UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)*
Under the Securities Exchange Act of 1934
Capital Trust
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(Name of Issuer)
Class A Common Shares of Beneficial Interest
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(Title of Class of Securities)
140920 10 9
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(CUSIP Number)
Thomas E. Kruger, Esq.
Battle Fowler LLP
75 East 55th Street
New York, NY 10022
(212) 856-7000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 10, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act.
667092.1
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/ CUSIP No. 140920 10 9 / SCHEDULE 13D
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This Amendment No.1 to Schedule 13D, which is filed pursuant to Rule
13d-2(a) of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended ("Amendment No. 1"), amends and supplements the Schedule
13D, dated July 15, 1997, as filed with the Securities and Exchange Commission
on July 25, 1997 ("Original Schedule 13D", which was filed by (i) Veqtor Finance
Company, LLC, a Delaware limited liability company ("VFC"); (ii) Capital Trust
Investors Limited Partnership (f/k/a CalREIT Investors Limited Partnership), an
Illinois limited partnership and a managing member of VFC ("CTILP"); (iii) SZ
Investments, LLC, a Delaware limited liability company and the sole general
partner of CTILP, ("SZI"); (iv) Zell General Partnership, Inc., an Illinois
corporation and the sole managing member of SZI ("Zell GP"); (v) the Samuel Zell
Revocable Trust, a trust formed under Illinois law pursuant to a trust
agreement, dated December 17, 1990, and the sole stockholder of Zell GP ("Zell
Trust"); (vi) Mr. Samuel Zell, a citizen of the United States and the trustee of
Zell Trust; (vii) V2 Holdings LLC, a Delaware limited liability company and a
member of VFC ("V2H"); (viii) Mr. John R. Klopp, a citizen of the United States
and a member of V2H; and (ix) Craig M. Hatkoff, a citizen of the United States
and a managing member of V2H, with respect to the ownership of class A common
shares of beneficial interest, $1.00 par value (the "Class A Common Shares"), in
Capital Trust, a California business trust (the "Issuer").
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended and supplemented by adding the following:
The $50 million principal amount of notes issued by VFC discussed
under Item 3 of the Original Schedule 13D are 12% convertible redeemable notes
(the "VFC Notes").
Item 6. Contracts, Arrangements, Understandings or Relationships with respect to
Securities of the Issuer.
Item 6 is hereby amended and supplemented by adding the following:
The VFC Notes earn interest at a rate of 12% per annum, except that
interest at a rate of 6% per annum is accrued and not payable until maturity or
redemption or conversion as discussed herein. The VFC Notes are convertible by
the holders thereof into preferred membership units in VFC ("VFC Preferred
Units") at the rate of $55.59 per unit from and after the earlier of July 15,
2000, the dissolution and winding up of the affairs of VFC or the sale of any or
all of VFC's Company Shares (as defined below). Upon conversion of the VFC Notes
into VFC Preferred Units, at any time after six months from the date of such
conversion, the VFC Preferred Units are redeemable by the holders thereof in
exchange for a specified portion of the 6,959,593 Class A Common Shares and
12,267,658 Class A Preferred Shares owned by VFC ("VFC's Company Shares"). The
VFC Preferred Units are also redeemable by the Company in exchange for VFC's
Company Shares at any time after 24 months from their date of issuance provided
all such units are redeemed. Upon such redemption, each holder of such VFC
Preferred Units is entitled to receive a specified portion of VFC's Company
Shares equal to the ratio of the total number of VFC Preferred Units held by
such holder to the sum of (i) the total number of VFC Preferred Units that would
be outstanding if all holders of the VFC Notes then outstanding converted their
VFC Preferred Units at a conversion price of $55.59 per unit and (ii) the total
number of common units in VFC then outstanding. Upon redemption of the VFC
Preferred Units, with respect to holders thereof who are bank holding companies
or affiliates thereof within the meaning of the Bank Holding Company Act of
1956, as amended (the "BHCA"), VFC is required to convert those of the VFC's
Company Shares allocable to such holders into class B common shares of
beneficial interest, $1.00 par value (the "Class B Common Shares"),
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667092.1
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/ CUSIP No. 140920 10 9 / SCHEDULE 13D
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and class B 9.5% cumulative convertible non-voting preferred shares of
beneficial interest, $1.00 par value (the "Class B Preferred Shares") in the
Company, as the case may be. The Class B Common Shares and the Class B Preferred
Shares are non-voting shares and are convertible, respectively, into Class A
Common Shares and Class A Preferred Shares on a share for share basis upon
certification by the holder thereof that such shareholder either (a) will not,
together with any other person (other than the Company) who previously held
voting shares of the Company held by such shareholder, upon the issuance of such
shares, own more than 4.9% of any class of voting shares of the Company or (b)
is not limited by the BHCA to holding no more than 4.9% of any class or series
of voting shares of the Company. VFC can redeem the VFC Notes for cash at par
(plus accrued and unpaid interest) at any time after July 15, 2000, subject to
the right of the holders of the VFC Notes to convert the VFC Notes into VFC
Preferred Units discussed above.
