pursuant to Section 9(1).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Equity" shall mean all shares now or hereafter authorized of
any class of common stock of the Corporation, including the Common Shares and
the class B common stock, par value $.01 per share, of the Corporation, all
shares of Series C Preferred Equity Stock and any other stock of the
Corporation, howsoever designated, authorized after the First Issuance, which
has the right (subject always to prior rights of any class or series of
preferred stock) to participate in the distribution of the assets and earnings
of the Corporation without limit as to per share amount.
"Constructive Ownership" shall mean ownership of Series C Preferred
Stock or Series C Excess Preferred by a Person who is or would be treated as
an owner of such Series C Preferred Stock or Series C Excess Preferred either
directly or constructively through the application of section 318 of the Code,
as modified by section 856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have the correlative
meanings.
"Current Market Price" of publicly traded Common Shares or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the NYSE or, if such
security is not listed or admitted for trading on the NYSE, on the principal
national securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national securities
exchange, on the Nasdaq National Market or, if such security is not quoted on
the Nasdaq National Market, the average of the closing bid and asked prices on
such day in the over-the-counter market as reported by Nasdaq or, if bid and
asked prices for such security on such day shall not have been reported
through Nasdaq the average of the bid and asked prices on such day as
furnished by any NYSE member firm regularly making a market in such security
selected for such purpose by the Corporation's Chief Executive Officer or the
Board of Directors of the Corporation.
"Fair Market Value" shall mean the average of the daily Current
Market Prices per Common Share (or other equity security as applicable) during
the ten consecutive Trading Days selected by the Corporation commencing not
more than 20 Trading Days before, and ending not later than, the earlier of
the day in question and the day before the "ex-date" with respect to the
issuance or distribution requiring such computation. The term "ex-date", when
used with respect to any issuance or distribution, means the first day on
which the Common Shares (or other equity security as applicable) trade regular
way, without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, for purposes of determining
that day's Current Market Price.
"IRS" shall mean the United States Internal Revenue Service.
"Ownership Limit" shall mean 9% in value of the aggregate of the
outstanding shares of Common Equity. The value of shares of the outstanding
shares of Common Equity shall be determined by the Board of Directors of the
Corporation in good faith, which determination shall be conclusive for all
purposes hereof.
"Person" shall mean an individual, corporation, partnership, estate,
trust, (including a trust qualified under section 401(a) or 501(c)(17) of the
Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in section 642(c) of the Code,
association, private foundation within the meaning of section 509(a) of the
Code, joint stock company or other entity, and also includes a group as that
term is used for purposes of section 13(d)(3) of the Securities Exchange Act
of 1934, as amended; but does not include an underwriter which participates in
a public offering of the Series C Preferred Stock or any interest therein,
provided that such ownership by such underwriter would not result in the
Corporation being "closely held" within the meaning of section 856(h) of the
Code, or otherwise result in the Corporation failing to qualify as a REIT.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Series C Excess Preferred, the purported
beneficial transferee or owner for whom the Purported Record Transferee would
have Acquired or owned shares of Series C Preferred Stock if such Transfer had
been valid under Section 9(a).
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Series C Excess Preferred, the record
holder of the Series C Preferred Stock if such Transfer had been valid under
Section 9(a).
"Series C Preferred Equity Stock" shall mean shares of stock that are
either Series C Preferred Stock or Series C Excess Preferred.
"Trading Day" shall mean any day on which the securities in question
are traded on the NYSE or, if such securities are not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which
such securities are listed or admitted or, if not listed or admitted for
trading on any national securities exchange, on the Nasdaq National Market or,
if such securities are not quoted on the Nasdaq National Market, on the
applicable securities market in which the securities are traded.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of Series C Preferred Equity Stock, including (i) the
granting of any option or entering into any agreement for the sale, transfer
or other disposition of Series C Preferred Equity Stock or (ii) the sale,
transfer, assignment or other disposition of any securities (or rights
convertible into or exchangeable for Series C Preferred Equity Stock), whether
voluntary or involuntary, whether of record or beneficially or Beneficially or
Constructively Owned (including but not limited to Transfers of interests in
other entities which result in changes in Beneficial or Constructive Ownership
of Series C Preferred Equity Stock), and whether by operation of law or
otherwise. The term "Transferring" and "Transferred" shall have the
correlative meanings.
"Transfer Agent" means American Stock Transfer & Trust Company, or
such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series C Preferred Stock.
"Trust" shall mean the trust created pursuant to Section 9(l).
"Trustee" shall mean the Person that is appointed by the Corporation
pursuant to Section 9(l) to serve as trustee of the Trust, and any successor
thereto.
10. Share Certificates.
The Board of Directors may authorize the issue of some or all of the
shares (including fractional shares) of Series C Preferred Stock without
certificates.
11. Determination by Board.
Any determination by the Board of Directors pursuant to the terms of
the Series C Preferred Stock shall be final and binding upon the holders
thereof and shall be conclusive for all purposes.
THIRD: The Shares have been classified and designated by the Board
of Directors under authority contained in the Charter.
FOURTH: These Articles Supplementary have been approved by the Board
of Directors in the manner and by the vote required by law.
FIFTH: These Articles Supplementary shall be effective at the time
the State Department of Assessments and Taxation of Maryland accepts these
Articles Supplementary for record.
SIXTH: Each of the undersigned acknowledges these Articles
Supplementary to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the undersigned
acknowledges that to the best of his knowledge, information and belief, those
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
IN WITNESS WHEREOF, Reckson Associates Realty Corp. has caused these
Articles Supplementary to be signed in its name and on its behalf by its Vice
President and attested to by its Secretary on this ---- day of October, 2000.
RECKSON ASSOCIATES REALTY CORP.
By:
------------------------------------
J. Michael Maturo,
Executive Vice President, Treasurer,
Chief Financial Officer
Attest:
By
--------------------------------------
----------------------------------
Secretary
Exhibit B
---------
(Form of Right Certificate)
Certificate No. R- Rights
------- --------
NOT EXERCISABLE AFTER OCTOBER 27, 2010, UNLESS EXTENDED PRIOR THERETO BY THE
BOARD OF DIRECTORS OR EARLIER IF REDEEMED BY THE CORPORATION. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $0.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY ARE NULL AND VOID.]*
[FN]
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Right Certificate
Reckson Associates Realty Corp.
This certifies that ------------------------, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of October 13, 2000 (the "Rights Agreement"),
between Reckson Associates Realty Corp., a Maryland corporation (the
"Corporation"), and American Stock Transfer & Trust Company (the "Rights
Agent"), to purchase from the Corporation at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
New York City, New York time, on October 13, 2010 (unless the Rights
represented hereby shall have been previously redeemed by the Corporation) at
the office or offices of the Rights Agent designated for such purpose, or at
the office of its successor as Rights Agent, one one-thousandth of a fully
paid non-assessable share of Series C Junior Participating Preferred Stock,
par value $.01 per share (the "Preferred Shares"), of the Corporation, at a
purchase price of $84.44 per one one-thousandth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
represented by this Right Certificate (and the number of one one-thousandths
of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of October 27, 2000 based on the Preferred Shares as constituted at
such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights represented by this Right
Certificate are Beneficially Owned by (i) an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate
or Affiliate who becomes a transferee after the Acquiring Person becomes such,
or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of any such Acquiring Person, Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such,
such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths of a Preferred Share or other securities which
may be purchased upon the exercise of the Rights represented by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as such term is defined in the
Rights Agreement).
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and restrictions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Corporation and the holders of the Right Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive offices of the Corporation and the office or offices of
the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
represented by this Certificate may be redeemed by the Corporation at a
redemption price of $0.01 per Right (subject to adjustment as provided in the
Rights Agreement) payable in cash.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights represented hereby (other than fractions which are one
one-thousandth or integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Corporation, be represented by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Corporation which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Corporation or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights represented by this Right Certificate
shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
[SEAL]
ATTEST: RECKSON ASSOCIATES REALTY CORP.
By:----------------------------- By:-----------------------------
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By:-------------------------------
Authorized Officer
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED --------------- hereby sells, assigns and transfers
unto -------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address of transferee)
- -------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint --------------- as Agent,
to transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: -------------, ----
--------------------------------
Signature
Signature Guaranteed:
- -------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights
represented by this Right Certificate are not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and (2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights represented by this
Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
--------------------------------
Signature
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if such holder
desires to exercise Rights
represented by the Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
- ----------------- Rights represented by this Right Certificate to purchase the
Preferred Shares, Common Shares or other securities issuable upon the exercise
of such Rights and requests that certificates for such Preferred Shares,
Common Shares or other securities be issued in the name of:
Please insert social security
or other identifying number----------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights represented by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ---------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Form of Reverse Side of Right Certificate -- continued
Dated: ---------------, ----
-------------------------------
Signature
Signature Guaranteed:
Form of Reverse Side of Right Certificate -- continued.
The undersigned hereby certifies that (1) the Rights
represented by this Right Certificate are not being exercised by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement) and (2) after due
inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights represented by this Rights Certificate from any Person who
is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement).
-------------------------------
Signature
NOTICE
The signature on the foregoing Forms of Assignment and
Election and certificates must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the Beneficial Owner
of the Rights represented by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On October 13, 2000, the Board of Directors of Reckson Associates
Realty Corp. (the "Corporation") authorized a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding share of
common stock, par value $.01 per share (the "Common Shares"), of the
Corporation. The dividend is payable to the stockholders of record on October
27, 2000 (the "Record Date"), and with respect to Common Shares issued
thereafter until the Distribution Date (as defined below) and, in certain
circumstances, with respect to Common Shares issued after the Distribution
Date. Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase from the Corporation one
one-thousandth of a share of Series C Junior Participating Preferred Stock,
$.01 par value per share (the "Preferred Shares"), of the Corporation at a
price of $84.44 per one one-thousandth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the
Corporation and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent"), dated as of October 13, 2000.
Concurrently with the Corporation's declaration of a dividend
distribution of Rights, the Corporation's primary subsidiary, Reckson
Operating Partnership, L.P. (the "Partnership") has declared a dividend
distribution to its common unitholders (including the Corporation) of
preferred unit purchase rights. These preferred unit purchase rights are
analogous to the Rights and carry rights and terms entitling the Partnership's
common unitholders to similar benefits as those conveyed to holders of Common
Shares upon a "Distribution Date" (as defined below).
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common
Shares upon the earliest to occur of (i) the date of first public announcement
that an Acquiring Person (as defined below) has become such; or (ii) 10 days
(or such later date as the Board may determine) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming an Acquiring
Person (as defined below) (the earliest of such dates being called the
"Distribution Date"). Subject to certain exceptions, an "Acquiring Person" is
any person who or which together with all affiliates and associates is the
beneficial owner of 15% or more of the outstanding Common Shares (except
pursuant to a Permitted Offer (as defined below)). The date of first public
announcement that a person or group has become an Acquiring Person is the
"Shares Acquisition Date." The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights) new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates representing the Rights
("Right Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date (and to each
initial record holder of certain Common Shares issued after the Distribution
Date), and such separate Right Certificates alone will represent the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 13, 2010, unless earlier redeemed
by the Corporation as described below.
In the event that any person becomes an Acquiring Person or an
affiliate or associate thereof (except pursuant to a tender or exchange offer
which is for all outstanding Common Shares at a price and on terms which a
majority of certain members of the Board of Directors determines to be
adequate and in the best interests of the Corporation and its stockholders,
other than such Acquiring Person, its affiliates and associates (a "Permitted
Offer")), each holder of a Right will thereafter have the right (the "Flip-In
Right") to receive upon exercise the number of Common Shares or one
one-thousandths of a Preferred Share (or, in certain circumstances, other
securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of the event described
above, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders
of all of the surviving corporation's voting power, or (ii) more than 50% of
the Corporation's assets or earning power is sold or transferred, in either
case with or to an Acquiring Person or any affiliate or associate or any other
person in which such Acquiring Person, affiliate or associate has an interest
or any person acting on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, if in such transaction all holders of Common
Shares are not treated alike, any other person, then each holder of a Right
(except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise,
common shares of the acquiring company (or in certain circumstances, its
parent) having a value equal to two times the exercise price of the Right. The
holder of a Right will continue to have the Flip-Over Right whether or not
such holder exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares,
Common Shares or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Preferred Shares, (ii) upon the grant to holders of the Preferred Shares
of certain rights or warrants to subscribe for or purchase Preferred Shares at
a price, or securities convertible into Preferred Shares with a conversion
price, less than the then current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-thousandths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring,
in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 1,000 times the dividend
declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to the greater of (i) a minimum preferential
liquidation payment of $10.00 per share and (ii) an aggregate payment per
share of 1,000 times the aggregate payment made per Common Share. The
Preferred Shares rank junior to all other classes and series of the
Corporation's preferred stock with respect to dividends and upon liquidation,
unless the terms of such other series provides otherwise. These rights are
protected by customary antidilution provisions. In the event that the amount
of accrued and unpaid dividends on the Preferred Shares is equivalent to six
full quarterly dividends or more, the holders of the Preferred Shares, subject
to certain limitations, shall have the right, voting as a class, to elect two
directors in addition to the directors elected by the holders of the Common
Shares until all cumulative dividends on the Preferred Shares have been paid
through the last quarterly dividend payment date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in
part, at a price of $0.01 per Right (the "Redemption Price") which redemption
shall be effective upon the action of the Board of Directors. Additionally,
following the time a person becomes an Acquiring Person and subject to certain
other conditions, the Corporation may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, in certain circumstances,
including redemption in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in which all
holders of Common Shares are treated alike but not involving (other than as a
holder of Common Shares being treated like all other holders) an Acquiring
Person or its affiliates or associates (or certain persons acting on behalf or
in concert with such person, affiliates or associates). The payment of the
Redemption Price may be deferred under certain circumstances as contemplated
in the Rights Agreement.
All of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board of Directors in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or,
subject to certain limitations, to shorten or lengthen any time period under
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders of the Corporation, stockholders may,
depending upon the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated October 13, 2000. A copy of the Rights Agreement is available free of
charge from the Corporation. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
EXECUTION COPY
- --------------------------------------------------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 7, 2000
AMONG
RECKSON OPERATING PARTNERSHIP, L.P.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
AND
THE CHASE MANHATTAN BANK
AS ADMINISTRATIVE AGENT,
UBS WARBURG LLC
AS SYNDICATION AGENT,
DEUTSCHE BANK
AS DOCUMENTATION AGENT
AND
CHASE SECURITIES INC. AND UBS WARBURG LLC
AS JOINT LEAD ARRANGERS AND JOINT BOOK MANAGERS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS...............................................................................2
1.1. Certain Defined Terms................................................................2
1.2. Computation of Time Periods..........................................................36
1.3. Accounting Terms.....................................................................37
1.4. Other Terms..........................................................................37
ARTICLE II. AMOUNTS AND TERMS OF LOANS...............................................................37
2.1. Committed Loans......................................................................37
2.2. Competitive Bid Loans................................................................40
2.3. Use of Proceeds of Loans and Letters of Credit.......................................44
2.4. Revolving Credit Termination Date Maturity of Competitive Bid Loans..................45
2.5. Maximum Credit Facility..............................................................45
2.6. Authorized Agents....................................................................46
ARTICLE III. LETTERS OF CREDIT.......................................................................46
3.1. Letters of Credit....................................................................46
3.2. Obligations Several..................................................................54
ARTICLE IV. PAYMENTS AND PREPAYMENTS.................................................................54
4.1. Prepayments; Reductions in Revolving Credit Commitments..............................54
4.2. Payments.............................................................................56
4.3. Promise to Repay; Evidence of Indebtedness...........................................60
ARTICLE V. INTEREST AND FEES.........................................................................62
5.1. Interest on the Loans and other Obligations..........................................62
5.2. Special Provisions Governing Eurodollar Rate Loans and Competitive Bid Loans.........64
5.3. Fees.................................................................................69
ARTICLE VI. CONDITIONS TO LOANS AND LETTERS OF CREDIT................................................70
6.1. Conditions Precedent to the Initial Loans and Letters of Credit......................70
6.2. Conditions Precedent to All Subsequent Loans and Letters of Credit...................72
ARTICLE VII. REPRESENTATIONS AND WARRANTIES..........................................................73
7.1. Representations and Warranties of the Borrower.......................................73
ARTICLE VIII. REPORTING COVENANTS....................................................................84
8.1. Borrower Accounting Practices........................................................84
8.2. Financial Reports....................................................................84
8.3. Events of Default....................................................................88
8.4. Lawsuits.............................................................................88
8.5. Insurance............................................................................89
8.6. ERISA Notices........................................................................89
8.7. Environmental Notices................................................................91
8.8. Labor Matters........................................................................91
8.9. Notices of Asset Sales and/or Acquisitions...........................................92
8.10. Notices of Joint Ventures...........................................................,92
8.11. Tenant Notifications................................................................92
8.12. Other Reports.......................................................................93
8.13. Other Information...................................................................93
ARTICLE IX. AFFIRMATIVE COVENANTS....................................................................93
9.1. Existence. Etc.......................................................................93
9.2. Powers; Conduct of Business..........................................................93
9.3. Compliance with Laws. Etc............................................................94
9.4. Payment of Taxes and Claims..........................................................94
9.5. Insurance............................................................................94
9.6. Inspection of Property, Books and Records Discussions................................94
9.7. ERISA Compliance.....................................................................95
9.8. Maintenance of Property..............................................................95
9.9. Company Status.......................................................................95
9.10. Ownership of Projects, Joint Ventures and Property..................................96
9.11. Maintenance of Operating Accounts...................................................96
9.12. Additional Guarantors; Solvency of Guarantors.......................................96
9.13. Further Assurances..................................................................97
9.14. Distributions in the Ordinary Course................................................97
ARTICLE X. NEGATIVE COVENANTS........................................................................97
10.1. Intentionally Omitted...............................................................97
10.2. Liens...............................................................................97
10.3. Intentionally Omitted...............................................................97
10.4. Conduct of Business.................................................................98
10.5. Transactions with Partners and Affiliates...........................................98
10.6. Restriction on Fundamental Changes..................................................98
10.7. Margin Regulations; Securities Laws.................................................98
10.8. ERISA...............................................................................99
10.9. Organizational Documents............................................................99
10.10. Fiscal Year........................................................................100
10.11. Financial Covenants................................................................100
10.12. Negative Covenants with respect to the Company.....................................101
ii
10.13. Covenants with respect to Metropolitan.............................................102
ARTICLE XI. EVENTS OF DEFAULT; RIGHTS AND REMEDIES...................................................103
11.1. Events of Default...................................................................103
11.2. Rights and Remedies.................................................................106
ARTICLE XII. THE AGENTS..............................................................................108
12.1. Appointment.........................................................................108
12.2. Nature of Duties....................................................................109
12.3. Right to Request Instructions.......................................................109
12.4. Reliance............................................................................110
12.5. Indemnification.....................................................................110
12.6. Agents Individually.................................................................110
12.7. Successor Agents....................................................................111
12.8. Relations Among the Lenders.........................................................112
12.9. Standard of Care....................................................................112
ARTICLE XIII. YIELD PROTECTION.......................................................................112
13.1. Taxes...............................................................................112
13.2. Increased Capital...................................................................115
13.3. Changes; Legal Restrictions.........................................................115
13.4. Replacement of Certain Lenders......................................................116
13.5. Mitigation..........................................................................117
ARTICLE XIV. MISCELLANEOUS...........................................................................117
14.1. Assignments and Participations......................................................117
14.2. Expenses............................................................................121
14.3. Indemnity...........................................................................122
14.4. Change in Accounting Principles.....................................................123
14.5. Intentionally Omitted...............................................................123
14.6. Ratable Sharing.....................................................................124
14.7. Amendments and Waivers..............................................................124
14.8. Notices.............................................................................127
14.9. Survival of Warranties and Agreements...............................................127
14.10. Failure or Indulgence Not Waiver; Remedies Cumulative..............................128
14.11. Payments Set Aside.................................................................128
14.12. Severability.......................................................................128
14.13. Headings...........................................................................128
14.14. Governing Law......................................................................128
14.15. Limitation of Liability............................................................128
14.16. Successors and Assigns.............................................................129
14.17. Certain Consents and Waivers of the Borrower.......................................129
14.18. Counterparts; Effectiveness; Inconsistencies.......................................130
iii
14.19. Limitation on Agreements...........................................................131
14.20. Disclaimers........................................................................131
14.21. Entire Agreement...................................................................131
14.22. Confidentiality....................................................................131
14.23. No Bankruptcy Proceedings..........................................................132
14.24. Transitional Arrangements..........................................................132
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Note
Exhibit B-2 Form of Designated Bank Note
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Notice of Conversion /Continuation
Exhibit E List of Closing Documents
Exhibit F Form of Compliance Certificate to Accompany Reports
Exhibit G Sample of Calculations of Financial Covenants
Exhibit H Form of Competitive Bid Quote Request
Exhibit I Form of Invitation for Competitive Bid Quote
Exhibit J Form of Competitive Bid Quote
Exhibit K Form of Designation Agreement
Exhibit L Form of Guaranty
Schedule 1.1.1 Existing Permitted Liens
Schedule 1.1.2 Permitted Securities Options
Schedule 6.1(d) Equity Changes
Schedule 7.1-A Organizational Documents
Schedule 7.1-C Corporate Structure; Outstanding Capital Stock and
Partnership Interests; Partnership Agreement
Schedule 7.1-H Indebtedness for Borrowed Money; Contingent Obligations
Schedule 7.1-I Pending Actions
Schedule 7.1-P Environmental Matters
Schedule 7.1-Q ERISA Matters
Schedule 7.1-R Securities Activities
Schedule 7.1-T Insurance Policies
iv
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of September 7, 2000
(as amended, supplemented or modified from time to time, the "AGREEMENT") is
entered into among RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("RECKSON"), the institutions from time to time a party hereto as
Lenders, whether by execution of this Agreement or an Assignment and
Acceptance, THE CHASE MANHATTAN BANK as Administrative Agent, UBS WARBURG LLC
as Syndication Agent, DEUTSCHE BANK as Documentation Agent, and CHASE
SECURITIES INC. and UBS WARBURG LLC as joint lead arrangers and joint book
managers.
RECITALS
WHEREAS, Reckson, an affiliate of Reckson, Chase, UBS, Deutsche Bank and
certain of the Lenders entered into that certain Credit Agreement dated as of
July 23, 1998, as amended by First Amendment to Credit Agreement dated as of
August 31, 1999 and as amended by Second Amendment to Credit Agreement dated
as of September 27, 1999, (as so amended, the "OLD REVOLVING CREDIT
AGREEMENT");
WHEREAS, Reckson, an affiliate of Reckson, Chase, and certain of the
Lenders entered into that certain Amended and Restated Credit Agreement dated
as of January 12, 1999, as amended by First Amendment to Amended and Restated
Credit Agreement dated as of September 27, 1999 and as amended by Second
Amended and Restated Credit Agreement dated as of December 17, 1999 (as so
amended, the "OLD TERM LOAN AGREEMENT"); and
WHEREAS, Reckson, Chase, UBS, Deutsche Bank and the other parties hereto
wish to amend and restate the Old Revolving Credit Agreement in its entirety
as set forth herein and to terminate the Old Term Loan Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1. CERTAIN DEFINED TERMS. The following terms used in this Agreement
shall have the following meanings, applicable both to the singular and the
plural forms of the terms defined:
"ADJUSTED UNENCUMBERED NOI" means, for the prior calendar quarter, the
sum of (i) NOI from the Consolidated Businesses attributable to Unencumbered
Projects and Unencumbered New York City Assets which are wholly-owned by a
Consolidated Business (including (x) the 919 Third Avenue Property so long as
such property meets the requirements of a New York City Asset and the
Borrower's interest in such Property remains Unencumbered and (y) the 120
Mineola Boulevard Property so long as Tower Mineola L.P.'s and the Borrower's
interest in such property remains Unencumbered); plus (ii) the Borrower's pro
rata share of NOI from Joint Ventures attributable to Unencumbered Projects
and Unencumbered New York City Assets, provided that (a) the Borrower's
beneficial economic interest in such Joint Ventures is 51% or greater and (b)
the sale or financing of any Property owned by such Joint Venture is
substantially controlled by the Borrower, subject to customary provisions set
forth in the organizational documents of such Joint Venture with respect to
financings, sales or rights of first refusal granted to other members of such
Joint Venture; plus (iii) the Borrower's pro rata share of Net Income
attributable to other Unencumbered assets (exclusive of Investment Funds, land
and development, and service company income);
less (iv) the Quarterly Capital Expenditure Reserve Amounts for such period
relating to such Unencumbered assets;
provided, the sum of clauses (ii) and (iii) above shall not exceed twenty
percent (20%) of Adjusted Unencumbered NOI, and clause (iii) shall not exceed
twelve and one-half percent (12.5%) of Adjusted Unencumbered NOI.
"ADMINISTRATIVE AGENT" means Chase, in its capacity as administrative
agent for the Lenders.
"AFFILIATE", as applied to any Person, means any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of the
equity Securities having voting power for the election of directors of such
2
Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting equity
Securities or by contract or otherwise.
"AGENTS" means, collectively, UBSW in its capacity as Syndication Agent,
Chase in its capacity as Administrative Agent, Deutsche Bank in its capacity
as Documentation Agent, each Arranger, and each successor agent appointed
pursuant to the terms of Article XII of this Agreement.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"APPLICABLE LENDING OFFICE" means, with respect to a particular Lender,
(i) its Eurodollar Lending Office in respect of provisions relating to
Eurodollar Rate Loans, (ii) its Domestic Lending Office in respect of
provisions relating to Base Rate Loans, and (iii) its Competitive Bid Lending
Office in respect of provisions relating to Competitive Bid Loans.
"APPLICABLE MARGIN" means, with respect to each Loan, the respective
percentages per annum determined based on the range into which the Borrower's
Credit Rating then falls, in accordance with the following table. Any change
in the Borrower's Credit Rating causing it to move to a different range on the
table shall to the extent set forth below effect an immediate change in the
Applicable Margin. The Borrower shall notify the Administrative Agent in
writing promptly after becoming aware of any change in any of its Credit
Ratings. In order to qualify for an Applicable Margin based upon a Credit
Rating, the Borrower shall maintain Credit Ratings from at least two (2)
Rating Agencies, one of which must be Moody's or S&P so long as such Persons
are in the business of providing debt ratings for the REIT industry; provided
that if the Borrower fails to maintain at least two Credit Ratings, the
Applicable Margin shall be based upon an S&P rating of less than BBB- in the
table below. In the event that the Borrower receives two (2) Credit Ratings
that are not equivalent, the Applicable Margin shall be determined by the
lower of such two (2) Credit Ratings, at least one of which shall be an
Investment Grade Rating. In the event the Borrower receives more than two (2)
Credit Ratings and such Credit Ratings are not equivalent, the Applicable
Margin shall be determined by the lower of the two highest ratings; provided
that each of said two (2) highest ratings shall be Investment Grade Ratings
and at least one of which shall be an Investment Grade Rating from S&P or
Moody's.
Range of Applicable
the Borrower's Applicable Margin for
Credit Rating Margin for Euro Base Rate
(S&P/Moody's Dollar Loans Loans
or other Ratings) (% per annum) (% per annum)
----------------- ------------- -------------
3
A-/A3 or their equivalent or higher 0.75 0
BBB+/Baa1 or their equivalent 0.825 0
BBB/Baa2 or their equivalent 0.90 0
BBB-/Baa3 or their equivalent 1.05 0
Below BBB-/Baa3 or their equivalent 1.25 0
or unrated
The Administrative Agent shall notify the Banks in writing promptly after it
obtains knowledge of any change in the Borrower's Credit Rating which shall
effect a change in the Applicable Margin.
"ARRANGERS" means UBSW and Chase Securities Inc., each appointed pursuant
to the terms of Article XII of this Agreement.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance in
substantially the form of EXHIBIT A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Administrative Agent in
connection with an assignment of a Lender's interest under this Agreement in
accordance with the provisions of Section 14.1.
"AUTHORIZED FINANCIAL OFFICER" means a chief executive officer,
president, chief financial officer, treasurer or other qualified senior
officer acceptable to the Administrative Agent.
"BASE RATE" means, for any period, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(i) the rate of interest announced publicly by Chase in New York,
New York from time to time, as Chase's prime rate; and
(ii) the sum of (A) one-half of one percent (0.50%) per annum plus
(B) the Federal Funds Rate in effect from time to time during such
period.
Any change in the Base Rate shall result in a corresponding change on the
same day in the rate of interest accruing from and after such day on the
unpaid balance of any Base Rate Loan.
"BASE RATE LOAN" means (i) a Committed Loan which bears interest at a
rate determined by reference to the Base Rate and the Applicable Margin as
provided in Section 5.1(a), (ii) an overdue amount which was a Base Rate
4
Loan immediately before it became due or (iii) for purposes of Section 5.2,
any Loan which bears interest at a rate determined by reference to the Base
Rate.
"BENEFIT PLAN" means an employee benefit plan defined in Section 3(3) of
ERISA in respect of which the Borrower or any ERISA Affiliate (i) is, or
within the immediately preceding six (6) years was, an "employer" as defined
in Section 3(5) of ERISA or (ii) has assumed or is otherwise subject to any
liability.
"BORROWER" means Reckson.
"BORROWER NOTES" has the meaning set forth in Section 4.3(a).
"BORROWER PARTNERSHIP AGREEMENT" means the Reckson Partnership Agreement
as such agreement may be amended, restated, modified or supplemented from time
to time with the consent of the Agents or as permitted under Section 10.9.
"BORROWING" means a borrowing consisting of Loans of the same type made,
continued or converted on the same day.
"BUSINESS DAY" means a day, in the applicable local time, which is not a
Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other governmental action to close (i) in New York, New
York and (ii) in the case of Eurodollar Rate Loans, in London, England and
(iii) in the case of Letter of Credit transactions for a particular Lender, in
the place where its office for issuance or administration of the pertinent
Letter of Credit is located.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether payable in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in conformity
with GAAP, are required to be included in or reflected by the Company's, the
Borrower's or any of its Subsidiaries' fixed asset accounts as reflected in
any of their respective balance sheets; provided, however, Capital
Expenditures shall include the sum of all expenditures by the Consolidated
Businesses and the portion of expenditures of Joint Ventures allocable to the
Consolidated Businesses for tenant improvements, leasing commissions, property
level capital expenditures (e.g., roof replacement, parking lot repairs, etc.,
but not capital expenditures in connection with expansions).
"CAPITAL EXPENDITURE RESERVE AMOUNTS" means the greater of (i) the sum of
(a) an amount per annum equal to $0.72 multiplied by the number of square feet
for office properties (other than New York City Assets) owned, directly or
indirectly by any of the Consolidated Businesses or Joint
5
Ventures; (b) an amount per annum equal to $0.28 multiplied by the number of
square feet for industrial properties owned, directly or indirectly by any of
the Consolidated Businesses or Joint Ventures; and (c) an amount per annum
equal to $0.90 multiplied by the number of square feet for New York City
Assets and (ii) as of the first day of each calendar quarter, an amount equal
to the actual Capital Expenditures for the immediately preceding consecutive
two (2) calendar quarters multiplied by two (2).
"CAPITAL LEASE" means any lease of any property (whether real, personal
or mixed) by a Person as lessee which, in conformity with GAAP, is accounted
for as a capital lease on the balance sheet of that Person.
"CAPITAL STOCK" means, with respect to any Person, any capital stock of
such Person, regardless of class or designation, and all warrants, options,
purchase rights, conversion or exchange rights, voting rights, calls or claims
of any character with respect thereto.
"CASH AND CASH EQUIVALENTS" means unrestricted (i) cash, (ii) marketable
direct obligations issued or unconditionally guaranteed by the United States
government and backed by the full faith and credit of the United States
government; and (iii) domestic and Eurodollar certificates of deposit and time
deposits, bankers' acceptances and floating rate certificates of deposit
issued by any commercial bank organized under the laws of the United States,
any state thereof, the District of Columbia, any foreign bank, or its branches
or agencies (fully protected against currency fluctuations), which, at the
time of acquisition, are rated A-1 (or better) by S&P or P-1 (or better) by
Moody's provided that the maturities of such Cash and Cash Equivalents shall
not exceed one year.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C.ss.ss.9601 et seq., -- --- any amendments
thereto, any successor statutes, and any regulations or guidance promulgated
thereunder.
"CHASE" means The Chase Manhattan Bank.
"CLAIM" means any claim or demand, by any Person, of whatsoever kind or
nature for any alleged Liabilities and Costs, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"CLOSING DATE" means September 7, 2000.
"COMBINED EQUITY VALUE" means Total Value, less Total Outstanding
Indebtedness.
6
"COMMERCIAL LETTER OF CREDIT" means any documentary letter of credit
issued by an Issuing Bank pursuant to Section 3.1 for the account of the
Borrower which is drawable upon presentation of documents evidencing the sale
or shipment of goods purchased by the Borrower in the ordinary course of its
business.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"COMMITTED LOAN" means a loan made by a Lender pursuant to Section 2.1;
provided, that if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Conversion/Continuation, the term
"Committed Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.
"COMPANY" means Reckson Associates Realty Corp., a Maryland corporation.
"COMPETITIVE BID LENDER" means, as to each Competitive Bid Loan, the
Lender funding such Competitive Bid Loan.
"COMPETITIVE BID LENDING OFFICE" means, as to each Lender, its Domestic
Lending Office or such other office, branch or affiliate of such Lender as it
may hereafter designate as its Competitive Bid Lending Office by notice to the
Borrower and the Agent.
"COMPETITIVE BID LOAN" means a loan made or to be made by a Lender
pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Section 5.2).
"COMPETITIVE BID MARGIN" has the meaning set forth in Section
2.2(d)(ii)(C).
"COMPETITIVE BID QUOTE" means an offer by a Lender to make a Competitive
Bid Loan in accordance with Section 2.2(d).
"COMPETITIVE BID QUOTE REQUEST" has the meaning set forth in Section
2.2(a).
"COMPLIANCE CERTIFICATE" has the meaning set forth in Section 8.2(b).
"CONSOLIDATED" means consolidated, in accordance with GAAP.
7
"CONSOLIDATED BUSINESSES" means the Company, the Borrower, Reckson FS
Limited Partnership, Metropolitan, MOP and their wholly-owned Subsidiaries.
"CONSTRUCTION ASSET COST" means, with respect to Property on which
construction of Improvements (other than TI Work, but including
redevelopments) has commenced (such commencement evidenced by foundation
excavation) and is proceeding to completion in the ordinary course but has not
yet been completed (as such completion shall be evidenced by a temporary or
permanent certificate of occupancy permitting use of such Property by the
general public), the aggregate sums incurred and paid on the construction of
such Improvements (including land acquisition costs and other soft costs and
TI Work relating to such Property, in accordance with GAAP). Any such Property
shall continue to be valued (for financial covenant compliance purposes) at
its Construction Asset Cost until the earlier of (a) the end of four (4)
consecutive quarters following such completion and (b) the date on which such
Property achieves an occupancy rate of at least 85%.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, radioactive materials, asbestos containing materials (in
any form or condition), polychlorinated biphenyls (PCBs), or any constituent
of any such substance or waste, and includes, but is not limited to, these
terms as defined in federal, state or local laws or regulations.
"CONTINGENT OBLIGATION" as to any Person means, without duplication, (i)
any contingent obligation of such Person required to be shown on such Person's
balance sheet in accordance with GAAP, and (ii) any obligation required to be
disclosed in the footnotes to such Person's financial statements in accordance
with GAAP, guaranteeing partially or in whole any non-recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion) which have
not yet been called on or quantified, of such Person or of any other Person.
Notwithstanding the foregoing, any litigation required to be disclosed in the
footnotes to such Person's financial statements in accordance with GAAP shall
not be included as a "Contingent Obligation" unless the same shall have been
reserved for in accordance with GAAP. The amount of any Contingent Obligation
described in clause (ii) shall be deemed to be (a) with respect to a guaranty
of interest or interest and principal, or operating income guaranty, the sum
of all payments required to be made thereunder (which in the case of an
operating income
8
guaranty shall be deemed to be equal to the debt service for the note secured
thereby), calculated at the interest rate applicable to such Indebtedness,
through (i) in the case of an interest or interest and principal guaranty, the
stated date of maturity of the obligation (and commencing on the date interest
could first be payable thereunder), or (ii) in the case of an operating income
guaranty, the date through which such guaranty will remain in effect, and (b)
with respect to all guarantees not covered by the preceding clause (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guaranty is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as recorded on the balance sheet and
on the footnotes to the most recent financial statements of the Borrower
required to be delivered pursuant hereto; provided that in no event shall the
amount of Contingent Obligations with respect to any guaranties relating to a
loan exceed the principal amount of such loan. Notwithstanding anything
contained herein to the contrary, guarantees of completion shall not be deemed
to be Contingent Obligations unless and until a claim for payment has been
made thereunder, at which time any such guaranty of completion shall be deemed
to be a Contingent Obligation in an amount equal to any such claim. Subject to
the preceding sentence, (i) in the case of a joint and several guaranty given
by such Person and another Person (but only to the extent such guaranty is
recourse, directly or indirectly to the Borrower), the amount of the guaranty
shall be deemed to be 100% thereof unless and only to the extent that (X) such
other Person has delivered Cash or Cash Equivalents to secure all or any part
of such Person's guaranteed obligations or (Y) such other Person holds an
Investment Grade Rating from either Moody's or S&P, and (ii) in the case of a
guaranty (whether or not joint and several) of an obligation otherwise
constituting Debt of such Person, the amount of such guaranty shall be deemed
to be only that amount in excess of the amount of the obligation constituting
Indebtedness of such Person. Notwithstanding anything contained herein to the
contrary, "Contingent Obligations" shall not be deemed to include guarantees
of loan commitments or of construction loans to the extent the same have not
been drawn.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument to which that Person is a party or by which it or any
of its properties is bound, or to which it or any of its properties is
subject.
"CREDIT RATING" means the ratings assigned by not less than two of the
Rating Agencies (at least one of which shall be S&P or Moody's) to the
9
Borrower's senior long-term unsecured indebtedness. The decision on which two
Rating Agencies to use shall be made by the Borrower so long as one of such
Rating Agencies shall be Moody's or S&P.
"CURE LOANS" has the meaning set forth in Section 4.2(b)(v)(C).
"CUSTOMARY PERMITTED LIENS" means
(i) Liens (other than Environmental Liens and Liens in favor of the
PBGC) with respect to the payment of taxes, assessments or governmental
charges or levies in all cases which are not yet due or which are being
contested in good faith by appropriate proceedings in accordance with
Section 9.4, and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(ii) statutory and common law Liens of landlords against any Property
of the Borrower or any of its Subsidiaries;
(iii) Liens against any Property of the Borrower or any of its
Subsidiaries in favor of suppliers, mechanics, carriers, materialmen,
warehousemen or workmen and other Liens against any Property of the
Borrower or any of its Subsidiaries imposed by law created in the
ordinary course of business for amounts which could not reasonably be
expected to result in a Material Adverse Effect;
(iv) Liens (other than any Lien in favor of the PBGC) incurred or
deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety,
appeal and performance bonds; provided that (A) all such Liens do not in
the aggregate materially detract from the value of the Borrower's or such
Subsidiary's assets or Property or materially impair the use thereof in
the operation of their respective businesses, and (B) all Liens of
attachment or judgment and Liens securing bonds to stay judgments or in
connection with appeals which do not secure at any time an aggregate
amount of recourse Indebtedness exceeding $10,000,000;
(v) Liens against any Property of the Borrower or any Subsidiary of
the Borrower arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the
use of Real Property which do not materially
10
interfere with the ordinary conduct of the business of the Borrower or any
of its Subsidiaries;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower and its
Subsidiaries taken as a whole;
(vii) Liens placed upon equipment or machinery used in the ordinary
course of business of the Borrower or any of its Subsidiaries at the time
of acquisition thereof by the Borrower or any such Subsidiary or within
180 days thereafter to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof, provided that the Lien encumbering
the equipment or machinery so acquired does not encumber any other asset
of the Borrower or such Subsidiary;
(viii) customary restrictions imposed by licensors of software or
trademarks on users thereof;
(ix) interests of licensees and sublicensees in any trademarks or
other intellectual property license or sublicense by the Borrower or any of
its Subsidiaries; and
(x) Environmental Liens less than $5,000,000, which are being
contested in good faith by appropriate proceedings.
"DESIGNATED BANK" means a special purpose corporation that (i) shall have
become a party to this Agreement pursuant to Section 14.1(f), and (ii) is not
otherwise a Lender.
"DESIGNATED BANK NOTES" means promissory notes of the Borrower,
substantially in the form of EXHIBIT B-2 hereto, evidencing the obligation of
the Borrower to repay Competitive Bid Loans made by Designated Banks, as the
same may be amended, supplemented, modified or restated from time to time, and
"Designated Bank Note" means any one of such promissory notes issued under
Section 14.1(f) hereof.
"DESIGNATED LENDER" has the meaning set forth in Section 13.4.
"DESIGNATING LENDER" shall have the meaning set forth in Section 14.1(f)
hereof.
"DESIGNATION AGREEMENT" means a designation agreement in substantially
the form of EXHIBIT K attached hereto, entered into by a Lender and a
Designated Bank and accepted by the Agent.
11
"DOCUMENTATION AGENT" means Deutsche Bank, in its capacity as
documentation agent for the Lenders.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOLLARS" and "$" mean the lawful money of the United States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrower and the Administrative Agent.
"DUFF & PHELPS" means Duff & Phelps Credit Rating Co. or any successor
thereto.
"ELIGIBLE ASSIGNEE" means (i) a Lender or any Affiliate thereof; (ii) a
commercial bank having total assets in excess of $5,000,000,000; (iii) the
central bank of any country which is a member of the organization for Economic
Cooperation and Development having total assets in excess of $10,000,000,000;
or (iv) a finance company or other financial institution reasonably acceptable
to the Administrative Agent, which is regularly engaged in making, purchasing
or investing in loans and having total assets in excess of $1,000,000,000 or
is otherwise reasonably acceptable to the Administrative Agent.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to any federal, state or local
law, ordinance, rule, regulation, Permit, license or other binding
determination of any Governmental Authority relating to, imposing liability or
standards concerning, or otherwise addressing the environment, health and/or
safety, including, but not limited to the Clean Air Act, the Clean Water Act,
CERCLA, RCRA, any so-called "Superfund" or "Superlien" law, the Toxic
Substances Control Act and OSHA, and public health codes, each as from time to
time in effect.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental Authority
for any (i) liabilities under any Environmental, Health or Safety Requirement
of Law, or (ii) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant
into the environment.
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"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable Requirement of
Law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the transfer, sale, lease or closure of any Property
or deed or title for any Property for environmental reasons, including, but
not limited to, any so-called "Environmental Cleanup Responsibility Act" or
"Responsible Property Transfer Act".
"EQUIPMENT" means equipment used in connection with the maintenance of
Projects and Properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C.ss.ss.1000 et seq., any amendments thereto, any -- --- successor
statutes, and any regulations or guidance promulgated thereunder.
"ERISA AFFILIATE" means (i) any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414 (b) of the
Internal Revenue Code) as the Borrower; (ii) a partnership or other trade or
business (whether or not incorporated) which is under common control (within
the meaning of Section 414 (c) of the Internal Revenue Code) with the
Borrower; and (iii) a member of the same affiliated service group (within the
meaning of Section 414 (m) of the Internal Revenue Code) as the Borrower, any
corporation described in clause (i) above or any partnership or trade or
business described in clause (ii) above.
"ERISA TERMINATION EVENT" means (i) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower or
any ERISA Affiliate from a Benefit Plan during a plan year in which the
Borrower or such ERISA Affiliate was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or the cessation of operations which results in
the termination of employment of 20% of Benefit Plan participants who are
employees of the Borrower or any ERISA Affiliate; (iii) the imposition of an
obligation on the Borrower or any ERISA Affiliate under Section 4041 of ERISA
to provide affected parties written notice of intent to terminate a Benefit
Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit Plan; (v) any
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Benefit Plan; or (vi) the partial or complete withdrawal of the Borrower or
any ERISA Affiliate from a Multiemployer Plan.
"EURODOLLAR AFFILIATE" means, with respect to each Lender, the Affiliate
of such Lender (if any) set forth below such Lender's name under the heading
"Eurodollar Affiliate" on the signature pages hereof or on the Assignment and
Acceptance by which it became a Lender or such Affiliate of a
13
Lender as it may from time to time specify by written notice to the Borrower
and the Administrative Agent.
"EURODOLLAR INTEREST PERIOD" has the meaning set forth in Section 5.2(b).
"EURODOLLAR INTEREST RATE DETERMINATION DATE" has the meaning set forth
in Section 5.2(c).
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, such
Lender's office (if any) specified as the "Eurodollar Lending Office" under
its name on the signature pages hereof or on the Assignment and Acceptance by
which it became a Lender or such other office or offices of such Lender as it
may from time to time specify by written notice to the Borrower and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Eurodollar Interest Period with respect
to any Eurodollar Rate Loan or a Competitive Bid Loan, an interest rate per
annum equal to the rate per annum obtained by multiplying (a) a rate per annum
equal to the rate for Dollar deposits with maturities comparable to such
Eurodollar Interest Period which appears on Telerate Page 3750 as of 11:00
a.m., London time, two (2) Business Days prior to the commencement of such
Eurodollar Interest Period, provided, however, that if such rate does not
appear on Telerate Page 3750, the "Eurodollar Rate" applicable to a particular
Eurodollar Interest Period shall mean a rate per annum equal to the rate at
which Dollar deposits in an amount approximately equal to the principal
balance (or the portion thereof which will bear interest at a rate determined
by reference to the Eurodollar Rate during the Eurodollar Interest Period to
which such Eurodollar Rate is applicable in accordance with the provisions
hereof), and with maturities comparable to the last day of the Eurodollar
Interest Period with respect to which such Eurodollar Rate is applicable, are
offered in immediately available funds in the London Interbank Market to the
London office of Chase by leading banks in the Eurodollar market at 11:00
a.m., London time, two (2) Business Days prior to the commencement of the
Eurodollar Interest Period to which such Eurodollar Rate is applicable, by (b)
a fraction (expressed as a decimal) the numerator of which shall be the number
one and the denominator of which shall be the number one minus the Eurodollar
Reserve Percentage for each day during such Eurodollar Interest Period.
"EURODOLLAR RATE LOAN" means (i) a Committed Loan which bears interest at
a rate determined by reference to the Eurodollar Rate and the Applicable
Margin for Eurodollar Rate Loans, as provided in Section 5.1(a) or (ii) an
overdue amount which was a Eurodollar Rate Loan immediately before
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it became due or (iii) for purpose of Section 5.2, any Loan which bears
interest at a rate determined by reference to the Eurodollar Rate.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, that percentage which
is in effect on such day, as prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York, New York with deposits
exceeding five billion Dollars in respect of "Eurocurrency Liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Loans is determined or
any category of extensions of credit or other assets which includes loans by a
non United States office of any bank to United States residents).
"EVENT OF DEFAULT" means any of the occurrences set forth in Section 11.1
after the expiration of any applicable grace period and the giving of any
applicable notice, in each case as expressly provided in Section 11.1.
"EXISTING PERMITTED LIENS" means each of the Liens set forth on SCHEDULE
1.1.1 hereto.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day in New York, New York, for the next
preceding Business Day) in New York, New York by the Federal Reserve Bank of
New York, or if such rate is not so published for any day which is a Business
Day in New York, New York, the average of the quotations for such day on such
transactions by the Reference Bank, as determined by the Administrative Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeeding to its functions.
"FFO" means "funds from operations" as defined in accordance with
resolutions adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts as in effect from time to time.
"FINANCIAL STATEMENTS" means (i) quarterly and annual consolidated
statements of income and retained earnings, statements of cash flow, and
balance sheets, prepared in accordance with GAAP, consistently applied, and
(ii) such other financial statements of the Borrower, the Company and the
15
other Consolidated Businesses or Joint Ventures that the Company shall
routinely and regularly prepare and that the Arrangers or the Requisite
Lenders may from time to time reasonably request.
"FISCAL YEAR" means the fiscal year of the Company and the Borrower for
accounting and tax purposes, which shall be the 12-month period ending on
December 31 of each calendar year.
"FITCH" means Fitch IBCA, Inc. or any successor thereto.
"FIXED CHARGES" means, with respect to any fiscal period, the sum of (a)
Total Interest Expense, (b) the aggregate of all scheduled principal payments
on Total Outstanding Indebtedness according to GAAP made or required to be
made during such fiscal period for the Consolidated Businesses and Joint
Ventures (but excluding balloon payments of principal due upon the stated
maturity of an Indebtedness), and (c) the aggregate of all dividends or
distributions payable (whether paid or accrued) on all preferred stock and
other preferred securities or preferential arrangements of the Consolidated
Businesses, including, without limitation, preferred distributions payable to
holders of preferred OP Units. As used herein, "OP Units" means limited
partnership interests in Reckson.
"FUNDING DATE" means, with respect to any Loan, the date of funding of
such Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the American Institute of Certified Public
Accountants' Accounting Principles Board and Financial Accounting Standards
Board or in such other statements by such other entity as may be in general
use by significant segments of the accounting profession as in effect on the
Closing Date (unless otherwise specified herein as in effect on another date
or dates).
"GENERAL PARTNER" means the Company and any successor general partner(s)
of the Borrower.
"GOVERNMENTAL APPROVAL" means all right, title and interest in any
existing or future certificates, licenses, permits, variances, authorizations
and approvals issued by any Governmental Authority having jurisdiction with
respect to any Project.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"GUARANTIES" means, collectively, the Unconditional Guaranties of
Payment, made by each of the Company, Reckson FS Limited Partnership and the
other Guarantors for the benefit of the Lenders, in substantially the form of
EXHIBIT L hereto.
"GUARANTORS" means, collectively, the Company, Reckson FS Limited
Partnership, Reckson 120 White Plains Road LLC, Reckson Short Hills LLC,
Reckson/Stamford Towers LLC, 360 Hamilton Plaza LLC, and any other Affiliate
of the Borrower executing a Guaranty. Any Guarantor that is the owner or
ground lessor of an Unencumbered Project shall be a wholly-owned Subsidiary of
the Borrower.
"IMPROVEMENTS" means all buildings, fixtures, structures, parking areas,
landscaping and all other improvements whether existing now or hereafter
constructed, together with all machinery and mechanical, electrical, HVAC and
plumbing systems presently located thereon and used in the operation thereof,
excluding (a) any such items owned by utility service providers, (b) any such
items owned by tenants or other third-parties unaffiliated with the Borrower
and (c) any items of personal property.
"INDEBTEDNESS", as applied to any Person, means, at any time, without
duplication, (a) all indebtedness, obligations or other liabilities of such
Person (whether consolidated or representing the proportionate interest in any
other Person) (i) for borrowed money (including construction loans) or
evidenced by debt securities, debentures, acceptances, notes or other similar
instruments, and any accrued interest and fees relating thereto, (ii) under
profit payment agreements or in respect of obligations to redeem, repurchase
or exchange any Securities of such Person or to pay dividends in respect of
any preferred stock (but only to the extent that such Person shall be
contractually obligated to pay the same), (iii) with respect to letters of
credit issued for such Person's account or for which such Person otherwise has
reimbursement obligations, (iv) to pay the deferred purchase price of property
or services, except accounts payable and accrued expenses arising in the
ordinary course of business, (v) in respect of Capital Leases, (vi) which are
Contingent Obligations or (vii) under indemnities but only at such time as a
claim shall have been made thereunder; (b) all indebtedness, obligations or
other liabilities of such Person or others secured by a Lien on any property
of such Person, whether or not such indebtedness, obligations or liabilities
are assumed by such Person, all as of such time; (c) all indebtedness,
obligations or other liabilities of such Person in respect of interest rate
contracts and foreign exchange contracts, net of liabilities owed to such
Person by the counterparties thereon; (d) all preferred stock and preferred
equity interests subject (upon the occurrence of any contingency or otherwise)
to mandatory redemption in cash by the holder of such preferred stock or
equity interest; (e) all preferred stock and preferred
17
equity interests in any Consolidated Business (other than the Company and the
Borrower) which has not provided a Guaranty of the Obligations (excluding the
Metropolitan Preferred Equity); and (f) all Contractual Obligations with
respect to any of the foregoing.
"INDEMNIFIED MATTERS" has the meaning set forth in Section 14.3.
"INDEMNITEES" has the meaning set forth in Section 14.3.
"INITIAL FUNDING DATE" means the date on or after the Closing Date on
which all of the conditions described in Section 6.1 have been satisfied (or
waived) in a manner satisfactory to the Administrative Agent and the Lenders
and on which the initial Loans under this Agreement are made by the Lenders to
the Borrower.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (ii) any purchase by that Person of
all or substantially all of the assets of a business conducted by another
Person, (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any
other Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business, and
(iv) any purchase or other acquisition by that Person of Real Property,
whether directly or indirectly. The amount of any Investment shall be the
original cost of such Investment (together with all capital improvement costs
thereafter paid with respect to such Investment), without any adjustments for
increases or decreases in value or write-ups, write-downs or write-offs with
respect to such Investment.
"INVESTMENT FUNDS" means (i) Reckson Strategic Venture Partners LLC, and
(ii) a Person in which FrontLine Capital Group or a Subsidiary thereof is a
general partner or a managing member, in the case of a partnership or limited
liability company, and which, in the case of a corporation, has the right to
elect a majority of the board of directors.
"INVESTMENT GRADE RATING" means a rating for a Person's senior long-term
unsecured debt of BBB- or better from S&P, and a rating of Baa3
18
or better from Moody's or a rating equivalent to the foregoing from Duff &
Phelps/Fitch or another Rating Agency.
"INVITATION FOR COMPETITIVE BID QUOTES" means an Invitation for
Competitive Bid Quotes substantially in the form of EXHIBIT I hereto.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUING BANK" means Chase, or with the consent of the Arrangers and the
Borrower, another Lender.
"JOINT VENTURES" means any interests in partnerships, joint ventures,
limited liability companies, trusts, associations and corporations held or
owned directly or indirectly by the Borrower and/or the Company which are not
wholly-owned by the Borrower and/or the Company, but excluding in any event
Metropolitan, MOP and the wholly-owned Subsidiaries of MOP (for so long as the
Company and its Subsidiaries directly or indirectly own all of the common
equity interests in Metropolitan).
"JOINT VENTURE UNENCUMBERED VALUE" means the portion of Total
Unencumbered Value from Joint Ventures attributable to Unencumbered Projects
and Unencumbered New York City Assets.
"KNOWLEDGE" with reference to the Company, the Borrower or any Subsidiary
of any of them, means the actual knowledge of such Person after reasonable
inquiry (which reasonable inquiry shall include, without limitation,
interviewing and questioning such other Persons as the Company, the Borrower
or such Subsidiary, as applicable, deems reasonably necessary).
"LEASE" means a lease, license, concession agreement or other agreement
providing for the use or occupancy of any portion of any Project, including
all amendments, supplements, modifications and assignments thereof and all
side letters or side agreements relating thereto.
"LENDER" means (i) each financial institution a signatory hereto as a
Lender as of the Closing Date and, at any other given time, each financial
institution which is a party hereto as Lender, whether as a signatory hereto
or pursuant to an Assignment and Acceptance, and (ii) each Designated Bank;
provided, however, that the term "Lender" shall exclude each Designated Bank
when used in reference to a Committed Loan, the Revolving Credit Commitments
or terms relating to the Committed Loans and the Revolving Credit Commitments
and shall further exclude each Designated Bank for all other purposes
hereunder except that any Designated Bank which funds a Competitive Bid Loan
shall, subject to Section 14.1(f), have the
19
rights (including, without limitation, the rights given to a Lender contained
in Section 14.2 and otherwise in Article XIV) and obligations of a Lender
associated with holding such Competitive Bid Loan.
"LETTER OF CREDIT" means any Commercial Letter of Credit or Standby
Letter of Credit.
"LETTER OF CREDIT FEE" has the meaning set forth in Section 5.3(a).
"LETTER OF CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) all outstanding Reimbursement Obligations, and (ii) the aggregate undrawn
face amount of all outstanding Letters of Credit, and (iii) the aggregate face
amount of all Letters of Credit requested by the Borrower but not yet issued.
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together)
as an Issuing Bank may employ in the ordinary course of business for its own
account, with such modifications thereto as may be agreed upon by such Issuing
Bank and the Borrower and as are not materially adverse (in the judgment of
such Issuing Bank and the Administrative Agent) to the interests of the
Lenders; provided, however, in the event of any conflict between the terms of
any Letter of Credit Reimbursement Agreement and this Agreement, the terms of
this Agreement shall control.
"LIABILITIES AND COSTS" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful
or wanton injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation, feasibility
or Remedial Action studies), fines, penalties and monetary sanctions,
interest, direct or indirect, known or unknown, absolute or contingent, past,
present or future.
"LIBOR AUCTION" means a solicitation of Competitive Bid Quotes setting
forth Competitive Bid Margins based on the Eurodollar Rate pursuant to Section
2.2.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security
interest, encumbrance, lien (statutory or other and including, without
limitation, any Environmental Lien), preference, priority or other security
20
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or imposed by
law, and includes the interest of a lessor under a Capital Lease or under any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor pursuant to ss. 9-408 of
the Uniform Commercial Code); naming the owner of such property as debtor,
under the Uniform Commercial Code or other comparable law of any jurisdiction.
"LIMITED PARTNERS" means those Persons who from time to time are limited
partners of the Borrower; and "LIMITED PARTNER" means each of the Limited
Partners, individually.
"LOAN ACCOUNT" has the meaning set forth in Section 4.3(b).
"LOAN DOCUMENTS" means this Agreement, the Notes and the Guaranties.
"LOANS" means Committed Loans and Competitive Bid Loans.
"MANAGEMENT COMPANY" means, collectively (i) Reckson Management Group,
Inc., a Delaware corporation, RANY Management Group, Inc. and their respective
wholly-owned or controlled Subsidiaries and (ii) such other property
management companies controlled (directly or indirectly) by the Company or the
Borrower and which property management companies manage properties owned by
the Company, the Borrower and its Subsidiaries and for which the Borrower has
previously provided the Administrative Agent with: (1) notice of such property
management company, (2) evidence reasonably satisfactory to the Administrative
Agent that such property management company is controlled (directly or
indirectly) by the Company or the Borrower, and (3) evidence reasonably
satisfactory to the Administrative Agent that such property management company
manages properties owned, in whole or in part by the Company or the Borrower
or its Subsidiaries.
"MARGIN STOCK" means "margin stock" or "margin security" as such terms
are defined in Regulation U and Regulation X.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
financial condition or assets of the Company, the Borrower and their
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its
material obligations under the Loan Documents, (iii) the ability of the
Guarantors to perform their material obligations under the Guaranties, or
21
(iv) the ability of the Lenders or the Administrative Agent to enforce any of
the Loan Documents.
"MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time, the
Revolving Credit Commitments at such time.
"METROPOLITAN" means Metropolitan Partners, LLC, a Delaware limited
liability company, in which the Borrower currently owns 100% of the common
equity interests.
"METROPOLITAN CONVERSION" means the earlier date on which either (a)
Metropolitan redeems Crescent Real Estate Equities Company's Metropolitan
Preferred Equity or (b) Crescent Real Estate Equities Company converts its
Metropolitan Preferred Equity into (i) common equity interests in Metropolitan
or (ii) shares of common stock in the Company.
"METROPOLITAN PREFERRED EQUITY" means the $85 million preferred equity
interest in Metropolitan owned by Crescent Real Estate Equities Company.
"MOODY'S" means Moody's Investors Service, Inc.
"MOP" means Metropolitan Operating Partnership, L.P., a Delaware limited
partnership, a Subsidiary of Metropolitan.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6)
years was, contributed to by either the Borrower or any ERISA Affiliate or in
respect of which the Borrower or any ERISA Affiliate has assumed any
liability.
"NET CASH PROCEEDS" means all cash when and as received in connection
with the sale or refinancing of any asset, less reasonable costs and expenses,
repayment of secured indebtedness with respect to the applicable asset, and
net of an amount equal to taxable capital gains and real estate transfer taxes
payable in connection with any asset sale.
"NET INCOME" means, with respect to any Person, the net income of such
Person determined in accordance with GAAP.
"NET OFFERING PROCEEDS" means all cash or other assets received by the
Company as a result of the sale of common shares, preferred shares,
partnership interests, limited liability company interests, convertible
securities or other ownership or equity interests in the Company, less
customary costs, expenses and discounts of issuance paid by the Company.
22
"NEW YORK CITY ASSET" means Real Property which is Class A office
property located in the borough of Manhattan, New York, New York and which is
owned by one of the Consolidated Businesses or Joint Ventures. The 919 Third
Avenue Property shall be deemed to be a New York City Asset for the purposes
of this Agreement so long as a Consolidated Business owns fee and ground
leasehold title to such property or continues to hold the Secured Indebtedness
on such property which provides for such Consolidated Business' receipt of
100% of the cash flow from such property, unless a Consolidated Business fails
to obtain fee and ground leasehold title to such property by March 31, 2001,
at which time the 919 Third Avenue Property will be treated as a mortgage note
receivable for purposes of Section 10.11 of this Agreement and the associated
definitions (provided that it shall not count toward (x) the 10% limitation on
notes, notes receivable and other investments in Real Property set forth in
clause (viii) of the definition of Total Value and (y) the 25% limitation on
items (a)(iv), (vii) and (viii) in the definition of Total Value set forth in
the proviso at the end of such definition).
"919 THIRD AVENUE PROPERTY" means the Real Property and Improvements
located at 919 Third Avenue, New York, New York, upon which a Consolidated
Business holds the Secured Indebtedness as of the Closing Date.
"NOI" means (x) net operating income determined in accordance with GAAP,
before gains or losses from extraordinary items relating to any Real Property,
plus (y) (i) any interest expense relating to such Real Property, (ii)
depreciation and amortization relating to such Real Property, and (iii)
Property Level G&A to the extent included in the calculation of net operating
income, less (z) (i) free rent and accrued rent with respect to tenants that
are more than 90 days in arrears in the payment of rent, and further adjusted
to omit the straight line treatment of rent, so as to account for rent on an
accrual basis, (ii) any interest income relating to such Real Property, and
(iii) the greater of Property Level G&A to the extent included in the
calculation of net operating income and an amount equal to 3% of gross
revenues with respect to such Real Property.
"NON PRO RATA LOAN" has the meaning set forth in Section 4.2(b)(v).
"NOTE" means the Borrower Notes and the Designated Lender Notes; "Notes"
means, collectively, all of such Notes outstanding at any given time.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing or a Notice
of Competitive Bid Borrowing.
"NOTICE OF COMMITTED BORROWING" means a notice substantially in the form
of EXHIBIT C attached hereto and made a part hereof.
23
"NOTICE OF COMPETITIVE BID BORROWING" has the meaning set forth in
Section 2.2(f).
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT D attached hereto and made a part hereof with respect to a
proposed conversion or continuation of a Loan pursuant to Section 5.1(c).
"OBLIGATIONS" means all Loans, advances, debts, liabilities and monetary
obligations owing by the Borrower to the Administrative Agent, the Syndication
Agent, the Documentation Agent, any Lender, or any Person entitled to
indemnification pursuant to Section 14.3 of this Agreement, of any kind or
nature, arising under this Agreement, the Notes or any other Loan Document.
The term includes, without limitation, all interest, charges, reasonable
expenses, fees, reasonable attorneys' fees and disbursements and any other sum
chargeable to the Borrower under this Agreement or any other Loan Document.
"OFFICER'S CERTIFICATE" means, as to a corporation, a certificate
executed on behalf of such corporation by the chairman of its board of
directors (if an officer of such corporation) or its chief executive officer,
president, any of its vice-presidents, its chief financial officer, or its
treasurer and, as to a partnership, a certificate executed on behalf of such
partnership by the chairman of the board of directors (if an officer of such
corporation) or chief executive officer, president, any vice-president, or
treasurer of the general partner of such partnership.
"OLD REVOLVING CREDIT AGREEMENT" has the meaning set forth in the
recitals.
"OLD TERM LOAN AGREEMENT" has the meaning set forth in the recitals.
"120 MINEOLA BOULEVARD PROPERTY" means the Real Property and Improvements
located at 120 Mineola Boulevard, Mineola, New York owned by Tower Mineola
L.P., a wholly-owned Subsidiary of Metropolitan.
"OPERATING ACCOUNT" has the meaning set forth in Section 9.11 hereof.
"OPERATING LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is
not a Capital Lease.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any corporation, limited
liability company, or partnership (i) the
24
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation or limited liability company, (ii) the
partnership agreement executed by the partners in such partnership, (iii) the
by-laws (or the equivalent governing documents) of such corporation, limited
liability company or partnership, and (iv) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such corporation's Capital Stock or such limited liability
company's or partnership's equity or ownership interests.
"OSHA" means the Occupational Safety and Health Act of 1970, 29
U.S.C.ss.ss. 651 et seq., any amendments thereto, any successor statutes and any
regulations or guidance promulgated thereunder.
"OTHER MANAGEMENT COMPANY" means property management companies controlled
(directly or indirectly) by the Company or the Borrower which may manage
properties owned by third parties.
"OTHER UNENCUMBERED VALUE" means the portion of Total Unencumbered Value
which is attributable to Unencumbered assets other than New York City Assets,
Projects, Investment Funds, land and development, and service company income.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"PERMITS" means any permit, consent, approval, authorization license,
variance, or permission required from any Person, including any Governmental
Approvals.
"PERMITTED SECURITIES OPTIONS" means the subscriptions, options,
warrants, rights, convertible Securities and other agreements or commitments
relating to the issuance of the Borrower's Securities or the Company's Capital
Stock identified as such on SCHEDULE 1.1.2.
"PERSON" means any natural person, corporation, limited liability
company, limited partnership, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust,
business trust or other organization, whether or not a legal entity, and any
Governmental Authority.
"PLAN" means a Benefit Plan or a Multiemployer Plan.
"POTENTIAL EVENT OF DEFAULT" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
25
"PREPAYMENT DATE" has the meaning set forth in Section 4.1(d).
"PROJECT" means any office or industrial properties owned, directly or
indirectly, by any of the Consolidated Businesses or Joint Ventures.
"PROPERTY" means any Real Property or personal property, plant, building,
facility, structure, equipment, general intangible, receivable, or other asset
owned or leased by any Consolidated Business or any Joint Venture. The
definition of "Property" shall specifically exclude items of Real Property or
personal property owned or leased by members of the Rechler family.
"PROPERTY LEVEL G&A" means general and administrative expenses allocated
to the Properties.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (i) such Lender's Revolving Credit Commitment (in each
case, as adjusted from time to time in accordance with the provisions of this
Agreement or any Assignment and Acceptance to which such Lender is a party) by
(ii) the aggregate amount of all of the Revolving Credit Commitments. The Pro
Rata Share of each Lender is set forth opposite such Lender's name on
signature pages hereof or the Assignment and Acceptance by which it became a
Lender, and shall be modified from time to time pursuant to this Agreement.
"QUARTERLY CAPITAL EXPENDITURE RESERVE AMOUNTS" means, as of the first
day of any calendar quarter for the immediately preceding quarter, one quarter
of the Capital Expenditure Reserve Amounts.
"RATING AGENCY" means Moody's, S&P, Duff & Phelps/Fitch or another
nationally-recognized rating agency reasonably satisfactory to the
Administrative Agent.
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C.ss.ss.6901 et seq., any amendments thereto, any successor statutes, and
any regulations or guidance promulgated thereunder.
"REAL PROPERTY" means all of the Borrower's and the consolidated
Subsidiaries' present and future right, title and interest (including, without
limitation, any leasehold estate) in (i) any plots, pieces or parcels of land,
(ii) any Improvements of every nature whatsoever (the rights and interests
described in clauses (i) and (ii) above being the "PREMISES"), (iii) all
easements, rights of way, gores of land or any lands occupied by streets,
ways, alleys, passages, sewer rights, water courses, water rights and powers,
and public places adjoining such land, and any other interests in property
26
constituting appurtenances to the Premises, or which hereafter shall in any
way belong, relate or be appurtenant thereto, and (iv) all other rights and
privileges thereunto belonging or appertaining and all extensions, additions,
improvements, betterments, renewals, substitutions and replacements to or of
any of the rights and interests described in clause (iii) above.
"RECKSON" means Reckson Operating Partnership, L.P., a Delaware limited
partnership.
"REFERENCE BANK" means Chase.
"REGISTER" has the meaning set forth in Section 14.1(c).
"REGULATION A" means Regulation A of the Federal Reserve Board as in
effect from time to time.
"REGULATION T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"REGULATION U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"REGULATION X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"REIMBURSEMENT DATE" has the meaning set forth in Section 3.1(d)(i)(A).
"REIMBURSEMENT OBLIGATIONS" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to amounts
drawn under Letters of Credit.
"REIT" means a domestic trust or corporation that qualifies as a real
estate investment trust under the provisions of Sections 856, et seq., of the
Internal Revenue Code.
"RELEASE" means any release, spill, emission, leaking, pumping, pouring,
dumping, injection, deposit, disposal, abandonment, or discarding of barrels,
containers or other receptacles, discharge, emptying, escape, dispersal,
leaching or migration into the indoor or outdoor environment or into or out of
any Property, including the movement of Contaminants through or in the air,
soil, surface water, groundwater or Property.
"REMEDIAL ACTION" means actions required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(ii) prevent the Release or threat of Release or minimize the
27
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"REPORTABLE EVENT" means any of the events described in Section 4043(c)
of ERISA and the regulations promulgated thereunder as in effect from time to
time but not including any such event as to which the thirty (30) day notice
requirement has been waived by applicable PBGC regulations.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject including, without limitation, the Securities Act, the Securities
Exchange Act, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the
Worker Adjustment and Retraining Notification Act, Americans with Disabilities
Act of 1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit and Environmental, Health or
Safety Requirement of Law.
"REQUISITE LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are equal to or greater than sixty-six and two-thirds percent
(66.67%); provided, however, that, in the event any of the Lenders shall have
failed to fund its Pro Rata Share of any Loan requested by the Borrower which
such Lenders are obligated to fund under the terms of this Agreement and any
such failure has not been cured as provided in Section 4.2(b)(v)(B), then for
so long as such failure continues, "Requisite Lenders" means Lenders
(excluding all Lenders whose failure to fund their respective Pro Rata Shares
of such Loans have not been so cured) whose Pro Rata Shares represent
sixty-six and two-thirds percent (66.67%) or more of the aggregate Pro Rata
Shares of such Lenders; provided, further, however, that, in the event that
the Revolving Credit Commitments have been terminated pursuant to the terms of
this Agreement, "Requisite Lenders" means Lenders (without regard to such
Lenders' performance of their respective obligations hereunder) whose
aggregate ratable shares (stated as a percentage) of the aggregate outstanding
principal balance of all Loans are sixty-six and two-thirds percent (66.67%)
or more.
"RESTRICTED PAYMENT" has the meaning set forth in Section 10.11(h).
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Maximum Revolving Credit Amount at such time exceeds the
Revolving Credit Obligations at such time.
28
"REVOLVING CREDIT COMMITMENT" means, with respect to any Lender, the
obligation of such Lender to make Committed Loans and to participate in
Letters of Credit pursuant to the terms and conditions of this Agreement, and
which shall not exceed the principal amount set forth opposite such Lender's
name under the heading "Revolving Credit Commitment" on the signature pages
hereof or the signature page of the Assignment and Acceptance by which it
became a Lender, as modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable Assignment and Acceptance, and
"REVOLVING CREDIT COMMITMENTS" means the aggregate principal amount of the
Revolving Credit Commitments of all the Lenders, the maximum amount of which
shall be $575,000,000 as reduced from time to time pursuant to Section 4.1.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Committed Loans at such time, plus
(ii) the Letter of Credit Obligations at such time, plus (iii) the outstanding
principal amount of the Competitive Bid Loans at such time.
"REVOLVING CREDIT PERIOD" means the period from the Initial Funding Date
to the Business Day next preceding the Revolving Credit Termination Date.
"REVOLVING CREDIT TERMINATION DATE" means the earlier to occur of (i)
September 7, 2003 (or, if not a Business Day, the next preceding Business
Day); and (ii) the date of termination of the Revolving Credit Commitments
pursuant to the terms of this Agreement.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"SECURED INDEBTEDNESS" means any Indebtedness secured by a Lien.
"SECURED LOAN-TO-VALUE RATIO" means, the ratio, expressed as a
percentage, of the aggregate amount of any Secured Indebtedness as of the date
of the determination to the value with respect to the Real Property encumbered
thereby as of such date, which value shall be determined by reference to the
formula set forth in the definition of "Total Value" with respect to each such
Real Property.
"SECURITIES" means any stock, shares, voting trust certificates,
partnership interests, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities", including, without
limitation, any "security" as such term is defined in Section 8-102 of the
Uniform Commercial Code, or any certificates of interest, shares, or
29
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Notes or any other evidence of the
obligations.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"SERVICING EBITDA" means, with respect to the Management Company or any
other service company owned by the Borrower or the Company, as of the first
day of each fiscal quarter for the immediately preceding fiscal quarter, an
amount, determined in accordance with GAAP, equal to (i) total earnings
relating to such companies' operations adjusted to exclude amounts that are
more than 90 days delinquent, less (ii) total operating expenses relating to
such operations, including corporate marketing, general and administrative
expenses.
"SOLVENT", when used with respect to any Person, means that at the time
of determination:
(i) the fair saleable value of its assets is in excess of the total
amount of its liabilities (including, without limitation, contingent
liabilities); and
(ii) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
"STANDBY LETTER OF CREDIT" means any letter of credit issued by an
Issuing Bank pursuant to Section 3.1 for the account of the Borrower, which is
not a Commercial Letter of Credit.
"SUBSIDIARY" of a Person means any corporation, limited liability
company, general or limited partnership, or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority
30
of the board of directors or other persons performing similar functions are at
the time directly or indirectly owned or controlled by such Person, one or
more of the other subsidiaries of such Person or any combination thereof.
"SYNDICATION AGENT" means UBSW, in its capacity as syndication agent for
the Lenders.
"TAXES" has the meaning set forth in Section 13.1(a).
"TELERATE PAGE 3750" means the display designated as "Page 3750" on the
Associated Press-Dow Jones Market Service (or such other page as may replace
Page 3750 on the Associated Press - Dow Jones Market Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest settlement rates for U.S. Dollar deposits). Any Eurodollar Rate
determined on the basis of the rate displayed on Telerate Page 3750 in
accordance with the provisions hereof shall be displayed by the Associated
Press-Dow Jones Telerate Service within one hour of the time when such rate is
first displayed by such service.
"TENANT ALLOWANCE" means a cash allowance paid to a tenant by the
landlord pursuant to a Lease.
"TI WORK" means any construction or other "build out" of tenant leasehold
improvement to the space demised to such tenant under Leases (excluding such
tenant's furniture, fixtures and equipment) performed pursuant to the terms of
such Leases, whether or not such tenant improvement work is performed by or on
behalf of the landlord or as part of a Tenant Allowance.
"TOTAL ADJUSTED EBITDA" means, for any period, (i) net income determined
in accordance with GAAP, plus (ii) depreciation and amortization deducted in
the calculation of such net income, plus (iii) taxes on income deducted in the
calculation of such net income, less (iv) the gains (and plus the losses) from
extraordinary items, asset sales, write-ups, or debt forgiveness included in
the calculation of such net income, less (v) the aggregate Capital Expenditure
Reserve Amounts for such period.
"TOTAL INTEREST EXPENSE" means the sum of (i) interest expense of the
Consolidated Businesses paid during such period and (ii) interest expense of
the Consolidated Businesses accrued and/or capitalized for such period and
(iii) the portion of the interest expense of Joint Ventures allocable to the
Borrower in accordance with GAAP and paid during such period and (iv) the
portion of the interest expense of Joint Ventures allocable to the Borrower in
accordance with GAAP and accrued and/or capitalized for such period, in
31
each case including participating interest expense but excluding extraordinary
interest expense, and net of amortization of deferred costs associated with
new financings or refinancings of existing Indebtedness.
"TOTAL OUTSTANDING INDEBTEDNESS" means, for any period, the sum of (i)
the amount of Indebtedness of the Consolidated Businesses set forth on the
then most recent quarterly financial statements of the Borrower, prepared in
accordance with GAAP, plus any additional Indebtedness incurred by the
Consolidated Businesses since the time of such statements, less any
Indebtedness repaid by the Consolidated Businesses since the time of such
statements, and (ii) the outstanding amount of Joint Venture Indebtedness set
forth on the then most recent quarterly financial statements of the Borrower
or the applicable Joint Venture, prepared in accordance with GAAP and
allocable in accordance with GAAP to any of the Consolidated Businesses, plus
any additional Joint Venture Indebtedness incurred by the Joint Ventures
allocable in accordance with GAAP to any of the Consolidated Businesses since
the time of such statements, less any Indebtedness repaid by the Joint
Ventures allocable in accordance with GAAP to any of the Consolidated
Businesses since the time of such statements, and (iii) the Contingent
Obligations of the Consolidated Businesses and, to the extent allocable to the
Consolidated Businesses in accordance with GAAP, of the Joint Ventures.
"TOTAL RECOURSE SECURED OUTSTANDING INDEBTEDNESS" means Total Secured
Outstanding Indebtedness under the terms of which any of the Consolidated
Businesses guarantees or is directly obligated for any portion of such
Indebtedness or interest payments thereon (other than exceptions to
non-recourse obligations, such as fraud and misappropriation, which are usual
and customary in like transactions involving institutional lenders),
including, without limitation, the portion of such recourse Indebtedness of
Joint Ventures allocable to any of the Consolidated Businesses.
"TOTAL SECURED OUTSTANDING INDEBTEDNESS" means the sum of (i) that
portion of Total Outstanding Indebtedness that is secured by a Lien, plus (ii)
that portion of Total Outstanding Indebtedness attributable to Consolidated
Subsidiaries of the Borrower which is recourse to the Borrower or any of the
Consolidated Subsidiaries (other than exceptions to non-recourse obligations,
such as fraud and misappropriation, which are usual and customary in like
transactions involving institutional lenders), regardless of whether it is
secured by a Lien (it being understood that this definition shall not include
the Loans hereunder).
"TOTAL UNENCUMBERED VALUE" means the portion of Total Value
attributable to Unencumbered assets (including, without limitation, the
32
Unencumbered Projects, but excluding Investment Funds, land and development,
and service company income) owned by the Consolidated Businesses and the Joint
Ventures, subject to the following conditions and limitations: (i) Other
Unencumbered Value shall be included only to the extent it does not exceed
twelve and one-half percent (12.5%) of Total Unencumbered Value; (ii) Joint
Venture Unencumbered Value shall be included to the extent that (A) the
Borrower's beneficial economic interest in such Joint Ventures is fifty-one
percent (51%) or greater and (B) the sale or financing of any Property owned
by such Joint Venture is substantially controlled by the Borrower, subject to
customary provisions set forth in the organizational documents of such Joint
Venture with respect to financings, sales or rights of first refusal granted
to other members of such Joint Venture, and (iii) the sum of Other
Unencumbered Value and Joint Venture Unencumbered Value shall not exceed
twenty percent (20%) of Total Unencumbered Value.
"TOTAL UNSECURED OUTSTANDING INDEBTEDNESS" means that portion of Total
Outstanding Indebtedness that is not secured by a Lien. Without limiting the
foregoing, Total Unsecured Outstanding Indebtedness shall include, without
double counting, (i) all amounts outstanding under this Agreement, (ii) all
Indebtedness of the Consolidated Businesses, including the Borrower's share of
Indebtedness of Joint Ventures, which is not secured by a Lien, (iii) all
outstanding undrawn letters of credit of the Consolidated Business less those
outstanding undrawn letters of credit for the benefit of any tenant,
prospective tenant or lender at any Real Property to secure the Borrower's
leasing obligations relating to tenant improvement work or third party leasing
commissions which have previously been paid, as evidenced by a schedule
provided by the Borrower to the Administrative Agent upon the request of the
Administrative Agent.
"TOTAL VALUE" means (a) the sum of (i) Valuation NOI divided by (A) eight
and three-quarters percent (8.75%) for all New York City Assets, (B) nine and
one-quarter percent (9.25%) for all other office Real Property, and (C) ten
percent (10%) for industrial Real Property; (ii) the Investment in office and
industrial Projects owned by the Consolidated Businesses for less than four
fiscal quarters which have not achieved an occupancy rate of eighty-five
percent (85%) for one fiscal quarter; (iii) unrestricted Cash and Cash
Equivalents; (iv) land cost (at book value) and Construction Asset Cost, which
credit will be limited to twenty percent (20%) (exclusive of build-to-suit
Projects that are seventy-five percent (75%) pre-leased or Projects which are
less than seventy-five percent (75%) pre-leased but have a pro-forma yield of
twelve percent (12%) or more, based upon executed leases and the cost of
acquisition plus the estimated cost to complete the same, which estimated cost
to complete shall be determined in a manner reasonably acceptable to
33
the Administrative Agent and the Syndication Agent) of Total Value; (v) NOI
from all other Real Property not otherwise set forth in this definition,
divided by twelve percent (12%); (vi) Servicing EBITDA of the Management
Company or other such service companies for the immediately preceding two (2)
consecutive quarters multiplied by two (2), divided by twenty percent (20%);
(vii) any investment in or loan to (based on the actual cash investment in or
loan to), directly or indirectly, an affiliated or unaffiliated operating
company and investments in or loans to Investment Funds either directly or
indirectly or joint venture arrangements with Investment Funds, which credit
will be limited to $250,000,000 (valued at the lower of cost or market in
accordance with GAAP); and (viii) mortgage notes, notes receivable and other
investments in Real Property (other than investments described in paragraph
(vii) above) which have current interest payments payable in cash (valued at
the lower of cost or market in accordance with GAAP) and which are not past
due or otherwise in default, which credit will be limited in the aggregate to
ten percent (10%) of Total Value (subject to the exception in the definition
of New York City Asset with respect to the 919 Third Avenue Property, which
provides that the interest in the 919 Third Avenue Property, if then treated
as a mortgage note, will not count against such 10% limitation);
less (b) the sum of (i) the quotient of (x) the Capital Expenditure Reserve
Amounts for such period, divided by (y) (A) eight and three-quarters percent
(8.75%) for all New York City Assets, (B) nine and one-quarter percent (9.25%)
for all other office Property, and (C) ten percent (10%) for industrial
Property and (ii) the amount of the Metropolitan Preferred Equity until the
Metropolitan Conversion; and
provided, the sum of items (a) (iv), (vii) and (viii) above shall not exceed
twenty-five percent (25%) of Total Value (subject to the exception in the
definition of New York City Asset with respect to the 919 Third Avenue
Property, which provides that the interest in the 919 Third Avenue Property,
if then treated as a mortgage note, will not count against such 25%
limitation).
"UBS" means UBS AG, Stamford Branch.
"UBSW" means UBS Warburg LLC.
"UNENCUMBERED CAPITAL EXPENDITURE RESERVE AMOUNTS" means, for any period,
the aggregate of Capital Expenditure Reserve Amounts with respect to Real
Property that is Unencumbered.
"UNENCUMBERED" means, with respect to any asset (other than a Project) as
of any date of determination, that such asset, the equity interests
34
in such asset and the revenues generated by such asset are not subject to any
Liens (excluding Customary Permitted Liens) or preferred equity interests;
provided that so long as the Borrower is in compliance with Section 10.13
hereof, (x) the Borrower's interest in the 919 Third Avenue Property shall be
deemed to be Unencumbered notwithstanding the existence of the Metropolitan
Preferred Equity and Metropolitan's inability to provide a Guaranty so long as
Total Unencumbered Value is reduced by the amount of the Metropolitan
Preferred Equity and (y) the 120 Mineola Boulevard Property shall be deemed to
be Unencumbered notwithstanding Tower Mineola L.P.'s inability to provide a
Guaranty (it being understood that no other assets owned directly or
indirectly by Metropolitan or MOP shall be deemed Unencumbered until the
Metropolitan Conversion).
"UNENCUMBERED PROJECT" means any Project located in the United States
that on any date of determination: (a) is not subject (nor are any equity
interests therein subject) to any Liens (excluding Customary Permitted Liens)
or preferred equity interests, (b) has been improved with Improvements which
(1) have been issued a certificate of occupancy (where available) or is
otherwise lawfully occupied for its intended use, and (2) are fully
operational, including in each case, an Unencumbered Project that is being
renovated and such renovation is proceeding to completion without undue delay
from Permit denial, construction delays or otherwise, (c) has not been the
subject of an event or occurrence that has had a Material Adverse Effect, and
(d) if owned by a wholly-owned Subsidiary of the Borrower, such Subsidiary has
executed and delivered a Guaranty; provided that so long as the Borrower is in
compliance with Section 10.13 hereof, (x) the Borrower's interest in the 919
Third Avenue Property shall be deemed to be Unencumbered notwithstanding the
existence of the Metropolitan Preferred Equity and Metropolitan's inability to
provide a Guaranty so long as Total Unencumbered Value is reduced by the
amount of the Metropolitan Preferred Equity and (y) the 120 Mineola Boulevard
Property shall be deemed to be an Unencumbered Project notwithstanding Tower
Mineola L.P.'s inability to provide a Guaranty (it being understood that no
other assets owned directly or indirectly by Metropolitan or MOP shall be
deemed to be an Unencumbered Project until the Metropolitan Conversion).
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as enacted in
the State of New York, as it may be amended from time to time.
"UNSECURED INTEREST EXPENSE" means the interest expense paid, accrued or
capitalized on the Total Unsecured Outstanding Indebtedness for the applicable
period.
35
"VALUATION NOI" means, the sum of (x) with respect to any office or
industrial Project or any office or industrial Joint Venture (exclusive of
projects under development), which has been owned by the Borrower for not less
than four consecutive quarters, as of the first day of each fiscal quarter, an
amount equal to the product of (i) NOI relating to such Project or the
Borrower's pro rata share of such Joint Venture for the immediately preceding
consecutive two fiscal quarters and (ii) two (2), (y) with respect to any
office or industrial Project or Joint Venture, which has been owned by the
Borrower for less than four consecutive quarters but which has achieved an
occupancy rate of not less than 85% for the immediately preceding quarter
(exclusive of projects under development), as of the first day of each quarter
until such time as such Project or Joint Venture shall qualify under clause
(x) above, an amount equal to the product of (i) the NOI relating to such
Project or the Borrower's pro rata share of such Joint Venture for the
immediately preceding quarter, and (ii) four (4), and (z) until March 31,
2002, the NOI from the 919 Third Avenue Property, calculated on a pro forma
basis for executed leases (i.e., at a rental rate deemed to be at the level of
initial rent), provided that no Potential Event of Default or Event of Default
has occurred and is continuing and that a Consolidated Business continues to
hold the Secured Indebtedness on such property which provides for such
Consolidated Business' receipt of 100% of the cash flow from such property. If
a Consolidated Business fails to obtain the fee and ground leasehold interest
to the 919 Third Avenue property by March 31, 2001, clause (z) above shall no
longer apply and said property will thereafter be treated as a mortgage note
for the purpose of calculating Total Value and the financial covenants
contained in this Agreement until a Consolidated Business obtains fee title,
provided, however, said property will not count toward the ten percent (10%)
limitation on notes, notes receivable and other investments in Real Property
set forth in clause (viii) of the definition of Total Value.
An example of the foregoing calculation is set forth on EXHIBIT G hereto.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"FROM" means "from and including" and the words "TO" and "UNTIL" each mean "to
but excluding". Periods of days referred to in this Agreement shall be counted
in calendar days unless Business Days are expressly prescribed. Any period
determined hereunder by reference to a month or months or year or years shall
end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last
day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month
36
during which such period is to end), such period shall, unless otherwise
expressly required by the other provisions of this Agreement, end on the last
day of the calendar month.
1.3. ACCOUNTING TERMS. Subject to Section 14.4, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.4. OTHER TERMS. All other terms contained in this Agreement shall, unless
the context indicates otherwise, have the meanings assigned to such terms by the
Uniform Commercial Code to the extent the same are defined therein.
1.5. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) The words "include", "includes" and "including" are not limiting.
(f) Reference to a particular "Section" refers to that section of
this Agreement unless otherwise indicated, and reference to a particular
"Exhibit" or "Schedule" refers to that exhibit or schedule to this
Agreement unless otherwise indicated.
ARTICLE II.
AMOUNTS AND TERMS OF LOANS
2.1. COMMITTED LOANS.
(a) Availability. Subject to the terms and conditions set forth in
this Agreement, each Lender hereby severally and not jointly agrees to
make revolving loans, in Dollars (each individually, a "COMMITTED LOAN"
and, collectively, the "COMMITTED LOANS") to the Borrower from time to
time during the Revolving Credit Period, in an amount not to exceed such
Lender's
37
Pro Rata Share of the Revolving Credit Availability at such time. The
aggregate amount of Loans to be made hereunder together with the Letter
of Credit Obligations with respect to the Borrower, shall not exceed Five
Hundred Seventy-Five Million Dollars ($575,000,000). All Committed Loans
comprising the same Borrowing under this Agreement shall be made by the
Lenders simultaneously and proportionately to their then respective Pro
Rata Shares, it being understood that no Lender shall be responsible for
any failure by any other Lender to perform its obligation to make a
Committed Loan hereunder nor shall the Revolving Credit Commitment of any
Lender be increased or decreased as a result of any such failure. Subject
to the provisions of this Agreement, the Borrower may repay any
outstanding Committed Loan on any day which is a Business Day and any
amounts so repaid may be reborrowed, up to the amount available under
this Section 2.1(a) at the time of such Borrowing, until the Business Day
next preceding the Revolving Credit Termination Date. Each requested
Borrowing of Committed Loans funded on any Funding Date shall be in a
principal amount of at least $3,000,000 and with integral multiples of
$500,000; provided, however, that if the aggregate Revolving Credit
Availability outstanding at the time of such requested Borrowing is less
than $3,000,000, then the requested Borrowing shall be for the total
amount of such outstanding aggregate Revolving Credit Availability.
(b) Notice of Borrowing. When the Borrower desires to borrow under
this Section 2.1, the Borrower shall deliver to the Administrative Agent
a Notice of Borrowing, signed by it (x) no later than 12:00 noon (New
York time) on the Business Day immediately preceding the proposed Funding
Date, in the case of a Borrowing of Base Rate Loans and (y) no later than
11:00 a.m. (New York time) at least three (3) Business Days in advance of
the proposed Funding Date, in the case of a Borrowing of Eurodollar Rate
Loans; provided, however, that no more than two (2) Borrowings may be
made within any five (5) Business Day period. Such Notice of Borrowing
shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount of the proposed Borrowing, (iii) the Revolving
Credit Availability as of the date of such Notice of Borrowing, (iv),
whether the proposed Borrowing will be of Base Rate Loans or Eurodollar
Rate Loans, (v) in the case of Eurodollar Rate Loans, the requested
Eurodollar Interest Period, (vi) instructions for the disbursement of the
proceeds of the proposed Borrowing, (vii) an Officer's Certificate of the
Borrower with respect to compliance with (including calculation thereof)
Sections 10.11(a) and 10.11(e), and (viii) that no Potential Event of
Default or Event of Default shall have occurred and be continuing or
would result therefrom. Any Notice of Borrowing (or telephonic notice in
lieu thereof) given pursuant to this Section 2.1(b) shall be irrevocable.
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(c) Making of Loans. (i) Promptly after receipt of a Notice of
Borrowing under Section 2.1(b), the Administrative Agent shall notify
each Lender by facsimile transmission, or other similar form of
transmission, of the proposed Borrowing (which notice to the Lenders, in
the case of a Borrowing of Eurodollar Rate Loans, shall be at least three
(3) Business Days in advance of the proposed Funding Date for such
Loans). Each Lender shall deposit an amount equal to its Pro Rata Share
of the Borrowing requested by the Borrower with the Administrative Agent
at its office in New York, New York, in immediately available funds, not
later than 12:00 noon (New York time) on the respective Funding Date
therefor. Subject to the fulfillment of the conditions precedent set
forth in Section 6.1 or Section 6.2, as applicable, the Administrative
Agent shall make the proceeds of such amounts received by it available to
the Borrower at the Administrative Agent's office in New York, New York
on such Funding Date (or on the date received if later than such Funding
Date) and shall disburse such proceeds in accordance with the Borrower's
disbursement instructions set forth in the applicable Notice of
Borrowing. The failure of any Lender to deposit the amount described
above with the Administrative Agent on the applicable Funding Date shall
not relieve any other Lender of its obligations hereunder to make its
Loan on such Funding Date In the event the conditions precedent set forth
in Section 6.1 or 6.2 are not fulfilled as of the proposed Funding Date
for any Borrowing, the Administrative Agent shall promptly return, by
wire transfer of immediately available funds, the amount deposited by
each Lender to such Lender.
(ii) Unless the Administrative Agent shall have been notified by any
Lender on the Business Day immediately preceding the applicable Funding
Date in respect of any Borrowing that such Lender does not intend to fund
its Loan requested to be made on such Funding Date, the Administrative
Agent may assume that such Lender has funded its Loan and is depositing
the proceeds thereof with the Administrative Agent on the Funding Date
therefor, and the Administrative Agent in its sole discretion may, but
shall not be obligated to, disburse a corresponding amount to the
Borrower on the applicable Funding Date. If the Loan proceeds
corresponding to that amount are advanced to the Borrower by the
Administrative Agent but are not in fact deposited with the
Administrative Agent by such Lender on or prior to the applicable Funding
Date, such Lender agrees to pay, and in addition the Borrower, agrees to
repay, to the Administrative Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such
amount is disbursed to or for the benefit of the Borrower until the date
such amount is paid or repaid to the Administrative Agent, at the average
Federal Funds Rate for such period. If such Lender shall pay to the
Administrative Agent the corresponding amount, the amount so paid shall
constitute such Lender's
39
Loan as of the Funding Date thereof, and if both such Lender and the
Borrower shall pay and repay such corresponding amount, the
Administrative Agent shall promptly pay to the Borrower such
corresponding amount. This Section 2.1(c)(ii) does not relieve any Lender
of its obligation to make its Loan on any applicable Funding Date.
2.2. COMPETITIVE BID LOANS.
(a) The Competitive Bid Option. For so long as the Borrower shall
maintain an Investment Grade Rating from at least two (2) Rating
Agencies, one (1) of which shall be Moody's or S&P, from time to time
during the Revolving Credit Period, the Borrower may, as set forth in
this Section 2.2, request the Lenders during the Revolving Credit Period
to make offers to make Competitive Bid Loans to the Borrower (a
"COMPETITIVE BID QUOTE REQUEST"), such Competitive Bid Loan not to
exceed, at such time (i) together with all Competitive Bid Loans then
outstanding, $287,500,000 (which amount shall be decreased by an amount
equal to 50% of any decrease in the Revolving Credit Commitments pursuant
to Sections 4.1(b) or (d)), or (ii) the Revolving Credit Availability.
Subject to the provisions of this Agreement, the Borrower may repay any
outstanding Competitive Bid Loan on any day which is a Business Day and
any amounts so repaid may be reborrowed, up to the amount available under
this Section 2.2(a) at the time of such Borrowing, until the Business Day
next preceding the Revolving Credit Termination Date. The Lenders may,
but shall have no obligation to, make such offers and the Borrower may,
but shall have no obligation to, accept any such offers in the manner set
forth in this Section 2.2.
(b) Competitive Bid Quote Request. When the Borrower wishes to
request offers to make Competitive Bid Loans under this Section, the
Borrower shall transmit to the Administrative Agent by telex or facsimile
transmission a Competitive Bid Quote Request substantially in the form of
EXHIBIT H hereto so as to be received not later than 10:30 A.M. (New York
City time) on the fourth (4th) Business Day prior to the date of
Borrowing proposed therein (or such other time or date as the Borrower
and the Administrative Agent shall have mutually agreed and shall have
notified to the Lenders not later than the date of the Competitive Bid
Quote Request for the first LIBOR Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Borrowing, which shall be
$20,000,000 or a larger multiple of $1,000,000 (which shall not exceed
the Revolving Credit Availability);
40
(iii) the duration of the Eurodollar Interest Period applicable
thereto, subject to the provisions of Section 5.2(b); and
(iv) the amount of all Competitive Bid Loans then outstanding
(which, together with the requested Borrowing shall not exceed, in the
aggregate, $287,500,000 (which amount shall be decreased by an amount
equal to 50% of any decrease in the Commitments pursuant to Sections
4.1(b) or (d))).
The Borrower may request offers to make Competitive Bid Loans for one, two or
three Eurodollar Interest Periods in a single Competitive Bid Quote Request.
Borrower may not make more than two (2) Competitive Bid Quote Requests in any
thirty-day period.
(c) Invitation for Competitive Bid Quotes. Promptly upon receipt of
a Competitive Bid Quote Request, the Administrative Agent shall send to
the Lenders by telex or facsimile transmission an Invitation for
Competitive Bid Quotes substantially in the form of EXHIBIT I hereto,
which shall constitute an invitation by the Borrower to each Lender to
submit Competitive Bid Quotes offering to make the Competitive Bid Loans
to which such competitive Bid Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Competitive Bid Quotes. (i) Each
Lender may submit a Competitive Bid Quote containing an offer or offers
to make Competitive Bid Loans in response to any Invitation for
Competitive Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this subsection (d) and must be submitted to the
Administrative Agent by telex or facsimile transmission not later than
9:30 A.M. (New York City time) on the third (3rd) Business Day prior to
the proposed date of Borrowing (or such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and
shall have notified the Lenders not later than the date of the
Competitive Bid Quote Request for the first LIBOR Auction for which such
change is to be effective); provided that Competitive Bid Quotes
submitted by the Administrative Agent (or any affiliate of the
Administrative Agent) in the capacity of a Lender may be submitted, and
may only be submitted, if the Administrative Agent or such affiliate
notifies the Borrower of the terms of the offer or offers contained
therein not later than one-quarter (1/4) hour prior to the deadline for
the other Lenders. Any Competitive Bid Quote so made shall be
irrevocable. Competitive Bid Loans to be funded pursuant to a Competitive
Bid Quote may, as provided in Section 14.1(f), be funded by a Lender's
Designated Bank. A Lender making a Competitive Bid Quote may, but shall
not be required to, specify in its Competitive Bid Quote whether the
related
41
Competitive Bid Loans are intended to be funded by such Lender's
Designated Bank, as provided in Section 14.1(f).
(ii) Each Competitive Bid Quote shall be in substantially the
form of EXHIBIT J hereto and shall in any case specify:
(A) the proposed date of Borrowing;
(B) the principal amount of the Competitive Bid Loan for
which each such offer is being made, which principal amount (w)
may be greater than or less than the Revolving Credit
Commitment of the quoting Lender, (x) must be $5,000,000 or a
larger multiple of $1,000,000 (or, if the Revolving Credit
Availability then is less than $5,000,000, such lesser amount),
(y) may not exceed the principal amount of Competitive Bid
Loans for which offers were requested and (z) may be subject to
an aggregate limitation as to the principal amount of
Competitive Bid Loans for which offers being made by such
quoting Lender may be accepted;
(C) the margin above or below the applicable Eurodollar
Rate (the "COMPETITIVE BID MARGIN") offered for each such
Competitive Bid Loan, expressed as a percentage (specified to
the nearest 1/10,000th of 1%) to be added to or subtracted from
such base rate offered for each Competitive Bid Loan; and
(D) the identity of the quoting Lender.
(iii) Any Competitive Bid Quote shall be disregarded if it:
(A) is not substantially in conformity with EXHIBIT J
hereto or does not specify all of the information required by
subsection (d)(ii) above;
(B) except as provided in subsection (d)(ii)(B)(z) above,
proposes terms other than or in addition to those set forth in
the applicable Invitation for Competitive Bid Quotes; or
(C) arrives after the time set forth in subsection (d)(i)
above.
(e) Notice to Borrower. The Administrative Agent shall promptly notify
the Borrower, of the terms (x) of any Competitive Bid Quote submitted by a
Lender that is in accordance with subsection (d) and (y) of any
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Competitive Bid Quote that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote submitted by such Lender with
respect to the same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Administrative Agent
unless such subsequent Competitive Bid Quote is submitted solely to
correct a manifest error in such former Competitive Bid Quote. The
Administrative Agent's notice to the Borrower shall specify (A) the
aggregate principal amount of Competitive Bid Loans for which offers have
been received for each Interest Period specified in the related
Competitive Bid Quote Request, (B) the principal amounts and Competitive
Bid Margins so offered and (C) if applicable, limitations on the
aggregate principal amount of Competitive Bid Loans for which offers in
any single Competitive Bid Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 11:00 A.M.
(New York City time) on the third (3rd) Business Day prior to the
proposed date of Borrowing (or such other time or date as the Borrower
and the Administrative Agent shall have mutually agreed and shall have
notified the Lenders not later than the date of the Competitive Bid Quote
Request for the first LIBOR Auction for which such change is to be
effective), the Borrower shall telephonically notify the Administrative
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e), and the Borrower shall confirm such
telephonic notification in writing not later than the third Business Day
prior to the proposed date of Borrowing. In the case of acceptance, such
notice (a "NOTICE OF COMPETITIVE BID BORROWING"), whether telephonic or
in writing, shall specify the aggregate principal amount of offers for
each Eurodollar Interest Period that are accepted and shall be
accompanied by an Officer's Certificate of the Borrower with respect to
compliance with (including calculation of) Sections 10.11(a) and (e). The
Borrower may accept any Competitive Bid Quote in whole or in part;
provided that:
(i) the aggregate principal amount of each Competitive Bid Loan
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request;
(ii) the principal amount of each Competitive Bid Loan
Borrowing must be $20,000,000 or a larger multiple of $1,000,000
(or, if the Revolving Credit Availability then is less than
$20,000,000, such lesser amount);
(iii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Quotes; and
43
(iv) the Borrower may not accept any offer that is described
in subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by
two or more Lenders with the same Competitive Bid Margins for a
greater aggregate principal amount than the amount in respect of
which such offers are permitted to be accepted for the related
Eurodollar Interest Period, the principal amount of Competitive Bid
Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Lenders as nearly
as possible (in multiples of $1,000,000, as the Administrative Agent
may deem appropriate) in proportion to the aggregate principal
amounts of such offers; provided, that the principal amount of such
Competitive Bid Loans shall be allocated among such Lenders, in
ascending order from those subject to the lowest Competitive Bid
Margin to those subject to the highest Competitive Bid Margin, as
applicable to provide to the Borrower the lowest effective cost
based on offers accepted. Determinations by the Administrative Agent
of the amounts of Competitive Bid Loans shall be conclusive in the
absence of manifest error. The Administrative Agent shall notify the
Borrower of all offers.
(h) Notification by Administrative Agent. Upon receipt of the
Borrower's Notice of Competitive Bid Borrowing in accordance with
Section 2.2(f) hereof, the Administrative Agent shall, on the date
such Notice of Competitive Bid Borrowing is received by the
Administrative Agent, notify each Lender of the principal amount of
the Competitive Bid Loan Borrowing accepted by the Borrower and of
such Lender's share (if any) of such Competitive Bid Loan Borrowing
and such Notice of Competitive Bid Borrowing shall not thereafter be
revocable by the Borrower. A Lender who is notified that it has been
selected to make a Competitive Bid Loan may designate its Designated
Bank (if any) to fund such Competitive Bid Loan on its behalf, as
described in Section 14.1(f). Any Designated Bank which funds a
Competitive Bid Loan shall on and after the time of such funding
become the obligee under such Competitive Bid Loan and be entitled
to receive payment thereof when due. No Lender shall be relieved of
its obligation to fund a Competitive Bid Loan, and no Designated
Bank shall assume such obligation, prior to the time the applicable
Competitive Bid Loan is funded.
2.3. USE OF PROCEEDS OF LOANS AND LETTERS OF CREDIT. The proceeds
of the Loans and the Letters of Credit issued for the account of the
Borrower hereunder may be used for the purposes of:
(a) investments in direct or indirect interests in industrial and
office properties (and notes secured by such properties) located in
44
the United States (and other assets which are incidental to portfolio
acquisitions of predominantly office and industrial properties);
(b) renovation and redevelopment of Properties owned and operated
by the Borrower;
(c) funding of TI Work and Tenant Allowances;
(d) financing expansions, renovations and new construction
related to Properties owned and operated by the Borrower;
(e) refinancing of existing Indebtedness for borrowed money
secured by Projects;
(f) funding, directly or indirectly, of investments in and
loans to Investment Funds, FrontLine Capital Group, Subsidiaries,
Affiliates and Joint Ventures;
(g) working capital needs of the Borrower;
(h) loans to Persons in connection with such Person's
contribution of real property to the Consolidated Businesses or Joint
Ventures; and
(i) payment and satisfaction of the Borrower's obligations under
the Old Term Loan Agreement.
2.4. REVOLVING CREDIT TERMINATION DATE; MATURITY OF COMPETITIVE BID
LOANS. (a) The Revolving Credit Commitments shall terminate, and all
outstanding Revolving Credit Obligations shall be paid in full (or, in the
case of unmatured Letter of Credit Obligations, provision for payment in cash
shall be made to the satisfaction of the Issuing Banks actually issuing
Letters of Credit and the Requisite Lenders), on the Revolving Credit
Termination Date. Each Lender's obligation to make Loans shall terminate on
the Business Day next preceding the Revolving Credit Termination Date.
(b) Each Competitive Bid Loan included in any Competitive Bid Loan
Borrowing shall mature, and the principal amount thereof shall be due and
payable, together with the accrued interest thereon, on the last day of the
Eurodollar Interest Period applicable to such Borrowing.
2.5. MAXIMUM CREDIT FACILITY. Notwithstanding anything in this Agreement to
the contrary, in no event shall the aggregate principal amount of Revolving
Credit Obligations exceed the Maximum Revolving Credit Amount.
45
2.6. AUTHORIZED AGENTS. On the Closing Date and from time to time
thereafter, the Borrower shall deliver to the Administrative Agent an
Officer's Certificate setting forth the names of the employees and agents
authorized to request Loans and Letters of Credit and to request a
conversion/continuation of any Loan and containing a specimen signature of
each such employee or agent. The employees and agents so authorized shall also
be authorized to act for the Borrower in respect of all other matters relating
to the Loan Documents. The Administrative Agent, the Documentation Agent, the
Syndication Agent, the Arrangers, the Lenders and any Issuing Bank shall be
entitled to rely conclusively on such employee's or agent's authority to
request such Loan or Letter of Credit or such conversion/continuation until
the Administrative Agent and the Arrangers receive written notice to the
contrary. None of the Administrative Agent or the Arrangers shall have any
duty to verify the authenticity of the signature appearing on any written
Notice of Borrowing or Notice of Conversion/Continuation or any other
document, and, with respect to an oral request for such a Loan or Letter of
Credit or such conversion/continuation, the Administrative Agent and the
Arrangers shall have no duty to verify the identity of any person representing
himself or herself as one of the employees or agents authorized to make such
request or otherwise to act on behalf of the Borrower. None of the
Administrative Agent, the Arrangers or the Lenders shall incur any liability
to the Borrower or any other Person in acting upon any telephonic or facsimile
notice referred to above which the Administrative Agent or the Arrangers
believe to have been given by a person duly authorized to act on behalf of the
Borrower and the Borrower hereby indemnifies and holds harmless the
Administrative Agent, each Arranger and each Lender from any loss or expense
the Administrative Agent, the Arrangers or the Lenders might incur in acting
in good faith as provided in this Section 2.6; provided, however, that
Borrower shall not indemnify the applicable party for acts resulting from its
own gross negligence or willful misconduct.
ARTICLE III.
LETTERS OF CREDIT
3.1. LETTERS OF CREDIT. Subject to the terms and conditions set forth in
this Agreement, including, without limitation, Section 3.1(c)(ii), each
Issuing Bank hereby severally agrees to issue for the account of the Borrower
one or more Letters of Credit, subject to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any obligation to
issue, amend or extend, and shall not issue, amend or extend, any Letter of
Credit at any time:
46
(i) if the aggregate Letter of Credit Obligations with respect to such
Issuing Bank, after giving effect to the issuance, amendment or extension of
the Letter of Credit requested hereunder, shall exceed any limit imposed by
law or regulation upon such Issuing Bank;
(ii) if, immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (1) the Letter of Credit Obligations at
such time would exceed $100,000,000 or (2) the Revolving Credit Obligations at
such time would exceed the Maximum Revolving Credit Amount at such time, or
(3) one or more of the conditions precedent contained in Sections 6.1 or 6.2,
as applicable, would not on such date be satisfied, unless such conditions are
thereafter satisfied and written notice of such satisfaction is given to such
Issuing Bank by the Administrative Agent (and such Issuing Bank shall not
otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Sections 6.1 or 6.2, as applicable, have
been satisfied);
(iii) which has an expiration date later than the earlier of (A) the date
one (1) year after the date of issuance (without regard to any automatic
renewal provisions thereof) or (B) ten Business Days preceding the scheduled
Revolving Credit Termination Date; or
(iv) which is in a currency other than Dollars.
(b) Conditions. In addition to being subject to the satisfaction of the
conditions precedent contained in Sections 6.1 and 6.2, as applicable, the
obligation of an Issuing Bank to issue, amend or extend any Letter of Credit
is subject to the satisfaction in full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower shall have executed and
delivered to such Issuing Bank and the Administrative Agent a Letter of Credit
Reimbursement Agreement and such other documents and materials as may be
required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be satisfactory to
the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) The Borrower shall give the
Administrative Agent written notice that it requires the issuance a Letter of
Credit not later than 11:00 a.m. (New York time) on the third (3rd) Business
Day preceding the requested date for issuance thereof under this Agreement.
Such notice shall be irrevocable unless and until such request is
47
denied by the Issuing Bank and shall specify (A) that the requested Letter of
Credit is either a Commercial Letter of Credit or a Standby Letter of Credit,
(B) the stated amount of the Letter of Credit requested, (C) the effective
date (which shall be a Business Day) of issuance of such Letter of Credit, (D)
the date on which such Letter of Credit is to expire (which shall be a
Business Day and no later than ten Business Days preceding the scheduled
Revolving Credit Termination Date), (E) the Person for whose benefit such
Letter of Credit is to be issued, (F) other relevant terms of such Letter of
Credit, (G) the Revolving Credit Availability at such time, and (H) the amount
of the then outstanding Letter of Credit Obligations. Such request shall be
accompanied by an Officer's Certificate of the Borrower with respect to
compliance with (and calculation of) Sections 10.11(a) and (e).
(ii) The Issuing Bank shall give the Administrative Agent written notice,
or telephonic notice confirmed promptly thereafter in writing, of the
issuance, amendment or extension of a Letter of Credit (which notice the
Administrative Agent shall promptly transmit by telegram, facsimile
transmission, or similar transmission to the Borrower and each Lender).
(d) Reimbursement Obligations; Duties of Issuing Bank and other Lenders;
Funding of a Loan.
(i) Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement:
(A) the Borrower shall reimburse each Issuing Bank for amounts drawn
under its Letter of Credit, in Dollars, no later than the date (the
"REIMBURSEMENT DATE") which is the earlier of (I) the time specified in the
applicable Letter of Credit Reimbursement Agreement and (II) the date that
payment has been made under such Letter of Credit by each Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter of Credit
shall bear interest at the rate applicable to Base Rate Loans in accordance
with Section 5.1(a) from the date of the relevant drawing under such Letter of
Credit until the Reimbursement Date and thereafter at the rate applicable to
Base Rate Loans in accordance with Section 5.1(d).
(ii) Each Issuing Bank shall give the Administrative Agent written
notice, or telephonic notice confirmed promptly thereafter in writing, of all
drawings under a Letter of Credit and the payment (or the failure to pay when
due) by the Borrower on account of a Reimbursement Obligation (which notice
the Administrative Agent
48
shall promptly transmit by telegram, facsimile transmission or similar
transmission to each Lender).
(iii) Solely as between the Issuing Bank and the other Lenders, in
determining whether to pay under any Letter of Credit, the Issuing Bank shall
have no obligation to the other Lenders other than to confirm that any
documents required to be delivered under a respective Letter of Credit appear
to have been delivered and that they appear on their face to comply with the
requirements of such Letter of Credit.
(iv) If any draft shall be presented or other demand for payment shall be
made under any Letter of Credit, the Issuing Bank shall notify the
Administrative Agent (and the Administrative Agent shall notify the Borrower
and the Lenders) of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor
such demand for payment, and, except as provided in this Section 3.1(d)(iv),
the Borrower shall reimburse the Issuing Bank, as set forth in Section
3.1(d)(i) above. Notwithstanding anything contained in Section 3.1(d)(i) above
or this Section 3.1(d)(iv) to the contrary, however, unless the Borrower shall
have notified the Administrative Agent and the Issuing Bank prior to 11:00
a.m. (New York time) on the Business Day immediately prior to the date of such
drawing that the Borrower intends to reimburse the Issuing Bank for the amount
of such drawing with funds other than the proceeds of Committed Loans, the
Borrower shall be deemed to have timely given a Notice of Borrowing pursuant
to Section 2.1(b) to the Administrative Agent, requesting a Base Rate Loan on
the date on which such drawing is honored and in an amount equal to the amount
of such drawing. The Borrower may thereafter convert any such Base Rate Loan
in accordance with Section 5.1(c). Each Lender shall, in accordance with
Section 2.1(c), make available such Lender's Pro Rata Share of such Borrowing
to the Administrative Agent, the proceeds of which shall be applied directly
by the Administrative Agent to reimburse the Issuing Bank for the amount of
such draw. In the event that any Lender fails to make available to the
Administrative Agent the amount of such Lender's Pro Rata Share of such
Borrowing on the date of the drawing, the Administrative Agent shall be
entitled to recover such amount on demand from such Lender plus any additional
amounts payable under Section 2.1(c)(ii) in the event of a late funding by a
Lender.
(e) Participations. (i) Immediately upon issuance by an Issuing Bank of any
Letter of Credit in accordance with the procedures set
49
forth in this Section 3.1, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from that Issuing Bank, without
recourse or warranty, an undivided interest and participation in such Letter
of Credit to the extent of such Lender's Pro Rata Share, including, without
limitation, all obligations of the Borrower with respect thereto (other than
amounts owing to that Issuing Bank under Section 3.1) and any security
therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of Credit and
the Borrower does not repay such amount to that Issuing Bank on the
Reimbursement Date and a Base Rate Loan has not been made with respect to such
payment pursuant to Section 3.1(d)(iv), that Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each other
Lender, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuing Bank, in immediately
available funds, the amount of such Lender's Pro Rata Share of such payment
(net of that portion of such payment, if any, made by such Issuing Bank in its
capacity as an issuer of a Letter of Credit), and the Administrative Agent
shall promptly pay to such Issuing Bank such amounts received by it, and any
other amounts received by the Administrative Agent for such Issuing Bank's
account, pursuant to this Section 3.1(e). If a Lender does not make its Pro
Rata Share of the amount of such payment available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent for the account
of the Issuing Bank, forthwith on demand, such amount together with interest
thereon at the interest rate then applicable to Base Rate Loans in accordance
with Section 5.1(a). The failure of any Lender to make available to the
Administrative Agent for the account of an Issuing Bank its Pro Rata Share of
any such payment shall neither relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of
such Issuing Bank such other Lender's Pro Rata Share of any payment on the
date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Administrative Agent. Notwithstanding
anything to the contrary set forth herein, the aggregate amount to be paid by
any Lender with respect any drawing under a Letter of Credit (whether as a
payment pursuant to this Section 3.1(e) or as a Loan pursuant to Section
3.1(d)(iv)) shall not exceed its Pro Rata Share of such drawing.
(iii) Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which the
Administrative Agent has previously received payments from any other Lender
for the account of such Issuing Bank pursuant to this Section 3.1(e), such
Issuing Bank shall promptly pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each other Lender an amount
50
equal to such other Lender's Pro Rata Share thereof. Each such payment shall
be made by such reimbursed Issuing Bank or the Administrative Agent, as the
case may be, on the Business Day on which such Person receives the funds paid
to such Person pursuant to the preceding sentence, if received prior to 11:00
a.m. (New York time) on such Business Day, and otherwise on the next
succeeding Business Day.
(iv) The Issuing Banks shall furnish the Lenders copies of any Letter of
Credit, Letter of Credit Reimbursement Agreement, and related amendment to
which such Issuing Bank is party and such other documentation as may be deemed
reasonable.
(v) The obligations of a Lender to make payments to the Administrative
Agent for the account of any Issuing Bank with respect to a Letter of Credit
shall be irrevocable, shall not be subject to any qualification or exception
whatsoever except willful misconduct or gross negligence of such Issuing Bank,
and shall be honored in accordance with this Article III (irrespective of the
satisfaction of the conditions described in Sections 6.1 and 6.2, as
applicable) under all circumstances, including, without limitation, any of the
following circumstances:
(A) any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;
(B) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against a beneficiary named in a Letter of
Credit or any transferee of a beneficiary named in a Letter of Credit (or any
Person for whom any such transferee may be acting), any Lender, or any other
Person, whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions (including any
underlying transactions between the account party and beneficiary named in any
Letter of Credit);
(C) any draft, certificate or any other document presented under any
Letter of Credit having been determined to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;
51
(E) any failure by that Issuing Bank to make any reports required
pursuant to Section 3.1(h) or the inaccuracy of any such report; or
(F) the occurrence of any Event of Default or Potential Event of Default.
(f) Payment of Reimbursement Obligations. (i) The Borrower
unconditionally agrees to pay to each Issuing Bank, in Dollars, the amount of
all Reimbursement Obligations, interest and other amounts payable to such
Issuing Bank under or in connection with the Letters of Credit when such
amounts are due and payable, irrespective of any claim, setoff, defense or
other right which the Borrower may have at any time against any Issuing Bank
or any other Person.
(ii) In the event any payment by the Borrower received by an Issuing Bank
with respect to a Letter of Credit and distributed by the Administrative Agent
to the Lenders on account of their participations is thereafter set aside,
avoided or recovered from such Issuing Bank in connection with any
receivership, liquidation or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by such Issuing Bank, contribute such
Lender's Pro Rata Share of the amount set aside, avoided or recovered together
with interest at the rate required to be paid by such Issuing Bank upon the
amount required to be repaid by it.
(g) Letter of Credit Fee Charges. In connection with each Letter of
Credit, Borrower hereby covenants to pay to the Administrative Agent the
following fees each payable quarterly in arrears (on the first Business Day of
each calendar quarter following the issuance of each Letter of Credit): (1) a
fee for the account of the Lenders, computed daily on the amount of such
Letter of Credit issued and outstanding at a rate per annum equal to the
"Banks' L/C Fee Rate" (as hereinafter defined) and (2) a fee, for the Issuing
Bank's own account, computed daily on the amount of such Letter of Credit
issued and outstanding at a rate per annum equal to 0.125%. For purposes of
this Agreement, the "BANKS' L/C FEE RATE" shall mean, at any time, a rate per
annum equal to the Applicable Margin for Eurodollar Rate Loans then in effect.
In addition, the Borrower shall pay to each Issuing Bank, solely for its own
account, the standard charges assessed by such Issuing Bank in connection with
the issuance, administration, amendment and payment or cancellation of Letters
of Credit and such compensation in respect of such Letters of Credit for the
Borrower's account as may be agreed upon by the Borrower and such Issuing Bank
in writing from time to time.
(h) Letter of Credit Reporting Requirement. Each Issuing Bank shall, no
later than the tenth (10th) Business Day following the last
52
day of each calendar quarter, provide to the Administrative Agent (who shall
promptly provide to the Borrower and each other Lender) separate schedules for
Commercial Letters of Credit and Standby Letters of Credit issued as Letters
of Credit, in form and substance reasonably satisfactory to the Administrative
Agent, setting forth the aggregate Letter of Credit Obligations outstanding to
it at the end of each month and, to the extent not otherwise provided in
accordance with the provisions of Section 3.1(c), any information requested by
the Administrative Agent or the Borrower relating to the date of issue,
account party, amount, expiration date and reference number of each Letter of
Credit issued by it.
(i) Indemnification; Exoneration. (i) In addition to all other amounts
payable to an Issuing Bank, the Borrower hereby agrees to defend, indemnify,
and save the Administrative Agent, each Issuing Bank, and each other Lender
harmless from and against any and all claims, demands, liabilities, penalties,
damages, losses (other than loss of profits), reasonable costs, reasonable
charges and reasonable expenses (including reasonable attorneys' fees but
excluding taxes) which the Administrative Agent, the Issuing Banks, or such
other Lender may incur or be subject to as a consequence, direct or indirect,
of (A) the issuance of any Letter of Credit other than as a result of the
gross negligence or willful misconduct of the Issuing Bank, as determined by a
court of competent jurisdiction, or (B) the failure of the Issuing Bank to
honor a drawing under such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority.
(ii) As between the Borrower on the one hand and the Lenders on the other
hand, the Borrower assumes all risks of the acts and omissions of, or misuse
of Letters of Credit by, the respective beneficiaries of the Letters of
Credit. In furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit Reimbursement Agreements, the
Administrative Agent, the Issuing Bank and the other Lenders shall not be
responsible for: (A) the form, validity, legality, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity, legality or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of a Letter of
Credit to duly comply with conditions required in order to draw upon such
Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they
53
be in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (H) any consequences arising from
causes beyond the control of the Administrative Agent, the Issuing Banks or
the other Lenders, other than any of the foregoing resulting from the gross
negligence or willful misconduct of the Issuing Bank.
3.2. OBLIGATIONS SEVERAL. The obligations of the Administrative Agent,
each Issuing Bank, and each other Lender under this Article III are several
and not joint, and no Issuing Bank or other Lender shall be responsible for
the obligation to issue Letters of Credit or participation obligations
hereunder, respectively, of any other Issuing Bank or other Lender.
ARTICLE IV.
PAYMENTS AND PREPAYMENTS
4.1. PREPAYMENTS; REDUCTIONS IN REVOLVING CREDIT COMMITMENTS.
(a) Voluntary Prepayments. The Borrower may, at any time and from time to
time, prepay the Loans, other than Competitive Bid Loans, in part or in their
entirety, subject to the following limitations. The Borrower shall give at
least three (3) Business Days prior written notice to the Administrative Agent
(which the Administrative Agent shall promptly transmit to each Lender) of any
prepayment in the entirety to be made prior to the occurrence of an Event of
Default, which notice of prepayment shall specify the date (which shall be a
Business Day) of prepayment. When notice of prepayment is delivered as
provided herein, the outstanding principal amount of the Loans on the
prepayment date specified in the notice shall become due and payable on such
prepayment date. Each voluntary partial prepayment of the Loans shall be in a
minimum amount of $1,000,000 and in integral multiples of $500,000 in excess
of that amount (or such lesser amount in the event the unpaid principal amount
of any Loan is less than such minimum prepayment amount). Eurodollar Rate
Loans may be prepaid in part or in their entirety only upon payment of the
amounts described in Section 5.2(f). Notwithstanding anything contained in
this Agreement to the contrary, Competitive Bid Loans may not be voluntarily
prepaid without the consent of the Lender(s) making such Loans.
(b) Voluntary Reductions In Revolving Credit Commitments. The Borrower may,
upon at least three (3) Business Days' prior written notice to the
Administrative Agent (which the Administrative Agent shall promptly
54
transmit to each Lender), at any time and from time to time, terminate in
whole or permanently reduce in part the Revolving Credit Commitments, provided
that (i) the Borrower shall have made whatever payment may be required to
reduce the Revolving Credit Obligations to an amount less than or equal to the
Revolving Credit Commitments as reduced, which amount shall become due and
payable on the date specified in such notice and (ii) in the case of a
reduction, the minimum Revolving Credit Commitments that shall remain
outstanding shall be $100,000,000. Any partial reduction of the Revolving
Credit Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount, and shall reduce
the Revolving Credit Commitment of each Lender proportionately in accordance
with its Pro Rata Share. Any notice of termination or reduction given to the
Administrative Agent under this Section 4.l(b) shall specify the date (which
shall be a Business Day) of such termination or reduction and, with respect to
a partial reduction, the aggregate principal amount thereof.
(c) No Penalty. The prepayments and payments in respect of reductions and
terminations described in clauses (a) and (b) of this Section 4.1 may be made
without premium or penalty (except as provided in Section 5.2(f)).
(d) Mandatory Prepayment. If at any time from and after the Closing Date,
the Company, the Borrower, or any of its Consolidated Subsidiaries receives
proceeds from the sale, transfer, assignment, conveyance or refinancing of an
Unencumbered Project, the Borrower shall be required to prepay a portion of
the Loans in an amount equal to the Net Cash Proceeds received by the Borrower
or the Company or the Borrower's pro rata share of Net Cash Proceeds received
by such Consolidated Subsidiary. If at any time from and after the Closing
Date: (i) the Company or the Borrower merges or consolidates with another
Person and the Company or Borrower, as the case may be, is not the surviving
entity and does not control the management of such surviving entity, or (ii)
the Company, the Borrower, any of its Affiliates or Consolidated Subsidiaries
or the Management Company ceases to provide property management and leasing
services to at least 80% of the total number of Projects in which the Borrower
has a direct ownership interest (the date any such event shall occur being the
"PREPAYMENT DATE"), the Borrower shall be required to prepay the Loans in
their entirety as if the Prepayment Date were the Revolving Credit Termination
Date and, the Revolving Credit Commitments thereupon shall be terminated. The
Borrower shall immediately make such prepayment together with interest accrued
to the date of the prepayment on the principal amount prepaid and shall return
or cause to be returned all Letters of Credit to the applicable Issuing Bank.
In connection with the prepayment of any Loan prior to the
55
maturity thereof, the Borrower shall also pay any applicable expenses pursuant
to Section 5.2(f). Each such prepayment shall be applied to prepay ratably the
Loans of the Lenders. Amounts prepaid pursuant to this Section 4.1(d) (other
than amounts prepaid pursuant to the first sentence of this Section 4.1(d))
may not be reborrowed. As used in this Section 4.1(d) only, the phrase "sale,
transfer, assignment or conveyance" shall not include (i) sales or conveyances
among Borrower and any of its Consolidated Subsidiaries, or (ii) mortgages or
other security interests secured by Real Property or other Property which are
permitted under this Agreement. Such prepayment shall not affect any rights
and remedies that the Agents and Lenders may otherwise have hereunder.
4.2. PAYMENTS.
(a) Manner and Time of Payment. All payments of principal of and interest
on the Loans and Reimbursement Obligations and other Obligations (including,
without limitation, fees and expenses) which are payable to the Administrative
Agent, the Arrangers or any Lender shall be made without condition or
reservation of right, in immediately available funds, delivered to the
Administrative Agent not later than 12:00 noon (New York time) on the date and
at the place due, to such account of the Administrative Agent (or such
Arranger) as it may designate, for the account of the Administrative Agent, an
Arranger, or such Lender, as the case may be; and funds received by the
Administrative Agent (or such Arranger), including, without limitation, funds
in respect of any Loans to be made on that date, not later than 12:00 noon
(New York time) on any given Business Day shall be credited against payment to
be made that day and funds received by the Administrative Agent (or such
Arranger) after that time shall be deemed to have been paid on the next
succeeding Business Day. Payments actually received by the Administrative
Agent for the account of the Documentation Agent, the Syndication Agent and
the Lenders, or any of them, shall be paid to them by the Administrative Agent
promptly after receipt thereof.
(b) Apportionment of Payments. (i) Subject to the provisions of Section
4.2(b)(v), all payments of principal and interest in respect of outstanding
Loans, all payments in respect of Reimbursement Obligations, all payments of
fees and all other payments in respect of any other Obligations, shall be
allocated among such of the Lenders as are entitled thereto, in proportion to
their respective Pro Rata Shares or otherwise as provided herein. Subject to
the provisions of Section 4.2(b)(ii), all such payments and any other amounts
received by the Administrative Agent from or for the benefit of the Borrower
shall be applied in the following order:
56
(A) to pay principal of and interest on any portion of the Loans which
the Administrative Agent may have advanced on behalf of any Lender other than
Chase for which the Administrative Agent has not then been reimbursed by such
Lender or the Borrower;
(B) to pay all other Obligations then due and payable, and
(C) as the Borrower so designates.
Unless otherwise designated by the Borrower, all principal payments in respect
of its Committed Loans shall be applied first, to repay its outstanding Base
Rate Loans, and then to repay its outstanding Eurodollar Rate Loans with those
Eurodollar Rate Loans which have earlier expiring Eurodollar Interest Periods
being repaid prior to those which have later expiring Eurodollar Interest
Periods.
(ii) After the occurrence of an Event of Default and while the same is
continuing which results in an acceleration of the Obligations in accordance
with Section 11.2, the Administrative Agent shall apply all payments in
respect of any Obligations in the following order:
(A) first, to pay principal of and interest on any portion of the Loans
which the Administrative Agent may have advanced on behalf of any Lender other
than Chase for which the Administrative Agent has not then been reimbursed by
such Lender or the Borrower;
(B) second, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Administrative Agent;
(C) third, to pay principal of and interest on Letter of Credit
Obligations (or, to the extent such Obligations are contingent, deposited with
the Administrative Agent to provide cash collateral in respect of such
Obligations);
(D) fourth, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Lenders;
(E) fifth, to pay interest due in respect of Loans;
(F) sixth, to the ratable payment or prepayment of principal outstanding on
Loans; and
57
(G) seventh, to the ratable payment of all other Obligations.
The order of priority set forth in this Section 4.2(b)(ii) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Administrative Agent and the Lenders as among themselves.
The order of priority set forth in clauses (A) and (B) of this Section
4.2(b)(ii) may be changed only with the prior written consent of the
Administrative Agent.
(iii) The Administrative Agent, in its sole discretion subject only to
the terms of this Section 4.2(b)(iii), may pay from the proceeds of Loans made
to the Borrower hereunder, whether made following a request by the Borrower
pursuant to Section 2.1 or a deemed request as provided in this Section
4.2(b)(iii), all amounts payable by the Borrower hereunder, including, without
limitation, amounts payable with respect to payments of principal, interest,
Reimbursement Obligations and fees. The Borrower hereby irrevocably authorizes
the Lenders to make Loans, which Loans shall be Base Rate Loans, in each case,
upon notice from the Administrative Agent as described in the following
sentence for the purpose of paying principal, interest, Reimbursement
Obligations and fees due from the Borrower, and agrees that all such Loans so
made shall be deemed to have been requested by it pursuant to Section 2.1 as
of the date of the aforementioned notice. The Administrative Agent shall
request Loans on behalf of the Borrower as described in the preceding sentence
by notifying the Lenders by facsimile transmission or other similar form of
transmission (which notice the Administrative Agent shall thereafter promptly
transmit to the Borrower), of the amount and Funding Date of the proposed
Borrowing and that such Borrowing is being requested on the Borrower's behalf
pursuant to this Section 4.2(b)(iii). On the proposed Funding Date, the
Lenders shall make the requested Loans in accordance with the procedures and
subject to the conditions specified in Section 2.1.
(iv) Subject to Section 4.2(b)(v), the Administrative Agent shall
promptly distribute to each Arranger and each Lender at its primary address
set forth on the appropriate signature page hereof or the signature page to
the Assignment and Acceptance by which it became a Lender, or at such other
address as a Lender may request in writing, such funds as such Person may be
entitled to receive, subject to the provisions of Article XII; provided that
the Administrative Agent shall under no circumstances be bound to inquire into
or determine the validity, scope or priority of any interest or entitlement of
any Lender
58
and may suspend all payments or seek appropriate relief (including, without
limitation, instructions from the Requisite Lenders or an action in the nature
of interpleader) in the event of any doubt or dispute as to any apportionment
or distribution contemplated hereby.
(v) In the event that any Lender fails to fund its Pro Rata Share of any
Loan requested by the Borrower which such Lender is obligated to fund under
the terms of this Agreement (the funded portion of such Loan being hereinafter
referred to as a "NON PRO RATA LOAN"), until the earlier of such Lender's cure
of such failure and the termination of the Revolving Credit Commitments, the
proceeds of all amounts thereafter repaid to the Administrative Agent by the
Borrower and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Administrative Agent on behalf of such Lender to cure, in
full or in part, such failure by such Lender, but shall nevertheless be deemed
to have been paid to such Lender in satisfaction of such other Obligations.
Notwithstanding anything in this Agreement to the contrary:
(A) the foregoing provisions of this Section 4.2(b)(v) shall apply only
with respect to the proceeds of payments of Obligations and shall not affect
the conversion or continuation of Loans pursuant to Section 5.1(c);
(B) a Lender shall be deemed to have cured its failure to fund its Pro
Rata Share of any Loan at such time as an amount equal to such Lender's
original Pro Rata Share of the requested principal portion of such Loan is
fully funded to the Borrower, whether made by such Lender itself or by
operation of the terms of this Section 4.2(b)(v), and whether or not the Non
Pro Rata Loan with respect thereto has been repaid, converted or continued;
(C) amounts advanced to the Borrower to cure, in full or in part, any
such Lender's failure to fund its Pro Rata Share of any Loan ("CURE LOANS")
shall bear interest at the Base Rate in effect from time to time, and for all
other purposes of this Agreement shall be treated as if they were Base Rate
Loans; and
(D) regardless of whether or not an Event of Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to its
desired application, all repayments of principal which, in accordance with the
other terms of this Section 4.2, would be applied to its outstanding
59
Base Rate Loans shall be applied first, ratably to its Base Rate Loans
constituting Non Pro Rata Loans, second, ratably to its Base Rate Loans other
than those constituting Non Pro Rata Loans or Cure Loans and, third, ratably
to its Base Rate Loans constituting Cure Loans.
(c) Payments on Non-Business Days. Whenever any payment to be made by the
Borrower hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day (or, as set forth in Section 5.2(b)(iv), the next preceding
Business Day).
4.3. PROMISE TO REPAY; EVIDENCE OF INDEBTEDNESS.
(a) Promise to Repay. The Borrower hereby agrees to pay when due the
principal amount of each Loan which is made to it, and further agrees to pay
all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Notes. The Borrower shall execute and deliver to each Lender
on the Closing Date, a promissory note, in the form of EXHIBIT B-1 attached
hereto with blanks appropriately completed, evidencing the Loans and
thereafter shall execute and deliver such other promissory notes as are
necessary to evidence the Loans made to it owing to the Lenders after giving
effect to any assignment thereof pursuant to Section 14.1, all in the form of
EXHIBIT B-1 attached hereto with blanks appropriately completed (all such
promissory notes and all amendments thereto, replacements thereof and
substitutions therefor being collectively referred to as the "BORROWER NOTES";
and "BORROWER NOTE" means any one of the Borrower Notes).
(b) Loan Account. Each Lender shall maintain in accordance with its usual
practice an account or accounts (a "LOAN ACCOUNT") evidencing the Indebtedness
of the Borrower to such Lender resulting from each Loan owing to such Lender
from time to time, including the amount of principal and interest payable and
paid to such Lender from time to time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Administrative Agent
pursuant to Section 14.1(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the type of Loan
comprising such Borrowing and any Eurodollar Interest Period applicable
thereto, (ii) the effective date and amount of each Assignment and Acceptance
delivered to and accepted by it and the parties thereto, (iii) the amount of
any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder or
60
under the Notes and (iv) the amount of any sum received by the Administrative
Agent from the Borrower hereunder and each Lender's share thereof.
(d) Entries Binding. The entries made in the Register and each Loan Account
shall be conclusive and binding for all purposes, absent manifest error.
(e) No Recourse. Notwithstanding anything contained in this Agreement,
any Note, or the Guaranties to the contrary, it is expressly understood and
agreed that nothing herein or therein shall be construed as creating any
liability on any Limited Partner, or any partner, officer, shareholder or
director of any Limited Partner or any officer, trustee, member, director, or
employee of the Borrower or any Guarantor, to pay any of the Obligations other
than liability arising under applicable law from or in connection with (i) its
own fraud or (ii) the misappropriation or misapplication by it of proceeds of
the Loans; but nothing contained in this Section 4.3(e) shall be construed to
prevent the exercise of any remedy allowed to the Administrative Agent, the
Arrangers or the Lenders by law or by the terms of this Agreement or the other
Loan Documents which does not relate to or result in such an obligation by any
Limited Partner or such other Persons to pay money.
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ARTICLE V.
INTEREST AND FEES
5.1. INTEREST ON THE LOANS AND OTHER OBLIGATIONS.
(a) Rate of Interest. All Loans and the outstanding principal balance of
all other Obligations shall bear interest on the unpaid principal amount
thereof from the date such Loans are made and such other Obligations are due
and payable until paid in full, except as otherwise provided in Section
5.1(d), as follows:
(i) If a Base Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Base Rate, as in effect from time to
time as interest accrues, plus (B) the then Applicable Margin for Base
Rate Loans;
(ii) If a Eurodollar Rate Loan, at a rate per annum equal to the sum
of (A) the Eurodollar Rate determined for the applicable Eurodollar
Interest Period, plus (B) the then Applicable Margin for Eurodollar
Loans; and
(iii) If a Competitive Bid Loan, at a rate per annum equal to the
sum of (A) the Eurodollar Rate determined for the applicable Eurodollar
Interest Period (determined as if the related Competitive Bid Loan were a
Committed Loan which is Eurodollar Rate Loan) plus (B) the Competitive
Bid Margin quoted by the Lender making such Competitive Bid Loan in
accordance with Section 2.2.
The applicable basis for determining the rate of interest on the Loans shall
be selected by the Borrower at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by the Borrower to the Administrative
Agent; provided, however, the Borrower may not select the Eurodollar Rate as
the applicable basis for determining the rate of interest on such a Loan if at
the time of such selection an Event of Default has occurred and is continuing
or if Eurodollar Rate Loans are not available pursuant to Section 5.2(d) or
(e). If on any day any Loan is outstanding with respect to which notice has
not been timely delivered to the Administrative Agent in accordance with the
terms of this Agreement specifying the basis for determining the rate of
interest on that day, then for that day interest on that Loan shall be
determined by reference to the Base Rate.
(b) Interest Payments. (i) Interest accrued on each Loan, whether a Base
Rate Loan, a Eurodollar Loan or a Competitive Bid Loan shall be calculated on
the last day of each calendar month and shall be
62
payable in arrears (A) on the first day of each calendar month, commencing on
the first such day following the making of such Loan, and on the last day of
the applicable Eurodollar Interest Period with respect to a Competitive Bid
Loan, (B) upon the payment or prepayment thereof in full or in part, and (C)
if not theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Loan.
(ii) Interest accrued on the principal balance of all other Obligations
shall be calculated on the last day of each calendar month and shall be
payable in arrears (A) on the first Business Day of each calendar month,
commencing on the first such day following the incurrence of such Obligation,
(B) upon repayment thereof in full or in part, and (C) if not theretofore paid
in full, at the time such other Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Conversion or Continuation. (i) The Borrower shall have the option
(A) to convert at any time all or any part of outstanding Base Rate Loans to
Eurodollar Rate Loans; (B) to convert all or any part of outstanding
Eurodollar Rate Loans having Eurodollar Interest Periods which expire on the
same date to Base Rate Loans on such expiration date; or (C) to continue all
or any part of outstanding Eurodollar Rate Loans having Eurodollar Interest
Periods which expire on the same date as Eurodollar Rate Loans, and the
succeeding Eurodollar Interest Period of such continued Loans shall commence
on such expiration date; provided, however, no such outstanding Loan may be
continued as, or be converted into, a Eurodollar Rate Loan (i) if the
continuation of, or the conversion into, would violate any of the provisions
of Section 5.2 or (ii) if an Event of Default has occurred and is continuing.
Any conversion into or continuation of Eurodollar Rate Loans under this
Section 5.1(c) shall be in a minimum amount of $3,000,000 and in integral
multiples of $500,000 in excess of that amount, except in the case of a
conversion into or a continuation of an entire Borrowing of Non Pro Rata
Loans.
(ii) To convert or continue a Committed Loan under Section 5.1(c)(i), the
Borrower shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 11:00 a.m. (New York time) at least three
(3) Business Days in advance of the proposed conversion/continuation date. A
Notice of Conversion/ Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the
principal amount of the Committed Loan to be converted/continued, (C) whether
such Loan shall be converted and/or continued, and (D) in the case of a
conversion to, or continuation of, a Eurodollar Rate Loan, the requested
Eurodollar Interest Period. Promptly after receipt of a Notice of
Conversion/Continuation under this Section 5.1(c)(ii), the Administrative
Agent
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shall notify each Lender by facsimile transmission, or other similar form of
transmission, of the proposed conversion/continuation. Any Notice of
Conversion/Continuation for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) given pursuant to this Section 5.1(c)(ii)
shall be irrevocable, and the Borrower shall be bound to convert or continue
in accordance therewith. In the event no Notice of Conversion/Continuation is
delivered as and when specified in this Section 5.1(c)(ii) with respect to
outstanding Eurodollar Rate Loans, upon the expiration of the Eurodollar
Interest Period applicable thereto, such Loans shall automatically be
converted to a Base Rate Loan.
(d) Default Interest. Notwithstanding the rates of interest specified in
Section 5.1(a) or elsewhere in this Agreement, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and other
Obligations shall bear interest at a rate equal to (A) in the case of any
Eurodollar Rate Loans outstanding as of the date of occurrence of any Event of
Default, the sum of (x) the applicable Eurodollar Rate, plus (y) six percent
(6.0%) per annum, and (B) in the case of any Base Rate Loan (including any
Eurodollar Loan that is converted to a Base Rate Loan at maturity) the sum of
(x) the Base Rate, as in effect from time to time as interest accrues, plus
(y) five percent (5.0%) per annum.
(e) Computation of Interest. Interest on all obligations shall be
computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing interest on
any Loan, the date of the making of such Loan or the first day of a Eurodollar
Interest Period, as the case may be, shall be included and the date of payment
or the expiration date of a Eurodollar Interest Period, as the case may be,
shall be excluded.
(f) Eurodollar Rate Information. Upon the request of the Borrower, the
Administrative Agent shall promptly provide to the Borrower such information
with respect to the applicable Eurodollar Rate as may be so requested.
5.2. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS AND COMPETITIVE BID
LOANS.
(a) Amount of Eurodollar Rate Loans. Each Eurodollar Rate Loan shall be in
a minimum principal amount of $3,000,000 and in integral multiples of $500,000
in excess of that amount.
(b) Determination of Eurodollar Interest Period. By giving notice as set
forth in Section 2.1(b) (with respect to a Borrowing of Eurodollar
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Rate Loans), Section 2.2 (with respect to a Borrowing of Competitive Bid
Loans) or Section 5.1(c) (with respect to a conversion into or continuation of
Eurodollar Rate Loans), the Borrower shall have the option, subject to the
other provisions of this Section 5.2, to select an interest period (each, a
"EURODOLLAR INTEREST PERIOD") to apply to the Loans described in such notice,
subject to the following provisions:
(i) The Borrower may only select, as to a particular Borrowing of
Eurodollar Rate Loans, a Eurodollar Interest Period of one, two, three or
six months in duration;
(ii) The Borrower may only select, as to a particular Borrowing of
Competitive Bid Loans, a Eurodollar Interest Period of one, two, or three
months in duration;
(iii) In the case of immediately successive Eurodollar Interest
Periods applicable to a Borrowing of Eurodollar Rate Loans, each
successive Eurodollar Interest Period shall commence on the day on which
the next preceding Eurodollar Interest Period expires;
(iv) If any Eurodollar Interest Period would otherwise expire on a
day which is not a Business Day, such Eurodollar Interest Period shall be
extended to expire on the next succeeding Business Day if the next
succeeding Business Day occurs in the same calendar month, and if there
will be no succeeding Business Day in such calendar month, such
Eurodollar Interest Period shall expire on the immediately preceding
Business Day;
(v) The Borrower may not select a Eurodollar Interest Period as to
any Loan if such Eurodollar Interest Period terminates later than the
Revolving Credit Termination Date;
(vi) The Borrower may not select a Eurodollar Interest Period with
respect to any portion of principal of a Loan which extends beyond a date
on which the Borrower is required to make a scheduled payment of such
portion of principal of which the Borrower is aware on the date of such
request, in the case of a payment pursuant to Section 4.1(d) hereof; and
(vii) There shall be no more than ten (10) Eurodollar Interest
Periods in effect at any one time with respect to Eurodollar Rate Loans.
(c) Determination of Eurodollar Interest Rate. As soon as practicable on
the second Business Day prior to the first day of each
65
Eurodollar Interest Period (the "EURODOLLAR INTEREST RATE DETERMINATION
DATE"), the Administrative Agent shall determine (pursuant to the procedures
set forth in the definition of "Eurodollar Rate") the interest rate which
shall apply to the Eurodollar Rate Loans or Competitive Bid Loans for which an
interest rate is then being determined for the applicable Eurodollar Interest
Period and shall promptly give notice thereof (in writing or by telephone or
by facsimile confirmed in writing) to the Borrower and to each Lender. The
Administrative Agent's determination shall be presumed to be correct, absent
manifest error, and shall be binding upon the Borrower.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the event that
at least one (1) Business Day before the Eurodollar Interest Rate Determination
Date:
(i) the Administrative Agent is advised by the Reference Bank that
deposits in Dollars (in the applicable amounts) are not being offered by the
Reference Bank in the London interbank market for such Eurodollar Interest
Period; or
(ii) the Administrative Agent determines that adequate and fair means do
not exist for ascertaining the applicable interest rates by reference to which
the Eurodollar Rate then being determined is to be fixed;
(iii) the Requisite Lenders advise the Administrative Agent that the
Eurodollar Rate for Eurodollar Rate Loans comprising such Borrowing will not
adequately reflect the cost to such Requisite Lenders of obtaining funds in
Dollars in the London interbank market in the amount substantially equal to
such Lenders' Eurodollar Rate Loans in Dollars and for a period equal to such
Eurodollar Interest Period; or
(iv) the applicable Lender(s) advise the Administrative Agent that the
Eurodollar Rate for Competitive Bid Loans comprising such Borrowing will not
adequately reflect the cost to such Lender(s) of obtaining funds in Dollars in
the London interbank market in the amount substantially equal to such
Lender(s)' Competitive Bid Loans in Dollars and for a period equal to such
Eurodollar Interest Period;
then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon (until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist) the right of the Borrower to elect to have Loans bear interest based
upon the Eurodollar Rate shall be suspended and each outstanding Eurodollar
Rate Loan and Competitive Bid Loan shall be converted into a
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Base Rate Loan on the last day of the then current Eurodollar Interest Period
therefor, notwithstanding any prior election by the Borrower to the contrary.
(e) Illegality. (i) If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Eurodollar
Rate Loan or Competitive Bid Loan has become unlawful or impermissible by
compliance by that Lender with any law, governmental rule, regulation or order
of any Governmental Authority (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful or would result
in costs or penalties), then, and in any such event, such Lender may give
notice of that determination, in writing, to the Borrower and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender.
(ii) When notice is given by a Lender under Section 5.2(e)(i), (A) the
Borrower's right to request from such Lender and such Lender's obligation, if
any, to make Eurodollar Rate Loans to the Borrower shall be immediately
suspended, and such Lender shall make a Base Rate Loan as part of any
requested Borrowing of Eurodollar Rate Loans and (B) if the affected
Eurodollar Rate Loan or Loans or Competitive Bid Loans are then outstanding,
the Borrower shall immediately, or if permitted by applicable law, no later
than the date permitted thereby, upon at least one (1) Business Day's prior
written notice to the Administrative Agent and the affected Lender, convert
each such Loan into a Base Rate Loan.
(iii) If at any time after a Lender gives notice under Section 5.2(e)(i)
such Lender determines that it may lawfully make Eurodollar Rate Loans, such
Lender shall promptly give notice of that determination, in writing, to the
Borrower and the Administrative Agent, and the Administrative Agent shall
promptly transmit the notice to each other Lender. The Borrower's right to
request, and such Lender's obligation, if any, to make Eurodollar Rate Loans
to the Borrower shall thereupon be restored.
(f) Compensation. In addition to all amounts required to be paid by the
Borrower pursuant to Section 5.1 and Article XIII, the Borrower shall
compensate each Lender, upon demand, for all losses, expenses and liabilities
(including, without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund or maintain such Lender's Eurodollar Rate Loans or Competitive Bid
Loans to the Borrower, but excluding any loss of Applicable Margin on the
relevant Loans) which that Lender may sustain (i) if for any reason a
Borrowing, conversion into or continuation of Eurodollar Rate Loans and/or
Competitive Bid Loans does not occur on a date specified therefor in a
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Notice of Borrowing or a Notice of Conversion/Continuation given by the
Borrower or in a telephonic request by it for borrowing or conversion/
continuation or a successive Eurodollar Interest Period does not commence
after notice therefor is given pursuant to Section 5.1(c), other than pursuant
to Sections 5.2(d) or (e), or (ii) if for any reason any Eurodollar Rate Loan
is prepaid (other than pursuant to Section 5.2(d) or (e)) or converted on a
date which is not the last day of the applicable Eurodollar Interest Period or
(iii) as a consequence of any failure by the Borrower to repay a Eurodollar
Rate Loan or Competitive Bid Loan when required by the terms of this
Agreement. The Lender making demand for such compensation shall deliver to the
Borrower concurrently with such demand a written statement in reasonable
detail as to such losses, expenses and liabilities, and this statement shall
be conclusive as to the amount of compensation due to that Lender, absent
manifest error.
(g) Booking of Eurodollar Rate Loans and Competitive Bid Loans. Any
Lender may make, carry or transfer Eurodollar Rate Loans and Competitive Bid
Loans at, to, or for the account of, its Eurodollar Lending Office or
Eurodollar Affiliate or its other offices or Affiliates. No Lender shall be
entitled, however, to receive any greater amount under Sections 4.2 or 5.2(f)
or Article XIII as a result of the transfer of any such Eurodollar Rate Loan
or Competitive Bid Loan to any office (other than such Eurodollar Lending
Office) or any Affiliate (other than such Eurodollar Affiliate) than such
Lender would have been entitled to receive immediately prior thereto, unless
(i) the transfer occurred at a time when circumstances giving rise to the
claim for such greater amount did not exist and (ii) such claim would have
arisen even if such transfer had not occurred.
(h) Affiliates Not Obligated. No Eurodollar Affiliate or other Affiliate of
any Lender shall be deemed a party to this Agreement or shall have any liability
or obligation under this Agreement.
(i) Adjusted Eurodollar Rate. Any failure by any Lender to take into
account the Eurodollar Reserve Percentage when calculating interest due on
Eurodollar Rate Loans or Competitive Bid Loans shall not constitute, whether
by course of dealing or otherwise, a waiver by such Lender of its right to
collect such amount for any future period.
(j) Application of Mandatory Prepayments. The principal amount of any
mandatory prepayment pursuant to Section 4.1(d) hereof, shall be applied,
first, to the outstanding Base Rate Loans and then, to the outstanding
Eurodollar Rate Loans. Unless the Borrower otherwise pays breakage costs in
accordance with Section 5.2(f), the Administrative Agent shall hold such
principal amounts allocated for prepayment of Eurodollar
68
Rate Loans until the end of the applicable Eurodollar Interest Periods) and,
during the interim period, shall invest said sums in Cash Equivalents.
Interest earned thereon shall be forwarded to the Borrower upon the payment of
the Eurodollar Rate Loans at the end of said Eurodollar Interest Period.
Interest shall continue to accrue on the principal amount of such Eurodollar
Rate Loans until so paid.
5.3. FEES.
(a) Letter of Credit Fee. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders in proportion to their interests in
respective undrawn Letters of Credit, a Letter of Credit Fee as more
particularly set forth in Section 3.1(g) hereof.
(b) Facility Fee. The Borrower shall pay to the Administrative Agent for
the account of the Lenders based on their respective Pro Rata Shares, a
facility fee on the Revolving Credit Commitments at the respective percentages
per annum based upon the Borrower's Credit Rating in accordance with the
following table:
Range of
the Borrower's
Credit Rating
(S&P/Moody's Facility Fee
Ratings) (% per annum)
--------- -------------
A-/A3 or higher 0.15
BBB+/Baa1 0.175
BBB/Baa2 0.20
BBB-/Baa3 0.20
Below BBB-/Baa3 or unrated 0.375
The facility fee shall be payable quarterly, in arrears, on the first Business
Day of each January, April, July and October, commencing on the first such day
after the Closing Date. Any change in the Borrower's Credit Rating causing it
to move into a different range on the table shall effect an immediate change
in the applicable percentage per annum. The Borrower shall maintain Credit
Ratings from at least two (2) Rating Agencies, one of
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which must be Moody's or S&P so long as such Persons are in the business of
providing debt ratings for the REIT industry; provided that if the Borrower
fails to maintain at least two Credit Ratings, the applicable percentage shall
be based upon an S&P rating of less than BBB- in the table above. In the event
that the Borrower's Credit Rating is such that the Rating Agencies' ratings
are split between a higher and a lower rating, the applicable percentage per
annum shall be based upon the lower of such two (2) Credit Ratings. In the
event that the Borrower receives more than two (2) Credit Ratings and such
Credit Ratings are not equivalent, the applicable fee shall be determined by
the lower of the two (2) highest ratings, provided that each of said two (2)
highest ratings shall be Investment Grade Ratings and at least one of which
shall be an Investment Grade Rating from S&P or Moody's.
Notwithstanding the foregoing, in the event that any Lender fails to fund
its Pro Rata Share of any Loan requested by the Borrower which such Lender is
obligated to fund under the terms of this Agreement, (A) such Lender shall not
be entitled to any portion of the facility fee with respect to its Revolving
Credit Commitment until such failure has been cured in accordance with Section
4.2(b)(v)(B) and (B) until such time, the facility fee shall accrue in favor
of the Lenders which have funded their respective Pro Rata Shares of such
requested Loan, and shall be allocated among such performing Lenders ratably
based upon their relative Revolving Credit Commitments.
(c) Competitive Bid Fee. Simultaneously with the delivery of each Notice of
Competitive Bid Borrowing, the Borrower shall pay to the Administrative Agent
for its own account, a fee equal to $2,500.
(d) Calculation and Payment of Fees. All fees shall be calculated on the
basis of the actual number of days elapsed in a 360-day year. All fees shall
be payable in addition to, and not in lieu of, interest, compensation, expense
reimbursements, indemnification and other Obligations. Fees shall be payable
to the Administrative Agent at its office in New York, New York in immediately
available funds unless otherwise set forth herein. All fees shall be fully
earned and nonrefundable when paid. All fees due to any Arranger or any
Lender, including, without limitation, those referred to in this Section 5.3,
shall bear interest, if not paid when due, at the interest rate specified in
Section 5.1(d) and shall constitute Obligations.
ARTICLE VI.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
6.1. CONDITIONS PRECEDENT TO THE INITIAL LOANS AND LETTERS OF CREDIT. The
obligation of each Lender on the Initial Funding Date to make
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any Loan requested to be made by it, and to issue Letters of Credit, shall be
subject to the satisfaction of all of the following conditions precedent:
(a) Documents. The Administrative Agent shall have received on or before
the Initial Funding Date all of the following:
(i) this Agreement, the Notes, and, to the extent not otherwise
specifically referenced in this Section 6.1(a), all other Loan Documents and
agreements, documents and instruments described in the List of Closing
Documents attached hereto as EXHIBIT E and made a part hereof, each duly
executed, and in form and substance satisfactory to the Agents; without
limiting the foregoing, the Borrower hereby directs its counsel, Brown & Wood
LLP to prepare and deliver to the Agents, the Lenders, and Bingham Dana LLP
the legal opinions referred to in such List of Closing Documents; and
(ii) such additional documentation as the Agents may reasonably request.
(b) No Legal Impediments. No law, regulation, order, judgment or decree
of any Governmental Authority shall, and the Administrative Agent shall not
have received any notice that litigation is pending or threatened which is
likely to (i) enjoin, prohibit or restrain the making of the Loans and/or the
issuance of Letters of Credit on the Initial Funding Date or (ii) impose or
result in the imposition of a Material Adverse Effect.
(c) No Change in Condition. No change in the business, assets,
management, operations, financial condition or prospects of the Borrower or
any of its Properties shall have occurred since June 30, 2000 which change, in
the judgment of the Administrative Agent and the Syndication Agent, will have
a Material Adverse Effect.
(d) Interim Liabilities and Equity. Except as disclosed to the Arrangers
and the Lenders, since June 30, 2000, neither the Borrower nor the Company
shall have (i) entered into any (as determined in good faith by the
Administrative Agent and the Syndication Agent) commitment or transaction,
including, without limitation, transactions for borrowings and capital
expenditures, which are not in the ordinary course of the Borrower's business,
(ii) declared or paid any dividends or other distributions other than in the
ordinary course of business, (iii) established compensation or employee
benefit plans, or (iv) redeemed or issued any equity Securities, other than
those described on SCHEDULE 6.1(D) hereto.
(e) No Loss of Material Agreements and Licenses. Since June 30, 2000, no
agreement or license relating to the business, operations or
71
employee relations of the Borrower or any of its Real Properties shall have
been terminated, modified, revoked, breached or declared to be in default, the
termination, modification, revocation, breach or default under which, in the
reasonable judgment of the Administrative Agent and the Syndication Agent,
would result in a Material Adverse Effect.
(f) No Market Changes. Since the Closing Date no material adverse change
shall have occurred in the conditions in the capital markets.
(g) No Default. No Event of Default or Potential Event of Default shall
have occurred and be continuing or would result from the making of the Loans or
the issuance of any Letter of Credit.
(h) Representations and Warranties. All of the representations and
warranties contained in Sections 7.1, 9.12(b) and 9.14 and in any of the other
Loan Documents shall be true and correct in all material respects on and as of
the Initial Funding Date.
(i) Termination of Old Term Loan Agreement. The Old Term Loan Agreement
shall have been repaid in full and terminated.
(j) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the accounts of the Agents and the Lenders, as
applicable, all fees due and payable on or before the Initial Funding Date and
all expenses due and payable on or before the Initial Funding Date, including,
without limitation, reasonable attorneys' fees and expenses, and other costs
and expenses incurred in connection with the Loan Documents.
6.2. CONDITIONS PRECEDENT TO ALL SUBSEQUENT LOANS AND LETTERS OF CREDIT.
The obligation of each Lender to make any Loan requested to be made by it on
any date after the Initial Funding Date and the agreement of each Lender to
issue any Letter of Credit on any date after the Initial Funding Date shall be
subject to the following conditions precedent as of each such date:
(a) Representations and Warranties. As of such date, both before and
after giving effect to the Loans to be made or the Letter of Credit to be
issued on such date, all of the representations and warranties of the Borrower
contained in Sections 7.1, 9.12(b) and 9.14 and all of the representations of
the Borrower and the parties to the Guaranties in any other Loan Document
(other than representations and warranties which expressly speak as of a
different date) shall be true and correct in all material respects.
72
(b) No Defaults. No Event of Default or Potential Event of Default shall
have occurred and be continuing or would result from the making of the
requested Loan or issuance of the requested Letter of Credit. Each of the
Lenders shall have received the Officer's Certificate as provided in Section
2.1(b)(vii), 2.2(f) or 3.1(c).
(c) No Legal Impediments. No law, regulation, order, judgment or decree
of any Governmental Authority shall, and the Administrative Agent shall not
have received from such Lender notice that, in the reasonable judgment of such
Lender, litigation is pending or threatened which is likely to, enjoin,
prohibit or restrain such Lender's making of the requested Loan or
participation in or issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. The Borrower shall not have received
written notice from the Requisite Lenders that an event has occurred since the
date of this Agreement which has had and continues to have, or is reasonably
likely to have, a Material Adverse Effect.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing with respect to a Loan, each acceptance by the Borrower of the
proceeds of each Loan made hereunder, each submission by the Borrower to a
Lender of a request for issuance of a Letter of Credit and the issuance of
such Letter of Credit, shall constitute a representation and warranty by the
Borrower as of the Funding Date in respect of such Loan and the date of
issuance of such Letter of Credit, that all the conditions contained in this
Section 6.2 have been satisfied or waived in accordance with Section 14.7 (it
being understood that with respect to the condition set forth in Section
6.2(c), the same shall constitute a representation and warranty by the
Borrower only to the extent that the Borrower shall have knowledge of any of
the events set forth therein).
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
7.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. In order to induce
the Lenders to enter into this Agreement and to make the Loans and the other
financial accommodations to the Borrower and to issue the Letters of Credit
described herein, the Borrower hereby represents and warrants to each Lender
that the following statements are true, correct and complete:
(a) Organization; Powers. (i) The Borrower (A) is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware, (B) is duly qualified to do business and is in
73
good standing under the laws of each jurisdiction in which failure to be so
qualified and in good standing will have a Material Adverse Effect, (C) has
all requisite power and authority to own, operate and encumber its Property
and to conduct its business as presently conducted and as proposed to be
conducted in connection with and following the consummation of the
transactions contemplated by this Agreement, and (D) is a partnership for
federal income tax purposes.
(ii) The Company (A) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland, (B) is duly
authorized and qualified to do business and is in good standing under the laws
of each jurisdiction in which failure to be so qualified and in good standing
will have a Material Adverse Effect, and (C) has all requisite corporate power
and authority to own, operate and encumber its Property and to conduct its
business as presently conducted.
(iii) True, correct and complete copies of the Organizational Documents
of the Borrower and the Company identified on SCHEDULE 7.1-A have been
delivered to Administrative Agent, each of which is in full force and effect,
has not been modified or amended except to the extent set forth or indicated
therein or as otherwise permitted hereby and, to the best of the Borrower's
knowledge, there are no defaults under such Organizational Documents and no
events which, with the passage of time or giving of notice or both, would
constitute a default under such Organizational Documents. Borrower shall
update SCHEDULE 7.1-A from time to time in order to keep said Schedule true
and correct.
(iv) Neither the Borrower nor the Company is a "foreign person" within
the meaning of Section 1445 of the Internal Revenue Code.
(b) Authority. (i) The Company has the requisite power and authority to
execute and deliver this Agreement on behalf of the Borrower and each of the
other Loan Documents which are required to be executed on behalf of the
Borrower as required by this Agreement. The Company is the Person who has
executed this Agreement and such other Loan Documents on behalf of the
Borrower and is the sole general partner of the Borrower.
(ii) The execution, delivery and performance of each of the Loan
Documents which must be executed in connection with this Agreement by the
Borrower and to which the Borrower is a party and the consummation of the
transactions contemplated thereby are within the Borrower's partnership
powers, have been duly authorized by all necessary partnership action (and, in
the case of the Company acting on behalf of the Borrower in connection
therewith, all necessary corporate action of the Company) and such
authorization has not been rescinded. No other partnership or corporate
74
action or proceedings on the part of the Borrower or the Company is necessary to
consummate such transactions.
(iii) Each of the Loan Documents to which the Borrower is a party has
been duly executed and delivered on behalf of the Borrower and constitutes the
Borrower's legal, valid and binding obligation, enforceable against the
Borrower in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general principles of equity
regardless of whether enforcement is considered in a proceeding at law or in
equity. Each of the Loan Documents to which Borrower is a party is in full
force and effect and all the terms, provisions, agreements and conditions set
forth therein and required to be performed or complied with by the Company,
the Borrower and the Borrower's Subsidiaries on or before the Initial Funding
Date have been performed or complied with, and no Potential Event of Default
or Event of Default exists.
(c) Subsidiaries; Ownership of Capital Stock and Partnership Interests.
(i) SCHEDULE 7.1-C (A) contains a diagram indicating the corporate structure
of the Company, the Borrower and any other Person in which the Company or the
Borrower holds a direct or indirect partnership, joint venture or other equity
interest indicating the nature of such interest with respect to each Person
included in such diagram; and (B) accurately sets forth (1) the correct legal
name of such Person, the jurisdiction of its incorporation or organization and
the jurisdictions in which it is qualified to transact business as a foreign
corporation, or otherwise, and (2) the authorized, issued and outstanding
shares or interests of each class of equity Securities of the Company, the
Borrower and the Subsidiaries of the Borrower, and (3) the ownership interest
of the Borrower, the Company and the Subsidiaries of the Borrower in all Joint
Ventures. None of such issued and outstanding Securities is subject to any
vesting, redemption, or repurchase agreement, and there are no warrants or
options (other than Permitted Securities options) outstanding with respect to
such Securities, except as noted on SCHEDULE 7.1-C. The outstanding Capital
Stock of the Company is duly authorized, validly issued, fully paid and
nonassessable and the outstanding Securities of the Borrower and its
Subsidiaries are duly authorized and validly issued. Attached hereto as part
of SCHEDULE 7.1-C is a true, accurate and complete copy of the Borrower
Partnership Agreement as in effect on the Closing Date and such Partnership
Agreement has not been amended, supplemented, replaced, restated or otherwise
modified in any respect since the Closing Date, except as otherwise permitted
hereby. Borrower shall update SCHEDULE 7.1-C as of the first day of each
fiscal quarter, and shall deliver the same together with the Quarterly
Compliance Certificates, to the extent required, in order to keep said
Schedule true and correct.
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(ii) Except where failure would not have a Material Adverse Effect, each
of the Subsidiaries of the Borrower: (A) is a corporation or partnership, as
indicated on SCHEDULE 7.1-C, duly organized or formed, validly existing and,
if applicable, in good standing under the laws of the jurisdiction of its
organization, (B) is duly qualified to do business and, if applicable, is in
good standing under the laws of each jurisdiction in which failure to be so
qualified and in good standing would have a Material Adverse Effect, and (C)
has all requisite power and authority to own, operate and encumber its
Property and to conduct its business as presently conducted and as proposed to
be conducted hereafter.
(iii) As to each Guarantor, a provision similar, as applicable to (a),
(b) and (c) above shall be included in each such Subsidiary's Guaranty, and
the Borrower shall be deemed to make for itself and on behalf of such
Subsidiary a representation as to such provisions.
(d) No Conflict. The execution, delivery and performance of each of the
Loan Documents to which the Borrower, the Company or any Guarantor is a party,
respectively, do not and will not (i) conflict with the Organizational
Documents of the Borrower, the Company or such Guarantor, as the case may be,
(ii) conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law or
material Contractual Obligation of the Borrower, the Company or such
Guarantor, as the case may be, or require termination of any such material
Contractual Obligation which would subject the Administrative Agent or any of
the other Lenders to any liability, (iii) result in or require the creation or
imposition of any Lien whatsoever upon any of the Property or assets of the
Borrower, the Company or such Guarantor, as the case may be, or (iv) require
any approval of shareholders of the Company (other than such approvals that
have been obtained and are in full force and effect).
(e) Governmental Consents. The execution, delivery and performance of
each of the Loan Documents to which the Borrower, the Company or any Guarantor
is a party do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by any Governmental
Authority, except filings, consents or notices which have been made, obtained
or given.
(f) Governmental Regulation. Neither of the Borrower or the Company is
subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, or the Investment Company
Act of 1940, or any other federal or state statute or regulation which limits
its ability to incur indebtedness as contemplated by this Agreement.
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(g) Financial Position. Complete and accurate copies of the following
financial statements and materials have been delivered to the Administrative
Agent: annual unaudited financial statements of the Borrower, annual audited
financial statements of the Company for the fiscal year ended December 31,
1999 and unaudited financial statements of the Company for the fiscal quarter
ended June 30, 2000. All annual financial statements of the Borrower shall be
accompanied by an Officer's Certificate of the Borrower, and shall be
certified by the Chief Financial Officer of the Borrower as fairly presenting
in all material respects the financial position of the Borrower. All financial
statements included in such materials were prepared in all material respects
in conformity with GAAP, except as otherwise noted therein, and fairly present
in all material respects the respective consolidated financial positions, and
the consolidated results of operations and cash flows for each of the periods
covered thereby of the Borrower and the Company as at the respective dates
thereof. Neither the Borrower nor the Company has any Contingent Obligation,
contingent liability or liability for any taxes, long-term leases or
commitments not reflected in its financial statements delivered to the
Administrative Agent on or prior to the Closing Date or otherwise disclosed to
the Administrative Agent and the Lenders in writing on or prior to the Closing
Date, which will have a Material Adverse Effect.
(h) Indebtedness. SCHEDULE 7.1-H sets forth, as of June 30, 2000, all
Indebtedness for borrowed money of each of the Borrower, the Company and their
respective Subsidiaries and, except as set forth on SCHEDULE 7.1-H, there are
no defaults in the payment of principal of or interest on any such
Indebtedness and no payments thereunder have been deferred or extended beyond
their stated maturity and there has been no material change in the type or
amount of such Indebtedness (except for the repayment of certain Indebtedness)
since June 30, 2000.
(i) Litigation; Adverse Effects. Except as set forth in SCHEDULE 7.1-I,
as of the Closing Date, there is no action, suit, proceeding, investigation or
arbitration before or by any Governmental Authority or private arbitrator
pending or, to the knowledge of the Borrower, threatened against the Company,
the Borrower or any of their respective Subsidiaries, or any Property of any
of them (i) challenging the validity or the enforceability of any of the Loan
Documents, (ii) which will result in any Material Adverse Effect, or (iii)
under the Racketeering Influenced and Corrupt Organizations Act or any similar
federal or state statute where such Person is a defendant in a criminal
indictment that provides for the forfeiture of assets to any Governmental
Authority as a potential criminal penalty. There is no material loss
contingency within the meaning of GAAP which has not been reflected in the
consolidated financial statements of the Company and the
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Borrower. None of the Company, the Borrower or any Subsidiary of the Borrower
is (A) in violation of any applicable Requirements of Law which violation will
have or is reasonably likely to have a Material Adverse Effect, or (B) in
default with respect to any final judgment, writ, injunction, restraining
order or order of any nature, decree, rule or regulation of any court or
Governmental Authority which will have a Material Adverse Effect.
(j) No Material Adverse Effect. Since June 30, 2000, there has occurred no
event which has had a Material Adverse Effect.
(k) Intentionally Omitted.
(l) Payment of Taxes. All material tax returns, reports and similar
statements or filings of the Company, the Borrower and their respective
Subsidiaries required to be filed have been timely filed (or extensions to
file have been obtained), and, except for Customary Permitted Liens, all
material taxes, assessments, fees and other charges of Governmental
Authorities thereupon and upon or relating to their respective Properties,
assets, receipts, sales, use, payroll, employment, income, licenses and
franchises which are shown in such returns or reports to be due and payable
have been paid, except to the extent (i) such taxes, assessments, fees and
other charges of Governmental Authorities are being contested in good faith by
an appropriate proceeding diligently pursued as permitted by the terms of
Section 9.4 and (ii) such taxes, assessments, fees and other charges of
Governmental Authorities pertain to Property of the Borrower or any of its
Subsidiaries and the non-payment of the amounts thereof would not,
individually or in the aggregate, result in a Material Adverse Effect. All
other material taxes (including, without limitation, real estate taxes),
assessments, fees and other governmental charges upon or relating to the
respective Properties of the Borrower and its Subsidiaries which are due and
payable have been paid, except for Customary Permitted Liens and except to the
extent described in clauses (i) and (ii) hereinabove. The Borrower has no
knowledge of any proposed tax assessment against the Borrower, any of its
Subsidiaries, or any of the Projects that will have or is reasonably likely to
have a Material Adverse Effect.
(m) Performance. To the knowledge of the Borrower, neither the Company,
the Borrower nor any of their Subsidiaries has received any written notice or
citation, nor has actual knowledge, that (i) it is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, or (ii)
any condition exists which, with the giving of notice or the lapse of time or
both, would constitute a default with respect to any such Contractual
78
Obligation; in each case, except where such default or defaults, if any, will
not have a Material Adverse Effect.
(n) Disclosure. The representations and warranties of the Borrower and
the Guarantors contained in the Loan Documents, and all certificates and other
documents delivered to the Administrative Agent or any Lender pursuant to the
terms thereof, do not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they were made,
taken as a whole, not misleading. Notwithstanding the foregoing, the Lenders
acknowledge that the Borrower shall not have liability under this clause (n)
with respect to its projections of future events or for any financial
projections.
(o) Requirements of Law. The Borrower and each of its Subsidiaries is in
compliance with all Requirements of Law applicable to it and its respective
businesses and Properties, in each case where the failure to so comply
individually or in the aggregate will have a Material Adverse Effect.
(p) Environmental Matters.
(i) Except as disclosed on SCHEDULE 7.1-P (the Borrower shall update
SCHEDULE 7.1-P as of the first day of each fiscal quarter, and deliver the
same together with the Quarterly Compliance Certificates, to the extent
required, in order to keep said Schedule true and correct):
(A) the operations of the Borrower, each of its Subsidiaries, and their
respective Properties comply with all applicable Environmental, Health or
Safety Requirements of Law, except to the extent any failure to do so would
not have a Material Adverse Effect;
(B) the Borrower and each of its Subsidiaries have obtained all material
environmental, health and safety Permits necessary for their respective
operations, and all such Permits are in good standing and the holder of each
such Permit is currently in compliance with all terms and conditions of such
Permits, except to the extent any failure to do so would not have a Material
Adverse Effect;
(C) to the knowledge of the Borrower, none of the Borrower, its
Subsidiaries or any of their respective present or past Properties or
operations are subject to or are the subject of
79
any investigation of any Governmental Authority, judicial or administrative
proceeding, order, judgment or decree, negotiations, agreement or settlement
respecting (I) any Remedial Action, (II) any Claims or Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment, or (III) any violation of or liability under any Environmental,
Health or Safety Requirement of Law, except to the extent none of the
foregoing would have a Material Adverse Effect;
(D) none of Borrower or any of its Subsidiaries has filed any notice
under any applicable Requirement of Law (I) reporting a Release of a
Contaminant; (II) indicating past or present treatment, storage or disposal of
a hazardous waste, as that term is defined under 40 C.F.R. Part 261 or any
state equivalent; or (III) reporting a violation of any applicable
Environmental, Health or Safety Requirement of Law with respect to any of the
foregoing, the substance of which would have a Material Adverse Effect;
(E) none of the Borrower's or any of its Subsidiaries' present or past
Property is listed or, to the knowledge of the Borrower, proposed for listing
on the National Priorities List ("NPL") pursuant to CERCLA or on the
Comprehensive Environmental Response Compensation Liability Information System
List ("CERCLIS") or any similar state list of sites requiring Remedial Action;
(F) to the knowledge of the Borrower, none of the Borrower or any of its
Subsidiaries has sent or directly arranged for the transport of any waste to
any site listed or proposed for listing on the NPL, CERCLIS or any similar
state list;
(G) to the best of the Borrower's knowledge, there is not now, and to the
Borrower's knowledge there has never been, on or in any Project (I) any
treatment, recycling, storage away from the site of generation or disposal of
any hazardous waste, as that term is defined under 40 C.F.R. Part 261 or any
state equivalent, (II) any solid waste management facility, (III) any
underground storage tanks the presence or use of which is in violation of
applicable Environmental, Health or Safety Requirements of Law, (IV) any
asbestos-containing material which, in its present state, such Person has any
reason to believe could subject such Person or its Property to Liabilities
80
and Costs arising out of or relating to environmental, health or safety
matters that would result in a Material Adverse Effect; or (V) any
polychlorinated biphenyls (PCB) used in hydraulic oils, electrical
transformers or other Equipment, which, in any such case, would subject the
Borrower or its Subsidiaries or their respective Properties to Liabilities and
Costs arising out of or relating to environmental, health or safety matters
that would result in a Material Adverse Effect;
(H) to the knowledge of the Borrower, none of the Borrower or any of its
Subsidiaries has received any notice or Claim to the effect that any of such
Persons is or may be liable to any Person as a result of the Release or
threatened Release of a Contaminant into the environment which would result in
a Material Adverse Effect;
(I) none of the Borrower or any of its Subsidiaries has any contingent
liability in connection with any Release or threatened Release of any
Contaminants into the environment which will result in a Material Adverse
Effect;
(J) no Environmental Lien has attached to any Property of the Borrower or
any of its Subsidiaries (other than those otherwise permitted hereunder) or
which do not constitute an Event of Default; and
(K) no Property of the Borrower or any of its Subsidiaries is subject to
any Environmental Property Transfer Act, or to the extent such acts are
applicable to any such Property, the Borrower and/or such Subsidiary whose
Property is subject thereto has complied in all material respects with the
requirements of such acts.
(q) ERISA. Neither the Borrower nor any ERISA Affiliate maintains or
contributes to any Benefit Plan or Multiemployer Plan other than those listed
on SCHEDULE 7.1-Q hereto. Each Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code as currently in effect has been
determined by the IRS to be so qualified, and each trust related to any such
Plan has been determined to be exempt from federal income tax under Section
501(a) of the Internal Revenue Code as currently in effect. Except as
disclosed in SCHEDULE 7.1-Q, neither the Borrower nor any of its Subsidiaries
maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA that provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA. The
Borrower and each of its Subsidiaries is in compliance in
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all material respects with the responsibilities, obligations and duties
imposed on it by ERISA, the Internal Revenue Code and regulations promulgated
thereunder with respect to all Plans. No Benefit Plan has incurred any
accumulated funding deficiency (as defined in Sections 302(a)(2) of ERISA and
412 (a) of the Internal Revenue Code) whether or not waived. Neither the
Borrower nor any ERISA Affiliate nor any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in a nonexempt prohibited transaction
described in Sections 406 of ERISA or 4975 of the Internal Revenue Code or
(ii) has taken or failed to take any action which would constitute or result
in an ERISA Termination Event. Neither the Borrower nor any ERISA Affiliate is
subject to any liability under Sections 4063, 4064, or 4204 of ERISA which
would have a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate is subject to any liability under Sections 4069 or 4212 (c) of ERISA
or has incurred any liability to the PBGC which remains outstanding other than
the payment of premiums, and there are no premium payments which have become
due which are unpaid. Schedule B to the most recent annual report filed with
the IRS with respect to each Benefit Plan has been furnished to the
Administrative Agent and is complete and accurate in all material respects.
Since the date of each such Schedule B, there has been no material adverse
change in the funding status or financial condition of the Benefit Plan
relating to such Schedule B. Neither the Borrower nor any ERISA Affiliate has
(i) failed to make a required contribution or payment to a Multiemployer Plan
or (ii) made a complete or partial withdrawal under Sections 4203 or 4205 of
ERISA from a Multiemployer Plan which would have a Material Adverse Effect.
Neither the Borrower, nor any ERISA Affiliate has failed to make a required
installment or any other required payment under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment.
Neither the Borrower nor any ERISA Affiliate is required to provide security
to a Benefit Plan under Section 401(a)(29) of the Internal Revenue Code due to
a Benefit Plan amendment that results in an increase in current liability for
the plan year. Except as disclosed on SCHEDULE 7.1-Q, which shall be updated
by Borrower as of the first day of each fiscal quarter, to the extent
required, neither the Borrower nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to
any employee pursuant to any Plan or existing contract or arrangement.