In connection with the Public Offering (as defined below), CTILP, V2H and
VFC have agreed with the Issuer that upon either the redemption for cash of all
of the VFC Notes or the conversion of all of the VFC Notes into VFC Preferred
Units, and, in the latter case, the subsequent redemption of all such units in
exchange for the specified portion of VFC's Company Shares, VFC shall convert
the remaining Class A Preferred Shares owned by it into Class A Common Shares.
CTILP, V2H and VFC have also agreed that VFC shall redeem the VFC Preferred
Units on the earliest date upon which Veqtor has the right to effect such
redemption.
On December 16, 1997, the Issuer closed a public offering of Class A
Common Shares (the "Public Offering"). VFC, CTILP, Mr. Zell, V2H, Mr. Klopp and
Mr. Hatkoff entered into standard lockup agreements with the underwriters for
the Public Offering pursuant to which each of them has agreed that until
December 10, 1998, without the prior written consent of the lead underwriter,
each of them will not (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any Class A Common Shares or any securties convertible
into or exercisable or exchangeable for Class A Common Shares or (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Class A Common Shares,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Class A Common Shares or such other securities, in cash,
or otherwise.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended and supplemented by adding the following:
Exhibit No. Description
----------- -----------
1. Letter Agreement, dated December 10, 1997, between
Capital Trust and Veqtor Finance Company LLC, Capital
Trust Investors Limited Partnerhsip and V2 Holdings LLC.
2. VFC Investment Agreement, dated as of July 15, 1997,
among Veqtor Finance Company, LLC, CalREIT Investors
Limited Partnership, V2 Holdings LLC, John R. Klopp and
Craig M. Hatkoff.
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667092.1
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct and agrees that this statement may be
filed jointly with the other undersigned party.
Dated: December 19, 1997
CalREIT Investors Limited Partnership
By: SZ Investments, LLC
its general partner
By: Zell General Partnership, Inc.,
its managing member
By: *
-------------------------
Name: Samuel Zell
Title: President
SZ Investments, LLC
By: Zell General Partnership, Inc.
its managing member
By: *
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Name: Samuel Zell
Title: President
Zell General Partnership, Inc.
By: *
-------------------------
Name: Samuel Zell
Title: President
Samuel Zell Revocable Trust
By: *
-------------------------
Name: Samuel Zell
Title: Trustee
Samuel Zell
*
-------------------------
Samuel Zell
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667092.1
<PAGE>
V2 Holdings LLC
By: John R. Klopp
its member
-------------------------
John R. Klopp
John R. Klopp
-------------------------
John R. Klopp
Craig M. Hatkoff
*
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Craig M. Hatkoff
* By:
-------------------------
John R. Klopp
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667092.1
Exhibit 1
CAPITAL TRUST
605 Third Avenue, 26th Floor
New York, New York 10016
December 10, 1997
Capital Trust Investors Limited Partnership
V2 Holdings LLC
Veqtor Finance Company, LLC
c/o Capital Trust
605 Third Avenue
26th Floor
New York, New York 10016
Ladies and Gentlemen:
Veqtor Finance Company, LLC ("Veqtor") owns as of the date
hereof 6,959,593 class A common shares of beneficial interest, $1.00 par value
("Class A Common Shares"), in Capital Trust (the "Company") and 12,267,658 class
A 9.5% cumulative convertible preferred shares of beneficial interest, $1.00 par
value, in the Company ("Class A Preferred Shares"). Capital Trust Investors
Limited Partnership ("CTILP") and V2 Holdings LLC ("V2") are the sole common
members of Veqtor.