(r) Securities Activities. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock except
as described on SCHEDULE 7.L-R.
(s) Solvency. After giving effect to the Loans to be made on the Initial
Funding Date or such other date as Loans requested hereunder
82
are made, and the disbursement of the proceeds of such Loans pursuant to the
Borrower's instructions, the Borrower and each Guarantor is Solvent.
(t) Insurance. SCHEDULE 7.1-T accurately sets forth as of the Closing
Date all insurance policies and programs currently in effect with respect to
the respective Property and assets and business of the Borrower and its
Subsidiaries, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification
number thereof, and (v) the expiration date thereof. The Borrower has
delivered to the Administrative Agent copies of all insurance policies set
forth on SCHEDULE 7.1-T. Such insurance policies and programs are currently in
full force and effect, in compliance with the requirements of Section 9.5
hereof and, together with payment by the insured of scheduled deductible
payments, are, to the knowledge of the Borrower, in amounts which should
reasonably be expected to be sufficient to cover the replacement value of the
respective Property and assets of the Borrower and/or its Subsidiaries.
Borrower shall update SCHEDULE 7.1-T, which shall be updated by Borrower
annually, to the extent required, in order to keep said Schedule true and
correct (or more frequently if an insurance policy or program shall be
terminated and/or replaced).
(u) REIT Status. The Company qualifies as a REIT under the Internal Revenue
Code.
(v) Ownership of Projects, Joint Ventures and Property. Ownership of all
wholly owned Projects, Joint Ventures and other Property of the Consolidated
Businesses is held by the Borrower and its Subsidiaries and is not held
directly by the Company.
(w) Title to Properties. The Borrower, the Guarantors and their
respective Subsidiaries that own Real Property each has good title to all of
its respective Real Property purported to be owned by it, including, without
limitation, that:
(a) Either (i) the Borrower or (ii) a Guarantor is the owner of or the
holder of a fee or ground leasehold interest (under an effective ground lease)
in the Unencumbered Projects which are wholly-owned by the Borrower and the
Consolidated Businesses (other than the 919 Third Avenue Property and the 120
Mineola Boulevard Property), free from any Lien, except for Customary
Permitted Liens, or preferred equity interest, except the Metropolitan
Preferred Equity.
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(b) The Company, the Borrower and their Consolidated Subsidiaries will,
as of the Closing Date, own all of the assets as reflected in the financial
statements of the Borrower and the Company described in Section 7.1(g) or
acquired since the date of such financial statements (except property and
assets sold or otherwise disposed of in the ordinary course of business since
that date).
ARTICLE VIII.
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any Revolving Credit
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities pursuant to Section 14.3 not yet due),
unless the Requisite Lenders shall otherwise give prior written consent
thereto:
8.1. BORROWER ACCOUNTING PRACTICES. The Borrower shall maintain, and
cause each of its consolidated Subsidiaries to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated financial statements in
conformity with GAAP.
8.2. FINANCIAL REPORTS. The Borrower shall deliver or cause to be delivered
to the Administrative Agent (with copies for each of the Lenders):
(a) Quarterly Reports.
(i) Borrower Quarterly Financial Reports. As soon as practicable, and in
any event within forty-five (45) days after the end of each fiscal quarter in
each Fiscal Year (other than the last fiscal quarter in each Fiscal Year), a
consolidated balance sheet of the Borrower and the related consolidated
statements of income and cash flow of the Borrower (to be prepared and
delivered quarterly in conjunction with the other reports delivered hereunder
at the end of each fiscal quarter) for each such fiscal quarter, and, in
comparative form, the corresponding figures for the corresponding dates and
periods of the previous Fiscal Year, certified by an Authorized Financial
Officer of the Borrower as fairly presenting in all material respects the
consolidated financial position of the Borrower as of the dates indicated and
the consolidated results of its operations and cash flow for the months
indicated in accordance with GAAP, subject to normal adjustments.
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(ii) Company Quarterly Financial Reports. As soon as practicable, and in
any event within forty-five (45) days after the end of each fiscal quarter in
each Fiscal Year (other than the last fiscal quarter in each Fiscal Year), the
Financial Statements of the Company and its consolidated Subsidiaries on Form
10-Q as at the end of such period and a report setting forth in comparative
form the corresponding figures for the corresponding dates and period of the
previous Fiscal Year, certified by an Authorized Financial Officer of the
Company as fairly presenting in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as at the
date indicated and the consolidated results of their operations and cash flow
for the period indicated in accordance with GAAP, subject to normal
adjustments.
(iii) Quarterly Compliance Certificates. Together with each delivery of
any quarterly report pursuant to paragraph (a)(i) of this Section 8.2,
Officer's Certificates of the Borrower and the Company in the form of EXHIBIT
F hereto (the "QUARTERLY COMPLIANCE CERTIFICATES"), signed by the Borrower's
and the Company's respective Authorized Financial Officers representing and
certifying (1) that the Authorized Financial Officer signatory thereto has
reviewed the terms of the Loan Documents, and has made, or caused to be made
under his/her supervision, a review in reasonable detail of the consolidated
financial condition of the Company and its Consolidated Subsidiaries, for the
fiscal quarter covered by such reports, that such review has not disclosed the
existence during or at the end of such fiscal quarter, and that such officer
does not have knowledge of the existence as at the date of such Officer's
Certificate, of an Event of Default or Potential Event of Default or mandatory
prepayment event, or, if any such condition or event existed or exists, the
nature and period of existence thereof and what action the Company and/or the
Borrower or any of their Subsidiaries has taken, is taking and proposes to
take with respect thereto; (2) the calculations in the form of EXHIBIT G
hereto for the period then ended which demonstrate compliance with the
covenants and financial ratios set forth in Sections 9.9, 9.11, 10.2, 10.6,
10.7, 10.11, and 10.12 hereof and, when applicable, that no Event of Default
described in Section 11.1 exists, (3) a schedule of the Borrower's outstanding
Indebtedness, including the amount, maturity, interest rate and amortization
requirements, as well as such other information regarding such Indebtedness as
may be reasonably requested by the Administrative Agent, (4) a schedule of
Total Adjusted EBITDA, and (5) a schedule of Adjusted Unencumbered NOI.
(b) Annual Reports.
85
(i) Borrower Financial Statements. As soon as practicable, and in any
event within ninety (90) days after the end of each Fiscal Year, the Financial
Statements of the Borrower and its respective Subsidiaries as at the end of
such Fiscal Year, accompanied by an Officer's Certificate of the Borrower,
signed by the Chief Financial Officer of the Borrower, that the Financial
Statements fairly present in all material respects the consolidated financial
position of the Borrower and its respective Subsidiaries as of the dates
indicated and the results of their operations and cash flow for the periods
indicated in conformity with GAAP consistently applied, and which Officer's
Certificate shall explain any inconsistencies between the Financial Statements
of the Borrower and the Financial Statements of the Company.
(ii) Company Financial Statements. As soon as practicable, and in any
event within ninety (90) days after the end of each Fiscal Year, (i) the
Financial Statements of the Company and its consolidated Subsidiaries on Form
10-K as at the end of such Fiscal Year and a report setting forth in
comparative form the corresponding figures from the consolidated Financial
Statements of the Company and its Subsidiaries for the prior Fiscal Year; (ii)
a report with respect thereto of Ernst & Young LLP or other independent
certified public accountants acceptable to the Administrative Agent (it being
understood that any "Big Five" certified public accountants are acceptable to
the Administrative Agent), which report shall be unqualified and shall state
that such financial statements fairly present the consolidated financial
position of each of the Company and its consolidated Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP (except for changes with which Ernst
& Young LLP or any such other independent certified public accountants, if
applicable, shall concur and which shall have been disclosed in the notes to
the financial statements) (which report shall be subject to the
confidentiality limitations set forth herein); and (iii) in the event that the
report referred to in clause (ii) above is qualified, a copy of the management
letter or any similar report delivered to the Company or to any officer or
employee thereof by such independent certified public accountants in
connection with such financial statements. The Administrative Agent and each
Lender (through the Administrative Agent) may, with the consent of the Company
(which consent shall not be unreasonably withheld), communicate directly with
such accountants, with any such communication to occur together with a
representative of the Company, at the expense of the Administrative Agent (or
the Lender requesting such communication), upon
86
reasonable notice and at reasonable times during normal business hours.
(iii) Annual Compliance Certificates. Together with each delivery of any
annual report pursuant to clauses (i) and (ii) of this Section 8.2(b),
Officer's Certificates of the Borrower and the Company in the form of EXHIBIT
F hereto (the "ANNUAL COMPLIANCE CERTIFICATES" and, collectively with the
Quarterly Compliance Certificates, the "COMPLIANCE CERTIFICATES"), signed by
the Borrower's and the Company's respective Authorized Financial Officers,
representing and certifying (1) that the officer signatory thereto has
reviewed the terms of the Loan Documents, and has made, or caused to be made
under his/her supervision, a review in reasonable detail of the consolidated
financial condition of the Company and its consolidated Subsidiaries, for the
accounting period covered by such reports, that such review has not disclosed
the existence at the end of such accounting period, and that such officer does
not have knowledge of the existence as at the date of such Officer's
Certificate, of an Event of Default or Potential Event of Default or mandatory
prepayment event, or, if any such condition or event existed or exists, the
nature and period of existence thereof and what action the Company and/or the
Borrower or any of their Subsidiaries has taken, is taking and proposes to
take with respect thereto; (2) the calculations in the form of EXHIBIT G
hereto for the period then ended which demonstrate compliance with the
covenants and financial ratios set forth in Sections 9.9, 9.11, 10.2, 10.6,
10.7, 10.11, and 10.12 hereof and, when applicable, that no Event of Default
described in Section 11.1 exists, (3) a schedule of the Borrower's outstanding
Indebtedness including the amount, maturity, interest rate and amortization
requirements, as well as such other information regarding such Indebtedness as
may be reasonably requested by the Administrative Agent, (4) a schedule of
Total Adjusted EBITDA and (5) a schedule of Adjusted Unencumbered NOI.
(iv) Tenant Bankruptcy Reports. As soon as practicable, and in any event
within ninety (90) days after the end of each Fiscal Year, a written report,
in form reasonably satisfactory to the Administrative Agent, of all bankruptcy
proceedings filed by or against any tenant of any of the Projects, which
tenant occupies three and one half percent (3.5%) or more of the gross
leasable area in the Projects in the aggregate. The Borrower shall deliver to
the Administrative Agent and the Lenders, immediately upon the Borrower's
learning thereof, of any bankruptcy proceedings filed by or against, or the
cessation of business or operations of, any tenant of any of the Projects
which
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tenant occupies three and one half percent (3.5%) or more of the gross
leasable area in the Projects in the aggregate.
(v) Update of Schedule 7.1-C. As soon as practicable, and in any event
within ninety (90) days after the end of each Fiscal Year, the Borrower shall
deliver an update of Schedule 7.1-C.
8.3. EVENTS OF DEFAULT. Promptly upon the Borrower obtaining knowledge
(a) of any condition or event which constitutes an Event of Default or
Potential Event of Default; (b) that any Person has given any notice to the
Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 11.1(e); or (c) of any condition or event which has a Material Adverse
Effect, the Borrower shall deliver to the Administrative Agent (with copies
for each of the Lenders) an Officer's Certificate specifying (i) the nature
and period of existence of any such claimed default, Event of Default,
Potential Event of Default, condition or event, (ii) the notice given or
action taken by such Person in connection therewith, and (iii) what action the
Borrower has taken, is taking and proposes to take with respect thereto.
8.4. LAWSUITS. (i) Promptly upon the Borrower's obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Borrower or
any of its Subsidiaries not previously disclosed pursuant to Section 7.1(i),
which action, suit, proceeding, governmental investigation or arbitration
exposes, or in the case of multiple actions, suits, proceedings, governmental
investigations or arbitrations arising out of the same general allegations or
circumstances which expose, in the Borrower's reasonable judgment, the
Borrower or any of its Subsidiaries to liability in an amount aggregating
$1,000,000 or more and is not covered by the Borrower's or such Subsidiary's
insurance, the Borrower shall give written notice thereof to the
Administrative Agent (with copies for each of the Lenders) and provide such
other information as may be reasonably available to enable each Lender and the
Administrative Agent and its counsel to evaluate such matters; (ii) as soon as
practicable and in any event within forty-five (45) days after the end of each
fiscal quarter of the Borrower, the Borrower shall provide a written quarterly
report to the Administrative Agent and the Lenders covering the institution
of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration in an amount equal to or in excess of $50,000,000
(to the extent not previously reported) against or affecting the Borrower or
any of its Subsidiaries or any Property of the Borrower or any of its
Subsidiaries not previously disclosed by the Borrower to the Administrative
Agent and the Lenders, and shall provide such other information at such time
as may be reasonably available to enable each Lender and the
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Administrative Agent and its counsel to evaluate such matters; and (iii) in
addition to the requirements set forth in clauses (i) and (ii) of this Section
8.4, the Borrower upon request of the Administrative Agent or the Requisite
Lenders shall promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) or (ii) above and provide such other
information as may be reasonably requested and available to it to enable each
Lender and the Administrative Agent and its counsel to evaluate such matters.
Notwithstanding the foregoing, the Borrower shall not be required to disclose
any information which is subject to the attorney-client privilege.
8.5. INSURANCE. As soon as practicable and in any event by January 31st
of each calendar year, the Borrower shall deliver to the Administrative Agent
(with copies for each of the Lenders) (i) a report in form and substance
reasonably satisfactory to the Administrative Agent, outlining all insurance
coverage maintained as of the date of such report by the Borrower and its
Subsidiaries and the duration of such coverage and (ii) an Officer's
Certificate signed by an Authorized Financial Officer of the Borrower
certifying that all premiums with respect to such coverage have been paid when
due.
8.6. ERISA NOTICES. The Borrower shall deliver or cause to be delivered to
the Administrative Agent (with copies for each of the Lenders), at the
Borrower's expense, the following information and notices as soon as reasonably
possible, and in any event:
(a) within fifteen (15) Business Days after the Borrower or any ERISA
Affiliate knows or has reason to know that an ERISA Termination Event has
occurred, a written statement of an Authorized Financial Officer of the
Borrower describing such ERISA Termination Event and the action, if any, which
the Borrower or any ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or threatened by the
IRS, DOL or PBGC with respect thereto;
(b) within fifteen (15) Business Days after the Borrower knows or has
reason to know that a non-exempt prohibited transaction (as defined in
Sections 406 of ERISA and Section 4975 of the Internal Revenue Code) has
occurred with respect to the Borrower, any ERISA Affiliate or any Plan, a
statement of an Authorized Financial Officer of the Borrower describing such
transaction with respect to the Borrower, any ERISA Affiliate or any Plan and
the action which the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(c) within fifteen (15) Business Days after the filing of the same with
the DOL, IRS or PBGC, copies of each annual report (Form 5500 series),
including Schedule B thereto, filed with respect to each Benefit Plan;
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(d) within fifteen (15) Business Days after receipt by the Borrower or
any ERISA Affiliate of each actuarial report for any Benefit Plan or
Multiemployer Plan and each annual report for any Multiemployer Plan, copies
of each such report;
(e) within fifteen (15) Business Days after the filing of the same with
the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all written communications received by the Borrower or any
ERISA Affiliate with respect to such request;
(f) within fifteen (15) Business Days after the occurrence of any
material increase in the benefits of any existing Benefit Plan or
Multiemployer Plan or the establishment of any new Benefit Plan or the
commencement of contributions to any Benefit Plan or Multiemployer Plan to
which the Borrower or any ERISA Affiliate to which the Borrower or any ERISA
Affiliate was not previously contributing, notification of such increase,
establishment or commencement;
(g) within fifteen (15) Business Days after the Borrower or any ERISA
Affiliate receives notice of the PBGC's intention to terminate a Benefit Plan
or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice;
(h) within fifteen (15) Business Days after the Borrower or any of its
Subsidiaries receives notice of any unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such letter to the extent any of the foregoing
would have a Material Adverse Effect;
(i) within fifteen (15) Business Days after the Borrower or any ERISA
Affiliate receives notice from a Multiemployer Plan regarding the imposition
of withdrawal liability, copies of each such notice;
(j) within fifteen (15) Business Days after the Borrower or any ERISA
Affiliate fails to make a required installment or any other required payment
under Section 412 of the Internal Revenue Code on or before the due date for
such installment or payment which failure has not been cured, a notification
of such failure; and
(k) within fifteen (15) Business Days after the Borrower or any ERISA
Affiliate knows or has reason to know (i) a Multiemployer Plan has been
terminated, (ii) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (iii) the PBGC has instituted or
has given written notice that it will institute proceedings under Section 4042
of ERISA to terminate a Multiemployer Plan,
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notification of such termination, intention to terminate, or institution of
proceedings.
For purposes of this Section 8.6, the Borrower and any ERISA Affiliate shall
be deemed to know all facts known by the "Administrator" of any Plan of which
the Borrower or any ERISA Affiliate is the plan sponsor.
8.7. ENVIRONMENTAL NOTICES. The Borrower shall notify the Administrative
Agent (with copies for each of the Lenders) in writing, promptly upon any
officer of the Borrower responsible for the environmental matters at any
Property of the Borrower learning thereof, of any of the following (together
with any material documents and correspondence received or sent in connection
therewith):
(a) notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release or
threatened Release of any Contaminant into the environment, if such liability
would result in a Material Adverse Effect;
(b) notice that the Borrower or any of its Subsidiaries is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment which would have a Material Adverse Effect;
(c) notice that any Property of the Borrower or any of its Subsidiaries
is subject to an Environmental Lien if the claim to which such Environmental
Lien relates would result in a Material Adverse Effect;
(d) notice of violation by the Borrower or any of its Subsidiaries of any
Environmental, Health or Safety Requirement of Law which violation would have
a Material Adverse Effect;
(e) commencement or written threat of any judicial or administrative
proceeding alleging a violation by the Borrower or any of its Subsidiaries of
any Environmental, Health or Safety Requirement of Law, which would result in
a Material Adverse Effect; or
(f) any proposed acquisition of stock, assets, real estate, or leasing of
Property by the Borrower or any of its Subsidiaries that would subject the
Borrower or any of its Subsidiaries to environmental, health or safety
Liabilities and Costs which would result in a Material Adverse Effect.
8.8. LABOR MATTERS. The Borrower shall notify the Administrative Agent
(with copies for each of the Lenders) in writing, promptly upon the
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Borrower's learning thereof, of any labor dispute to which the Borrower or any
of its Subsidiaries is reasonably expected to become a party (including,
without limitation, any strikes, lockouts or other disputes relating to any
Property of such Persons and other facilities) which would result in a
Material Adverse Effect.
8.9. NOTICES OF ASSET SALES AND/OR ACQUISITIONS. The Borrower shall
deliver to the Administrative Agent and the Lenders written notice of each of
the following not less than five (5) Business Days prior to the occurrence
thereof: (a) a sale, transfer or other disposition of assets, in a single
transaction or series of related transactions, (b) an acquisition of assets,
in a single transaction or series of related transactions within the two
preceding calendar quarter period, for consideration in excess of $50,000,000,
and (c) the grant of a Lien with respect to assets, in a single transaction or
series of related transactions. In addition, simultaneously with delivery of
any such notice, the Borrower shall deliver to the Administrative Agent a
certificate of an Authorized Officer certifying that Borrower is in compliance
with this Agreement and the other Loan Documents both on a historical basis
and on a pro forma basis, exclusive of the property sold, transferred and/or
encumbered and inclusive of the property to be acquired or the indebtedness to
be incurred.
To the extent such proposed transaction would result in a failure to comply
with the covenants set forth herein, proceeds of such transaction (together
with such additional amounts as may be required), in an amount, as determined
by the Administrative Agent, equal to that which would be required to reduce
the Obligations so that Borrower will be in compliance with the covenants set
forth herein upon the consummation of the contemplated transaction, shall be
applied to prepay the Obligations.
8.10. NOTICES OF JOINT VENTURES. The Borrower shall deliver to the
Administrative Agent and the Lenders written notice of each of the following
not less than two (2) Business Days prior to the occurrence thereof: (a) the
acquisition of an interest in a Joint Venture in excess of $1,000,000, (b) the
investment of an amount in excess of $1,000,000 in a Joint Venture of which
the Administrative Agent and the Lenders have not previously received notice,
and (c) the sale of an interest in a Subsidiary that results in the same
becoming a Joint Venture. Simultaneously with the delivery of the Compliance
Certificates, the Borrower shall deliver to the Administrative Agent and the
Lenders written notice of the formation of any other Joint Venture.
8.11. TENANT NOTIFICATIONS. The Borrower shall promptly notify the
Administrative Agent upon obtaining knowledge of the bankruptcy or
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cessation of operations of any tenant to which greater than three and one half
percent (3.5%) of the Borrower's share of annual base rent (as reported in the
Borrower's most recent quarterly financial statements) is attributable to such
tenant.
8.12. OTHER REPORTS. The Borrower shall deliver or cause to be delivered
to the Administrative Agent (with copies for each of the Lenders) copies of
all financial statements and reports, if any, sent or made available generally
by the Company and/or the Borrower to its respective Securities holders,
including, without limitation, supplemental quarterly forms, or (to the extent
not otherwise provided hereunder), all press releases made available generally
by the Company and/or the Borrower or any of its Subsidiaries to the public
concerning material adverse developments in the business of the Company, the
Borrower or any such Subsidiary and all material notifications received by the
Company, the Borrower or their Subsidiaries pursuant to the Securities
Exchange Act and the rules promulgated thereunder.
8.13. OTHER INFORMATION. Promptly upon receiving a request therefor from
the Administrative Agent or any Arranger, the Borrower shall prepare and
deliver to the Administrative Agent (with copies for each of the Lenders) such
other information with respect to the Company, the Borrower, or any of their
Subsidiaries, as from time to time may be reasonably requested by the
Administrative Agent or any Arranger, including without limitation, rent
rolls, title reports, environmental site assessments, and tax returns.
ARTICLE IX.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as any Revolving Credit
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities pursuant to Section 14.3 not yet due),
unless the Requisite Lenders shall otherwise give prior written consent:
9.1. EXISTENCE. ETC. The Borrower shall, and shall cause each of its
Subsidiaries and the Company to, at all times maintain its corporate existence
or existence as a limited partnership or joint venture, as applicable, and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its businesses, except where the loss or
termination of such rights and franchises will not have a Material Adverse
Effect.
9.2. POWERS; CONDUCT OF BUSINESS. The Borrower shall remain qualified, and
shall cause each of its Subsidiaries and the Company to qualify
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and remain qualified, to do business and maintain its good standing in each
jurisdiction in which the nature of its business and the ownership of its
Property requires it to be so qualified and in good standing if the failure to
do so will have a Material Adverse Effect.
9.3. COMPLIANCE WITH LAWS. ETC. The Borrower shall, and shall cause each of
its Subsidiaries and the Company to, (a) comply with all Requirements of Law and
all restrictive covenants affecting such Person or the business, Property or
operations of such Person, and (b) obtain and maintain as needed all Permits
necessary for its operations (including, without limitation, the operation of
the Projects) and maintain such Permits in good standing, except where
noncompliance with either clause (a) or (b) above will not have a Material
Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS. (a) The Borrower shall pay, and cause
each of its Subsidiaries and the Company to pay, (i) all material taxes,
assessments and other governmental charges imposed upon it or on any of its
Property or assets or in respect of any of its franchises, licenses, receipts,
sales, use, payroll, employment, business, income or Property before any
penalty or interest accrues thereon, and (ii) all material Claims (including,
without limitation, claims for labor, services, materials and supplies) for
sums which have become due and payable and which by law have or may become a
Lien (other than a Lien permitted by Section 10.2 or a Customary Permitted
Lien for property taxes and assessments not yet due upon any of the
Borrower's, the Company's or any of the Borrower's Subsidiaries' Property,
prior to the time when any penalty or fine shall be incurred with respect
thereto; provided, however, that no such taxes, assessments, fees and
governmental charges referred to in clause (i) above or Claims referred to in
clause (ii) above need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
9.5. INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect the insurance policies and programs listed on SCHEDULE 7.1-T or
substantially similar policies and programs or other policies and programs as
are reasonably acceptable to the Administrative Agent. All such policies and
programs shall be maintained with insurers having an Alfred M. Best Company,
Inc. rating of "A" or better and a financial size category of not less than IX.
9.6. INSPECTION OF PROPERTY, BOOKS AND RECORDS DISCUSSIONS. The Borrower
shall permit, and cause each of its Subsidiaries
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and the Company to permit, any authorized representative(s) designated by the
Administrative Agent or any Arranger or Lender (coordinated through the
Administrative Agent) to visit and inspect any of the Projects, to examine,
audit, and check their respective financial and accounting records, books,
journals, orders, receipts and any correspondence and other data relating to
their respective businesses or the transactions contemplated hereby
(including, without limitation, in connection with environmental compliance,
hazard or liability), and to discuss their affairs, finances and accounts with
their officers and independent certified public accountants, upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested. Each such visitation and inspection shall be at
such visitor's expense. The Borrower shall keep and maintain, and cause its
Subsidiaries to keep and maintain, in all material respects proper books of
record and account in which entries are made in conformity with GAAP.
9.7. ERISA COMPLIANCE. The Borrower shall, and shall cause each of its
Subsidiaries and ERISA Affiliates to, establish, maintain and operate all
Benefit Plans to comply in all material respects with the provisions of ERISA,
the Internal Revenue Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans.
9.8. MAINTENANCE OF PROPERTY. The Borrower shall, and shall cause each of
its Subsidiaries to, maintain in all material respects all of their respective
owned and leased Property in good, safe and insurable condition and repair
(ordinary wear and tear excepted), and not permit, commit or suffer any waste
or abandonment of any such Property and from time to time shall make or cause
to be made all material repairs, renewals and replacements thereof, including,
without limitation, any capital improvements which may be required to maintain
the same; provided, however, that such Property may be altered or renovated in
the ordinary course of business of the Borrower or such applicable Subsidiary.
Without any limitation on the foregoing, the Borrower shall maintain the
Projects in a manner such that each Project can be used in the manner and
substantially for the purposes such Project is used on the Closing Date,
including, without limitation, maintaining all utilities, access rights,
zoning and necessary Permits for such Project.
9.9. COMPANY STATUS. The Borrower shall cause the Company to, and the
Company shall, at all times (1) remain a publicly traded company listed on the
New York Stock Exchange; (2) maintain its status as a REIT under the Internal
Revenue Code, and (3) retain direct or indirect management and control of the
Borrower.
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9.10. OWNERSHIP OF PROJECTS, JOINT VENTURES AND PROPERTY. The ownership
of substantially all wholly owned Projects, Joint Ventures and other Property
of the Consolidated Businesses shall be held by the Borrower and its
Subsidiaries and shall not be held directly by the Company.
9.11. MAINTENANCE OF OPERATING ACCOUNTS. The Borrower shall at all times
during the Revolving Credit Period maintain a demand deposit account held by
Administrative Agent (the "OPERATING ACCOUNT") and shall cause funds to be
deposited therein in an amount sufficient to permit the Administrative Agent
to automatically deduct therefrom the respective interest payments on the
obligations at 12:00 p.m. on the first Business Day of each month.
9.12. ADDITIONAL GUARANTORS; SOLVENCY OF GUARANTORS.
(a) If, after the Closing Date, a Subsidiary of the Borrower that is not
a Guarantor acquires any Real Property that then or thereafter qualifies under
the definition of Unencumbered Project or any other Unencumbered asset and
such Property or asset is directly or indirectly wholly-owned or ground leased
by the Borrower, the Borrower shall cause such Person (which Person must be or
become a wholly-owned Subsidiary of the Borrower) to execute and deliver a
Guaranty to the Administrative Agent and the Lenders in substantially the form
of EXHIBIT L hereto. Such Guaranty shall evidence consideration and equivalent
value.
(b) The Borrower, the Company, and each other Guarantor are Solvent. The
Borrower and the Company each acknowledge that, subject to the indefeasible
payment and performance in full of the Obligations, the rights of contribution
among each of them and the other Guarantors are in accordance with applicable
laws and in accordance with each such Person's benefits under the Loans and
this Agreement. The Borrower further acknowledges that, subject to the
indefeasible payment and performance in full of the Obligations, the rights of
subrogation of the Guarantors as against the Borrower and the Company are in
accordance with applicable laws.
(c) Other than during the continuance of a Potential Event of Default or
Event of Default, at the request of the Borrower following the delivery of the
certificate of an Authorized Officer in accordance with Section 8.9 hereof,
the Guaranty of any Guarantor shall be released by the Administrative Agent if
and when all of the Real Property owned or ground-leased by such Guarantor
shall cease (not thereby creating a Potential Event of Default or Event of
Default) to be an Unencumbered Project which is wholly-owned by a Consolidated
Business, provided the foregoing shall never permit the release of the
Company.
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9.13. FURTHER ASSURANCES. The Borrower will, and will cause each
Guarantor to, cooperate with, and to cause each of its Subsidiaries to
cooperate with, the Administrative Agent and the Lenders and execute such
further instruments and documents as the Lenders or the Administrative Agent
shall reasonably request to carry out to their reasonable satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.
9.14. DISTRIBUTIONS IN THE ORDINARY COURSE. In the ordinary course of
business the Borrower causes all of its Subsidiaries to make net transfers of
cash and cash equivalents upstream to the Borrower and the Company, and shall
continue to follow such ordinary course of business. The Borrower shall not
make net transfers of cash and cash equivalents downstream to its Subsidiaries
except in the ordinary course of business consistent with past practice.
ARTICLE X.
NEGATIVE COVENANTS
Borrower covenants and agrees that it shall comply with the following
covenants so long as any Revolving Credit Commitments are outstanding and
thereafter until payment in full of all of the Obligations (other than
indemnities pursuant to Section 14.3 not yet due), unless the Requisite
Lenders shall otherwise give prior written consent:
10.1. INTENTIONALLY OMITTED.
10.2. LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any Property, except:
(a) Liens with respect to Capital Leases of Equipment entered into in the
ordinary course of business of the Borrower or its Subsidiaries pursuant to
which the aggregate Indebtedness under such Capital Leases does not exceed
$1,000,000 for any Project;
(b) Existing Permitted Liens;
(c) Liens securing permitted Secured Indebtedness; provided that the
incurrence of such Liens shall be subject to compliance with Section 4.1(d)
and Section 8.9 hereof; and
(d) Customary Permitted Liens.
10.3. INTENTIONALLY OMITTED.
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10.4. CONDUCT OF BUSINESS. Neither the Borrower nor any of its
Subsidiaries shall engage in any business, enterprise or activity other than
(a) the businesses of acquiring, developing, re-developing and managing
predominantly office and industrial Projects and portfolios of like Projects,
(b) any business or activities which are substantially similar, related or
incidental thereto, (c) investments in and loans to Investment Funds,
FrontLine Capital Group, Subsidiaries, Affiliates and Joint Ventures and (d)
other activities referred to in Section 2.3 hereof.
10.5. TRANSACTIONS WITH PARTNERS AND AFFILIATES. Neither the Borrower nor
any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder or holders of more than five percent (5%) of any class of equity
Securities of the Borrower, or with any Affiliate of the Borrower which is not
its Subsidiary, unless such transaction is determined by the Board of
Directors of the Company to be no less favorable to the Borrower or any of its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a holder or
Affiliate (other than transactions referred to in Section 2.3). Nothing
contained in this Section 10.5 shall prohibit (a) increases in compensation
and benefits for officers and employees of the Borrower or any of its
Subsidiaries; (b) payment of officers', managers', trustees', directors',
partners' and other similar indemnities; (c) performance of any obligations
arising under the Loan Documents; or (d) loans to Persons in connection with
such Person's contribution of Real Property to the Consolidated Businesses or
Joint Ventures.
10.6. RESTRICTION ON FUNDAMENTAL CHANGES. The Borrower shall not enter
into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer
any liquidation or dissolution), or convey, lease, sell, transfer or otherwise
dispose of, in one transaction or series of transactions, all or substantially
all of the Borrower's business or Property, whether now or hereafter acquired,
except in connection with issuance, transfer, conversion or repurchase of
limited partnership interests in the Borrower. Notwithstanding the foregoing,
the Borrower shall be permitted to merge with another Person so long as the
Borrower is the surviving Person following such merger.
10.7. MARGIN REGULATIONS; SECURITIES LAWS. Neither the Borrower nor any of
its Subsidiaries shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
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10.8. ERISA. The Borrower shall not and shall not permit any of its
Subsidiaries or ERISA Affiliates to:
(a) engage in any prohibited transaction described in Sections 406 of
ERISA or 4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been previously
obtained from the DOL, except to the extent engaging in such transaction would
not have a Material Adverse Effect;
(b) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to
any Benefit Plan, whether or not waived;
(c) fail to pay timely required contributions or annual installments due
with respect to any waived funding deficiency to any Benefit Plan;
(d) terminate any Benefit Plan which would result in any liability of
Borrower or any ERISA Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any Multiemployer Plan
which Borrower or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto,
except to the extent such failure would not have a Material Adverse Effect;
(f) fail to pay any required installment or any other payment required
under Section 412 of the Internal Revenue Code on or before the due date for
such installment or other payment; or
(g) amend a Benefit Plan resulting in an increase in current liability
for the plan year such that the Borrower or any ERISA Affiliate is required to
provide security to such Plan under Section 401(a)(29) of the Internal Revenue
Code.
10.9. ORGANIZATIONAL DOCUMENTS. Neither the Company nor the Borrower
shall, and the Borrower shall not permit any Guarantor to, amend, modify or
otherwise change any of the terms or provisions in any of their respective
Organizational Documents as in effect on the Closing Date, except amendments
to effect (a) a change of name of the Borrower or such Guarantor, provided
that the Borrower shall have provided the Administrative Agent with thirty
(30) days prior written notice of any such name change, or (b) changes that
would not affect such Organizational Documents in any material manner not
otherwise prohibited under this Agreement.
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10.10. FISCAL YEAR. Neither the Company, the Borrower nor any of their
Subsidiaries shall change its Fiscal Year for accounting or tax purposes from a
period consisting of the 12-month period ending on December 31 of each calendar
year.
10.11. FINANCIAL COVENANTS.
(a) Indebtedness. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except (i)
Total Outstanding Indebtedness which would not exceed fifty-five percent (55%)
of Total Value as of the date of incurrence, (ii) Total Secured Outstanding
Indebtedness which would not exceed thirty-five percent (35%) of Total Value
as of the date of incurrence or (iii) Total Recourse Secured Outstanding
Indebtedness which would not exceed ten percent (10%) of Total Value as of the
date of incurrence.
(b) Minimum Combined Equity Value. The Combined Equity Value shall at no
time be less than $1,250,000,000, plus an amount equal to seventy percent
(70%) of all Net Offering Proceeds received by the Company after the date
hereof.
(c) Intentionally Omitted.
(d) Minimum Unsecured Interest Coverage Ratio. As of the first day of
each calendar quarter for the immediately preceding calendar quarter, the
ratio of (i) Adjusted Unencumbered NOI to (ii) Unsecured Interest Expense
shall not be less than (A) 1.75 to 1.0 through December 31, 2000 and (B) 2.0
to 1.0 thereafter.
(e) Limitation on Total Unsecured Outstanding Indebtedness. As of the
first day of each calendar quarter for the immediately preceding calendar
quarter, the ratio of (i) Total Unsecured Outstanding Indebtedness to (ii)
Total Unencumbered Value shall not exceed 0.60 to 1.0.
(f) Minimum Total Interest Coverage Ratio. As of the first day of each
calendar quarter for the immediately preceding calendar quarter, the ratio of
(i) Total Adjusted EBITDA to (ii) Total Interest Expense shall not be less
than 2.0 to 1.0.
(g) Minimum Fixed Charge Coverage Ratio. As of the first day of each
calendar quarter for the immediately preceding calendar quarter, the ratio of
(i) Total Adjusted EBITDA to (ii) Fixed Charges shall not be less than (x)
1.65 to 1.0 through December 31, 2000 and (y) 1.75 to 1.0 thereafter.
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(h) Maximum Dividend Payout Ratio. The Company shall not make any
Restricted Payment during any of its fiscal quarters, which, when added to all
Restricted Payments made during the three immediately preceding fiscal
quarters, exceeds the greater of (i) 90% of FFO, and (ii) the amounts required
to maintain its status as a REIT under the Internal Revenue Code, and,
provided an Event of Default shall not have occurred and be continuing, to
avoid federal income and excise tax liability. For purposes of this provision,
"Restricted Payment" means any cash dividend or other cash distribution on any
shares of the Company's capital stock (except dividends payable solely in
shares of its capital stock or in rights to subscribe for or purchase shares
of its capital stock).
(i) Recourse Secured Indebtedness. The Secured Loan-to-Value Ratio with
respect to any Project for which the Consolidated Businesses shall create or
assume recourse Secured Indebtedness, shall at no time exceed seventy five
percent (75%).
(j) Negative Pledge. From and after the date hereof, neither the Borrower
nor the Company will, and will not permit any of their respective
Subsidiaries, to enter into any agreement containing any provision prohibiting
the creation or assumption of any Lien upon its properties (other than with
respect to prohibitions on subordinate liens set forth in a mortgage on a
particular property or customary restrictions contained in the Organizational
Documents of a Joint Venture), revenues or assets, whether now owned or
hereafter acquired, or restricting the ability of the Borrower to amend or
modify this Agreement or any other Loan Document.
(k) Pro Forma Calculations. The Borrower shall comply with the financial
ratios set forth in this Section 10.11 as of the date of each Borrowing. The
Borrower shall recalculate the financial ratios by adding the deemed amount
equal to the applicable Borrowing to the Indebtedness reflected on the most
recently available financial statements, and adding thereto any Indebtedness
incurred since the date of such financial statement and adding the value of
such assets (determined at cost) acquired with such Indebtedness to Total
Value.
10.12. NEGATIVE COVENANTS WITH RESPECT TO THE COMPANY.
(a) From and after the date hereof, the Company will not acquire any
assets of any nature whatsoever other than additional units in the Borrower.
(b) From and after the date hereof, the Company will not incur any
Indebtedness or any other obligations or liabilities except (x) as the general
partner of the Borrower in connection with trade payables incurred
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in the ordinary course of business, (y) Indebtedness, the net proceeds of
which are contributed to the Borrower simultaneously with the incurrence
thereof by the Company, and (z) guarantees of Indebtedness which are recourse
to the Borrower.
(c) From and after the date hereof, the Company will not retain any Net
Offering Proceeds, and the same will be contributed by the Company to the
Borrower simultaneously with receipt thereof by the Company.
(d) The Company shall not enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, any of its business or assets, including its interests
in the Borrower. Notwithstanding the foregoing, the Company shall be permitted
to merge with another Person so long as the Company is the surviving Person
following such merger.
10.13. COVENANTS WITH RESPECT TO METROPOLITAN.
(a) Until the earlier to occur of (i) the Metropolitan Conversion or (ii)
each of the 919 Third Avenue Property and the 120 Mineola Boulevard Property
is no longer an Unencumbered Project, the Borrower shall not permit
Metropolitan or MOP or their Subsidiaries to incur any Indebtedness (other
than the refinancing of existing Secured Indebtedness secured by a Lien on
assets of such Person, other than the 919 Third Avenue Property and the 120
Mineola Boulevard Property), issue any preferred equity interests (in addition
to the Metropolitan Preferred Equity) or incur any Contingent Obligation if
the effect thereof is to decrease the value of the equity interests in
Metropolitan and MOP held by the Company or to create a preference over the
Obligations.
(b) Until the earlier to occur of (i) the execution and delivery of a
Guaranty by Tower Mineola L.P. or (ii) the 120 Mineola Boulevard Property is
no longer an Unencumbered Project, the Borrower shall not permit Tower Mineola
L.P. to incur any Indebtedness, issue any preferred equity interests or incur
any Contingent Obligation if the effect thereof is to decrease the value of
the equity interests in Tower Mineola L.P. held by the Company or to create a
preference over the Obligations.
(c) The Borrower shall cause each of Metropolitan, MOP and Tower Mineola
L.P. to execute and deliver a Guaranty promptly after the date on which the
Metropolitan Preferred Interest is redeemed by Metropolitan or converted to
common stock in the Company by Crescent Real Estate Equities Company.
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ARTICLE XI.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.1. EVENTS OF DEFAULT. Each of the following occurrences shall constitute
an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall fail to pay (i)
when due any principal payment on the Obligations which is due on the
Revolving Credit Termination Date or pursuant to the terms of Section 2.1(a),
Section 2.4, Section 4.1(a), or Section 4.1(d) or (ii) when due, any interest
payment on the obligations, provided, however, that the Borrower shall be
entitled to a five (5) day grace period with respect to any interest payment
but not more than one time in any twelve (12) month period during the term
hereof, or (iii) when due, any principal payment on the Obligations not
referenced in clauses (i) or (ii) hereinabove or (iv) when due, any fees due
pursuant to the terms of Section 5.3 and such default shall continue for five
(5) days.
(b) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on such Person under Sections 9.1, 9.4, 9.5, 9.10, 9.11 or Article X.
(c) Breach of Representation or Warranty. Any representation or warranty
made by the Borrower or any of the parties to the Guaranties to the
Administrative Agent, any Arranger or any Lender herein or by the Borrower or
any of the parties to the Guaranties or any of their Subsidiaries in any of
the other Loan Documents or in any statement or certificate at any time given
by any such Person pursuant to any of the Loan Documents shall be false or
misleading in any material respect on the date as of which made.
(d) Other Defaults. The Borrower shall default in the performance of or
compliance with any terms contained in this Agreement (other than as
identified in paragraphs (a), (b) or (c) of this Section 11.1), or any default
or event of default shall occur under any of the other Loan Documents, and
such default or event of default shall continue for thirty (30) days after
receipt of written notice from the Administrative Agent thereof.
(e) Acceleration of Other Indebtedness. Any breach, default or event of
default shall occur and be continuing, or any other condition shall exist under
any instrument, agreement or indenture pertaining to any recourse Indebtedness
(other than the Obligations) of the
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Company, the Borrower or their Subsidiaries aggregating more than $10,000,000,
and the effect thereof is to cause an acceleration, mandatory redemption or
other required repurchase of such Indebtedness, or permit the holder(s) of
such Indebtedness to accelerate the maturity of any such Indebtedness or
require a redemption or other repurchase of such Indebtedness; or any such
Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the Borrower or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
or any such Indebtedness shall not be repaid at maturity (after taking into
account grace and cure periods).
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the Company, the
Borrower or any of its Subsidiaries to which $25,000,000 or more of the
Combined Equity Value is attributable, and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company, the Borrower or
any such Subsidiaries of the Borrower in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; or any other similar relief shall be granted under any applicable
federal, state, local or foreign law; or the respective board of directors of
the Company, or General Partner or Limited Partners of the Borrower or the
board of directors or partners of any such Subsidiaries of the Borrower (or
any committee thereof) adopts any resolution or otherwise authorizes any
action to approve any of the foregoing.
(ii) A decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over the Company, the Borrower or any of
their Subsidiaries to which $25,000,000 or more of the Combined Equity Value
is attributable, or over all or a substantial part of the Property of the
Company, the Borrower or any of such Subsidiaries shall be entered; or an
interim receiver, trustee or other custodian of the Company, the Borrower or
any of such Subsidiaries or of all or a substantial part of the Property of
the Company, the Borrower or any of such Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any substantial
part of the Property of any of the Company, the Borrower, or any of such
Subsidiaries shall be issued and any such
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event shall not be stayed, dismissed, bonded or discharged within sixty (60)
days after entry, appointment or issuance; or the respective board of
directors of any of the Company or General Partners or Limited Partners of the
Borrower or the board of directors or partners of any of Borrower's
Subsidiaries (or any committee thereof) adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
(g) Voluntary Bankruptcy; Appointment of Receiver. Etc. The Company, the
Borrower or any of their Subsidiaries to which $25,000,000 or more of the
Combined Equity Value is attributable, shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
Property; or the Company, the Borrower or any of such Subsidiaries shall make
any assignment for the benefit of creditors or shall be unable or fail, or
admit in writing its inability, to pay its debts as such debts become due.
(h) Judgments and Unpermitted Liens.
(i) Any money judgment (other than a money judgment covered by insurance
as to which the insurance company has acknowledged coverage), writ or warrant
of attachment, or similar process against the Borrower or any of its
Subsidiaries or any of their respective assets involving in any case an amount
in excess of $5,000,000 (other than with respect to Claims arising out of
non-recourse Indebtedness) is entered and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days or in any
event later than five (5) days prior to the date of any proposed sale
thereunder.
(ii) A federal, state, local or foreign tax Lien is filed against the
Borrower which is not discharged of record, bonded over or otherwise secured
to the satisfaction of the Administrative Agent within sixty (60) days after
the filing thereof or the date upon which the Administrative Agent receives
actual knowledge of the filing thereof for an amount which, either separately
or when aggregated with the amount of any judgments described in clause (i)
above, equals or exceeds $5,000,000.
(iii) An Environmental Lien is filed against any Project with respect to
Claims in an amount which, either separately or when
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aggregated with the amount of all other such Environmental Liens, equals or
exceeds $5,000,000.
(i) Dissolution. Any order, judgment or decree shall be entered against
the Borrower or any Guarantor decreeing its involuntary dissolution or split
up; or the Borrower or any Guarantor shall otherwise dissolve or cease to
exist except as specifically permitted by this Agreement.
(j) Loan Documents. At any time, for any reason, any Loan Document ceases
to be in full force and effect or the Borrower or any Guarantor seeks to
repudiate its obligations thereunder.
(k) ERISA Termination Event. Any ERISA Termination Event occurs which the
Administrative Agent believes could subject any of the Borrower or any ERISA
Affiliate to liability in excess of $500,000.
(l) Waiver Application. The plan administrator of any Benefit Plan
applies under Section 412 (d) of the Internal Revenue Code for a waiver of the
minimum funding standards of Section 412 (a) of the Internal Revenue Code and
the Administrative Agent believes that the substantial business hardship upon
which the application for the waiver is based could subject either the
Borrower or any ERISA Affiliate to liability in excess of $500,000.
(m) Material Adverse Effect. An event shall occur which has a Material
Adverse Effect.
(n) Certain Defaults Pertaining to the Company. The Company shall fail to
comply with Sections 9.9, or 7.1(a)(ii), (b), (d), (l), or (o).
(o) Merger or Liquidation of the Company, the Borrower. The Company shall
merge or liquidate with or into any other Person and, as a result thereof and
after giving effect thereto, (i) the Company is not the surviving Person or
(ii) such merger or liquidation would effect an acquisition of or Investment
in any Person not otherwise permitted under the terms of this Agreement. The
Borrower shall merge or liquidate with or into any other Person and, as a
result thereof and after giving effect thereto, (i) the Borrower is not the
surviving Person or (ii) such merger or liquidation would effect an
acquisition of or Investment in any Person not otherwise permitted under the
terms of this Agreement.
An Event of Default shall be deemed "continuing" until cured or waived in
writing in accordance with Section 14.7.
11.2. RIGHTS AND REMEDIES.
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(a) Acceleration and Termination. Upon the occurrence of any Event of
Default described in Sections 11.1(f) or 11.1(g), the Revolving Credit
Commitments shall automatically and immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Obligations and
all accrued fees and other Obligations shall automatically become immediately
due and payable, without presentment, demand, or protest or other requirements
of any kind (including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate and of
acceleration), all of which are hereby expressly waived by the Borrower, and,
upon the occurrence and during the continuance of any other Event of Default,
the Administrative Agent shall at the request, or may with the consent, of the
Lenders whose Pro Rata Shares, in the aggregate, are greater than fifty-one
percent (51%), by written notice to the Borrower, (i) declare that the
Revolving Credit Commitments are terminated, whereupon the Revolving Credit
Commitments and the obligation of each Lender to make any Loan hereunder and
of each Lender to issue or participate in any Letter of Credit not then issued
shall immediately terminate, and/or (ii) declare the unpaid principal amount
of and any and all accrued and unpaid interest on the Obligations and all
other Obligations to be, and the same shall thereupon be, immediately due and
payable, without presentment, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of acceleration),
all of which are hereby expressly waived by the Borrower and/or (iii) require
the Borrower to provide cash collateral for all Reimbursement Obligations.
(b) Rescission. If at any time after termination of the Revolving Credit
Commitments and/or acceleration of the maturity of the Loans, the Borrower
shall pay all arrears of interest and all payments on account of principal of
the Loans and Reimbursement Obligations which shall have become due otherwise
than by acceleration (with interest on principal and, to the extent permitted
by law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than nonpayment of
principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to Section 14.7,
then upon the written consent of the Requisite Lenders and written notice to
the Borrower, the termination of the Revolving Credit Commitments and/or the
acceleration and their consequences may be rescinded and annulled; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right or remedy consequent thereon. The provisions of
the preceding sentence are intended merely to bind the Lenders to a decision
which may be made at the election of the Requisite Lenders; they are not
intended to benefit the Borrower and do not give the Borrower the right to
require the
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Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
(c) Enforcement. The Borrower acknowledges that in the event the
Borrower, the Guarantors or any of their Subsidiaries fails to perform,
observe or discharge any of their respective obligations or liabilities under
this Agreement or any other Loan Document, any remedy of law may prove to be
inadequate relief to the Administrative Agent, the Arrangers and the Lenders;
therefore, the Borrower agrees that the Administrative Agent, the Arrangers
and the Lenders shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.
ARTICLE XII.
THE AGENTS
12.1. APPOINTMENT. (a) Each Lender hereby designates and appoints Chase
as the Administrative Agent, UBSW as the Syndication Agent, Deutsche Bank as
the Documentation Agent and the Arrangers as the Arrangers of such Lender
under this Agreement, and each Lender hereby irrevocably authorizes the
Administrative Agent, the other Agents and the Arrangers to take such actions
on its behalf under the provisions of this Agreement and the Loan Documents
and to exercise such powers in each case only as are set forth herein or
therein together with such other powers as are reasonably incidental thereto.
The Administrative Agent, the other Agents and the Arrangers each agrees to
act as such on the express conditions contained in this Article XII.
(b) The provisions of this Article XII are solely for the benefit of the
Administrative Agent, the Syndication Agent, the Documentation Agent, the
Arrangers and the Lenders, and neither the Borrower, the Company nor any
Subsidiary of the Borrower shall have any rights to rely on or enforce any of
the provisions hereof (other than as expressly set forth in Section 12.7). In
performing its respective functions and duties under this Agreement, the
Administrative Agent, the Documentation Agent, the Syndication Agent, and each
Arranger shall act solely as agents of the Lenders and do not assume and shall
not be deemed to have assumed any obligation or relationship of agency,
trustee or fiduciary with or for the Company, the Borrower or any Subsidiary
of the Borrower. The Administrative Agent, the Documentation Agent, the
Syndication Agent and each Arranger may perform any of their respective duties
hereunder, or under the Loan Documents, by or through their respective agents
or employees.
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12.2. NATURE OF DUTIES. The Administrative Agent, the Documentation
Agent, the Syndication Agent and the Arrangers shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Administrative Agent, the Documentation
Agent, the Syndication Agent and the Arrangers shall be mechanical and
administrative in nature. None of the Administrative Agent, the Documentation
Agent, the Syndication Agent or any Arranger shall have by reason of this
Agreement a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, expressed or implied, is intended to
or shall be construed to impose upon the Administrative Agent, the
Documentation Agent, the Syndication Agent or any Arranger any obligations in
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein or therein. The Administrative Agent, the Documentation Agent,
the Syndication Agent and each Arranger each hereby agrees that its duties
shall include providing copies of documents received by such Agent from the
Borrower which are reasonably requested by any Lender, furnishing copies of
documents to each Lender, upon request, of documents sent by such Agent to the
Borrower and promptly notifying each Lender upon its obtaining actual
knowledge of the occurrence of any Event of Default hereunder. In addition,
the Administrative Agent shall deliver to each Lender, promptly after receipt
thereof, copies of those documents and reports received by it pursuant to
Sections 8.2 (other than clause (b)(iv)), 8.3, 8.4, 8.7 and 8.12.
12.3. RIGHT TO REQUEST INSTRUCTIONS. The Administrative Agent, the
Documentation Agent, the Syndication Agent and each Arranger may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of any of the Loan Documents such Agent is permitted or
required to take or to grant, and such Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from those Lenders from whom such Agent is required
to obtain such instructions for the pertinent matter in accordance with the
Loan Documents. Without limiting the generality of the foregoing, such Agent
shall take any action, or refrain from taking any action, which is permitted
by the terms of the Loan Documents upon receipt of instructions from those
Lenders from whom such Agent is required to obtain such instructions for the
pertinent matter in accordance with the Loan Documents, provided, that no
Lender shall have any right of action whatsoever against the Administrative
Agent, the Documentation Agent, the Syndication Agent or any Arranger as a
result of such Agent acting or refraining from acting under the Loan Documents
in accordance with the
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instructions of the Requisite Lenders or, where required by the express terms
of this Agreement, a greater proportion of the Lenders.
12.4. RELIANCE. The Administrative Agent, the Documentation Agent, the
Syndication Agent and each Arranger shall each be entitled to rely upon any
written notices, statements, certificates, orders or other documents believed
by it in good faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder,
upon advice of legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it.
12.5. INDEMNIFICATION. To the extent that the Administrative Agent, the
Documentation Agent, the Syndication Agent or any Arranger is not reimbursed
and indemnified by the Borrower, the Lenders will reimburse and indemnify such
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, and reasonable costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against it in any way relating to or arising out of
the Loan Documents or any action taken or omitted by such Agent under the Loan
Documents, in proportion to each Lender's Pro Rata Share. Notwithstanding
anything to the contrary contained herein, the Administrative Agent, the
Documentation Agent, the Syndication Agent or any Arranger shall not be
indemnified to the extent such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs and expenses result from such
Person's gross negligence, willful misconduct or breach of this Article XII.
Such Agent agrees to refund to the Lenders any of the foregoing amounts paid
to it by the Lenders which amounts are subsequently recovered by such Agent
from the Borrower or any other Person on behalf of the Borrower. The
obligations of the Lenders under this Section 12.5 shall survive the payment
in full of the Loans, the Reimbursement Obligations and all other Obligations
and the termination of this Agreement.
12.6. AGENTS INDIVIDUALLY. With respect to their respective Pro Rata
Share of the Revolving Credit Commitments hereunder, if any, and the Loans
made by them, if any, the Administrative Agent, the Documentation Agent, the
Syndication Agent and the Arrangers shall have and may exercise the same
rights and powers hereunder and are subject to the same obligations and
liabilities as and to the extent set forth herein for any Lender. The terms
"LENDERS" or "REQUISITE LENDERS" or any similar terms shall, unless the
context clearly otherwise indicates, include Chase, UBS and Deutsche Bank,
each in its respective individual capacity as a Lender or as one of the
Requisite Lenders. Chase, Chase Securities Inc., UBSW, and each other Arranger
and each of their respective Affiliates may accept deposits from,
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lend money to, and generally engage in any kind of banking, trust or other
business with the Borrower or any of its Subsidiaries as if Chase, Chase
Securities Inc., and UBSW, were not acting as an Agent or Arranger pursuant
hereto.
12.7. SUCCESSOR AGENTS.
(a) Resignation. Any Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to the Borrower and the Lenders, unless
applicable law requires a shorter notice period or that there be no notice
period, in which instance such applicable law shall control. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to this Section 12.7.
(b) Appointment by Requisite Lenders. Upon any such resignation becoming
effective, (i) if an Arranger shall then be acting with respect to this
Agreement, such Arranger shall become the Administrative Agent or (ii) if no
Arranger shall then be acting with respect to this Agreement, the Requisite
Lenders shall have the right to appoint a successor Administrative Agent
selected from among the Lenders with the prior written consent of the Borrower
(so long as no Event of Default then exists), which consent shall not be
unreasonably withheld.
(c) Appointment by Retiring Agent. If a successor Administrative Agent
shall not have been appointed within the thirty (30) Business Day or shorter
period provided in paragraph (a) of this Section 12.7, the retiring Agent
shall then appoint a successor Agent who shall serve as Administrative Agent
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above with the prior written consent of the Borrower (so long as no
Event of Default then exists) which shall not be unreasonably withheld,
provided, however, that such successor Administrative Agent shall have total
assets of not less than $10,000,000,000.
(d) Rights of the Successor and Retiring Agents. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this
Agreement.
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12.8. RELATIONS AMONG THE LENDERS. Each Lender agrees that it will not
take any legal action, nor institute any actions or proceedings, against the
Borrower or any other obligor hereunder with respect to any of the
Obligations, without the prior written consent of the Lenders. Without
limiting the generality of the foregoing, no Lender may accelerate or
otherwise enforce its portion of the obligations, or unilaterally terminate
its Revolving Credit Commitment except in accordance with Section 11.2(a).
12.9. STANDARD OF CARE. The Administrative Agent, the Documentation Agent,
the Syndication Agent and each Arranger shall administer the Loans in the same
manner that such Agent administers loans made for its own account.
ARTICLE XIII.
YIELD PROTECTION
13.1. TAXES.
(a) Payment of Taxes. Any and all payments by the Borrower hereunder or
under the Notes or other documents evidencing any Obligations of such Person
shall be made, in accordance with Section 4.2, free and clear of and without
reduction for any and all present or future taxes, levies, imposts,
deductions, charges, withholdings, and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes which arise from the execution,
delivery or registration, or from payment or performance under, or otherwise
with respect to, any of the Loan Documents or the Revolving Credit Commitments
and all other liabilities with respect thereto excluding, in the case of each
Lender, taxes imposed on or measured by net income or overall gross receipts
and capital and franchise taxes imposed on it by (i) the United States, (ii)
the Governmental Authority of the jurisdiction in which such Lender's
Applicable Lending Office is located or any political subdivision thereof or
(iii) the Governmental Authority in which such Person is organized, managed
and controlled or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges and withholdings being hereinafter
referred to as "TAXES"). Except as otherwise provided herein, if the Borrower
shall be required by law to withhold or deduct any Taxes from or in respect of
any sum payable hereunder or under any such Note or document to any Lender,
(x) the sum payable to such Lender shall be increased as may be necessary so
that after making all required withholding or deductions (including
withholding or deductions applicable to additional sums payable under this
Section 13.1) such Lender receives an amount equal to the sum it would have
received had no such withholding or deductions been made, (y) the Borrower
shall make such withholding or deductions, and (z) the Borrower shall pay the
full amount
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withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) Indemnification. Except as otherwise provided herein, the Borrower
will indemnify each Lender against, and reimburse each Lender within ten (10)
Business Days after written demand for, the full amount of all Taxes
(including, without limitation, any Taxes imposed by any Governmental
Authority on amounts payable under this Section 13.1 and any additional income
or franchise taxes resulting therefrom) incurred or paid by such Lender and
any liability (including penalties, interest, and out-of-pocket expenses paid
to third parties) arising therefrom or with respect thereto, whether or not
such Taxes were lawfully payable, to the extent not paid by the Borrower
pursuant to this Section 13.1. A certificate as to any additional amount
payable to any Person under this Section 13.1 submitted by it to the Borrower
shall, absent manifest error, be final, conclusive and binding upon all
parties hereto. Each Lender agrees, within a reasonable time after receiving a
written request from the Borrower, to provide the Borrower and the
Administrative Agent with such certificates and other documents as are
reasonably required, and take such other actions as are reasonably necessary
to claim such exemptions as such Lender may be entitled to claim in respect of
all or a portion of any Taxes which are otherwise required to be paid or
deducted or withheld pursuant to this Section 13.1 in respect of any payments
under this Agreement or under the other Loan Documents. If any Lender receives
any refund with respect to any Taxes, such Lender shall promptly remit such
refund to the Borrower.
(c) Receipts. Within thirty (30) days after the date of any payment of
Taxes by the Borrower, the Borrower will furnish to the Administrative Agent,
at its address referred to in Section 14.8, the original or a certified copy
of a receipt evidencing payment thereof.
(d) Foreign Bank Certifications. (i) Each Lender that is not created or
organized under the laws of the United States or a political subdivision
thereof shall deliver to each of the Borrower and the Administrative Agent on
the Closing Date or the date on which such Lender becomes a Lender pursuant to
Section 14.1 hereof a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender to the effect that such Lender is
eligible to receive payments hereunder and under the Notes without deduction
or withholding of United States federal income tax (I) under the provisions of
an applicable tax treaty concluded by the United States (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 1001
(or any successor or substitute form or forms, including W-8ECI)) or (II)
under Sections 1442(c)(1) and 1442(a) of the Internal Revenue Code (in which
case the certificate shall be
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accompanied by two duly completed copies of IRS Form 4224 (or any successor or
substitute form or forms, including W-8BEN)).
(ii) Each Lender referred to in Section 13.1(d)(i) further agrees to
deliver to each of the Borrower and the Administrative Agent from time to
time, a true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender before or promptly upon the occurrence of
any event requiring a change in the most recent certificate previously
delivered by it to the Borrower and the Administrative Agent pursuant to this
Section 13.1(d). Each certificate required to be delivered pursuant to this
Section 13.1(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments hereunder and under
the Notes without deduction or withholding of United States federal income
tax;
(B) that such Lender cannot continue to receive payments hereunder and
under the Notes without deduction or withholding of United States federal
income tax as specified therein but does not require additional payments
pursuant to Section 13.1(a) because it is entitled to recover the full amount
of any such deduction or withholding from a source other than the Borrower; or
(C) that such Lender is no longer capable of receiving payments hereunder
and under the Notes without deduction or withholding of United States federal
income tax as specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Borrower.
Each such Lender agrees to deliver to each of the Borrower and the
Administrative Agent further duly completed copies of the above-mentioned IRS
forms on or before the earlier of (x) the date that any such form expires or
becomes obsolete or otherwise is required to be resubmitted as a condition to
obtaining an exemption from withholding from United States federal income tax
and (y) fifteen (15) days after the occurrence of any event requiring a change
in the most recent form previously delivered by such Lender to the Borrower
and Administrative Agent, unless any change in treaty, law, regulation, or
official interpretation thereof which would render such form inapplicable or
which would prevent such Lender from duly completing and delivering such form
has occurred prior to the date on which any such delivery would otherwise be
required and such Lender promptly advises the Borrower that it is not capable
of receiving payments hereunder and under the Notes without any deduction or
withholding of United States federal income tax.
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(iii) Notwithstanding anything to the contrary contained in this Section
13.1, the Borrower will not be required to make any additional payment to or
for the account of any Lender under Section 13.1(a) or (b) by reason of (x) a
breach by such Lender of any certification or representation set forth in any
form furnished to the Borrower under this Section 13.1(d), or (y) such
Lender's failure or inability to furnish, if required to do so, under this
Section 13.1(d) an original of an extension or renewal of a Form 1001 or Form
4224 (or successor form, including W-8ECI or W-8BEN), as applicable, unless
such failure or inability results from a change (after the date such Lender
became a Lender party hereto) in any applicable law or regulation or in the
interpretation thereof by any regulatory authority (including without
limitation any change in any applicable tax treaty).
13.2. INCREASED CAPITAL. If after the date hereof any Lender determines
that (i) the adoption or implementation of or any change in or in the
interpretation or administration of any law or regulation or any guideline or
request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over
any Lender or banks or financial institutions generally (whether or not having
the force of law), compliance with which affects the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and (ii) the amount of such capital is increased by or
based upon (A) the making or maintenance by any Lender of its Loans, any
Lender's participation in or obligation to participate in the Loans, Letters
of Credit or other advances made hereunder or the existence of any Lender's
obligation to make Loans or (B) the issuance or maintenance by any Lender of,
or the existence of any Lender's obligation to issue, Letters of Credit, then,
in any such case, within ten (10) Business Days after written demand by such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall immediately pay to the Administrative Agent for the account of such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation therefor. Such demand
shall be accompanied by a statement as to the amount of such compensation and
include a brief summary of the basis for such demand. Such statement shall be
conclusive and binding for all purposes, absent manifest error.
13.3. CHANGES; LEGAL RESTRICTIONS. If after the date hereof any Lender
determines that the adoption or implementation of or any change in or in the
interpretation or administration of any law or regulation or any guideline or
request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over
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any Lender, or over banks or financial institutions generally (whether or not
having the force of law), compliance with which:
(a) subjects a Lender (or its Applicable Lending Office or Eurodollar
Affiliate) to charges (other than taxes) of any kind which such Lender
reasonably determines to be applicable to the Revolving Credit Commitments of
the Lenders to make Eurodollar Rate Loans or issue and/or participate in
Letters of Credit or change the basis of taxation of payments to that Lender
of principal, fees, interest, or any other amount payable hereunder with
respect to Eurodollar Rate Loans, Competitive Bid Loans or Letters of Credit
(other than taxes excluded in Section 13.1(a) hereof); or
(b) imposes, modifies, or holds applicable, in the determination of a
Lender, any reserve, special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other liabilities
(including those pertaining to Letters of Credit) in or for the account of,
advances or loans by, commitments made, or other credit extended by, or any
other acquisition of funds by, a Lender or any Applicable Lending Office or
Eurodollar Affiliate of that Lender in respect of Eurodollar Loans or Letters
of Credit;
and the result of any of the foregoing is to increase the cost to that Lender
of making, renewing or maintaining the Loans or its Revolving Credit
Commitment or issuing or participating in the Letters of Credit or to reduce
any amount receivable thereunder; then, in any such case, within ten (10)
Business Days after written demand by such Lender (with a copy of such demand
to the Administrative Agent), the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, such amount or amounts as may be necessary to
compensate such Lender or its Eurodollar Affiliate for any such additional
cost incurred or reduced amount received. Such demand shall be accompanied by
a statement as to the amount of such compensation and include a brief summary
of the basis for such demand. Such statement shall be conclusive and binding
for all purposes, absent manifest error.
13.4. REPLACEMENT OF CERTAIN LENDERS. In the event a Lender (a
"DESIGNATED LENDER") shall have (i) requested additional compensation from the
Borrower under Section 13.1 or under Section 13.2 or under Section 13.3, (ii)
failed to make its Pro Rata Share of any Loan requested to be made hereby or
(iii) failed to make any Loan at the Eurodollar Rate, the Borrower may, at its
sole election, make written demand on such Designated Lender (with a copy to
the Administrative Agent) for the Designated Lender to assign, and such
Designated Lender shall assign pursuant to one or more
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duly executed Assignment and Acceptances to one or more Eligible Assignees
which the Borrower or the Administrative Agent shall have identified for such
purpose, all of such Designated Lender's right and obligations under this
Agreement, the Notes and the other Loan Documents (including, without
limitation, its Revolving Credit Commitment, all Loans owing to it, and all of
its participation interests in Letters of Credit and all other Obligations
owing to it) in accordance with Section 14.1. All out-of-pocket expenses
incurred by the Administrative Agent in connection with the foregoing shall be
for the sole account of the Borrower and shall constitute Obligations
hereunder. In no event shall Borrower's election under the provisions of this
Section 13.4 affect its obligation to pay the additional compensation required
under either Section 13.1, Section 13.2 or Section 13.3.
13.5. MITIGATION. Each Lender shall notify the Borrower of any event
occurring after the date of this Agreement entitling such Lender to
compensation under Sections 13.1, 13.2 or 13.3 as promptly as practicable, but
in any event, within 45 days, after such Lender obtains actual knowledge
thereof; provided that (i) if any Lender fails to give such notice within 45
days after it obtains actual knowledge of such an event, such Lender shall,
with respect to compensation payable pursuant to Sections 13.1, 13.2 or 13.3
in respect of any costs resulting from such event, only be entitled to payment
under Sections 13.1, 13.2 or 13.3 for costs incurred from and after the date
45 days prior to the date that such Lender does give such notice and (ii) each
Lender will designate a different Applicable Lending Office for the Loans of
such Lender affected by such event if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Lender, be disadvantageous to such Lender.
ARTICLE XIV.
MISCELLANEOUS
14.1. ASSIGNMENTS AND PARTICIPATIONS.
(a) Assignments. No assignments or participations of any Lender's rights
or obligations under this Agreement shall be made except in accordance with
this Section 14.1. Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all of its rights and obligations with respect to the Loans and the Letters of
Credit) in accordance with the provisions of this Section 14.1.
(b) Limitations on Assignments. For so long as no Event of Default has
occurred and is continuing, each assignment shall be subject to the following
conditions: (i) each assignment shall be of a constant, and not a
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varying, ratable percentage of all of the assigning Lender's rights and
obligations under this Agreement and, in the case of a partial assignment to
an assignee which is not a Lender or an Affiliate of a Lender, shall be in a
minimum principal amount of $5,000,000 (and the assignor shall maintain a
minimum amount of $5,000,000 for its own account unless the assignor shall
assign or participate its entire interest), (ii) each such assignment shall be
to an Eligible Assignee, (iii) each assignment to an assignee which is not a
Lender or an Affiliate of a Lender shall be subject to the approval of the
Administrative Agent and the Borrower (which approval of the Administrative
Agent and the Borrower shall not be unreasonably withheld and which approval
of the Borrower shall be deemed to have been given if the Borrower fails to
object to such proposed assignment within five (5) Business Days of its
receipt of a request for approval), and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance. Upon
the occurrence and continuance of an Event of Default, none of the foregoing
restrictions on assignments shall apply, provided, however, that while an
Event of Default (other than an Event of Default that shall have required that
the Administrative Agent shall have delivered a notice of the underlying
default) shall be continuing but prior to acceleration of the Loans, the
applicable Lender shall give the Borrower five (5) days written notice by
telecopy of its intention to assign any or all of its interest in this
Agreement. Upon such execution, delivery, acceptance and recording in the
Register, from and after the effective date specified in each Assignment and
Acceptance and agreed to by the Administrative Agent, (A) the assignee
thereunder shall, in addition to any rights and obligations hereunder held by
it immediately prior to such effective date, if any, have the rights and
obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder as if it were an original Lender
hereunder, (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of such assigning Lender's rights and obligations
under this Agreement, the assigning Lender shall cease to be a party hereto,
except as otherwise provided in Section 14.9) and (C) the Borrower shall
execute and deliver to the assignee thereunder a Note evidencing its
obligations to such assignee with respect to the Loans.
(c) The Register. The Administrative Agent shall maintain at its address
referred to in Section 14.8 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register (the "REGISTER") for the recordation of the
names and addresses of the Lenders, the Revolving
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Credit Commitment of, and the principal amount of the Loans under the
Revolving Credit Commitments owing to, each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an Assignment and Acceptance. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the other Lenders and each other party
to a Loan Document may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance executed by the
assigning Lender and an Assignee and a processing and recordation fee of
$3,500 (payable by the assignee to the Administrative Agent), the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in compliance with this Agreement and in substantially the
form of EXHIBIT A hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower.
(e) Participations. Each Lender may sell participations to one or more
other financial institutions or other Person in or to all or a portion of its
rights and obligations under and in respect of any and all facilities under
this Agreement (including, without limitation, all or a portion of its
Revolving Credit Commitment hereunder and the Committed Loans owing to it and
its undivided interest in the Letters of Credit); provided, however, that (i)
such Lender's obligations under this Agreement (including, without limitation,
its Revolving Credit Commitment hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, (iv) each participation (other than a participation to an
Affiliate) shall be in a minimum amount of $5,000,000, and (v) such
participant's rights to agree or to restrict such Lender's ability to agree to
the modification, waiver or release of any of the terms of the Loan Documents,
to consent to any action or failure to act by any party to any of the Loan
Documents or any of their respective Affiliates, or to exercise or refrain
from exercising any powers or rights which any Lender may have under or in
respect of the Loan Documents, shall be limited to the right to consent to any
(A) increase in the Revolving Credit Commitment of the Lender from whom such
participant purchased a participation, (B) reduction of the principal of, or
rate or amount of interest on the Loans subject to such participation (other
than by the payment or prepayment
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thereof), (C) postponement of any date fixed for any payment of principal of,
or interest on, the Loans) subject to such participation and (D) release of
any guarantor of the Obligations. Participations by a Person in a Competitive
Bid Loan of any Lender shall not be deemed "participations" for purposes of
this Section 14.1(e) and shall not be subject to the restrictions on
"participations" contained herein.
(f) Any Lender (each, a "DESIGNATING LENDER") may at any time designate
one Designated Bank to fund Competitive Bid Loans on behalf of such
Designating Lender subject to the terms of this Section 14.1(f) and the
provisions in Section 14.1(b) and (e) shall not apply to such designation. No
Lender may designate more than one (1) Designated Bank. The parties to each
such designation shall execute and deliver to the Administrative Agent for its
acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a
designee representing that it is a Designated Bank, the Administrative Agent
will accept such Designation Agreement and will give prompt notice thereof to
the Borrower, whereupon, (i) the Borrower shall execute and deliver to the
Designating Bank a Designated Bank Note payable to the order of the Designated
Bank, (ii) from and after the effective date specified in the Designation
Agreement, the Designated Bank shall become a party to this Agreement with a
right to make Competitive Bid Loans on behalf of its Designating Lender
pursuant to Section 2.2 after the Borrower has accepted a Competitive Bid Loan
(or portion thereof) of the Designating Lender, and (iii) the Designated Bank
shall not be required to make payments with respect to any obligations in this
Agreement except to the extent of excess cash flow of such Designated Bank
which is not otherwise required to repay obligations of such Designated Bank
which are then due and payable; provided, however, that regardless of such
designation and assumption by the Designated Bank, the Designating Lender
shall be and remain obligated to the Borrower, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the other Lenders for each and
every of the obligations of the Designating Lender and its related Designated
Bank with respect to this Agreement, including, without limitation, any
indemnification obligations under Section 12.5 hereof and any sums otherwise
payable to the Borrower by the Designated Bank. Each Designating Lender shall
serve as the administrative agent of the Designated Bank and shall on behalf
of, and to the exclusion of, the Designated Bank: (i) receive any and all
payments made for the benefit of the Designated Bank and (ii) give and receive
all communications and notices and take all actions hereunder, including,
without limitation, votes, approvals, waivers, consents and amendments under
or relating to this Agreement and the other Loan Documents. Any such notice,
communication, vote, approval, waiver, consent or amendment shall be signed by
the Designating Lender as administrative
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agent for the Designated Bank and shall not be signed by the Designated Bank
on its own behalf but shall be binding on the Designated Bank to the same
extent as if actually signed by the Designated Bank. The Borrower, the
Administrative Agent, the Documentation Agent, the Syndication Agent and
Lenders may rely thereon without any requirement that the Designated Bank sign
or acknowledge the same. No Designated Bank may assign or transfer all or any
portion of its interest hereunder or under any other Loan Document, other than
assignments to the Designating Lender which originally designated such
Designated Bank.
(g) Information Regarding the Borrower. Any Lender may, subject to the
provisions of Section 14.22, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
14.1, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or its Subsidiaries
furnished to such Lender by the Administrative Agent or by or on behalf of the
Borrower.
(h) Payment to Participants. Anything in this Agreement to the contrary
notwithstanding, in the case of any participation, all amounts payable by the
Borrower under the Loan Documents shall be calculated and made in the manner
and to the parties required hereby as if no such participation had been sold.
(i) Lenders' Creation of Security Interests. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Obligations owing to it and any Note held by
it) in favor of any Federal Reserve bank in accordance with Regulation A.
14.2. EXPENSES.
(a) Generally. The Borrower agrees promptly upon demand to pay, or
reimburse the Administrative Agent for the reasonable fees, expenses and
disbursements of counsel to the Administrative Agent (but not of other legal
counsel) and for all other reasonable out-of-pocket costs and expenses
incurred by the Administrative Agent, the Syndication Agent or each Arranger
in connection with (i) the preparation, negotiation, and execution of the Loan
Documents; (ii) the preparation, negotiation, execution, syndication and
interpretation of this Agreement (including, without limitation, the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article VI), the Loan Documents, and the making of the Loans hereunder; (iii)
any amendments, consents, waivers, assignments, restatements, or supplements
to any of the Loan Documents and the preparation, negotiation, and execution
of the same; and (iv) any other amendments, modifications, agreements,
assignments,
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restatements or supplements to any of the Loan Documents requested by Borrower
and the preparation, negotiation, and execution of the same.
(b) After Default. The Borrower further agrees to pay or reimburse the
Administrative Agent, the Arrangers and each of the Lenders upon demand for
all reasonable out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys' fees (including allocated costs of internal
counsel and costs of settlement) incurred by the such entity after the
occurrence and during the continuance of an Event of Default (i) in enforcing
any Loan Document or Obligation, the collection of any Obligation or
exercising or enforcing any other right or remedy available by reason of such
Event of Default; or (ii) in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, a Project, or any of the Consolidated Businesses and related to
or arising out of the transactions contemplated hereby or by any of the other
Loan Documents; and (iv) in taking any other action in or with respect to any
suit or proceeding (bankruptcy or otherwise) described in clauses (i) through
(iii) above.
14.3. INDEMNITY. The Borrower further agrees (a) to defend, protect,
indemnify, and hold harmless the Administrative Agent, the Arrangers and each
and all of the Lenders and each of their respective officers, directors,
employees, attorneys and agents (collectively, the "INDEMNITEES") from and
against any and all liabilities, obligations, losses (other than loss of
profits), damages, penalties, actions, judgments, suits, claims, reasonable
costs, reasonable expenses and reasonable disbursements (excluding any taxes
and including, without limitation, the reasonable fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall
be designated a party thereto), imposed on, incurred by, or asserted against
such Indemnitees in any manner relating to or arising out of (i) this
Agreement or the other Loan Documents, the making of the Loans and the
issuance of and participation in Letters of Credit hereunder, the use or
intended use of the proceeds of the Loans or Letters of Credit hereunder, or
any of the other transactions contemplated by the Loan Documents, or (ii) any
Liabilities and Costs relating to violation of any Environmental, Health or
Safety Requirements of Law, the past, present or future operations of the
Borrower, any of its Subsidiaries or any of their respective predecessors in
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interest, or, the past, present or future environmental, health or safety
condition of any respective Property of the Borrower or any of its
Subsidiaries, the presence of asbestos-containing materials at any respective
Property of the Borrower or any of its Subsidiaries, or the Release or
threatened Release of any Contaminant into the environment (collectively, the
"INDEMNIFIED MATTERS"); provided, however, the Borrower shall have no
obligation to an Indemnitee hereunder with respect to Indemnified Matters
caused by or resulting from the willful misconduct or gross negligence of such
Indemnitee, as determined by a court of competent jurisdiction in a
non-appealable final judgment; and provided further that payment of the costs
of preparation of the Loan Documents shall be governed by Section 14.2(a)
hereof; and (b) not to assert any claim against any of the Indemnitees, on any
theory of liability, for consequential or punitive damages arising out of, or
in any way in connection with, the Revolving Credit Commitments, the
Obligations, or the other matters governed by this Agreement and the other
Loan Documents. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it
is violative of any law or public policy, the Borrower shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
14.4. CHANGE IN ACCOUNTING PRINCIPLES. If any change in the accounting
principles used in the preparation of the most recent financial statements
referred to in Sections 8.1 or 8.2 are hereafter required or permitted by the
rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Company or the Borrower as applicable, with the agreement of its independent
certified public accountants and such changes result in a change in the method
of calculation of any of the covenants, standards or terms found in Article X,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating compliance with such covenants, standards and
terms by the Borrower shall be the same after such changes as if such changes
had not been made; provided, however, no change in GAAP that would affect the
method of calculation of any of the covenants, standards or terms shall be
given effect in such calculations until such provisions are amended, in a
manner satisfactory to the Administrative Agent and the Borrower, to so
reflect such change in accounting principles.
14.5. INTENTIONALLY OMITTED.
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14.6. RATABLE SHARING. The Lenders agree among themselves that (i) with
respect to all amounts received by them which are applicable to the payment of
the Obligations (excluding the repayment of Competitive Bid Loans to a
particular Competitive Bid Lender and the costs, fees and other payments
described in Sections 3.1(g), 5.2(f), and 5.3, Article XIII and Section 14.1)
equitable adjustment will be made so that, in effect, all such amounts will be
shared among them ratably in accordance with their Pro Rata Shares, whether
received by voluntary payment, by the exercise of the right of setoff or
banker's lien, by counterclaim or cross-action or by the enforcement of any or
all of the Obligations (excluding the repayment of Competitive Bid Loans to a
particular Competitive Bid Lender and the costs, fees and other payments
described in Sections 3.1(g), 5.2(f), and 5.3, Article XIII and Section 14.1),
(ii) if any of them shall by voluntary payment or by the exercise of any right
of counterclaim, setoff, banker's lien or otherwise, receive payment of a
proportion of the aggregate amount of the Obligations held by it, which is
greater than the amount which such Lender is entitled to receive hereunder,
the Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such Obligations
owed to the others so that all such recoveries with respect to such
obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be
returned to such party to the extent necessary to adjust for such recovery,
but without interest except to the extent the purchasing party is required to
pay interest in connection with such recovery. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 14.6 may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
14.7. AMENDMENTS AND WAIVERS.
(a) General Provisions. Unless otherwise provided for or required in this
Agreement, no amendment or modification of any provision of this Agreement or
any of the other Loan Documents shall be effective without the written
agreement of the Requisite Lenders (which the Requisite Lenders shall have the
right to grant or withhold in their sole discretion) and the Borrower;
provided, however, that the Borrower's agreement shall not be required for any
amendment or modification of Sections 12.1 through 12.8 (other than Section
12.7). In the event that the Administrative Agent shall request the agreement
of the Lenders to any amendment, modification or waiver, if any Lender shall
fail to respond to any such request within fifteen
124
(15) days after receipt of such request, such Lender's approval thereto shall
be deemed to have been given; provided, however, that such request shall
state, in capital letters that "FAILURE TO RESPOND TO THIS REQUEST WITHIN
FIFTEEN (15) DAYS AFTER RECEIPT, SHALL BE DEEMED CONSENT TO THE ENCLOSED
REQUEST". No termination or waiver of any provision of this Agreement or any
of the other Loan Documents, or consent to any departure by the Borrower
therefrom, shall be effective without the written concurrence of the Requisite
Lenders, which the Requisite Lenders shall have the right to grant or withhold
in their sole discretion. All amendments, waivers and consents not
specifically reserved to the Administrative Agent, the Arrangers or the
Lenders in Section 14.7(b), 14.7(c), and in other provisions of this Agreement
shall require only the approval of the Requisite Lenders. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances. Notwithstanding the foregoing, no amendment,
waiver or consent shall, unless in writing and signed by the Designating
Lender on behalf of its Designated Bank affected thereby, (a) subject such
Designated Bank to any additional obligations, (b) reduce the principal of,
interest on, or other amounts due with respect to, the Designated Bank Note
made payable to such Designated Bank, or (c) postpone any date fixed for any
payment of principal of, or interest on, or other amounts due with respect to
the Designated Bank Note made payable to the Designated Bank.
(b) Amendments, Consents and Waivers by Affected Lenders. Any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender affected thereby as described below:
(i) waiver of any of the conditions specified in Sections 6.1 and 6.2 (except
with respect to a condition based upon another provision of this Agreement,
the waiver of which requires only the concurrence of the Requisite Lenders),
(ii) increase in the amount of such Lender's Revolving Credit Commitment,
(iii) reduction of the principal of, or the rate or amount of interest on, the
Loans or the Reimbursement Obligations, or any fees or other amounts payable
to such Lender (other than by the payment or prepayment thereof), and
125
(iv) postponement or extension of any date (other than the Revolving Credit
Termination Date postponement or extension of which is governed by Section
14.7(c)(i)) fixed for any payment of principal of, or interest on, the Loans
or the Reimbursement Obligations or any fees or other amounts payable to such
Lender (except with respect to any modifications of the application provisions
relating to prepayments of Loans and other Obligations which are governed by
Section 4.2(b)).
(c) Amendments, Consents and Waivers by All Lenders. Any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:
(i) postponement of the Revolving Credit Termination Date, or increase in the
Maximum Revolving Credit Amount to any amount in excess of $575,000,000,
(ii) change in the definition of Requisite Lenders or in the aggregate Pro
Rata Share of the Lenders which shall be required for the Lenders or any of
them to take action hereunder or under the other Loan Documents,
(iii) amendment of Section 14.6 or this Section 14.7,
(iv) assignment of any right or interest in or under this Agreement or any of
the other Loan Documents by the Borrower,
(v) waiver of any Event of Default under Section 11.1(a), Section 11.1(f) or
Section 11.1(g), and
(vi) amendment or release of the Guaranties, except in connection with the
permitted sale of an Unencumbered Project by a Guarantor.
(d) Administrative Agent Authority. Subject to the second succeeding
sentence of this subsection (d), the Administrative Agent may, but shall have
no obligation to, with the written concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender.
Notwithstanding anything to the contrary contained in this Section 14.7, no
amendment, modification, waiver or consent shall affect the rights or duties
of the Administrative Agent under this Agreement and the other Loan Documents,
unless made in writing and signed by the Administrative Agent in addition to
the Lenders required above to take such action. Notwithstanding anything
herein to the contrary, in the event that the Borrower shall have requested,
in writing, that any Lender agree to an
126
amendment, modification, waiver or consent with respect to any particular
provision or provisions of this Agreement or the other Loan Documents, and
such Lender shall have failed to state, in writing, that it either agrees or
disagrees (in full or in part) with all such requests (in the case of its
statement of agreement, subject to satisfactory documentation and such other
conditions it may specify) within fifteen (15) days after such request, then
such Lender hereby irrevocably authorizes the Administrative Agent to agree or
disagree, in full or in part, and in the Administrative Agent's sole
discretion, to such requests on behalf of such Lender as such Lender's
attorney-in-fact and to execute and deliver any writing approved by the
Administrative Agent which evidences such agreement as such Lender's duly
authorized agent for such purposes; provided, however, that such request shall
state, in capital letters that "FAILURE TO RESPOND TO THIS REQUEST WITHIN
FIFTEEN (15) DAYS AFTER RECEIPT, SHALL BE DEEMED AUTHORIZATION TO THE
ADMINISTRATIVE AGENT WITH RESPECT TO THE ENCLOSED REQUEST".
14.8. NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given shall be in
writing and may be personally served, sent by facsimile transmission or by
courier service or United States certified mail and shall be deemed to have
been given when delivered in person or by courier service, upon receipt of a
facsimile transmission, or four (4) Business Days after deposit in the United
States mail with postage prepaid and properly addressed. Notices to the
Administrative Agent pursuant to Articles II, IV or XII shall not be effective
until received by the Administrative Agent. For the purposes hereof, the
addresses of the parties hereto (until notice of a change thereof is delivered
as provided in this Section 14.8) shall be as set forth below each party's
name on the signature pages hereof or the signature page of any applicable
Assignment and Acceptance, or, as to each party, at such other address as may
be designated by such party in a written notice to all of the other parties to
this Agreement.
14.9. SURVIVAL OF WARRANTIES AND AGREEMENTS. All representations and
warranties made herein and all obligations of the Borrower in respect of
taxes, indemnification and expense reimbursement shall survive the execution
and delivery of this Agreement and the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and, in the case of any Lender that may assign any interest in its
Revolving Credit Commitment, Loans or participation interests in Letters of
Credit hereunder, shall survive the making of such assignment, notwithstanding
that such assigning Lender may cease to be a "Lender" hereunder, and, except
for the representations and warranties, the termination of this Agreement
other than any of the
127
foregoing set forth in Section 13.1 or Section 13.2 or Section 13.3 or Section
5.2(f), which shall survive for thirty (30) days after termination of this
Agreement.
14.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of the Administrative Agent or any Lender in the exercise
of any power, right or privilege under any of the Loan Documents shall impair
such power, right or privilege or be construed to be a waiver of any default
or acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. All rights and remedies existing under the
Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
14.11. PAYMENTS SET ASIDE. To the extent that the Borrower makes a
payment or payments to the Administrative Agent, any Arranger or any Lender or
any such Person exercises its rights of setoff, and such payment or payments
or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party, then to
the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
14.12. SEVERABILITY. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.
14.13. HEADINGS. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
or be given any substantive effect.
14.14. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAWS
PRINCIPLES.
14.15. LIMITATION OF LIABILITY. No claim may be made by any Lender, any
Arranger, the Administrative Agent, or any other Person against any Lender
(acting in any capacity hereunder) or the Affiliates,
128
directors, officers, employees, attorneys or agents of any of them for any
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each Lender, each Arranger and the
Administrative Agent hereby waives, releases and agrees not to sue upon any
such claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
14.16. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto
and the successors and permitted assigns of the Lenders. Except as otherwise
provided in Section 10.6, the rights hereunder of the Borrower, or any
interest therein, may not be assigned without the written consent of all
Lenders.
14.17. CERTAIN CONSENTS AND WAIVERS OF THE BORROWER.
(a) Personal Jurisdiction. (i) EACH OF THE AGENTS, THE LENDERS, AND THE
BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT
SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS
OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
EACH OF THE AGENTS, THE LENDERS AND THE BORROWER AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. EACH OF THE AGENTS, THE LENDERS, AND THE BORROWER WAIVES IN ALL DISPUTES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
129
(ii) THE BORROWER AGREES THAT THE ADMINISTRATIVE AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION NECESSARY OR APPROPRIATE TO ENABLE THE ADMINISTRATIVE AGENT AND THE
LENDERS TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE
ADMINISTRATIVE AGENT OR ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENT OR ANY
LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER'S PROCESS AGENT OR THE BORROWER'S NOTICE
ADDRESS SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT. THE
BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
THE ADMINISTRATIVE AGENT OR THE LENDERS TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
(C) WAIVER OF JURY TRIAL. EACH OF THE AGENTS AND THE LENDERS AND THE
BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
14.18. COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES. This Agreement and
any amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective against the Borrower
and each Agent and Lender on the Closing Date. This Agreement and each of the
other Loan Documents shall
130
be construed to the extent reasonable to be consistent one with the other, but
to the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
14.19. LIMITATION ON AGREEMENTS. All agreements between the Borrower, the
Administrative Agent, each Arranger and each Lender in the Loan Documents are
hereby expressly limited so that in no event shall any of the Loans or other
amounts payable by the Borrower under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.
14.20. DISCLAIMERS. The Administrative Agent, the Arrangers and the
Lenders shall not be liable to any contractor, subcontractor, supplier,
laborer, architect, engineer, tenant or other party for services performed or
materials supplied in connection with any work performed on the Projects,
including any TI Work. The Administrative Agent, the Arrangers and the Lenders
shall not be liable for any debts or claims accruing in favor of any such
parties against the Borrower or others or against any of the Projects. The
Borrower is not and shall not be an agent of any Agent, the Arrangers or the
Lenders for any purposes and none of the Lenders, the Arrangers, or the Agents
shall be deemed partners or joint venturers with Borrower. None of the
Administrative Agent, the Arrangers or the Lenders shall be deemed to be in
privity of contract with any contractor or provider of services to any
Project, nor shall any payment of funds directly to a contractor or
subcontractor or provider of services be deemed to create any third party
beneficiary status or recognition of same by any of the Administrative Agent,
the Arrangers or the Lenders and the Borrower agrees to hold the
Administrative Agent, the Arrangers and the Lenders harmless from any of the
damages and expenses resulting from such a construction of the relationship of
the parties or any assertion thereof.
14.21. ENTIRE AGREEMENT. This Agreement, taken together with all of the
other Loan Documents, embodies the entire agreement and understanding among
the parties hereto and supersedes all prior agreements and understandings,
written and oral, relating to the subject matter hereof.
14.22. CONFIDENTIALITY. Each of the Agents, the Arrangers and the Lenders
agrees to keep confidential all non-public information provided to it by the
Borrower pursuant to this Agreement that is designated by the Borrower as
confidential; provided that nothing herein shall prevent the Agents or the
Lenders from disclosing any such information (a) to the Agents, any other
Lender or any Affiliate of any Lender (provided such Affiliate is made aware
of the confidentiality of such information and agrees to keep
131
such information confidential), (b) to any Assignee, Participant or
prospective Assignee or Participant or any actual or prospective counterparty
(or its advisors) to any swap or derivative transactions relating to the
Borrower and its Obligations (provided such Person is made aware of the
confidentiality of such information and agrees to keep such information
confidential), (c) to the employees, directors, agents, attorneys, accountants
and other professional advisors of any Lender, Assignee, Participant,
prospective Assignee or Participant who are advised of the provisions of this
Section, (d) upon the request or demand of any Governmental Authority having
or asserting jurisdiction over either Agent or any Lender, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to
do so in connection with the exercise of any remedy hereunder or under any
other Loan Document, (g) upon the advice of counsel that such disclosure is
required by law, (h) with the consent of the Borrower, (i) in connection with
any litigation to which any Agent, Arranger or Lender is a party, or (j) to
the extent such information becomes publicly available other than as a result
of a breach of this Section 14.22 or becomes available to any Agent, Arranger
or Lender on a nonconfidential basis from a source other than the Borrower.
14.23. NO BANKRUPTCY PROCEEDINGS. Each of the Borrower the Administrative
Agent, the Documentation Agent, the Syndication Agent and the Lenders hereby
agrees that it will not institute against any Designated Bank or join any
other Person in instituting against any Designated Bank any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, until the later to occur of (i)
one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Designated Bank and (ii) the Revolving
Credit Termination Date.
14.24. TRANSITIONAL ARRANGEMENTS.
(a) Old Revolving Credit Agreement Superseded. This Agreement shall
supersede the Old Revolving Credit Agreement in its entirety, except as
provided in this Section 14.24. On the Closing Date, the rights and
obligations of the parties under the Old Revolving Credit Agreement and the
"Notes" defined therein shall be subsumed within and be governed by this
Agreement and the Notes; provided however, that any of the "Revolving Credit
Obligations" (as defined in the Old Revolving Credit Agreement) outstanding
under the Old Revolving Credit Agreement shall, for purposes of this
Agreement, be Revolving Credit Obligations hereunder. The Lenders' interests
in such Revolving Credit Obligations, and participations in such Letters of
Credit shall be reallocated on the Closing Date in accordance with each
Lender's applicable Pro Rata Share.
132
(b) Return and Cancellation of Notes. Upon its receipt of the Revolving
Credit Notes to be delivered hereunder on the Closing Date, each Lender will
promptly return to the Borrower, marked "Cancelled" or "Replaced", the notes
of the Borrower held by such Lender pursuant to the Old Revolving Credit
Agreement.
(c) Interest and Fees Under Original Agreement. All interest and all
commitment, facility and other fees and expenses owing or accruing under or in
respect of the Old Revolving Credit Agreement shall be calculated as of the
Closing Date (prorated in the case of any fractional periods), and shall be
paid on the Closing Date in accordance with the method specified in the Old
Revolving Credit Agreement as if such agreement were still in effect.
[Remainder of Page Intentionally Left Blank]
[SIGNATURE PAGES TO FOLLOW]
133
IN WITNESS WHEREOF the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
BORROWER:
--------
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.
By: ________________________________
Name:
Title:
Notice Address:
--------------
225 Broadhollow Road
Melville, New York 11747
Attention: Michael Maturo
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
ADMINISTRATIVE AGENT AND LENDER:
-------------------------------
THE CHASE MANHATTAN BANK
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
270 Park Avenue
New York, NY 10017
Attention:
With a copy of all notice to:
270 Park Avenue, 31st Floor
New York, NY 10017
Attention: Marc E. Costantino
Pro Rata Share:
7.652173913%
Revolving Credit Commitment:
$44,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
SYNDICATION AGENT:
UBS WARBURG LLC
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
DOCUMENTATION AGENT AND LENDER:
BANKERS TRUST COMPANY
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
130 Liberty Street
New York, NY 10006
Attention: Gloria Argueta
Pro Rata Share:
7.4782608696%
Revolving Credit Commitment:
$43,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
------
UBS AG, STAMFORD BRANCH
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
c/o UBS AG, New York Branch
Attention: Mara Martez
299 Park Avenue
New York, NY 10171
Pro Rata Share:
--------------
7.4782608696%
Revolving Credit Commitment:
$43,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
MANAGING AGENT AND LENDER:
-------------------------
BANK OF AMERICA, N.A.
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
100 North Tryon Street
NC1-007-11-07
Charlotte, NC 28255
Attn: Mark Wilson
Pro Rata Share:
6.7826086957%
Revolving Credit Commitment:
$39,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
MANAGING AGENT AND LENDER:
CITICORP REAL ESTATE, INC.
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
390 Greenwich Street, 1st Floor
New York, NY 10013
Attn: David Hirsh
Fax Number: 212-723-8380
Pro Rata Share:
6.7826086957%
Revolving Credit Commitment:
$39,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
MANAGING AGENT AND LENDER:
COMMERZBANK
AKTIENGESELLSCHAFT, NEW
YORK BRANCH
By:________________________________
Name:
Title:
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
2 World Financial Center
New York, NY 10281
Attn: David Schwarz
Pro Rata Share:
6.7826086957%
Revolving Credit Commitment:
$39,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
MANAGING AGENT AND LENDER:
-------------------------
BAYERISCHE HYPO-UND
VEREINSBANK AG NEW YORK
BRANCH
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
150 E 42nd Street
New York, NY 10017-4679
Attn: Robert Dowling
Pro Rata Share:
--------------
6.7826086957%
Revolving Credit Commitment:
$39,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
CO-AGENT AND LENDER:
THE BANK OF NEW YORK
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
One Wall Street
New York, NY 10286
Attention: David Fowler
Pro Rata Share:
5.3913043478%
Revolving Credit Commitment:
$31,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
CO-AGENT AND LENDER:
-------------------
ING (U.S.) CAPITAL LLC
By: ING (U.S.) CAPITAL FINANCIAL
HOLDINGS LLC, ITS SOLE
MEMBER
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
55 East 52nd Street
New York, NY 10055
Attention: Thomas Hobbis
Pro Rata Share:
5.3913043478%
Revolving Credit Commitment:
$31,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
CO-AGENT AND LENDER:
-------------------
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
40 West 57th Street
22nd Floor
New York, NY 10019
Attention: Kimberly Naso
2120 East Park Place, Suite 100
Elsegundo, CA 90245
Attention: Susan Figeura
Pro Rata Share:
5.3913043478%
Revolving Credit Commitment:
$31,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
------
BAYERISCHE LANDESBANK
GIROZENTRALE
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
560 Lexington Ave.
New York, NY 10022
Attention: Daniel Reddy
Pro Rata Share:
--------------
3.4782608696%
Revolving Credit Commitment:
$20,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
------
EUROPEAN AMERICAN BANK
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
335 Madison Avenue
New York, NY 10017
Attention: Shaelee Lopes
Pro Rata Share:
3.4782608696%
Revolving Credit Commitment:
$20,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
CO-AGENT AND LENDER:
PNC BANK, NATIONAL ASSOCIATION
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
One Penn Plaza, Suite 2504
New York, NY 10119
Attention: Thomas Nastarowicz
Pro Rata Share:
5.3913043478%
Revolving Credit Commitment:
$31,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
ERSTE BANK
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
280 Park Avenue, West
Building-32
New York, NY 10017
Attention: Paul Judicke
Pro Rata Share:
2.6086956522%
Revolving Credit Commitment:
$15,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
FLEET NATIONAL BANK
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
100 Federal Street
Mail code MA DE 10009A
Boston, MA 02110
Attention: Kathleen Ahern
Pro Rata Share:
3.4782608696%
Revolving Credit Commitment:
$20,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
------
LASALLE BANK NATIONAL ASSOCIATION
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
135 South LaSalle Street
Chicago, IL 60603-3499
Attention: Klay Schmeisser
Pro Rata Share:
3.4782608696%
Revolving Credit Commitment:
$20,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
------
BANK LEUMI USA
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
562 Fifth Avenue
New York, NY 10036
Attention: Cynthia Wilbur
Pro Rata Share:
.8695652174%
Revolving Credit Commitment:
$5,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
MERRILL LYNCH MORTGAGE
CAPITAL INC.
By: ________________________________
Name:
Title:
Notice Address, Domestic and Eurodollar
Lending Office:
Four World Financial Center,
North Tower
New York, NY 10281-1307
Attention: Daniel Gilbert
Pro Rata Share:
3.4782608696%
Revolving Credit Commitment:
$20,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
SUMMIT BANK
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
750 Walnut Avenue
Cranford, NJ 07016
Attention: Marianne deJongh
Pro Rata Share:
4.3478260870%
Revolving Credit Commitment:
$25,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
LENDER:
------
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
Notice Address, Domestic and
Eurodollar Lending Office:
75 Wall Street
New York, NY 10005-2889
Attention: David Samer
Pro Rata Share:
--------------
3.4782608696%
Revolving Credit Commitment:
$20,000,000
SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT
WITH RECKSON OPERATING PARTNERSHIP, L.P.
EXHIBIT _
EXHIBIT A
to
Amended and Restated Credit Agreement dated as of September __, 2000
FORM OF ASSIGNMENT AND ACCEPTANCE
- --------------------------------------------------------------------------------
ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE dated as of _______________, 200_,
among [Names of Assignor Lenders] (each, an "Assignor" and collectively, the
"Assignors") and __________, ___________, ___________, (etc.) (each, an
"Assignee" and collectively, the "Assignees").
PRELIMINARY STATEMENTS
A. Reference is made to the Amended and Restated Credit Agreement
dated as of September __, 2000 (as the same may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement")
among Reckson Operating Partnership, L.P., the institutions from time to time
party thereto as Lenders, and The Chase Manhattan Bank, as Administrative
Agent, UBS WARBURG LLC, as Syndication Agent, DEUTSCHE BANK as Documentation
Agent, and CHASE SECURITIES INC. and UBS WARBURG LLC as joint lead arrangers
and joint book managers. Capitalized terms used herein and not otherwise
defined herein are used as defined in the Credit Agreement.
B. The Assignors are Lenders under the Credit Agreement and each
desires to sell and assign to the Assignees a portion of such Assignor's
existing Revolving Credit Commitment, as set forth on Schedule 2 attached
hereto (each, an "Assigned Commitment") in the aggregate amount of $________
of the Revolving Credit Commitments (the "Aggregate Assigned Amount"), and
each Assignee desires to purchase and assume from each Assignor, on the terms
and conditions set forth below, an interest in such Assignor's respective
Assigned Commitment and related outstanding Loans (the "Assigned
Percentages"), together with the Assignors' respective rights and obligations
under the Credit Agreement with respect to the Assigned Percentages, such that
each Assignee shall, from and after the Effective Date (as defined below),
become a Lender under the Credit Agreement with the respective Revolving
Credit Commitment and Pro Rata Share listed on the signature pages attached
hereto.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Assignors and the Assignees
hereby agree as follows:
1. In consideration of the payments of each Assignee to each
Assignor, to be made by wire transfer to the Administrative Agent for the
account of the applicable Assignor of immediately available funds on the
Effective Date in accordance with Schedule 3 attached hereto, each Assignor
hereby sells and assigns to each Assignee, and each Assignee hereby purchases
and assumes from such Assignor, the Assigned Percentage set forth on Schedule
1 attached hereto, together with such Assignor's rights and obligations under
the Credit Agreement and all of the other Loan Documents with respect to the
Assigned Percentages as of the date hereof (after giving effect to any other
assignments thereof made prior to the date hereof, whether or not such
assignments have become effective, but without giving effect to any other
assignments thereof also made on the date hereof), including, without
limitation, the obligation to make Loans and the obligation to participate in
Letters of Credit.
2. Each Assignor (i) represents and warrants that as of the date
hereof its Revolving Credit Commitment is as set forth on Schedule 2 attached
hereto (in each case, after giving effect to any other assignments thereof
made prior to the date hereof, whether or not such assignments have become
effective, but without giving effect to any other assignments thereof made as
of the date hereof); (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and that such Assignor is
legally authorized to enter into this Assignment and Acceptance; (iii) makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Credit Agreement or any of the other Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant thereto; and (iv) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any Guarantor or the performance or observance by the
Borrower or any Guarantor of any obligations under the Credit Agreement or any
of the other Loan Documents or any other instrument or document furnished
pursuant thereto.
3. Each Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit Agreement, together with copies of such
other documents and information as it has deemed appropriate to make its
A-2
own credit analysis and decision to enter into this Assignment and Acceptance;
(iii) agrees that it shall have no recourse against the Assignor with respect
to any matter relating to the Credit Agreement, any of the other Loan
Documents, or this Assignment and Acceptance (except with respect to the
representations or warranties made by the Assignors in clauses (i) and (ii) of
paragraph 2 above); (iv) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignors or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (v) confirms that it is an Eligible Assignee; (vi)
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vii) agrees that it will perform
in accordance with their terms all of the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender; (viii)
confirms that, to the best of its knowledge, as of the date hereof, it is not
subject to any law, regulation or guideline from any central bank or other
Governmental Authority or quasigovernmental authority exercising jurisdiction,
power or control over it, which would subject the Borrower to the payment of
additional compensation under Section 13.2 or under Section 13.3 of the Credit
Agreement; (ix) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office(s) the offices set forth beneath its
name on the signature pages hereof; (x) if such Assignee is organized under
the laws of a jurisdiction outside the United States, attaches the forms
described in Section 13.1(d) of the Credit Agreement or any successor forms
prescribed by the Internal Revenue Service of the United States certifying as
to the Assignee's exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Credit Agreement and the
Notes or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty; and (xi) represents and warrants that none of the funds, monies,
assets or other consideration being used to purchase pursuant to this
Assignment and Acceptance are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not
be "plan assets" under ERISA.
4. Following the execution of this Assignment and Acceptance by each
of the Assignors and the Assignees, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date of this Assignment and Acceptance shall be ______________, 200_ (the
"Effective Date").
A-3
5. As of the Effective Date, (i) each Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii)
each Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights (except as provided in Section 14.9 of the Credit
Agreement) and be released from its obligations under the Credit Agreement
with respect to its Assigned Commitment.
6. From and after the Effective Date, the Administrative Agent shall
make all payments under the Credit Agreement and the Notes in respect of the
Aggregate Assigned Amount (including, without limitation, all payments of
principal, interest and fees with respect thereto) to the appropriate
Assignees. The Administrative Agent shall make all appropriate adjustments in
payments under the Credit Agreement and the Notes for periods prior to the
Effective Date.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
8. This Assignment and Acceptance may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
[9. The Assignor represents and warrants that it has given the
Borrower five (5) days written notice by telecopy of its intention to enter
into this Assignment and Acceptance in accordance with the provisions of
Section 14.1(b) of the Credit Agreement.](1)
- --------
(1) Applies only during the continuance of an Event of Default and
prior to an acceleration of the Loans.
A-4
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
ASSIGNORS:
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Notice Address, Domestic
Lending Office and Eurodollar
Lending Office:
Adjusted Pro Rata Share: ____%
Adjusted Revolving Credit Commitment: $___________
A-5
ASSIGNEES:
------------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Notice Address, Domestic
Lending Office and Eurodollar
Lending Office:
Pro Rata Share ___%
Revolving Credit Commitment: $___________
A-6
Accepted as of this ___ day
of _____________, 200_
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_______________________
Name:
Title:
By:_______________________
Name:
Title:
Consented and agreed to
as of this ___ day of ___________, 200_
RECKSON OPERATING PARTNERSHIP, L.P.,(2)
a Delaware limited partnership
By: RECKSON ASSOCIATES REALTY CORP.,
a Maryland corporation, its general partner
By:_______________________________
Name:
Title:
- --------
(2) Consent not required if the circumstances described in Section
14.1(b) of the Credit Agreement have occurred and are continuing.
SCHEDULE 1
Assigned New Pro
Assignee Percentage Rata Share
- -------- ---------- ----------
A-8
SCHEDULE 2
EXISTING REVOLVING CREDIT COMMITMENTS AND
PRO RATA SHARES OF ASSIGNORS
Existing Existing
Revolving Credit Pro Rata Assigned
Assignor Commitment Share Commitment
- -------- ---------------- --------- ----------
A-9
SCHEDULE 3
PAYMENTS (3)
Funding Fee to
Facility Amount/Repayment Administrative
Lender Fee to Assignors Agent (4)
- ------ --- ------------ ---------
- --------
(3) Paymentsto the Lenders are shown without parentheses; payments
from the Lenders to the Administrative Agent, on its own behalf or on behalf
of the Lenders, are shown in parentheses.
(4) Pursuant to Section 14.1(d) of the Credit Agreement.
A-10
EXHIBIT B-1
to
Amended and Restated Credit Agreement dated as of ______, 2000
FORM OF PROMISSORY NOTE
- --------------------------------------------------------------------------------
$______________ New York, New York
_____, 2000
For value received, Reckson Operating Partnership, L.P., a Delaware
limited partnership (the "Borrower"), promises to pay to the order of
_____________________________ (the "Lender") the unpaid principal amount of
each Loan made by the Lender to the Borrower pursuant to the Credit Agreement
referred to below on the Revolving Credit Termination Date (as such term is
defined in the Credit Agreement) or on such other dates as may be specified in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of the Administrative Agent
(as such term is defined in the Credit Agreement).
All Loans made by the Lender, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Lender and, if the Lender so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be endorsed by
the Lender on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Amended and Restated
Credit Agreement, dated as of September __, 2000, among the Borrower, the
institutions from time to time party thereto, The Chase Manhattan Bank, as
Administrative Agent, UBS Warburg LLC, as Syndication Agent, Deutsche Bank, as
Documentation Agent, and Chase Securities Inc. and UBS Warburg LLC, as joint
lead arrangers and joint book managers (as the same may be amended,
supplemented, restated, or otherwise modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof, the acceleration of the maturity
hereof upon the happening of certain events and certain waivers by the Borrower.
THIS NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
BORROWER:
RECKSON OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership
By: RECKSON ASSOCIATES
REALTY CORP., a Maryland
corporation, its general partner
By:_____________________________
Name:
Title:
B-1.2
LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
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EXHIBIT B-2
to
Amended and Restated Credit Agreement dated as of September __, 2000
FORM OF DESIGNATED BANK PROMISSORY NOTE
- --------------------------------------------------------------------------------
$___________________ New York, New York
_______, 2000
For value received, Reckson Operating Partnership, L.P., a Delaware
limited partnership (the "Borrower"), promises to pay to the order of
____________________________ (the "Lender") the unpaid principal amount of
each Competitive Bid Loan made by the Lender to the Borrower pursuant to the
Credit Agreement referred to below on the dates specified in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal
amount of each such Competitive Bid Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of the Administrative Agent
(as such term is defined in the Credit Agreement).
All Competitive Bid Loans made by the Lender, the respective types
and maturities thereof and all repayments of the principal thereof shall be
recorded by the Lender and, if the Lender so elects in connection with any
transfer or enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding may be
endorsed by the Lender on the schedule attached hereto, or on a continuation
of such schedule attached to and made a part hereof; provided that the failure
of the Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This note is one of the Designated Bank Notes referred to in the
Amended and Restated Credit Agreement, dated as of September __, 2000, among
the Borrower, the institutions from time to time party thereto, The Chase
Manhattan Bank, as Administrative Agent, UBS Warburg LLC, as Syndication
Agent, Deutsche Bank, as Documentation Agent, and Chase Securities Inc. and
UBS Warburg LLC, as joint lead arrangers and joint book managers (as the same
may be amended, supplemented, restated, or otherwise modified from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for
provisions for the prepayment
hereof, the acceleration of the maturity hereof upon the happening of certain
events and certain waivers by the Borrower.
THIS NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
BORROWER:
RECKSON OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership
By: RECKSON ASSOCIATES
REALTY CORP., a Maryland
corporation, its general partner
By:_____________________________
Name:
Title:
B-2.2
LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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EXHIBIT C
to
Amended and Restated Credit Agreement dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF NOTICE OF BORROWING
______________, 200_
The Chase Manhattan Bank, as Administrative Agent
for the Lenders party to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
Attention: Marc Costantino
Ladies and Gentlemen:
Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of September __, 2000 (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among Reckson Operating Partnership, L.P., a Delaware limited partnership (the
"Borrower"), the institutions from time to time party thereto as Lenders, The
Chase Manhattan Bank, as Administrative Agent, UBS Warburg LLC, as Syndication
Agent, Deutsche Bank, as Documentation Agent, and Chase Securities Inc. and
UBS Warburg LLC, as joint lead arrangers and joint book managers.
The Borrower hereby gives you notice, irrevocably, pursuant to
Section 2.1(b) of the Credit Agreement that the Borrower hereby requests a
Borrowing under the Credit Agreement and, in that connection, sets forth below
the information relating to such Borrowing (the "Proposed Borrowing") as
required pursuant to the terms of the Credit Agreement:
The Funding Date (which shall be a Business Day) of the Proposed
Borrowing is ________________, 200__.
The amount of the Proposed Borrowing is $____________.(1)
- --------
(1) Such amount must be in a minimum amount of $3,000,000 and in
integral multiples of $500,000 in excess of that amount.
The Revolving Credit Availability as of the date of this Notice of
Borrowing is $_______________.
The Proposed Borrowing will be of [Eurodollar Rate Loans] [Base Rate
Loans].
The requested Eurodollar Interest Period for the Proposed Borrowing
is from _________ and ending __________ (for a total of ________ months).(2)
The Borrower (by its signature below) hereby directs the
Administrative Agent to disburse the proceeds of the Loans comprising the
Proposed Borrowing on the Funding Date therefor as set forth on Schedule 1
attached hereto and made a part hereof, whereupon the proceeds of such Loans
shall be deemed received by or for the benefit of the Borrower.
The Borrower (by its signature below) hereby certifies that the
conditions precedent contained in Section [6.1] [6.2] are satisfied on the
date hereof and will be satisfied on the Funding Date of the Proposed
Borrowing.
RECKSON OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership
By: RECKSON ASSOCIATES
REALTY CORP., a Maryland
corporation, its general partner
By:_____________________________
Name:
Title:
- --------
(2) To be specified if the Proposed Borrowing is of Eurodollar Rate
Loans. Such Eurodollar Interest Period must comply with the provisions of
Section 5.2(b) of the Credit Agreement.
C-2
SCHEDULE 1
to
Notice of Borrowing
-------------------
dated _____________, 200_
[Insert disbursement directions]
C-3
EXHIBIT D
to
Amended and Restated Credit Agreement dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF NOTICE OF CONVERSION/CONTINUATION
___________, 200__
The Chase Manhattan Bank, as Administrative Agent
for the Lenders party to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
Attention: Marc Costantino
Ladies and Gentlemen:
Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of September __, 2000 (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among Reckson Operating Partnership, L.P., a Delaware limited partnership (the
"Borrower"), the institutions from time to time party thereto as Lenders, The
Chase Manhattan Bank, as Administrative Agent, UBS Warburg LLC, as Syndication
Agent, Deutsche Bank, as Documentation Agent, and Chase Securities Inc. and
UBS Warburg LLC, as joint lead arrangers and joint book managers.
The Borrower by its signature below hereby gives you notice pursuant
to Section 5.1(c)(ii) of the Credit Agreement that the Borrower hereby elects
to(1):
1. Convert $_____________(2) in aggregate principal amount of Base Rate
Loans from Base Rate Loans - to Eurodollar Rate Loans on
- --------
(1) Include those items that are applicable, completed appropriately
for the circumstances.
(2) Such amount of conversion to or continuation of Eurodollar Rate
Loans must be in a minimum amount of $3,000,000 and in integral multiples
______________, 200_(3). The Eurodollar Interest Period for such Eurodollar Rate
Loans - is requested to be ______________ month[s].(4)
2. Convert $____________ in aggregate principal amount of Eurodollar
Rate Loans with a current Eurodollar Interest Period ending ___________,
200_(5) to Base Rate Loans.
3. Continue as Eurodollar Rate Loans $_________ (6) in aggregate
principal amount of Eurodollar Rate Loans with a current Eurodollar Interest
Period from ________________ and ending _____________ 200_. The succeeding
Eurodollar Interest period for such Eurodollar Rate Loans is requested to be
____ month [s].(7)
- --------------------------------------------------------------------------------
of $500,000 in excess of that amount, except in the case of a conversion into
or a conversion of an entire Borrowing of Non Pro Rata Loans.
(3) Date of conversion must be a Business Day.
(4) Such Eurodollar Interest Period must comply with the provisions
of Section 5.2(b) of the Credit Agreement.
(5) The conversion of Eurodollar Rate Loans to Base Rate Loans shall
be made on, and only on, the last day of the Eurodollar Interest Period for
such Eurodollar Rate Loans.
(6) Such amount of conversion to or continuation of Eurodollar Rate
Loans must be in a minimum amount of $3,000,000 and in integral multiples of
$500,000 in excess of that amount, except in the case of a conversion into or
a conversion of an entire Borrowing of Non Pro Rata Loans.
(7) Such Eurodollar Interest Period must comply with the provisions
of Section 5.2(b) of the Credit Agreement.
D-2
The Borrower by its signature below hereby certifies that on the date
hereof there are no prohibitions under the Credit Agreement to the requested
conversion/continuation, and no such prohibitions will exist on the date of
the requested conversion/continuation.
RECKSON OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership
By: RECKSON ASSOCIATES
REALTY CORP., a Maryland
corporation, its general partner
By______________________________
Name:
Title:
D-3
EXHIBIT E
to
Amended and Restated Credit Agreement dated as of September __, 2000
- --------------------------------------------------------------------------------
LIST OF CLOSING DOCUMENTS
$575,000,000
REVOLVING CREDIT FACILITY
among
RECKSON OPERATING PARTNERSHIP, L.P.,
THE LENDERS,
THE CHASE MANHATTAN BANK,
UBS WARBURG LLC, AND
DEUTSCHE BANK.
SEPTEMBER __, 2000
LIST OF CLOSING DOCUMENTS(1)
- ----------------------------
1. Amended and Restated Credit Agreement (the "Credit Agreement"),
among Reckson Operating Partnership, L.P. (the "Borrower"), certain financial
institutions listed on the signature pages thereof as lenders (collectively
referred to herein, together with their respective successors and assigns, as
the "Lenders"), The Chase Manhattan Bank, as Administrative Agent ("Chase"),
UBS Warburg LLC, as Syndication Agent ("UBS"), Deutsche Bank, as Documentation
Agent, and Chase Securities Inc. and UBS Warburg LLC, as joint lead arrangers
and joint book managers.
2. Exhibits and Schedules to the Credit Agreement as described on
Schedule 1 attached hereto.
3. Promissory Notes (the "Borrower Notes") executed by the Borrower
and payable to each Lender evidencing the Loans made by such Lender under the
Credit Agreement.
4. Guaranty Agreement by each of Reckson Associates Realty Corp. (the
"Company"), Reckson FS Limited Partnership ("Reckson FS"), Reckson 120 White
Plains Road LLC, Reckson Short Hills LLC, Reckson/Stamford Towers LLC, and 360
Hamilton LLC for the benefit of Chase and the Lenders.
- --------
(1) Capitalized terms used herein but not otherwise defined herein
have the meanings assigned to such terms in the Credit Agreement.
5. (a) Certificate of the Company dated the Closing Date, in its
capacity as general partner of the Borrower, certifying (1) the names and true
signatures of the incumbent officers of the Company authorized to sign the
Credit Agreement, the Borrower Notes, and the other Loan Documents on behalf
of the Borrower, (2) the resolutions of the Company's Board of Directors
approving and authorizing the execution, delivery and performance of the
Credit Agreement, the Borrower Notes and all other Loan Documents executed by
the General Partner on behalf of the Borrower, and (3) a copy of the
Partnership Agreement of the Borrower as in effect on the date of such
certification, and (b) a copy of the Certificate of Incorporation of the
Company, together with all amendments thereto, if any, certified by the
Secretary of State of Maryland.
6. (a) Certificate of general partner/manager of each Guarantor dated
the Closing Date in its capacity as general partner/manager of each Guarantor
certifying (1) the names and true signatures of the incumbent officers of such
Guarantor authorized to sign the Guaranty and the other Loan Documents on
behalf of such Guarantor, (2) the resolutions of such general partner/manager
approving and authorizing the execution, delivery and performance of the
Guaranty and all other Loan Documents executed by such general partner/manager
on behalf of such Guarantor, and (3) a copy of the Partnership Agreement or
Operating Agreement of such Guarantor as in effect on the date of such
certification, and (b) a copy of the organizational documents of such general
partner/manager together with all amendments thereto, if any, certified by the
Secretary of State of its jurisdiction of organization.
7. Copy of the Certificate of Limited Partnership of the Borrower,
together with all amendments thereto, if any, certified by the Secretary of
State of Delaware.
8. Copy of the Articles of Incorporation of the Company, together
with all amendments thereto, if any, certified by the Secretary of State of
Maryland.
9. Copy of the Certificate of Limited Partnership or Certificate of
Organization of each Guarantor, together with all amendments thereto, if any,
certified by the Secretary of State of its jurisdiction of organization.
10. Copy of the Certificate of Formation of the general
partner/manager of each Guarantor, together with all amendments thereto, if
any, certified by the Secretary of State of its jurisdiction of organization.
E-2
11. Good Standing Certificates of the Borrower, the Company, Reckson FS
Limited Partnership and Reckson FS, Inc., each Guarantor and each general
partner/manager of each Guarantor.
12. Foreign Qualification Certificates of the Borrower, the Company,
each Guarantor and each general partner/manager of each Guarantor from each
jurisdiction in which such entity owns Real Property.
13. Opinion of Brown & Wood LLP, counsel for the Borrower, the Company
and the Guarantors.
14. Notice of Borrowing executed by the Borrower with respect to the
Loans to be made on the Initial Funding Date.
15. Disbursement Direction Authorization executed by the Borrower
pursuant to which Chase is directed to disburse the proceeds of the Loans to
be made on the Initial Funding Date as described therein.
16. Officer's Certificate of the General Partners dated the Initial
Funding Date, signed by the President of the Company, certifying, among other
things, satisfaction of the conditions precedent to funding set forth in
Section 6.1 of the Credit Agreement.
E-3
Schedule 1 to Exhibit E
-----------------------
LIST OF EXHIBITS AND SCHEDULES TO THE CREDIT AGREEMENT
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Note
Exhibit B-2 Form of Designated Bank Note
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Notice of Conversion /Continuation
Exhibit E List of Closing Documents
Exhibit F Form of Compliance Certificate to Accompany Reports
Exhibit G Sample of Calculations of Financial Covenants
Exhibit H Form of Competitive Bid Quote Request
Exhibit I Form of Invitation for Competitive Bid Quote
Exhibit J Form of Competitive Bid Quote
Exhibit K Form of Designation Agreement
Exhibit L Form of Guaranty
Schedule 1.1.1 Existing Permitted Liens
Schedule 1.1.2 Permitted Securities Options
Schedule 6.1(d) Equity Changes
Schedule 7.1-A Organizational Documents
Schedule 7.1-C Corporate Structure; Outstanding Capital Stock and
Partnership Interests; Partnership Agreement
Schedule 7.1-H Indebtedness for Borrowed Money; Contingent Obligations
Schedule 7.1-I Pending Actions
Schedule 7.1-P Environmental Matters
Schedule 7.1-Q ERISA Matters
Schedule 7.1-R Securities Activities
Schedule 7.1-T Insurance Policies
E-4
EXHIBIT F
to
Amended and Restated Credit Agreement dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF [QUARTERLY/ANNUAL] COMPLIANCE CERTIFICATE TO
ACCOMPANY REPORTS
_____________, 200_
The Chase Manhattan Bank, as Administrative Agent
for the Lenders party to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
Attention: Marc Costantino
Ladies and Gentlemen:
Pursuant to Section [8.2(a)(iii)] [8.2(b)(iii)] of that certain
Amended and Restated Credit Agreement dated as of September __, 2000 (as the
same may be amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined) among Reckson Operating Partnership, L.P., a Delaware limited
partnership (the "Borrower"), the institutions from time to time party thereto
as Lenders, The Chase Manhattan Bank, as Administrative Agent, UBS Warburg
LLC, as Syndication Agent, Deutsche Bank, as Documentation Agent, and Chase
Securities Inc. and UBS Warburg LLC, as joint lead arrangers and joint book
managers, the undersigned, ___________, the ____________of [Reckson Operating
Partnership, L.P., a Delaware limited partnership][Reckson Associates Realty
Corp., a Maryland corporation (the "Company")], hereby certifies that:
1. The undersigned has reviewed the terms of the Loan Documents, and
has made, or caused to be made under [his/her] supervision, a review in
reasonable detail of the consolidated financial condition of the Company and
its consolidated Subsidiaries during the accounting period covered by the
financial statements identified below. To the best of the undersigned's
knowledge, such review has not disclosed the existence during or at the end of
such accounting period, and as of the date hereof the
undersigned does not have knowledge, of the existence of any condition or
event which constitutes an Event of Default or Potential Event of Default1
2. The financial statements, reports and copies of certain instruments
and documents attached hereto, namely,
A. Compliance Certificate, dated _____________
B. _____________________, dated _____________
C. _____________________, dated _____________
D. _____________________, dated _____________
are true and complete copies of the aforesaid which constitute part of or are
based upon the customary books and records of the Company, and, to the best of
the undersigned's knowledge and belief, there exist no facts or circumstances
which would have a Material Adverse Effect. The calculations set forth in the
attached Compliance Certificate demonstrate compliance with the covenants and
financial ratios set forth in Sections 9.9, 9.11, 10.2, 10.6, 10.7, 10.11 and
10.12 of the Credit Agreement.
-----------------------------------------
Name:
Title:
- --------
(1) If such condition or event exists or existed, specify (i) the
nature and period of such condition or event and (ii) the action taken, being
taken or proposed to be taken with respect thereto.
F-2
EXHIBIT G
SAMPLE CALCULATIONS OF FINANCIAL COVENANTS
See Exhibit A attached hereto
EXHIBIT H
to
Amended and Restated Credit Agreement
dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF COMPETITIVE BID QUOTE REQUEST
_____, 2000
To: THE CHASE MANHATTAN BANK, as Administrative Agent
From: RECKSON OPERATING PARTNERSHIP, L.P.
Re: Amended and Restated Credit Agreement (as amended,
supplemented, restated or otherwise modified from time to
time, the "Credit Agreement") dated as of September __, 2000
among Reckson Operating Partnership, L.P., and the Lenders,
Agents and Arrangers parties thereto
--------------------------------------------------------------
We hereby give notice pursuant to Section 2.2 of the Credit Agreement
that we request Competitive Bid Quotes for the following proposed Competitive
Bid Borrowing(s):
Date of Borrowing: __________________
Principal Amounts (1) Interest Period (2)
- ----------------- ---------------
$
Such Competitive Bid Quotes should offer a Competitive Bid Margin.
Terms used herein have the meanings assigned to them in the Credit Agreement.
- --------
(1) Amount must be $20,000,0000 or a larger multiple of $1,000,000,
with all outstanding Competitive Bid Loans not to exceed fifty percent of the
Maximum Revolving Credit Amount.
(2) In the case of Eurodollar Competitive Bid Loans: 1, 2 or 3 months,
subject to the provisions of the definition of Eurodollar Interest Period.
Competitive Bid Loans in the amount of $______________ are currently
outstanding.
RECKSON OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership
By: RECKSON ASSOCIATES
REALTY CORP., a Maryland
corporation, its general partner
By:____________________________
Name:
Title:
H-2
EXHIBIT I
to
Amended and Restated Credit Agreement
dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF INVITATION FOR COMPETITIVE BID QUOTE
To: [Name of Bank]
Re: Invitation for Competitive Bid Quotes to Reckson Operating
Partnership, L.P.
Pursuant to Section 2.2 of the Amended and Restated Credit Agreement
(as amended, supplemented, restated or otherwise modified from time to time,
the "Credit Agreement") dated as of September __, 2000 among Reckson Operating
Partnership, L.P., and the Lenders, Agents and Arrangers parties thereto, we
are pleased on behalf of the Borrower to invite you to submit Competitive Bid
Quotes to the Borrower for the following proposed Competitive Bid
Borrowing(s):
Date of Borrowing: ___________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Competitive Bid Quotes should offer a Competitive Bid Margin.
Terms used herein have the meanings assigned to them in the Credit Agreement.
Please respond to this invitation by no later than 9:30 A.M. (New
York City time) on [date].
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:________________________
Authorized Officer
EXHIBIT J
to
Amended and Restated Credit Agreement dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF COMPETITIVE BID QUOTE
To: THE CHASE MANHATTAN BANK, as Administrative Agent
Re: Competitive Bid Quote to Reckson Operating Partnership, L.P. (the
"Borrower")
In response to your invitation on behalf of the Borrower dated
_______________, 2000, we hereby make the following Competitive Bid Quote on
the following terms:
1. Quoting Bank: ___________________________________________
2. Person to contact at Quoting Bank: ________________________
3. Date of Borrowing: ___________________________*
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Competitive Bid
Amount** Period*** [Margin****]
- -------- --------- ------------
$
$
[Provided, that the aggregate principal amount of Competitive Bid Loans for
which the above offers may be accepted shall not exceed $____________.]**
- --------------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Lender is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month, as specified in the related Invitation in the
case of Competitive Bid Loans based on the Eurodollar Rate.
**** Margin over or under the Eurodollar Rate determined for the applicable
Interest Period. Specify percentage (to the nearest 1/10,000 of 1%) and
specify whether "PLUS" or "MINUS".
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Amended and
Restated Credit Agreement dated as of September __, 2000 (as amended,
supplemented, restated or otherwise modified from time to time) among Reckson
Operating Partnership, L.P., and the Lenders, Agents and Arrangers parties
thereto, the terms defined therein being used herein as therein defined
irrevocably obligates us to make the Competitive Bid Loan(s) for which any
offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF LENDER]
Dated:________________ By:________________________
Authorized Officer
J-2
EXHIBIT K
to
Amended and Restated Credit Agreement
dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF DESIGNATION AGREEMENT
-----------------------------
Dated _______________, 2000
Reference is made to that certain Amended and Restated Credit
Agreement dated as of September __, 2000 (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement") among Reckson Operating Partnership, L.P. (the "Borrower"), the
institutions from time to time party thereto as Lenders, The Chase Manhattan
Bank, as Administrative Agent, UBS Warburg LLC, as Syndication Agent, Deutsche
Bank, as Documentation Agent, and Chase Securities Inc. and UBS Warburg LLC as
joint lead arrangers and joint book managers. Terms defined in the Credit
Agreement are used herein with the same meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the
"Designee"), and the Administrative Agent agree as follows:
1. The Designor hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Competitive Bid Loans
pursuant to Article II of the Credit Agreement. Any assignment by Designor to
Designee of its rights to make a Competitive Bid Loan pursuant to such Article
II shall be effective at the time of the funding of such Competitive Bid Loan
and not before such time.
2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument and document furnished
pursuant thereto and (b) the financial condition of the Borrower or any
Guarantor or the performance or observance by the Borrower or any Guarantor of
any of its obligations under any Loan Document or any other instrument or
document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of the financial statements referred to the
Credit Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement; (b) agrees that it will independently and without
reliance upon the Administrative Agent, the Designor or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under any Loan Document; (c) confirms that it is a Designated Bank; (d)
appoints and authorizes the Administrative Agent to take such action as agent
on its behalf and to exercise such powers and discretion under any Loan
Document as are delegated to the Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (e) agrees to be bound by each and every provision of each Loan Document
and further agrees that it will perform in accordance with their terms all of
the obligations which by the terms of any Loan Document are required to be
performed by it as a Lender, including any and all obligations set forth in
Section 14.1(f) of the Credit Agreement.
4. The Designee hereby appoints Designor as Designee's agent and
attorney in fact, and grants to Designor an irrevocable power of attorney, to
receive payments made for the benefit of Designee under the Credit Agreement,
to deliver and receive all communications and notices under the Credit
Agreement and other Loan Documents and to exercise on Designee's behalf all
rights to vote and to grant and make approvals, waivers, consents of
amendments to or under the Credit Agreement or other Loan Documents. Any
document executed by the Designor on the Designee's behalf in connection with
the Credit Agreement or other Loan Documents shall be binding on the Designee
to the same extent as if actually signed by the Designee. The Borrower, the
Administrative Agent and each of the other Lenders may rely on and are
beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement by the
Designor and Designee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date for
this Designation Agreement (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on
the signature page hereto.
6. The Administrative Agent hereby agrees that it will not institute
against the Designee or join any other Person in instituting against the
Designee any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law,
until the later to occur of (i) one year and one day after the payment in full
of
K-2
to the latest maturing commercial paper note issued by the Designee and (ii)
the Revolving Credit Termination Date.
7. The Designor unconditionally agrees to pay or reimburse the
Designee for, and save the Designee harmless against, all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be
imposed or asserted by any of the parties to the Loan Documents against the
Designee, in its capacity as such, in any way relating to or arising out of
this Agreement or any other Loan Documents or any action taken or omitted by
the Designee hereunder or thereunder, provided that the Designor shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results from the Designee's gross negligence or willful misconduct.
8. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right to make Competitive Bid Loans as a Lender pursuant to Section 2.2
of the Credit Agreement and the rights and obligations of a Lender related
thereto; provided, however, that the Designee shall not be required to make
payments with respect to such obligations except to the extent of excess cash
flow of the Designee which is not otherwise required to repay obligations of
the Designee which are then due and payable. Notwithstanding the foregoing,
the Designor, as agent for the Designee, shall be and remain obligated to the
Borrower and the other Lenders for each and every of the obligations of the
Designee and the Designor with respect to the Credit Agreement, including,
without limitation, any indemnification obligations under Section 12.5 of the
Credit Agreement and any sums otherwise payable to the Borrower by the
Designee.
9. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Designation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Designation Agreement.
K-3
IN WITNESS WHEREOF, the Designor and the Designee, intending to be
legally bound, have caused this Designation Agreement to be executed by their
officers thereunto duly authorized as of the date first above written.
Effective Date: __________________________
2000
[NAME OF DESIGNOR], as
Designor
By:_______________________
Title:____________________
[NAME OF DESIGNEE] as
Designee
By:_______________________
Title:____________________
Applicable Lending
Office (and (address for
notices):
[ADDRESS]
Accepted this ________ day
of ____________, 20__
THE CHASE MANHATTAN BANK
as Administrative Agent
By:________________________
Title:______________________
K-4
EXHIBIT L
to
Amended and Restated Credit Agreement
dated as of September __, 2000
- --------------------------------------------------------------------------------
FORM OF GUARANTY
----------------
GUARANTY AGREEMENT
UNCONDITIONAL GUARANTY OF PAYMENT (this "Guaranty"), is made as of
September __, 2000 by ____________________________________ (the "Guarantor"),
in favor of THE CHASE MANHATTAN BANK, as administrative agent and UBS WARBURG
LLC, as syndication agent (collectively, "Agents") for the benefit of the
banks (the "Lenders") that are from time to time parties to that certain
Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of
September __, 2000, among Reckson Operating Partnership, L.P., the Lenders and
the Agents.
Capitalized terms not otherwise defined in this Guaranty shall have
the meanings ascribed to them in the Credit Agreement.
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the terms of the Credit Agreement, Reckson
Operating Partnership, L.P. (the "Borrower") requested that the Lenders make
Loans to the Borrower, to be guaranteed by Guarantor and to be evidenced by
certain Promissory Notes (the "Notes"), each dated as of September __, 2000,
in the aggregate principal amount of $575,000,000, payable by the Borrower to
the order of the Lenders;
WHEREAS, this Guaranty is one of the "Guaranties" referred to in the
Credit Agreement;
WHEREAS, the Guarantor is [a wholly-owned subsidiary of the Borrower,
and Reckson Financing LLC, a wholly-owned subsidiary of the Borrower, is the
general partner of Guarantor]; and
WHEREAS, in order to induce the Agents and the Lenders to make the
Loans to the Borrower, and to satisfy one of the conditions contained in the
Credit Agreement with respect thereto, the Guarantor has agreed to enter into
this Guaranty.
NOW THEREFORE, in consideration of the premises and the direct and
indirect benefits to be derived from the making of the Loans by the
Lenders to the Borrower, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Guarantor hereby
agrees as follows:
1. (a) Guarantor, on behalf of itself and its successors and assigns,
hereby irrevocably, absolutely, and unconditionally guarantees the full and
punctual payment when due, whether at stated maturity or otherwise, of all
obligations of the Borrower now or hereafter existing under the Credit
Agreement, under the Notes, under any Letter of Credit or Letter of Credit
Reimbursement Agreement or under any of the other Loan Documents to which the
Borrower is a party; and
(b) Guarantor, on behalf of itself and its successors and
assigns, hereby irrevocably, absolutely, and unconditionally guarantees the
full and punctual payment when due of any and all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements) incurred by the Agents and the Lenders in enforcing their
rights under this Guaranty (all such obligations set forth in this Paragraph 1
being referred to as the "Guaranteed Obligations").
2. It is agreed that the obligations of Guarantor hereunder are
primary and this Guaranty shall be enforceable against Guarantor and its
successors and assigns without the necessity for any suit or proceeding of any
kind or nature whatsoever brought by the Agents or the Lenders against the
Borrower, or its respective successors or assigns or any other party or
against any security for the payment and performance of the Guaranteed
Obligations and, to the extent permitted by applicable law, without the
necessity of any notice of non-payment or non-observance or of any notice of
acceptance of this Guaranty or of any notice or demand to which Guarantor
might otherwise be entitled (including, without limitation, diligence,
presentment, notice of maturity, extension of time, change in nature or form
of the Guaranteed Obligations, acceptance of further security, release of
further security, imposition or agreement arrived at as to the amount of or
the terms of the Guaranteed Obligations, notice of adverse change in the
Borrower's financial condition and any other fact which might materially
increase the risk to Guarantor), all of which Guarantor, to the extent
permitted by applicable law, hereby expressly waives; and, to the extent
permitted by applicable law, Guarantor hereby expressly agrees that the
validity of this Guaranty and the obligations of the Guarantor hereunder shall
in no way be terminated, affected, diminished, modified or impaired by reason
of the assertion of, or the failure to assert by the Agents or the Lenders
against the Borrower or its respective successors or assigns, any of the
rights or remedies reserved to the Agents and the Lenders pursuant to the
provisions of the Loan Documents. Guarantor hereby agrees that, to the extent
permitted by applicable law, any
2
notice or directive given at any time to the Agents or the Lenders which is
inconsistent with the waiver in the immediately preceding sentence shall be
void and may be ignored by the Agents and the Lenders, and, in addition, may
not be pleaded or introduced as evidence in any litigation relating to this
Guaranty for the reason that such pleading or introduction would be at
variance with the written terms of this Guaranty, unless the Agents have
specifically agreed otherwise in writing, signed by a duly authorized officer.
Guarantor specifically acknowledges and agrees that the foregoing waivers are
of the essence of this transaction and that, but for this Guaranty and such
waivers, the Agents and the Lenders would not make the requested Loans to the
Borrower.
3. To the extent permitted by applicable law, Guarantor hereby
waives, and covenants and agrees that it will not at any time insist upon,
plead or in any manner whatsoever claim or take the benefit or advantage of,
any and all appraisal, valuation, stay, extension, marshalling-of-assets or
redemption laws, or right of homestead exemption, whether now or at any time
hereafter in force, which may delay, prevent or otherwise affect the
performance by Guarantor of its obligations under, or the enforcement by the
Agents and the Lenders of, this Guaranty. To the extent permitted by
applicable law, Guarantor further covenants and agrees not to set up or claim
any defense, counterclaim, offset, set-off or other objection of any kind to
any action, suit or proceeding in law, equity or otherwise, or to any demand
or claim that may be instituted or made by the Agents or the Lenders, other
than the defense of the actual timely payment and performance by the Borrower
of the Guaranteed Obligations hereunder. Guarantor represents, warrants and
agrees that, as of the date hereof, its obligations under this Guaranty are
not subject to any counterclaims, offsets or defenses against the Agents or
the Lenders of any kind.
It is the intention and agreement of Guarantor, the Agents and the
Lenders that the obligations of Guarantor under this Guaranty shall be valid
and enforceable against Guarantor to the maximum extent permitted by
applicable law. Accordingly, if any provision of this Guaranty creating any
obligation of Guarantor in favor of the Agents and the Lenders shall be
declared to be invalid or unenforceable in any respect or to any extent, it is
the stated intention and agreement of Guarantor, the Agents and the Lenders
that any balance of the obligation created by such provision and all other
Guaranteed Obligations shall remain valid and enforceable. Likewise, if by
final order a court of competent jurisdiction shall declare any sums which the
Agents or the Lenders may be otherwise entitled to collect from Guarantor
under this Guaranty to be in excess of those permitted under any law
(including any federal or state fraudulent conveyance or like statute or rule
of law) applicable to Guarantor's obligations under this Guaranty, it is
3
the stated intention and agreement of Guarantor, the Agents and the Lenders
that all sums not in excess of those permitted under such applicable law shall
remain fully collectible by the Agents and the Lenders from Guarantor. Nothing
in the foregoing limits the covenant of the Borrower contained in Section
9.12(b) of the Credit Agreement.
4. The provisions of this Guaranty are for the benefit of the Agents
on behalf of the Lenders and their successors and permitted assigns, and
nothing herein contained shall impair as among the Borrower, the Lenders and
the Agents the obligations of the Borrower under the Loan Documents.
5. This Guaranty shall be a continuing, unconditional and absolute
guaranty and, to the extent permitted by applicable law, the liability of
Guarantor hereunder shall in no way be terminated, affected, modified,
impaired or diminished by reason of the happening, from time to time, of any
of the following, although without notice or the further consent of Guarantor:
(a) any assignment, amendment, modification or waiver of or
change in any of the terms, covenants, conditions or provisions of
any of the Guaranteed Obligations or the Loan Documents or the
invalidity or unenforceability of any of the foregoing; or
(b) any extension of time that may be granted by the Agents or
the Lenders to the Borrower, any guarantor, or their respective
successors or assigns; or
(c) any action which the Agents or the Lenders may take or
fail to take under or in respect of any of the Loan Documents or by
reason of any waiver of, or failure to enforce any of the rights,
remedies, powers or privileges available to the Agents or the Lenders
under this Guaranty or any of the other Loan Documents or available
to the Agents or the Lenders at law, in equity or otherwise, or any
action on the part of the Agents or the Lenders granting indulgence
or extension in any form whatsoever; or
(d) any sale, exchange, release, or other disposition of any
property pledged, mortgaged or conveyed, or any property in which the
Agents and/or the Lenders have been granted a lien or security
interest to secure any indebtedness of the Borrower to the Agents
and/or the Lenders; or
(e) any release of any person or entity who may be liable in
any manner for the payment and collection of any amounts owed by the
Borrower to the Agents and/or the Lenders; or
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(f) the application of any sums by whomsoever paid or
however realized to any amounts owing by the Borrower to the Agents
and/or the Lenders under the Loan Documents in such manner as the
Agents and the Lenders shall determine in their sole discretion; or
(g) the Borrower's or any guarantor's voluntary or
involuntary liquidation, dissolution, sale of all or substantially
all of their respective assets and liabilities, appointment of a
trustee, receiver, liquidator, sequestrator or conservator for all or
any part of the Borrower's or guarantor's assets, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment, or the commencement of
other similar proceedings affecting the Borrower or any guarantor or
any of the assets of any of them, including, without limitation, (i)
the release or discharge of the Borrower or any guarantor from the
payment and performance of its respective obligations under any of
the Loan Documents by operation of law, or (ii) the impairment,
limitation or modification of the liability of the Borrower or any
guarantor in bankruptcy, or of any remedy for the enforcement of the
Guaranteed Obligations under any of the Loan Documents, or
Guarantor's liability under this Guaranty, resulting from the
operation of any present or future provisions of the Bankruptcy Code
or other present or future federal, state or applicable statute or
law or from the decision in any court; or
(h) any improper disposition by the Borrower of any Letter
of Credit or the proceeds of the Loans, it being acknowledged by
Guarantor that the Agents and the Lenders shall be entitled to honor
any request made by the Borrower for a disbursement of such proceeds
and that the Agents and the Lenders shall have no obligation to see
the proper disposition by the Borrower of such Letter of Credit or
proceeds.
6. Guarantor hereby agrees that if at any time all or any part of any
payment at any time received by the Agents or the Lenders from the Borrower
under any of the Notes or other Loan Documents or Guarantor under or with
respect to this Guaranty is or must be rescinded or returned by the Agents or
the Lenders for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Borrower or Guarantor or any
other guarantor), then Guarantor's obligations hereunder shall, to the extent
of the payment rescinded or returned, be deemed to have continued in existence
notwithstanding such previous receipt by the Agents or the Lenders, and
Guarantor's obligations hereunder shall continue to be
5
effective or reinstated, as the case may be, as to such payment, as though
such previous payment to the Agents or the Lenders had never been made.
7. Until this Guaranty is terminated pursuant to the terms hereof,
the Guarantor (i) shall have no right of subrogation against the Borrower or
any entity comprising same by reason of any payments or acts of performance by
Guarantor in compliance with the obligations of Guarantor hereunder; (ii)
hereby waives any right to enforce any remedy which Guarantor now or hereafter
shall have against the Borrower, or any entity comprising the same, by reason
of any one or more payment or acts of performance in compliance with the
obligations of Guarantor hereunder; and (iii) shall subordinate any liability
or indebtedness of the Borrower or any entity comprising same now or hereafter
held by Guarantor to the obligations of the Borrower, as applicable, under the
Loan Documents; provided that nothing contained herein shall limit the right
of the Guarantor to receive any amount from the Borrower, as applicable, or
any entity comprising the same that is not prohibited by the terms of the Loan
Documents.
8. Guarantor hereby represents and warrants on its own behalf to the
Agents with the knowledge that the Agents and the Lenders are relying upon the
same, as follows:
(a) as of the date hereof, Guarantor is a wholly-owned
subsidiary of the Borrower, and Reckson Financing LLC (a wholly-owned
subsidiary of the Borrower) is the general partner of Guarantor, and
Guarantor is familiar with the financial condition of Borrower;
(c) based upon such relationship, Guarantor has determined
that it is in its best interest to enter into this Guaranty;
(d) this Guaranty is necessary and convenient to the conduct,
promotion and attainment of Guarantor's business, and is in furtherance
of Guarantor's business purposes;
(e) the benefits to be derived by Guarantor from the
Borrower's access to funds made possible by the Loan Documents are at
least equal to the obligations of Guarantor undertaken pursuant to
this Guaranty;
(f) Guarantor is Solvent and has full corporate,
partnership, limited liability company or trust power, as the case
may be, and legal right to enter into this Guaranty and to perform
its obligations under the terms hereof and (i) Guarantor is organized
or formed and validly existing under the laws of the state of its
establishment or formation,
6
(ii) Guarantor has complied with all provisions of applicable law in
connection with all aspects of this Guaranty, and (iii) the person
executing this Guaranty on behalf of Guarantor has all the requisite
power and authority to execute and deliver this Guaranty; and
(g) this Guaranty has been duly executed by Guarantor and
constitutes the legal, valid and binding obligation of Guarantor,
enforceable against it in accordance with its terms except as
enforceability may be limited by applicable insolvency, bankruptcy or
other laws affecting creditors' rights generally or general
principles of equity whether such enforceability is considered in a
proceeding in equity or at law.
9. Guarantor and the Agents acknowledge and agree that this Guaranty
is a guaranty of payment and not of collection and enforcement in respect of
any obligations which may accrue to the Agents and/or the Lenders from the
Borrower under the provisions of any Loan Document.
10. Subject to the terms and conditions of the Credit Agreement, and
only in conjunction with a transfer permitted thereunder, the Agents and the
Lenders may assign any or all of their respective rights under this Guaranty.
11. Guarantor agrees, upon the written request of the Agents, to
execute and deliver to the Agents, from time to time, any modification or
amendment hereto or any additional instruments or documents reasonably
considered necessary by the Agents or its counsel to cause this Guaranty to
be, become or remain valid and effective in accordance with its terms or in
order to implement more fully the intent of this Guaranty, provided, that, any
such modification, amendment, additional instrument or document shall not
increase Guarantor's obligations or diminish its rights hereunder and shall be
reasonably satisfactory as to form to Guarantor and to Guarantor's counsel.
12. The representation and warranties of the Guarantor set forth in
this Guaranty shall survive until this Guaranty shall terminate in accordance
with the terms hereof.
13. This Guaranty together with the Credit Agreement and the other
Loan Documents contains the entire agreement among the parties with respect to
the Loans and other extensions of credit being made to the Borrower, and
supersedes all prior agreements relating to such Loans and other extensions of
credit and may not be modified, amended, supplemented or discharged except by
a written agreement signed by Guarantor and the Agents.
7
14. If all or any portion of any provision contained in this Guaranty
shall be determined to be invalid, illegal or unenforceable in any respect for
any reason, such provision or portion thereof shall be deemed stricken and
severed from this Guaranty and the remaining provisions and portions thereof
shall continue in full force and effect.
15. In order for any demand, request or notice to the respective
parties hereto to be effective, such demand, request or notice shall be given,
in writing, by delivering the same personally or by nationally recognized
overnight courier service or by mailing, by certified or registered mail,
postage prepaid or by telecopying the same, addressed to such party at the
address set forth below or to such other address as may be identified by any
party in a written notice to the others. Any such demand, request or notice
sent-as aforesaid shall be deemed to have been received by the party to whom
it is addressed upon delivery, if personally delivered and on the actual
receipt thereof, if sent by certified or registered mail or by telecopier, and
when transmitted, if sent by telex:
If to:
Guarantor: ________________________
225 Broadhollow Road
Melville, New York 11747
Attention: Michael Maturo
Telecopy: (516) 756-1764
With Copies of
Notices to the
Guarantor to: Brown & Wood LLP
One World Trade Center
New York, New York 10048
Attention: Jeff B. Feigelson, Esq.
Telecopy: (212) 839-5599
If to the Agents: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Marc Costantino
Telecopy: (212) 270-9554
and
UBS Warburg LLC
299 Park Avenue
New York, NY 10171
Attention:
Telecopy:
8
With Copies to: Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Attention: Peter Van, Esq.
Telecopy: (617) 951-8736
16. This Guaranty shall be binding upon Guarantor and its successors
and assigns and shall inure to the benefit of the Agents and the Lenders and
their successors and assigns.
17. The failure of the Agents to enforce any right or remedy
hereunder, or promptly to enforce any such right or remedy, shall not
constitute a waiver thereof, nor give rise to any estoppel against the Agents
or the Lenders, nor excuse Guarantor from its obligations hereunder. Any
waiver of any such right or remedy to be enforceable against the Agents must
be expressly set forth in a writing signed by the Agents.
18. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Guaranty
and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery
of this Guaranty, Guarantor hereby accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and appellate courts from any thereof. Guarantor irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to Guarantor at the address for notices
set forth herein. Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Guaranty
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Agents and the Lenders to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against Guarantor in any other jurisdiction.
9
(c) GUARANTOR AND AGENTS BY THEIR EXECUTION HEREOF AND THE
LENDERS' ACCEPTANCE HEREOF EACH HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THIS
GUARANTY. IT IS HEREBY ACKNOWLEDGED BY GUARANTOR THAT THE WAIVER OF A JURY
TRIAL IS A MATERIAL INDUCEMENT FOR THE AGENTS TO ACCEPT THIS GUARANTY AND THAT
THE LOANS MADE BY THE LENDERS ARE MADE IN RELIANCE UPON SUCH WAIVER. GUARANTOR
FURTHER WARRANTS AND REPRESENTS THAT SUCH WAIVER HAS BEEN KNOWINGLY AND
VOLUNTARILY MADE, FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED BY THE AGENTS IN COURT AS A WRITTEN
CONSENT TO A NON-JURY TRIAL.
(d) Guarantor does hereby further covenant and agree to and with
the Agents that Guarantor may be joined in any action against the Borrower in
connection with the Loan Documents and that recovery may be had against
Guarantor in such action or in any independent action against Guarantor (with
respect to the Guaranteed Obligations), without the Agents or the Lenders
first pursuing or exhausting any remedy or claim against the Borrower, its
successors or assigns. Guarantor also agrees that, in an action brought with
respect to the Guaranteed Obligations in any jurisdiction, it shall be
conclusively bound by the judgment in any such action by the Agents (wherever
brought) against the Borrower, or its successors or assigns, as if Guarantor
were a party to such action, even though Guarantor was not joined as parties
in such action.
(e) Guarantor hereby agrees to pay all expenses (including,
without limitation, reasonable attorneys fees and disbursements) which may be
incurred by the Agents in connection with the enforcement of their rights
under this Guaranty, whether or not suit is initiated; provided, however, that
such expenses shall be paid by the Agents if a final judgment in favor of
Guarantor is rendered by a court of competent jurisdiction. Moreover,
Guarantor covenants and agrees to indemnify and save the Agents harmless of
and from, and defend it against, all losses, out-of pocket costs and expenses,
liabilities, damages or claims arising by reason of Guarantor's failure to
perform its obligations hereunder.
19. Subject to the terms of Section 6 hereof, this Guaranty shall
terminate and be of no further force or effect upon the full performance and
payment of the Guaranteed Obligations hereunder. Upon termination of this
Guaranty in accordance with the terms of this Guaranty, the Agents promptly
shall deliver to Guarantor such documents as Guarantor or
10
Guarantor's counsel reasonably may request in order to evidence such
termination.
20. All of the Agents' and the Lenders' rights and remedies under
each of the Loan Documents or under this Guaranty are intended to be distinct,
separate and cumulative and no such right or remedy therein or herein
mentioned is intended to be in exclusion of or a waiver of any other right or
remedy available to the Agents.
21. Recourse with respect to any claim arising under or in connection
with this Guaranty by Agents, the Arrangers and the Lenders shall be limited
to the same extent as is provided in Section 4.3 (e) of the Credit Agreement
with respect to claims against the Guarantor and the other parties named
therein and the terms, covenants and conditions of Section 4.3 (e) of the
Credit Agreement are hereby incorporated by reference as if fully set forth
herein.
22. By executing and delivering this Guaranty, Guarantor hereby
agrees that it shall be bound by, and shall comply with, all warranties and
covenants applicable to it set forth in the Credit Agreement.
23. Guarantor shall make no claim against any Lender (acting in any
capacity under the Credit Agreement), any Arranger, the Administrative Agent,
or any other Person, or the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any consequential or punitive damages
in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Guaranty, or any act, omission or event occurring in connection therewith; and
Guarantor hereby waives, releases and agrees not to sue upon any such claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
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IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be
duly executed and delivered as of the date first set forth above.
--------------------------------
By:_____________________________
Name:
Title:
12
GUARANTY AGREEMENT
UNCONDITIONAL GUARANTY OF PAYMENT (this "Guaranty"), is made as of
September 7, 2000 by RECKSON ASSOCIATES REALTY CORP., a Maryland corporation
(the "Guarantor"), in favor of THE CHASE MANHATTAN BANK, as administrative
agent and UBS WARBURG LLC, as syndication agent (collectively, "Agents") for
the benefit of the banks (the "Lenders") that are from time to time parties to
that certain Amended and Restated Credit Agreement (the "Credit Agreement"),
dated as of September 7, 2000, among Reckson Operating Partnership, L.P., the
Lenders and the Agents.
Capitalized terms not otherwise defined in this Guaranty shall have the
meanings ascribed to them in the Credit Agreement.
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the terms of the Credit Agreement, Reckson Operating
Partnership, L.P. (the "Borrower") requested that the Lenders make Loans to
the Borrower, to be guaranteed by Guarantor and to be evidenced by certain
Promissory Notes (the "Notes"), each dated as of September 7, 2000, in the
aggregate principal amount of $575,000,000, payable by the Borrower to the
order of the Lenders;
WHEREAS, this Guaranty is one of the "Guaranties" referred to in the
Credit Agreement;
WHEREAS, the Guarantor is the general partner of Borrower and has an
eighty-eight percent (88%) beneficial interest therein; and
WHEREAS, in order to induce the Agents and the Lenders to make the Loans
to the Borrower, and to satisfy one of the conditions contained in the Credit
Agreement with respect thereto, the Guarantor has agreed to enter into this
Guaranty.
NOW THEREFORE, in consideration of the premises and the direct and
indirect benefits to be derived from the making of the Loans by the Lenders to
the Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Guarantor hereby agrees as
follows:
1. (a) Guarantor, on behalf of itself and its successors and assigns,
hereby irrevocably, absolutely, and unconditionally guarantees the full and
punctual payment when due, whether at stated maturity or otherwise, of all
obligations of the Borrower now or hereafter existing under the Credit
Agreement, under the Notes, under any Letter of Credit or Letter of Credit
Reimbursement Agreement or under any of the other Loan Documents to which the
Borrower is a party; and
(b) Guarantor, on behalf of itself and its successors and assigns,
hereby irrevocably, absolutely, and unconditionally guarantees the full and
punctual payment when due of any and all reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred by the Agents and the Lenders in enforcing their rights under this
Guaranty (all such obligations set forth in this Paragraph 1 being referred to
as the "Guaranteed Obligations").
2. It is agreed that the obligations of Guarantor hereunder are primary
and this Guaranty shall be enforceable against Guarantor and its successors
and assigns without the necessity for any suit or proceeding of any kind or
nature whatsoever brought by the Agents or the Lenders against the Borrower,
or its respective successors or assigns or any other party or against any
security for the payment and performance of the Guaranteed Obligations and, to
the extent permitted by applicable law, without the necessity of any notice of
non-payment or non-observance or of any notice of acceptance of this Guaranty
or of any notice or demand to which Guarantor might otherwise be entitled
(including, without limitation, diligence, presentment, notice of maturity,
extension of time, change in nature or form of the Guaranteed Obligations,
acceptance of further security, release of further security, imposition or
agreement arrived at as to the amount of or the terms of the Guaranteed
Obligations, notice of adverse change in the Borrower's financial condition
and any other fact which might materially increase the risk to Guarantor), all
of which Guarantor, to the extent permitted by applicable law, hereby
expressly waives; and, to the extent permitted by applicable law, Guarantor
hereby expressly agrees that the validity of this Guaranty and the obligations
of the Guarantor hereunder shall in no way be terminated, affected,
diminished, modified or impaired by reason of the assertion of, or the failure
to assert by the Agents or the Lenders against the Borrower or its respective
successors or assigns, any of the rights or remedies reserved to the Agents
and the Lenders pursuant to the provisions of the Loan Documents. Guarantor
hereby agrees that, to the extent permitted by applicable law, any notice or
directive given at any time to the Agents or the Lenders which is inconsistent
with the waiver in the immediately preceding sentence shall be void and may be
ignored by the Agents and the Lenders, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the
written terms of this Guaranty, unless the Agents have specifically agreed
otherwise in writing, signed by a duly authorized officer. Guarantor
specifically acknowledges and agrees that the foregoing waivers are of the
essence of this transaction and that, but for this Guaranty and such waivers,
the Agents and the Lenders would not make the requested Loans to the Borrower.
3. To the extent permitted by applicable law, Guarantor hereby waives,
and covenants and agrees that it will not at any time insist upon, plead or in
any manner whatsoever claim or take the benefit or advantage of, any and all
appraisal, valuation, stay, extension, marshalling-of-assets or redemption
laws, or right of homestead exemption, whether now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance by
Guarantor of its obligations under, or the enforcement by the Agents and the
Lenders of, this Guaranty. To the extent permitted by applicable law,
Guarantor further covenants and agrees not to set up or claim any defense,
counterclaim, offset, set-off or other objection of any kind to any action,
suit or proceeding in law, equity or otherwise, or to any demand or claim that
may be instituted or made by the Agents or the Lenders, other than the defense
of the actual timely payment and performance by the Borrower of the Guaranteed
Obligations hereunder. Guarantor represents, warrants and agrees that, as of
the date hereof, its obligations under this Guaranty are not subject to any
counterclaims, offsets or defenses against the Agents or the Lenders of any
kind.
4. The provisions of this Guaranty are for the benefit of the Agents on
behalf of the Lenders and their successors and permitted assigns, and nothing
herein contained shall impair as among the Borrower, the Lenders and the
Agents the obligations of the Borrower under the Loan Documents.
5. This Guaranty shall be a continuing, unconditional and absolute
guaranty and, to the extent permitted by applicable law, the liability of
Guarantor hereunder shall in no way be terminated, affected, modified,
impaired or diminished by reason of the happening, from time to time, of any
of the following, although without notice or the further consent of Guarantor:
(a) any assignment, amendment, modification or waiver of or change
in any of the terms, covenants, conditions or provisions of any of the
Guaranteed Obligations or the Loan Documents or the invalidity or
unenforceability of any of the foregoing; or
(b) any extension of time that may be granted by the Agents or the
Lenders to the Borrower, any guarantor, or their respective successors or
assigns; or
(c) any action which the Agents or the Lenders may take or fail to
take under or in respect of any of the Loan Documents or by reason of any
waiver of, or failure to enforce any of the rights, remedies, powers or
privileges available to the Agents or the Lenders under this Guaranty or
any of the other Loan Documents or available to the Agents or the Lenders
at law, in equity or otherwise, or any action on the part of the Agents
or the Lenders granting indulgence or extension in any form whatsoever;
or
(d) any sale, exchange, release, or other disposition of any
property pledged, mortgaged or conveyed, or any property in which the
Agents and/or the Lenders have been granted a lien or security interest
to secure any indebtedness of the Borrower to the Agents and/or the
Lenders; or
(e) any release of any person or entity who may be liable in any
manner for the payment and collection of any amounts owed by the Borrower
to the Agents and/or the Lenders; or
(f) the application of any sums by whomsoever paid or however
realized to any amounts owing by the Borrower to the Agents and/or the
Lenders under the Loan Documents in such manner as the Agents and the
Lenders shall determine in their sole discretion; or
(g) the Borrower's or any guarantor's voluntary or involuntary
liquidation, dissolution, sale of all or substantially all of their
respective assets and liabilities, appointment of a trustee, receiver,
liquidator, sequestrator or conservator for all or any part of the
Borrower's or guarantor's assets, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment, or the commencement of other similar proceedings affecting
the Borrower or any guarantor or any of the assets of any of them,
including, without limitation, (i) the release or discharge of the
Borrower or any guarantor from the payment and performance of its
respective obligations under any of the Loan Documents by operation of
law, or (ii) the impairment, limitation or modification of the liability
of the Borrower or any guarantor in bankruptcy, or of any remedy for the
enforcement of the Guaranteed Obligations under any of the Loan
Documents, or Guarantor's liability under this Guaranty, resulting from
the operation of any present or future provisions of the Bankruptcy Code
or other present or future federal, state or applicable statute or law or
from the decision in any court; or
(h) any improper disposition by the Borrower of any Letter of Credit
or the proceeds of the Loans, it being acknowledged by Guarantor that the
Agents and the Lenders shall be entitled to honor any request made by the
Borrower for a disbursement of such proceeds and that the Agents and the
Lenders shall have no obligation to see the proper disposition by the
Borrower of such Letter of Credit or proceeds.
6. Guarantor hereby agrees that if at any time all or any part of any
payment at any time received by the Agents or the Lenders from the Borrower
under any of the Notes or other Loan Documents or Guarantor under or with
respect to this Guaranty is or must be rescinded or returned by the Agents or
the Lenders for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Borrower or Guarantor or any
other guarantor), then Guarantor's obligations hereunder shall, to the extent
of the payment rescinded or returned, be deemed to have continued in existence
notwithstanding such previous receipt by the Agents or the Lenders, and
Guarantor's obligations hereunder shall continue to be effective or
reinstated, as the case may be, as to such payment, as though such previous
payment to the Agents or the Lenders had never been made.
7. Until this Guaranty is terminated pursuant to the terms hereof, the
Guarantor (i) shall have no right of subrogation against the Borrower or any
entity comprising same by reason of any payments or acts of performance by
Guarantor in compliance with the obligations of Guarantor hereunder; (ii)
hereby waives any right to enforce any remedy which Guarantor now or hereafter
shall have against the Borrower, or any entity comprising the same, by reason
of any one or more payment or acts of performance in compliance with the
obligations of Guarantor hereunder; and (iii) shall subordinate any liability
or indebtedness of the Borrower or any entity comprising same now or hereafter
held by Guarantor to the obligations of the Borrower, as applicable, under the
Loan Documents; provided that nothing contained herein shall limit the right
of the Guarantor to receive any amount from the Borrower, as applicable, or
any entity comprising the same that is not prohibited by the terms of the Loan
Documents.
8. Guarantor hereby represents and warrants on its own behalf to the
Agents with the knowledge that the Agents and the Lenders are relying upon the
same, as follows:
(a) as of the date hereof, Guarantor is the general partner of
Borrower and has an 88% beneficial interest therein, and Guarantor is
familiar with the financial condition of Borrower;
(c) based upon such relationship, Guarantor has determined that it
is in its best interest to enter into this Guaranty;
(d) this Guaranty is necessary and convenient to the conduct,
promotion and attainment of Guarantor's business, and is in furtherance
of Guarantor's business purposes;
(e) the benefits to be derived by Guarantor from the Borrower's
access to funds made possible by the Loan Documents are at least equal to
the obligations of Guarantor undertaken pursuant to this Guaranty;
(f) Guarantor is Solvent and has full corporate, partnership,
limited liability company or trust power, as the case may be, and legal
right to enter into this Guaranty and to perform its obligations under
the terms hereof and (i) Guarantor is organized or formed and validly
existing under the laws of the state of its establishment or formation,
(ii) Guarantor has complied with all provisions of applicable law in
connection with all aspects of this Guaranty, and (iii) the person
executing this Guaranty on behalf of Guarantor has all the requisite
power and authority to execute and deliver this Guaranty; and
(g) this Guaranty has been duly executed by Guarantor and
constitutes the legal, valid and binding obligation of Guarantor,
enforceable against it in accordance with its terms except as
enforceability may be limited by applicable insolvency, bankruptcy or
other laws affecting creditors' rights generally or general principles of
equity whether such enforceability is considered in a proceeding in
equity or at law.
9. Guarantor and the Agents acknowledge and agree that this Guaranty is a
guaranty of payment and not of collection and enforcement in respect of any
obligations which may accrue to the Agents and/or the Lenders from the
Borrower under the provisions of any Loan Document.
10. Subject to the terms and conditions of the Credit Agreement, and only
in conjunction with a transfer permitted thereunder, the Agents and the
Lenders may assign any or all of their respective rights under this Guaranty.
11. Guarantor agrees, upon the written request of the Agents, to execute
and deliver to the Agents, from time to time, any modification or amendment
hereto or any additional instruments or documents reasonably considered
necessary by the Agents or its counsel to cause this Guaranty to be, become or
remain valid and effective in accordance with its terms or in order to
implement more fully the intent of this Guaranty, provided, that, any such
modification, amendment, additional instrument or document shall not increase
Guarantor's obligations or diminish its rights hereunder and shall be
reasonably satisfactory as to forth to Guarantor and to Guarantor's counsel.
12. The representation and warranties of the Guarantor set forth in this
Guaranty shall survive until this Guaranty shall terminate in accordance with
the terms hereof.
13. This Guaranty together with the Credit Agreement and the other Loan
Documents contains the entire agreement among the parties with respect to the
Loans and other extensions of credit being made to the Borrower, and
supersedes all prior agreements relating to such Loans and other extensions of
credit and may not be modified, amended, supplemented or discharged except by
a written agreement signed by Guarantor and the Agents.
14. If all or any portion of any provision contained in this Guaranty
shall be determined to be invalid, illegal or unenforceable in any respect for
any reason, such provision or portion thereof shall be deemed stricken and
severed from this Guaranty and the remaining provisions and portions thereof
shall continue in full force and effect.
15. In order for any demand, request or notice to the respective parties
hereto to be effective, such demand, request or notice shall be given, in
writing, by delivering the same personally or by nationally recognized
overnight courier service or by mailing, by certified or registered mail,
postage prepaid or by telecopying the same, addressed to such party at the
address set forth below or to such other address as may be identified by any
party in a written notice to the others. Any such demand, request or notice
sent-as aforesaid shall be deemed to have been received by the party to whom
it is addressed upon delivery, if personally delivered and on the actual
receipt thereof, if sent by certified or registered mail or by telecopier, and
when transmitted, if sent by telex:
If to
Guarantor: Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, New York 11747
Attention: Michael Maturo
Telecopy: (516) 756-1764
With Copies of
Notices to the
Guarantor to: Brown & Wood LLP
One World Trade Center
New York, New York 10048
Attention: Patricia A. Murphy, Esq.
Telecopy: (212) 839-5599
If to the Agents: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Marc Costantino
Telecopy: (212) 270-9554
and
UBS Warburg LLC
299 Park Avenue
New York, NY 10171
Attention: Joseph Bassil
Telecopy: (212) 821-3851
With Copies to: Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Attention: Peter Van, Esq.
Telecopy: (617) 951-8736
16. This Guaranty shall be binding upon Guarantor and its successors and
assigns and shall inure to the benefit of the Agents and the Lenders and their
successors and assigns.
17. The failure of the Agents to enforce any right or remedy hereunder,
or promptly to enforce any such right or remedy, shall not constitute a waiver
thereof, nor give rise to any estoppel against the Agents or the Lenders, nor
excuse Guarantor from its obligations hereunder. Any waiver of any such right
or remedy to be enforceable against the Agents must be expressly set forth in
a writing signed by the Agents.
18. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this Guaranty and
any action for enforcement of any judgment in respect thereof may be brought
in the courts of the State of New York or of the United States of America for
the Southern District of New York, and, by execution and delivery of this
Guaranty, Guarantor hereby accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and appellate courts from any thereof. Guarantor irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to Guarantor at the address for notices set
forth herein. Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty brought in
the courts referred to above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of the Agents and the Lenders to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Guarantor in any other jurisdiction.
(c) GUARANTOR AND AGENTS BY THEIR EXECUTION HEREOF AND THE LENDERS'
ACCEPTANCE HEREOF EACH HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY AND ALL
CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. IT IS
HEREBY ACKNOWLEDGED BY GUARANTOR THAT THE WAIVER OF A JURY TRIAL IS A MATERIAL
INDUCEMENT FOR THE AGENTS TO ACCEPT THIS GUARANTY AND THAT THE LOANS MADE BY
THE LENDERS ARE MADE IN RELIANCE UPON SUCH WAIVER. GUARANTOR FURTHER WARRANTS
AND REPRESENTS THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE,
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
GUARANTY MAY BE FILED BY THE AGENTS IN COURT AS A WRITTEN CONSENT TO A
NON-JURY TRIAL.
(d) Guarantor does hereby further covenant and agree to and with the
Agents that Guarantor may be joined in any action against the Borrower in
connection with the Loan Documents and that recovery may be had against
Guarantor in such action or in any independent action against Guarantor (with
respect to the Guaranteed Obligations), without the Agents or the Lenders
first pursuing or exhausting any remedy or claim against the Borrower, its
successors or assigns. Guarantor also agrees that, in an action brought with
respect to the Guaranteed Obligations in any jurisdiction, it shall be
conclusively bound by the judgment in any such action by the Agents (wherever
brought) against the Borrower, or its successors or assigns, as if Guarantor
were a party to such action, even though Guarantor was not joined as parties
in such action.
(e) Guarantor hereby agrees to pay all expenses (including, without
limitation, reasonable attorneys fees and disbursements) which may be incurred
by the Agents in connection with the enforcement of their rights under this
Guaranty, whether or not suit is initiated; provided, however, that such
expenses shall be paid by the Agents if a final judgment in favor of Guarantor
is rendered by a court of competent jurisdiction. Moreover, Guarantor
covenants and agrees to indemnify and save the Agents harmless of and from,
and defend it against, all losses, out-of pocket costs and expenses,
liabilities, damages or claims arising by reason of Guarantor's failure to
perform its obligations hereunder.
19. Subject to the terms of Section 6 hereof, this Guaranty shall
terminate and be of no further force or effect upon the full performance and
payment of the Guaranteed Obligations hereunder. Upon termination of this
Guaranty in accordance with the terms of this Guaranty, the Agents promptly
shall deliver to Guarantor such documents as Guarantor or Guarantor's counsel
reasonably may request in order to evidence such termination.
20. All of the Agents' and the Lenders' rights and remedies under each of
the Loan Documents or under this Guaranty are intended to be distinct,
separate and cumulative and no such right or remedy therein or herein
mentioned is intended to be in exclusion of or a waiver of any other right or
remedy available to the Agents.
21. Recourse with respect to any claim arising under or in connection
with this Guaranty by Agents, the Arrangers and the Lenders shall be limited
to the same extent as is provided in Section 4.3 (e) of the Credit Agreement
with respect to claims against the Guarantor and the other parties named
therein and the terms, covenants and conditions of Section 4.3 (e) of the
Credit Agreement are hereby incorporated by reference as if fully set forth
herein.
22. By executing and delivering this Guaranty, Guarantor hereby agrees
that it shall be bound by, and shall comply with, all warranties and covenants
applicable to it set forth in the Credit Agreement.
23. Guarantor shall make no claim against any Lender (acting in any
capacity under the Credit Agreement), any Arranger, the Administrative Agent,
or any other Person, or the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any consequential or punitive damages
in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Guaranty, or any act, omission or event occurring in connection therewith; and
Guarantor hereby waives, releases and agrees not to sue upon any such claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be duly
executed and delivered as of the date first set forth above.
RECKSON ASSOCIATES REALTY
CORP., a Maryland corporation
By: ___________________________
Name:
Title:
OPERATING AGREEMENT
OF
RT TRI-STATE LLC
THIS OPERATING AGREEMENT is entered into as of September 28,
2000, between Reckson Tri-State Member LLC, a Delaware limited liability
company (together with its permitted successors and assigns, "Reckson") and
TIAA Tri-State LLC, a Delaware limited liability company (together with its
permitted successors and assigns, "TIAA LLC"). Reckson and TIAA LLC shall
hereinafter collectively be referred to as the "Members".
WHEREAS, a limited liability company was previously formed
pursuant to the provisions of the Delaware Limited Liability Company Act (as
the same may be amended from time to time, the "LLC Act") under the name RT
Tri-State LLC (the "LLC") pursuant to a Certificate of Formation dated as of
September 14, 2000 (the "Certificate") and pursuant to which Reckson OP (as
hereinafter defined) was the sole member;
WHEREAS, subsequent to the LLC's formation, Reckson OP
contributed all of its interest in the LLC to Reckson in exchange for
Reckson's receipt of all of the ownership interests in the LLC;
WHEREAS, on the date hereof, the LLC owns all right, title
and interest in (a) Reckson Stamford Towers LLC ("Reckson/Stamford Towers
LLC"), the owner of fee simple title to the property commonly known as
Stamford Towers, Stamford, Connecticut ("Stamford Towers"), (b) Reckson Short
Hills LLC ("Reckson Short Hills LLC"), the owner of a condominium unit in the
building known as 51 JFK Parkway, Short Hills, New Jersey (such condominium
unit, "51 JFK"), (c) Reckson 120 White Plains Road LLC ("Reckson 120 White
Plains Road LLC"), the owner of fee simple title to the property commonly
known as 120 White Plains Road, Tarrytown, New York ("120 White Plains"), (d)
400 Garden City LLC ("400 Garden City LLC"), the owner of fee simple title to
the property commonly known as 400 Garden City Plaza, Garden City, New York
("400 Garden City Plaza"), (e) 1305 Walt Whitman LLC ("1305 Walt Whitman
LLC"), the owner of fee simple title to the property commonly known as 1305
Walt Whitman Road, Melville, New York ("1305 Walt Whitman"), (f) 90 Merrick
LLC ("90 Merrick LLC"), the owner of the ground lessee's interest in the
building commonly known as 90 Merrick Avenue, East Meadow, New York ("90
Merrick") and (g) 275 Broadhollow LLC ("275 Broadhollow LLC"), the owner of
fee simple title to the property commonly known as 275 Broadhollow Road,
Melville, New York ("275 Broadhollow"). Each of Reckson/Stamford Towers LLC,
Reckson Short Hills LLC, Reckson 120 White Plains Road LLC, 400 Garden City
LLC, 1305 Walt Whitman LLC, 90 Merrick LLC and 275 Broadhollow LLC shall be
referred to individually as a "Property Owner" and collectively as the
"Property Owners". Each of Stamford Towers, 51 JFK, 120 White Plains, 400
Garden City Plaza, 1305 Walt Whitman, 90 Merrick and 275 Broadhollow shall be
referred to individually as a "Property" and collectively as the "Properties."
The Members acknowledge that the agreed gross value of each Property as of the
date of this Agreement is as set forth on Schedule 1 (the "Allocated Values");
and
WHEREAS, on the date hereof and as set forth herein (a) TIAA
LLC has made an initial capital contribution to the LLC in the amount set
forth in Section 5.01(a)(i), (b) TIAA LLC has received a 49% interest in the
LLC in exchange for such contribution; and (c) such capital contribution has
been distributed to Reckson (the occurrence of the events described in clauses
(a), (b) and (c) on the date of this Agreement are sometimes herein referred
to as the "Closing").
NOW, THEREFORE, in consideration of the foregoing, and of
the covenants and agreements hereinafter set forth, Reckson and TIAA LLC
hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise specified, all references herein to
Articles or Sections are to Articles or Sections of this Agreement. Unless the
context otherwise specifies or requires, capitalized terms used herein shall
apply equally to both the singular and the plural forms of such capitalized
terms and shall have the following respective meanings:
51 JFK: As defined in the recitals to this Agreement.
90 Merrick LLC: As defined in the recitals to this Agreement.
90 Merrick: As defined in the recitals to this Agreement.
101 JFK: As defined in Section 7.05.
120 White Plains: As defined in the recitals to this
Agreement.
275 Broadhollow: As defined in the recitals to this
Agreement.
275 Broadhollow LLC: As defined in the recitals to this
Agreement.
400 Garden City LLC: As defined in the recitals to this
Agreement.
400 Garden City Plaza: As defined in the recitals to this
Agreement.
1305 Walt Whitman: As defined in the recitals to this
Agreement.
1305 Walt Whitman LLC: As defined in the recitals to this
Agreement.
Actively Managed Entity: As defined in Section 9.06(a)(i).
Adjusted Net Ordinary Cash Flow: For any period means an
amount equal to the Net Ordinary Cash Flow for such period plus payments on
account of debt service, any expenses required or permitted to be capitalized,
Leasing Costs, Management Fees and excluding any changes in Cash Reserves.
Adjusted Portfolio Valuation: As defined in Section
9.06(a)(ii)(A).
Affiliate: When used with reference to a specified Person,
means any Person that directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control with
the specified Person. For purposes of this definition of "Affiliate" the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
Agreement: This Operating Agreement, as it may be further
amended or supplemented from time to time.
Allocated Values: As defined in the recitals to this
Agreement.
Annual Report: As defined in Section 8.04.
Applicable Interest: As defined in Section 9.04(a)(i).
Applicable Leases: As defined in Section 12.01(a).
Appraiser: As defined in Section 9.06(a)(ii)(A).
Approved Entity: As defined in Section 9.06(a)(i).
Approved Entity List: As defined in Section 9.06(a)(i).
Approved Pledgee: As defined in Section 9.09(d).