The Company proposes to issue and sell to certain underwriters
(the "Underwriters") for reoffer and resale 8,000,000 Class A Common Shares
(plus not more than an additional 1,200,000 Class A Common Shares) (the
"Offering") pursuant to and upon the terms and conditions of that certain
underwriting agreement, dated December 10, 1997 with the Underwriters (the
"Underwriting Agreement").
Veqtor has outstanding $50 million principal amount of 12%
convertible redeemable notes issued by Veqtor (the "Veqtor Notes"). Pursuant to
the terms of the Veqtor Notes, the Company may redeem the Veqtor Notes for cash
on or after July 15, 2000, subject to the right of the holders of the Veqtor
Notes on or after July 15, 2000 to convert the Veqtor Notes into preferred units
of Veqtor that are entitled to a 6% annual preferred distribution (the "Veqtor
Preferred Units"). Pursuant to the terms of the limited liability company
agreement of Veqtor, dated as of June 16, 1997 (the "Operating Agreement"), the
Veqtor Preferred Units are redeemable under certain circumstances and at certain
times by the holders thereof or by Veqtor for a specified portion of the Class A
Common Shares and Class A Preferred Shares owned by Veqtor (the "Specified
Company Shares").
651637.5
<PAGE>
Veqtor, CTILP and V2 acknowledge and agree that they will
benefit from the Offering. In consideration of the foregoing benefit, Veqtor,
CTILP and V2 agree that if and when all of the Veqtor Notes either have been (i)
redeemed for cash or (ii) converted into Veqtor Preferred Units and at such time
as all such units have in turn been redeemed for the Specified Company Shares,
Veqtor will convert into Class A Common Shares any Class A Preferred Shares
owned by Veqtor following the retirement of the Veqtor Notes or the redemption
of the Veqtor Preferred Units, as the case may be (the "Remaining Class A
Preferred Shares"). Therefore, in order to induce the Company to undertake the
Offering, Veqtor, CTILP and V2 agree with the Company that immediately following
the redemption for cash of all of the outstanding Veqtor Notes or the redemption
of all of the outstanding Veqtor Preferred Units into the Specified Company
Shares, as the case may be (the "Final Retirement/Conversion Time"), Veqtor
shall convert the Remaining Class A Preferred Shares owned by it in accordance
with the conversion provisions thereof into Class A Common Shares. In connection
with the foregoing, Veqtor further agrees that it shall redeem the Veqtor
Preferred Units for the Specified Company Shares at the earliest date upon which
Veqtor has the right to effectuate such redemption and CTILP and V2 agree that
they shall take all actions as may reasonably be required to enable Veqtor to
effect such redemption.
The Company agrees with Veqtor, CTILP and V2 that the
agreements of Veqtor, CTILP and V2 herein may not be waived by the Company or
amended or modified in any manner by the parties hereto without the approval of
those trustees of the Company who have no direct or indirect personal interest
in Veqtor, CTILP, V2 or any of their affiliated persons or entities (other than
the Company). The Company acknowledges that the foregoing agreement of the
Company is made to induce the Underwriters to enter into the Underwriting
Agreement and proceed with the Offering.
The foregoing agreement shall terminate and be of no force and
effect if the Underwriting Agreement is not consummated by the Closing Date
specified in such agreement or upon the termination of the Underwriting
Agreement in accordance with its terms.
Please confirm your agreement with the foregoing by signing
and returning one fully executed copy of this agreement to the undersigned,
where upon this agreement shall become a binding agreement between the parties
hereto.