Bank Account: As defined in Section 8.03.
Bankrupt: "Bankruptcy" shall mean, and a Member shall be
deemed "Bankrupt" upon, (i) the entry of a final, nonappealable decree or
order for relief of the Member by a court of competent jurisdiction in any
involuntary case involving the Member under any bankruptcy, insolvency or
other similar law now or hereafter in effect; (ii) the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar agent for the Member or for all or substantially all of the Member's
assets or property which appointment is not discharged within ninety (90)
days; (iii) the ordering of the winding up or liquidation of the Member's
affairs; (iv) the filing with respect to the Member of a petition in any such
involuntary bankruptcy case, which petition remains undismissed for a period
of 90 days; (v) the commencement by the Member of a voluntary case under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (vi)
the consent by the Member to the entry of an order for relief in an
involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar agent for the Member or for all or substantially
all of the Member's assets or property; (vii) the making by the Member of any
general assignment for the benefit of creditors; or (viii) the admission in
writing by the Member of its inability to pay its debts as such debts become
due.
Base Rents: For any Lease, the annual base rent payable by
the tenant under such Lease (calculated on a per rentable square foot basis of
the space demised under such Lease).
Binding Commitment Notice: As defined in Section 9.04(a)(i).
Binding Commitment Period: As defined in Section 9.04(a)(i).
Binding Loan Commitment: As defined in Section 10.03(c).
Binding Property Notice: As defined in Section 9.05(c).
Binding Third Party Property Notice: As defined in Section
10.01(a).
Book Value: Means, with respect to any LLC Asset, the
asset's adjusted basis for federal income tax purposes, except that, in
accordance with the rules set forth in Treas. Reg. Section 1.704-1(b)(iv)(f):
(a) The initial Book Value of the assets of the LLC
as of the date of the contribution or deemed contribution shall be their
respective gross fair market values at such time as reasonably determined by
the Operating Member and approved by TIAA LLC, which approval shall not be
unreasonably withheld and, in the case of each Property shall be equal to its
applicable Allocated Value;
(b) The Book Value of any asset distributed or
deemed distributed by the LLC to any Member shall be adjusted immediately
prior to such distribution to equal its gross fair market value at such time
as reasonably determined by the Operating Member and approved by TIAA LLC,
which approval shall not be unreasonably withheld;
(c) The Book Values of all LLC assets may be
adjusted to equal their respective gross fair market values, as reasonably
determined by the Operating Member (and approved by TIAA LLC, which approval
shall not be unreasonably withheld or delayed) as of:
(i) the date of the acquisition of an
additional interest in the LLC by any new
or existing Member in exchange for a
contribution to the capital of the LLC; or
(ii) upon any distribution in liquidation of
the LLC, or the distribution by the LLC to
a retiring or continuing Member of money
or other assets of the LLC in reduction of
such Member's Interest in the LLC.
Any adjustments to the adjusted basis of any asset of the LLC pursuant
to Sections 734 or 743 of the Code shall be taken into account in determining
such asset's Book Value in a manner consistent with Treas. Reg. Section
1.704-1(b)(2)(iv)(m); and
(d) If the Book Value of an asset has been
determined pursuant to clauses (a) through (c) above, such Book Value shall
thereafter be adjusted in the same manner as would the asset's adjusted tax
basis for federal income tax purposes, except that depreciation and
amortization deductions shall be computed based on the asset's Book Value as
so determined, and not on the asset's adjusted tax basis in a manner
consistent with Treas. Reg. Section 1.704-1(b)(2)(iv)(g)(3) or 1.704-3(d)(2),
as applicable.
Borrower: As defined in Section 10.03(b).
Broker: As defined in Section 13.21.
Budgets: As defined in Section 7.03(a)(i).
Business Plan: As defined in Section 7.03(a)(i).
Business Day: Monday through Friday of each week, except
that a legal holiday recognized as such by the Government of the United States
and any other day on which banks in the State of New York are required or
permitted to be closed shall not be regarded as a business day.
Buy-Sell Lockout or Buy-Sell Lockouts: As defined in Section
9.05(a).
Capital Account: means, with respect to any Member, the
capital account of such Member maintained pursuant to Section 6.01, including
all additions thereto and subtractions therefrom pursuant to this Agreement.
Capital Budget: As defined in Section 7.03(a)(i).
Capital Contribution: Any property (including cash)
contributed to the LLC by or on behalf of a Member.
Capital Improvements: Any renewals, replacements and
improvements to the Properties which in accordance with GAAP must be
capitalized.
Cash Reserves: Reserve funds established by the Operating
Member to pay LLC Charges as set forth in the Business Plan or as reasonably
approved by TIAA LLC. TIAA LLC hereby approves an initial Cash Reserve of
$250,000 to be held by the LLC, which shall be in addition to any "Property
Level Reserves" (as such term is defined in each Management Agreement).
Certificate: As defined in the recitals to this Agreement.
Change in Control: Means the occurrence of any Person or
group (as such term is used in Section 13(d)(3) and 14(d)(2) of the Exchange
Act), other than the Permitted Holders, being or becoming the beneficial owner
(as such term is used in Section 13(d)(3) and 14(d)(2) of the Exchange Act),
directly or indirectly, of more than 50% of the Voting Stock of a Reckson
Party, including by way of merger, consolidation or otherwise. For purposes of
this paragraph "Permitted Holders" means (a) Teachers, (b) Senior Management
of Reckson Associates, (c) the spouses, issue, parents and first cousins of
Senior Management of Reckson Associates and the first cousins of the spouses,
issue and parents of the Rechlers, (d) trusts for the benefit of the Persons
described in clause (b) and (c) of this definition, (e) entities controlling
or controlled by foregoing Persons and (f) in the event of the death of any
such individual Person, heirs or testamentary legatees of such Person;
provided, that the parties described in (c), (d) and (e) shall only be deemed
Permitted Holders so long as a majority of the Persons holding the positions
of executive vice president or higher at Reckson Associates are either Senior
Management of Reckson Associates or individuals with at least 10 years
experience in owning or operating commercial real estate. For purposes of this
definition "Voting Stock" means equity interests in a corporation or other
Person with voting power under ordinary circumstances entitling the holders
thereof to elect the Board of Directors or other governing body of such
corporation or Person.
Change in Control Notice: As defined in Section
9.06(a)(ii)(A).
Closing: As defined in the recitals to this Agreement.
Code: The Internal Revenue Code of 1986, as in effect and
hereafter amended, and, unless the context otherwise requires, applicable
regulations thereunder. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.
Conflict Notice: As defined in Section 9.06(a)(ii)(A).
Contracts: As defined in Section 12.01(a)(xiii).
Contributing Member: As defined in Section 5.02(b)(i).
Contributing Member Contribution: As defined in Section
5.02(b)(ii).
Conversion Date: As defined in Section 5.02(b)(ii).
CPI: The Consumer Price Index for All Urban Consumers
(CPI-U), All Items, applicable to the N.Y.-Northeastern N.J. area (1982-84 =
100) for urban wage earners and clerical workers, as published by the U.S.
Department of Labor, Bureau of Labor Statistics. If such Consumer Price Index
is discontinued or otherwise revised during the term of this Agreement, the
Consumer Price Index for All Urban Consumers (CPI-U), All Items, U.S. City
Average (1982-84 = 100) for urban wage earners and clerical workers, as
published by the U.S. Department of Labor, Bureau of Labor Statistics, shall
be used, and if such national index is discontinued or otherwise revised
during the term of this Agreement, such other government index or computation
with which it is replaced shall be used in order to obtain substantially the
same result as would be obtained if the Consumer Price Index had not been
discontinued or revised.
CPI Increase: As of any date during the term of this
Agreement (such date, the "Determination Date"), the percent of increase, if
any, in the CPI for month in which the applicable Determination Date occurs
over the CPI for September, 2000. The parties agree that if such percentage
increase is not an even multiple of 10%, such percentage shall be reduced to
the next lowest even multiple of 10%.
Damages: As defined in Section 12.01(b).
Default Amount: As defined in Section 5.02(b)(i).
Default Loan(s): As defined in Section 5.02(b)(i).
Default Loan Period: As defined in Section 7.02(b).
Default Rate: The lesser of (a) the Prime Rate plus 2% and
(b) the maximum interest rate permitted by law.
Deposit: As defined in Section 9.04(a)(i).
Disputed Amount: As defined in Section 9.06(a)(ii)(A).
Election Period: As defined in Section 5.02(b)(i).
ERISA Problem: As defined in Section 9.06(a)(ii)(A).
Escrow Agent: As defined in Section 9.04(a)(i).
Final Plan: As defined in Section 7.03(a)(i).
First Refusal Notice: As defined in Section 9.04(a)(i).
Fiscal Year: As defined in Section 8.02.
Frontline: As defined in Section 13.25.
GAAP: Generally accepted accounting principles consistently
applied.
Ground Lease: The Lease dated October 28, 1983 by and
between County of Nassau and Avon Park Management Associates, Inc. (as amended
and assigned through the date hereof) with respect to 90 Merrick.
Indemnitees: As defined in Section 13.22(a).
Indemnity Laws: As defined in Section 13.22(b).
Initial Period: As defined in Section 5.02(b)(ii).
Initial Portfolio Valuation: As defined in Section 6.01(a).
Initial Working Capital: As defined in Section 5.02(a).
Interest Alteration: As defined in Section 9.01(c).
Initial Working Capital: As defined in Section 5.02(a).
Institutional Lender: means a savings bank, a savings and
loan association, a commercial bank or trust company, a private pension fund,
a credit union or company, an insurance company, a religious, educational or
eleemosynary institution, a federal, state or municipal employee's welfare,
benefit, pension or retirement fund, any governmental agency or entity insured
by a governmental agency, any brokerage or investment banking organization,
opportunity fund or any other Person reasonably satisfactory to TIAA LLC,
which is engaged in the business of making loans and whether acting in its own
capacity or on behalf of one or more third parties, who need not be
Institutional Lenders, or any Affiliate of any of the foregoing; provided,
that each of the above entities shall qualify as an Institutional Lender only
if it (together with its Affiliates) shall have net assets or a net equity or
combined capital and surplus, as the case may be, of not less than
$250,000,000.
Interest: As to any Member, all of the interest of that
Member in the LLC, including, without limitation, such Member's (i) right to a
distributive share of the income, gain, losses and deductions of the LLC in
accordance with this Agreement, and (ii) right to a distributive share of LLC
Assets.
Involuntary Change in Control: As defined in Section
9.06(a)(ii)(A).
Joint Decisions: As defined in Section 7.02.
Lease: Any lease, license or other agreement now or
hereafter entered into which permits the use and occupancy of any portion of
any Property.
Leasing Costs: With respect to any Lease, the costs payable
by the LLC for tenant improvements, tenant allowances and payments, leasing
commissions, costs incurred in connection with the LLC or any Property Owner
assuming a tenant's lease obligations with respect to real property other than
the Properties and costs incurred in connection with the LLC's or any Property
Owner's exercise of a right to "take-back" space in any of the Properties in
connection with the premises demised under such Lease for the term thereof
(calculated on a per rentable square foot basis of the space demised under
such Lease).
Leasing Guidelines: As defined in Section 7.03(a)(i).
Lesser Price Offer: As defined in Section 10.01(a).
Legal Requirements: All laws, statutes, or ordinances,
including building codes, subdivision, zoning regulations, urban redevelopment
plans, fire, health, safety, pollution, environmental protection and safety
laws, OSHA requirements, and the orders, rules, regulations, directives and
requirements of any federal, state or local governmental or quasi-governmental
authority which are applicable to any Property or the LLC; all requirements,
obligations, terms, restrictions, provisions and conditions of all covenants,
conditions, easements, rights of way, instruments now or hereafter applicable
to any Property whether or not of record; and all rules, regulations and
requirements of any insurance company insuring all or any part of any
Property.
LLC: As defined in the recitals to this Agreement.
LLC Accountants: Ernst & Young LLP, and its successor;
Kinsey, Beck and Company and its successor or such other firm of independent
certified public accountants which shall be one of the five largest accounting
firms in the United States chosen by Operating Member, or, if not one of the
above-mentioned accounting firms, then such firm as is reasonably approved by
TIAA LLC.
LLC Act: As defined in the recitals to this Agreement.
LLC Assets: All assets and property, whether tangible or
intangible and whether real, personal or mixed, at any time owned by or held
for the benefit of the LLC.
LLC Charges: For a given period of time, a sum equal to the
aggregate of the expenditures, charges and costs actually paid by the LLC or
the Property Owners during such period of time in accordance with the terms of
this Agreement including, without duplication or limitation:
(a) expenses, costs and charges in connection with the
ownership, operation, management or leasing of all or any portion of the
Properties, the LLC or the Property Owners;
(b) expenses, costs and charges in connection with the
repair, maintenance, replacement, alteration of or Capital Improvement to any
portion of the Properties, including any casualty or condemnation losses, to
the extent that the losses are not reimbursed during such period by any third
party responsible therefor or through insurance maintained by the LLC or any
of the Property Owners;
(c) all payments of principal and interest on loans to the
LLC or any of the Property Owners;
(d) all sales, payroll, real estate, personal property,
occupancy and other excise, property, privilege or other taxes and assessments
imposed upon the Properties, the LLC or any Property Owners ("Taxes");
(e) utility costs and deposits and other costs and deposits
required to obtain or lease any service or equipment relating to the
Properties;
(f) management fees, leasing fees and reimbursements payable
to the Managing Agent pursuant to the Management Agreement ("Management
Fees");
(g) Leasing Costs;
(h) the net increase, if any, in the Cash Reserves during
such period of time;
(i) the fees and expenses of the LLC or the Property Owners
for accountants, attorneys, architects, engineers, appraisers and other
professionals retained by or on behalf of the LLC or any Property Owners in
accordance with the terms hereof; and
(j) all other appropriate and necessary costs and expenses
of the LLC or any Property Owner incurred in accordance with this Agreement.
Notwithstanding the foregoing, there shall, however, be
excluded from LLC Charges:
(i) all non-cash items such as depreciation;
(ii) amounts distributed to the Members pursuant to this Agreement; (iii) all
payments and expenses deducted from the proceeds of a Major Capital Event to
determine the Net Extraordinary Cash Flow; (iv) any expense, cost or charge
enumerated in clauses (a) through (g), (i) or (j) above, to the extent such
expense, cost or charge was paid from Cash Reserves; and (v) any and all
expenses, obligations or liabilities which are specifically stated to be those
of Reckson or TIAA LLC (rather than the LLC) under this Agreement.
LLC Charges shall be determined on the cash basis of
accounting.
Loan: As defined in Section 10.03(a).
Loan Closing Date: As defined in Section 10.03(b)(i).
Loan Commitment: As defined in Section 10.03(b)(i).
Loan Guidelines: As defined in Section 10.03(a).
Major Capital Event: Any extraordinary transaction with
respect to the LLC or any Property or Property Owner which generates cash
receipts other than ordinary operating income, including, without limitation,
sales of real or personal property (other than sales of personal property in
the ordinary course of business), sales of interests in any Property Owner or
the LLC, borrowings (whether secured or unsecured) by the LLC or any Property
Owner, condemnations (and conveyances in lieu thereof), recoveries relating to
damage to any Property, and receipts of insurance proceeds relating to damage
to any Property.
Majority-Owned Affiliate: With respect to a specified
Person, an Affiliate of such Person in which such Person owns, directly or
indirectly, more than 50% of the ownership interests in such Affiliate.
Management Agreement: Each management and leasing agreement
governing the management and leasing of a Property between a Property Owner
and Managing Agent in the form attached hereto as Exhibit A, as each such
agreement may be modified, amended or restated from time to time in accordance
with this Agreement and any replacement management and leasing agreement
entered into in accordance with the provisions of this Agreement.
Management Fees: As defined in the definition of LLC Charges.
Managing Agent: Reckson Management Group, Inc. or any
successor thereto or any replacement managing agent appointed in accordance
with the terms hereof.
Managing Directors: As defined in Section 12.01(a).
Marketing Period: As defined in Section 10.01(a).
Material Business Conflict: means a material adverse effect
on Teachers' overall ability to act as a pension fund advisor, a custodian of
state tuition accounts, an insurer or in its then existing capacity in any
other separate line of business which it may maintain.
Member: Means, at any time, any person or entity admitted
and remaining as a member of the LLC pursuant to the terms of this Agreement.
As of the date of this Agreement, the Members of the LLC are Reckson and TIAA
LLC.
Member Contributions: As defined in Section 5.01(a)(iii).
Member Debtor: As defined in Section 9.09(a).
Modified Buy-Sell Rights: As defined in Section
9.06(a)(ii)(B).
Necessary Expenses: Means expenses required to provide
necessary services for the Properties and to operate and maintain the level
and quality of services for the Properties provided as of the date hereof,
plus (without duplication) (i) any amounts required to comply with (A) all
applicable Legal Requirements, (B) obligations under Leases other than the
general obligation to maintain the applicable Property in a first class manner
and (C) other contractual obligations to third parties; (ii) utility charges,
ground rent, amounts payable to Manager under the Management Agreement, wages
and benefits to employees and insurance premiums; and (iii) amounts necessary
to avoid imminent danger to life or property.
Net Cost: As defined in Section 7.02(a)(ii).
Net Extraordinary Cash Flow: The amount, if any, remaining
after subtracting from cash receipts arising from a Major Capital Event (a)
all expenses of the LLC related to such Major Capital Event and (b) such
reserves for the business of the LLC as may be reasonably established by the
Operating Member and reasonably approved by TIAA LLC. Net Extraordinary Cash
Flow shall be determined on the cash basis of accounting.
Net Ordinary Cash Flow: For any given period of time, the
Receipts of the LLC for such period less the LLC Charges of the LLC for such
period. Net Ordinary Cash Flow shall be determined on the cash basis of
accounting.
Net Income and Net Loss mean, respectively, for any period,
the taxable income and taxable loss of the LLC for such period as determined
for U.S. federal income tax purposes (inclusive of items required to be
separately accounted for under Section 702(a) of the Code), provided that for
purposes of determining Net Income and Net Loss and each item thereof (and not
for income tax purposes) (a) there shall be taken into account any tax exempt
income of the LLC, (b) any expenditures of the LLC which are described in
Section 705(a)(2)(B) of the Code or which are deemed to be described in
Section 705(a)(2)(B) of the Code pursuant to Regulations under Section 704(b)
of the Code shall be treated as deductible expenses, (c) if any LLC Asset has
a Book Value which differs from its adjusted tax basis as determined for U.S.
federal income tax purposes, income, gain, loss and deduction with respect to
such LLC Asset shall be computed based upon the LLC Asset's Book Value rather
than its adjusted tax basis, (d) items of gross income or deduction allocated
pursuant to Section 6.03, including "nonrecourse deductions" and "partner
nonrecourse deductions", shall be excluded from the computation of Net Income
and Net Loss, and (e) if the Book Value of any LLC Asset is adjusted pursuant
to clauses (b) through (d) of the definition thereof, the amount of such
adjustment shall be taken into account as gain or loss for purposes of
computing Net Income and Net Loss.
Non-Contributing Member: As defined in Section 5.02(b).
Non-Approved Entity: As defined in Section 9.06(a)(ii)(A).
Non-Approving Member: As defined in Section 10.01(a).
Non-Operating Member: Means TIAA LLC and any party
succeeding to the Interest of TIAA LLC.
Non-Transferring Member: As defined in Section 9.04(a)(i).
Offering Notice: As defined in Section 7.05.
Offering Price: As defined in Section 9.04(a)(i)(B).
OM Decisions: As defined in Section 7.02(c).
OM Termination Event: As defined in Section 7.02(c).
Operating Budget: As defined in Section 7.03(a)(i).
Operating Member: Means Reckson and any party succeeding to
the Interest of Reckson or its rights hereunder.
Overage Rent: As defined in Section 5.01(b)(v).
Parent: As defined in Section 9.01.
Percentage Interest: A Member's percentage of the total
Interests of the Members. The initial Percentage Interests of the Members
shall be Reckson: 51% and TIAA LLC: 49% and shall be subject to adjustment as
provided in Section 5.02(b).
Person: Any individual, corporation, association,
partnership, limited liability company, joint venture, trust, estate or other
entity or organization.
Pledge: As defined in Section 9.01(b).
Prime Rate: Means the rate of interest per annum for U.S.
Dollar loans publicly announced from time to time by Chase Manhattan Bank,
N.A. (or any successor thereto) as its prime rate in effect in its principal
office in New York City.
Proceeding: As defined in Section 12.01(b).
Properties Appraised Market Value: As defined in Section
9.06(a)(ii)(A).
Property and Properties: As defined in the recitals to this
Agreement.
Property Commitment Period: As defined in Section 9.05(c).
Property Offer Notice: As defined in Section 9.05(a).
Property Offering Member: As defined in Section 9.05(a).
Property Owners: As defined in the recitals to this
Agreement.
Property Purchasing Party: As defined in Section 9.05(d).
Property Receiving Member: As defined in Section 9.05(a).
Property Recommending Member: As defined in Section 10.01(a).
Property Selling Party: As defined in Section 9.05(d).
Proposed Addition: As defined in Section 9.06(a)(i).
Proposed Loan Notice: As defined in Section 10.03(b).
Proposed Non-Approved Entity Change in Control: As defined
in Section 9.06(a)(ii)(A).
Proposed Non-Approved Entity Transfer: As defined in Section
9.06(b)(i).
Purchaser: As defined in Section 9.09(a).
Put Closing Date: As defined in Section 9.06(a)(ii)(A).
Put Election Notice: As defined in Section 9.06(a)(ii)(A).
Put Sale: As defined in Section 9.06(a)(ii)(A).
Put Sale Price: As defined in Section 9.06(a)(ii)(A).
Real Estate Operating Company: Means a "real estate
operating company" within the meaning of the U.S. Department of Labor's "plan
asset" regulations at 29 C.F.R. ss. 2510.3-101.
Receipts: For any given period of time, a sum equal to the
aggregate of all amounts actually received by the LLC or any of the Property
Owners from or in respect of any Property or other LLC Asset during such
period, including, without limitation:
(a) all rents, percentage rent, expense reimbursements,
termination fees and other charges received from tenants and other occupants
of the Properties;
(b) proceeds of rent insurance and business interruption
insurance;
(c) all utility or other deposits returned to the LLC or any
Property Owner, which deposits were made on or after the date hereof or for
which apportionment was made pursuant to Section 5.01(b);
(d) interest, if any, earned on tenants' security deposits
or escrows to the extent unconditionally retained and security deposits to the
extent applied pursuant to the provisions of the applicable Leases;
(e) interest, if any, earned and available to the LLC on any
Cash Reserves or other LLC funds, or on any escrow funds deposited by the LLC
or any Other Property Owner with others;
(f) the amount of any net reduction of Cash Reserves; and
(g) cash or other receipts (other than receipts from a Major
Capital Event) received by the LLC or any Property Owner from any other
source.
Receipts shall be determined on the cash basis of
accounting.
Notwithstanding the foregoing Receipts shall not include (u)
amounts contributed or loaned by the Members to the LLC pursuant to this
Agreement including without limitation the TIAA LLC Contribution, (v) each
tenant's security deposit and interest thereon, if any, as long as the LLC has
a contingent legal obligation to return that deposit or such interest thereon,
(w) amounts which, although held by a Property Owner, may not be distributed
by such Property Owner to the LLC or by the LLC to its Members under
applicable law or pursuant to the terms of an agreement with a third party,
(x) revenues to which Reckson is entitled under Section 5.01(b), (y) amounts
arising from a Major Capital Event and (z) amounts which either Reckson or
TIAA LLC are entitled to retain pursuant to Section 13.04.
Rechlers: As defined in the definition of "Change in
Control".
Reckson: As defined in the preamble to this Agreement.
Reckson 120 White Plains Road LLC: As defined in the
recitals to this Agreement.
Reckson Amount: As defined in Section 9.06(a)(ii)(A).
Reckson Artwork: As defined in Section 13.32.
Reckson Associates: Reckson Associates Realty Corp. or,
subject to the provisions of Section 9.06(a)(ii), any successor thereto by
merger or acquisition of all or substantially all of its assets,
reorganization or otherwise.
Reckson Companies: Reckson OP and Reckson Associates or,
subject to the provisions of Section 9.06(a)(ii) Agreement, any successor to
either of the foregoing thereto by merger or acquisition of all or
substantially all of their assets, by reorganization or otherwise or, subject
to the provisions of Section 9.06(a)(ii), any successor thereto by merger or
acquisition of all or substantially all of its assets, reorganization or
otherwise.
Reckson Contribution: As defined in Section 5.01(a)(ii).
Reckson Knowledge Individuals: As defined in Section
12.01(a).
Reckson OP: Reckson Operating Partnership, L.P., a Delaware
limited partnership or, subject to the provisions of Section 9.06(a)(ii), any
successor thereto by merger or acquisition of all or substantially all of its
assets, reorganization or otherwise.
Reckson Owner: Reckson OP or any other Affiliate of Reckson
which owned a Property prior to the date hereof.
Reckson Party: Reckson Associates; provided that in the
event Reckson Associates ceases to be the sole general partner of Reckson OP,
"Reckson Party" shall be deemed to mean both Reckson Associates and Reckson
OP.
Reckson Short Hills LLC: As defined in the recitals to this
Agreement.
Recording Office: The office of the Secretary of State of
the State of Delaware.
Recourse Coverage: As defined in Section 9.04(b)(iv).
Regulations: The regulations issued by the United States
Department of the Treasury under the Code as now in effect and as they may be
amended from time to time, and any successor regulations.
Regulatory Allocations: As defined in Section 6.03(b).
Rep. Basket: As defined in Section 12.01(b).
Rep. Closing Date: As defined in Section 12.01(b).
Response Notice: As defined in Section 7.05.
Responsible Member: As defined in Section 9.07(a)(ii).
Revenues: As defined in Section 5.01(b)(i).
ROFO Period: As defined in Section 10.03(b).
ROFR Closing Date: As defined in Section 9.04(a)(i).
ROFR: Means the Right of First Refusal contemplated in
Section 9.04.
Rules: As defined in Section 13.30
Sale Closing Date: As defined in Section 9.05(d) and
10.01(b).
Sale Prices: As defined in Section 9.05(b).
Sale Property or Sale Properties: As defined in Section
9.05(a).
Selling Property Owner: As defined in Section 10.01(b).
Senior Management of Reckson Associates: Means the majority
of individuals who hold a position of executive vice president or higher at
Reckson Associates at the time of a Change in Control of Reckson, but
excluding those who did not hold such a position 270 days prior to the
applicable Change in Control. As of the date hereof the following individuals
hold the position of executive vice president or higher at Reckson: Donald
Rechler, Scott Rechler, Roger Rechler, Mitchell Rechler, Gregg Rechler
(collectively, the "Rechlers"), Michael Maturo and Jason Barnett.
Special Affiliate: Any Person that owns, is owned by, or is
under common ownership with, directly or indirectly, fifty-one percent (51%)
or more of the ownership interest of the specified Person; provided, that any
Person owning the remaining interests in such specified Person does not
possess more approval rights in the aggregate of the specified Person than
TIAA LLC has under this Agreement.
Stamford Towers: As defined in the recitals to this
Agreement.
Taxes: As defined in the definition of LLC Charges.
Teachers: Means Teachers Insurance and Annuity Association
of America, a New York corporation.
Tenant: As defined in Section 12.01(a)(i)(A).
Termination Date: The 99th anniversary of the date of this
Agreement.
Third Party Offer Notice: As defined in Section 10.01(a).
Third Party Property Purchasing Party: As defined in Section
10.01(b).
Third Party Sale Price: As defined in Section 10.01(a).
Third Party Sale Property or Third Party Sale Properties: As
defined in Section 10.01(a).
TIAA Determined Non-Approved Entity: As defined in Section
9.06(a)(ii)(A).
TIAA LLC: As defined in the preamble to this Agreement.
TIAA LLC Conflict: As defined in Section 9.06(a)(ii)(A).
TIAA LLC Contribution: As defined in Section 5.01(a)(i).
Transfer: As defined in Section 9.01(a).
Transfer Notice: As defined in Section 9.01(b)(i).
Transfer of an Interest: As defined in Section 9.01(e).
Transferee: As defined in Section 9.01(h).
Transferring Member: As defined in Section 9.04(a).
Undistributed Income: As defined in Section 13.05.
Upper Tier Pledge: As defined in Section 9.01(g).
Upper Tier Transfer: As defined in Section 9.01(d).
Valid Third Party Contract: As defined in Section 10.01(a).
ARTICLE II
FILING/ADMISSION; NAME; PLACE OF BUSINESS
2.01 Filing/Admission of TIAA LLC
(a) The Members shall execute and acknowledge, and the
Operating Member shall promptly file or record with the proper offices in each
jurisdiction and political subdivision in which the LLC does business, and if
necessary or desirable, cause to be published, such certificates or amended
certificates, if any, as are required or permitted by the LLC Act, or any
fictitious name act, or act relating to qualification to do business, or
similar statute or any rule or regulation in effect in such jurisdiction or
political subdivision. The Members shall further execute and acknowledge and
the Operating Member shall promptly file or record such amended certificates
or additional certificates or instruments of whatever nature as may from time
to time be called for or required by such statutes, rules or regulations to
permit the continued existence and operation of the LLC.
(b) TIAA LLC is hereby admitted to the LLC as a Member upon
the terms and conditions set forth herein.
2.02 Name of LLC
The name under which the LLC shall conduct its business is
RT Tri-State LLC or such other name as the Members may select. In the event
that either of the Members shall transfer its Interest pursuant to the
provisions set forth herein or shall transfer its interest in one or more
Properties, the name under which the LLC shall conduct its business shall be
modified at the transferring Member's request such that the transferring
Member's name (or any reference to such name (including its initials)) shall
be removed from the LLC's name or, if applicable, the name of the Property
Owner in which such Member no longer owns an interest, at the time of such
transfer.
2.03 Place of Business
The location of the principal place of business of the LLC
shall be c/o Reckson Associates Realty Corp., 225 Broadhollow Road, Melville,
New York 11747. The principal place of business of the LLC shall be changed to
such other place or places within the United States as the Operating Member
may from time to time determine, provided that, if necessary, the Members
shall amend the Certificate in accordance with the applicable requirements of
the LLC Act. The Operating Member may establish and maintain such other
offices and additional places of business of the LLC, either within or without
the State of New York, as TIAA LLC shall approve, such approval not to be
unreasonably withheld.
2.04 Registered Office and Registered Agent
The street address of the initial registered office of the
LLC shall be Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801 and the LLC's registered agent at such address shall be CT
Corporation. The Operating Member may hereafter change the registered agent
and registered office and, if necessary, the Members shall amend the
Certificate in accordance with the applicable requirements of the LLC Act to
reflect such change.
ARTICLE III
PURPOSES AND POWERS OF LLC
3.01 Purposes
The purposes of the LLC shall be to acquire, own, hold,
finance, lease, operate and sell and otherwise dispose of or deal with and
exercise any rights it may have with respect to (i) the Property Owners and
(ii) in the LLC's capacity as owner of the Property Owners, the Properties,
and to do all other things reasonably incident thereto, in accordance with the
terms of this Agreement.
3.02 Powers
The LLC shall have the power to do any and all acts and
things necessary, appropriate, advisable or convenient for the furtherance and
accomplishment of the purposes of the LLC, including, without limitation, to
engage in any kind of activity and to enter into and perform obligations of
any kind necessary to, or in connection with, or incidental to, the
accomplishment of the purposes of the LLC, so long as said activities and
obligations may be lawfully engaged in or performed by a limited liability
company under the LLC Act.
ARTICLE IV
TERM OF LLC
The existence of the LLC commenced on the date upon which
the Certificate was duly filed with the Recording Office and shall continue
until the Termination Date, unless dissolved and liquidated before the
Termination Date in accordance with the provisions of Article XI.
ARTICLE V
CAPITAL
5.01 Capital Contributions and Percentage Interests of
the Members
(a) (i) On the date hereof, TIAA LLC has made a Capital
Contribution to the LLC in cash in the amount of $135,975,000.00 in respect of
a 49% interest in the LLC (the "TIAA LLC Contribution"), which amount is being
adjusted as provided for in (b) below. The TIAA LLC Contribution was
immediately thereafter distributed to Reckson.
(ii) As of the date hereof, after taking into
account the distribution referred to in Section 5.01(a)(i) hereof, Reckson is
deemed to have contributed capital to the LLC of $141,525,000 (the "Reckson
Contribution").
(iii) The outstanding amount of each of the
TIAA LLC Contribution and the Reckson Contribution shall automatically (A)
be increased to reflect any additional Contributions made (or deemed made) by
Reckson or TIAA LLC, as the case may be, pursuant to Section 5.02 and (B)
shall be decreased to reflect any distributions of Net Extraordinary Cash Flow
made (or deemed made) to Reckson or TIAA LLC, as the case may be, after the
date hereof. The sum of (I) the amount of the Reckson Contribution (as so
increased or decreased) plus (II) the amount of the TIAA LLC Contribution
(as so increased or decreased) outstanding at any time is hereinafter referred
to as, the "Member Contributions").
(b) (i) As of 11:59 P.M. on the day immediately preceding
the date hereof, Reckson, on behalf of the Property Owners, shall close, or
cause to be closed, the books of the LLC and the Property Owners. Subject to
the further provisions of this Section 5.01, the revenues and expenses of the
Properties shall be apportioned and, except as otherwise provided herein (i)
Reckson shall be entitled to all revenues of the Properties from all sources,
including, without limitation, from the proceeds of operations, leasing, tax
certiorari proceedings (subject to the rights of tenants), utility or other
deposits, financing and payments on construction warranties and guarantees
(collectively, "Revenues") payable or accruing prior to the date hereof or
which are otherwise allocable to the period prior to the date hereof (whether
received before or after the date hereof), (ii) there shall be allocated to
Reckson all of the expenses of the Properties arising or accruing prior to the
date hereof, (iii) the LLC shall be entitled to all Revenues accruing from and
after the date hereof or which are otherwise allocable to the period on or
after the date hereof (whether received before or after the date hereof) and
(iv) there shall be allocated to the LLC all of the expenses of the Properties
arising or accruing on or after the date hereof. Revenues and expenses that
are allocable to a period of time falling in part before, and in part on or
after, the date hereof shall be apportioned between such respective portions
of the period in question according to the number of days in each, so that
Reckson will receive the portion of such revenues, and (except to the extent
otherwise provided herein) bear the portion of such expenses, apportioned to
the period before the date hereof, and the LLC will receive and bear the
balance of each.
(ii) Notwithstanding Section 5.01(b)(i), the
actual costs incurred in connection with the capital projects described on
Schedule 2-A and the costs set forth on Schedule 2-B shall be deemed to be
costs of the LLC.
(iii) All income, gains, losses, deductions and
credits of the LLC accruing prior to the date hereof shall be allocated to
Reckson. From and after the date hereof, the respective Interests of the
Members in the revenues, distributions, expenses, income, gains, losses,
deductions and credits of the LLC shall be in accordance with the provisions
of this Agreement.
(iv) For purposes of this Section 5.01(b),
Revenues for the period before the date hereof will not include rents that are
not payable in respect of such period notwithstanding the fact that generally
accepted accounting principles might treat some portion of the rents payable
in respect of the period after the date hereof as being allocable to the
period before the date hereof (e.g., because of straight-line accounting and
future rent step-ups).
(v) As to rental payments for fuel pass-alongs,
so-called escalation rent, percentage rent, or charges based upon real estate
taxes, operating expenses, labor costs, "porter's wage rate," cost of living
increases or other similar items (such pass-alongs, escalation rent and
charges being collectively called "Overage Rent"), for the accounting period
in which the Closing occurs, if the date of this Agreement is prior to the
time when any such Overage Rent is payable, then such Overage Rent shall be
apportioned subsequent to the date hereof. The LLC shall receive in trust and
pay over to Reckson a pro-rated amount (on a per diem basis) of such Overage
Rent as and when collected. As to any Overage Rent payable subsequent to the
date hereof with respect to an accounting period which occurs prior to the
date hereof, the LLC shall receive and hold such Overage Rent in trust for
Reckson and pay the entire amount to Reckson promptly after receipt thereof.
Reckson shall furnish to the LLC all information with respect to the
accounting period in which the Closing occurs which is reasonably necessary
for the billing of such Overage Rent. If, prior to the date hereof, Reckson
shall collect any sums on account of Overage Rent for any accounting period
beginning prior to but ending subsequent to the date hereof, such sum shall be
apportioned as of the date hereof. The parties shall reconcile estimates of
Overage Rent under any Lease attributable to the period prior to the date
hereof with actual Overage Rent, when such amounts are actually determined by
the LLC after the date hereof. The LLC shall provide to Reckson an accounting
of all such amounts.
(c) Any and all amounts received by the LLC or any Property
Owner following Closing for rents due to Reckson prior to Closing (including
an amount equal to Reckson's share of rents receivable for the month in which
the Closing occurs) shall be paid to Reckson promptly after receipt. If at the
time of Closing any tenants are delinquent in the payment of rental, then any
rent received from any such tenant after the Closing shall be applied
thereafter in the following order of priority: (i) first, to rent arrearages
with respect to the month in which the Closing shall have occurred (subject to
apportionment pursuant to Section 5.01(b) above), (ii) second, to rent
arrearages with respect to the month immediately preceding the month in which
the Closing shall have occurred (which shall be paid to Reckson), (iii) third,
to rent arrearages with respect to the period following the month in which the
Closing shall have occurred (which shall be paid to the LLC) and, (iv) fourth,
to any other rent arrearages with respect to the period preceding the month in
which the Closing shall have occurred (which shall be paid to Reckson).
Notwithstanding the foregoing sentence, if a tenant specifies the particular
purpose and applicable time period for a payment, then such payment shall be
applied as so specified by the tenant. Any amounts so payable to Reckson after
the Closing shall be paid over by the LLC to Reckson promptly after receipt.
The LLC shall account to Reckson monthly with respect to same.
(d) If any tax reduction proceedings in respect of the
Properties are pending at the time of the Closing (other than proceedings in
respect of the current tax year or tax years commencing after the date hereof)
Reckson reserves, and shall have, the right to continue to prosecute the same
provided that Reckson shall not settle any claims in a manner which has a
material adverse effect on the LLC. The LLC shall have the right to prosecute
tax reduction proceedings for the current or subsequent tax years provided
that the LLC shall not settle the same in a manner which would have a material
adverse effect on a Reckson Owner. Any refunds or savings in the payment of
taxes resulting from tax reduction proceedings applicable entirely to tax
years prior to the current tax year shall belong to and be the property of
Reckson, and any refunds or savings in the payment of taxes applicable to the
tax years commencing from and after the date hereof shall belong to and be the
property of the LLC, subject in each case to the rights of any tenants to
receive any refunds. The refunds or savings in the payment of taxes applicable
to the current tax year (after payment of all attorneys' fees and other
expenses incurred in obtaining such refunds or savings and subject to the
rights of any tenants to receive refunds) shall be apportioned between Reckson
and the LLC on a per diem basis in accordance with Section 5.01(b)(i).
(e) (i) Reckson shall indemnify and hold harmless the LLC
and TIAA LLC from and against all loss, obligation, expense (including
reasonable counsel fees), damage and liability to the Properties or the
Property Owners resulting from claims asserted by third parties, but only if
and to the extent (A) such expenses, obligations and liabilities have arisen
or accrued prior to the date hereof or are allocable to the period prior to
the date hereof and (B) are not related to (I) the physical or environmental
condition of the Properties or any improvements located on the Properties or
any fixtures or equipment located thereon (except, solely with respect to the
environmental condition of the Properties, if Reckson has actual knowledge on
the date hereof that a claim in writing was received by a Reckson Owner
regarding such environmental condition during the period of time that a
Reckson Owner owned the applicable Property) or (II) any matters that would
ordinarily be covered by title insurance or are disclosed by the surveys of
the Properties (except for title claims as to which Reckson has actual
knowledge on the date hereof that a Reckson Owner received written notice of
during the period of time that such Reckson Owner owned the applicable
Property and which claims are not covered by TIAA LLC's title insurance
policy).
(ii) The LLC shall (and shall cause the Property Owners to)
defend, indemnify and hold harmless the Reckson Owners and their respective
Affiliates from all loss, obligation, expense (including reasonable counsel
fees), damage and liability in any way relating to claims asserted by third
parties relating to the Properties and/or the Property Owners but only to the
extent arising or accruing after the date hereof or which are allocable to the
period from and after the date hereof.
(f) The respective obligations of Reckson and the LLC with
respect to the matters set forth on Schedule 3 shall be as set forth on such
Schedule.
5.02 Additional Contributions
(a) The Members shall make additional Capital Contributions
in proportion to their respective Percentage Interests, in such amounts (i) as
may be required by the Business Plan, (ii) to pay any Necessary Expenses as
they become due if the LLC shall not have sufficient available Net Ordinary
Cash Flow or Cash Reserves to pay the same, (iii) to fund initial working
capital for the Property Owners in an amount agreed to by the Members on the
date hereof (the "Initial Working Capital") or (iv) as the Members may
otherwise agree. Such amounts shall be paid (A) in the case of additional
Capital Contributions required by the Business Plan, within 7 Business Days
after request therefor by the Operating Member (which request shall not be
given more than 45 days before the date on which such funds are required in
accordance with the Business Plan), (B) in the case of additional Capital
Contributions required to pay Necessary Expenses, within 15 Business Days
after request therefor by the Operating Member, (C) in the case of the Initial
Working Capital on the date hereof and (D) as the Members may otherwise agree.
Additional Capital Contributions which are required for the business of one of
the Property Owners shall be contributed by the LLC to such Property Owner (or
loaned by the LLC to the Property Owner on such terms as are determined by the
Members).
(b) If at any time or times either Member shall fail to
timely make any Capital Contribution which such Member is obligated to make
under Section 5.02(a) (such Member being referred to herein as a
"Non-Contributing Member"), and such failure shall continue for a period of 5
Business Days after notice of such failure from the other Member, the
Operating Member shall notify the other Member of such Member's failure to
make such Capital Contribution and the rights and remedies set forth below in
this Section 5.02 shall apply.
(i) The Member that has timely made its own
Capital Contribution (a "Contributing Member") may (but shall not be obligated
to), within 30 days after the expiration of the 5 Business-Day period referred
to above (such 30-day period is called the "Election Period") advance all or
any part of the portion of the Capital Contribution which the Non-Contributing
Member has failed to make (the amount so advanced, the "Default Amount") as a
loan (a "Default Loan") from the Contributing Member to the Non-Contributing
Member. The Contributing Member shall give notice thereof to the
Non-Contributing Member upon the Contributing Member's payment of the Default
Amount to the LLC. Any Default Loan shall bear interest on the unpaid
principal amount thereof at the Default Rate from the date advanced until the
date repaid.
(ii) If the Non-Contributing Member fails to repay
the full amount of any Default Loan plus all interest accrued thereon on or
prior to the date which is 180 days after the date such Default Loan was made
(such period of 180 days, the "Initial Period"), the Contributing Member shall
have an option for a period of 30 days thereafter to convert the outstanding
amount of the Default Loan plus all accrued interest thereon into a Capital
Contribution by the Contributing Member (a "Contributing Member
Contribution"). Such option shall be exercised, if at all, by written notice
(the date of such notice, the "Conversion Date") given not more than 30 days
after the end of the Initial Period. If the Contributing Member elects to make
a Contributing Member Contribution, (x) the Percentage Interest of the
Non-Contributing Member shall be decreased as of the Conversion Date by the
number of percentage points equal to the quotient (expressed as a percentage
and carried out to two (2) decimal places) of 110% of the amount so
contributed by the Contributing Member divided by the total amount of the
Member Contributions on the Conversion Date and (y) the Percentage Interest of
the Contributing Member shall be increased as of the Conversion Date by the
same number of percentage points. Except as set forth in Sections 5.02(e),
7.02(b), 7.02(c) and 10.03, the foregoing shall constitute the sole remedy of
the Contributing Member for the failure by the Non-Contributing Member to
repay the Default Loan.
(c) Unless and until a Default Loan is timely converted into
a Capital Contribution, a Default Loan may be prepaid without penalty or
premium. All payments in respect of a Default Loan shall be applied first on
account of accrued and unpaid interest and next on account of principal. If
more than one Default Loan is outstanding at the same time, all payments shall
be applied first to interest and principal outstanding on the oldest Default
Loan until the oldest Default Loan is paid off, before application to the next
oldest Default Loan.
(d) If the principal and interest due on a Default Loan
shall be converted into a Capital Contribution pursuant to Section
5.02(b)(ii), (x) no subsequent payment or tender of payment by the
Non-Contributing Member of the amount so converted or contributed shall affect
the Members' Capital Account and Percentage Interests as recalculated in
accordance with Section 5.02(b)(ii) and (y) the Non-Contributing Member shall
have neither the right nor the obligation to repay such interest and
principal.
(e) If any Member makes a Default Loan, then until the
earlier to occur of (i) the Conversion Date or (ii) the repayment in full of
such Default Loan plus all accrued interest thereon, all amounts which would
be distributed to the Non-Contributing Member under Sections 6.05 or 11.03 or
any other provision of this Agreement shall be paid to the Contributing Member
to repay such Default Loan and accrued interest. Such payments shall be
applied in accordance with the last two (2) sentences of Section 5.02(c), and
shall be considered, for all other purposes of this Agreement, to have been
distributed to the Defaulting Member.
(f) If any Contributing Member elects not to make a Default
Loan to the Non-Contributing Member, such Contributing Member shall have the
option (to be exercised within the Election Period (i) to have its Capital
Contribution (if previously made) returned (it being agreed that,
notwithstanding such return, such Member shall not be deemed a
Non-Contributing Member) or (ii) to treat the Non-Contributing Member's
Percentage Interest of the Capital Contribution made by such Contributing
Member as a Default Loan from such Contributing Member to the Non-Contributing
Member (in which event the provisions of (b) through (e) of this Section 5.02
shall be applicable thereto as if the Contributing Member had made a Capital
Contribution equal to its Percentage Interest of the Capital Contribution it
originally made and a Default Loan equal to the balance of the Capital
Contribution it originally made). If, within the Election Period, the
Contributing Member shall neither notify the Non-Contributing Member of an
election under this Section 5.02(f) nor make a Default Loan pursuant to
Section 5.02(b), the Contributing Member shall be deemed to have elected to
have its Capital Contribution returned.
(g) So long as there is no material adverse tax or other
consequence for Reckson, the LLC or any Property Owner or to the operation and
maintenance of any Property, at the request of TIAA LLC, all Capital
Improvements in excess of $100,000 per Capital Improvement (as increased by
the CPI Increase) to be funded by the LLC or the Property Owners shall be
funded from Capital Contributions to the LLC by the Members (in lieu of being
funded from Receipts of the LLC or the Property Owners.
5.03 Liability of Members
Except as otherwise provided in the LLC Act and this
Agreement, the debts, obligations and liabilities of the LLC, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the LLC, and the Members shall not be obligated personally for
any such debt, obligation or liability of the LLC solely by reason of being a
Member. The failure of the LLC to observe any formalities or requirements
relating to the exercise of its powers or management of its business or
affairs under the LLC Act or this Agreement shall not be grounds for imposing
personal liability on the Members for liabilities of the LLC.
5.04 Return of Capital
Except upon the dissolution of the LLC or as may be
specifically provided in this Agreement, no Member shall have the right to
demand or to receive the return of all or any part of its Capital Account or
its Capital Contributions to the LLC.
ARTICLE VI
ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS
6.01 Capital Accounts
(a) Each Member shall have a Capital Account which shall be
maintained in accordance with Regulations sections 1.704-1(b)(2)(iv) and
1.704-2. The Members agree that after consummation of the transactions
described in Section 5.01(a)(i) hereof, the Capital Account balances of the
Members on the date hereof are as follows:
TIAA LLC: $135,975,000.00
RECKSON: $141,525,000.00
The Members agree that on the date hereof the value of the
Properties, net of liabilities, is $277,500,000.00 (the "Initial Portfolio
Valuation").
(b) The Capital Account of each Member shall be increased
(i) by the amount of cash and the fair market value of any property (net of
any liability secured by such property that the LLC is considered to assume,
or take subject to, under Section 752 of the Code) contributed by such Member
to the LLC pursuant to Section 5.02 when such Capital Contribution is made
(ii) by any Net Income and gross income items allocated to such Member; and
(iii) as otherwise provided in this Agreement.
(c) The Capital Account of each Member shall be reduced by
(i) the amount of cash or the fair market value of any property (net of any
liability secured by such property that the Member is considered to assume or
take subject to Section 752 of the Code) distributed to such Member pursuant
to Section 6.05 when such distribution is made, (ii) the Net Loss and items of
deduction or expense allocated to such Member pursuant to Section 6.03
including, without limitation, any "partner nonrecourse deductions" (as
defined in Treas. Reg. Section 1.704-2(i)) and any "nonrecourse deductions"
(as defined in Treas. Reg. Section 1.704-2(b)) allocated to such Member
pursuant to Section 6.03 of this Agreement), and (iii) as otherwise provided
in this Agreement.
(d) Except as otherwise provided in this Agreement, whenever
it is necessary to determine the Capital Account of any Member, the Capital
Account of such Member shall be determined after giving effect to the
allocations of Net Income, Net Loss and other items realized prior or
concurrently to such time (including, without limitation, any Net Income and
Net Losses attributable to adjustments to Book Values with respect to any
concurrent distribution), and all contributions and distributions made prior
or concurrently to the time as of which such determination is to be made.
6.02 Allocation of Net Income or Net Loss
Net Income or Net Loss, for each Fiscal Year (or portion
thereof) shall be allocated to the Members in accordance with their Percentage
Interests. The provisions in this Agreement pertaining to allocations and
adjustments of the Capital Accounts are intended to comply with Code Section
704(b) and the Regulations thereunder. Subject to TIAA LLC's approval, not to
be unreasonably withheld or delayed, Reckson is hereby authorized to make
appropriate modifications to such allocations and adjustments when needed to
comply with Code Section 704(b) or the Regulations thereunder to the extent
such modifications would not result in any material modification of the
economic arrangement of the Members as reflected in this Agreement.
6.03 Allocations of Nonrecourse Deductions; Minimum
Gain Chargeback; Qualified Income Offset
(a) Notwithstanding any other provision of this Agreement,
(i) "partner nonrecourse deductions" (as defined in Regulations Section
1.704-2(i)), if any, of the LLC shall be allocated to the Member which bears
the economic risk of loss within the meaning of Regulations Section
1.704-2(i), and (ii) "nonrecourse deductions" (as defined in Regulations
Section 1.704-2(b)) of the LLC shall be allocated to the Members in accordance
with their Percentage Interests.
(b) This Agreement shall be deemed to include "qualified
income offset," "minimum gain chargeback" and "partner nonrecourse debt
minimum gain chargeback" provisions within the meaning of the Regulations
under Section 704(b) of the Code. Accordingly, notwithstanding any other
provision of this Agreement, items of gross income shall be allocated to the
Members on a priority basis to the extent and in the manner required by such
provisions. Any allocations required to be made pursuant to this Section
6.03(b) (the "Regulatory Allocations") shall be offset, to the extent possible
without causing the LLC to fail to comply with the Regulations under Section
704(b) of the Code, by special allocations of other items of LLC income, gain,
loss, or deduction, so that, after such special offsetting allocations have
been made, each Member's Capital Account balance will be equal to the Capital
Account balance such Member would have had if the Regulatory Allocations had
not been made.
6.04 Tax Allocations; Allocation of Income and Loss
With Respect to LLC Interests Transferred
(a) For federal income tax purposes, except as otherwise
provided in Section 6.04(b), each item of income, gain, loss and deduction
shall be allocated among the Members in the same manner as its corresponding
item of book income, gain, loss or deduction is allocated pursuant to this
Article VI.
(b) In accordance with Code Sections 704(b) and 704(c) and
the Regulations thereunder, income, gain, loss and deduction with respect to
any Property contributed to the capital of the LLC shall, solely for federal
income tax purposes, be allocated among the Members so as to take into account
any variation between the adjusted basis of such Property for federal income
tax purposes and its Book Value upon its contribution. If the Book Value of
any LLC Asset is adjusted, subsequent allocations of taxable income, gain,
loss and deduction with respect to such LLC Asset shall take account of any
variation between the adjusted basis of such LLC Asset for federal income tax
purposes and the Book Value of such LLC Asset in the manner prescribed under
Code Sections 704(b) and 704(c) and the Regulations thereunder. In
implementing the provisions of the prior two sentences, the LLC shall employ
the traditional allocation method described in Regulation Section 1.704-3(b).
(c) If any Interest is transferred during any Fiscal Year in
accordance with this Agreement, the Net Income or Net Loss (and other items
referred to in Section 6.02) attributable to such Interest for such Fiscal
Year shall be allocated between the transferor and the transferee by closing
the books of the LLC as of the date of the transfer, or by any other method
permitted under Code Section 706 and the Regulations thereunder and agreed to
by the Members, including the transferor and the transferee.
6.05 Distributions of Net Ordinary Cash
Flow and Net Extraordinary Cash Flow
(a) Distributions in Accordance with Percentage Interests.
Except as provided in Section 5.01, 5.02(e) and 11.03, Net Ordinary Cash Flow
and Net Extraordinary Cash Flow shall be distributed to the Members in
proportion to their respective Percentage Interests.
(b) Net Ordinary Cash Flow. The Operating Member shall
determine Net Ordinary Cash Flow at least monthly on a cumulative year-to-date
basis and apply and distribute Net Ordinary Cash Flow as provided in this
Section 6.05 on or before the 24th day of the following month. Notwithstanding
the preceding sentence, which is intended to permit interim distributions of
Net Ordinary Cash Flow, the Operating Member shall calculate Net Ordinary Cash
Flow on an annual basis and if the annual audited report of the LLC should
show that there was any over-distribution of Net Ordinary Cash Flow to a
Member, such Member shall repay the over-distribution within 30 days after
receipt of such report. If such annual audited report should show that there
was an under-distribution of Net Ordinary Cash Flow to a Member, such
under-distribution shall be paid to such Member within 30 after receipt of
such report.
(c) Net Extraordinary Cash Flow. The Operating Member shall
calculate Net Extraordinary Cash Flow (other than Net Extraordinary Cash Flow
arising from a sale incidental to the dissolution and liquidation of the LLC
which shall be distributed in accordance with Section 11.03) and apply and
distribute such Net Extraordinary Cash Flow to the Members, as provided in
Section 6.05, reasonably and promptly after the LLC's receipt thereof.
Notwithstanding the preceding sentence, which is intended to permit interim
distributions of Net Extraordinary Cash Flow, the Operating Member shall
determine Net Extraordinary Cash Flow on an annual basis and if the annual
audited report of the LLC should show that there was any over-distribution of
Net Extraordinary Cash Flow to a Member, such Member shall repay the
over-distribution within 30 days after receipt of such report. If such annual
audited report should show that there was an under-distribution of Net
Extraordinary Cash Flow to a Member, such under-distribution shall be paid to
such Member within 30 days after receipt of such report.
(d) No Restoration of Funds. Except as provided in Sections
6.05(b) and 6.05(c), no Member shall be required to restore to the LLC any
funds properly distributed to such Member pursuant to any of the provisions of
this Section 6.05 or pursuant to Section 11.03, unless required by applicable
law.
(e) Limitation on Distributions. No Member shall be entitled
to (i) receive any distribution from the LLC (including a withdrawal of any of
such Member's capital) except pursuant to this Section 6.05 and Section 11.03,
(ii) receive interest from the LLC upon any capital contributed to the LLC, or
(iii) receive property other than cash in return for such Member's Capital
Contributions.
6.06 Section 754 Election
The Operating Member shall cause the LLC to file on its tax
return for the year ending December 31, 2000 an election under Section 754 of
the Code to provide for an adjustment to the adjusted tax basis of LLC Assets.
ARTICLE VII
MANAGEMENT
7.01 General Scope of Duties and Authority
Except as specifically provided in this Agreement to the
contrary, the business and affairs of the LLC (including, without limitation,
the right of the LLC to take any action as a member of the Property Owners)
shall be carried on and managed by the Operating Member, who shall have full,
exclusive and complete right, power and authority with respect thereto.
Notwithstanding the foregoing, the Member that is not the Operating Member
shall upon request of the Operating Member, join in such execution and/or
execute and deliver any instruments the Operating Member may reasonably
require to confirm the Operating Member's authority hereunder. On the date
hereof, each Property Owner has entered into a Management Agreement with
Managing Agent governing the management and leasing of the Properties.
7.02 Joint Decisions
Notwithstanding the provisions of Section 7.01, the
Operating Member shall not take any of the following actions (collectively,
the "Joint Decisions") unless such Joint Decision has been approved by the
Non-Operating Member or is set forth in the Business Plan (it being understood
that for all purposes hereof, all Joint Decisions shall require the consent of
both the Operating Member and the Non-Operating Member); provided, with
respect to Sections 7.02(a)(i), 7.02(a)(ix), 7.02(a)(x), 7.02(b)(i) and
7.02(b)(iii) below, (i) such consent shall not be unreasonably withheld or
delayed (and with respect to Sections 7.02(a)(x) and 7.02(b)(iii) shall take
into account the timing and quality of the service to be performed and the
quality of the service provider) and (ii) if the other Member fails to grant
or deny its consent within 7 Business Days after a request for such consent
has been made, such consent shall be deemed given.
(a) At all times throughout the term of this Agreement the
following shall be a Joint Decision:
(i) entering into or causing any Property Owner to
enter into any Lease which is inconsistent with the Leasing Guidelines;
(ii) entering into or causing any Property Owner to
enter into any modification, amendment, surrender or termination, other than
pursuant to an option contained in a Lease, which (x) shortens the term of any
Lease, (y) reduces the amount paid by the tenant or (z) materially increases
the landlord's obligations thereunder, which in the case of (x), (y) or (z)
will have a Net Cost to the landlord of $100,000.00 (as increased by the CPI
Increase) or more with respect to a single transaction or $250,000.00 (as
increased by the CPI Increase) with respect to all of the transactions entered
into by all Property Owners in a single calendar year; provided, that without
the consent of the Non-Operating Member, the Operating Member may settle
disputes with tenants in the ordinary course of business and terminate Leases
of tenants in default. As used herein the term "Net Cost" means the amount, if
any, by which the present value (applying a discount rate of 10% per annum) as
of the effective date of the transaction in question of the aggregate amount
of payments to be foregone or made by the landlord (net of any amounts to be
received by the landlord in connection with the transaction) exceeds the
present value (applying such discount rate) as of such date of the revenue
which the applicable Property Owner reasonably expects to receive from a
replacement tenant with respect to whom such Property Owner has either
executed a Lease or which has been specifically identified and negotiations
with such replacement tenant have progressed to the point that the Operating
Member reasonably expects a Lease to be executed;
(iii) the modification or amendment by any Property
Owner of its Management Agreement (other than de minimis modifications or
amendments) or the waiver of any default under the Management Agreement or the
selection of a replacement Managing Agent or the determination of the terms of
any replacement Management Agreement;
(iv) any borrowing by the LLC or any Property Owner;
provided, that without the Non-Operating Member's consent, but subject to
Section 10.03(g), the Operating Member shall be permitted to effectuate a Loan
which meets the Loan Guidelines in accordance with Section 10.03 and may
effectuate equipment financing in the ordinary course of business;
(v) acquisition by the LLC or any Property Owner of any
real property other than the Properties;
(vi) except as otherwise provided in this Agreement,
selling, or otherwise disposing of any Property or Property Owner or issuing
additional Interests;
(vii) except as expressly provided in this Agreement
admitting to the LLC or to any Property Owner additional or successor Members;
(viii) taking any other action with respect to any
matter which, pursuant to the express provisions of this Agreement, requires
the approval, consent or agreement of all of the Members;
(ix) incurring or causing a Property Owner to incur any
expenditure, charge or cost in any given month (other than Necessary Expenses)
which is inconsistent with the Business Plan or exceeds the budgeted line item
cost in the Operating Budget and Capital Budget by more than 10% or increases
the Budgets by 7% or more (exclusive of increases attributable to temporary
timing differences arising in the ordinary course of business); provided,
however, that in incurring Necessary Expenses the Operating Member shall act
prudently and in the best economic interest of the LLC, Property Owners and
Properties;
(x) accepting or causing a Property Owner to accept a
bid in excess of $100,000.00 (as increased by the CPI Increase) for any
Capital Improvement, but only if and to the extent such bid is greater than
110% of the lowest conforming bid received for such Capital Improvement from
qualified bidders;
(xi) engaging in any transaction between the LLC or any
Property Owner and any Member or any Affiliate of a Member. Notwithstanding
anything to the contrary contained herein, the Members herein approve (1) the
form and substance of the Management Agreement entered into on the date hereof
(and the transactions with Affiliates permitted thereby) and (2) the
transactions described in Section 13.25 below, subject in each case to the
provisions thereof;
(xii) making or causing a Property Owner to make any
loans to any Person which are not in furtherance of the stated purposes or
intended business of the LLC or any Property Owner as set forth in this
Agreement or executing or becoming liable under any guaranty (in whatever
form) by the LLC or any Property Owner of the obligations of any Person other
than the LLC or any Property Owner or otherwise for ordinary course
obligations (e.g., endorsing checks);
(xiii) taking any action not in furtherance of the
stated purposes or intended business of the LLC as set forth in this
Agreement;
(xiv) entering or causing a Property Owner to enter
into any joint venture (regardless of the form of the joint venture) with
another Person;
(xv) executing and delivering any document which is
prohibited under the LLC Act or this Agreement;
(xvi) amending, modifying or terminating this Agreement
or, except as provided in this Agreement, any of the organizational documents
and organizational instruments governing the Property Owners; and
(xvii) commencement on behalf of the LLC or any
Property Owner of any voluntary case under any bankruptcy, insolvency or
similar law.
(b) The additional matters set forth in clauses (i)-(iii)
below shall require a Joint Decision only if and for so long as (x) the
Operating Member is a Non-Contributing Member, (y) the Non-Operating Member is
not a Non-Contributing Member and (z) the sum of (1) the principal amount of
all unpaid Default Loans which are then outstanding to Reckson made pursuant
to Section 5.02(b)(i) of this Agreement plus (2) the principal amount of any
Default Loans to Reckson converted to a Capital Contribution pursuant to
Section 5.02(b)(ii) of this Agreement, exceeds the amount of $5,000,000.00.
The period in which these Joint Decisions are required is herein referred to
as the "Default Loan Period":
(i) entering into a Lease inconsistent with the Leasing
Guidelines;
(ii) incurring or causing any Property Owner to incur
LLC Charges to perform any Capital Improvements exclusive of Capital
Improvements (w) required on account of emergencies (i.e. as necessary to
avoid imminent danger to life or property), (x) required to comply with Legal
Requirements or obligations under any Lease (other than a general obligation
under a Lease to maintain the Property in a first-class condition) or other
third party agreement binding upon the LLC or any Property Owner, (y) for
which the Operating Member had accepted bids (even if it had not executed a
binding contract) prior to the commencement of the Default Loan Period and (z)
which in the good faith judgment of the Operating Member are necessary to be
performed in order to avoid undue financial burden on the Property Owners or a
negative affect on any Property; and
(iii) accepting a bid in excess of $50,000.00 (as
increased by the CPI Increase) for any Capital Improvement, but only if and to
the extent the bid is greater than 110% of the lowest conforming bid received
for such Capital Improvement from qualified bidders.
(c) All decisions which theretofore may have been made
solely by the Operating Member in its capacity as such relating to the
operation and management of the LLC, the Property Owners and the Properties
("OM Decisions") shall become a Joint Decision, and the Operating Member, in
its capacity as such, will cease to be able to take any action without the
consent of the Non-Operating Member, if any of the events described in clause
(i) through (xii) below (each, an "OM Termination Event") occurs and, solely
with respect to clause (vi), (ix), (x) or (xii)(B) below, continues beyond any
applicable notice and grace periods contained herein, or if no such notice and
grace periods shall be contained herein, such OM Termination Event continues
uncured for a period of 15 days after written notice, provided, that if such
OM Termination Event is of the type described in clauses (x) or (xii)(B) and
cannot reasonably be cured in such cure period and the Operating Member shall
have commenced to cure such OM Termination Event within such cure period and
thereafter diligently and expeditiously proceeds to cure the same, such cure
period shall be extended for so long as it shall require the Operating Member
in the exercise of due diligence to cure such default, it being agreed that no
such extension shall be for a period in excess of 120 days from the date of
the initial written notice from the Non-Operating Member to the Operating
Member identifying an OM Termination Event and provided further, that no such
event shall constitute an OM Termination Event if prior to the date of the
occurrence of such event, an event of the same nature as those set forth in
clause (i), (vi), (vii) (viii) or (x) has occurred and is continuing on the
part of the Non-Operating Member. For the avoidance of doubt, the parties
confirm that, except as otherwise provided in Section 10.03(g), all of
Reckson's rights under Articles 9 and 10 are not "OM Decisions" and Reckson
may continue to exercise such rights notwithstanding the occurrence of an OM
Termination Event. The OM Termination Events are:
(i) The principal amount of all unpaid Default Loans
which are then outstanding to Reckson pursuant to Section 5.02(b)(i) of this
Agreement plus the principal amount of any Default Loan converted to a Capital
Contribution pursuant to Section 5.02(b)(ii) of this Agreement exceeds the
amount of $10,000,000.00, but only if the Non-Operating Member is not a
Non-Contributing Member;
(ii) a Change in Control described in Section
9.06(a)(ii)(B) occurs;
(iii) a transfer of the Operating Member's Interest
described in Section 9.06(b)(ii) occurs;
(iv) The Operating Member's pledged Interest is
purchased or acquired as a result of foreclosure by a Non-Approved Entity as
described in Section 9.09(a)(iii);
(v) any act committed by the Operating Member or any of
its partners, principals, agents or employees (but only if such act was
committed at the direction or express consent of a member of Senior Management
of Reckson), which constitutes willful malfeasance, fraud, embezzlement,
theft, or a felony and which materially harms the business affairs of the LLC;
(vi) the Operating Member fails to close or otherwise
materially defaults under Section 9.05 or 9.06(a) (with respect to the closing
of a Put Sale) of this Agreement;
(vii) The Operating Member transfers its Interest in
violation of Article 9 of this Agreement;
(viii) the Operating Member becomes Bankrupt;
(ix) Reckson effectuates a Loan in violation of Section
10.03 of this Agreement;
(x) the Operating Member willfully breaches any
material term(s) of this Agreement which causes a material adverse effect to
the value of the LLC taken as a whole; provided, that such action shall not be
deemed to be an OM Termination Event if, following the final determination of
the reduction in the LLC's value directly resulting from such breach (either
by agreement of the parties or by a decision of an arbitrator in accordance
with Section 13.30), the Operating Member repays such amount to the LLC;
(xi) the Managing Agent (provided the Managing Agent is
then an Affiliate of the Operating Member) improperly transfers the Management
Agreement and/or its interest therein in violation of the Management
Agreement; or
(xii) any act(s) (A) described in subparagraph (v) or
(viii) of this Section 7.02(c) or (B) any act described in subparagraph (x) of
this Section 7.02(c) which in the case of (A) or (B) occur with respect to the
Managing Agent (provided the Managing Agent is then an Affiliate of the
Operating Member).
If an OM Termination Event occurs, the Non-Operating
Member will have the option to terminate the Management Agreement on behalf of
the LLC and propose a successor Managing Agent, subject to the Operating
Member's reasonable approval as to the identity of such successor and the
terms of the Management Agreement. Any dispute between the Members regarding
whether an OM Termination Event has occurred shall be resolved by arbitration
in accordance with Section 13.30 and, pending the determination of the
arbitration, no OM Termination Event shall be deemed to have occurred.
7.03 Business Plan
(a) (i) On or before October 15th, or at least 75 days
before the beginning of each Fiscal Year, the Operating Member shall prepare
and submit to the Non-Operating Member for its reasonable approval a proposed
pro forma business plan in preliminary draft form for the promotion, operation
and maintenance of each Property, taking into consideration the then current
market conditions and for the operation of the LLC during the succeeding
Fiscal Year (each, as the same may be modified as provided below, a "Business
Plan"). Each Business Plan shall consist of an operating budget, as same may
be modified as provided below (the "Operating Budget"), a Capital Improvements
budget, as same may be modified as provided below (the "Capital Budget";
together with the Operating Budget, the "Budgets"), and the leasing
guidelines, as same may be modified as provided below (the "Leasing
Guidelines"). The form of Business Plan shall be substantially as set forth in
the Fiscal Year 2000 Business Plan for each Property, as more particularly set
forth on Exhibit C. Each Operating Budget shall show, on a month-by-month
basis, in reasonable detail, each line item of anticipated income and expense
including, without limitation, amounts required to establish, maintain and/or
increase Cash Reserves. Each Capital Budget shall show, in reasonable detail,
anticipated expenditures for Capital Improvements with respect to each
Property or portion thereof. The Leasing Guidelines for each Property shall
specify net average effective rent over the term of the Lease on a
Property-by-Property basis, and with respect to each Property, on a
space-by-space basis, taking into account Base Rent, the term of the Lease,
leasing commissions due to any outside leasing brokers or as set forth in the
Management Agreement, including overrides to the Managing Agent, tenant
improvements, free rent and any other tenant concessions. Unless the Operating
Member otherwise elects, the Leasing Guidelines shall provide for payment of a
"full commission" to outside leasing brokers representing a prospective
tenant. The Operating Member shall submit to the Non-Operating Member within
15 days after delivery of the proposed Business Plan (which shall in no event
be later than November 1) a revised Business Plan. Within 15 days following
delivery of the revised Business Plan, but no later than November 15, the
Non-Operating Member shall submit to the Operating Member any comments to the
revised Business Plan. The Operating Member shall submit to the Non-Operating
Member, within 15 days thereafter, but no later than December 1, the final
Business Plan incorporating the Non-Operating Member's comments and revisions
(the "Final Plan"). The Non-Operating Member shall approve or disapprove the
Final Plan within 15 days after receipt thereof, but no later than December
15, which, as so approved, shall constitute the "Business Plan". If Operating
Member shall fail to submit any comments or revisions to any draft of the
Business Plan on or prior to the dates set forth above, the Non-Operating
Member shall be deemed to have granted its consent to any such draft.
(ii) The Operating Member may, from time to time and at
any time, modify the Business Plan without the Non-Operating Member's consent
to reflect changes in market conditions and to provide for payment of
Necessary Expenses. If the Operating Member modifies the Business Plan
pursuant to the preceding sentence on account of changes in market conditions,
it shall give prompt written notice thereof to the Non-Operating Member
together with a written explanation of the reason(s) therefor. In other
circumstances, the Operating Member may, from time to time and at any time,
modify the Business Plan but only with the prior written consent of the
Non-Operating Member, which consent shall not be unreasonably withheld or
delayed and shall be deemed given if the Non-Operating Member fails to grant
or deny such consent within 10 Business Days after receipt of the proposed
modification. The Business Plan, as modified in accordance with this
subsection (ii) (either or without the consent of the Non-Operating Member),
shall be deemed to be the Business Plan for all purposes herein.
(iii) The Operating Member shall use diligent, good
faith efforts to cause the Managing Agent to operate each Property in
conformity with the applicable Budgets and the permitted variances therefrom
as set forth in Section 7.02(a)(ix). The Non-Operating Member acknowledges and
agrees that the Budgets are only an estimate and not a guaranty by the
Operating Member or the Managing Agent and there may be substantial variations
between the estimates set forth in the Business Plan and actual results.
(b) On the date hereof the Members have adopted the Business
Plan for each Property for the Fiscal Year 2000 as set forth on Exhibit C,
annexed hereto and made a part hereof. On the date hereof, the Members have
adopted for each Property a projection of the anticipated Capital Budget for
the Fiscal Years 2001 and 2002 as set forth on Exhibit D, annexed hereto and
made a part hereof, it being acknowledged and agreed by the Members that such
Capital Budget projection is only an estimate and not a guaranty by Reckson or
the Managing Agent and there may be substantial variations between the
estimates set forth in the projected Capital Budgets and the actual results.
The Operating Member shall be entitled to cause the Property Owners to pay all
LLC Charges as and when due to the extent such LLC Charges are either
consistent with the Business Plan or are a permitted variance therefrom as set
forth in Section 7.02(a)(ix) or are Necessary Expenses.
(c) During any period when the Members fail to reach
agreement on any portions of any Business Plan for any Property prior to the
commencement of the Fiscal Year to which such Business Plan relates, such
Property shall be operated during such Fiscal Year (i) in accordance with such
portions of such Business Plan as to which agreement has been reached, (ii) at
rates or levels of expenditures as are actually charged or incurred with
respect to Necessary Expenses and (iii) with respect to those portions of such
Business Plan which are discretionary and as to which agreement has not been
reached at rates or levels of expenditures comparable to those of the
preceding Fiscal Year, (x) increased by the CPI Increase (computed for this
purpose from the January 1st of the last Fiscal Year for which a Business Plan
was approved to December 31st of the Fiscal Year immediately preceding the
Fiscal Year to which the Business Plan in dispute relates) and (y) increased
or decreased to reflect increases or decreases in the percentage of such
Property occupied by tenants since the last Fiscal Year for which a Business
Plan was approved (but only to the extent the Operating Member reasonably
determines that such increases or decreases are reasonably related to the
level of such Property's occupancy).
7.04 Other Activities of Members
Any Member may own, purchase, sell, or otherwise deal in any
manner with any property not owned by the LLC or a Property Owner without
notice to any other Member, without participation of any other Member, and
without liability to the LLC, a Property Owner or any other Member and any
such Member may, without notice to any other Member and without obligation to
present to the LLC or to a Property Owner or any other Member an opportunity
of any kind whatsoever, acquire, sell (subject to Section 7.05, to the extent
applicable), finance, lease, operate, manage, develop or syndicate any real
property not owned by the LLC or of a Property Owner, free of any claim
whatsoever of the other Member or the LLC. No Member shall incur any liability
to the LLC or to a Property Owner or any other Member as a result of such
Member's interest in such other property or pursuit of such other business
interests, and neither the LLC nor any Member or Property Owner shall have any
right to participate in such other property or business or to receive or share
in any income or profits derived therefrom.
7.05 Right of First Negotiation on 101 JFK Parkway
If and so long as Reckson or any Affiliate of Reckson owns
101 JFK Parkway, Short Hills, New Jersey ("101 JFK"), and, at any time during
the term of this Agreement Reckson or such Affiliate shall desire to sell 101
JFK pursuant to a single-property transaction (as opposed to selling 101 JFK
as part of a multi-property transaction, in which case this Section 7.05 shall
not apply and the rights of TIAA LLC under the Section 7.05 shall terminate
upon the consummation of such sale), Reckson shall give a notice to TIAA LLC
(the "Offering Notice"), which notice shall set forth the desire of Reckson or
such Affiliate to so sell 101 JFK. Within 10 Business Days after the giving of
the Offering Notice, TIAA LLC shall give a notice to Reckson (the "Response
Notice") stating whether or not TIAA LLC desires to purchase 101 JFK. If the
Response Notice states that TIAA LLC desires to purchase 101 JFK, then the
parties shall proceed to negotiate in good faith to reach agreement on the
terms of the sale and purchase of 101 JFK, and for a period of 15 Business
Days after the giving of the Response Notice, Reckson shall not negotiate with
any third party to sell 101 JFK. If, at the end of such 15 Business-Day
period, Reckson and TIAA LLC are unable to agree on the terms of such sale and
purchase for any reason, or if TIAA LLC shall fail timely to deliver the
Response Notice, then the rights of TIAA LLC under this Section 7.05 shall
terminate and Reckson may sell 101 JFK to any third party on any terms. The
parties further acknowledge that in the event 101 JFK is transferred to an
Affiliate of Reckson, this Section 7.05 shall not be triggered, but TIAA LLC's
right under this Section 7.05 shall be preserved and, in the event Reckson's
Affiliate shall desire to sell 101 JFK to a party which is not an Affiliate of
Reckson, Reckson shall cause such Affiliate to adhere to the terms of this
Section 7.05.
ARTICLE VIII
BANK ACCOUNTS; BOOKS AND RECORDS;
STATEMENTS; TAXES; FISCAL YEAR
8.01 Books of Account
At all times during the existence of the LLC, the books of
account of the LLC and each Property Owner shall be prepared and kept by the
Operating Member in accordance with GAAP, which shall reflect all LLC and each
Property Owner's transactions and shall be appropriate and adequate for the
LLC's and each Property Owner's business, and which books of account shall be
maintained at the principal place of business of the LLC. Any Member or its
duly authorized representatives shall have the right at any time to inspect
and copy such books of account during normal business hours upon reasonable
notice. Any Member and its duly authorized representatives shall have the
right to examine (and copy) or conduct an audit of the LLC's and each Property
Owner's books and records at any time during normal business hours and upon
reasonable notice at the LLC's principal place of business. Any such
examination or special audit (i.e., audits other than the annual audits for
the LLC and each Property Owner which shall be conducted as of December 31 at
the LLC's sole cost and expense) shall be performed at such Member's sole cost
and expense.
8.02 Fiscal Year
Unless the Members shall agree otherwise, the fiscal year of
the LLC and the Property Owners for financial, accounting, federal, state and
local income tax purposes (the "Fiscal Year") shall be the calendar year
(except that the first Fiscal Year of the LLC and the Property Owners (for
financial and accounting purposes) shall begin on the date hereof and the last
Fiscal Year of the LLC and the Property Owners shall end on the last day of
the term of this Agreement).
8.03 Bank Accounts
All funds of the LLC shall be deposited in the LLC's name in
one or more separate bank accounts (each, a "Bank Account") at a bank selected
by the Operating Member. Each such Bank Account shall be used exclusively for
the LLC's funds and no other funds shall be commingled therein. Withdrawals
may be made from such Bank Account only by the Operating Member and only for
purposes authorized under this Agreement. All withdrawals from the Bank
Account shall be made only upon the signature of an authorized signatory of
the Operating Member. The LLC may, at the Operating Member's option, establish
one or more bank accounts in the name of the Property Owners to hold the funds
of the Property Owners and/or security deposits of tenants or to comply with
the requirements of a lender to the LLC or to a Property Owner.
8.04 Financial Statements
Within 90 days after the end of each Fiscal Year, the
Operating Member shall prepare and deliver to the Non-Operating Member a
financial report of the LLC for the preceding Fiscal Year, including a balance
sheet, a statement of operations and statements of Members' Capital Accounts,
changes in financial position, Net Ordinary Cash Flow and Net Extraordinary
Cash Flow and Adjusted Net Ordinary Cash Flow, all of which shall be audited
by the LLC Accountants in accordance with generally accepted auditing
standards, and all of which (except for the reports of Net Ordinary Cash Flow
and Net Extraordinary Cash Flow and other reports prepared on a cash basis)
shall be prepared in accordance with GAAP (the "Annual Report"). All financial
statements prepared pursuant to this Section 8.04 shall present fairly the
financial position and operating results of the LLC. TIAA LLC acknowledges
that any financial projections that have been or are hereafter delivered to
TIAA LLC (the "Projections") (a) reflect a number of estimates, assumptions
and judgments concerning anticipated results of the Properties, (b) were not
prepared with a view to disclosure or compliance with published guidelines of
the SEC or the guidelines established by the American Institute of Certified
Public Accountants regarding projections or forecasts and (c) do not purport
to present operations at the Properties in accordance with generally accepted
accounting principles. The Projections are and will be subject to certain
risks and uncertainties that could cause actual results to differ
substantially from the Projections. None of Reckson or any of its Affiliates
or representatives has made or makes any representation to TIAA LLC or any
other person regarding the actual performance of the Properties compared to
the information contained in the Projections and each of them expressly
disclaims any representation or warranty, express or implied, as to the
accuracy or completeness of the Projections.
8.05 Tax Returns; Tax Matters Partner
(a) The Operating Member shall cause all LLC tax returns to
be timely filed with the applicable government authorities within allowable
time periods, including extensions, and shall use reasonable efforts to
provide such tax returns in a timely manner to the Members with the necessary
information, including Schedules K-1, with respect to the operations of the
LLC to allow them to file their own tax returns. The Operating Member shall
provide TIAA LLC with copies of the LLC's form K-1 at least 15 days prior to
the date such tax returns shall be filed.
(b) The Operating Member shall act as the "tax matters
partner" of the LLC as provided in Section 6231 of the Code and the
Regulations thereunder. Each Member hereby approves of such designation and
agrees to execute, certify, acknowledge, deliver, swear to, file, and record
at the appropriate public offices such documents as may be deemed necessary or
appropriate to evidence such approval. The tax matters partner shall take such
reasonable actions to insure that TIAA LLC will be a "notice partner", as such
term is defined under Section 6231 of the Code. Expenses incurred by the
Operating Member in acting in its capacity as "tax matters partner" shall be
deemed to be LLC Charges.
8.06 Partnership
The LLC shall be treated as a partnership for federal income
tax purposes and no Member shall make any election (for tax purposes or
otherwise) inconsistent with such treatment.
8.07 Management Agreement Records
The Operating Member shall use reasonable efforts to enforce
Managing Agent's obligations under the Management Agreement, and, without
limiting the foregoing, shall cause the Managing Agent to provide the Members
with copies of the reports required to be furnished by Managing Agent to Owner
under Paragraph III(D)(iii) of each Management Agreement as in effect on the
date hereof (or the comparable provisions of any future Management Agreement)
and, upon TIAA LLC's request, the LLC will (A) cause the Managing Agent to
provide to TIAA LLC copies of all bids in excess of $100,000 (as increased by
the CPI Increase) (or $50,000 (as increased by the CPI Increase) during any
Default Loan Period) and (B) cause a cost adjuster/contract auditor to be
engaged to review specific bid and vendor selection decisions.
ARTICLE IX
TRANSFERS OF INTERESTS; RIGHT OF FIRST REFUSAL; PLEDGES
9.01 Restrictions on Transfers and Pledges of LLC Interests
(a) The term "transfer" or "Transfer" when used in this
Agreement shall mean any sale, assignment, conveyance, gift or transfer.
(b) The term "pledge" or "Pledge" when used in this
Agreement shall mean any pledge, hypothecation, mortgage, or granting of a
security interest.
(c) The term "Interest Alteration" when used in this
Agreement shall mean a change in the Members' respective Interests, Percentage
Interests, Capital Accounts, rights to act as Operating Member (and the
decision-making authority appurtenant thereto) or any other rights,
obligations and responsibilities under this Agreement or with respect to the
Properties.
(d) The term "Upper Tier Transfer" means, with respect to
any Member, any transfer of ownership interests in an entity or issuance of
additional ownership interests, or any other transaction howsoever effected,
which results in a change in the ultimate beneficial ownership of such Member
by its Parent. The term Upper Tier Transfer does not include a transfer of
ownership interests in, or issuance of additional ownership interests in, or
any other transaction howsoever effected which results in a change in
ownership of the Parent of a Member, it being understood however, that a
Change in Control with respect to a Reckson Party may trigger the consequences
set forth in Section 9.06.
(e) The term "Transfer (or transfer) of an Interest" means
only a direct Transfer of an Interest and does not include an Upper Tier
Transfer.
(f) The term Parent, when used with respect to (I) Reckson,
means Reckson OP and (II) TIAA LLC, means Teachers; provided however, if as a
result of a Transfer or Upper Tier Transfer permitted under this Agreement,
Reckson ceases to be a Special Affiliate of Reckson OP or TIAA LLC shall cease
to be a Special Affiliate of Teachers, this paragraph (f) shall be amended to
identify the new parent of Reckson or TIAA LLC, as applicable, and references
to the Reckson Parties shall be deemed to refer to such new parent. This
paragraph (f) shall apply with respect to any subsequent Transfer or Upper
Tier Transfer.
(g) The term "Upper Tier Pledge" means with respect to any
Member, any pledge of all or any part of the ownership interests in a Member
(as opposed to a pledge of the Interest itself) or in any subsidiary of such
Member's Parent which directly, or through ownership of other Persons, owns an
interest in such Member.
(h) Except as permitted under this Article 9 and under
Article 10, neither Member may transfer or pledge all or any portion of its
Interest hereunder without the prior written consent of the other Member,
which consent may be withheld in such other Member's sole and absolute
discretion. Except as permitted under this Article 9 and Article 10, neither
Member may permit any Upper Tier Transfer or Upper Tier Pledge with respect to
it, without the prior written consent of the other Member, which consent may
be withheld in such other Member's sole and absolute discretion. Upon a
Member's transfer of its Interest to any person or entity ("Transferee") under
and in accordance with this Article 9, such Transferee shall be admitted as a
substitute Member in lieu of such Transferring Member.
9.02 Intentionally Omitted
9.03 Transfers and Pledges to Affiliates
(a) Notwithstanding Section 9.01, each Member may, without
the consent of the other Member, transfer or pledge all, but not part, of its
respective Interest in the LLC to an Affiliate of such Member and each Member
may permit Upper Tier Transfers and Upper Tier Pledges to Affiliates of such
Member; provided that following any such transfer, pledge, Upper Tier Transfer
or Upper Tier Pledge (or the foreclosure (or transfer in lieu of foreclosure)
of any pledge or Upper Tier Pledge), the new Member shall (x) with respect to
Reckson, be a Special Affiliate of Reckson OP and (y) with respect to TIAA
LLC, be a Special Affiliate of Teachers.
(b) Notwithstanding Section 9.01, Reckson shall be
permitted, without the consent of the other Member, to transfer all, but not a
part, of its Interest in the LLC or to effectuate Upper Tier Transfers with
respect to all, but not part, of the ownership interests in Reckson, to an
entity which is an Actively Managed Entity; provided that if at any time after
such transfer a majority of the Senior Management of Reckson at the time of
such transfer shall cease to be actively involved in the Actively Managed
Entity, then the Modified Buy-Sell Rights may be triggered by either party,
but there shall not otherwise be any Interest Alteration as a result thereof.
There shall be no restriction on transfers of Interests or Upper Tier
Transfers with respect to an Actively Managed Entity so long as it remains an
Actively Managed Entity.
(c) Any transfer or pledge or Upper Tier Transfer or Upper
Tier Pledge pursuant to this Section 9.03 shall not result in any Interest
Alteration.
9.04 Right of First Refusal
(a) From and after the date which is 180 days from the date
of this Agreement, (i) if TIAA LLC desires to transfer its Interest to a party
other than pursuant to Section 9.03 or (ii) if Reckson desires to transfer its
Interest other than pursuant to Section 9.03 to an Approved Entity, and in
either such case the Member which so desires to Transfer (the "Transferring
Member") shall obtain a bona fide third party offer to purchase the Interest
of the Transferring Member (the "Applicable Interest"), then the following
provisions shall apply:
(i) The Transferring Member shall give to the other
Member (the "Non-Transferring Member") a written notice (the "First Refusal
Notice") setting forth:
(A) the name, address and any other information
reasonably necessary to identify the proposed transferee; and
(B) the material business terms and conditions of
the proposed transfer including the price (the "Offering Price") at
which the Transferring Member proposes to transfer the Applicable
Interest. Such material business terms and conditions shall in all
events provide (i) that the Applicable Interest constitutes the
entire Interest of the Transferring Member in the LLC, and any
outstanding Default Loans held by the Transferring Member (but no
other assets), and (ii) the Offering Price will be payable entirely
in cash, in immediately available funds.
(ii) Within 45 days following the delivery of the
First Refusal Notice (the "Binding Commitment Period"), the Non-Transferring
Member may, by notice in writing to the Transferring Member (the "Binding
Commitment Notice") elect to make a binding commitment to purchase (at the
Offering Price specified in the First Refusal Notice or on any other terms
agreed to by the parties) the Applicable Interest.
(iii) Simultaneously with delivery of the Binding
Commitment Notice on or before the end of the Binding Commitment Period, the
Non-Transferring Member shall deliver to the New York office of one of the
five largest national title insurance companies in the United States which
shall be designated by the Transferring Member in the First Refusal Notice
(the "Escrow Agent"), a non-refundable amount (the "Deposit") equal to 10% of
the Offering Price which shall be held in escrow pursuant to an escrow
agreement in a form reasonably agreeable to the parties, and the
Non-Transferring Member shall be obligated to purchase the Applicable Interest
on the date (x) selected by the Non-Transferring Member on not less than 20
days written notice to the Transferring Member and (y) not more than 180 days
following the end of the Binding Commitment Period. The Binding Commitment
Notice shall be void ab initio if the Non-Transferring Member fails to deliver
the Deposit simultaneously with the delivery of the Binding Commitment Notice.
The date upon which the closing of the purchase of the Applicable Interest
shall occur shall be called the "ROFR Closing Date".
(b) On the ROFR Closing Date:
(i) the Transferring Member shall deliver to the
Non-Transferring Member a duly executed and acknowledged instrument of
assignment conveying the Applicable Interest to the Non-Transferring Member or
its designee(s) free and clear of all liens and encumbrances, except for such
liens and encumbrances as set forth in the First Refusal Notice which
assignment shall contain a surviving representation and warranty as to the
ownership of such Interest and the absence of such liens and encumbrances;
(ii) the Transferring Member shall (A) unless
otherwise provided in the First Refusal Notice, pay all transfer, stamp or
similar taxes due in connection with the conveyance of the Applicable Interest
and (B) pay any amounts due to the Non-Transferring Member or the LLC under
this Agreement;
(iii) the Non-Transferring Member shall pay the
Offering Price (as adjusted by the credits and apportionments herein set
forth) by wire transfer in immediately available funds;
(iv) if pursuant to the terms of the First Refusal
Notice, the proposed transferee was obligated to indemnify, assume or cause to
be released or satisfied any debts, obligations or claims against the LLC or
any Property Owner for which the Transferring Member or its Affiliate is or
may be personally liable (collectively, "Recourse Coverage"), the
Non-Transferring Member shall be obligated to provide the same Recourse
Coverage, and if pursuant to the First Refusal Notice the proposed transferee
would provide the Recourse Coverage by a creditworthy entity (i.e., an entity
having assets other than its interest in the LLC) the Non-Transferring Member
shall provide (or guaranty) such Recourse Coverage by an entity which has
assets other than in its interest in the LLC, and which, considering the
obligations involved, has creditworthiness which is either as creditworthy as
the entity to have been provided pursuant to the First Refusal Notice or, if
not, is, considering the obligations involved, reasonably satisfactory to the
Transferring Member;
(v) the LLC shall close its books as of the ROFR
Closing Date;
(vi) Net Ordinary Cash Flow and Net Extraordinary Cash
Flow to the ROFR Closing Date shall be distributed in accordance with the
provisions of Article VI unless the First Refusal Notice provides for no
apportionment or apportionment on a different basis in which event in lieu of
such distribution, apportionment shall be made in accordance with the First
Refusal Notice;
(vii) the Offering Price shall (A) except to the
extent otherwise provided in the First Refusal Notice, be increased by the
aggregate amount of all additional Capital Contributions made by the
Transferring Member on account of the Applicable Interest in the period
between the date of the First Refusal Notice and the ROFR Closing Date and (B)
be decreased by any Net Extraordinary Cash Flow distributed to the
Transferring Member on account of the Applicable Interest during such period,
except to the extent the First Refusal Notice provides that Net Extraordinary
Cash Flow (specified as to source and amount) would be retained by the
Transferring Member without reduction in the Offering Price, in which event no
such decrease shall be made on account of the specified Net Extraordinary Cash
Flow so distributed;
(viii) the Members shall execute all amendments to
fictitious name, membership or similar certificates necessary to reflect the
withdrawal of the Transferring Member from the LLC (if applicable), the
admission of any new Member to the LLC (if applicable), the termination of the
LLC, or as may otherwise be required by law or as is contemplated by Section
2.02; and
(ix) each Member shall be reasonable and shall
cooperate with the other Member and the transferee in consummating the
transaction contemplated by this Section 9.04(b), including, without
limitation, by executing such documents as may reasonably be required in
connection therewith.
(c) If the Non-Transferring Member fails timely to deliver a
Binding Commitment Notice to the Transferring Member, the Transferring Member
shall have the right, subject to this Section 9.04(c), to sell the Applicable
Interest to the proposed transferee specified in the First Refusal Notice,
provided that (i) the gross purchase price (without deduction for any
brokerage or similar fees payable in connection with such sale or any
apportionment in the nature of those described in Section 5.01(b)) is at a
price not less than 97.5% of the Offering Price, (ii) the other terms and
conditions of the sale, when taken as a whole, are not less favorable to the
Transferring Member than the terms and conditions set forth in the First
Refusal Notice, (iii) the closing of such sale shall occur not later than 150
days after expiration of the Binding Commitment Period, except as otherwise
provided in this Agreement and upon such Closing the proposed transferee shall
succeed to all the rights, obligations and responsibilities of the
Transferring Member without any Interest Alteration. The Non-Transferring
Member shall within 10 Business Days after request therefor from the
Transferring Member, execute and deliver such documentation as the
Transferring Member shall reasonably request evidencing the Non-Transferring
Member's declining (or deemed declining) of the right to purchase the
Applicable Interest, but the failure to do so shall in no way affect the
Transferring Member's right to sell the Applicable Interest as described
herein.
(d) If the Transferring Member does not close a sale of the
Applicable Interest which satisfies the requirements of Section 9.04(c) above
within the 150-day period described in Section 9.04(c), then the Transferring
Member may not sell the Applicable Interest without again giving notice to the
Non-Transferring Member pursuant to Section 9.04(a) above.
(e) If the Transferring Member or the Non-Transferring
Member shall fail to close the sale of an Applicable Interest contemplated by
this Section 9.04 after the Binding Commitment Notice has been given, then,
unless such failure would have been excused under the terms set forth in the
First Refusal Notice, the non-failing Member may, as its sole remedies (i)
seek specific performance of the failing Member's obligations or (ii) if the
failing Member shall be the Non-Transferring Member, the Transferring Member
may (x) retain the Deposit as liquidated damages; and (y) if such failure was
not due to a prohibition under applicable law which first arose after the
delivery of the Binding Commitment Notice, thereafter sell its Interest (one
time only) to any entity, whether or not an Approved Entity, without invoking
the right of first refusal described in this Section 9.04 and such buyer shall
succeed to all of the rights, obligations and responsibilities of the
Transferring Member under this Agreement without any Interest Alteration.
(f) No First Refusal Notice may be given with respect to a
transfer of any direct or indirect owner of an Interest as opposed to the
Interest itself. If a Member wishes to effectuate an Upper Tier Transfer not
permitted under Section 9.03 it must comply with the provisions of this
Section 9.04 with respect to its Interest (but not with respect to an upper
tier interest).
9.05 Buy-Sell of Properties
(a) Either Member may at any time tender to the other Member
a written offer (a "Property Offer Notice") in which the offering member (the
"Property Offering Member") requests that the LLC direct the sale of one or
more specified Properties owned by the Property Owners at the time of the
Property Offer Notice (each such Property, a "Sale Property" and collectively,
the "Sale Properties") to (i) the non-offering Member (the "Property Receiving
Member") or (ii) the Property Offering Member; provided, however that such
Property Offer Notice may only be given at any time after (x) the third (3rd)
anniversary of the date hereof with respect to 400 Garden City Plaza, 90
Merrick and 120 White Plains; (y) the fourth (4th) anniversary of the date
hereof with respect to 275 Broadhollow and Stamford Towers; and (z) the fifth
(5th) anniversary of the date hereof with respect to 51 JFK and 1305 Walt
Whitman (the time restrictions set forth in the foregoing clauses (x), (y) and
(z) shall be referred to collectively as the "Buy-Sell Lockouts" and
individually as a "Buy-Sell Lockout"). Notwithstanding the foregoing Buy-Sell
Lockouts, a Property Offer Notice may be sent at any time, but only with
respect to a sale of all of the Properties after the occurrence of an OM
Termination Event or as otherwise expressly stated in this Agreement.
(b) The Property Offer Notice shall stipulate a distinct and
separate value, in dollars, for each Sale Property, free and clear of all LLC
liabilities secured by or otherwise relating to such Sale Property (the "Sale
Price").
(c) Within a period (the "Property Commitment Period") of 45
days after receipt of the Property Offer Notice, the Property Receiving Member
shall deliver to the Property Offering Member, a notice (the "Binding Property
Notice") stating the Property Receiving Member's binding commitment (stated
separately with respect to each Sale Property) to either (i) direct the
applicable Property Owner(s) to sell the Sale Property to the Property
Offering Member for the Sale Price, or (ii) purchase such Sale Property for
the Sale Price. If the Property Offer Notice shall cover more than one Sale
Property, the Property Receiving Member shall have the right, in the Binding
Property Notice, to elect to purchase one or more of the Sale Properties
covered by the Property Offer Notice and direct a Property Owner to sell to a
Property Offering Member the Sale Property(ies) not elected to be purchased by
the Property Receiving Member. Within 10 days after receipt of the Binding
Property Notice, each Property Purchasing Party (as defined below) shall
deliver to the Escrow Agent a deposit in an amount equal to 10% of the Sale
Price for each Sale Property to be purchased by such Property Purchasing
Party, which amount shall be non-refundable (except in the event of the
selling Property Owner(s)' failure to convey title under this Section 9.05, in
which case such deposit shall be returned to the purchasing Member) and shall
be held in escrow pursuant to an escrow agreement reasonably agreeable to the
parties. The closing of the purchase of each Sale Property shall occur on a
date (xx) selected by the Property Purchasing Party for such Sale Property on
not less than 20 days prior written notice to the Property Selling Party (as
defined below) and (yy) no more than 120 days following the delivery of the
Binding Property Notice. If the Property Receiving Member fails to deliver a
Binding Property Notice on or before the close of the Property Commitment
Period, the Property Receiving Member shall be deemed to have elected to
direct the applicable Property Owner(s) to sell each Sale Property to the
Property Offering Member or its designee(s).
(d) For purposes of the remainder of this Section 9.05, (A)
the Member who shall purchase (or whose designee(s) shall purchase) a Sale
Property shall be called the "Property Purchasing Party", (B) the other Member
shall be called the "Property Selling Party" and (C) the date upon which the
Property Purchasing Party is obligated to close on the purchase of a Sale
Property shall be called the "Sale Closing Date".
On the Sale Closing Date:
(i) the Property Purchasing Party shall take title to
each Sale Property in its "as is" physical condition;
(ii) the Property Purchasing Party shall deliver to
the selling Property Owner the Sale Price (less the deposit) set forth in the
Property Offer Notice by wire transfer in immediately available funds and the
deposit, together with all interest accrued thereon, shall be transferred from
the Escrow Agent to the selling Property Owner (which aggregate amount shall
be distributed to the Members in accordance with Section 6.05(c) of this
Agreement);
(iii) the Property Selling Party shall cause the
selling Property Owner to pay all transfer, stamp or similar taxes due in
connection with the conveyance of each Sale Property;
(iv) the Property Selling Party shall cause the
selling Property Owner to deliver to the Property Purchasing Party or its
designee a duly executed and acknowledged bargain and sale deed without
covenants or the equivalent form of deed for the particular state in which the
Sale Property is located, or assignment instrument with respect to 90 Merrick
conveying the applicable Sale Property to the Property Purchasing Party or its
designee(s), subject to all liens, encumbrances and other matters affecting
title thereto (other than LLC liabilities secured by, or otherwise relating
to, the applicable Sale Property) which conveyance shall be without any
representation, warranty or recourse against the selling Property Owner or the
LLC;
(v) all items of revenue and expense of the applicable
Property Owner which are customarily apportioned in the sale of properties
comparable to such Sale Property shall be apportioned between the selling
Property Owner and the Property Purchasing Party for the current calendar
period as of 11:59 p.m. on the day preceding the Sale Closing Date in
accordance with the customs and practices usual in transactions involving
properties comparable to the Sale Properties; and
(vi) the selling Property Owner and the Property
Purchasing Party shall deliver such additional instruments (without
representation or warranty by the Property Selling Party) which are
customarily delivered by buyers or sellers of properties comparable to the
Properties.
(e) If the selling Property Owner or the Property Purchasing
Party shall fail to close the sale of any Sale Property contemplated by this
Section 9.05 on or before the Sale Closing Date, then the non-failing party
may (i) require the failing party to specifically perform its obligation, (ii)
if the failing party is the Property Purchasing Party, the Property Selling
Party shall direct the selling Property Owner to retain the deposit as
liquidated damages or (iii) if the failing party is the Operating Member, the
provisions of Section 7.02(c) shall apply.
(f) If any Property Owner has entered into a contract to
sell a Property in accordance with the terms hereof, no Member shall have the
right to designate such Property as a Sale Property unless and until such
contract terminates without a closing occurring thereunder.
9.06 Special Transfer Provisions Applicable to Reckson
(a) Change in Control of Reckson Associates. The following
shall apply with respect to a Change in Control of a Reckson Party:
(i) Approved Entity/Actively Managed Entity Transfer.
If, after giving effect to a Change in Control of a Reckson Party, such
Reckson Party is an Approved Entity or an Actively Managed Entity, then such
Change in Control may be consummated without any rights on the part of TIAA
LLC and without any Interest Alteration.
An "Actively Managed Entity" shall mean an entity in
which the Senior Management of Reckson Associates remains actively involved in
the management of the LLC and the Properties, including without limitation,
development of the Business Plan, and does not merely act as a fee manager.
An "Approved Entity" is each entity listed on Schedule
4 attached hereto and a Majority-Owned Affiliate thereof (the "Approved Entity
List"), as the same may be modified in accordance with the following:
At any time and from time to time Reckson may propose
additional entities to add to the Approved Entity List (each, a "Proposed
Addition") by giving written notice of such Proposed Addition to TIAA LLC.
TIAA LLC shall have 10 Business Days from receipt of notice of a Proposed
Addition to approve or reject the Proposed Addition, and TIAA LLC's failure to
reject a Proposed Addition within such 10 Business-Day period shall be deemed
an approval of such Proposed Addition. TIAA LLC may reject a Proposed Addition
only if (x) TIAA LLC acting reasonably and in good faith can cite to specific
events, instances, financial circumstances or reputational information that
would deter a prudent investor from becoming a party to this Agreement with
the Proposed Addition or determines that such Proposed Addition would create a
Material Business Conflict, or (y) TIAA LLC or any of its Majority-Owned
Affiliates acting reasonably and in good faith rejects such Proposed Addition
because it is then actively involved (i.e., a plaintiff or a defendant) in or
has previously been actively involved in a material lawsuit with the Proposed
Addition. TIAA LLC acting reasonably and in good faith may, upon written
notice to Reckson, require the removal of any entity on the Approved Entity
List if and only to the extent that TIAA LLC (1) possesses evidence that the
financial condition of such Approved Entity has materially adversely changed
since the date such entity was placed on the Approved Entity List due to a
specific event or series of events or (2) in good faith can cite to specific
events, instances, financial circumstances or reputational information
demonstrating that there has occurred a material adverse change with respect
to such entity which would deter a prudent investor from becoming a party to
this Agreement with such Approved Entity or (3) TIAA LLC or any of its
Majority-Owned Affiliates is then actively involved in a material lawsuit with
such entity. Notwithstanding the foregoing, in no event may TIAA LLC require
the removal of any entity from the Approved Entity List after it has been
notified by Reckson that the Reckson Party has either entered into an
agreement with such entity which might result in a Change in Control of such
Reckson Party or is having substantive discussions with such entity which may
lead to such agreement. Any dispute between the Members regarding the addition
or removal of an entity from or to the Approved Entity List shall be resolved
by arbitration in accordance with Section 13.30.
(ii) Non-Approved Entity Change in Control.
(A) If a Change in Control of a Reckson Party is proposed (a
"Proposed Non-Approved Entity Change in Control") which, after giving effect
to such Change in Control, would result in the applicable Reckson Party (or
the successor entity owning the Interest or the interests in Reckson) being
neither an Approved Entity nor an Actively Managed Entity (each a
"Non-Approved Entity") and such Change in Control is not an Involuntary Change
In Control (as defined below), Reckson shall notify TIAA LLC of the proposed
Change in Control and the identity of the proposed transferee (the "Change in
Control Notice"). A Change in Control Notice shall state that such notice is a
request for TIAA LLC's approval that (I) such Proposed Non-Approved Entity
Change in Control does not create a TIAA LLC Conflict and (II) if no TIAA LLC
Conflict is triggered, such proposed Non-Approved Entity may be added to the
Approved Entity List. Not more than 21 days from receipt of such Change in
Control Notice, TIAA LLC shall advise Reckson by written notice (the "Conflict
Notice") if the Proposed Non-Approved Entity Change in Control creates a TIAA
LLC Conflict (as defined below), in which case the provisions of this
9.06(a)(ii)(A) shall apply, or, if TIAA LLC reasonably determines that the
Proposed Non-Approved Entity does not create a TIAA LLC Conflict, but
nevertheless believes that such entity should not be added to the Approved
Entity List (a "TIAA Determined Non-Approved Entity"), the provisions of
Section 9.06(a)(ii)(B) shall apply. If TIAA LLC does not send the Conflict
Notice within 21 days following receipt of the Change in Control Notice, the
Proposed Non-Approved Entity Change in Control shall, subject to the other
terms and conditions hereof, be deemed approved by TIAA LLC with the same
force and effect as if the other party thereto were an Approved Entity and
TIAA LLC shall be deemed to have waived its Put Sale rights. A "TIAA LLC
Conflict" shall mean a Material Business Conflict or an ERISA Problem. An
"ERISA Problem" shall occur if the applicable Change in Control would, in the
opinion of outside counsel to TIAA LLC (which outside counsel shall be
Debevoise & Plimpton (or another firm reasonably acceptable to Reckson)), (i)
cause the LLC to be deemed to hold "plan assets" within the meaning of ERISA
or (ii) be reasonably likely to result in TIAA LLC (or Teachers) becoming
party to a "prohibited transaction" under ERISA; provided, that no ERISA
Problem shall exist for so long as the LLC is qualified as a Real Estate
Operating Company ("REOC") and if because of such qualification (or otherwise)
the LLC is entitled to the same legal protection in all material respects as
it is entitled under current law. The Members agree to use commercially
reasonable efforts to cause the LLC to be and remain qualified as a REOC so
long as the requirements therefor remain substantially the same as they are on
the date of this Agreement.
If TIAA LLC furnishes to Reckson a Conflict Notice stating
that the Proposed Non-Approved Entity Change in Control creates a TIAA LLC
Conflict, and Reckson does not dispute such determination as provided below,
Reckson shall have 10 Business Days from receipt of such Conflict Notice to
elect (without prejudice to its rights under Section 9.06(a)(ii)(B) below) by
notice to TIAA LLC to (1) abandon the Proposed Non-Approved Entity Change of
Control, in which event there shall be no Interest Alteration or (2) proceed
with the Proposed Non-Approved Entity Change in Control, in which event TIAA
LLC may elect, by notice to Reckson (the "Put Election Notice") within 10
Business Days from receipt of the Reckson Election Notice, to sell its
Interest in the LLC to Reckson or its designee (the "Put Sale") at a price
(the "Put Sale Price") which is the greater of (x) the "Adjusted Portfolio
Valuation" (which shall mean an amount calculated by multiplying TIAA LLC's
then current Percentage Interest by the aggregate of the Allocated Values of
the Properties then owned by the Property Owners and subtracting any Net
Extraordinary Cash Flow distributed to TIAA LLC with respect to such
Properties as of such date) and (y) TIAA LLC's then Percentage Interest in the
appraised fair market value of the Properties as determined below (the
"Properties Appraised Market Value").
If Reckson shall dispute TIAA's determination that the
proposed entity created a TIAA LLC Conflict, such dispute shall be resolved by
arbitration in accordance with Section 13.30.
If a Change in Control of a Reckson Party with a
Non-Approved Entity shall have occurred which did not result from a merger,
sale of assets or other transaction entered into voluntarily by the Reckson
Party (an "Involuntary Change in Control"), promptly following Reckson's
receipt of notification that such Involuntary Change in Control occurred,
Reckson shall furnish to TIAA LLC a Change in Control Notice and the
provisions set forth above in this paragraph (A) shall apply.
The Properties Appraised Market Value shall be determined in
accordance with Section 13.30 of this Agreement, except that the arbitration
procedure shall be modified as follows: within 30 days following receipt of
the Put Election Notice, each of Reckson and TIAA LLC shall prepare a
calculation of the Properties Appraised Market Value and submit such
calculation to the arbitrator, who, solely for purposes of this Section
9.06(a)(ii), shall be an MAI-designated appraiser having at least 10 years
experience in appraising Class A Office buildings in the New York Metropolitan
area (the "Appraiser"). TIAA LLC and Reckson shall appoint the Appraiser
within 30 days of receipt of the Put Election Notice (or, if TIAA LLC and
Reckson are unable to agree upon an Appraiser within said 30-day period), then
the selection of the Appraiser shall be governed by the selection process set
forth in Section 13.30. Each of Reckson and TIAA LLC shall submit to the
Appraiser its calculation of the Properties Appraised Market Value. Within 20
days after receipt of such submissions, the Appraiser shall make a
determination of the Properties Appraised Market Value, which determination
shall be limited to selecting as the Properties Appraised Market Value either
Reckson's or TIAA LLC's calculation.
The Put Sale shall close on or prior to the date (the "Put
Closing Date") that is (x) 30 days following TIAA LLC's delivery of the Put
Election Notice, with respect to an Involuntary Change In Control and (y) in
all other cases, simultaneously with the closing of the Proposed Non-Approved
Entity Change in Control (or on such date as otherwise agreed to in writing by
the parties). On the Put Closing Date:
(I) TIAA LLC shall deliver to Reckson (or its
designee) a duly executed and acknowledged instrument of assignment conveying
its Interest to Reckson or its designee(s) free and clear of all liens and
encumbrances, which assignment shall contain a surviving representation and
warranty as to ownership of such interest and the absence of such liens and
encumbrances;
(II) TIAA LLC shall (A) unless otherwise agreed to by
the parties, pay any transfer, stamp or similar taxes due in connection with
the conveyance of its Interest, to the extent attributable to any portion of
the Put Sale Price which is in excess of the Adjusted Portfolio Valuation and
(B) pay any amounts due to Reckson or the LLC under this Agreement;
(III) Reckson (or its designee) shall (A) unless
otherwise agreed to by the parties pay any transfer, stamp or similar taxes
due in connection with the transfer of TIAA LLC's Interest to the extent
attributable to any portion of the Put Sale Price which is equal to the
Adjusted Portfolio Valuation and (B) pay the Put Sale Price (as adjusted by
the credits and apportionments herein set forth) by wire transfer in
immediately available funds;
(IV) Net Ordinary Cash Flow and Net Extraordinary Cash
Flow to the Put Closing Date shall be distributed in accordance with the
provisions of Article VI unless the parties agree to apportionment on a
different basis;
(V) the Put Sale Price shall (A) be increased by the
aggregate amount of all additional Capital Contributions made by TIAA LLC in
the period between the date of the Put Election Notice and the Put Closing
Date and (B) be decreased by any Net Extraordinary Cash Flow distributed to
TIAA LLC during the period; and
(VI) the Members shall execute all amendments to
fictitious name, membership or similar certificates necessary to reflect the
withdrawal of TIAA LLC from the LLC (if applicable), the admission of any new
Member to the LLC (if applicable), the termination of the LLC, or as may
otherwise be required by law or as is contemplated by Section 2.02.
If there is an Involuntary Change in Control and a dispute
arises as to the amount of the Put Sale Price, the Put Sale shall close in all
respects on the scheduled Put Closing Date except that the Put Sale Price
dispute shall be resolved by arbitration in accordance with Section 13.30. On
the scheduled Put Closing Date Reckson shall (I) pay to TIAA LLC the amount
(the "Reckson Amount") set forth in Reckson's calculation of Properties
Appraised Market Value (or, if applicable, the Adjusted Portfolio Valuation)
that was submitted to the Appraiser and (II) place in an escrow account an
amount (the "Disputed Amount") equal to the difference between TIAA LLC's
calculation of Properties Appraised Market Value (or, if applicable, the
Adjusted Portfolio Valuation) that was submitted to the Appraiser and the
Reckson Amount. At Reckson's election, Reckson may deliver to TIAA LLC a
letter of credit in the Disputed Amount. The escrow account shall be held by a
party mutually agreeable to the parties and the distribution of the Disputed
Amount shall be governed by an escrow agreement mutually agreeable to the
parties acting reasonably. The Disputed Amount (if the same shall not be in
the form of a letter of credit) shall be placed in an interest bearing
account. Upon the arbitrator's final determination of the Put Sale Price, the
Disputed Amount (plus all accrued interest (if applicable)) shall be delivered
to the party whose calculation was selected by the arbitrator.
(B) If a Proposed Non-Approved Entity Change in Control does
not (or is deemed not to) cause a TIAA LLC Conflict, but TIAA LLC notifies
Reckson in the Conflict Notice that the proposed entity is a TIAA-Determined
Non-Approved Entity, then, Reckson shall have 10 Business Days from receipt of
any such notice (but without prejudice to its rights below) to elect by
written notice to TIAA LLC to (I) if the Change in Control is not an
Involuntary Change in Control, abandon the proposed Non-Approved Entity Change
of Control, in which event there will be no Interest Alteration or (II)
proceed with the Proposed Non-Approved Entity Change of Control in which case
(and in the case of an Involuntary Change of Control to an entity which is a
Non-Approved Entity), following the consummation of the Change in Control, the
provisions of Section 7.02(c) shall apply and, subject to the further
provisions of this Section 9.06(a)(ii)(B), the Buy-Sell Rights set forth in
Section 9.05 may be exercised (x) despite any Buy-Sell Lockouts and (y) only
with respect to all of the Properties (such modified Buy-Sell Rights shall be
referred to as the "Modified Buy-Sell Rights").
If Reckson shall dispute TIAA LLC's determination of a
proposed entity as a TIAA-Determined Non-Approved Entity, such dispute shall
be resolved by arbitration in accordance with the terms of Section 13.30. If
the arbitrator finds that TIAA LLC properly determined that such entity was a
Non-Approved Entity, then, following such arbitrator's determination, either
party may exercise the Modified Buy-Sell Rights and if the Modified Buy-Sell
Rights are exercised by either party within 120 days following the
arbitrator's determination and if TIAA LLC shall be the party purchasing any
Sale Properties under Section 9.05, TIAA LLC shall pay, subject to the last
sentence of this paragraph, an amount equal to 97% of the amount that would
otherwise be payable by TIAA LLC under Section 9.05(c) and if Reckson shall be
the party purchasing any Sale Properties under Section 9.05 Reckson shall pay,
subject to the last sentence of this paragraph, 103% of the amount that would
otherwise be payable by Reckson under Section 9.05(c). If, however, the
arbitrator determines that TIAA LLC improperly determined that the proposed
entity was a Non-Approved Entity, then TIAA LLC may, for a period ending on
the date that is 120 days following the closing of the applicable Proposed
Non-Approved Entity Change of Control, exercise the Modified Buy-Sell Rights
and (x) if TIAA LLC shall be the party purchasing any Sale Properties, TIAA
LLC shall pay, subject to the last sentence of this paragraph, an amount equal
to 103% of the amount that would otherwise be payable by TIAA LLC under
Section 9.05(c) and (y) if Reckson shall be the party purchasing any Sale
Properties, Reckson shall pay, subject to the last sentence of this paragraph,
an amount equal to 97% of the amount that Reckson would otherwise have paid
under Section 9.05(c). Solely for the purposes of calculating any premium or
discount contemplated by this paragraph, the amount payable by Reckson or TIAA
LLC shall be calculated by (a) subtracting from the amount payable by the
Property Purchasing Party under Section 9.05, the amount that would be
distributed by the LLC under Section 6.05(c) in connection with such
transaction to the Member which is (or which designated) the Property
Purchasing Member and (b) then applying the discount or premium to such
remaining amount.
Notwithstanding anything to the contrary contained
herein (and regardless of any notices or elections made by the Members) if
Reckson shall notify TIAA LLC that a proposed Change in Control with respect
to a Reckson Party has been withdrawn, abandoned or terminated prior to the
consummation thereof, then (i) any Put Election Notice given by TIAA LLC or
any Modified Buy-Sell Rights invoked by either Member shall be deemed void,
(ii) there shall be no Interest Alteration and (iii) the rights and the
obligations of the parties shall be returned as if there had been no such
proposed Change in Control.
(b) Other Transfers by Reckson.
(i) If Reckson proposes to transfer its Interest to a
Non-Approved Entity other than in connection with a Change in Control with
respect to a Reckson Party (a "Proposed Non-Approved Entity Transfer"),
Reckson shall give written notice to TIAA LLC identifying the proposed
transferee (the "Transfer Notice") which shall be deemed to be a request to
add the proposed transferee to the Approved Entity List. TIAA LLC shall advise
Reckson by written notice within 21 days after receipt of the Transfer Notice
(the "Conflict Notice") if the Proposed Non-Approved Entity Transfer creates a
TIAA LLC Conflict and whether such entity will be added to the Approved Entity
List. If TIAA LLC does not send the Conflict Notice within such 21-day period,
the Proposed Non-Approved Entity Transfer shall be deemed approved by TIAA
LLC. If the Conflict Notice is timely delivered and properly identifies a TIAA
LLC Conflict, then Reckson shall have 10 Business Days from receipt of the
Conflict Notice to elect by notice to TIAA LLC to (A) proceed with the
Proposed Non-Approved Entity Transfer, in which event either party shall be
entitled to invoke the Modified Buy-Sell Rights so long as the Sale Closing
Date occurs on or prior to the closing of the Proposed Non-Approved Entity
Transfer or (B) abandon the Proposed Non-Approved Entity Transfer, in which
event there shall be no Interest Alteration. If the Conflict Notice is timely
delivered and provides that such entity will not be added to the Approved
Entity List, the provisions of Section 9.06(b)(ii) shall apply. Any dispute as
to whether a TIAA LLC Conflict occurred under this Section 9.06(b)(i) or
whether TIAA LLC properly refused to add the proposed transferee to the
Approved Entity List shall be resolved by arbitration in accordance with
Section 13.30.
(ii) If Reckson proposes to transfer its Interest to a
Non-Approved Entity in a transfer other than a Change in Control with respect
to a Reckson Party which does not cause (or is deemed not to cause) a TIAA LLC
Conflict or which causes a TIAA LLC Conflict but was approved by TIAA LLC and
the transfer closes, then (A) the provisions of Section 7.02(c) shall apply
and (B) either party may, at any time thereafter, invoke the Modified Buy-Sell
Rights.
9.07 Conditions Applicable to All Transfers
(a) (i) Notwithstanding anything to the contrary contained
in this Agreement, any transfer, of any Interest by a Member or any Upper Tier
Transfer with respect to a Member shall be made in full compliance with (A)
all applicable statutes, laws, ordinances, rules and regulations of all
federal, state and local governmental bodies, agencies and subdivisions having
jurisdiction over the LLC or any Property Owners or the Properties and (B) the
mortgages, loan agreements, and other material agreements binding upon the LLC
and any affected Property Owner at the time of such transfer. In the event
that any filing, application, approval or consent is required in connection
with any such transfer, the "Responsible Member" (as hereinafter defined)
shall promptly make such filing or application or obtain such approval or
consent, at its sole expense, and shall reimburse the other Member for any
costs or expenses (including attorneys' fees) incurred by such Member in
connection with any filing, application, approval or consent.
(ii) The "Responsible Member" shall be transferring
Member. In the event the Responsible Member shall fail to comply with its
obligations as such, the other Member, upon 10 Business Days prior written
notice to the Responsible Member, may do so at the sole cost and expense of
the Responsible Member and adjourn the closing for such periods of time as are
necessary, and all amounts so incurred by the other Member, including
accounting, attorneys and other professional fees, shall be payable by the
Responsible Member upon demand.
(b) Notwithstanding anything to the contrary contained in
this Agreement, no transfer of the Interest of any Member shall be binding
upon the other Member unless (i) registration is not required under the
Securities Act of 1933, as amended, in respect of such transfer, (ii) such
transfer does not violate any applicable federal or state securities, real
estate syndication, or comparable laws, (iii) such transfer will not be
subject to, or such transfer, when aggregated with prior transfers in
accordance with applicable law, will not result in the imposition of, any
state, city or local transfer taxes to the LLC, the Property Owners or the
non-transferring Member (except to the extent it is specifically provided
herein that the non-transferring Member is obligated to pay all or a portion
of such taxes), unless the transferring Member agrees to pay such transfer tax
and to indemnify the non-transferring Member, (iv) the transfer does not
create any risk that the LLC will be treated as a publicly-traded partnership
within the meaning of Section 7704 of the Code and the Treasury Regulations
promulgated thereunder, (v) true copies of the instruments of transfer
executed and delivered pursuant to or in connection with such transfer shall
have been delivered to such other Member, (vi) in the case of a transfer of a
direct Interest the transferee shall have delivered to such other Member an
executed and acknowledged assumption agreement pursuant to which the
transferee assumes all the obligations of the transferor from and after the
date of such transfer under, and agrees to be bound by all the provisions of,
this Agreement (or, in the case where the transferee is an Affiliate of the
transferor, from and after the date of this Agreement), subject to the
limitations of liabilities set forth herein and (vii) the transferee shall
have executed, acknowledged and delivered any instruments required under the
LLC Act to effect such transfer and its admission to the LLC. The transferee
may also be required to make certain representations, warranties and covenants
to evidence compliance with U.S. federal and state securities laws, including,
but not limited to, representations as to its net worth, sophistication and
investment intent. Notwithstanding anything in this Agreement to the contrary,
in no event shall an Interest be transferred to a Person who is the subject of
any pending bankruptcy proceedings, or to a Person who is a minor or who
otherwise lacks legal capacity, and any attempt to effect a transfer to such a
Person shall be void and of no effect and shall not bind the LLC.
(c) At the election of the purchasing Member (or if
requested by any other Member remaining in the LLC), any change of ownership
of the Interest of any Member will, if practically and commercially feasible,
be structured to avoid a termination of the LLC for federal income tax
purposes so long as the selling Member is not obligated to increase its costs
and/or liability, unless the purchasing Member(s) provides a reasonably
acceptable indemnity to the selling Member.
(d) The transferring Member shall remain primarily liable
for all accrued obligations (as of the date of transfer) of the transferring
Member under this Agreement, notwithstanding any transfer pursuant to this
Article 9 or Article 10, unless the transferee agrees to assume in writing all
accrued obligations of the transferring member, in which event the
transferring Member shall have no further obligation after a transfer. In
connection with any transfer permitted under this Article 9 or under Article
10, each Member hereby consents to the withdrawal of the transferring Member
as a Member and the admission of the transferee as a Member with the rights of
the transferring Member hereunder.
(e) The LLC, each Member and any other Person or Persons
having business with the LLC, need deal only with Members who are admitted as
Members or as substituted Members of the LLC, and they shall not be required
to deal with any other Person by reason of transfer by a Member or by reason
of the death of a Member, except as otherwise provided in this Agreement. In
the absence of the substitution (as provided herein) of a Member for a
transferring or a deceased Member, any payment to a Member or to a Member's
executors or administrators shall acquit the LLC and the Members of all
liability to any other Persons who may be interested in such payment by reason
of an assignment by, or the death of, such Member.
9.08 Admission of Transferee
Any person or entity who becomes a Member, accepts, ratifies
and agrees to be bound by all actions duly taken pursuant to the terms and
provisions of this Agreement by the LLC prior to the date of its membership in
the LLC and, without limiting the generality of the foregoing, specifically
ratifies and approves all agreements and other instruments as may have been
properly executed and delivered on behalf of the LLC or any Property Owner in
accordance with this Agreement prior to said date and which are in force and
effect on said date. Unless and until a transferee is admitted as a
substituted Member, the transferee shall be entitled only to allocations and
distributions with respect to such Interest in accordance with this Agreement,
and shall have no right to any information or accounting of the affairs of the
LLC, shall not be entitled to inspect the books or records of the LLC, and
shall not have no right to exercise any of the powers, rights, and privileges
of a Member hereunder.
9.09 Pledge of Interest
(a) Either Member (a "Member Debtor") may, provided same is
permitted under the terms of any then existing loan documents binding upon the
LLC or any Property Owner, Pledge all (but not part) of its Interest to an
Approved Pledgee to secure a debt or obligation of such Member Debtor or of an
Affiliate of such Member Debtor, to such Approved Pledgee, pursuant to an
agreement which is expressly subject to the provisions of this Section 9.09;
and such pledged Interest may be transferred by foreclosure, assignment in
lieu thereof or other enforcement of such a pledge; provided and upon the
condition that (i) the Person (the "Purchaser", who may be the Approved
Pledgee) who purchases or otherwise acquires the pledged Interest does so
subject to all of the terms and conditions of this Agreement as it may have
been modified or amended, (ii) the Purchaser, for its acquisition of a pledged
Interest to be effective, shall comply with the provisions of Section 9.07 and
9.08 but not 9.04 and (iii) in the case of Reckson's pledged Interest which is
being foreclosed upon, assigned in lieu thereof or otherwise transferred in
enforcement of such Pledge if the Purchaser is a Non-Approved Entity, then
TIAA LLC may upon foreclosure or transfer to the Purchaser (A) immediately
exercise the Modified Buy-Sell Rights and (B) the provisions of Section
7.02(c) shall apply. Subject to the immediately preceding sentence, the
Members hereby consent to any transfer resulting from the foreclosure of a
Pledge permitted under this Section 9.09, or an assignment in lieu thereof, or
other such enforcement of such a Pledge, the withdrawal of a Member Debtor if
its entire Interest was so transferred, and the admission of the Purchaser as
a substitute Member, as the case may be, with all of the rights of the Member
Debtor hereunder including, without limitation, its rights with respect to
management and distributions. No such pledge, foreclosure or other enforcement
shall require the Approved Pledgee or its Affiliate to assume the obligations
of a Member Debtor hereunder unless and until such Approved Pledgee or its
Affiliate acquires the pledged Interest of such Member Debtor.
(b) If an Approved Pledgee of a Member Debtor's Interest
shall have given the other Member a written notice specifying such Approved
Pledgee's name and address, then, whenever the other Member shall thereafter
give notice to such Member Debtor of a default by the Member Debtor under this
Agreement, the other Member shall also give such Approved Pledgee at such
address a copy of each notice given by the other Member to the Member Debtor
in the same manner and at the same time as any such notice is given to the
Member Debtor. No such notice by the other Member shall be deemed to have been
given to the Member Debtor unless and until a copy thereof shall have been so
given to the Approved Pledgee. The other Member will accept performance by any
such Approved Pledgee of any covenant or obligation on the Member Debtor's
part to be performed hereunder, with the same force and effect as though
performed by the Member Debtor and the Approved Pledgee shall be entitled to
the same notice and grace periods as the Member Debtor hereunder. In the event
that an OM Termination Event under Section 7.02(c) occurs and the Approved
Pledgee subsequently (whether before or after any foreclosure or
transfer-in-lieu of foreclosure to the Approved Pledgee) cures the applicable
OM Termination Event, such event shall no longer be deemed to be an OM
Termination Event and (x) if there has been no transfer of Reckson's Interest
by foreclosure (or transfer in lieu thereof) Reckson's rights as Operating
Member shall be restored as if no OM Termination Event shall have occurred and
(y) if such a transfer has occurred and the transferee is an Approved Entity,
such transferee shall be entitled to act as Operating Member as if no OM
Termination Event occurred. For purposes of the preceding sentence, an OM
Termination Event which by its nature is not curable by an Approved Pledgee
(i.e. those described in clauses (ii), (iii), (vii), (viii) and (xi) of
Section 7.02(c), and clause (xii) of such Section insofar as it relates to the
Bankruptcy of the Manager) shall be deemed cured if, after giving effect to a
foreclosure or transfer in lieu thereof, the OM Termination Event no longer
exists (for example, with respect to clause (viii) the Approved Pledgee is not
bankrupt or with respect to clause (vii) the transferee is permitted under the
terms of this Agreement to hold the Interest it acquired). The Members shall
not terminate, or modify in any material respect, this Agreement without the
prior written consent of each Approved Pledgee, except to the extent required
hereunder.
(c) The Member which is not the Member Debtor shall not
unreasonably withhold its consent to the execution by the LLC of such
instruments as are reasonably required by an Approved Pledgee in order to
ensure the perfection of its security interest in the Member Debtor's
Interest.
(d) "Approved Pledgee" means (i) an Approved Entity; (ii) an
Institutional Lender to whom assets other than the pledged Interest are being
Pledged; (iii) a proposed pledgee to whom the other Member does not reasonably
object within 10 Business Days after written notification from the Member
Debtor identifying the proposed pledgee; (iv) a pledgee to secure any existing
or future line of credit of the Reckson Companies or (v) a pledgee required in
connection with a Change in Control under Section 9.06(a). Notwithstanding the
foregoing, if, at the time Reckson intends to grant a pledge, the proposed
pledgee is a person who if it became the Member would cause a TIAA LLC
Conflict, then TIAA LLC may disapprove of the proposed pledgee.
ARTICLE X
SALE AND FINANCING OF PROPERTIES
10.01 Sale of Properties to Third Parties
(a) Either Member (the "Property Recommending Member") may,
at any time after the expiration of the relevant Buy-Sell Lockout (or prior
thereto, Reckson) tender to the other Member (the "Non-Approving Member") a
written offer (a "Third Party Offer Notice") in which the Property
Recommending Member recommends that the LLC direct the sale of one or more
specified Properties owned by the Property Owners at the time of the Third
Party Offer Notice (each such Property, a "Third Party Sale Property" and
collectively, the "Third Party Sale Properties") to a third party. The Third
Party Offer Notice shall (i) provide a gross sales price for each of the Third
Party Sale Properties, free and clear of all liabilities secured by or
otherwise relating to such Third Party Sale Properties (the "Third Party Sale
Price") and (ii) provide the LLC Accountants' calculation of the amount that
would be distributed to each Member under Article VI (after paying all LLC
liabilities secured by or otherwise relating to such Third Party Sale
Properties (as determined by the LLC Accountants) as provided in such Article
if the Third Party Sale Properties were sold for cash in an amount equal to
the value set forth in the Third Party Property Offer Notice. The
Non-Approving Member shall have 45 days from receipt of the Third Party
Property Offer Notice to deliver to the Property Recommending Member a notice
(the "Binding Third Party Property Notice") stating its binding commitment to
either (x) approve the proposed sale of the Third Property Sale Properties
subject to the further provisions of this Section 10.01 and direct the
applicable Property Owner(s) to market the Third Party Sale Properties, in
which event the Property Recommending Member shall market the Third Party Sale
Properties on behalf of the applicable Property Owner for a period of up to
180 days (the "Marketing Period") or (y) purchase the Third Party Sale
Properties by delivering to the Escrow Agent a deposit in an amount equal to
10% of the price set forth in the Third Party Property Offer Notice, which
amount shall be non-refundable (except in the event of the Property
Recommending Member's failure to deliver title, in which case such deposit
shall be returned to the Non-Approving Member) and shall be held in escrow
pursuant to an escrow agreement reasonably satisfactory to each of the Members
and the Property Recommending Member shall be obligated to close on the
purchase of the Third Party Sale Properties on a date (x) selected by the
Non-Approving Member on not less than 20 days written notice to the Property
Recommending Member and (y) no more than 120 days following the delivery of
the Binding Third Party Property Notice. In the event that a third party bona
fide purchaser who is unaffiliated with the Property Recommending Member
enters into a binding contract to buy the Third Party Sale Properties, which
contract shall (A) provide for a minimum deposit of not less than 5% of the
Third Party Sale Price to be paid simultaneously with the execution of such
contract, (B) contain no financing contingencies and (C) be on otherwise
commercially reasonable terms during the Marketing Period at a gross purchase
price (without any deduction for any brokerage commissions or similar fees
payable in connection with such sale and without adjustment for apportionments
(a "Valid Third Party Contract") then the Property Recommending Member shall
deliver to the Non-Approving Member the proposed contract (which shall be in a
form that the Property Recommending Member is willing to execute) and if (A)
the proposed contract is a Valid Third Party Contract and (B) the price set
forth in the proposed contract is not less that 97.5% of the Third Party Sale
Price, then the Non-Approving Party shall be deemed to have approved the Valid
Third Party Contract. If, however, the Valid Third Party Contract is less than
97.5% of the Third Party Sale Price stated in the Third Party Offer Notice and
the Property Recommending Member is willing to sell at such lesser price (the
"Lesser Price Offer") then upon written notice by the Property Recommending
Member to the Non-Approving Member, (xx) the Non-Approving Member shall have
the right to purchase the Third Party Sale Properties pursuant to the terms of
the applicable Valid Third Party Contract at the Lesser Price Offer as if such
notice were a Third Party Sale Notice, except that the time to deliver a
Binding Third Party Property Notice shall be reduced to a 15-day period or
(yy) if the Non-Approving Member does not timely elect to so purchase the
Third Party Sale Properties then the Property Recommending Member may cause
the applicable Property Owner to sell the Third Party Sale Properties to such
bona fide third party for the Lesser Price Offer with the closing of such sale
to occur within 180 days. Any dispute as to whether a proposed contract is a
Valid Third Party Contract shall be resolved by arbitration in accordance with
Section 13.30.
(b) For purposes of the remainder of this Section 10.01, (i)
the Member who shall purchase (or whose designee(s) shall purchase) the Third
Party Sale Properties shall be called the "Third Party Property Purchasing
Party", (ii) the Property Owner which sells the Third Party Sale Properties to
the Third Party Property Purchasing Party shall be called the "Selling
Property Owner" and (iii) the date upon which the Third Party Property
Purchasing Party is obligated to close on the purchase of the Third Party Sale
Properties shall be called the "Sale Closing Date".
On the Sale Closing Date:
(A) unless otherwise provided in the Valid Third Party
Contract (if applicable), the Third Party Property Purchasing Party shall take
title to each Sale Property in its "as is" physical condition;
(B) the Third Party Property Purchasing Party shall
deliver to the Selling Property Owner the purchase price (less the deposit)
set forth in the Valid Third Party Contract by wire transfer in immediately
available funds and the deposit, together with all interest accrued thereon,
shall be transferred from the Escrow Agent to the Selling Property Owner;
(C) unless otherwise provided in the Valid Third Party
Contract (if applicable), the Selling Property Owner shall pay the transfer,
stamp or similar taxes due in connection with the conveyance of each Third
Party Sale Property;
(D) each Selling Property Owner shall deliver to the
Third Party Property Purchasing Party or its designee a duly executed and
acknowledged bargain and sale deed without covenant (or equivalent form for
the particular state in which the Third Party Sale Property is located) or
assignment instrument with respect to 90 Merrick conveying the applicable
Third Party Sale Property to the Third Party Property Purchasing Party or its
designee(s), subject to all liens, encumbrances and other matters affecting
title thereto other than LLC liabilities secured by, or otherwise relating to,
the Third Party Sale Property, which conveyance shall be without any
representation, warranty or recourse against the Selling Property Owner or the
LLC unless otherwise provided in the Valid Third Party Contract (if
applicable);
(E) unless otherwise provided in the Valid Third Party
Contract (if applicable), all items of revenue and expense of the Selling
Property Owner which are customarily apportioned in the sale of properties
comparable to such Third Party Sale Property shall be apportioned between the
Selling Property Owner and the Third Party Property Purchasing Party for the
current calendar period as of 11:59 p.m. on the day preceding the Sale Closing
Date in accordance with the customs and practices usual in transactions
involving properties comparable to the Third Party Sale Properties; and
(F) the Selling Property Owner and the Third Party
Property Purchasing Party shall deliver such additional instruments (without
representation or warranty by the Property Owner) which are customarily
delivered by buyers or sellers of properties comparable to the Properties
being sold.
(c) If the Selling Property Owner or the Property Purchasing
Party shall fail to close the sale of any Third Party Sale Property
contemplated by this Section 10.01, after the end of the commitment period
provided in the relevant sale contract, then, unless such terms would have
been excused under the terms set forth in the Valid Third Party Contract (if
applicable) the non-failing party may, as its sole remedies (i) seek specific
performance of the failing party's obligations or (ii) if the failing party is
the Third Party Property Purchasing Party, the Selling Property Owner may
retain the deposit as liquidated damages. In addition, if the failing party is
the Third Party Property Purchasing Party and if such failure was not due to a
prohibition under applicable law first arising after the date the Property
Purchasing Party elected to purchase, the Property Recommending Member may
thereafter sell the Third Property Sale Properties to any unrelated third
party pursuant to a Valid Third Party Contract without the Third Party
Property Purchasing Party having any rights to purchase such Properties under
this Section 10.01 or otherwise consent thereto.
(d) If any Property Owner has entered into a contract to
sell a Property, neither Member shall have the right to designate such
Property as a Third Party Sale Property unless and until such contract
terminates without a closing occurring thereunder.
10.02 Relationship of Certain Rights
If a Member has initiated the procedures under Section 9.04,
9.05 or 10.01 with respect to any or all of the Properties, no Member shall
initiate any procedure under any such Section until the proceeding first
initiated shall have been fully exercised, exhausted or extinguished, except
that if a Member has initiated the procedures under Section 9.05 or 10.01 with
respect to less than all of the Properties either Member may initiate the
procedures under Section 9.05 or 10.01 with respect to other Properties,
subject to the restrictions set forth in this Agreement.
10.03 Financing/Refinancing by Reckson
(a) Subject to the provisions of Section 10.03(b) and
10.03(g), at any time and from time to time during the term of this Agreement,
Reckson may elect to effectuate one or more borrowings or refinance any
existing borrowing at then current market rates and terms (each such financing
transaction, a "Loan") that satisfies each of the following requirements (the
"Loan Guidelines"):
(i) after giving effect to any Loan, the weighted
average interest rate on all Loans secured by any one Property shall not
exceed 9% taking into account (A) any Loans (or portions thereof) which bear a
fixed rate and (B) any Loans (or portion thereof) which, although bearing a
floating rate are subject to a "cap", "collar" or other hedge which has the
effect of limiting the interest rate (assuming the maximum rate after giving
effect to such cap, collar or other hedge). Any Loan which shall bear interest
at a floating rate shall be subject to a cap, collar or other hedge which has
the effect of limiting the interest rate;
(ii) after giving effect to any Loan, the aggregate
loan to value ratio with respect to the Property affected by such Loan shall
not exceed 65% based on the lender's appraisal of the fair market value of the
Property securing the Loan, or if there is no such lender's appraisal, on the
appraised fair market value of the Property secured by the Loan on a date
which is not more than 180 days prior to the Loan Closing Date based on an
appraisal prepared by an appraiser retained by the Operating Member and
reasonably approved by the other Member setting forth the appraiser's opinion
of the fair market value of said Property valued free and clear of other
indebtedness of the LLC;
(iii) the Loan shall be nonrecourse to the LLC, the
Property Owners and the Members, except it may be recourse to (or guaranteed
by) the LLC and the Property Owners and Reckson or its Affiliates with respect
to environmental issues, fraud, misapplication of funds or other standard
carve-outs which are then customary for non-recourse mortgage loans and the
Loan may be recourse to (or guaranteed by) the Property Owner of the Property
securing the Loan;
(iv) no Loan may be secured by more than one Property
(i.e. cross-collateralization is not permitted);
(v) participation or contingent payments based on
revenues, sales, proceeds from the Loan, appreciation in value or other items
shall not be permitted;
(vi) the amortization schedule for the Loan shall be
no less than 20 years; and
(vii) the Loan shall not have a term of more than 10
years; and
(viii) the Loan shall either (x) be prepayable at any
time without premium or penalty (other than customary breakage costs for
floating rate loans) or (y) permit transfers by Reckson of its Interest to
TIAA LLC without penalty or default.
(b) If Reckson desires to cause one or more Property Owners
to effectuate a borrowing in accordance with Section 10.03(a), Reckson shall
first send a notice to TIAA LLC describing the proposed Loan, including the
identity of the Property to be secured by each such Loan and a summary of the
proposed terms and conditions of the financing, which terms and conditions
must comply with the Loan Guidelines (the "Proposed Loan Notice"). Within 10
Business Days following delivery of the Proposed Loan Notice, TIAA LLC acting
reasonably and in good faith may by written notice object to the proposed Loan
but only on the basis that the proposed Loan either does not meet the Loan
Guidelines or that the proposed Loan is inappropriate for the Property. A
proposed Loan shall be deemed "inappropriate for the Property" only if the
Loan would either create undue risk of default (e.g. because of the leasing
profile of the Property) or harm Property operations (e.g. leave insufficient
cash flow (taking into anticipated reserves) to meet reasonably projected
capital needs). For the avoidance of doubt, the parties confirm that a Loan
will not be deemed "inappropriate for the Property" because it contains
features (such as restrictions on sale and/or prepayment penalties) which
would make it more difficult to sell the Property or an interest in the
Property Owner during the term of the Loan or because TIAA LLC would prefer
different financial terms (e.g. floating vs. fixed rate or vice versa or a
longer or shorter terms). If TIAA LLC objects to a proposed Loan it shall set
forth it reasons therefor in reasonable detail in its objection notice. The
failure of TIAA LLC to timely object to a Proposed Loan Notice shall be deemed
a waiver of its right to do so. Reckson may respond to any such objection
notice by (i) modifying the terms of the proposed Loan to satisfy the
objections of TIAA LLC or (ii) submitting to arbitration in accordance with
Section 13.30 as to whether TIAA LLC has properly objected to the Proposed
Loan Notice or (iii) elect not to proceed with the Loan. If (x) TIAA LLC is
determined in two (or more) separate arbitration proceedings to have not
properly objected to a Proposed Loan Notice, TIAA LLC shall forfeit the right
to object to future Proposed Loan Notices based on the Loan being
"inappropriate for the Property" for a 24-month period from the second of such
arbitrator's decisions and for a 24-month period from any succeeding
arbitrator's decision and (y) if TIAA LLC is determined in two (or more)
separate arbitration proceedings to have properly objected to a Proposed Loan
Notice, Reckson shall be prohibited from effectuating a Loan without TIAA
LLC's approval for a 12-month period from such second arbitrator's decision
and for a 12-month period from any succeeding arbitrator's decision.
(c) If TIAA LLC does not object (or is deemed to waive its
right to object) to a proposed Loan, then within 10 Business Days following
delivery of the Proposed Loan Notice (the "ROFO Period"), TIAA LLC may cause
Teachers to send to Reckson a binding loan commitment (the "Binding Loan
Commitment") in which Teachers offers to make the Loan upon terms and
conditions which in every material respect are the same or more favorable to
the Borrower than those stated in the Proposed Loan Notice; provided, however,
Reckson may reject any such Binding Loan Commitment if in its reasonable
judgment the making of the Loan by Teachers (or the terms thereof) is
reasonably likely to create any negative tax consequences for Reckson. If
Reckson elects to cause the applicable Property Owner to accept the Binding
Loan Commitment, the closing of the Loan shall occur on the date specified in
the Binding Loan Commitment.
(1) If TIAA LLC fails timely to deliver a Binding Loan
Commitment to Reckson, Reckson shall have the right, subject to satisfaction
of the Loan Guidelines and provided TIAA LLC has not properly objected (or has
been deemed to have waived its objection) as provided in paragraph (b) above,
to cause the applicable Property Owner to effectuate the borrowing
substantially in accordance with the Proposed Loan Notice, provided that the
closing of the Loan occurs within 180 days after the date of the failure to
deliver the Binding Loan Commitment.
(2) If Reckson does not cause the applicable Property
Owner to close the Loan, which satisfies the requirements of subparagraph (1)
above within the 180-day period described therein, then Reckson may not cause
such Property Owner to effectuate a Loan without again giving a Proposed Loan
Notice to TIAA LLC pursuant to this paragraph (c).
(3) If Teachers executes a Binding Loan Commitment
which is accepted by Reckson on behalf of a Property Owner and Teachers
thereafter wrongfully fails to close on the Loan contemplated thereby, TIAA
LLC shall thereafter have no further right to deliver a Binding Loan
Commitment to Reckson with respect to any proposed Loan. The foregoing shall
be in addition to any other rights and remedies available to Reckson, the LLC
or the applicable Property Owner with respect to such failure.
(d) If Reckson or any Affiliate elects to give an
environmental indemnity or guaranty recourse carve-outs to a lender in
connection with a Loan, the LLC and the Property Owners, subject to Section
13.05, shall indemnify, defend and hold harmless Reckson from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, proceedings, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, all costs and expenses of defense,
appeal, and settlement of any and all suits, actions, or proceedings
threatened or instituted against the indemnified party and all costs of
investigations in connection therewith) which may be imposed on, incurred by,
or asserted against Reckson in any way relating to or arising out of such
indemnity or guaranty of recourse carve-outs.
(e) If in connection with this Section 10.03, Reckson or any
Affiliate (other than the LLC or any Property Owner) would or could
potentially become personally liable to a lender for any sum on account of the
LLC opposing in any manner whatsoever the foreclosure of a mortgage given by
any Property Owner to such lender or any other enforcement proceeding under
such mortgage or any other instrument entered into in connection therewith,
Reckson may cause the relevant Property Owner to elect not to oppose a
foreclosure or other enforcement proceeding by such lender.
(f) In connection with any Loan, (i) Reckson may execute and
deliver on behalf of the LLC and the Property Owners notes, mortgages,
security agreements, pledges of equity interest in the Property Owners,
assignment of rents and leases, environmental indemnities, non-recourse
carve-out guarantees and other customary loan documents, (ii) Reckson or its
Affiliate may (x) give any guaranty contemplated by 10.03(a)(iii) and (y)
guaranty any Loan if there is a default under such Loan or Reckson reasonably
believes a default is likely; provided that the LLC and the Property Owners
(other than the borrowing Property Owner) shall not indemnify Reckson with
respect to any such guaranty under this sub-clause (y) but the borrowing
Property Owner shall so indemnify Reckson, and TIAA LLC shall have the right,
but not the obligation, to issue a similar guaranty, and (iii) Reckson may
cause the LLC or any Property Owner to enter into any "bankruptcy remote"
covenants required by the lender under the Loan, including, without
limitation, requiring the Property Owner to comply with "single purpose
entity" covenants and the admission of unaffiliated third parties as
"independent managers" or "independent members" (with a nominal or
non-economic interest) with approval rights over bankruptcy filings and
certain other matters as is customarily required to comply with bankruptcy
remote requirements.
(g) If an OM Termination Event has occurred, Reckson must
obtain TIAA LLC's prior written consent to effectuate any Loan. TIAA agrees
not to unreasonably withhold such consent if the OM Termination Event is of
the type described in Section 7.02(c)(ii), (iii) or (iv). If, following an OM
Termination Event of the type described in Section 7.02(c) (ii), (iii) or
(iv), Reckson delivers a Proposed Loan Notice to TIAA LLC under Section
10.03(b) and TIAA LLC does not consent to the proposed Loan described in the
Proposed Loan Notice, if Reckson disputes the reasonableness of TIAA LLC's
refusal to consent, such dispute shall be resolved by arbitration in
accordance with Section 13.30. If the arbitration shall be resolved in favor
of Reckson, Reckson shall be permitted to effectuate the proposed Loan
notwithstanding any such OM Termination Event; provided that (i) either party
may exercise the Modified Buy Sell Rights and (ii) Reckson may not so
effectuate the Loan if, within 15 days following the determination of such
arbitration, TIAA LLC shall exercise such Modified Buy Sell Rights, in which
case Reckson may not enter into such Loan until the closing of the Buy-Sell
occurs under Section 9.05.
ARTICLE XI
DISSOLUTION AND LIQUIDATION
11.01 Events Causing Dissolution
The LLC shall be dissolved and its affairs wound up upon the
occurrence of any of the following:
(a) the Members consent in writing to such dissolution;
(b) the sale or other disposition (voluntarily or
involuntarily) by the LLC of all or substantially all of the LLC Assets and
the collection of all amounts derived from any such sale or other disposition,
including all amounts payable to the LLC under any promissory notes or other
evidences of indebtedness taken by the LLC (unless the Members shall elect to
distribute such indebtedness to the Members in liquidation), and the
satisfaction of contingent liabilities of the LLC in connection with such sale
or other disposition;
(c) the Termination Date;
(d) the occurrence of any event that, under the LLC Act,
would cause the dissolution of the LLC or that would make it unlawful for the
business of the LLC to be continued; or
(e) any Member becomes Bankrupt.
11.02 Right to Continue Business of the LLC
Upon an event described in Section 11.01(c), (d) or (e) (but
not an event described in Section 11.01(d) that makes it unlawful for the
business of the LLC to be continued), the LLC thereafter shall be dissolved
and liquidated unless, within 90 days after the event described in any of such
Sections, an election to continue the business of the LLC shall be made in
writing by the Members. If such an election to continue the LLC is made, then
the LLC shall continue until another event causing dissolution in accordance
with this Article XI shall occur.
11.03 Distributions Upon Dissolution
(a) Upon the dissolution of the LLC, the Operating Member
(or any other Person responsible for winding up the affairs of the LLC) shall
proceed without any unnecessary delay to sell or otherwise liquidate the LLC
Assets (including the assets of the Property Owners) and pay or make due
provision for the payment of all debts, liabilities and obligations of the LLC
and the Property Owners.
(b) Subject to Section 5.02(e), the net liquidation proceeds
and any other liquid assets of the LLC after the payment of all debts,
liabilities and obligations of the LLC and the Property Owners (including,
without limitation, all amounts owing to either Member under this Agreement or
under any agreement between a Property Owner and a Member entered into by the
Member other than in its capacity as a Member in the LLC), the payment of
expenses of liquidation of the LLC, and the establishment of a reasonable
reserve in an amount estimated by the Operating Member to be sufficient to pay
any amounts reasonably anticipated to be required to be paid by the LLC or a
Property Owner, shall be distributed to the Members pro rata, in accordance
with their respective Percentage Interests. In paying the debts, liabilities
and obligations of the LLC or any other Property Owner any available funds
shall be applied (to the extent practical and permitted by law), first, to
repay any indebtedness or liabilities of the LLC and the Property Owners for
which the Members (or any guarantor of the obligations of the LLC or a
Property Owner) shall have recourse liability, second, to repay any other
indebtedness or liabilities of the LLC or a Property Owner, and third to repay
any loans made to the LLC or a Property Owner by the Members (in proportion to
the amounts so loaned together with the accrued interest thereon).
(c) Each of the Members shall be furnished with a statement
prepared by, or under the supervision of, the LLC Accountants, the Operating
Member and any other person or entity responsible for winding up the affairs
of the LLC which shall set forth the assets and liabilities of the LLC as of
the date of complete liquidation. Upon dissolution and liquidation of the LLC,
the Members shall execute, acknowledge and cause to be filed any notice or
certificate required by law to reflect the termination of the LLC.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
12.01 Representations and Warranties
(a) Reckson represents and warrants to TIAA LLC the
following as of the date hereof; provided, however, that, except as otherwise
expressly provided below, the representations and warranties contained in
paragraphs (i), (v) and (x) below shall only relate to the Leases set forth on
Schedule 5 (the "Applicable Leases"). In addition, at such time as an estoppel
certificate for an Applicable Lease is executed by the applicable tenant and
delivered to TIAA LLC, the representations and warranties set forth in such
paragraphs shall be of no force or effect with respect to such Applicable
Lease, except to the extent a representation or warranty shall be inconsistent
with an item set forth in the applicable estoppel certificate, in which case
such representation or warranty shall continue to be applicable.
(i) Schedule 6 sets forth all Leases. True and
complete copies of the Applicable Leases have been delivered to TIAA LLC and
constitute the entire agreement between landlord and Tenant with respect to
the premises demised thereunder. The Applicable Leases have not been amended
or modified by Reckson or any Affiliate of Reckson, except as set forth on
said Schedule 5 or, to the best of Reckson's knowledge, otherwise amended or
modified. Schedule 5 sets forth all security deposits held by or on behalf of
Reckson under the Applicable Leases. Except as set forth on Schedule 5:
(A) to the best of Reckson's knowledge, no tenant
under an Applicable Lease (a "Tenant") is more than 30 days in
arrears in the payment of base rent due under its Applicable Lease;
Reckson has not given any written notice to any Tenant that such
Tenant has failed to perform any of its material obligations under
its Applicable Lease, which failure remains uncured;
(B) Reckson has not received written notice from
any Tenant that Reckson has failed to perform any of its material
obligations under its Applicable Lease, which failure remains
uncured; and
(C) Reckson has not received written notice from
any Tenant that such Tenant is insolvent and/or has filed for
bankruptcy and/or reorganization:
(ii) Reckson has not received written notice of and,
to the best of Reckson's knowledge, there are no pending condemnation
proceeding or similar proceeding affecting any of the Properties.
(iii) Except for violations (which shall be governed
exclusively by clause (v) below), Reckson has not received written notice
(including a summons or complaint) of any action, suit, litigation, proceeding
or governmental investigation, which remains pending against the Properties,
is not covered by insurance and if adversely determined would have a material
adverse affect on the Properties.
(iv) Reckson has not granted to any Person any right
or option to acquire any of the Properties or any interest in the LLC or in
any other Property Owner.
(v) To the best of Reckson's knowledge, Schedule 5
sets forth all tenant improvement work and tenant work allowances
outstanding with respect to the Applicable Leases.
(vi) Reckson has not received, during the 12-month
period immediately preceding the date hereof, written notice from any
governmental entity having jurisdiction over any of the Properties of any
violation of law applicable to the Properties which violation remains uncured.
(vii) To the best of Reckson's knowledge, Schedule 7
sets forth all of the brokerage commissions outstanding and unpaid
relating to the Properties.
(viii) To the best of Reckson's knowledge, all
licenses and permits required to be obtained by Reckson in connection with the
present use and occupancy of any Property have been obtained and are in full
force and effect, other than any licenses and permits the failure of which to
obtain and be in full force and affect would not have a material adverse
effect on the present use and occupancy of such Property and other than
licenses and permits which a tenant is obligated to obtain pursuant to a
Lease.
(ix) Reckson has delivered to TIAA LLC true and
correct copies of the annual income and expense statements for 1997, 1998 and
1999 and the semi-annual income and expense statements for the period ending
6/30/2000 with respect to each Property for the entire period for which
Reckson (or its Affiliate) has owned such Property.
(x) Except as set forth on Schedule 5, Reckson has
paid or performed all of Landlord's obligations under all Applicable Leases
which are a condition to a Tenant's initial occupancy thereunder and required
to be performed prior to the date hereof.
(xi) Reckson is a "non-foreign person" within the
meaning of Section 1445 of the Code, and, concurrently herewith, Reckson shall
deliver to TIAA LLC a confirmatory affidavit.
(xii) Reckson is not an "employee benefit plan", as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA"), or a "plan", as defined in Section 4975(e) of the Internal Revenue
Code (the "Code"), and the assets of Reckson have not been deemed "plan
assets" of one or more such plans for purposes of Title I of ERISA or Section
4975 of the Code. Reckson is not a "governmental plan" within the meaning of
Section 3(32) of ERISA, and no transaction by or with Reckson is subject to or
in violation of any state statutes applicable to regulation of investments of
and fiduciary obligations with respect to governmental plans.
(xiii) Reckson has heretofore delivered to TIAA LLC
true and complete copies of each of the material contracts affecting the
Property (the "Contracts"); each of the Contracts is in full force and effect
and has not been modified or amended; Reckson is not in default of any of its
material obligations under any of the Contracts and knows of no material
default on the part of the other parties thereto; and the Contracts represent
the complete agreement between Reckson and such other parties as to the
services to be performed or materials to be provided thereunder and the
compensation to be paid for such services or materials, as applicable, and
such other parties possess no unsatisfied claim against Reckson.
(xiv) All insurance policies held by Reckson, the LLC
or any Other Property Owner relating to or affecting the Properties are
described in Schedule 8 hereof; all of such policies are in full force and
effect and Reckson has not received any notice of default or notice
terminating or threatening to terminate any of such insurance policies that
remains uncured.
(xv) To the best of Reckson's knowledge, each Property
Owner owns, leases or has the legal right to use all personal property
(whether tangible or intangible) currently employed in the operation of its
respective Property except where the failure to own, lease or have the legal
right to use such property would not have a material adverse effect on the
applicable Property.
(xvi) The sole ground lease applicable to the
Properties is the Ground Lease, a true and complete copy of which has been
delivered to TIAA LLC. To Reckson's knowledge (A) there exists no default (or
event, condition or act that, with the giving of notice or lapse of time, or
both, would become a default) of 90 Merrick LLC under the Ground Lease, (B)
the Ground Lease is in full force and effect and (C) all rents, additional
rents and sums payable pursuant to the Ground Lease that were or are due and
payable have been paid.
(xvii) There are no collective bargaining agreements
or other labor union contract to which Reckson is a party. None of the
Property Owners has any employees. There are no material controversies pending
between the Managing Agent and any of its employees at the Properties and as
of the date hereof, there are no strikes, slowdowns, work stoppages or
lockouts pending with respect to any employees of the Managing Agent at the
Properties.
(xviii) Neither Reckson nor any Affiliate thereof owns
any interest, or has an option to acquire any interest in (A) any of the
Properties or Property Owners that is not subject to the terms of this
Agreement, or (B) any land adjacent to the Properties that was acquired for
the purposes of the expansion of any of the Properties.
(xix) No third party is entitled to receive any
interest, rent or other payments from any Property Owner calculated based on
the cash flow, receipts or income of any of the Properties.
(xx) Reckson is not a party to any written contract
having a remaining non-cancelable term of more than one year and involving the
payment of more than $100,000 per year affecting any Property.
(xxi) The aggregate tax basis of the LLC in the
Properties immediately before the Closing is not less than $225,000,000.
(xxii) The admission of TIAA LLC to the LLC will not
create a default under any agreement binding as of the date hereof upon the
LLC or any Property Owner.
Any and all uses of the phrase, "to the best of Reckson's
knowledge" or other references to Reckson's knowledge in this Agreement shall
mean the actual, present, conscious knowledge of Jason Barnett and Richard
Conniff (the "Reckson Knowledge Individuals") as to a fact at the time given
after inquiry of Salvatore Campofranco, Jeff Schotz, F.D. Rick Rich, Mitchell
Rechler and Gregg Rechler (the "Managing Directors"). Without limiting the
foregoing, TIAA LLC acknowledges that the Reckson Knowledge Individuals have
not performed and are not obligated to perform any investigation or review of
any files or other information in the possession of Reckson, or to make any
inquiry of any persons, or to take any other actions in connection with the
representations and warranties of Reckson set forth in this Agreement other
than inquiry of the Managing Directors. Neither the actual, present, conscious
knowledge of any other individual or entity, nor the constructive knowledge of
the Reckson Knowledge Individuals or of any other individual or entity, shall
be imputed to the Reckson Knowledge Individuals.
(b) The representations and warranties contained in Section
12.01(a) shall survive for 12 months following the date hereof (the "Rep.
Closing Date"). Each such representation and warranty shall automatically be
null and void and of no further force or effect on the Rep. Closing Date
unless, prior to the Rep. Closing Date, TIAA LLC shall have commenced a legal
proceeding (a "Proceeding") against Reckson alleging that Reckson shall be in
breach of such representation or warranty and that TIAA LLC shall have
suffered actual damages as a result thereof in excess of $250,000.00 (the
"Rep. Basket"). Notwithstanding anything to the contrary contained herein TIAA
LLC shall not have claim for any breach of a representation or warranty if
TIAA LLC had actual knowledge of such breach on or before the date hereof. If
TIAA LLC shall have timely commenced a Proceeding and a court of competent
jurisdiction shall, pursuant to a final, non-appealable order in connection
with such Proceeding, determine that (i) Reckson was in breach of any
applicable representation or warranty as of the date of this Agreement, (ii)
TIAA LLC suffered actual damages (the "Damages") by reason of such breach in
an amount exceeding the Rep. Basket and (iii) TIAA LLC did not have actual
knowledge of such breach on or prior to the date hereof, then, subject to the
next sentence, TIAA LLC shall be entitled to receive an amount equal to the
Damages minus the Rep. Basket. Notwithstanding anything to the contrary
contained herein (A) if Reckson breaches any representation or warranty with
respect to a particular Property or Properties, then Reckson's liability to
TIAA LLC and TIAA LLC's damages for such breach shall not exceed Reckson's
Percentage Interest in the allocated value of that Property or Properties and
(B) in no event shall Reckson's liability for all breaches exceed
$7,500,000.00 in the aggregate. Any amounts payable to TIAA LLC under this
Section 12.01(b) shall be paid to TIAA LLC within 30 days following the entry
of such final, non-appealable order and delivery of a copy thereof to Reckson.
TIAA LLC's sole remedy for breach of a representation or warranty contained
herein is to seek damages, subject to the limitations in this paragraph.
(c) Each Member hereby represents and warrants to the other
Member as of the date hereof that:
(i) It has the requisite partnership or limited
liability company corporate power and authority to enter into and perform the
terms of this Agreement; the execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly
authorized and no other partnership, corporate, limited liability company or
other action on the part of such Member or any of its shareholders, partners
or members is necessary in order to permit such Member to consummate the
transactions contemplated hereby. This Agreement constitutes the valid and
binding obligation of such Member, enforceable in accordance with its terms as
the same may be limited, however, by applicable insolvency, bankruptcy or
other laws affecting creditors' rights generally or by general principles of
law.
(ii) Neither the execution, delivery or performance by
such Member of this Agreement or the transactions contemplated hereby will
conflict with, or will result in a breach of, or will constitute a default
under, (A) any agreement or instrument by which such Member may be bound or
(B) any legal requirement or any other judgment, statute, rule, law, order,
decree, writ or injunction of any court or governmental authority.
(iii) Other than as set forth herein, no approval,
consent, order or authorization of, or designation, registration or
declaration with, any governmental authority or other third party is required
in connection with the valid execution and delivery of, and compliance with,
this Agreement by the Member and the performance by the Member of the
transactions contemplated hereby which has not heretofore been obtained.
(iv) The tax identification number of such Member is
as set forth by its signature block to this Agreement.
(d) TIAA LLC acknowledges that, except as expressly set
forth in this Agreement, neither Reckson nor any of its Affiliates has made,
and no such party is liable for or bound in any manner by, any express or
implied warranties, guaranties, promises, statements, inducements,
representations or information pertaining to the Properties, the Property
Owners, the income, expenses, operation or tax benefits of Reckson, the
Properties, the status of the Interests or any other matter or thing with
respect thereto.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 Compliance with LLC Act
Each Member agrees not to take any action or fail to take
any action which, considered alone or in the aggregate with other actions or
events, would result in the termination of the LLC under the LLC Act.
13.02 Additional Actions and Documents
Each of the Members hereby agrees to take or cause to be
taken such further actions, to execute, acknowledge, deliver and file or cause
to be executed, acknowledged, delivered and filed such further documents and
instruments, and to use commercially reasonable efforts to obtain such
consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Agreement.
13.03 Notices
All notices, demands, requests, or other communications
which may be or are required to be given, served, delivered, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including
delivery by internationally recognized courier), or facsimile transmission
(with a copy simultaneously delivered by one of the other permitted methods of
delivery), addressed as follows:
(a) To Reckson:
c/o Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, New York 11747
Attention: Jason Barnett, Esq.
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Joshua Mermelstein, Esq.
(b) To TIAA LLC:
Teachers Insurance and Annuity
Association College Retirement Equities Fund
730 Third Avenue
New York, New York 10017-3206
Attention: Managing Director, Real Estate Portfolio
and Vice President of Investments-Real Estate
with a copy to:
To TIAA LLC:
Teachers Insurance and Annuity
Association College Retirement Equities Fund
730 Third Avenue
New York, New York 10017-3206
Attention: Chief Counsel, Real Estate Law
and Vice President of Investments-Real Estate
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served,
delivered or sent. Each notice, demand, request, or communication which shall
be mailed, delivered or transmitted in the manner described above shall be
deemed, given, served or delivered at such time as it is received by the
addressee upon presentation or at such times as delivery is attempted in the
case of any change in address as to which notice was not given to the other
party as required hereunder or in the case of a refusal to accept delivery.
No provision in this Agreement that a failure of one Member
to timely respond or object to a specified notice shall be treated as, or
deemed to be, the approval of such Member of the matter set forth in the
specified notice (or as a waiver of the Member's right to object thereto)
unless such specified notice states in ALL CAPITAL LETTERS that the failure to
timely respond or object to such specified notice within a specified time
period set forth herein shall be treated as approval of such matter set forth
herein (or as a waiver of such Member's right to object thereto).
13.04 Expenses
(a) TIAA LLC shall pay all costs of its due diligence in
connection with this transaction. Each Member shall each pay its own legal
fees and expenses in connection with the preparation, negotiation and
execution of this Agreement. TIAA LLC shall be responsible for paying all
costs of title insurance to insure its Interest and is exclusively entitled to
any proceeds which may result from the title policies insuring its Interest.
Reckson is exclusively entitled to any proceeds which may result from the
title insurance policies insuring the Properties and the Property Owners'
title therein as of the day before the date hereof. All other costs and
expenses attributable to TIAA LLC's acquisition of its Interest shall be
deemed to be LLC Charges. TIAA LLC acknowledges that, in connection with the
transfer of the Properties to the LLC, TIAA LLC shall waive any obligation on
the part of Operating Member to pursue Reckson OP under the warranty deeds
executed in connection with such transfers and, if such a claim is made, any
amounts collected pursuant to such claim shall be retained solely by Reckson.
(b) In the event of any dispute which results in legal
proceedings between the Members, all reasonable legal fees, court costs and
disbursements incurred in connection with such action by the party prevailing
in such legal proceedings after a final non-appealable judgment of a court of
competent jurisdiction has been entered shall be paid by the party not
prevailing in such action within 10 days after demand therefor.
13.05 Obligations Are Without Recourse
Notwithstanding anything to the contrary contained in this
Agreement, no recourse shall be had against either Member, whether by levy or
execution or otherwise, for the payment of any loans or other payments due or
for any other claim under this Agreement or based on the failure of
performance or observance of any of the terms and conditions of this Agreement
against such Member, the partners, members or shareholders of such Member or
any predecessor, successor or Affiliate of such Member or any of their
respective assets other than such Member's Interest or any undistributed Net
Ordinary Cash Flow or Net Extraordinary Cash Flow due or to become due to such
Member (collectively, "Undistributed Income") or against any principal,
partner, shareholder, controlling person, officer, director, agent or employee
of any of the aforesaid Persons, under any rule of law, statute or
constitution, or by the enforcement of any assessment or penalty, or
otherwise, nor shall any of such Persons be personally liable for any
contributions, loans, payments or claims, or liable for any deficiency
judgment based thereon or with respect thereto, it being expressly understood
that the sole remedies of the LLC or any other Member with respect to such
amounts and claims shall be against such Interest and such Member's
Undistributed Income, and that all such liability of the aforesaid Persons,
except as expressly provided in this Section, is expressly waived and released
as a condition of, and as consideration for, the execution of this Agreement;
provided, however, that nothing contained in this Agreement (including,
without limitation, the provisions of this Section), (a) shall constitute a
waiver of any obligation of a Member under this Agreement, (b) shall be taken
to prevent recourse to and the enforcement against such Interest and
Undistributed Income for all of the respective liabilities, obligations, and
undertakings of the aforesaid Persons contained in this Agreement, (c) shall
be taken to prevent recourse to and the enforcement against (i) a transferring
Member of its liabilities, obligations and undertakings contained in any
instrument of assignment or indemnity delivered in connection with such
transfer (but such recourse shall be limited to the proceeds received by such
transferring Member in connection with the assignment to the purchasing Member
(or its designee)) or (ii) any security delivered by any of the aforesaid
Persons pursuant to this Agreement or (d) shall be taken to limit or restrict
any action or proceeding against any of the aforesaid Persons which does not
seek damages or a money judgment or does not seek to compel payment of money
(or the performance of obligations which would require the payment of money)
by any of the aforesaid Persons. For the purposes of this Section 13.05, the
term "shareholder" shall be deemed to include the shareholders of any
corporation which is a shareholder, principal, partner or agent and the term
"partner" shall be deemed to include the partners of any partnership which is
(w) a partner in a partnership, (x) a shareholder in a corporation, (y) a
principal or (z) an agent.
13.06 Time of the Essence
Except as otherwise expressly provided in this Agreement,
time shall be of the essence with respect to all time periods set forth in
this Agreement.
13.07 Ownership of LLC Assets
The Interest of each Member shall be personal property for
all purposes. All real and other property owned by the LLC shall be deemed
owned by the LLC as LLC property. No Member, individually, shall have any
direct ownership of such property and title to such property shall be held in
the name of the LLC.
13.08 Status Reports
Recognizing that each Member may find it necessary from time
to time to establish to third parties, such as accountants, banks, mortgagees,
prospective transferees of its Interest, or the like, the then current status
of performance of the LLC and the Interests, each Member shall, within 10
Business Days following the written request of the other Member (provided any
such written request is not made more than twice in any 12-month period),
furnish a written statement (in recordable form, if requested) on the status
of the following:
(a) that this Agreement is unmodified and in full force and
effect (or if there have been modifications, that this Agreement is in full
force and effect as modified and stating the modifications);
(b) stating whether or not to the best knowledge of such
certifying Member (i) the other Member in the LLC is in default in keeping,
observing or performing any of the terms contained in this Agreement and, if
in default, specifying each such default (limited to those defaults of which
the certifying Member has knowledge) and (ii) there has occurred an event that
with the passage of time or the giving of notice, or both, would ripen into a
default hereunder on the part of such other Member (limited to those events of
which the certifying Member has knowledge);
(c) stating the amount of Default Loans made by or to such
certifying Member and the amount of accrued but unpaid interest thereon; and
(d) stating the Percentage Interests of the Members; and
(e) to the best of the knowledge and belief of the party
making such statement, with respect to any other matters as may be reasonably
requested by the other Member.
Such statement may be relied upon (and shall state that it may be relied upon)
by the other Member and any other Person for whom such statement is requested,
but no such statement shall operate as a waiver as to any default or other
matter as to which the Member executing it did not have actual knowledge.
13.09 Survival
Subject to the provision of Section 12.01(b), it is the
express intention and agreement of the Members that all covenants, agreements,
statements, representations, warranties and indemnities made in this Agreement
shall survive the execution and delivery of this Agreement.
13.10 Waivers
Neither the waiver by the LLC or either Member of a breach
of or a default under any of the provisions of this Agreement, nor the failure
of the LLC or either Member, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right, remedy or privilege
hereunder, shall thereafter be construed as a waiver of any subsequent breach
or default of a similar nature, or as a waiver of any such provisions, rights,
remedies or privileges hereunder. Each Member hereby waives the right to trial
by jury in connection with any legal proceeding between the Members with
respect to this Agreement or the LLC.
13.11 Exercise of Rights
No failure or delay on the part of either Member or the LLC
in exercising any right, power or privilege hereunder and no course of dealing
between the Members or between a Member and the LLC shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Except as otherwise provided
in this Agreement, the rights and remedies herein expressly provided are
cumulative and not exclusive of any other rights or remedies which either
Member or the LLC would otherwise have at law or in equity or otherwise.
13.12 Binding Effect
Subject to any provisions hereof restricting assignment,
this Agreement shall be binding upon and shall inure to the benefit of both
Members and their respective heirs, devises, executors, administrators, legal
representatives, successors and assigns.
13.13 Limitation on Benefits of this Agreement
It is the explicit intention of the Members that no Person
other than the Members and the LLC is or shall be entitled to bring any action
to enforce any provision of this Agreement against either Member or the LLC,
and that the covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only
by, the Members (or their respective successors and assigns as permitted
hereunder), and the LLC.
13.14 Severability
The invalidity of any one or more provisions hereof or of
any other agreement or instrument given pursuant to or in connection with this
Agreement shall not affect the remaining portions of this Agreement or any
such other agreement or instrument or any part thereof, all of which are
inserted conditionally on their being held valid in law; and in the event that
one or more of the provisions contained herein or therein should be invalid,
or should operate to render this Agreement or any such other agreement or
instrument invalid, this Agreement and such other agreements and instruments
shall be construed as if such invalid provisions had not been inserted.
13.15 Amendment Procedure
This Agreement may only be modified or amended by the
unanimous written consent of the Members.
13.16 Entire Agreement
This Agreement and any agreements executed contemporaneously
herewith contain the entire agreement between the Members with respect to the
matters contemplated herein, and supersede all prior oral or written
agreements, commitments or understandings with respect to the matters provided
for herein and therein.
13.17 Headings
Article, Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.
13.18 Governing Law
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of Delaware (but not including the
choice of law rules thereof).
13.19 Execution in Counterparts
To facilitate execution, this Agreement may be executed in
as many counterparts as may be required; and it shall not be necessary that
the signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall
be sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
13.20 Consents and Approvals
No consent or approval requested of either Member shall be
effective unless such consent or approval shall be delivered by such Member in
a written instrument in advance of the action with respect to which such
consent or approval was requested.
13.21 Brokerage
Each Member represents and warrants to the other Member that
it has not dealt with any broker in connection with the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
except Eastdil Realty ("Broker"). Reckson will pay the Broker's commission by
separate agreement and will indemnify TIAA LLC from any claims asserted
against TIAA LLC or the LLC by Broker. Each Member shall indemnify the other
and the LLC from any claims asserted against the other Member or the LLC by
reason of any party other than Broker claiming to have dealt with such Member.
13.22 Indemnification
(a) The LLC shall indemnify each of the Members and hold
them and their Affiliates (collectively, the "Indemnitees") harmless from and
against any and all claims, demands, losses, damages, liabilities, lawsuits
and other proceedings, judgments, awards, costs and expenses (including
reasonable attorneys' fees, disbursements and court costs) to the extent the
same arise directly or indirectly from the ownership, operation, use,
maintenance or management of the Properties, provided the same does not arise
out of the gross negligence or willful misconduct of, or willful breach of the
express terms of this Agreement by, such Indemnitee. The LLC shall indemnify,
defend and protect each Member from any losses, liabilities, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees and
disbursements) incurred by each Member by reason of its acts or omissions
which are for or on behalf of the LLC, except for such Member's gross
negligence or willful misconduct or willful breach of the express terms of
this Agreement; provided, however, that in seeking to recover from the LLC
either Member may look solely to the LLC Assets and neither Member (nor any of
their Affiliates) shall be personally liable nor shall any of their (or their
Affiliates') assets be available to satisfy any claim or judgment awarded to
either Member seeking indemnity hereunder. Except in the case of gross
negligence or willful misconduct or willful breach of the express terms of
this Agreement by a Member, neither Member shall be liable to the other Member
or the LLC for (i) any act or omission performed or omitted in good faith,
(ii) such Member's failure or refusal to perform any act, except those
required by the terms of this Agreement or (iii) the negligence, dishonesty or
bad faith of any agent, consultant or broker of the LLC selected, engaged or
retained in good faith and with reasonable prudence. The indemnification
provided by this Section 13.22 shall be recoverable only out of the LLC
Assets, and neither Member shall have any personal liability (or obligation to
contribute capital to the LLC) on account thereof. The Members shall be
entitled to rely on the advice of counsel or public accountants experienced in
the matter at issue and any act or omission of such Member pursuant to such
advice shall in no event subject either Member to liability to the LLC or the
other Member.
(b) Without limiting the provisions of Section 13.22(a)
above, in any action brought against either Member pursuant to the LLC Act,
the Member named as a defendant in such suit shall be entitled to be
indemnified to the fullest extent permitted under Section 18-108 of the LLC
Act or any other applicable law (the "Indemnity Laws") and, to the fullest
extent permitted under the Indemnity Laws, the LLC shall advance any expenses
incurred by such defending Member in defending such action, subject to
repayment.
13.23 Business Day Extension
In the event any time period or any date provided in this
Agreement ends or falls on a day other than a business day, then such time
period shall be deemed to end and such date shall be deemed to fall on the
next succeeding business day, and performance hereunder may be made on such
Business Day with the same force and effect as if made on such other day.
13.24 Consent to Jurisdiction
Any legal suit, action or proceeding against either Member
arising out of or relating to this Agreement, may be instituted in any Federal
or state court in New York, New York, and each of the Members hereby waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding, and each of the Partners hereby irrevocably
submits to the jurisdiction of any such court in any such suit, action or
proceeding.
13.25 Transactions with Affiliates
Anything contained in this Agreement to the contrary
notwithstanding, in addition to the Management Agreement, the Operating Member
may cause the LLC or the Property Owners to enter into agreements or other
arrangements for the furnishing to the LLC of goods or services with Frontline
Capital Group LLC ("Frontline") or any entity in which Frontline has a direct
or indirect investment or any Person who is an Affiliate of the Operating
Member (including, but not limited to, agreements or arrangements for the
construction of Tenant improvements and other construction relating to the
Properties and telephone, internet and other communication services) if such
agreements or other arrangements shall be on fair market terms and the
services shall be competitive with those that the LLC would have obtained from
an unaffiliated third party of quality and reputation similar to such
Affiliate.
13.26 No Presumption
This Agreement shall be construed without regard to any
presumption against the party causing this Agreement to be drafted.
13.27 Confidentiality
(a) Each of the Members represents and warrants that prior
to the date hereof it has not, except with the consent of the other Members,
disclosed any of the terms, conditions, obligations or matters contained in,
or relating to, this Agreement and the transactions contemplated herein other
than to their respective counsel, accountants and other advisors and their
members, partners, managers, investors and lenders. Each of the Members
covenants and agrees (and agrees to cause its employees, agents, or
Affiliates) not to disclose the economic terms of this Agreement except (i) to
any lender providing financing to the LLC, (ii) to such Member's lenders,
accountants and attorneys, (iii) to any prospective purchaser of its Interest,
so long as such party is bound by a confidentiality agreement on terms which
are substantially similar in all respects to this Section 13.05, (iv) pursuant
to a subpoena or order issued by a court, arbitrator or governmental body,
agency or official, (v) to one or more of its potential investors, (vi)
pursuant to any other governmental requirements (e.g., securities law
requirements), or (vii) with the prior written consent of the other Member. To
avoid any ambiguity, TIAA LLC recognizes and agrees that Reckson will be
required to file this Agreement with the Securities and Exchange Commission.
In the event that either Member shall receive a request to disclose any of the
terms of this Agreement under a subpoena or order, such Member shall (x)
promptly notify the LLC and the other Member, (y) consult with the LLC on the
advisability of taking steps to resist or narrow such request, and (z) if
disclosure is required or deemed advisable, reasonably cooperate with the LLC
(at no cost to such Member) in any attempt it may make to obtain an order or
other assurance that confidential treatment will be accorded those terms of
this Agreement that are disclosed.
(b) No Member shall issue any press releases or other
announcements regarding the transactions contemplated hereby unless the other
Member first shall reasonably approve such release or announcement, in
writing.