Very truly yours,
CAPITAL TRUST
By: /s/ Craig M. Hatkoff
--------------------------
Name: Craig M. Hatkoff
Title: Vice Chairman
651637.5
<PAGE>
Accepted and Agreed this day
of December 10, 1997
CAPITAL TRUST INVESTORS LIMITED PARTNERSHIP
By: /s/ Samuel Zell
--------------------------
Name: Samuel Zell
Title: President of Indirect Managing Member
V2 HOLDINGS LLC
By: /s/ Craig M. Hatkoff
--------------------------
Name: Craig M. Hatkoff
Title: Member
VEQTOR FINANCE COMPANY, LLC
By: CAPITAL TRUST INVESTORS
LIMITED PARTNERSHIP,
its managing member
By: V2 HOLDINGS LLC,
its attorney-in-fact
By: /s/ Craig M. Hatkoff
-----------------------
Name: Craig M. Hatkoff
Title: Member
By: V2 HOLDINGS LLC,
its managing member
By: /s/ Craig M. Hatkoff
-----------------------
Name: Craig M. Hatkoff
Title: Member
651637.5
Exhibit 2
VFC INVESTMENT AGREEMENT
This VFC Investment Agreement (this "Agreement"), is made as of July 15,
1997, among Veqtor Finance Company, LLC, a Delaware limited liability company
("Veqtor"), CalREIT Investors Limited Partnership, an Illinois limited
partnership ("CRIL"), V2 Holdings LLC, a Delaware limited liability company
("V2"), John R. Klopp ("Klopp") and Craig M. Hatkoff ("Hatkoff"). Capitalized
terms used and not otherwise defined herein have the respective meanings given
such terms in Article 1 hereof.
WITNESSETH
WHEREAS, as of the date of this Agreement, CRIL and V2 each hold the same
kind and number of Veqtor Units;
WHEREAS, as of the date of this Agreement, Klopp and Hatkoff hold in the
aggregate 100% of the issued and outstanding V2 Units;
WHEREAS, the parties hereto desire to set forth herein provisions
governing, among other things, the transfer of Veqtor Units and V2 Units among
one another and third parties;
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties agree as follows:
Article 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the following meanings:
"Affiliate" means, with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person.
"Capital Trust" means the California Real Estate Investment Trust, a
business trust organized under the laws of the State of California and
established under a Declaration of Trust dated September 15, 1966, as amended
from time to time, and any successor thereto, whose name is intended to be
changed to "Capital Trust".
"Capital Trust Voting Common" means the class A common shares of beneficial
interests, $1.00 par value, in Capital Trust.
"Capital Trust Voting Preferred" means the Class A 9.5% Cumulative
Convertible Preferred Shares of Beneficial Interests, $1.00 par value, in
Capital Trust.
"Claims" means all options, proxies, voting trusts, voting agreements,
judgments, pledges, charges, escrows, rights of first refusal or first offer,
mortgages, indentures, claims, transfer restrictions, liens, equities,
encumbrances, security interests and other encumbrances of every kind and nature
whatsoever, whether arising by agreement, operation of law or otherwise.
"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 ownership of voting securities, by contract or otherwise.
"DOT" means the Amended and Restated Declaration of Trust of Capital Trust,
as amended or restated, from time to time.
"Employment Agreement" means: (a) with respect to Klopp, the Employment
Agreement, dated as of July 15, 1997, by and between Klopp and Capital Trust, as
amended, modified, supplemented or restated from time to time; and (b) with
respect to Hatkoff, the Employment Agreement, dated as of July 15, 1997, by and
between Hatkoff and Capital Trust, as amended, modified, supplemented or
restated from time to time.
"Entity" means a corporation, a partnership or a limited liability company.
"Fair Market Value" shall have the meaning ascribed to it in Section 3.5
hereof.
"Hatkoff Family Entity" means any corporation, partnership, limited
liability company or trust wholly controlled by Hatkoff and wholly owned
beneficially and of record by Hatkoff and Hatkoff's wife, children,
grandchildren and/or parents or a trust established for their benefit, provided
such trust is wholly controlled by Hatkoff.
"Holder" shall mean (a) each of CRIL, V2, Klopp, and Hatkoff, (b) each
Permitted Transferee of CRIL, V2, Klopp, and Hatkoff, and (c) each Third Party
Transferee.
"Klopp Family Entity" means any corporation, partnership, limited liability
company or trust wholly controlled by Klopp and wholly owned beneficially and of
record by Klopp and Klopp's wife, children, grandchildren and/or parents or a
trust established for their benefit, provided such trust is wholly controlled by
Klopp.