13.28 Intentionally Omitted
13.29 Cooperation of Operating Member
In the event of any proposed sale, assignment or other
transfer of all or a portion of a Property or portion thereof or a transfer of
an interest in any Member or a Transfer of any Member's Interest in accordance
with the terms hereof, the Operating Member shall, or shall cause the Managing
Agent to, upon reasonable notice, (a) make available to the prospective
transferee at all reasonable hours all books of account, correspondence,
leases, and all other information related to the Properties and to the
management thereof at the request and expense of the requesting Member, or
copies thereof; and (b) cause the management personnel involved directly or
indirectly in the affairs of the LLC and the Property Owners to cooperate
fully with the requesting Member and its proposed transferee or designees of
either of them and furnish information in their possession as reasonably
requested by such persons as to the status of the affairs of the LLC and the
Property Owners.
13.30 Arbitration
(a) Except as otherwise expressly provided herein, any
dispute requiring arbitration in accordance with the terms of this Agreement
shall be finally settled by arbitration in accordance with the CPR Institute
for Dispute Resolution Rules for Non-Administered Arbitration, except as
modified herein. The place of arbitration shall be New York, New York. Either
Party may commence arbitration by addressing to the other party a notice of
arbitration. Within 5 days after receipt of the notice of arbitration, the
respondent shall deliver to the claimant a notice of defense. In the event
respondent does not deliver such a notice, all claims set forth in the demand
shall be deemed denied.
(b) The arbitration shall be conducted by a sole arbitrator
jointly appointed by the parties within 10 days of receipt by the respondent
of the notice of arbitration. If the parties have not jointly appointed an
arbitrator by that time, either party may request the CPR to appoint the sole
arbitrator, and the CPR shall endeavor to make the appointment within 5 days
of that request, provided, however, that its failure to meet that deadline
shall in no way impair the effectiveness of the appointment. The CPR shall
endeavor to appoint as arbitrator a person with substantial experience in the
real estate business, but the appointee's qualifications or lack of
qualifications in this respect shall under no circumstances impair the
effectiveness of the appointment or provide cause for challenge. The CPR shall
have no obligation to follow the procedures set forth in Rule 6, but shall
instead appoint a person whom it deems qualified to serve.
(c) The arbitrator shall have authority to take all steps
necessary and appropriate in order to hold a hearing within 40 days of his or
her appointment and to render an award within 5 days thereafter. The
arbitrator shall have full discretion to set the procedure or modify the Rules
in any way he or she deems necessary in order to meet those deadlines,
provided, however, that failure to meet those deadlines shall in no way affect
the validity or effectiveness of the award.
(d) The arbitrator shall have no authority to award damages
of any kind in connection with any matter or claim that is subject to
arbitration under this Agreement and the parties expressly waive their right
to seek any damages for any matter or claim which is subject to arbitration
hereunder.
(e) The arbitration and this clause shall be governed by
Title 9 (Arbitration) of the United States Code, and judgment on the award may
be entered by any court of competent jurisdiction. The arbitrator's award
shall be final and binding upon the parties. The parties herewith consent to
jurisdiction in the federal and state courts located in the County of New
York, State of New York, for the purpose of enforcing the award.
(f) Each party is required to continue to perform its
obligations under this Agreement pending final resolution of any dispute
arising out of or relating to this Agreement, unless to do so would be
impossible or impracticable under the circumstances.
13.31 Lender's Rights
If a mortgage is granted with respect to a Property, the
mortgagee may foreclose on its collateral free and clear of any rights under
Articles 9 or 10 on the part of the Members under this Agreement.
13.32 Art Work
All art work at or on the Properties as of the date hereof
(except for the art work described on Schedule 9) (all such art work other
than as set forth on Schedule 9, is collectively, the "Reckson Artwork"),
shall be the exclusive personal property of members of Senior Management of
Reckson or Affiliates of Reckson other than a Property Owner. Reckson or any
of its agents may at any time remove the Reckson Artwork and the LLC shall
agree to cure any damage to the Properties caused by such removal other than
structural damage, which shall be the responsibility of Reckson.
Notwithstanding the foregoing, no rental (or other fee) shall be charged to
the Property Owner or the LLC in connection with the Reckson Artwork.
13.33 Signage
Reckson may place at the Properties signs, logos and other
items identifying the Properties as "Reckson" or "RA" properties or as
properties "managed by Reckson" (or employing similar nomenclature); provided
that in no event shall it be stated on such items that the Properties are
"owned" by Reckson.
13.34 Ground Lease
Without in any way limiting Reckson's rights elsewhere under
this Agreement, Reckson may cause the LLC to guarantee to the landlord under
the Ground Lease the obligations of the tenant thereunder accruing from and
after the date hereof, it being understood and acknowledged by TIAA LLC that a
primary purpose of such guarantee shall be to obtain the release of Reckson OP
from its obligations under the Ground Lease.
IN WITNESS WHEREOF, the undersigned have caused this
Operating Agreement to be duly executed on their behalf as of the day and year
first hereinabove set forth.
RECKSON TRI-STATE MEMBER LLC
Reckson Operating Partnership, L.P.
By: Reckson Associates Realty Corp.,
its general partner
By:__________________________
Name:
Title:
Tax Identification Number:
11-3233647
TIAA TRI-STATE LLC
By: Teachers Insurance And Annuity
Association, its sole Member
By:__________________________
Name:
Title:
Tax Identification Number:
SCHEDULE 3
The parties acknowledge that in connection with its
engineering review of Stamford Towers TIAA LLC had identified a
potential issue relating to the installation of the exterior pre-cast
concrete facade panels (the "Potential Issue"). From and after the
date hereof, Reckson, acting reasonably and in good faith, with the
best interest of the LLC in mind, will continue to investigate and
take the appropriate actions in addressing the Potential Issue,
including retaining Wiss Janney, or another reputable engineering
firm reasonably acceptable to TIAA LLC, to prescribe a plan of action
to further investigate the Potential Issue. If as a result of such
investigation the engineering firm recommends that repairs be made to
remediate the Potential Issue, Reckson shall promptly cause the LLC
to make such repairs. The cost of such repairs shall be borne as
follows:
(a) The first $823,000 of cost shall be borne by the LLC as
an LLC Charge;
(b) Any additional cost shall be contributed by Reckson to
the LLC (without any increase in its Capital Account or any increase
in its deemed Capital Contribution or Percentage Interest).
OPERATING AGREEMENT
OF
RT TRI-STATE LLC
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................2
ARTICLE II FILING/ADMISSION; NAME; PLACE OF BUSINESS.............................................................19
2.01 Filing/Admission of TIAA LLC.......................................................................19
2.02 Name of LLC........................................................................................19
2.03 Place of Business..................................................................................20
2.04 Registered Office and Registered Agent.............................................................20
ARTICLE III PURPOSES AND POWERS OF LLC...........................................................................20
3.01 Purposes...........................................................................................20
3.02 Powers.............................................................................................20
ARTICLE IV TERM OF LLC...........................................................................................21
ARTICLE V CAPITAL................................................................................................21
5.01 Capital Contributions and Percentage Interests of the Members......................................21
5.02 Additional Contributions...........................................................................24
5.03 Liability of Members...............................................................................27
5.04 Return of Capital..................................................................................27
ARTICLE VI ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS.......................................................27
6.01 Capital Accounts...................................................................................27
6.02 Allocation of Net Income or Net Loss...............................................................28
6.03 Allocations of Nonrecourse Deductions; Minimum Gain Chargeback; Qualified Income Offset...........28
6.04 Tax Allocations; Allocation of Income and Loss With Respect to LLC Interests Transferred...........29
6.05 Distributions of Net Ordinary Cash Flow and Net Extraordinary Cash Flow...........................30
6.06 Section 754 Election...............................................................................31
ARTICLE VII MANAGEMENT...........................................................................................31
7.01 General Scope of Duties and Authority..............................................................31
7.02 Joint Decisions....................................................................................31
7.03 Business Plan......................................................................................36
7.04 Other Activities of Members........................................................................39
7.05 Right of First Negotiation on 101 JFK Parkway......................................................39
ARTICLE VIII BANK ACCOUNTS; BOOKS AND RECORDS; STATEMENTS; TAXES; FISCAL YEAR...................................40
8.01 Books of Account...................................................................................40
8.02 Fiscal Year........................................................................................40
8.03 Bank Accounts......................................................................................40
8.04 Financial Statements...............................................................................41
8.05 Tax Returns; Tax Matters Partner...................................................................41
8.06 Partnership........................................................................................42
8.07 Management Agreement Records.......................................................................42
ARTICLE IX TRANSFERS OF INTERESTS; RIGHT OF FIRST REFUSAL; PLEDGES...............................................42
9.01 Restrictions on Transfers and Pledges of LLC Interests.............................................42
9.02 Intentionally Omitted..............................................................................43
9.03 Transfers and Pledges to Affiliates................................................................43
9.04 Right of First Refusal.............................................................................44
9.05 Buy-Sell of Properties.............................................................................48
9.06 Special Transfer Provisions Applicable to Reckson..................................................50
9.07 Conditions Applicable to All Transfers.............................................................57
9.08 Admission of Transferee............................................................................59
9.09 Pledge of Interest.................................................................................59
ARTICLE X SALE AND FINANCING OF PROPERTIES.......................................................................61
10.01 Sale of Properties to Third Parties...............................................................61
10.02 Relationship of Certain Rights....................................................................64
10.03 Financing/Refinancing by Reckson..................................................................64
ARTICLE XI DISSOLUTION AND LIQUIDATION...........................................................................68
11.01 Events Causing Dissolution........................................................................68
11.02 Right to Continue Business of the LLC.............................................................69
11.03 Distributions Upon Dissolution....................................................................69
ARTICLE XII REPRESENTATIONS AND WARRANTIES.......................................................................70
12.01 Representations and Warranties....................................................................70
ARTICLE XIII MISCELLANEOUS PROVISIONS............................................................................75
13.01 Compliance with LLC Act...........................................................................75
13.02 Additional Actions and Documents..................................................................75
13.03 Notices...........................................................................................76
13.04 Expenses..........................................................................................77
13.05 Obligations Are Without Recourse..................................................................78
13.06 Time of the Essence...............................................................................79
13.07 Ownership of LLC Assets...........................................................................79
13.08 Status Reports....................................................................................79
13.09 Survival..........................................................................................80
13.10 Waivers...........................................................................................80
13.11 Exercise of Rights................................................................................80
13.12 Binding Effect....................................................................................80
13.13 Limitation on Benefits of this Agreement..........................................................80
13.14 Severability......................................................................................81
13.15 Amendment Procedure...............................................................................81
13.16 Entire Agreement..................................................................................81
13.17 Headings..........................................................................................81
13.18 Governing Law.....................................................................................81
13.19 Execution in Counterparts.........................................................................82
13.20 Consents and Approvals............................................................................82
13.21 Brokerage.........................................................................................82
13.22 Indemnification...................................................................................82
13.23 Business Day Extension............................................................................83
13.24 Consent to Jurisdiction...........................................................................83
13.25 Transactions with Affiliates......................................................................84
13.26 No Presumption....................................................................................84
13.27 Confidentiality...................................................................................84
13.28 Intentionally Omitted.............................................................................85
13.29 Cooperation of Operating Member...................................................................85
13.30 Arbitration.......................................................................................85
13.31 Lender's Rights...................................................................................86
13.32 Art Work..........................................................................................86
13.33 Signage...........................................................................................87
13.34 Ground Lease......................................................................................87
SCHEDULES
- ---------
SCHEDULE 1 ALLOCATED VALUES
SCHEDULE 2-A LLC CAPITAL PROJECT COSTS
SCHEDULE 2-B LLC LEASING COSTS
SCHEDULE 3 MISCELLANEOUS LIABILITIES UNDER LEASES
SCHEDULE 4 APPROVED ENTITY LIST
SCHEDULE 5 APPLICABLE LEASES
SCHEDULE 6 LEASES
SCHEDULE 7 BROKERAGE COMMISSIONS
SCHEDULE 8 INSURANCE
SCHEDULE 9 RECKSON ARTWORK
EXHIBITS
EXHIBIT A FORM OF MANAGEMENT AGREEMENT
EXHIBIT B INTENTIONALLY OMITTED
EXHIBIT C FISCAL YEAR 2000 BUSINESS PLAN
EXHIBIT D CAPITAL BUDGET PROJECTIONS FOR FISCAL
YEARS 2001 AND 2002
PROPERTY MANAGEMENT AND LEASING AGREEMENT
THIS PROPERTY MANAGEMENT AND LEASING AGREEMENT ("Agreement") dated
_______, 2000, is between ______________ ("Owner"), whose principal offices
are located ____________________________________________________________, and
RECKSON MANAGEMENT GROUP, INC., a New York corporation ("Manager"), whose
principal office is located at 225 Broadhollow Road, Melville, New York 11747.
RECITALS
A. On the date hereof, RT Tri-State LLC (the "LLC") owns all right,
title and interest in Owner, the owner of the ground lessee's interest in the
building commonly known as _______________________________________ (the
"Property").
B. Pursuant to the Operating Agreement of the LLC (the "Operating
Agreement"), one hundred percent (100%) of the beneficial membership interests
of the LLC are held by Reckson Tri-State Member LLC, a Delaware limited
liability company, whose address is 225 Broadhollow Road, Melville, New York
11747, together with its permitted successors and assigns under the Operating
Agreement, "Reckson" and TIAA Tri-State LLC, a Delaware limited liability
company, whose principal office is located at 730 Third Avenue, New York, New
York 10017, together with its permitted successors and assigns under the
Operating Agreement, "TIAA LLC". Reckson and TIAA LLC shall hereinafter be
collectively referred to as the "Members".
C. Owner desires to retain Manager as exclusive manager and leasing
agent for the Property, and Manager desires to serve as exclusive manager and
leasing agent for the Property, all upon the terms and conditions set forth
below.
D. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Operating Agreement.
NOW THEREFORE, in consideration of the promises, covenants and
conditions contained in this Agreement, Owner and Manager, intending to be
legally bound, agree as follows:
AGREEMENT
I. Appointment. Owner hereby appoints Manager, and Manager hereby
accepts appointment, on the terms and conditions hereinafter set forth, as
sole and exclusive leasing and management agent for the Property. Manager
shall manage the Property in accordance with the Operating Standard and the
Business Plan. "Operating Standard" shall mean the management of the Property
in an efficient, prudent and economic manner, consistent with (A) its existing
character, condition and level of operation and maintenance (subject to
reasonable wear and tear) as a first-class suburban office building, (B) the
manner in which Manager historically has conducted and, as of the date hereof,
conducts the management of the Property and (C) then current prudent business
and management practices applicable to the operation and maintenance of
first-class suburban office buildings in the suburban marketplace in the state
in which the Property is located of similar size, character and location. Both
Manager and Owner agree to use all commercially reasonable efforts subject to
the Business Plan to maintain the Operating Standard with respect to the
Property.
II. Term. The term of this Agreement shall commence on the date
hereof and terminate upon the first to occur of the events specified in
Section VIII.
III. Services To Be Performed By Manager. Manager shall provide the
following services for Owner, all of which shall be performed in a manner
consistent with the Operating Standard and the Business Plan, subject to the
specific provisions of this Agreement, including the limitations with respect
to expenditures of funds (as set forth in Section III(B)(ii)) and the
availability of funds.
(A) Collecting Rents and Enforcing Obligations. Manager shall make
diligent efforts to collect all rents and other sums due from (i) tenants of
the Property; (ii) users of any garage or other parking space in or on the
Property; (iii) concessionaires in connection with their authorized operation
of facilities on or in the Property, and (iv) all others from whom rents or
other sums are due to Owner with respect to the Property in the ordinary
course of business. Owner authorizes Manager to request, demand, collect,
receive and give receipt for all such rents and other charges in the name of
and on behalf of Owner. All funds collected by Manager shall be deposited
promptly into the Bank Account. Manager shall bill tenants of the Property on
a monthly basis. Furthermore, subject to Owner's prior written consent and
provided the same is consistent with the Operating Standard, the Manager
shall, in Owner's name and at Owner's expense, (a) give notices to terminate
leases at the Property by reason of the default of the tenants thereunder; (b)
institute and prosecute legal actions relating to such leases; (c) evict
tenants and recover possession of the portions of the Property occupied by
such tenants; (d) sue for and recover rents and other sums due Owner and (e)
settle, compromise and release such actions or suits or reinstate such
tenancies. Manager is hereby authorized on behalf of Owner to retain approved
counsel, collection agents and other such professionals to assist Manager in
connection with the foregoing obligations. Notwithstanding the foregoing,
Manager shall not enter into any Lease or any modification, amendment,
shortening of the term, surrender or termination of any Lease, it being
understood that all of the foregoing may be executed only by Owner.
(B) Paying Expenses.
(i) Power to Disburse. Owner shall be responsible for
providing funds for the Bank Account or causing funds to be so provided to
meet on a timely basis the cash requirements of Manager for the proper
operation of the Property pursuant to this Agreement. Manager shall be
a signatory on the Bank Account and as such shall have the power, and is
hereby authorized and directed, to disburse or cause to be disbursed from the
Bank Account any amounts either payable to third parties or to Manager in
accordance with this Agreement.
(ii) Limitation on Disbursements. Manager shall not disburse
any sum in connection with the operation, maintenance or repair of the
Property, whether such expenditures are operating or capital expenditures,
except (a) as permitted under the Business Plan; (b) if such cost is incurred
in connection with a Necessary Expense; (c) expenditures in connection with
providing additional services to tenants for which Owner or Manager is entitled
to be reimbursed by such tenant or (d) with the prior written consent or
approval of Owner.
(iii) No Obligation to Advance. Manager shall not be required
to make any advance to or for the account of Owner, or to pay any amount,
except out of funds held by Manager in the Bank Account for the account of
Owner or provided by Owner as aforesaid; nor shall Manager be required to
incur any obligation to third parties unless Owner shall furnish Manager with
necessary funds for the discharge thereof. Subject to the provisions of
paragraph (ii) above, if the Bank Account has insufficient funds to permit
Manager's proper and timely performance of its obligations under this
Agreement, Manager shall notify Owner of the same at least fifteen (15)
Business Days (or seven (7) Business Days if required for payment of Necessary
Expenses), but not more than forty five (45) days, prior to the need for such
funds and, on or before such date, Owner shall deposit such amount in the Bank
Account to enable Manager to pay expenses in accordance with this Agreement.
(iv) Remainder Remitted to Owner. After paying the expenses of
the Property as set forth herein and maintaining a sufficient reserve as
determined by Manager, but at no time less than $10,000.00 ("Property Level
Reserves"), for the timely payment of future expenses, taking into account
anticipated revenues and expenses, Manager shall remit to Owner the remainder
of the rents and other sums collected hereunder from time to time as directed
by Owner, but in no event later than the 24th day of each month for the
preceding month.
(v) Excluded Expenses. Except as specifically provided below,
any payments to be made by Manager shall be made by Manager on behalf of Owner
out of the Bank Account or as may otherwise be provided by Owner. Manager shall
not be reimbursed under this Agreement for the following expenses:
(a) cost of salary, wages, commissions or other
remuneration, and related benefits for any officer, director, partner,
principal or executive of Manager, except that Manager shall be
reimbursed for the salary and other benefits of the employees of Manager,
including, but not limited to, any building manager ("Building Manager")
(but excluding any employee above the level of Building Manager) employed
to supervise the employees at the Property in accordance with Section
III(H), which sums shall be an operating expense of the Property but
allocated to the extent that such Building Manager or other employee
devotes his or her time to management, maintenance and operation of any
properties other than the Property;
(b) the cost of Manager's own office equipment,
stationary, postage, telephone, and all other administrative expenses not
properly chargeable to the Property and general overhead of Manager; and
(c) general accounting and reporting services as such
services are performed by Manager required to fulfill Manager's
accounting and reporting obligations under this Agreement, including, but
not limited to, cost of electronic data processing equipment or cost of
data processing provided by third party data processing companies.
(C) Property Management/Leasing Office. If Owner does not
currently maintain a property management/leasing office in the Property,
Owner may make available up to 1,000 square feet of space in the
Property for a property management/leasing office, which office the Building
Manager (or other appropriate employee of Manager) shall use solely to perform
the duties set forth in this Agreement. Owner may determine the size and
location of such office and Manager shall not pay any rent or other charges by
reason of such office. The cost of remodeling the space, and the cost (or
rental) of furniture, furnishings, fixtures and equipment, including but not
limited to, personal computers, to be placed in such office, shall be paid for
by Owner as an operating expense of the Property in accordance with the
Business Plan and shall at all times be, and remain, the property of the
Owner. Notwithstanding the foregoing, Manager may continue to use any portion
of the Property which is presently used for the operation of the Property and
which is depicted on Exhibit A annexed hereto, for such purpose.
(D) Preparing the Business Plan.
(i) On or before October 15, or at least 75 days before the
beginning of each new Fiscal Year (hereinafter defined), Manager shall prepare
and submit to Owner for its approval a proposed pro-forma business plan in
preliminary draft form (the "Proposed Plan") for the promotion, operation, and
maintenance of the Property in accordance with the Operating Standard taking
into consideration then current market conditions (each a "Business Plan").
Each Business Plan shall consist of an operating budget (the "Operating
Budget"), a capital improvements budget (the "Capital Budget" and together
with the Operating Budget, the "Budgets"), and the leasing guidelines (the
"Leasing Guidelines"). Each Operating Budget shall show, on a month-by-month
basis, in reasonable detail, each line item of anticipated income and expense
including, without limitation, amounts required to establish, maintain and/or
increase Cash Reserves. Each Capital Budget shall show, in reasonable detail,
anticipated expenditures and cost of completion for Capital Improvements with
respect to each Property or portion thereof (exclusive of CM Fees or
construction oversight fees payable to RCG under Sections III(E)(ii)(a) or
(b)). The Leasing Guidelines for the Property shall specify net average
effective rent over the term of the Lease, on a space-by-space basis, taking
into account Base Rent, the term of the Lease, leasing commissions (including
overrides to Manager), tenant improvements, free rent and any other tenant
concessions. Owner may give comments or seek revisions to the Proposed Plan,
but its failure to do so shall not prejudice its right to do so with respect
to the Revised Plan (as hereinafter defined). Manager shall submit to Owner,
within 15 days after the delivery to Owner of the Proposed Plan, but no later
than November 1, the Proposed Plan in definitive form (the "Revised Plan").
Within 15 days from delivery of the Revised Plan, but no later than November
15, Owner shall submit to Manager any comments or proposed revisions to the
Revised Plan. Manager shall submit to Owner, within 15 days thereafter, but no
later than December 1, the final Business Plan incorporating Owner's comments
and revisions (the "Final Plan"). Owner shall approve or disapprove the Final
Plan, within 15 days after receipt thereof, but no later than December 15,
which as so approved shall constitute the "Business Plan". Owner acknowledges
and agrees that the Business Plan is only an estimate and not a guaranty by
Manager and there may be substantial variations between the estimates set
forth in the Business Plan and the actual results. The parties acknowledge and
agree that the Business Plan for the current Fiscal Year is annexed hereto as
Exhibit B and that such Exhibit will serve as the form of the Business Plan
for all subsequent Fiscal Years during the term of this Agreement.
(ii) During any Fiscal Year when Owner has failed to approve
any portion of the Business Plan for any Property prior to the commencement of
the Fiscal Year to which such Business Plan relates, the Property shall be
operated during such Fiscal Year (A) in accordance with such portions of such
Business Plan as to which agreement has been reached, (B) at rates or levels
of expenditures as are actually charged or incurred with respect to Necessary
Expenses and (C) with respect to those portions of such Business Plan which
are discretionary and as to which agreement has not been reached at rates or
levels of expenditures in the approved Business Plan for the preceding Fiscal
Year, (x) increased by the CPI Increase (computed for this purpose from the
January 1st of the last Fiscal Year for which a Business Plan was approved to
December 31st of the Fiscal Year immediately preceding the Fiscal Year to
which the Business Plan in dispute relates) and (y) increased or decreased to
reflect increases or decreases in the percentage of the Property occupied by
tenants since the last Fiscal Year for which a Business Plan was approved (but
only to the extent the Owner reasonably determines that such increases or
decreases are reasonably related to the level of the Property's occupancy).
Unless Manager is otherwise notified by Owner, the fiscal year of the Property
(the "Fiscal Year") shall be from the first (1st) day of January of each year,
to and including the last day of December of such year except that the current
Fiscal Year shall be from the date hereof through December 31, 2000. The
Fiscal Year may not be changed without the express prior written approval of
Owner. Manager shall be entitled to pay all LLC Charges as and when due to the
extent such LLC Charges are either consistent with the Business Plan, are
Necessary Expenses or if inconsistent with the applicable Business Plan, do
not exceed the budgeted line item cost in the Operating Budget and Capital
Budget by more than 10% or increase the Budgets by more than 7% (exclusive of
increases attributable to temporary timing differences arising in the ordinary
course of business), provided that Manager will act prudently and in the best
economic interest of Owner in incurring Necessary Expenses. Owner and Manager
shall review the Business Plan on a quarterly basis and, in connection
therewith, Manager shall prepare and submit for Owner's review any proposed
modifications to the Business Plan. Following any modification approved by
Owner, the "Business Plan" shall be the original Business Plan as so modified.
(iii) Monthly and Quarterly Reports. During the term of this
Agreement, Manager shall render to Owner a monthly (and year to date) written
report (the "Monthly Report"), containing the information and in the form set
forth on Exhibit C for the immediately preceding calendar month. During the
term of this Agreement, Manager shall render to Owner a written quarterly
report (the "Quarterly Report") containing the information and in the form set
forth on Exhibit D for the immediately preceding quarter. Manager shall
prepare all financial statements that are a part of the Monthly and Quarterly
Reports on an accrual basis in accordance with GAAP. Owner, at its election,
may inspect Manager's books and records with respect to the Property and Owner
and may review and make copies of invoices, bills or other supporting data in
connection with a Monthly or Quarterly Report. Manager shall provide
itemization of and supporting data for any sums retained by or claimed to be
due to Manager as a Management Fee (hereinafter defined), Leasing Commission
(hereinafter defined), or otherwise.
(E) Making Contracts for the Property.
(i) Manager, as agent for Owner, shall enter into contracts
(payable at Owner's sole cost and expense) or otherwise arrange for fuel, oil,
vermin extermination, janitorial service, trash removal, snow removal and
other necessary services (each, a "Contract") as shall be consistent with the
Operating Standard and the Business Plan. Unless otherwise approved in writing
by Owner, all contracts shall be terminable by Manager or Owner upon thirty
(30) days notice. Manager shall also be authorized on behalf of Owner to place
orders in Manager's or Owner's name for such equipment, tools, appliances,
materials and supplies ("Personal Property") as are necessary to maintain the
Property in a matter consistent with the Operating Standard and the Business
Plan. Owner hereby acknowledges and agrees that the Contracts executed prior
to the date hereof and set forth on Exhibit E annexed hereto (the "Existing
Contracts") are hereby approved in all respects.
(ii) (a) Subject to the provisions of paragraph (b) below,
so long as Reckson Construction Group, Inc. (or any successor or affiliate
thereof) ("RCG") remains an affiliate of Manager, Owner hereby authorizes
Manager to utilize RCG to provide construction management services ("CM
Services") for tenant improvements and capital improvement projects at the
Property (each particular tenant improvement or capital improvement project, a
"Construction Project" and the CM Services for a Construction Project a "CM
Service"). Subject to Owner's prior approval, RCG shall be reimbursed by Owner
for all costs actually paid to third parties by RCG in connection with the
Construction Project at the Property. If RCG shall perform the CM Services
(and another Qualified Bidder was not engaged to perform such CM Services
pursuant to clause (b) below), RCG shall receive a fee for the CM Services in
an amount equal to six percent (6%) (the "CM Fee") of all costs, except for
the cost of the CM Fee or other amounts in the nature of a fee paid to RCG,
actually paid to third parties under each contract for a particular tenant
improvement or capital improvement (the "Total Project Cost"). CM Services do
not include and no CM Fee shall be paid to RCG for a Construction Project for
which Manager determines no contract was required or which costs less than
$10,000.00.
(b) If a particular Construction Project (other than a
Construction Project which is necessary (and so limited in scope) to remediate
an emergency condition (an "Emergency Project")) is not specified in the then
approved Business Plan or if TIAA LLC has not otherwise received written
notice of a Construction Project, Manager shall give written notice to Owner
and TIAA LLC at least sixty (60) days prior to the commencement of such
Construction Project or such shorter notice as may be practicable under the
circumstances. Notwithstanding the provisions of (a) above, TIAA LLC may, on
behalf of Owner, by notice given to Manager at least thirty (30) days prior to
the commencement of a particular Construction Project (or if TIAA LLC was
given less than 60 days' notice, then within 15 days after such notice was
given), elect not to permit RCG to perform CM Services for that particular
Construction Project; provided, however, TIAA LLC may not make such election
with respect to an Emergency Project. In the event Owner does not approve
RCG's performance of CM Services for the Construction Project pursuant to the
foregoing sentence, Owner shall retain a general contractor to perform such
Construction Project by (x) bidding out the Construction Project to at least
three (3) (or, if RCG is not one of the bidders, to less than three (3) if
Manager does not deem three (3) to be practicable) general contractors who are
reputable and have reasonable financial strength, and such bidders may include
RCG (each a "Qualified Bidder") and (y) awarding such Construction Project to
RCG or to another Qualified Bidder as Owner, may determine in its sole and
absolute discretion, provided however, that the bid shall not be awarded to
RCG without the prior consent of TIAA LLC (the "Successful Contractor").
Manager shall retain RCG to oversee the Successful Contractor's Construction
Project, for which RCG shall be paid a construction oversight fee equal to 2%
of all costs (except for the cost of paying such construction oversight fees
or other amounts in the nature of a fee paid to RCG) actually paid for the
Construction Project.
(c) So long as RCG remains an affiliate of Manager, Owner
hereby authorizes Manager to utilize RCG to provide architectural and
engineering services ("A&E Services") to the Property (each, an "A&E Project")
provided such A&E Services are (1) of satisfactory quality, (2) provided at no
higher than the then current market rates and (3) in accordance with the
applicable Business Plan to the extent the A&E Services are scheduled to
commence on or after the beginning of the 2001 Fiscal Year. Subject to Owner's
approval, RCG shall be reimbursed by Owner for all costs actually paid to
third parties by RCG in connection with an A&E Project. Notwithstanding the
foregoing, if the A&E Service to be provided by RCG with respect to a
particular A&E Project is estimated to exceed $50,000.00, which amount shall
be adjusted annually by the CPI Fraction, then Owner shall (x) bid out such
A&E Project to at least three (3) (or, if RCG is not one of the bidders, to
less than three (3) bidders if Manager does not deem three (3) to be
practicable) qualified third parties who are reputable and have reasonable
financial strength and such bidders may include RCG (each a "Qualified A&E
Bidder") and (y) award such A&E Project to RCG or another Qualified A&E Bidder
as Owner may determine in its sole and absolute discretion, provided however,
that the bid shall not be awarded to RCG without the prior consent of TIAA
LLC.
(d) Manager will deliver to Owner copies of any bids which
Owner is required to provide to TIAA LLC under Section 8.07 of the Operating
Agreement.
(F) Maintaining the Property. Manager shall maintain the
grounds, buildings and other improvements of the Property in a manner
consistent with the Operating Standard, subject to limitations set forth in
Section III(B) and the Business Plan.
(G) Maintaining Insurance. (i) Manager shall place any and
all insurance coverage contemplated in this Section III(G) with such
companies, in such amounts, and with such beneficial interest appearing
therein as shall be acceptable to Owner, in its sole discretion, and such
insurance coverage shall otherwise be in conformity with the requirements of
law or any contractual obligation of Owner with respect thereto. Any changes
in such coverage shall require the approval of TIAA LLC, which approval shall
not be unreasonably withheld. In any event, all such policies shall, at a
minimum, name Owner as beneficiary and each shall provide that the policy
shall not be canceled or amended unless thirty (30) days' prior written notice
of such cancellation or amendment is given to Owner. Manager and its
Affiliates (as defined in the Operating Agreement) maintain insurance coverage
as set forth on Exhibit F for all of the Properties and the other properties
owned or managed by Manager and its Affiliates.
(ii) Owner hereby authorizes Manager to maintain, at Owner's
expense, subject to the Business Plan, throughout the term of this Agreement,
comprehensive general liability insurance policy in such amounts and with such
insurance carriers as Owner from time to time shall determine, insuring Owner
and naming Manager as an additional insured. Manager shall pay the premiums
and other charges with respect thereto on Owner's behalf out of the Bank
Account as operating expenses of the Property. Manager, on its own behalf and
at its own expense, shall also maintain, and provide to Owner evidence of
maintaining, comprehensive general liability insurance in an amount not less
than Two Million Dollars ($2,000,000.00) naming Owner, TIAA LLC and the LLC as
additional insureds.
(iii) Owner shall maintain, or shall authorize Manager to
maintain, at Owner's expense, such fire, extended coverage and other insurance
on the Property in such amounts and with such insurance carriers as Owner
shall from time to time determine. All insurance carriers covering the
Property shall waive any right of subrogation against Manager for negligence
in the performance of its services, under this Agreement with respect to any
fire, extended coverage or other like insurance claim paid to Owner regarding
the Property.
(iv) Manager shall, at Owner's expense, cause to be placed
and kept in force all workers' compensation insurance, insurance against theft
by Manager's employees. To the extent such insurance is required in the
conduct of Manager's business or to cover Manager's employees, such insurance
shall be at Manager's expense, otherwise it shall be an expense of the
Property. Manager understands and agrees that the insurance coverage required
herein by this Agreement shall not limit the extent of Manager's
responsibilities and liabilities otherwise imposed by this Agreement or by any
Federal, State or local law.
(v) Manager shall require all contractors performing work at
the Property to maintain workers compensation and general liability insurance
coverage with such companies, in such amounts, and with such beneficial
interest appearing therein as shall be acceptable to Owner, in its sole
discretion.
(vi) Manager shall notify Owner, in writing, of any material
fire or any other material damage to the Property promptly following such
casualty. Subject to Owner's consent, except in the case of an emergency, in
the event of any personal injury or property damage occurring to or claimed by
any tenant or third party on or with respect to the Property, Manager shall
take such actions as is prudent and consistent with the Operating Standard,
subject to the limitations set forth in Section III(B). Manager shall not
settle any claims against insurance carriers for damages to the Property or
personal injury without the prior written consent of Owner in each instance.
(H) Employing Personnel. Manager shall interview,
investigate, hire, pay, supervise, discipline and discharge the personnel
necessary to be employed in or on the Property in order to manage, maintain
and operate the Property in accordance with the Operating Standard and the
Business Plan. Manager shall comply with all applicable laws with respect to
the employment of such personnel, including without limitation laws regarding
employment and withholding taxes, workers compensation insurance, employee
benefits and employment discrimination. Owner or TIAA on Owner's behalf may
direct Manager to remove any employee of Manager from any assignment at the
Property; provided, however, that if TIAA LLC so directs Manager and the
direction is not for good cause, TIAA LLC shall indemnify and hold Manager and
Owner harmless from any loss, cost or expense (including reasonable attorneys
fees) arising therefrom. Manager shall not discriminate against any employee
or applicant for employment because of race, color, religion, national origin,
ancestry, physical handicap, age or sex; and all employment advertising shall
indicate that Manager is an "Equal Opportunity Employer." Such personnel shall
in every instance be employees of Manager and not of Owner.
(I) Employing Counsel and Other Professionals. Manager may,
on Owner's behalf and at Owner's expense, employ approved counsel and other
professionals in connection with negotiating, amending and renewing leases
consistent with the Operating Standard and the Business Plan and as otherwise
may be required to perform Manager's obligations under this Agreement.
(J) Miscellaneous.(i)Records. Manager shall maintain full
and complete records, books, and accounts (including equipment guarantees,
warranties and construction plans) relating to the Property in a manner
consistent with the Operating Standard. Owner and TIAA LLC shall have the
right (at their sole expense) to inspect and audit such records and statements
required by this Agreement at reasonable hours during the term of this
Agreement and for a period of one (1) year after the effective termination
date of this Agreement, and at any time to take possession of copies of all
bank statements, check registers, canceled checks and invoices, bills and
supporting data related to the Property.
(ii) Tenant Complaints. Consistent with the Operating
Standard, Manager shall maintain businesslike relations with tenants and shall
maintain and, if requested, provide to Owner in a timely manner, records
setting forth tenants' service requests and complaints received and Manager's
action taken to resolve the same.
(iii) Inspections. As part of a continuing program to secure
full performance by tenants of all maintenance and other obligations for which
they are responsible, Manager shall make regular inspections of the Property,
including all rentable and common areas, and, in addition, shall make such
other inspections as may be consistent with the Operating Standard.
(iv) Personnel Returns Required by Law. Manager shall
prepare, execute and file punctually when due (after giving effect to
permitted extensions) all forms, tax returns and other reports required by law
relating to the employment of personnel. Manager shall promptly and timely pay
all taxes and other payments required in connection therewith.
(v) Compliance with Legal Requirements; Contracts. Subject
to the limitations set forth in Section III(B) of this Agreement and to the
extent the same is materially consistent with the Operating Standard, Manager
shall take such necessary action to comply with any and all governmental
constitutions, statutes, regulations, codes, orders or other requirements
affecting the Property from time to time in effect or enacted by any federal,
state, county, municipal or other authority having jurisdiction thereover, and
to comply with all requirements or orders of the Board of Fire Underwriters or
other similar bodies and with all contracts and other agreements affecting the
Property (collectively and individually, the "Legal Requirements"). Manager,
however, shall not take any such action so long as Manager (with Owner's
consent) or Owner is contesting or either party has affirmed to the other its
intention to contest (and promptly institutes proceedings contesting) any such
Legal Requirement, except that if failure to comply promptly with any such
Legal Requirement would or might expose Manager or Owner to criminal
liability, Manager shall cause the same to be complied with, with or without
Owner's approval.
Manager, promptly following receipt of notice of any
significant violation of any Legal Requirement, shall give written notice of
same to Owner and shall deliver to Owner copies thereof.
(K) Renting the Property. Manager shall use commercially
reasonable efforts consistent with the Operating Standard and the Business
Plan (x) to lease vacant space and (y) to keep the Property fully rented to
desirable, credit-worthy tenants. In connection with the leasing of the
Property, Manager shall perform the following:
(i) Enlisting Cooperating Brokers. Manager is hereby
authorized on behalf of Owner and at Owner's expense to (x) enter into an
exclusive agency agreement pursuant to which a third party broker ("Exclusive
Broker") will be retained by Manager on behalf of Owner to act as Owner's
representative and exclusive agent to lease all or a portion of the Property
(an "Exclusive Agency Agreement") or (y) cooperate with or permit an Exclusive
Broker to cooperate with third-party real estate brokers representing tenants
("Co-Brokers") and to pay such Exclusive Broker and Co-Brokers a leasing
commission as determined by the then current market rates ("Standard
Commission"). The parties acknowledge that current market rates are as set
forth on Exhibit G annexed hereto. Manager shall notify Owner in writing
giving reasonable detail (and Manager shall give a copy of such notice to TIAA
LLC) of any changes in market rates.
(ii) Advertising the Property. Manager shall advertise the
Property or portions thereof, prepare and secure advertising signs, publish
and distribute brochures, and advertise in periodicals and other forms of
advertising in accordance with the Operating Standard and the Business Plan.
(iii) Referrals; Negotiating. Owner shall refer to Manager
all inquiries for any rental of space or for renewals of leases for space in
the Property; and, except as hereinafter set forth, all negotiations connected
therewith shall be conducted solely by or under the direction of Manager.
Manager shall make such investigation of prospective tenants as shall be
consistent with the Operating Standard. Owner hereby acknowledges that Manager
manages and acts as leasing agent for, and affiliates of Manager own (directly
or indirectly), other properties in the same commercial property market as the
Property which may be competitive with the Property and that the continuation
of such management, leasing or ownership shall not serve as the basis of any
claim against, or result in any liability to, Manager or its affiliates.
Notwithstanding the foregoing sentence, Manager shall not unfairly allocate
leasing opportunities to other properties owned, managed or leased by Manager
or any of its Affiliates (i) which are appropriate for the Property, (ii) if
the Property can satisfy all of the prospective tenant's specific leasing
requirements and (iii) which (if consummated) would comply with the Business
Plan.
IV. Compensation. The compensation of Manager for the
performance of its obligations under this Agreement shall be as follows:
(A) Management Fee. (i) Subject to clause (ii) below,
Manager shall be compensated for its services under this Agreement in an
amount equal to 3% of Gross Collections (hereinafter defined) collected by
Manager in the current calendar month as set forth in the Monthly Report (the
"Management Fee"). Manager shall include in the Monthly Report the calculation
used in determining the Management Fee. The Management Fee for each month
shall be accrued as of last day of the current month. Manager is authorized to
pay itself the Management Fee at any time subsequent to the date that the
Management Fee is accrued and the Monthly Report has been delivered to Owner.
(ii) If the Annual Report shall indicate that the Adjusted
Net Ordinary Cash Flow from the Properties at the end of any Fiscal Year is
less than the anticipated income set forth in the original approved Business
Plans for the Properties for such Fiscal Year and to the extent that such
shortfall, whether from a decrease in revenue or increase in expenses, is not
attributable to changes in market conditions, then the Management Fees for all
the Properties shall be reduced on a dollar for dollar basis, to not less than
2% of Gross Collections from all of the Properties. Owner or TIAA LLC, on
behalf of Owner, shall notify Manager of the extent to which Owner believes it
is entitled to any reduction in the Management Fee pursuant to this clause
(ii). The provisions of this clause (ii) are intended to operate in tandem
with (and without duplication of) the corresponding provisions of the other
Management Agreements between the other Property Owners and Manager to affect
the aggregate Management Fees payable under all such Management Agreements.
(iii) Any dispute regarding the Management Fee (including
any dispute under clause (ii)) shall be resolved by arbitration in accordance
with Article XIX.
(B) Leasing Commissions. For Manager's services under
Section III(K) of this Agreement, Owner shall pay to Manager a leasing
commission ("Leasing Commission") in the following manner:
(i) Existing Leases. Manager shall not be entitled to a
Leasing Commission by virtue of any leases executed by Owner prior to the date
hereof for space in the Property (each, an "Existing Lease"), whether or not
the terms of such Existing Lease have commenced or the tenants under such
lease have commenced to occupy the space; provided, that, subject to the
limitations set forth in subparagraph (v) below, Manager shall receive a
Leasing Commission in connection with (a) any renewal of any Existing Lease
(whether or not pursuant to an existing option), (b) the expansion of the
space presently covered by such Existing Lease (whether or not pursuant to the
exercise of any option contained in the Existing Lease) (c) an amendment of an
Existing Lease that results in additional income to the Owner or (d) existing
Leases set forth on Exhibit H.
(ii) Space Occupied by Owner and by Agent. Manager shall not
be entitled to a Leasing Commission on account of any space in the Property
leased to or occupied by Owner, by Manager, or by any affiliate of Owner or
Manager, where such leased or occupied space is used primarily for the
management and operation of the Property.
(iii) New Leases and Expansions. Manager shall not be
entitled to a Leasing Commission on account of any space in the Property
leased to a tenant by an Exclusive Broker retained by Manger pursuant to an
Exclusive Agency Agreement. Subject to the limitation in the foregoing
sentence, in connection with (a) all new leases for space in the Property (and
the renewals of such new leases or the expansion of the premises demised
pursuant to such new leases during the term of this Agreement) and (b) those
instances set forth in paragraph (i) above where Manager shall be entitled to
a Leasing Commission, Manager shall receive the following as a Leasing
Commission: (1) if a Co-Broker is entitled to a leasing commission, Manager
shall be entitled to a Leasing Commission in an amount equal to 25% of a
Standard Commission or (2) if no Co-Broker is involved in the transaction,
Manager shall be entitled to a Leasing Commission equal to 50% of the Standard
Commission. Manager, on behalf of Owner, shall pay all leasing commissions,
fees, and commissions of the Co-Broker from the Bank Account.
(iv) Payment of Leasing Commissions. Leasing Commissions
shall be due and payable to Manager as follows: Leasing Commission upon (1)
with respect to a new lease, lease amendment, lease expansion or lease renewal
(other than to evidence the exercise of a lease expansion or renewal option,
which shall be governed by clause (2) of this sentence), 50% upon the
execution and delivery of a final lease (or lease amendment) by Owner (or
Manager) and tenant and 50% upon the taking of occupancy and the commencement
of rent payments and (2) with respect to a lease expansion option or lease
renewal option, the date such tenant exercises its option; provided, however,
that if the tenant defaults prior to paying the first month's rent with
respect to the expansion space (in the case of a lease expansion option) or
the first month's rent with respect to the renewal period (in the case of a
lease renewal option), (as the case may be) and the lease is terminated on
account thereof, Manager shall refund 50% of the Leasing Commission paid with
respect to such lease expansion option or lease renewal option.
(v) Commission After Termination. Manager shall not be
entitled to a Leasing Commission respecting (a) a lease for space in the
Property or (b) any renewal or expansion by a tenant, in each case occurring
after termination of this Agreement. Notwithstanding the foregoing, Manager
shall be entitled to a Leasing Commission for (x) any Leasing Commission
accruing through the date of the termination of this Agreement which was not
yet payable as of the date of the termination; or (y) all Prospective Tenants
with whom Manager was in negotiation at the time of giving or receipt of such
notice of termination, provided that within fifteen (15) days following notice
of termination of this Agreement, Manager shall register with Owner in writing
a list of all such Prospective Tenants and setting forth with respect to each
such Prospective Tenant, the tenant's name and address, and the space(s) in
the Property for which negotiations were then in progress, and further
provided that, within a period of one hundred thirty-five (135) days after the
effective date of termination, a lease with such prospective tenant for space
in the Property was actually entered into. As used herein the term
"Prospective Tenants" shall mean (i) prospective new tenants at the Property
and (ii) existing tenants with whom Manager was negotiating for renewal of
their leases and/or expansion of their premises and who agree to such renewal
or expansion within such 135 day period.
(vi) Cancellation Provision. In leases containing a
cancellation privilege on the part of the tenant, Owner shall pay to Manager a
Leasing Commission in accordance with the provisions of Section IV(B)(iv)
computed as if the lease term ended on the date when cancellation could first
occur (the "Cancellation Date"), and, in the event of cancellation, no further
Leasing Commission will be due. If the tenant does not exercise the
cancellation privilege and remains as a tenant in the Property beyond the
Cancellation Date, Owner shall pay the remainder of the Leasing Commission.
V. Bank Account. Owner shall establish a bank account (the
"Bank Account") into which all funds collected by Manager for the benefit of
each Owner under this Agreement shall, without exception, be deposited
promptly by Manager. The Bank Account shall be in Owner's name, and Manager
and Owner shall be authorized to deposit and withdraw moneys from the Bank
Account in accordance with this Agreement. Owner and Manager shall maintain in
the Bank Account the Property Level Reserves to permit the proper and timely
performance by Manager of its obligations under this Agreement and to maintain
the Operating Standard taking into account anticipated future revenues and
expenses. To the extent required by law or provided in leases at the Property,
Manager shall deposit any security deposits received by Manager in a separate
bank account in the name of, and for the benefit of, Owner to be administered
and applied by Manager on behalf of Owner in accordance with such leases and
applicable law.
VI. Hold Harmless
(A) Owner agrees to (i) hold and save Manager free and
harmless from any damages or injuries to persons or property by reason of any
cause whatsoever either in and about the Property or elsewhere when Manager is
carrying out the provisions of this Agreement or acting under the express or
implied directions of Owner; (ii) reimburse Manager upon demand for any monies
which Manager is required to pay out for any reason whatsoever, either in
connection with, or as an expense in defense of, any claim, civil or criminal
action, proceeding, charge or prosecution made, instituted or maintained
against Manager or Owner and Manager jointly or severally, affecting or due to
the condition or use of the Property, or acts or omissions of employees of
Owner, or arising out of or based upon any law, regulation, discriminatory
practices (sexual or harassment), requirement, contract or award relating to
the hours of employment, working conditions, wages and/or compensation of
employees or former employees of Owner, or otherwise in connection with the
ownership, operation, leasing, maintenance or status of the Property or the
performance by Manager of its duties under this Agreement; and (iii) defend
promptly and diligently, at Owner's sole expense, any claim, action or
proceeding brought against Manager or Manager and Owner jointly or severally
arising out of or connected with any of the foregoing, and to hold harmless
and fully indemnify Manager from any judgment, loss or settlement on account
thereof; provided, however that Owner shall have no obligation under (i)-(iii)
hereof with respect to any matter for which it is finally determined that
Manager is obligated to indemnify Owner under (B) below, although pending such
a determination Owner shall advance the cost of defense subject to a right to
recoup the same upon final determination that Manager is not entitled to
indemnification hereunder. It is expressly understood and agreed that the
foregoing provisions of this Section shall survive the termination of this
Agreement, but this shall not be construed to mean that Owner's liability does
not survive as to other provisions of this Agreement.
(B) Manager shall indemnify and hold Owner harmless of, from
and against any and all expenses, claims, damages, losses and liabilities
caused or occasioned by or arising out of the fraud, gross negligence, willful
or wanton misconduct of Manager or acts of Manager beyond the authority
granted to Manager under this Agreement.
VII. Representations, Warranties and Covenants of Manager.
Manager hereby warrants and represents that Manager is a duly licensed real
estate broker in the State where the Property is located. Manager further
represents and warrants that it is in good standing and otherwise is qualified
to do business in such jurisdiction, and has full power and authority to enter
into this Agreement and carry out its obligations under this Agreement.
VIII. Termination.
(A) During the term of this Agreement, including any renewal
term, TIAA LLC on behalf of Owner may terminate this Agreement upon ten (10)
Business Days' prior written notice to Manager if an OM Termination Event
occurs pursuant to Section 7.02(c) of the Operating Agreement.
(B) In the event of a sale (including a sale by foreclosure
or deed in lieu of foreclosure) of the Property, this Agreement shall
automatically terminate with respect to such Property upon the consummation of
such sale.
(C) Manager may terminate this Agreement at any time upon 45
days' prior written notice, which notice shall specify the effective date of
termination.
(D) Upon termination:
(i) Manager shall have the right to remove from the
Property, without compensation to Owner, any computer equipment and any
proprietary software owned by Manager;
(ii) an escrow fund held by a bank, title insurance company
or other escrow agent designated by Manager and reasonably acceptable to Owner
("Escrow Agent") in an amount reasonably acceptable to Manager and Owner shall
be established from Gross Collections (or, if Gross Collections are not
sufficient, with funds provided by Owner) to cover (a) any amounts which are
due or shall become due to Manager, (b) any expenses which are required to be
paid by Manager under the Management Agreement and (c) other pending or
contingent claims, including those which arise after termination for causes
arising during the term of this Agreement.
(iii) an escrow fund to be held by Escrow Agent in an amount
reasonably acceptable to Manager and Owner shall be established from Gross
Collections (or, if Gross Collections are not sufficient, with funds provided
by Owner) to reimburse Manager for all costs and expenses incurred by Manager
which arise out of the termination of employment of Manager's employees at the
Property, such as reasonable severance pay, payments with respect to any
pension plan, unemployment compensation or other employee liability costs; and
(iv) any signage which contains the word "Reckson" (or any
initials or abbreviations thereof) or any trademark, tradename or logo
identifying "Reckson", directly or indirectly, may be removed by Manager from
the Property, provided that Manager shall repair any physical damage caused by
such removal.
(E) Notwithstanding the termination of this Agreement under
this Section VIII, Owner and Manager shall be liable for and shall be
obligated to perform their respective duties or obligations under this
Agreement up to and including the effective date of termination and Manager
shall be entitled to compensation in accordance with this Agreement accruing
through the date of termination, as well as any compensation which may be owed
to Manager after the termination of this Agreement pursuant to this Agreement.
Upon any such termination, Manager shall forthwith (i) deliver to Owner, as
received, any funds due Owner under this Agreement but received after such
termination, (ii) deliver to Owner all materials and supplies, and keys,
leases, contracts and documents, and such other accounting, paper,
correspondence, files and records pertaining to the Property or to this
Agreement, (iii) assign to Owner, or to anyone designated by Owner without
recourse, representation or warranty, such existing Contracts as Owner shall
require, (iv) furnish to Owner, or to anyone designated by Owner, all such
information, and take all such action as Owner shall require in order to
effectuate a professional, orderly and systematic ending of Manager's duties
and activities hereunder. Within ten (10) days after the effective date of any
such termination, Manager shall deliver to Owner a Monthly Report for the
period since the last Monthly Report, and within sixty (60) days after the
effective date of any such termination, Manager shall deliver to Owner the
Annual Report for the Fiscal Year or portion thereof ending on the effective
date of termination. The provisions of this Section and Manager's and Owner's
obligations hereunder, shall survive the termination of this Agreement.
IX. Notices. All notices required or permitted by any party
under this Agreement shall be in writing, and served upon any party by (A)
personal delivery, (B) by United States mail, postage prepaid, by registered
or certified mail, return receipt requested, (C) by telecopier with
confirmation of receipt, confirmed in a writing by overnight courier sent on
the same day in accordance with (D) below, or (D) by overnight courier, in
each instance addressed to the respective parties at their respective
addresses as set forth below:
To Owner:
with a copy to: TIAA Tri-State LLC
c/o Teachers Insurance and Annuity Association/College
Retirement Equities Fund
730 Third Avenue
New York, New York 10017-3206
Attention: Nicholas E. Stolatis
Telephone: (212) 916-4479
Telecopier: (212) 916-6306
and a copy to: TIAA Tri-State LLC
c/o Teachers Insurance and Annuity Association/College
Retirement Equities Fund
730 Third Avenue
New York, New York 10017-3206
Attention: Chief Counsel-Mortgage and Real Estate Law
Telephone: (212) 916-4479
Telecopier: (212) 916-6306
To Manager: Reckson Management Group, Inc.
c/o Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, New York 11747
Attention: Jason Barnett, Esq.
Telephone: (516) 694-6900
Telecopier: (516) 622-6788
Each notice, demand, request or communication which shall be
mailed, delivered or transmitted in the manner described above shall be
deemed, given, served or delivered at such time as it is received by the
addressee upon presentation or at such times as delivery is attempted in the
case of any change in address as to which notice was not given to the other
party as required hereunder or in the case of a refusal to accept delivery.
Counsel for each party may deliver notices on behalf of such party.
X. No Joint Venture. Nothing herein shall be deemed or
construed to create any partnership, joint venture or other form of joint
enterprise between the parties hereto.
XI. Agreement Not Assignable. This Agreement is personal in
nature, and neither party may, without the express prior written consent of
the other party, assign or transfer its rights hereunder, nor permit any
assignee or transferee to assume its obligations hereunder. Without intending
to limit the foregoing, each party is expressly prohibited from appointing
sub-agents without the express prior written consent of the other party.
Notwithstanding the foregoing, without Owner's consent, Manager may (A) assign
its rights under this Agreement or (B) transfer its ownership interests, so
long as in each case after such assignment or transfer, Manager remains an
Special Affiliate of Reckson; provided however that an assignment of this
Agreement to an entity which is not a Special Affiliate of Reckson or a
transfer of the ownership interests in Manager which results in Manager not
being a Special Affiliate of Reckson which Reckson deems reasonably necessary
or desirable in order for Reckson Associates (as defined in the Operating
Agreement) to maintain its tax status as a REIT, shall be permitted, so long
as the Senior Management of Reckson remains actively involved in the
management of the assignee or transferee.
XII. Entire Agreement and Binding Effect. This Agreement
shall constitute the entire agreement between the parties hereto and no
modification or amendment thereof shall be effective unless made by
supplemental agreement in writing, executed by both of the parties hereto.
This Agreement shall be binding, upon and shall inure to the benefit of the
parties hereto, and, to the extent assignment does not violate the provisions
of Section XII hereof, upon their respective successors and assigns.
XIII. New York Law. This Agreement is made under and shall
be governed by the laws of the State of New York without giving effect to
principles of conflict of laws. Any court of competent jurisdiction within the
State of New York shall be the proper forum for bringing an action to enforce
or construe the provisions of this Agreement. If any court of competent
jurisdiction is unable to construe any provision of this Agreement or holds
any part thereof to be invalid, such holding, shall in no way affect the
validity of the remainder of this Agreement.
XIV. Attorneys' Fees. In the event of any action between
Manager and Owner seeking enforcement of any of the terms and conditions of
this Agreement, or in connection with the Property, the prevailing party in
such action shall be awarded, in addition to damages, injunctive or other
relief, its reasonable costs and expenses, including reasonable attorneys'
fees.
XV. Authority. Subject to the limitations set forth in this
Agreement, Manager may enter into and execute any agreement or agreements
(other than leases, lease amendments, renewals, modifications, terminations or
surrenders which shall be entered into and executed only by Owner) and any
other instruments or documents and take all actions consistent with the
Operating Standard and the Business Plan, for, and on, Owner's behalf as shall
be necessary to carry out the intent and purposes of this Agreement. All
actions taken by Manager on behalf of Owner shall be binding on Owner and all
third parties shall be entitled to rely on any document signed, or actions
taken, by Manager to be the action or obligation of Owner. So long as Reckson
is the Operating Member under the Operating Agreement, every act of Manager
which requires Owner's consent and does not specifically require TIAA LLC's
consent shall be deemed consented to by Owner to the extent the Operating
Member is entitled to act without the Non-Operating Member's consent under the
Operating Agreement. So long as Reckson is the Operating Member under the
Operating Agreement, every act of Manager which requires notice to Owner and
does not specifically require notice to TIAA LLC shall be deemed given to
Owner.
XVI. Signage. Manager may, subject to Owner's prior consent,
place on the Property such signage as Manager deems to be consistent with the
Operating Standard, provided that such signage shall not refer to Manager or
its Affiliates as the owner of the Property.
XVII. Independent Contractor. Manager understands and agrees
that its relationship to Owner is that of independent contractor and that it
will not represent to anyone that its relationship to owner is other than that
of independent contractor.
XVIII. Books and Records. Manager will cooperate with Owner
to coordinate a download from IBS to Timberline for the maintenance of
parallel books by the Members.
XIX. Arbitration
(A) Any dispute under Section IV(A)(i) or (ii) of this
Agreement shall be finally settled by arbitration in accordance with CPR
Institute for Dispute Resolution Rules for Non-Administered Arbitration,
except as modified herein. The place of arbitration shall be New York, New
York. Either Party may commence arbitration by addressing to the other party a
notice of arbitration. Within 5 days after receipt of the notice of
arbitration, the Respondent shall deliver to the Claimant a notice of defense.
In the event Respondent does not deliver such a notice, all claims set forth
in the demand shall be deemed denied.
(B) The arbitration shall be conducted by a sole arbitrator
jointly appointed by the parties within 10 days of receipt by the Respondent
of the notice of arbitration. If the parties have not jointly appointed an
arbitrator by that time, either party may request the CPR to appoint the sole
arbitrator, and the CPR shall endeavor to make the appointment within 5 days
of that request, provided, however, that its failure to meet that deadline
shall in no way impair the effectiveness of the appointment. The CPR shall
endeavor to appoint as arbitrator a person with substantial experience in the
real estate business, but the appointee's qualifications or lack of
qualifications in this respect shall under no circumstances impair the
effectiveness of the appointment or provide cause for challenge. The CPR shall
have no obligation to follow the procedures set forth in Rule 6, but shall
instead appoint a person whom it deems qualified to serve.
(C) The arbitrator shall have authority to take all steps
necessary and appropriate in order to hold a hearing within 40 days of his or
her appointment and to render an award within 5 days thereafter. The
arbitrator shall have full discretion to set the procedure or modify the Rules
in any way he or she deems necessary in order to meet those deadlines.
Provided, however, that failure to meet those deadlines shall in no way affect
the validity or effectiveness of the award.
(D) In each arbitration, the arbitrator shall only determine
the disputed amount of the Management Fee under Section IV(A)(i) of this
Agreement or the disputed amount of any reduction in the Management Fee under
Section IV(A)(ii) of this Agreement. The arbitrator shall have no authority to
award damages beyond the disputed amount in Section IV(A)(ii). The parties
expressly waive their right to seek any such damages.
(E) The arbitration and this clause shall be governed by
Title 9 (Arbitration) of the United States Code, the decision of the
arbitration shall be final and judgment on the award may be entered by any
court of competent jurisdiction. The parties herewith consent to jurisdiction
in the federal and state courts located in the county of New York, New York,
for the purpose of enforcing the award.
(F) Each party is required to continue to perform its
obligations under this Agreement pending final resolution of any dispute
arising out of relating to this Agreement, unless to do so would be impossible
or impracticable under the circumstances.
IN WITNESS WHEREOF, Owner and Manager have each caused their duly
authorized officers to execute this Agreement as of the day and year first
written above.
OWNER
By:________________________________
Name:
Title:
MANAGER
RECKSON MANAGEMENT GROUP, INC.
By:________________________________
Name: Jason Barnett
Title: Executive Vice President
PROPERTY MANAGEMENT AND LEASING AGREEMENT
BETWEEN
______________
AND
RECKSON MANAGEMENT GROUP, INC., A NEW YORK CORPORATION
TABLE OF CONTENTS
RECITALS.......................................................................................................1
AGREEMENT......................................................................................................2
I. Appointment..................................................................................2
II. Term.........................................................................................2
III. Services To Be Performed By Manager..........................................................2
(A) Collecting Rents and Enforcing Obligations.............................................2
(B) Paying Expenses........................................................................3
(i) Power to Disburse.............................................................3
(ii) Limitation on Disbursements...................................................3
(iii) No Obligation to Advance......................................................4
(iv) Remainder Remitted to Owner...................................................4
(v) Excluded Expenses.............................................................4
(C) Property Management/Leasing Office.....................................................5
(D) Preparing the Business Plan............................................................6
(E) Making Contracts for the Property......................................................9
(F) Maintaining the Property..............................................................11
(G) Maintaining Insurance.................................................................11
(H) Employing Personnel...................................................................13
(I) Employing Counsel and Other Professionals.............................................14
(J) Miscellaneous.........................................................................14
(i) Records......................................................................14
(ii) Tenant Complaints............................................................14
(iii) Inspections..................................................................15
(iv) Personnel Returns Required by Law............................................15
(v) Compliance with Legal Requirements; Contracts................................15
(K) Renting the Property..................................................................16
(i) Enlisting Cooperating Brokers................................................16
(ii) Advertising the Property.....................................................16
(iii) Referrals; Negotiating.......................................................16
IV. Compensation................................................................................17
(A) Management Fee........................................................................17
(B) Leasing Commissions...................................................................18
(i) Existing Leases..............................................................18
(ii) Space Occupied by Owner and by Agent.........................................19
(iii) New Leases and Expansions....................................................19
(v) Commission After Termination.................................................20
(vi) Cancellation Provision.......................................................20
V. Bank Account................................................................................21
VI. Hold Harmless...............................................................................21
VII. Representations, Warranties and Covenants of Manager........................................22
VIII. Termination.................................................................................23
IX. Notices.....................................................................................25
X. No Joint Venture............................................................................26
XI. Agreement Not Assignable....................................................................26
XII. Entire Agreement and Binding Effect.........................................................27
XIII. New York Law................................................................................27
XIV. Attorneys' Fees.............................................................................27
XV. Authority...................................................................................27
XVI. Signage.....................................................................................28
XVII. Independent Contractor......................................................................28
XVIII. Books and Records...........................................................................28
XIX. Arbitration.................................................................................28
EXHIBIT A OPERATION SPACE AT PROPERTY................................................................A-1
EXHIBIT B BUSINESS PLAN..............................................................................B-1
EXHIBIT C MONTHLY REPORT FORMAT......................................................................C-1
EXHIBIT D QUARTERLY REPORT FORMAT....................................................................D-1
EXHIBIT E EXISTING CONTRACTS.........................................................................E-1
EXHIBIT F CURRENT INSURANCE COVERAGES................................................................F-1
EXHIBIT G COMMISSION SCHEDULE........................................................................G-1
EXHIBIT H EXISTING LEASES............................................................................H-1
INDEX OF DEFINED TERMS
Unless otherwise specified references to Articles of
Sections are to articles and sections of this Agreement. Unless the context
otherwise specifies or requires, capitalized terms used herein shall apply
equally to both the singular and the plural forms of such capitalized terms
and shall have the following respective meanings:
A&E Project: As defined in Section III(E)(ii)(b).
A&E Services: As defined in Section III(E)(ii)(b).
Adjusted Net Ordinary Cash Flow: As defined in Article I of
the Operating Agreement.
Annual Report: Means the financial report of the LLC
prepared by the Operating Member and delivered to the Non-Operating Member
within 90 days after the end of each Fiscal Year in accordance with Section
8.04 of the Operating Agreement.
Bank Account: As defined in Section V.
Budgets: As defined in Section III(D)(i).
Building Manager: As defined in Section III(B)(iv)(a)
Business Day: Monday through Friday of each week, except
that a legal holiday recognized as such by the Government of the United States
and any other day on which banks in the State of New York are required or
permitted to be closed shall not be regarded as a business day.
Business Plan: As defined in Section III(D)(i)
Cancellation Date: As defined in Section IV(B)(vi).
Capital Budget: As defined in Section III(D)(i).
CM Fee: As defined in Section III(E)(ii)(a).
CM Service: As defined in Section III(E)(ii)(a).
Co-Brokers: As defined in Section III(K)(i).
Construction Project: As defined in Section III(E)(ii)(a).
Contract: As defined in Section III(E)(i).
CPI: Means the Consumer Price Index for All Urban Consumers
(CPI-U), All Items, applicable to the N.Y.-Northeastern N.J. area (1982-84 =
100) for urban wage earners and clerical workers, as published by the U.S.
Department of Labor, Bureau of Labor Statistics. If such Consumer Price Index
is discontinued or otherwise revised during the term of this Agreement, the
Consumer Price Index for All Urban Consumers (CPI-U), All Items, U.S. City
Average (1982-84 = 100) for urban wage earners and clerical workers, as
published by the U.S. Department of Labor, Bureau of Labor Statistics, shall
be used, and if such national index is discontinued or otherwise revised
during the term of this Agreement, such other government index or computation
with which it is replaced shall be used in order to obtain substantially the
same result as would be obtained if the Consumer Price Index had not been
discontinued or revised.
CPI Increase: As of any date during the term of this
Agreement (such date, the "Determination date"), the percent of increase, if
any, in the CPI for the month in which the applicable Determination Date
occurs over the CPI for September, 2000. The parties agree that if such
percentage increase is not an even multiple of 10%, such percentage shall be
reduced to the next lowest even multiple of 10%.
Emergency Project: As defined in Section III(E)(ii)(b).
Escrow Agent: As defined in Section VIII(D)(ii).
Exclusive Agency Agreement: As defined in Section III(K)(i).
Exclusive Broker: As defined in Section III(K)(i).
Existing Contracts: As defined in Section III(E)(i).
Existing Lease: As defined in Section IV(B)(i).
Final Plan: As defined in Section III(D)(i).
Fiscal Year: As defined in Section III.
Gross Collections: Means all amounts actually collected by
Manager as rents or additional rent or other charges in connection with the
use and occupancy of the Property, but shall exclude: (i) income derived from
interest on investments or otherwise; (ii) proceeds of claims on account of
insurance policies (except for business interruption or rental insurance);
(iii) abatement or refund of taxes; (iv) awards arising out of takings by
eminent domain; (v) discounts and dividends on insurance policies; (vi)
payments made by tenants for amortization of the cost of above-standard tenant
improvements paid for by Owner, which payments are separately identified in
the lease and are not included in the base rent thereunder; (vii) all purchase
discounts, concessions, rebates and allowances; and (viii) security deposits
unless applied.
Lease: Any lease, license or other agreement now or
hereafter entered into which permits the use and occupancy of any portion of
any Property.
Leasing Commission: As defined in Section IV(B).
Leasing Guidelines: As defined in Section III(D)(i).
LLC Expenses: As defined in Section III.
Management Agreements: At any time, collectively, this
Agreement and each other Management Agreement (as defined in Article I of the
Operating Agreement) then in effect for the Properties.
Management Fee: As defined in Section IV(A).
Management Fees: At any time, the aggregate of the
"Management Fee" payable to Manager under the Management Agreements then in
effect for all of the Properties.
Manager: As defined in the first paragraph of this Agreement.
Members: As defined in the recitals to this Agreement.
Monthly Report: As defined in Section III(D)(iii).
Necessary Expense: Means expenses required to provide
necessary services for the Property and to operate and maintain the level and
quality of services for the Property provided as of the date hereof, plus
(without duplication) (i) any amounts required to comply with (A) all
applicable Legal Requirements, (B) obligations under Leases other than the
general obligation to maintain the applicable property in a first class manner
and (C) other contractual obligations to third parties; (ii) utility charges,
ground rent, amounts payable to Manager under this Agreement, wages and
benefits to employees and insurance premiums; and (iii) amounts necessary to
avoid imminent danger to life or property.
Net Ordinary Cash Flow: As defined in Article I of the
Operating Agreement.
Non-Operating Member: Means TIAA LLC and any party
succeeding to TIAA LLC's membership interest in the LLC.
OM Termination Event: As defined in Section 7.02(c) of the
Operating Agreement.
Operating Agreement: As defined in the recitals to this
Agreement.
Operating Budget: As defined in Section III(D)(i)
Operating Member: Means Reckson and any party succeeding to
the Reckson's membership interest in the LLC pursuant to the provisions of the
Operating Agreement.
Operating Standard: As defined in Section I.
Owner: As defined in the recitals to this Agreement.
Person: Any individual, corporation, association,
partnership, limited liability company, joint venture, trust, estate or other
entity or organization.
Personal Property: As defined in Section III(E)(i).
Property: As defined in the recitals to this Agreement.
Property: As defined in the Operating Agreement.
Properties: As defined in Article I of the Operating
Agreement.
Property Owners: As defined in Article I of the Operating
Agreement.
Property Level Reserves: As defined in Section III(B)(iv).
Prospective Tenant: As defined in Section IV(B)(v).
Proposed Plan: As defined in Section III(D)(i).
Qualified A&E Bidder: As defined in Section III(E)(ii)(b).
Qualified Bidder: As defined in Section III(E)(ii)(b).
Quarterly Report: As defined in Section III(D)(iii).
RCG: As defined in Section III(E)(ii)(a).
Reckson: As defined in the recitals to this Agreement.
Reckson Associates: As defined in Article I of the Operating
Agreement.
REIT: Means a Real Estate Investment Trust.
Revised Plans: As defined in Section III(D)(i).
Special Affiliate: As defined in Article I of the Operating
Agreement.
Standard Commission: As defined in Section III(K)(i).
Successful Contractor: As defined in Section III(E)(ii)(b).
Taxes: Means all sales, payroll, real estate, personal
property, occupancy and other exercise, property, privilege or other taxes and
assessments imposed upon the Property, the LLC (with respect to the Property)
or Owner.
TIAA LLC: As defined in the recitals to this Agreement.
Total Project Cost: As defined in Section III(E)(ii)(a).
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Donald J. Rechler ("Executive") and Reckson Associates Realty Corp., a
Maryland corporation with a principal place of business at 225 Broadhollow
Road, Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
June 1, 1998 (the "Prior Agreement") by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the title Co-Chief Executive
Officer of the Employer. Executive's duties and authority shall be as set
forth in the By-laws of the Employer and as otherwise established by the Board
of Directors of the Employer, and shall be commensurate with his titles and
positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
investing his assets as a passive investor in other entities or business
ventures, provided that he performs no management or similar role with respect
to such other entities or ventures and such investment does not violate
Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $525,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary for
the remaining term of this Agreement after the date of Executive's
termination, at the rate in effect on the date of his termination and on
the same periodic payment dates as payment would have been made to
Executive had the Employment Period not been terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into account
any changes in such benefits effected in violation of this Agreement. For
purposes of the application of such benefits, Executive shall be treated
as if he had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of the
Employer for the remaining term of this Agreement after the date of
Executive's termination so that (x) any stock options or other awards
(including restricted stock grants) of the Executive under such plan
shall continue to vest and become exercisable, and (y) Executive shall be
entitled to exercise any exercisable options or other rights;
(iv) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of this Agreement; and
(v) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer which, by reducing the number
of shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Employer beneficially owned by
any Person to 30% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional stock of the Employer or other Voting
Securities (other than pursuant to a share split, stock dividend, or similar
transaction), then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), or (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By: ------------------------------------------------------
Name:
Title:
-----------------------------------------------------------
Donald J. Rechler
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Donald J. Rechler (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of February 25, 1998 by and among the Executive
and the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive,
subject only to the severance provisions specifically set forth in this
Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions
with the Employer, which, in Executive's reasonable judgment, does
not represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior
to the Change-in-Control, or any removal of Executive from or any
failure to reappoint or reelect Executive to such positions, except
in connection with the termination of Executive's employment for
Good Reason, disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as
in effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of
the benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute
benefit plan, program or arrangement with substantially the same
terms and to the same extent and with the same rights as Executive
had with respect to the benefit plan, program or arrangement that is
discontinued) other than as a result of the normal expiration of any
such benefit plan, program or arrangement in accordance with its
terms as in effect at the time of the Change-in-Control, or the
taking of any action, or the failure to act, by the Employer which
would adversely affect Executive's continued participation in any of
such benefit plans, programs or arrangements on at least as
favorable a basis to Executive as is the case on the date of the
Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed
by Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit
Executive with the number of paid vacation days to which Executive
is then entitled in accordance with the Employer's normal vacation
policies as in effect immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's
residence immediately prior to the Change-in-Control, except for
required travel relating to the Employer's business to an extent
substantially consistent with the business travel obligations which
Executive undertook on behalf of the Employer prior to the
Change-in-Control;
(vi) the failure by the Employer to obtain from any successor
to the Employer an agreement to be bound by this Agreement and the
Employment Agreement; or
(vii) any refusal by the Employer to continue to allow
Executive to attend to matters or engage in activities not directly
related to the business of the Employer which, prior to the
Change-in-Control, Executive was permitted by the Employer's Boards
of Directors to attend to or engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full
Base Salary though the date of termination at the rate in effect on
such date, (y) compensation for accrued but unused vacation time,
plus (z) a pro rata portion of the Executive's incentive
compensation for the calendar year in which the event of termination
occurs, assuming that the Executive would have received incentive
compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to
subsection 3(a) of the Employment Agreement for such full calendar
year and (B) the greater of (a) 1/2 or (b) a percentage equal to the
following
(I) the sum of (x) the cash bonus awarded to the Executive for
the immediately preceding fiscal year, (y) the product of the price
per share of Common Stock on the date of termination (as equitably
adjusted to reflect any changes in the capitalization of the
Employer) and the aggregate number of shares of Common Stock
granted, sold or covered by options or loans awarded to the
Executive as incentive compensation for the immediately preceding
fiscal year, and (z) the value of all other incentive compensation
paid or awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such incentive
compensation includible in the Executive's gross income and reported
on an Internal Revenue Service Form W-2), divided by (II) the
Executive's Base Salary for the immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the
"Deemed Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not
later than the tenth day following the date of termination, a lump
sum severance payment (the "Severance Payment") equal to the
aggregate of all compensation that would have been due to the
Executive hereunder had his or her employment not been so terminated
(without duplication of subsection 3(c)(i) above), including,
without limitation, (A) Base Salary (at the greater of the rate
payable pursuant to subsection 3(a) of the Employment Agreement or
the rate payable to the other Co-Chief Executive Officer of the
Employer), and (B) all incentive compensation which would have been
due to the Executive pursuant to subsection 3(b) of the Employment
Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event
of a Change-in-Control) assuming that the Executive would have
received incentive compensation for each calendar year through the
expiration of this Agreement (as such Agreement may continue in
effect under Section 2 hereof in the event of a Change-in-Control)
equal to the product of (x) the Base Salary payable to the Executive
pursuant to clause (A), and (y) the Deemed Bonus Percentage (or, if
greater, the Deemed Bonus Percentage determined with respect to the
other Co-Chief Executive Officer of the Employer), payable in the
same proportions of cash, grants of securities, loans to purchase
securities, loan forgiveness and gross-up payments as the incentive
compensation paid to the Executive for the immediately preceding
fiscal year; provided, however, that such Severance Payment shall
not be payable to the Executive until (I) the Executive has executed
and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For
purposes of determining Executive's annual compensation in the
preceding sentence, compensation payable to the Executive by the
Employer shall include, without limitation, every type and form of
compensation includible in the Executive's gross income in respect
of his or her employment by the Employer (including, without
limitation, all income reported on an Internal Revenue Service Form
W-2), compensation income recognized as a result of the Executive's
exercise of stock options or sale of the stock so acquired and any
annual incentive compensation paid in cash or securities to such
Executive;
(iii) An amount equal to the Additional Amount pursuant to
Section 5 below and an amount equal to the Income Tax Payment
pursuant to Section 6 below;
(iv) For the remaining term of the Employment Agreement,
Executive shall continue to receive all benefits described in
Section 3 of the Employment Agreement existing immediately prior to
the date of termination (without taking into account any changes in
such benefits effected in violation of the Employment Agreement) and
any other benefits then provided by Employer to Executive in
addition to those described in Section 3 of the Employment
Agreement, including, but not limited to, the life insurance
coverage provided by Employer to Executive and the automobile
provided by Employer to Executive and automobile insurance and
maintenance in respect of such automobile. For purposes of the
application of such benefits, Executive shall be treated as if he or
she had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(v) For purposes of any equity compensation plan of the
Employer, (x) any stock options or other awards (including
restricted stock grants) of the Executive under such plan shall vest
and become exercisable upon any such termination, and (y) Executive
shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after
the date of Executive's termination so that Executive shall be
entitled to exercise any exercisable options or other rights;
(vi) For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if
he or she had remained in the employ of the Employer for the
remaining term of the Employment Agreement after the date of
Executive's termination so that Executive may continue to receive
all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection
with such plan as in effect immediately prior to such termination;
(vii) The amount of any outstanding loans made by the Employer
to the Executive, together with any interest accrued on any such
loans, and any related "tax" loans made by the Employer to the
Executive in respect of tax liabilities owing as the result of the
forgiveness of such loans (including forgiveness pursuant to the
terms of this Section 3(c)(vii)), together with any interest accrued
on any such tax loans, shall be deemed forgiven and Executive shall
have no further liability in respect thereof;
(viii) If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer
may not be paid or provided under such plan or program to Executive,
or to Executive's dependents, beneficiaries or estate, because
Executive is no longer considered to be an employee of the Employer,
the Employer shall pay or provide for payment of such benefits and
service credits to Executive, or to Executive's dependents,
beneficiaries or estate, for the remaining term of the Employment
Agreement; and
(ix) Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will
not serve to reduce in any way the amounts and benefits payable in
accordance herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in the
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has received or will receive any compensation or
recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if (i) the
Executive has received or will receive any compensation or recognize any
income (whether or not pursuant to this Agreement, the Employment Agreement or
any plan or other arrangement of the Employer and whether or not the
Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by Executive
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.
9. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
-------------------------------------------------
Name:
Title:
-------------------------------------------------
Donald J. Rechler
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Gregg Rechler ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
June 1, 1998 (the "Prior Agreement") by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the titles Co-Chief Operating
Officer, Executive Vice President and Secretary of the Employer. Executive's
duties and authority shall be as set forth in the By-laws of the Employer and
as otherwise established by the Board of Directors of the Employer, and shall
be commensurate with his titles and positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
investing his assets as a passive investor in other entities or business
ventures, provided that he performs no management or similar role with respect
to such other entities or ventures and such investment does not violate
Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $400,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary
for the remaining term of this Agreement after the date of
Executive's termination, at the rate in effect on the date of his
termination and on the same periodic payment dates as payment would
have been made to Executive had the Employment Period not been
terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into
account any changes in such benefits effected in violation of this
Agreement. For purposes of the application of such benefits,
Executive shall be treated as if he had remained in the employ of
the Employer with a Base Salary at the rate in effect on the date of
termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of
the Employer for the remaining term of this Agreement after the date
of Executive's termination so that (x) any stock options or other
awards (including restricted stock grants) of the Executive under
such plan shall continue to vest and become exercisable, and (y)
Executive shall be entitled to exercise any exercisable options or
other rights;
(iv) If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer
may not be paid or provided under such plan or program to Executive,
or to Executive's dependents, beneficiaries or estate, because
Executive is no longer considered to be an employee of the Employer,
the Employer shall pay or provide for payment of such benefits and
service credits to Executive, or to Executive's dependents,
beneficiaries or estate, for the remaining term of this Agreement;
and
(v) Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will
not serve to reduce in any way the amounts and benefits payable in
accordance herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer which, by reducing the number
of shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Employer beneficially owned by
any Person to 30% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional stock of the Employer or other Voting
Securities (other than pursuant to a share split, stock dividend, or similar
transaction), then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), or (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
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Name:
Title:
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Gregg Rechler
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Gregg Rechler (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of February 25, 1998 by and among the Executive
and the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive,
subject only to the severance provisions specifically set forth in this
Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions with
the Employer, which, in Executive's reasonable judgment, does not
represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior to
the Change-in-Control, or any removal of Executive from or any failure to
reappoint or reelect Executive to such positions, except in connection
with the termination of Executive's employment for Good Reason,
disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as in
effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of the
benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute benefit
plan, program or arrangement with substantially the same terms and to the
same extent and with the same rights as Executive had with respect to the
benefit plan, program or arrangement that is discontinued) other than as
a result of the normal expiration of any such benefit plan, program or
arrangement in accordance with its terms as in effect at the time of the
Change-in-Control, or the taking of any action, or the failure to act, by
the Employer which would adversely affect Executive's continued
participation in any of such benefit plans, programs or arrangements on
at least as favorable a basis to Executive as is the case on the date of
the Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed by
Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit Executive
with the number of paid vacation days to which Executive is then entitled
in accordance with the Employer's normal vacation policies as in effect
immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's residence
immediately prior to the Change-in-Control, except for required travel
relating to the Employer's business to an extent substantially consistent
with the business travel obligations which Executive undertook on behalf
of the Employer prior to the Change-in-Control;
(vi) the failure by the Employer to obtain from any successor to the
Employer an agreement to be bound by this Agreement and the Employment
Agreement; or
(vii) any refusal by the Employer to continue to allow Executive to
attend to matters or engage in activities not directly related to the
business of the Employer which, prior to the Change-in-Control, Executive
was permitted by the Employer's Boards of Directors to attend to or
engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full
Base Salary though the date of termination at the rate in effect on
such date, (y) compensation for accrued but unused vacation time,
plus (z) a pro rata portion of the Executive's incentive
compensation for the calendar year in which the event of termination
occurs, assuming that the Executive would have received incentive
compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to
subsection 3(a) of the Employment Agreement for such full calendar
year and (B) the greater of (a) 1/2 or (b) a percentage equal to the
following
(I) the sum of (x) the cash bonus awarded to the Executive
for the immediately preceding fiscal year, (y) the product
of the price per share of Common Stock on the date of
termination (as equitably adjusted to reflect any changes in
the capitalization of the Employer) and the aggregate number
of shares of Common Stock granted, sold or covered by
options or loans awarded to the Executive as incentive
compensation for the immediately preceding fiscal year, and
(z) the value of all other incentive compensation paid or
awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such
incentive compensation includible in the Executive's gross
income and reported on an Internal Revenue Service Form
W-2), divided by (II) the Executive's Base Salary for the
immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the
"Deemed Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not
later than the tenth day following the date of termination, a lump
sum severance payment (the "Severance Payment") equal to the
aggregate of all compensation that would have been due to the
Executive hereunder had his or her employment not been so terminated
(without duplication of subsection 3(c)(i) above), including,
without limitation, (A) Base Salary (at the greater of the rate
payable pursuant to subsection 3(a) of the Employment Agreement or
the highest rate then payable to any Executive Vice President of the
Employer), and (B) all incentive compensation which would have been
due to the Executive pursuant to subsection 3(b) of the Employment
Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event
of a Change-in-Control) assuming that the Executive would have
received incentive compensation for each calendar year through the
expiration of this Agreement (as such Agreement may continue in
effect under Section 2 hereof in the event of a Change-in-Control)
equal to the product of (x) the Base Salary payable to the Executive
pursuant to clause (A), and (y) the Deemed Bonus Percentage (or, if
greater, the highest Deemed Bonus Percentage determined with respect
to any Executive Vice President of the Employer), payable in the
same proportions of cash, grants of securities, loans to purchase
securities, loan forgiveness and gross-up payments as the incentive
compensation paid to the Executive for the immediately preceding
fiscal year; provided, however, that such Severance Payment shall
not be payable to the Executive until (I) the Executive has executed
and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For
purposes of determining Executive's annual compensation in the
preceding sentence, compensation payable to the Executive by the
Employer shall include, without limitation, every type and form of
compensation includible in the Executive's gross income in respect
of his or her employment by the Employer (including, without
limitation, all income reported on an Internal Revenue Service Form
W-2), compensation income recognized as a result of the Executive's
exercise of stock options or sale of the stock so acquired and any
annual incentive compensation paid in cash or securities to such
Executive;
(iii) An amount equal to the Additional Amount
pursuant to Section 5 below and an amount equal to the Income Tax
Payment pursuant to Section 6 below;
(iv) For the remaining term of the Employment
Agreement, Executive shall continue to receive all benefits described
in Section 3 of the Employment Agreement existing immediately prior
to the date of termination (without taking into account any changes
in such benefits effected in violation of the Employment Agreement)
and any other benefits then provided by Employer to Executive in
addition to those described in Section 3 of the Employment Agreement,
including, but not limited to, the life insurance coverage provided
by Employer to Executive and the automobile provided by Employer to
Executive and automobile insurance and maintenance in respect of such
automobile. For purposes of the application of such benefits,
Executive shall be treated as if he or she had remained in the employ
of the Employer with a Base Salary at the rate in effect on the date
of termination;
(v) For purposes of any equity compensation plan of
the Employer, (x) any stock options or other awards (including
restricted stock grants) of the Executive under such plan shall vest
and become exercisable upon any such termination, and (y) Executive
shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after the
date of Executive's termination so that Executive shall be entitled
to exercise any exercisable options or other rights;
(vi) For purposes of any section 401(k) plan or
other deferred compensation plan of the Employer, Executive shall be
treated as if he or she had remained in the employ of the Employer
for the remaining term of the Employment Agreement after the date of
Executive's termination so that Executive may continue to receive all
matching contributions as provided by the Employer in connection with
such plan or any other contributions by Employer in connection with
such plan as in effect immediately prior to such termination;
(vii) The amount of any outstanding loans made by
the Employer to the Executive, together with any interest accrued on
any such loans, and any related "tax" loans made by the Employer to
the Executive in respect of tax liabilities owing as the result of
the forgiveness of such loans (including forgiveness pursuant to the
terms of this Section 3(c)(vii)), together with any interest accrued
on any such tax loans, shall be deemed forgiven and Executive shall
have no further liability in respect thereof;
(viii) If, in spite of the provisions above, any
benefits or service credits under any benefit plan or program of the
Employer may not be paid or provided under such plan or program to
Executive, or to Executive's dependents, beneficiaries or estate,
because Executive is no longer considered to be an employee of the
Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's
dependents, beneficiaries or estate, for the remaining term of the
Employment Agreement; and
(ix) Nothing herein shall be deemed to obligate
Executive to seek other employment in the event of any such
termination and any amounts earned or benefits received from such
other employment will not serve to reduce in any way the amounts and
benefits payable in accordance herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in the
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has received or will receive any compensation or
recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if (i) the
Executive has received or will receive any compensation or recognize any
income (whether or not pursuant to this Agreement, the Employment Agreement or
any plan or other arrangement of the Employer and whether or not the
Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by Executive
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.
9. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
-------------------------------------------------
Name:
Title:
-------------------------------------------------
Gregg Rechler
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Michael Maturo ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
June 1, 1998 (the "Prior Agreement"), by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the titles Executive Vice
President, Chief Financial Officer and Treasurer of the Employer. Executive's
duties and authority shall be as set forth in the By-laws of the Employer and
as otherwise established by the Board of Directors of the Employer, and shall
be commensurate with his titles and positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
(i) continuing to serve as a member of the Board of Directors, and as
Treasurer, of FrontLine Capital Group ("FrontLine"), (ii) continuing to serve
as a member of the Board of Directors of HQ Global Holdings, Inc. ("HQ") or
(iii) investing his assets as a passive investor in other entities or business
ventures, provided that he performs no management or similar role with respect
to such other entities or ventures and such investment does not violate
Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $400,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary
for the remaining term of this Agreement after the date of
Executive's termination, at the rate in effect on the date of his
termination and on the same periodic payment dates as payment would
have been made to Executive had the Employment Period not been
terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into
account any changes in such benefits effected in violation of this
Agreement. For purposes of the application of such benefits,
Executive shall be treated as if he had remained in the employ of
the Employer with a Base Salary at the rate in effect on the date of
termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of
the Employer for the remaining term of this Agreement after the date
of Executive's termination so that (x) any stock options or other
awards (including restricted stock grants) of the Executive under
such plan shall continue to vest and become exercisable, and (y)
Executive shall be entitled to exercise any exercisable options or
other rights;
(iv) If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer
may not be paid or provided under such plan or program to Executive,
or to Executive's dependents, beneficiaries or estate, because
Executive is no longer considered to be an employee of the Employer,
the Employer shall pay or provide for payment of such benefits and
service credits to Executive, or to Executive's dependents,
beneficiaries or estate, for the remaining term of this Agreement;
and
(v) Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will
not serve to reduce in any way the amounts and benefits payable in
accordance herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer which, by reducing the number
of shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Employer beneficially owned by
any Person to 30% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional stock of the Employer or other Voting
Securities (other than pursuant to a share split, stock dividend, or similar
transaction), then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity, (iii) continuing to serve as a member of
the Board of Directors, and as Treasurer, of FrontLine or (iv) continuing to
serve as a member of the Board of Directors of HQ.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By
-------------------------------------
Name:
Title:
-----------------------------------------
Michael Maturo
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Michael Maturo (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of February 25, 1998 by and among the Executive
and the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive,
subject only to the severance provisions specifically set forth in this
Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions with
the Employer, which, in Executive's reasonable judgment, does not
represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior to
the Change-in-Control, or any removal of Executive from or any failure to
reappoint or reelect Executive to such positions, except in connection
with the termination of Executive's employment for Good Reason,
disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as in
effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of the
benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute benefit
plan, program or arrangement with substantially the same terms and to the
same extent and with the same rights as Executive had with respect to the
benefit plan, program or arrangement that is discontinued) other than as
a result of the normal expiration of any such benefit plan, program or
arrangement in accordance with its terms as in effect at the time of the
Change-in-Control, or the taking of any action, or the failure to act, by
the Employer which would adversely affect Executive's continued
participation in any of such benefit plans, programs or arrangements on
at least as favorable a basis to Executive as is the case on the date of
the Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed by
Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit Executive
with the number of paid vacation days to which Executive is then entitled
in accordance with the Employer's normal vacation policies as in effect
immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's residence
immediately prior to the Change-in-Control, except for required travel
relating to the Employer's business to an extent substantially consistent
with the business travel obligations which Executive undertook on behalf
of the Employer prior to the Change-in-Control;
(vi) the failure by the Employer to obtain from any successor to the
Employer an agreement to be bound by this Agreement and the Employment
Agreement; or
(vii) any refusal by the Employer to continue to allow Executive to
attend to matters or engage in activities not directly related to the
business of the Employer which, prior to the Change-in-Control, Executive
was permitted by the Employer's Boards of Directors to attend to or
engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full
Base Salary though the date of termination at the rate in effect on
such date, (y) compensation for accrued but unused vacation time,
plus (z) a pro rata portion of the Executive's incentive
compensation for the calendar year in which the event of termination
occurs, assuming that the Executive would have received incentive
compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to
subsection 3(a) of the Employment Agreement for such full calendar
year and (B) the greater of (a) 1/2 or (b) a percentage equal to the
following
(I) the sum of (x) the cash bonus awarded to the Executive
for the immediately preceding fiscal year, (y) the product
of the price per share of Common Stock on the date of
termination (as equitably adjusted to reflect any changes in
the capitalization of the Employer) and the aggregate number
of shares of Common Stock granted, sold or covered by
options or loans awarded to the Executive as incentive
compensation for the immediately preceding fiscal year, and
(z) the value of all other incentive compensation paid or
awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such
incentive compensation includible in the Executive's gross
income and reported on an Internal Revenue Service Form
W-2), divided by (II) the Executive's Base Salary for the
immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the
"Deemed Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not
later than the tenth day following the date of termination, a lump
sum severance payment (the "Severance Payment") equal to the
aggregate of all compensation that would have been due to the
Executive hereunder had his or her employment not been so terminated
(without duplication of subsection 3(c)(i) above), including,
without limitation, (A) Base Salary (at the greater of the rate
payable pursuant to subsection 3(a) of the Employment Agreement or
the highest rate then payable to any Executive Vice President of the
Employer), and (B) all incentive compensation which would have been
due to the Executive pursuant to subsection 3(b) of the Employment
Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event
of a Change-in-Control) assuming that the Executive would have
received incentive compensation for each calendar year through the
expiration of this Agreement (as such Agreement may continue in
effect under Section 2 hereof in the event of a Change-in-Control)
equal to the product of (x) the Base Salary payable to the Executive
pursuant to clause (A), and (y) the Deemed Bonus Percentage (or, if
greater, the highest Deemed Bonus Percentage determined with respect
to any Executive Vice President of the Employer), payable in the
same proportions of cash, grants of securities, loans to purchase
securities, loan forgiveness and gross-up payments as the incentive
compensation paid to the Executive for the immediately preceding
fiscal year; provided, however, that such Severance Payment shall
not be payable to the Executive until (I) the Executive has executed
and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For
purposes of determining Executive's annual compensation in the
preceding sentence, compensation payable to the Executive by the
Employer shall include, without limitation, every type and form of
compensation includible in the Executive's gross income in respect
of his or her employment by the Employer (including, without
limitation, all income reported on an Internal Revenue Service Form
W-2), compensation income recognized as a result of the Executive's
exercise of stock options or sale of the stock so acquired and any
annual incentive compensation paid in cash or securities to such
Executive;
(iii) An amount equal to the Additional Amount pursuant to
Section 5 below and an amount equal to the Income Tax Payment
pursuant to Section 6 below;
(iv) For the remaining term of the Employment Agreement,
Executive shall continue to receive all benefits described in
Section 3 of the Employment Agreement existing immediately prior to
the date of termination (without taking into account any changes in
such benefits effected in violation of the Employment Agreement) and
any other benefits then provided by Employer to Executive in
addition to those described in Section 3 of the Employment
Agreement, including, but not limited to, the life insurance
coverage provided by Employer to Executive and the automobile
provided by Employer to Executive and automobile insurance and
maintenance in respect of such automobile. For purposes of the
application of such benefits, Executive shall be treated as if he or
she had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(v) For purposes of any equity compensation plan of the
Employer, (x) any stock options or other awards (including
restricted stock grants) of the Executive under such plan shall vest
and become exercisable upon any such termination, and (y) Executive
shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after
the date of Executive's termination so that Executive shall be
entitled to exercise any exercisable options or other rights;
(vi) For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if
he or she had remained in the employ of the Employer for the
remaining term of the Employment Agreement after the date of
Executive's termination so that Executive may continue to receive
all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection
with such plan as in effect immediately prior to such termination;
(vii) The amount of any outstanding loans made by the Employer
to the Executive, together with any interest accrued on any such
loans, and any related "tax" loans made by the Employer to the
Executive in respect of tax liabilities owing as the result of the
forgiveness of such loans (including forgiveness pursuant to the
terms of this Section 3(c)(vii)), together with any interest accrued
on any such tax loans, shall be deemed forgiven and Executive shall
have no further liability in respect thereof;
(viii) If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer
may not be paid or provided under such plan or program to Executive,
or to Executive's dependents, beneficiaries or estate, because
Executive is no longer considered to be an employee of the Employer,
the Employer shall pay or provide for payment of such benefits and
service credits to Executive, or to Executive's dependents,
beneficiaries or estate, for the remaining term of the Employment
Agreement; and
(ix) Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will
not serve to reduce in any way the amounts and benefits payable in
accordance herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Employer, the Executive has received or will receive any compensation
or recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if
(i) the Executive has received or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement, the Employment
Agreement or any plan or other arrangement of the Employer and whether or not
the Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by
Executive without the prior written consent of the Employer and (ii) may be
assigned by the Employer and shall be binding upon, and inure to the benefit
of, the Employer's successors and assigns. Headings herein are for convenience
of reference only and shall not define, limit or interpret the contents
hereof.
9. Amendment. This Agreement may be amended, modified or
supplemented by the mutual consent of the parties in writing, but no oral
amendment, modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates
any one or more of the provisions hereof as invalid, illegal or unenforceable
in any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by
the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
-------------------------------------------------
Name:
Title:
-------------------------------------------------
Michael Maturo
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Mitchell Rechler ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
June 1, 1998 (the "Prior Agreement"), by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the titles Co-Chief Operating
Officer and Executive Vice President of the Employer. Executive's duties and
authority shall be as set forth in the By-laws of the Employer and as
otherwise established by the Board of Directors of the Employer, and shall be
commensurate with his titles and positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
(i) serving as a member of the Board of Directors of Frontline Capital Group
("FrontLine") or (ii) investing his assets as a passive investor in other
entities or business ventures, provided that he performs no management or
similar role with respect to such other entities or ventures and such
investment does not violate Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $400,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary for
the remaining term of this Agreement after the date of Executive's
termination, at the rate in effect on the date of his termination and on
the same periodic payment dates as payment would have been made to
Executive had the Employment Period not been terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into account
any changes in such benefits effected in violation of this Agreement. For
purposes of the application of such benefits, Executive shall be treated
as if he had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of the
Employer for the remaining term of this Agreement after the date of
Executive's termination so that (x) any stock options or other awards
(including restricted stock grants) of the Executive under such plan
shall continue to vest and become exercisable, and (y) Executive shall be
entitled to exercise any exercisable options or other rights;
(iv) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of this Agreement; and
(v) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be
deemed to have occurred for purposes of the foregoing clause (A) solely as the
result of an acquisition of securities by the Employer which, by reducing the
number of shares of stock or other Voting Securities outstanding, increases
(x) the proportionate number of shares of stock of the Employer beneficially
owned by any Person to 30% or more of the shares of stock then outstanding or
(y) the proportionate voting power represented by the Voting Securities
beneficially owned by any Person to 30% or more of the combined voting power
of all then outstanding Voting Securities; provided, however, that if any
Person referred to in clause (x) or (y) of this sentence shall thereafter
become the beneficial owner of any additional stock of the Employer or other
Voting Securities (other than pursuant to a share split, stock dividend, or
similar transaction), then a "Change-in-Control" shall be deemed to have
occurred for purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in
which the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity, or (iii) serving as a member of the Board
of Directors of FrontLine.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
------------------------------------------------------
Name:
Title:
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Mitchell Rechler
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Mitchell Rechler (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of February 25, 1998 by and among the Executive
and the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive,
subject only to the severance provisions specifically set forth in this
Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions with
the Employer, which, in Executive's reasonable judgment, does not
represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior to
the Change-in-Control, or any removal of Executive from or any failure to
reappoint or reelect Executive to such positions, except in connection
with the termination of Executive's employment for Good Reason,
disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as in
effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of the
benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute benefit
plan, program or arrangement with substantially the same terms and to the
same extent and with the same rights as Executive had with respect to the
benefit plan, program or arrangement that is discontinued) other than as
a result of the normal expiration of any such benefit plan, program or
arrangement in accordance with its terms as in effect at the time of the
Change-in-Control, or the taking of any action, or the failure to act, by
the Employer which would adversely affect Executive's continued
participation in any of such benefit plans, programs or arrangements on
at least as favorable a basis to Executive as is the case on the date of
the Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed by
Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit Executive
with the number of paid vacation days to which Executive is then entitled
in accordance with the Employer's normal vacation policies as in effect
immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's residence
immediately prior to the Change-in-Control, except for required travel
relating to the Employer's business to an extent substantially consistent
with the business travel obligations which Executive undertook on behalf
of the Employer prior to the Change-in-Control;
(vi) the failure by the Employer to obtain from any successor to the
Employer an agreement to be bound by this Agreement and the Employment
Agreement; or
(vii) any refusal by the Employer to continue to allow Executive to
attend to matters or engage in activities not directly related to the
business of the Employer which, prior to the Change-in-Control, Executive
was permitted by the Employer's Boards of Directors to attend to or
engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full Base
Salary though the date of termination at the rate in effect on such date,
(y) compensation for accrued but unused vacation time, plus (z) a pro
rata portion of the Executive's incentive compensation for the calendar
year in which the event of termination occurs, assuming that the
Executive would have received incentive compensation for such full
calendar year equal to the product of (A) the Base Salary that would be
payable to the Executive pursuant to subsection 3(a) of the Employment
Agreement for such full calendar year and (B) the greater of (a) 1/2 or
(b) a percentage equal to the following
(I) the sum of (x) the cash bonus awarded to the Executive
for the immediately preceding fiscal year, (y) the product
of the price per share of Common Stock on the date of
termination (as equitably adjusted to reflect any changes in
the capitalization of the Employer) and the aggregate number
of shares of Common Stock granted, sold or covered by
options or loans awarded to the Executive as incentive
compensation for the immediately preceding fiscal year, and
(z) the value of all other incentive compensation paid or
awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such
incentive compensation includible in the Executive's gross
income and reported on an Internal Revenue Service Form
W-2), divided by (II) the Executive's Base Salary for the
immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the
"Deemed Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not later
than the tenth day following the date of termination, a lump sum
severance payment (the "Severance Payment") equal to the aggregate of all
compensation that would have been due to the Executive hereunder had his
or her employment not been so terminated (without duplication of
subsection 3(c)(i) above), including, without limitation, (A) Base Salary
(at the greater of the rate payable pursuant to subsection 3(a) of the
Employment Agreement or the highest rate then payable to any Executive
Vice President of the Employer), and (B) all incentive compensation which
would have been due to the Executive pursuant to subsection 3(b) of the
Employment Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event of a
Change-in-Control) assuming that the Executive would have received
incentive compensation for each calendar year through the expiration of
this Agreement (as such Agreement may continue in effect under Section 2
hereof in the event of a Change-in-Control) equal to the product of (x)
the Base Salary payable to the Executive pursuant to clause (A), and (y)
the Deemed Bonus Percentage (or, if greater, the highest Deemed Bonus
Percentage determined with respect to any Executive Vice President of the
Employer), payable in the same proportions of cash, grants of securities,
loans to purchase securities, loan forgiveness and gross-up payments as
the incentive compensation paid to the Executive for the immediately
preceding fiscal year; provided, however, that such Severance Payment
shall not be payable to the Executive until (I) the Executive has
executed and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For purposes
of determining Executive's annual compensation in the preceding sentence,
compensation payable to the Executive by the Employer shall include,
without limitation, every type and form of compensation includible in the
Executive's gross income in respect of his or her employment by the
Employer (including, without limitation, all income reported on an
Internal Revenue Service Form W-2), compensation income recognized as a
result of the Executive's exercise of stock options or sale of the stock
so acquired and any annual incentive compensation paid in cash or
securities to such Executive;
(iii) An amount equal to the Additional Amount pursuant to Section 5
below and an amount equal to the Income Tax Payment pursuant to Section 6
below;
(iv) For the remaining term of the Employment Agreement, Executive
shall continue to receive all benefits described in Section 3 of the
Employment Agreement existing immediately prior to the date of
termination (without taking into account any changes in such benefits
effected in violation of the Employment Agreement) and any other benefits
then provided by Employer to Executive in addition to those described in
Section 3 of the Employment Agreement, including, but not limited to, the
life insurance coverage provided by Employer to Executive and the
automobile provided by Employer to Executive and automobile insurance and
maintenance in respect of such automobile. For purposes of the
application of such benefits, Executive shall be treated as if he or she
had remained in the employ of the Employer with a Base Salary at the rate
in effect on the date of termination;
(v) For purposes of any equity compensation plan of the Employer,
(x) any stock options or other awards (including restricted stock grants)
of the Executive under such plan shall vest and become exercisable upon
any such termination, and (y) Executive shall be treated as if he or she
had remained in the employ of the Employer for the remaining term of the
Employment Agreement after the date of Executive's termination so that
Executive shall be entitled to exercise any exercisable options or other
rights;
(vi) For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if he or
she had remained in the employ of the Employer for the remaining term of
the Employment Agreement after the date of Executive's termination so
that Executive may continue to receive all matching contributions as
provided by the Employer in connection with such plan or any other
contributions by Employer in connection with such plan as in effect
immediately prior to such termination;
(vii) The amount of any outstanding loans made by the Employer to
the Executive, together with any interest accrued on any such loans, and
any related "tax" loans made by the Employer to the Executive in respect
of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)),
together with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect
thereof;
(viii) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of the Employment Agreement; and
(ix) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in the
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has received or will receive any compensation or
recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if (i) the
Executive has received or will receive any compensation or recognize any
income (whether or not pursuant to this Agreement, the Employment Agreement or
any plan or other arrangement of the Employer and whether or not the
Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by Executive
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.
9. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
------------------------------------------
Name:
Title:
------------------------------------------
Mitchell Rechler
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Scott Rechler ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
June 1, 1998 (the "Prior Agreement"), by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the titles Co-Chief Executive
Officer and President of the Employer. Executive's duties and authority shall
be as set forth in the By-laws of the Employer and as otherwise established by
the Board of Directors of the Employer, and shall be commensurate with his
titles and positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
(i) providing services to FrontLine Capital Group ("FrontLine") and its
affiliates, or (ii) investing his assets as a passive investor in other
entities or business ventures, provided that he performs no management or
similar role with respect to such other entities or ventures and such
investment does not violate Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $525,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary for
the remaining term of this Agreement after the date of Executive's
termination, at the rate in effect on the date of his termination and on
the same periodic payment dates as payment would have been made to
Executive had the Employment Period not been terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into account
any changes in such benefits effected in violation of this Agreement. For
purposes of the application of such benefits, Executive shall be treated
as if he had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of the
Employer for the remaining term of this Agreement after the date of
Executive's termination so that (x) any stock options or other awards
(including restricted stock grants) of the Executive under such plan
shall continue to vest and become exercisable, and (y) Executive shall be
entitled to exercise any exercisable options or other rights;
(iv) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of this Agreement; and
(v) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer which, by reducing the number
of shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Employer beneficially owned by
any Person to 30% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional stock of the Employer or other Voting
Securities (other than pursuant to a share split, stock dividend, or similar
transaction), then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity, or (iii) providing services to FrontLine
and its affiliates.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
-------------------------------------------------
Name:
Title:
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Scott Rechler
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Scott Rechler (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of February 25, 1998 by and among the Executive
and the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive,
subject only to the severance provisions specifically set forth in this
Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions with
the Employer, which, in Executive's reasonable judgment, does not
represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior to
the Change-in-Control, or any removal of Executive from or any failure to
reappoint or reelect Executive to such positions, except in connection
with the termination of Executive's employment for Good Reason,
disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as in
effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of the
benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute benefit
plan, program or arrangement with substantially the same terms and to the
same extent and with the same rights as Executive had with respect to the
benefit plan, program or arrangement that is discontinued) other than as
a result of the normal expiration of any such benefit plan, program or
arrangement in accordance with its terms as in effect at the time of the
Change-in-Control, or the taking of any action, or the failure to act, by
the Employer which would adversely affect Executive's continued
participation in any of such benefit plans, programs or arrangements on
at least as favorable a basis to Executive as is the case on the date of
the Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed by
Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit Executive
with the number of paid vacation days to which Executive is then entitled
in accordance with the Employer's normal vacation policies as in effect
immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's residence
immediately prior to the Change-in-Control, except for required travel
relating to the Employer's business to an extent substantially consistent
with the business travel obligations which Executive undertook on behalf
of the Employer prior to the Change-in-Control;
(vi) the failure by the Employer to obtain from any successor to the
Employer an agreement to be bound by this Agreement and the Employment
Agreement; or
(vii) any refusal by the Employer to continue to allow Executive to
attend to matters or engage in activities not directly related to the
business of the Employer which, prior to the Change-in-Control, Executive
was permitted by the Employer's Boards of Directors to attend to or
engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full Base
Salary though the date of termination at the rate in effect on such date,
(y) compensation for accrued but unused vacation time, plus (z) a pro
rata portion of the Executive's incentive compensation for the calendar
year in which the event of termination occurs, assuming that the
Executive would have received incentive compensation for such full
calendar year equal to the product of (A) the Base Salary that would be
payable to the Executive pursuant to subsection 3(a) of the Employment
Agreement for such full calendar year and (B) the greater of (a) 1/2 or
(b) a percentage equal to the following
(I) the sum of (x) the cash bonus awarded to the Executive
for the immediately preceding fiscal year, (y) the product
of the price per share of Common Stock on the date of
termination (as equitably adjusted to reflect any changes in
the capitalization of the Employer) and the aggregate number
of shares of Common Stock granted, sold or covered by
options or loans awarded to the Executive as incentive
compensation for the immediately preceding fiscal year, and
(z) the value of all other incentive compensation paid or
awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such
incentive compensation includible in the Executive's gross
income and reported on an Internal Revenue Service Form
W-2), divided by (II) the Executive's Base Salary for the
immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the
"Deemed Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not later
than the tenth day following the date of termination, a lump sum
severance payment (the "Severance Payment") equal to the aggregate of all
compensation that would have been due to the Executive hereunder had his
or her employment not been so terminated (without duplication of
subsection 3(c)(i) above), including, without limitation, (A) Base Salary
(at the greater of the rate payable pursuant to subsection 3(a) of the
Employment Agreement or the rate payable to the other Co-Chief Executive
Officer of the Employer), and (B) all incentive compensation which would
have been due to the Executive pursuant to subsection 3(b) of the
Employment Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event of a
Change-in-Control) assuming that the Executive would have received
incentive compensation for each calendar year through the expiration of
this Agreement (as such Agreement may continue in effect under Section 2
hereof in the event of a Change-in-Control) equal to the product of (x)
the Base Salary payable to the Executive pursuant to clause (A), and (y)
the Deemed Bonus Percentage (or, if greater, the Deemed Bonus Percentage
determined with respect to the other Co-Chief Executive Officer of the
Employer), payable in the same proportions of cash, grants of securities,
loans to purchase securities, loan forgiveness and gross-up payments as
the incentive compensation paid to the Executive for the immediately
preceding fiscal year; provided, however, that such Severance Payment
shall not be payable to the Executive until (I) the Executive has
executed and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For purposes
of determining Executive's annual compensation in the preceding sentence,
compensation payable to the Executive by the Employer shall include,
without limitation, every type and form of compensation includible in the
Executive's gross income in respect of his or her employment by the
Employer (including, without limitation, all income reported on an
Internal Revenue Service Form W-2), compensation income recognized as a
result of the Executive's exercise of stock options or sale of the stock
so acquired and any annual incentive compensation paid in cash or
securities to such Executive;
(iii) An amount equal to the Additional Amount pursuant to Section 5
below and an amount equal to the Income Tax Payment pursuant to Section 6
below;
(iv) For the remaining term of the Employment Agreement, Executive
shall continue to receive all benefits described in Section 3 of the
Employment Agreement existing immediately prior to the date of
termination (without taking into account any changes in such benefits
effected in violation of the Employment Agreement) and any other benefits
then provided by Employer to Executive in addition to those described in
Section 3 of the Employment Agreement, including, but not limited to, the
life insurance coverage provided by Employer to Executive and the
automobile provided by Employer to Executive and automobile insurance and
maintenance in respect of such automobile. For purposes of the
application of such benefits, Executive shall be treated as if he or she
had remained in the employ of the Employer with a Base Salary at the rate
in effect on the date of termination;
(v) For purposes of any equity compensation plan of the Employer,
(x) any stock options or other awards (including restricted stock grants)
of the Executive under such plan shall vest and become exercisable upon
any such termination, and (y) Executive shall be treated as if he or she
had remained in the employ of the Employer for the remaining term of the
Employment Agreement after the date of Executive's termination so that
Executive shall be entitled to exercise any exercisable options or other
rights;
(vi) For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if he or
she had remained in the employ of the Employer for the remaining term of
the Employment Agreement after the date of Executive's termination so
that Executive may continue to receive all matching contributions as
provided by the Employer in connection with such plan or any other
contributions by Employer in connection with such plan as in effect
immediately prior to such termination;
(vii) The amount of any outstanding loans made by the Employer to
the Executive, together with any interest accrued on any such loans, and
any related "tax" loans made by the Employer to the Executive in respect
of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)),
together with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect
thereof;
(viii) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of the Employment Agreement; and
(ix) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in the
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has received or will receive any compensation or
recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if (i) the
Executive has received or will receive any compensation or recognize any
income (whether or not pursuant to this Agreement, the Employment Agreement or
any plan or other arrangement of the Employer and whether or not the
Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by Executive
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.
9. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
-------------------------------------------------
Name:
Title:
--------------------------------------------------
Scott Rechler
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Roger Rechler ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
June 1, 1998 (the "Prior Agreement") by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the title Executive Vice
President of the Employer. Executive's duties and authority shall be as set
forth in the By-laws of the Employer and as otherwise established by the Board
of Directors of the Employer, and shall be commensurate with his titles and
positions with the Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
(i) serving as a member of the Board of Directors of FrontLine Capital Group
("FrontLine") or (ii) investing his assets as a passive investor in other
entities or business ventures, provided that he performs no management or
similar role with respect to such other entities or ventures and such
investment does not violate Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $400,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary for
the remaining term of this Agreement after the date of Executive's
termination, at the rate in effect on the date of his termination and on
the same periodic payment dates as payment would have been made to
Executive had the Employment Period not been terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into account
any changes in such benefits effected in violation of this Agreement. For
purposes of the application of such benefits, Executive shall be treated
as if he had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of the
Employer for the remaining term of this Agreement after the date of
Executive's termination so that (x) any stock options or other awards
(including restricted stock grants) of the Executive under such plan
shall continue to vest and become exercisable, and (y) Executive shall be
entitled to exercise any exercisable options or other rights;
(iv) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of this Agreement; and
(v) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer which, by reducing the number
of shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Employer beneficially owned by
any Person to 30% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional stock of the Employer or other Voting
Securities (other than pursuant to a share split, stock dividend, or similar
transaction), then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity, or (iii) serving as a member of the Board
of Directors of FrontLine.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
---------------------------------------
Name:
Title:
-------------------------------------------
Roger Rechler
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Roger Rechler (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of February 25, 1998 by and among the Executive
and the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the Employment
Agreement is "at will" and may be terminated by the Employer at any time with
or without Good Reason, by a majority vote of all of the members of the Board
of Directors of the Employer upon written notice to Executive, subject only to
the severance provisions specifically set forth in this Section 3 and in
Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions
with the Employer, which, in Executive's reasonable judgment, does
not represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior
to the Change-in-Control, or any removal of Executive from or any
failure to reappoint or reelect Executive to such positions, except
in connection with the termination of Executive's employment for
Good Reason, disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as
in effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of
the benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute
benefit plan, program or arrangement with substantially the same
terms and to the same extent and with the same rights as Executive
had with respect to the benefit plan, program or arrangement that is
discontinued) other than as a result of the normal expiration of any
such benefit plan, program or arrangement in accordance with its
terms as in effect at the time of the Change-in-Control, or the
taking of any action, or the failure to act, by the Employer which
would adversely affect Executive's continued participation in any of
such benefit plans, programs or arrangements on at least as
favorable a basis to Executive as is the case on the date of the
Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed
by Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit
Executive with the number of paid vacation days to which Executive
is then entitled in accordance with the Employer's normal vacation
policies as in effect immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's
residence immediately prior to the Change-in-Control, except for
required travel relating to the Employer's business to an extent
substantially consistent with the business travel obligations which
Executive undertook on behalf of the Employer prior to the
Change-in-Control;
(vi) the failure by the Employer to obtain from any successor
to the Employer an agreement to be bound by this Agreement and the
Employment Agreement; or
(vii) any refusal by the Employer to continue to allow
Executive to attend to matters or engage in activities not directly
related to the business of the Employer which, prior to the
Change-in-Control, Executive was permitted by the Employer's Boards
of Directors to attend to or engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full Base
Salary though the date of termination at the rate in effect on such date,
(y) compensation for accrued but unused vacation time, plus (z) a pro
rata portion of the Executive's incentive compensation for the calendar
year in which the event of termination occurs, assuming that the
Executive would have received incentive compensation for such full
calendar year equal to the product of (A) the Base Salary that would be
payable to the Executive pursuant to subsection 3(a) of the Employment
Agreement for such full calendar year and (B) the greater of (a) 1/2 or
(b) a percentage equal to the following
(I) the sum of (x) the cash bonus awarded to the Executive
for the immediately preceding fiscal year, (y) the product
of the price per share of Common Stock on the date of
termination (as equitably adjusted to reflect any changes in
the capitalization of the Employer) and the aggregate number
of shares of Common Stock granted, sold or covered by
options or loans awarded to the Executive as incentive
compensation for the immediately preceding fiscal year, and
(z) the value of all other incentive compensation paid or
awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such
incentive compensation includible in the Executive's gross
income and reported on an Internal Revenue Service Form
W-2), divided by (II) the Executive's Base Salary for the
immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the
"Deemed Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not later
than the tenth day following the date of termination, a lump sum
severance payment (the "Severance Payment") equal to the aggregate of all
compensation that would have been due to the Executive hereunder had his
or her employment not been so terminated (without duplication of
subsection 3(c)(i) above), including, without limitation, (A) Base Salary
(at the greater of the rate payable pursuant to subsection 3(a) of the
Employment Agreement or the highest rate then payable to any Executive
Vice President of the Employer), and (B) all incentive compensation which
would have been due to the Executive pursuant to subsection 3(b) of the
Employment Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event of a
Change-in-Control) assuming that the Executive would have received
incentive compensation for each calendar year through the expiration of
this Agreement (as such Agreement may continue in effect under Section 2
hereof in the event of a Change-in-Control) equal to the product of (x)
the Base Salary payable to the Executive pursuant to clause (A), and (y)
the Deemed Bonus Percentage (or, if greater, the highest Deemed Bonus
Percentage determined with respect to any Executive Vice President of the
Employer), payable in the same proportions of cash, grants of securities,
loans to purchase securities, loan forgiveness and gross-up payments as
the incentive compensation paid to the Executive for the immediately
preceding fiscal year; provided, however, that such Severance Payment
shall not be payable to the Executive until (I) the Executive has
executed and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For purposes
of determining Executive's annual compensation in the preceding sentence,
compensation payable to the Executive by the Employer shall include,
without limitation, every type and form of compensation includible in the
Executive's gross income in respect of his or her employment by the
Employer (including, without limitation, all income reported on an
Internal Revenue Service Form W-2), compensation income recognized as a
result of the Executive's exercise of stock options or sale of the stock
so acquired and any annual incentive compensation paid in cash or
securities to such Executive;
(iii) An amount equal to the Additional Amount pursuant to Section 5
below and an amount equal to the Income Tax Payment pursuant to Section 6
below;
(iv) For the remaining term of the Employment Agreement, Executive
shall continue to receive all benefits described in Section 3 of the
Employment Agreement existing immediately prior to the date of
termination (without taking into account any changes in such benefits
effected in violation of the Employment Agreement) and any other benefits
then provided by Employer to Executive in addition to those described in
Section 3 of the Employment Agreement, including, but not limited to, the
life insurance coverage provided by Employer to Executive and the
automobile provided by Employer to Executive and automobile insurance and
maintenance in respect of such automobile. For purposes of the
application of such benefits, Executive shall be treated as if he or she
had remained in the employ of the Employer with a Base Salary at the rate
in effect on the date of termination;
(v) For purposes of any equity compensation plan of the Employer,
(x) any stock options or other awards (including restricted stock grants)
of the Executive under such plan shall vest and become exercisable upon
any such termination, and (y) Executive shall be treated as if he or she
had remained in the employ of the Employer for the remaining term of the
Employment Agreement after the date of Executive's termination so that
Executive shall be entitled to exercise any exercisable options or other
rights;
(vi) For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if he or
she had remained in the employ of the Employer for the remaining term of
the Employment Agreement after the date of Executive's termination so
that Executive may continue to receive all matching contributions as
provided by the Employer in connection with such plan or any other
contributions by Employer in connection with such plan as in effect
immediately prior to such termination;
(vii) The amount of any outstanding loans made by the Employer to
the Executive, together with any interest accrued on any such loans, and
any related "tax" loans made by the Employer to the Executive in respect
of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)),
together with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect
thereof;
(viii) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of the Employment Agreement; and
(ix) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Employer, the Executive has received or will receive any compensation
or recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if
(i) the Executive has received or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement, the Employment
Agreement or any plan or other arrangement of the Employer and whether or not
the Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by
Executive without the prior written consent of the Employer and (ii) may be
assigned by the Employer and shall be binding upon, and inure to the benefit
of, the Employer's successors and assigns. Headings herein are for convenience
of reference only and shall not define, limit or interpret the contents
hereof.
9. Amendment. This Agreement may be amended, modified or
supplemented by the mutual consent of the parties in writing, but no oral
amendment, modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates
any one or more of the provisions hereof as invalid, illegal or unenforceable
in any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by
the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
---------------------------
Name:
Title:
-------------------------------
Roger Rechler
AMENDMENT AND RESTATEMENT OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement") is made as of the 15th day of August, 2000 by and between
Jason Barnett ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends, supersedes and
completely restates the Employment and Noncompetition Agreement made as of
November 2, 1999 (the "Prior Agreement") by and between the Executive and the
Employer.
1. Term. The term of this Agreement shall commence on the date first
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth anniversary of such date (the "Original Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided therein. The Original Term may be extended for
such period or periods, if any, as agreed to by Executive and the Employer
(each a "Renewal Term"). The period of Executive's employment hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".
2. Employment and Duties.
(a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates. Executive shall serve the
Employer as a senior corporate executive with the titles Executive Vice
President, General Counsel and Assistant Secretary of the Employer.
Executive's duties and authority shall be as set forth in the By-laws of the
Employer and as otherwise established by the Board of Directors of the
Employer, and shall be commensurate with his titles and positions with the
Employer.
(b) Executive agrees to his employment as described in this
Paragraph 2 and agrees to devote substantially all of his business time and
efforts to the performance of his duties under this Agreement, except as
otherwise approved by the Board of Directors of the Employer; provided,
however, that nothing herein shall be interpreted to preclude Executive from
investing his assets as a passive investor in other entities or business
ventures, provided that he performs no management or similar role with respect
to such other entities or ventures and such investment does not violate
Section 8 hereof.
(c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require.
Executive shall be based in Nassau County, Suffolk County or New York County,
New York.
3. Compensation and Benefits. In consideration of Executive's services
hereunder, the Employer shall compensate Executive as provided in this Section
3.
(a) Base Salary. The Employer shall pay Executive an aggregate
annual salary at the rate of $400,000 per annum during the Employment Period
("Base Salary"), subject to withholding for applicable federal, state and
local taxes. Base Salary shall be payable in accordance with the Employer's
normal business practices, but in no event less frequently than monthly.
Executive's Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased, but not decreased, by the Employer during
the Employment Period.
(b) Incentive Compensation. In addition to the Base Salary payable
to Executive pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with respect to senior executive officers of the Employer, subject to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's participation in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.
(c) Stock Options. During the Employment Period, Executive shall be
eligible to participate in employee stock option plans established from time
to time for the benefit of senior executive officers and other employees of
the Employer in accordance with the terms and conditions of such plans. All
decisions regarding awards to Executive under the Employer's stock option
plans shall be made in the sole discretion of the Employer's Board of
Directors, or a committee thereof.
(d) Expenses. Executive shall be reimbursed for all reasonable
business related expenses incurred by Executive at the request of or on behalf
of the Employer, subject to such reasonable requirements with respect to
substantiation and documentation as may be specified by the Employer.
(e) Medical and Dental Insurance. During the Employment Period,
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.
(f) Life Insurance and Disability Insurance. During the Employment
Period, the Employer shall provide Executive with life insurance policies and
coverage and comprehensive disability insurance coverage of the same type and
at the same levels in effect with respect to other senior executive officers
of the Employer.
(g) Vacations. Executive shall be entitled to four weeks of paid
vacation per annum in accordance with the then regular procedures of the
Employer governing senior executive officers.
(h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits, including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.
4. Indemnification and Liability Insurance. The Employer agrees to
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director, or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer also agrees to use its best efforts to secure and maintain officers
and directors liability insurance providing coverage for Executive.
5. Employer's Policies. Executive agrees to observe and comply with the
rules and regulations of the Employer as adopted by its Board of Directors
regarding the performance of his duties and to carry out and perform orders,
directions and policies communicated to him from time to time by the
Employer's Board of Directors.
6. Nondisclosure Covenant.
(a) General. All records, financial statements and similar documents
obtained, reviewed or compiled by Executive in the course of the performance
by him of services for the Employer, whether or not confidential information
or trade secrets, shall be the exclusive property of the Employer. Executive
shall have no rights in such documents upon any termination of this Agreement.
(b) Confidential Information. Executive will not disclose to any
person or entity (except as required by applicable law or in connection with
the performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any confidential information of the Employer obtained by
him incident to his employment with the Employer. The term "confidential
information" includes, without limitation, financial information, business
plans, prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information which has
become part of the public domain by means other than Executive's
non-observance of his obligations hereunder. This paragraph shall survive the
termination of this Agreement.
7. Termination and Severance Payments.
(a) At-Will Employment. Executive's employment hereunder is "at
will" and may be terminated by the Employer at any time with or without Good
Reason (as defined in Section 7(e) below), by a majority vote of all of the
members of the Board of Directors of the Employer upon written notice to
Executive, subject only to the severance provisions specifically set forth in
this Section 7, and by the Executive at any time, whether pursuant to Section
7(b) or otherwise.
(b) Termination by Executive. The Employment Period and Executive's
employment hereunder may be terminated effective immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2, or (ii) a material failure by the
Employer to comply with the provisions of Section 3 or a material breach by
the Employer of any other provision of this Agreement.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 7 or otherwise required by law, all
compensation and benefits to Executive under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the
foregoing, if the Employment Period is terminated pursuant to Section 7(b) or
if Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall continue to pay Executive's Base Salary for
the remaining term of this Agreement after the date of Executive's
termination, at the rate in effect on the date of his termination and on
the same periodic payment dates as payment would have been made to
Executive had the Employment Period not been terminated;
(ii) For the remaining term of this Agreement, Executive shall
continue to receive all benefits described in Section 3 existing
immediately prior to the date of termination, without taking into account
any changes in such benefits effected in violation of this Agreement. For
purposes of the application of such benefits, Executive shall be treated
as if he had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(iii) For purposes of any stock option plan of the Employer,
Executive shall be treated as if he had remained in the employ of the
Employer for the remaining term of this Agreement after the date of
Executive's termination so that (x) any stock options or other awards
(including restricted stock grants) of the Executive under such plan
shall continue to vest and become exercisable, and (y) Executive shall be
entitled to exercise any exercisable options or other rights;
(iv) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid
or provided under such plan or program to Executive, or to Executive's
dependents, beneficiaries or estate, because Executive is no longer
considered to be an employee of the Employer, the Employer shall pay or
provide for payment of such benefits and service credits to Executive, or
to Executive's dependents, beneficiaries or estate, for the remaining
term of this Agreement; and
(v) Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts
earned or benefits received from such other employment will not serve to
reduce in any way the amounts and benefits payable in accordance
herewith.
(d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii) Executive shall voluntarily terminate his
employment hereunder (other than pursuant to Section 7(b) hereof), then the
Employment Period shall terminate as of the effective date set forth in the
written notice of such termination (the "Termination Date") and Executive
shall be entitled to receive only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in accordance with the terms of the stock option plan or option
agreement under which the stock options were granted.
(e) Definitions. The following terms shall be defined as set forth
below.
(i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:
(A) any Person, together with all "affiliates" and "associates"
(as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934 (the "Exchange Act")) of such Person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Employer representing 30% or more of (A) the combined voting
power of the Employer's then outstanding securities having the right
to vote in an election of the Employer's Board of Directors ("Voting
Securities"), (B) the combined voting power of the Employer's then
outstanding Voting Securities and any securities convertible into
Voting Securities, or (C) the then outstanding shares of all classes
of stock of the Employer; or
(B) individuals who, as of the effective date of this
Agreement, constitute the Employer's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the
Employer's Board of Directors, provided that any person becoming a
director of the Employer subsequent to the effective date of this
Agreement whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors (other than
an election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Employer,
as such terms are used in Rule 14a-11 of Regulation 14A under the
Exchange Act) shall, for purposes of this Agreement, be considered
an Incumbent Director; or
(C) the stockholders of the Employer shall approve (1) any
consolidation or merger of the Employer or any subsidiary where the
stockholders of the Employer, immediately prior to the consolidation
or merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, but based solely on their
prior ownership of shares of the Employer, shares representing in
the aggregate more than 60% of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (2) any sale, lease, exchange
or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Employer or (3) any plan or
proposal for the liquidation or dissolution of the Employer;
Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer which, by reducing the number
of shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Employer beneficially owned by
any Person to 30% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in clause (x) or (y) of this sentence shall thereafter become the
beneficial owner of any additional stock of the Employer or other Voting
Securities (other than pursuant to a share split, stock dividend, or similar
transaction), then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean a finding by the Employer's Board of
Directors that Executive has (A) acted with gross negligence or willful
misconduct in connection with the performance of his material duties
hereunder; (B) defaulted in the performance of his material duties
hereunder and has not corrected such action within 15 days of receipt of
written notice thereof; (C) willfully acted against the best interests of
the Employer, which act has had a material and adverse impact on the
financial affairs of the Employer; or (D) been convicted of a felony or
committed a material act of common law fraud against the Employer or its
employees and such act or conviction has had, or the Employer's Board of
Directors reasonably determines will have, a material adverse effect on
the interests of the Employer; provided, however, that a finding of Good
Reason shall not become effective unless and until the Board of Directors
provides the Executive notice that it is considering making such finding
and a reasonable opportunity to be heard by the Board of Directors.
(iii) "Person" shall have the meaning used in Sections 13(d) and
14(d) of the Exchange Act; provided however, that the term "Person" shall
not include (A) any executive officer of the Employer on the date hereof,
or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary
or other person or entity holding securities under any employee benefit
plan of the Employer or any of its subsidiaries.
(f) Termination by Reason of Death. The Employment Period shall
terminate upon Executive's death and in such event, the Employer shall pay
Executive's Base Salary for a period of six (6) months from the date of his
death, or such longer period as the Employer's Boards of Directors may
determine, to Executive's estate or to a beneficiary designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.
(g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently perform his duties hereunder because of any
physical or mental disability or illness, Executive shall be entitled to be
paid his Base Salary until the later of such time when (i) the period of
disability or illness (whether or not the same disability or illness) shall
exceed 180 consecutive days during the Employment Period and (ii) Executive
becomes eligible to receive benefits under a comprehensive disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the expiration of the Disability Period, the Employer may terminate this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain exercisable or vest upon such termination only to
the extent provided in the applicable option plan and option agreements .
(h) Arbitration in the Event of a Dispute Regarding the Nature of
Termination. In the event that the Employer terminates Executive's employment
for Good Reason and Executive contends that Good Reason did not exist, the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration Association ("AAA"). In such a proceeding, the only
issue before the arbitrator will be whether Executive was in fact terminated
for Good Reason. If the arbitrator determines that Executive was not
terminated for Good Reason, the only remedy that the arbitrator may award is
entitlement to the severance payments and benefits specified in Paragraph
7(c), the costs of arbitration, and Executive's attorneys' fees. If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive anything, the parties will each
be responsible for their own attorneys' fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.
8. Noncompetition Covenant.
(a) Because Executive's services to the Employer are essential and
because Executive has access to the Employer's confidential information,
Executive covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by Executive other than pursuant to Section 7(b) hereof, during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous
consent of the Directors who are not officers of the Employer, directly or
indirectly:
(A) engage, participate or assist, as an owner, partner,
employee, consultant, director, officer, trustee or agent, in any
business that engages or attempts to engage in, directly or
indirectly, the acquisition, development, construction, operation,
management or leasing of any industrial or office real estate
property in any of the submarkets throughout the tri-state
metropolitan area of New York, New Jersey and Connecticut in which
the Company is operating, or
(B) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Employer or
its affiliates and any tenant, supplier, contractor, lender,
employee or governmental agency or authority.
(b) For purposes of this Section 8, the Noncompetition Period shall
mean the period commencing on the date of termination of Executive's
employment under this Agreement and ending on the later of (i) the third
anniversary of the effective date of the Prior Agreement, or (ii) the first
anniversary of the date of termination of Executive's employment under this
Agreement.
(c) Notwithstanding anything contained herein to the contrary,
Executive is not prohibited by this Section 8 from (i) maintaining his
investment in any Option Property (as such term is defined in the Employer's
final prospectus relating to the initial public offering of the Employer's
Common Stock), or (ii) from making investments in any entity that engages,
directly or indirectly, in the acquisition, development, construction,
operation, management or leasing of industrial or office real estate
properties, regardless of where they are located, if the shares or other
ownership interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity ownership of such entity.
(d) The provisions of this Section 8 shall survive the termination
of this Agreement.
9. Conflicting Agreements. Executive hereby represents and warrants that
the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
he is a party or is bound, and that he is not now subject to any covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.
10. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
11. Miscellaneous. This Agreement and the Severance Agreement (i)
constitute the entire agreement between the parties concerning the subject
matter hereof and supersedes any and all prior agreements or understandings,
(ii) may not be assigned by Executive without the prior written consent of the
Employer, and (iii) may be assigned by the Employer and shall be binding upon,
and inure to the benefit of, the Employer's successors and assigns. Headings
herein are for convenience of reference only and shall not define, limit or
interpret the contents hereof.
12. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
13. Specific Enforcement. The provisions of Sections 6 and 8 of this
Agreement are to be specifically enforced if not performed according to their
terms. Without limiting the generality of the foregoing, the parties
acknowledge that the Employer may be irreparably damaged and there may be
no adequate remedy at law for Executive's breach of Sections 6 and 8 of this
Agreement and further acknowledge that the Employer may seek entry of a
temporary restraining order or preliminary injunction, in addition to any
other remedies available at law or in equity, to enforce the provisions
thereof.
14. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
15. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
--------------------------------------
Name:
Title:
-----------------------------------------
Jason Barnett
AMENDMENT AND RESTATEMENT OF
SEVERANCE AGREEMENT
AMENDMENT AND RESTATEMENT OF SEVERANCE AGREEMENT, dated as of the 15th day
of August, 2000 (the "Agreement") by and between Jason Barnett (the
"Executive"), and Reckson Associates Realty Corp., a Maryland corporation with
a principal place of business at 225 Broadhollow Road, Melville, New York
11747 (the "Employer") and amends, supersedes and completely restates the
Severance Agreement made as of November 2, 1999 by and among the Executive and
the Employer.
Terms used in this Agreement with the initial letter capitalized shall,
unless otherwise defined herein, have the meanings specified in the Amendment
and Restatement of Employment and Noncompetition Agreement, dated August 15,
2000, between the Employer and the Executive and in any amendment to or
restatement of such agreement (the "Employment Agreement").
W I T N E S S E T H :
WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and
WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.
NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows:
1. Employment and Noncompetition Agreement. This Agreement is
supplementary to and, except as explicitly set forth herein, does not limit or
alter any of the terms and conditions established under the Employment
Agreement.
2. Term. The term and duration of this Agreement shall be identical to
the term of the Employment Agreement, provided, however, that if a
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue
in effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is sixty months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.
3. Termination and Severance Payments. Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section
3.
(a) At-Will Employment. Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive,
subject only to the severance provisions specifically set forth in this
Section 3 and in Sections 7(d) through 7(h) of the Employment Agreement.
(b) Termination by Executive. The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2
of the Employment Agreement, (ii) within 30 days of the occurrence of a
material failure by the Employer to comply with the provisions of Section 3 of
the Employment Agreement or a material breach by the Employer of any other
provision of the Employment Agreement, (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control, or
(iv) within 30 days of the occurrence of a Force Out. For this purpose, a
Force Out shall be deemed to have occurred in the event of:
(i) a change in duties, responsibilities, status or positions
with the Employer, which, in Executive's reasonable judgment, does
not represent a promotion from or maintaining of Executive's duties,
responsibilities, status or positions as in effect immediately prior
to the Change-in-Control, or any removal of Executive from or any
failure to reappoint or reelect Executive to such positions, except
in connection with the termination of Executive's employment for
Good Reason, disability, retirement or death;
(ii) a reduction by the Employer in Executive's Base Salary as
in effect immediately prior to the Change-in-Control;
(iii) the failure by the Employer to continue in effect any of
the benefit plans, programs or arrangements in which Executive is
participating at the time of the Change-in-Control of the Employer
(unless Executive is permitted to participate in any substitute
benefit plan, program or arrangement with substantially the same
terms and to the same extent and with the same rights as Executive
had with respect to the benefit plan, program or arrangement that is
discontinued) other than as a result of the normal expiration of any
such benefit plan, program or arrangement in accordance with its
terms as in effect at the time of the Change-in-Control, or the
taking of any action, or the failure to act, by the Employer which
would adversely affect Executive's continued participation in any of
such benefit plans, programs or arrangements on at least as
favorable a basis to Executive as is the case on the date of the
Change-in-Control or which would materially reduce Executive's
benefits in the future under any of such benefit plans, programs or
arrangements or deprive Executive of any material benefits enjoyed
by Executive at the time of the Change-in-Control;
(iv) the failure by the Employer to provide and credit
Executive with the number of paid vacation days to which Executive
is then entitled in accordance with the Employer's normal vacation
policies as in effect immediately prior to the Change-in-Control;
(v) the Employer's requiring Executive to be based in an office
located beyond a reasonable commuting distance from Executive's
residence immediately prior to the Change-in-Control, except for
required travel relating to the Employer's business to an extent
substantially consistent with the business travel obligations which
Executive undertook on behalf of the Employer prior to the
Change-in-Control;
(vi) the failure by the Employer to obtain from any successor
to the Employer an agreement to be bound by this Agreement and the
Employment Agreement; or
(vii) any refusal by the Employer to continue to allow
Executive to attend to matters or engage in activities not directly
related to the business of the Employer which, prior to the
Change-in-Control, Executive was permitted by the Employer's Boards
of Directors to attend to or engage in.
(c) Certain Benefits upon Termination by Executive. Except as
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of
the Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the
date of termination of the Employment Period. Notwithstanding the foregoing,
if the Employment Period is terminated pursuant to Section 3(b) or if
Executive's employment is terminated by the Employer other than for Good
Reason, Executive shall be entitled to the following benefits:
(i) The Employer shall pay the Executive (x) his or her full
Base Salary though the date of termination at the rate in effect on
such date, (y) compensation for accrued but unused vacation time,
plus (z) a pro rata portion of the Executive's incentive
compensation for the calendar year in which the event of termination
occurs, assuming that the Executive would have received incentive
compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to
subsection 3(a) of the Employment Agreement for such full calendar
year and (B) the greater of (a) 1/2 or (b) a percentage equal to the
following
(I) the sum of (x) the cash bonus awarded to the Executive
for the immediately preceding fiscal year, (y) the product
of the price per share of Common Stock on the date of
termination (as equitably adjusted to reflect any changes in
the capitalization of the Employer) and the aggregate number
of shares of Common Stock granted, sold or covered by
options or loans awarded to the Executive as incentive
compensation for the immediately preceding fiscal year, and
(z) the value of all other incentive compensation paid or
awarded to the Executive for the immediately preceding
fiscal year (including, without limitation, all such
incentive compensation includible in the Executive's gross
income and reported on an Internal Revenue Service Form
W-2), divided by (II) the Executive's Base Salary for the
immediately preceding fiscal year,
(the greater of clauses (a) and (b) being herein referred to as the "Deemed
Bonus Percentage");
(ii) The Employer shall pay as severance to the Executive, not
later than the tenth day following the date of termination, a lump
sum severance payment (the "Severance Payment") equal to the
aggregate of all compensation that would have been due to the
Executive hereunder had his or her employment not been so terminated
(without duplication of subsection 3(c)(i) above), including,
without limitation, (A) Base Salary (at the greater of the rate
payable pursuant to subsection 3(a) of the Employment Agreement or
the highest rate then payable to any Executive Vice President of the
Employer), and (B) all incentive compensation which would have been
due to the Executive pursuant to subsection 3(b) of the Employment
Agreement, through the expiration of this Agreement (as such
Agreement may continue in effect under Section 2 hereof in the event
of a Change-in-Control) assuming that the Executive would have
received incentive compensation for each calendar year through the
expiration of this Agreement (as such Agreement may continue in
effect under Section 2 hereof in the event of a Change-in-Control)
equal to the product of (x) the Base Salary payable to the Executive
pursuant to clause (A), and (y) the Deemed Bonus Percentage (or, if
greater, the highest Deemed Bonus Percentage determined with respect
to any Executive Vice President of the Employer), payable in the
same proportions of cash, grants of securities, loans to purchase
securities, loan forgiveness and gross-up payments as the incentive
compensation paid to the Executive for the immediately preceding
fiscal year; provided, however, that such Severance Payment shall
not be payable to the Executive until (I) the Executive has executed
and delivered to the Employer a general release in a form to be
determined by the Employer in good faith, and (II) any applicable
revocation period with respect to such release has expired. For
purposes of determining Executive's annual compensation in the
preceding sentence, compensation payable to the Executive by the
Employer shall include, without limitation, every type and form of
compensation includible in the Executive's gross income in respect
of his or her employment by the Employer (including, without
limitation, all income reported on an Internal Revenue Service Form
W-2), compensation income recognized as a result of the Executive's
exercise of stock options or sale of the stock so acquired and any
annual incentive compensation paid in cash or securities to such
Executive;
(iii) An amount equal to the Additional Amount pursuant to
Section 5 below and an amount equal to the Income Tax Payment
pursuant to Section 6 below;
(iv) For the remaining term of the Employment Agreement,
Executive shall continue to receive all benefits described in
Section 3 of the Employment Agreement existing immediately prior to
the date of termination (without taking into account any changes in
such benefits effected in violation of the Employment Agreement) and
any other benefits then provided by Employer to Executive in
addition to those described in Section 3 of the Employment
Agreement, including, but not limited to, the life insurance
coverage provided by Employer to Executive and the automobile
provided by Employer to Executive and automobile insurance and
maintenance in respect of such automobile. For purposes of the
application of such benefits, Executive shall be treated as if he or
she had remained in the employ of the Employer with a Base Salary at
the rate in effect on the date of termination;
(v) For purposes of any equity compensation plan of the
Employer, (x) any stock options or other awards (including
restricted stock grants) of the Executive under such plan shall vest
and become exercisable upon any such termination, and (y) Executive
shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after
the date of Executive's termination so that Executive shall be
entitled to exercise any exercisable options or other rights;
(vi) For purposes of any section 401(k) plan or other deferred
compensation plan of the Employer, Executive shall be treated as if
he or she had remained in the employ of the Employer for the
remaining term of the Employment Agreement after the date of
Executive's termination so that Executive may continue to receive
all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection
with such plan as in effect immediately prior to such termination;
(vii) The amount of any outstanding loans made by the Employer
to the Executive, together with any interest accrued on any such
loans, and any related "tax" loans made by the Employer to the
Executive in respect of tax liabilities owing as the result of the
forgiveness of such loans (including forgiveness pursuant to the
terms of this Section 3(c)(vii)), together with any interest accrued
on any such tax loans, shall be deemed forgiven and Executive shall
have no further liability in respect thereof;
(viii) If, in spite of the provisions above, any benefits or
service credits under any benefit plan or program of the Employer
may not be paid or provided under such plan or program to Executive,
or to Executive's dependents, beneficiaries or estate, because
Executive is no longer considered to be an employee of the Employer,
the Employer shall pay or provide for payment of such benefits and
service credits to Executive, or to Executive's dependents,
beneficiaries or estate, for the remaining term of the Employment
Agreement; and
(ix) Nothing herein shall be deemed to obligate Executive to
seek other employment in the event of any such termination and any
amounts earned or benefits received from such other employment will
not serve to reduce in any way the amounts and benefits payable in
accordance herewith.
4. Expenses. Section 3(d) of the Employment Agreement is hereby
supplemented by this Section 4. In addition to the expenses referred to in
Section 3(d) of the Employment Agreement, the Employer shall pay all legal
fees and related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result of (i) the
termination of the Employment Period or Executive's employment pursuant to
this Agreement or the Employment Agreement (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination),
(ii) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement, the Employment Agreement or by any other plan or
arrangement maintained by the Employer under which the Executive is or may be
entitled to receive benefits or (iii) any action taken by the Employer against
the Executive, unless and until such time that a final judgement has been
rendered in favor of the Employer and all appeals related to any such action
have been exhausted; provided however, that the circumstances set forth above
occurred on or after a Change-in-Control.
5. Additional Amount. Whether or not Section 3 is applicable, if in the
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has received or will receive any compensation or
recognize any income (whether or not pursuant to this Agreement, the
Employment Agreement or any plan or other arrangement of the Employer and
whether or not the Employment Period or the Executive's employment with the
Employer has terminated) which will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code (or for which a tax is
otherwise payable under Section 4999 of the Code), then the Employer shall pay
the Executive an additional amount (the "Additional Amount") equal to the sum
of (i) all taxes payable by the Executive under Section 4999 of the Code with
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount. Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of
each written request therefor made by the Executive.
6. Income Tax Payment. Whether or not Section 3 is applicable, if (i) the
Executive has received or will receive any compensation or recognize any
income (whether or not pursuant to this Agreement, the Employment Agreement or
any plan or other arrangement of the Employer and whether or not the
Employment Period or the Executive's employment with the Employer has
terminated) in connection with a "Change-in-Control" (as that term may be
interpreted in this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer), and (ii) such compensation or income represents
non-cash compensation or income (including, without limitation, non-cash
compensation or income attributable to the vesting or exercise of stock
options and other awards (including restricted stock grants) under any stock
option plan of the Employer), then the Employer shall pay the Executive in
cash an amount (the "Income Tax Payment") equal to the sum of (A) all federal,
state and local income taxes payable by Executive with respect to such
non-cash compensation or income, plus (B) all federal, state and local income
taxes payable by Executive with respect to any such Income Tax Payment. The
Income Tax Payment shall be paid by the Employer to the Executive within 30
days of the written request therefor made by the Executive.
7. Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed sufficient when given by hand, by nationally
recognized overnight courier or by express, registered or certified mail,
postage prepaid, return receipt requested, and addressed to the Employer or
Executive, as applicable, at the address indicated above (or to such other
address as may be provided by notice).
8. Miscellaneous. This Agreement (i) may not be assigned by Executive
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.
9. Amendment. This Agreement may be amended, modified or supplemented by
the mutual consent of the parties in writing, but no oral amendment,
modification or supplement shall be effective.
10. Severability. If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the extent and
duration of such invalidity, illegality or unenforceability and such
invalidity, illegality or unenforceability shall not affect the remaining
substance of such provision or any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid, legal and enforceable. If it
shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein, and the
parties will use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purpose
and intent of the provision originally contained herein.
11. Governing Law. This Agreement shall be construed and governed by the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.
RECKSON ASSOCIATES REALTY CORP.
By:
-------------------------------------
Name:
Title:
----------------------------------------
Jason Barnett
RECKSON ASSOCIATES REALTY CORP.
AMENDED AND RESTATED BYLAWS
(amended as of August 2000)
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located at such place or places as the Board of Directors may
designate.
Section 2. ADDITIONAL OFFICES. The Corporation may have additional
offices at such places as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE. All meetings of stockholders shall be held at the
principal office of the Corporation or at such other place within the United
States as shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the stockholders for the
election of directors and the transaction of any business within the powers of
the Corporation shall be held on a date and at the time set by the Board of
Directors during the month of May in each year.
Section 3. SPECIAL MEETINGS. The president, chief executive officer or
Board of Directors may call special meetings of the stockholders. Special
meetings of stockholders shall also be called by the secretary of the
Corporation upon the written request of the holders of shares entitled to cast
not less than a majority of all the votes entitled to be cast at such meeting.
Such request shall state the purpose of such meeting and the matters proposed
to be acted on at such meeting. The secretary shall inform such stockholders
of the reasonably estimated cost of preparing and mailing notice of the
meeting and, upon payment to the Corporation by such stockholders of such
costs, the secretary shall give notice to each stockholder entitled to notice
of the meeting. Unless requested by the stockholders entitled to cast a
majority of all the votes entitled to be cast at such meeting, a special
meeting need not be called to consider any matter which is substantially the
same as a matter voted on at any special meeting of the stockholders held
during the preceding twelve months.
Section 4. NOTICE. Not less than ten nor more than 90 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting and to each stockholder not entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time
and place of the meeting and, in the case of a special meeting or as otherwise
may be required by any statute, the purpose for which the meeting is called,
either by mail or by presenting it to such stockholder personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the stockholder at his post office address as it appears on the records of
the Corporation, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Corporation may be
transacted at an annual meeting of stockholders without being specifically
designated in the notice, except such business as is required by any statute
to be stated in such notice. No business shall be transacted at a special
meeting of stockholders except as specifically designated in the notice.
Section 6. ORGANIZATION. At every meeting of stockholders, the Chairman
of the Board, if there be one, shall conduct the meeting or, in the case of
vacancy in office or absence of the Chairman of the Board, one of the
following officers present shall conduct the meeting in the order stated: the
Vice Chairman of the Board, if there be one, the President, the Vice
Presidents in their order of rank and seniority, or a Chairman chosen by the
stockholders entitled to cast a majority of the votes which all stockholders
present in person or by proxy are entitled to cast, shall act as Chairman, and
the Secretary, or, in his absence, an assistant secretary, or in the absence
of both the Secretary and assistant secretaries, a person appointed by the
Chairman shall act as Secretary.
Section 7. QUORUM. At any meeting of stockholders, the presence in person
or by proxy of stockholders entitled to cast a majority of all the votes
entitled to be cast at such meeting shall constitute a quorum; but this
section shall not affect any requirement under any statute or the charter of
the Corporation for the vote necessary for the adoption of any measure. If,
however, such quorum shall not be present at any meeting of the stockholders,
the stockholders entitled to vote at such meeting, present in person or by
proxy, shall have the power to adjourn the meeting from time to time to a date
not more than 120 days after the original record date without notice other
than announcement at the meeting. At such adjourned meeting at which a quorum
shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 8. VOTING. A plurality of all the votes cast at a meeting of
stockholders duly called and at which a quorum is present shall be sufficient
to elect a director. Each share may be voted for as many individuals as there
are directors to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of stockholders duly called
and at which a quorum is present shall be sufficient to approve any other
matter which may properly come before the meeting, unless more than a majority
of the votes cast is required by statute or by the charter of the Corporation.
Unless otherwise provided in the charter, each outstanding share, regardless
of class, shall be entitled to one vote on each matter submitted to a vote at
a meeting of stockholders.
Section 9. PROXIES. A stockholder may vote the stock owned of record by
him, either in person or by proxy executed in writing by the stockholder or by
his duly authorized attorney in fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
Section 10. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation
registered in the name of a corporation, partnership, trust or other entity,
if entitled to be voted, may be voted by the president or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed
by any of the foregoing individuals, unless some other person who has been
appointed to vote such stock pursuant to a bylaw or a resolution of the
governing body of such corporation or other entity or agreement of the
partners of a partnership presents a certified copy of such bylaw, resolution
or agreement, in which case such person may vote such stock. Any director or
other fiduciary may vote stock registered in his name as such fiduciary,
either in person or by proxy.
Shares of stock of the Corporation directly or indirectly owned by
it shall not be voted at any meeting and shall not be counted in determining
the total number of outstanding shares entitled to be voted at any given time,
unless they are held by it in a fiduciary capacity, in which case they may be
voted and shall be counted in determining the total number of outstanding
shares at any given time.
The Board of Directors may adopt by resolution a procedure by which
a stockholder may certify in writing to the Corporation that any shares of
stock registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth
the class of stockholders who may make the certification, the purpose for
which the certification may be made, the form of certification and the
information to be contained in it; if the certification is with respect to a
record date or closing of the stock transfer books, the time after the record
date or closing of the stock transfer books within which the certification
must be received by the Corporation; and any other provisions with respect to
the procedure which the Board of Directors considers necessary or desirable.
On receipt of such certification, the person specified in the certification
shall be regarded as, for the purposes set forth in the certification, the
stockholder of record of the specified stock in place of the stockholder who
makes the certification.
Notwithstanding any other provision of the charter of the
Corporation or these Bylaws, Title 3, Subtitle 7 of the Corporations and
Associations Article of the Annotated Code of Maryland (or any successor
statute) shall not apply to any acquisition by any person of shares of stock
of the Corporation. This section may be repealed, in whole or in part, at any
time, whether before or after an acquisition of control shares and, upon such
repeal, may, to the extent provided by any successor bylaw, apply to any prior
or subsequent control share acquisition.
Section 11. INSPECTORS. At any meeting of stockholders, the chairman of
the meeting may, or upon the request of any stockholder shall, appoint one or
more persons as inspectors for such meeting. Such inspectors shall ascertain
and report the number of shares represented at the meeting based upon their
determination of the validity and effect of proxies, count all votes, report
the results and perform such other acts as are proper to conduct the election
and voting with impartiality and fairness to all the stockholders.
Each report of an inspector shall be in writing and signed by him or
by a majority of them if there is more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or inspectors on
the number of shares represented at the meeting and the results of the voting
shall be prima facie evidence thereof.
Section 12. NOMINATIONS AND STOCKHOLDER BUSINESS
(a) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors and the proposal of business to be
considered by the stockholders (except for stockholder proposals included in
the proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) may be made at an annual meeting of
stockholders (i) pursuant to the Corporation's notice of meeting, (ii) by or
at the direction of the Board of Directors or (iii) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of notice
provided for in this Section 12(a), who is entitled to vote at the meeting and
who complied with the notice procedures set forth in this Section 12(a).
(ii) (2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (iii) of
paragraph (a)(1) of this Section 12, the stockholder must have given timely
notice thereof in writing to the secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to the secretary at the principal
executive offices of the Corporation not less than 75 days nor more than 180
days prior to the first anniversary of the preceding year's annual meeting or
special meeting in lieu thereof; provided, however, that in the event that the
date of the annual meeting is advanced by more than seven calendar days or
delayed by more than 60 days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the 180th day
prior to such annual meeting and not later than the close of business on the
later of the 75th day prior to such annual meeting or the twentieth day
following the earlier of the day on which public announcement of the date of
such meeting is first made or notice of the meeting is mailed to stockholders.
Such stockholder's notice shall set forth (i) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Exchange Act (including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); (ii) as to any other business that
the stockholder proposes to bring before the meeting, a brief description of
the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such stockholder and of the beneficial owner, if any, on whose
behalf the proposal is made; and (iii) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or proposal
is made, (x) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (y) the number of shares
of each class of stock of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this Section 12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least 85
days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 12(a) shall also be considered
timely, but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the secretary at the principal
executive offices of the Corporation not later than the close of business on
the tenth day following the day on which such public announcement is first
made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders at which directors are to be elected (i)
pursuant to the Corporation's notice of meeting, (ii) by or at the direction
of the Board of Directors or (iii) provided that the Board of Directors has
determined that directors shall be elected at such special meeting, by any
stockholder of the Corporation who is a stockholder of record at the time of
giving of notice provided for in this Section 12(b), who is entitled to vote
at the meeting and who complied with the notice procedures set forth in this
Section 12(b). In the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more directors to the Board of
Directors, any such stockholder may nominate a person or persons (as the case
may be) for election to such position as specified in the Corporation's notice
of meeting, if the stockholder's notice containing the information required by
paragraph (a)(2) of this Section 12 shall be delivered to the secretary at the
principal executive offices of the Corporation not earlier than the 180th day
prior to such special meeting and not later than the close of business on the
later of the 75th day prior to such special meeting or the tenth day following
the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected
at such meeting.
(c) General. (1) Only such persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 12. The presiding officer of the
meeting shall have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made in accordance with
the procedures set forth in this Section 12 and, if any proposed nomination or
business is not in compliance with this Section 12, to declare that such
defective nomination or proposal be disregarded.
(2) For purposes of this Section 12, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable news service or in a document publicly filed by
the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 12, a
stockholder shall also comply with all applicable requirements of state law
and of the Exchange Act and the rules and regulations thereunder with respect
to the matters set forth in this Section 12. Nothing in this Section 12 shall
be deemed to affect any rights of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under
the Exchange Act.
Section 13. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any stockholder
shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS; QUALIFICATIONS. The business and affairs of
the Corporation shall be managed under the direction of its Board of
Directors.
Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or
at any special meeting called for that purpose, a majority of the entire Board
of Directors may establish, increase or decrease the number of directors,
provided that the number thereof shall never be less than the minimum number
required by the Maryland General Corporation Law, nor more than 15, and
further provided that the tenure of office of a director shall not be affected
by any decrease in the number of directors.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of
Directors shall be held immediately after and at the same place as the annual
meeting of stockholders, no notice other than this Bylaw being necessary. The
Board of Directors may provide, by resolution, the time and place, either
within or without the State of Maryland, for the holding of regular meetings
of the Board of Directors without other notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board (or any
co-chairman of the board if more than one), president or by a majority of the
directors then in office. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either within or without
the State of Maryland, as the place for holding any special meeting of the
Board of Directors called by them.
Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, facsimile
transmission, United States mail or courier to each director at his business
or residence address. Notice by personal delivery, by telephone or a facsimile
transmission shall be given at least two days prior to the meeting. Notice by
mail shall be given at least five days prior to the meeting and shall be
deemed to be given when deposited in the United States mail properly
addressed, with postage thereon prepaid. Telephone notice shall be deemed to
be given when the director is personally given such notice in a telephone call
to which he is a party. Facsimile transmission notice shall be deemed to be
given upon completion of the transmission of the message to the number given
to the Corporation by the director and receipt of a completed answer-back
indicating receipt. Neither the business to be transacted at, nor the purpose
of, any annual, regular or special meeting of the Board of Directors need be
stated in the notice, unless specifically required by statute or these Bylaws.
Section 6. QUORUM. A majority of the directors shall constitute a quorum
for transaction of business at any meeting of the Board of Directors, provided
that, if less than a majority of such directors are present at said meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice, and provided further that if, pursuant to the charter
of the Corporation or these Bylaws, the vote of a majority of a particular
group of directors is required for action, a quorum must also include a
majority of such group.
The Board of Directors present at a meeting which has been duly
called and convened may continue to transact business until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a
quorum.
Section 7. VOTING. The action of the majority of the directors present at
a meeting at which a quorum is present shall be the action of the Board of
Directors, unless the concurrence of a greater proportion is required for such
action by applicable statute.
Section 8. TELEPHONE MEETINGS. Directors may participate in a meeting by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person
at the meeting.
Section 9. INFORMAL ACTION BY DIRECTORS. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting, if a consent in writing to such action is signed by each director and
such written consent is filed with the minutes of proceedings of the Board of
Directors.
Section 10. VACANCIES. If for any reason any or all the directors cease
to be directors, such event shall not terminate the Corporation or affect
these Bylaws or the powers of the remaining directors hereunder (even if fewer
than three directors remain). Any vacancy on the Board of Directors for any
cause other than an increase in the number of directors shall be filled by a
majority of the remaining directors, although such majority is less than a
quorum. Any vacancy in the number of directors created by an increase in the
number of directors may be filled by a majority vote of the entire Board of
Directors. Any individual so elected as director shall hold office for the
unexpired term of the director he is replacing.
Section 11. COMPENSATION. Directors shall not receive any stated salary
for their services as directors but, by resolution of the Board of Directors,
may receive fixed sums per year and/or per meeting and/or per visit to real
property owned or to be acquired by the Corporation and for any service or
activity they performed or engaged in as directors. Directors may be
reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Board of Directors or of any committee thereof and for
their expenses, if any, in connection with each property visit and any other
service or activity they performed or engaged in as directors; but nothing
herein contained shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 12. LOSS OF DEPOSITS. No director shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings
and loan association, or other institution with whom moneys or stock have been
deposited.
Section 13. SURETY BONDS. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his duties.
Section 14. RELIANCE. Each director, officer, employee and agent of the
Corporation shall, in the performance of his duties with respect to the
Corporation, be fully justified and protected with regard to any act or
failure to act in reliance in good faith upon the books of account or other
records of the Corporation, upon an opinion of counsel or upon reports made to
the Corporation by any of its officers or employees or by the adviser,
accountants, appraisers or other experts or consultants selected by the Board
of Directors or officers of the Corporation, regardless of whether such
counsel or expert may also be a director.
Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
The directors shall have no responsibility to devote their full time to the
affairs of the Corporation. Any director or officer, employee or agent of the
Corporation, in his personal capacity or in a capacity as an affiliate,
employee, or agent of any other person, or otherwise, may have business
interests and engage in business activities similar to or in addition to or in
competition with those of or relating to the Corporation.
Section 16. MATTERS TO BE TAKEN INTO CONSIDERATION BY DIRECTORS. In
considering any potential acquisition of control of the Corporation, the
directors may consider the effect of the potential acquisition of control on
(i) stockholders of the Corporation and unitholders of Reckson Operating
Partnership, L.P. and employees, suppliers, customers and creditors of the
Corporation or any of its subsidiaries; and (ii) communities in which offices
or other establishments of the Corporation are located.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may
appoint from among its members an Executive Committee, an Audit Committee, a
Compensation Committee and other committees, composed of two or more
directors, to serve at the pleasure of the Board of Directors.
Section 2. POWERS. The Board of Directors may delegate to committees
appointed under Section 1 of this Article any of the powers of the Board of
Directors, except as prohibited by law.
Section 3. MEETINGS. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board of Directors. A
majority of the members of the committee shall constitute a quorum for the
transaction of business at any meeting of the committee. The act of a majority
of the committee members present at a meeting shall be the act of such
committee. The Board of Directors may designate a chairman of any committee,
and such chairman or any two members of any committee may fix the time and
place of its meeting unless the Board shall otherwise provide. In the absence
of any member of any such committee, the members thereof present at any
meeting, whether or not they constitute a quorum, may appoint another director
to act in the place of such absent member. Each committee shall keep minutes
of its proceedings.
Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting
can hear each other at the same time. Participation in a meeting by these
means shall constitute presence in person at the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if a consent in writing to such action is
signed by each member of the committee and such written consent is filed with
the minutes of proceedings of such committee.
Section 6. VACANCIES. Subject to the provisions hereof, the Board of
Directors shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace
any absent or disqualified member or to dissolve any such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Corporation shall
include a chief executive officer, a president, a secretary and a treasurer
and may include a chairman of the board (or one or more co-chairmen of the
board), a vice chairman of the board, one or more executive vice presidents,
one or more senior vice presidents, one or more vice presidents, a chief
operating officer, a chief financial officer, a treasurer, one or more
assistant secretaries and one or more assistant treasurers. In addition, the
Board of Directors may from time to time appoint such other officers with such
powers and duties as they shall deem necessary or desirable. The officers of
the Corporation shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting of
stockholders, except that the chief executive officer may appoint one or more
vice presidents, assistant secretaries and assistant treasurers. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as may be convenient. Each officer shall hold office
until his successor is elected and qualifies or until his death, resignation
or removal in the manner hereinafter provided. Any two or more offices except
president and vice president may be held by the same person. In its
discretion, the Board of Directors may leave unfilled any office except that
of president, treasurer and secretary. Election of an officer or agent shall
not of itself create contract rights between the Corporation and such officer
or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Corporation may be removed by the Board of Directors if in its judgment the
best interests of the Corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Any officer of the Corporation may resign at any time by giving
written notice of his resignation to the Board of Directors, the chairman of
the board (or any co-chairman of the board if more than one), the president or
the secretary. Any resignation shall take effect at any time subsequent to the
time specified therein or, if the time when it shall become effective is not
specified therein, immediately upon its receipt. The acceptance of a
resignation shall not be necessary to make it effective unless otherwise
stated in the resignation. Such resignation shall be without prejudice to the
contract rights, if any, of the Corporation.
Section 3. VACANCIES. A vacancy in any office may be filled by the Board
of Directors for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate
a chief executive officer. In the absence of such designation, the chairman of
the board (or, if more than one, the co-chairmen of the board in the order
designated at the time of their election or, in the absence of any
designation, then in the order of their election) shall be the chief executive
officer of the Corporation. The chief executive officer shall have general
responsibility for implementation of the policies of the Corporation, as
determined by the Board of Directors, and for the management of the business
and affairs of the Corporation.
Section 5. CHIEF OPERATING OFFICER. The Board of Directors may designate
a chief operating officer. The chief operating officer shall have the
responsibilities and duties as set forth by the Board of Directors or the
chief executive officer.
Section 6. CHIEF FINANCIAL OFFICER. The Board of Directors may designate
a chief financial officer. The chief financial officer shall have the
responsibilities and duties as set forth by the Board of Directors or the
chief executive officer.
Section 7. CHAIRMAN OF THE BOARD. The Board of Directors shall designate
a chairman of the board (or one or more co-chairmen of the board). The
chairman of the board shall preside over the meetings of the Board of
Directors and of the stockholders at which he shall be present. If there be
more than one, the co-chairmen designated by the Board of Directors will
perform such duties. The chairman of the board shall perform such other duties
as may be assigned to him or them by the Board of Directors.
Section 8. CHAIRMAN OF THE BOARD EMERITUS. The directors may elect by a
majority vote, from time to time, a chairman of the board emeritus (or one or
more co-chairmen of the board emeritus). The chairman of the board emeritus
shall be an honorary position and shall have no vote on any matter considered
by the directors. The chairman of the board emeritus shall serve for such term
as determined by the Board of Directors and may be removed by a majority vote
of directors with or without cause.
Section 9. PRESIDENT. The president or chief executive officer, as the
case may be, shall in general supervise and control all of the business and
affairs of the Corporation. In the absence of a designation of a chief
operating officer by the Board of Directors, the president shall be the chief
operating officer. He may execute any deed, mortgage, bond, contract or other
instrument, except in cases where the execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer
or agent of the Corporation or shall be required by law to be otherwise
executed; and in general shall perform all duties incident to the office of
president and such other duties as may be prescribed by the Board of Directors
from time to time.
Section 10. VICE PRESIDENTS. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there
be more than one vice president, the vice presidents in the order designated
at the time of their election or, in the absence of any designation, then in
the order of their election) shall perform the duties of the president and
when so acting shall have all the powers of and be subject to all the
restrictions upon the president; and shall perform such other duties as from
time to time may be assigned to him by the president or by the Board of
Directors. The Board of Directors may designate one or more vice presidents as
executive vice president or as vice president for particular areas of
responsibility.
Section 11. SECRETARY. The secretary shall (a) keep the minutes of the
proceedings of the stockholders, the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions of these
Bylaws or as required by law; (c) be custodian of the corporate records and of
the seal of the Corporation; (d) keep a register of the post office address of
each stockholder which shall be furnished to the secretary by such
stockholder; (e) have general charge of the share transfer books of the
Corporation; and (f) in general perform such other duties as from time to time
may be assigned to him by the chief executive officer, the president or by the
Board of Directors.
Section 12. TREASURER. The treasurer shall have the custody of the funds
and securities of the Corporation and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. In the absence of a designation of a chief financial officer by the
Board of Directors, the treasurer shall be the chief financial officer of the
Corporation.
The treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and Board of Directors, at
the regular meetings of the Board of Directors or whenever it may so require,
an account of all his transactions as treasurer and of the financial condition
of the Corporation.
If required by the Board of Directors, the treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of
his death, resignation, retirement or removal from office, of all books,
papers, vouchers, moneys and other property of whatever kind in his possession
or under his control belonging to the Corporation.
Section 13. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant
secretaries and assistant treasurers, in general, shall perform such duties as
shall be assigned to them by the secretary or treasurer, respectively, or by
the president or the Board of Directors. The assistant treasurers shall, if
required by the Board of Directors, give bonds for the faithful performance of
their duties in such sums and with such surety or sureties as shall be
satisfactory to the Board of Directors.
Section 14. SALARIES. The salaries and other compensation of the officers
shall be fixed from time to time by the Board of Directors and no officer
shall be prevented from receiving such salary or other compensation by reason
of the fact that he is also a director.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Board of Directors may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument in
the name of and on behalf of the Corporation and such authority may be general
or confined to specific instances. Any agreement, deed, mortgage, lease or
other document executed by one or more of the directors or by an authorized
person shall be valid and binding upon the Board of Directors and upon the
Corporation when authorized or ratified by action of the Board of Directors.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name
of the Corporation shall be signed by such officer or agent of the Corporation
in such manner as shall from time to time be determined by the Board of
Directors.
Section 3. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
designate.
ARTICLE VII
STOCK
Section 1. CERTIFICATES. Each stockholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of stock held by him in the Corporation. Each certificate
shall be signed by the chief executive officer, the president or a vice
president and countersigned by the secretary or an assistant secretary or the
treasurer or an assistant treasurer and may be sealed with the seal, if any,
of the Corporation. The signatures may be either manual or facsimile.
Certificates shall be consecutively numbered; and if the Corporation shall,
from time to time, issue several classes of stock, each class may have its own
number series. A certificate is valid and may be issued whether or not an
officer who signed it is still an officer when it is issued. Each certificate
representing shares which are restricted as to their transferability or voting
powers, which are preferred or limited as to their dividends or as to their
allocable portion of the assets upon liquidation or which are redeemable at
the option of the Corporation, shall have a statement of such restriction,
limitation, preference or redemption provision, or a summary thereof, plainly
stated on the certificate. If the Corporation has authority to issue stock of
more than one class, the certificate shall contain on the face or back a full
statement or summary of the designations and any preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends and
other distributions, qualifications and terms and conditions of redemption of
each class of stock and, if the Corporation is authorized to issue any
preferred or special class in series, the differences in the relative rights
and preferences between the shares of each series to the extent they have been
set and the authority of the Board of Directors to set the relative rights and
preferences of subsequent series. In lieu of such statement or summary, the
certificate may state that the Corporation will furnish a full statement of
such information to any stockholder upon request and without charge. If any
class of stock is restricted by the Corporation as to transferability, the
certificate shall contain a full statement of the restriction or state that
the Corporation will furnish information about the restrictions to the
stockholder on request and without charge.
Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer
agent of the Corporation of a stock certificate duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.
The Corporation shall be entitled to treat the holder of record of
any share of stock as the holder in fact thereof and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
share or on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Maryland.
Notwithstanding the foregoing, transfers of shares of any class of
stock will be subject in all respects to the charter of the Corporation and
all of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board
of Directors may direct a new certificate to be issued in place of any
certificate previously issued by the Corporation alleged to have been lost,
stolen or destroyed upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing the
issuance of a new certificate, an officer designated by the Board of Directors
may, in his discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or the owner's
legal representative to advertise the same in such manner as he shall require
and/or to give bond, with sufficient surety, to the Corporation to indemnify
it against any loss or claim which may arise as a result of the issuance of a
new certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board
of Directors may set, in advance, a record date for the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders
or determining stockholders entitled to receive payment of any dividend or the
allotment of any other rights, or in order to make a determination of
stockholders for any other proper purpose. Such date, in any case, shall not
be prior to the close of business on the day the record date is fixed and
shall be not more than 90 days and, in the case of a meeting of stockholders,
not less than ten days, before the date on which the meeting or particular
action requiring such determination of stockholders of record is to be held or
taken.
In lieu of fixing a record date, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not
longer than 20 days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days before the date
of such meeting.
If no record date is fixed and the stock transfer books are not
closed for the determination of stockholders, (a) the record date for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day on which the notice
of meeting is mailed or the 30th day before the meeting, whichever is the
closer date to the meeting; and (b) the record date for the determination of
stockholders entitled to receive payment of a dividend or an allotment of any
other rights shall be the close of business on the day on which the resolution
of the directors, declaring the dividend or allotment of rights, is adopted.
When a determination of stockholders entitled to vote at any meeting
of stockholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, except when (i) the determination has
been made through the closing of the transfer books and the stated period of
closing has expired or (ii) the meeting is adjourned to a date more than 120
days after the record date fixed for the original meeting, in either of which
case a new record date shall be determined as set forth herein.
Section 5. STOCK LEDGER. The Corporation shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
stockholder and the number of shares of each class held by such stockholder.
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors
may issue fractional stock or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any
other provision of the charter or these Bylaws, the Board of Directors may
issue units consisting of different securities of the Corporation. Any
security issued in a unit shall have the same characteristics as any identical
securities issued by the Corporation, except that the Board of Directors may
provide that for a specified period securities of the Corporation issued in
such unit may be transferred on the books of the Corporation only in such
unit.
ARTICLE VIII
ACCOUNTING YEAR
The Board of Directors shall have the power, from time to time, to
fix the fiscal year of the Corporation by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the
stock of the Corporation may be authorized and declared by the Board of
Directors, subject to the provisions of law and the charter of the
Corporation. Dividends and other distributions may be paid in cash, property
or stock of the Corporation, subject to the provisions of law and the charter.
Section 2. CONTINGENCIES. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Corporation
available for dividends or other distributions such sum or sums as the Board
of Directors may from time to time, in its absolute discretion, think proper
as a reserve fund for contingencies, for equalizing dividends or other
distributions, for repairing or maintaining any property of the Corporation or
for such other purpose as the Board of Directors shall determine to be in the
best interest of the Corporation, and the Board of Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE X
INVESTMENT POLICY
Subject to the provisions of the charter of the Corporation, the
Board of Directors may from time to time adopt, amend, revise or terminate any
policy or policies with respect to investments by the Corporation as it shall
deem appropriate in its sole discretion.
ARTICLE XI
SEAL
Section 1. SEAL. The Board of Directors may authorize the adoption of a
seal by the Corporation. The seal shall contain the name of the Corporation
and the year of its incorporation and the words "Corporate Seal Maryland." The
Board of Directors may authorize one or more duplicate seals and provide for
the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or
required to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the
word "(SEAL)" adjacent to the signature of the person authorized to execute
the document on behalf of the Corporation.
ARTICLE XII
INDEMNIFICATION AND ADVANCES FOR EXPENSES
To the maximum extent permitted by Maryland law in effect from time
to time, the Corporation, without requiring a preliminary determination of the
ultimate entitlement to indemnification, shall indemnify and shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding
to (a) any individual who is a present or former director or officer of the
Corporation and who is made a party to the proceeding by reason of his service
in that capacity or (b) any individual who, while a director of the
Corporation and at the request of the Corporation, serves or has served
another corporation, partnership, joint venture, trust, employee benefit plan
or any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made a party to the proceeding by reason of his service
in that capacity. The Corporation may, with the approval of its Board of
Directors, provide such indemnification and advance for expenses to a person
who served a predecessor of the Corporation in any of the capacities described
in (a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation.
Neither the amendment nor repeal of this Article, nor the adoption
or amendment of any other provision of the Bylaws or charter of the
Corporation inconsistent with this Article, shall apply to or affect in any
respect the applicability of the preceding paragraph with respect to any act
or failure to act which occurred prior to such amendment, repeal or adoption.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the charter
of the Corporation or these Bylaws or pursuant to applicable law, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted at nor the
purpose of any meeting need be set forth in the waiver of notice, unless
specifically required by statute. The attendance of any person at any meeting
shall constitute a waiver of notice of such meeting, except where such person
attends a meeting for the express purpose of objecting to the transaction of
any business on the ground that the meeting is not lawfully called or
convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Board of Directors shall have the exclusive power to adopt,
alter or repeal any provision of these Bylaws and to make new Bylaws.
Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, New York 11747
(Phone) (631) 694-6900
(Facsimile) (631) 622-6790
Contact: Scott Rechler, President and Co-CEO
Michael Maturo, CFO
For Immediate Release
RECKSON ASSOCIATES REALTY CORP. ANNOUNCES
SHAREHOLDER RIGHTS PLAN
(MELVILLE, NEW YORK, OCTOBER 16, 2000) - RECKSON ASSOCIATES REALTY
CORP. (NYSE: RA) today announced that its Board of Directors has adopted a
Shareholder Rights Plan designed to protect shareholders from various abusive
takeover tactics, including attempts to acquire control of the Company at an
inadequate price, depriving shareholders of the full value of their investment.
The Plan is designed to allow the Board of Directors to secure the best
available transaction for all the Company's shareholders. The Plan was not
adopted in response to any known effort to acquire control of the Company.
"In view of current stock market conditions, we decided it was in the
best interest of our shareholders that we join the significant number of
REITs that have adopted Shareholder Rights Plans," commented Donald Rechler,
Reckson's Chairman and Co-Chief Executive Officer. Mr. Rechler continued,
"We believe this is consistent with our continuing emphasis on maintaining
strong corporate governance and optimizing long-term shareholder value."
Under the Plan, each shareholder will receive a dividend of one Right for
each share of the Company's outstanding class A common stock. The Rights will
be exercisable only if a person or group acquires, or announces their intent
to acquire, 15% or more of Reckson's class A common stock, or announces a
tender offer the consummation of which would result in beneficial ownership
by a person or group of 15% or more of the class A common stock. Each Right
will entitle the holder to purchase one one-thousandth of a share of new series
of junior participating preferred stock of the Company at an initial exercise
price of $84.44.
If any person acquires beneficial ownership of 15% or more of the
outstanding shares of class A common stock, then all Rights holders except
the acquiring person will be entitled to purchase the Company's stock at a
price discounted from the then market price. If the Company is acquired in a
merger after such an acquisition, all Rights holders except the acquiring
person will also be entitled to purchase stock in the buyer at a discount in
accordance with the Plan.
The distribution of Rights will be made to class A common shareholders of
record at the close of business on October 27, 2000 and shares of class A
common stock that are newly-issued after that date (including shares of class A
common stock issued upon conversion of the outstanding class B common stock)
will also carry Rights until the Rights become detached from the class A common
stock. The Rights will expire at the close of business on October 13, 2010,
unless earlier redeemed by the Company. The Rights distribution is not taxable
to stockholders.
Details of the Plan are included with a letter which will be mailed to
holders of class A common stock of the Company.
Reckson Associates Realty Corp. is a self-administered and self-managed
real estate investment trust (REIT) specializing in the acquisition, leasing,
financing, management and development of office and industrial properties.
Reckson's core strategy is focused on the markets surrounding
and including New York City. The Company is one of the largest publicly
traded owners and managers of Class A office and industrial properties in the
New York Tri-State area, with 186 properties comprised of approximately 20.8
million square feet either owned and controlled, directly or indirectly, or
under contract. For additional information on Reckson Associates Realty
Corp. please visit the Company's web site at www.reckson.com.
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