"Permitted Transferee" means:
(a) with respect to the Transfer of V2 Units by Klopp, a Klopp Family
Entity;
(b) with respect to the Transfer of V2 Units by Hatkoff, a Hatkoff
Family Entity;
(c) with respect to the Transfer of Veqtor Units by V2 (or its
Permitted Transferee, in the case of a subsequent Transfer subject to this
paragraph (c)): (i) any Entity wholly owned beneficially and of record, and
wholly controlled, by V2; or (ii) any Entity wholly owned beneficially and
of record by Klopp (or a Klopp Family Entity) and Hatkoff (or a Hatkoff
Family Entity) and wholly controlled by Klopp and Hatkoff, in each case in
the same relative proportions with respect to ownership and control vis a
vis Klopp (or a Klopp Family Entity), on the one hand, and Hatkoff (or a
Hatkoff Family Entity), on the other hand, immediately after the Transfer
as immediately before the Transfer; and
(d) with respect to the Transfer of Veqtor Units by CRIL (or its
Permitted Transferee, in the case of a subsequent Transfer subject to this
paragraph (d)), any Affiliate of CRIL.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint stock company, a
trust, a business trust, a government or any agency or any political
subdivision, any unincorporated organization or any other entity.
"Third Anniversary" means the third anniversary of the date of the closing
of that certain 12% Convertible Redeemable Note Purchase Agreement among Veqtor
and certain institutional investors, dated as of June 16, 1997.
"Third Party Transferee" means any Person (other than Klopp, Hatkoff, V2,
CRIL and their Permitted Transferees) to whom Veqtor Units or V2 Units are
Transferred pursuant to Section 4.2(b), 4.3(b) or 4.4(c) hereof.
"Transfer" means any voluntary or involuntary, direct or indirect,
transfer, sale, assignment, donation, pledge, hypothecation, issuance, grant of
a security interest in or other disposition or attempted disposition of Veqtor
Units or V2 Units, as the case may be, or any right or interest whatsoever
therein, including, without limitation, pursuant to the laws of descent and
distribution, by operation of law or otherwise, whether with or without
consideration or value, and whether for cash, other securities or other property
and specifically including any share for share or similar exchange.
"V2 Units" means any and all limited liability company or other interests
in V2 or any successor thereto, however designated and whether voting or
nonvoting, including, without limitation, common interests and preferred
interests, and whenever acquired.
"Veqtor" means Veqtor Finance Company, LLC, a Delaware Limited Liability
Company.
"Veqtor LLC Agreement" means the Limited Liability Company Agreement of
Veqtor, dated as of June 16, 1997, as amended, modified, supplemented or
restated from time to time.
"Veqtor Units" means any and all limited liability company or other
interests in Veqtor or any successor thereto, however designated and whether
voting or nonvoting, including, without limitation, common interests and
preferred interests, and whenever acquired.
Article 2. Buy/Sell Agreement. From and after the Third Anniversary, either
CRIL or V2 (the "Initiating Party") may deliver written notice (the "Initiating
Notice") to the other (the "Responding Party") to the effect that the Initiating
Party is willing to sell for cash all (but not less than all) of the Veqtor
Units then held by the Initiating Party to the Responding Party or purchase for
cash from the Responding Party all (but not less than all) of the Veqtor Units
then held by the Responding Party at the same specified price per Veqtor Unit.
The Responding Party shall have one hundred fifty (150) days after receipt of
the Initiating Notice to elect, by delivery of written notice to the Initiating
Party, to either (i) sell for cash to the Initiating Party all (but not less
than all) of the Veqtor Units then held by the Responding Party at the price per
Veqtor Unit specified in the Initiating Notice or (ii) to purchase for cash from
the Initiating Party all (but not less than all) of the Veqtor Units then held
by the Initiating Party at the price per Veqtor Unit specified in the Initiating
Notice. If the Responding Party fails to make an election in a timely manner as
provided in the immediately preceding sentence, the Responding Party shall be
deemed to have elected to sell for cash to the Initiating Party all (but not
less than all) of the Veqtor Units then held by the Responding Party at the
price per Veqtor Unit specified in the Initiating Notice. If the Responding
Party elects to purchase, the closing of the purchase will take place on the
date specified by the Responding Party not later than one hundred eighty (180)
days after receipt of the Initiating Notice. If the Responding Party elects to
sell, the closing of the sale will take place on the date specified by the
Initiating Party not later than one hundred eighty (180) days after receipt of
the Initiating Notice.
Article 3. Special Triggering Events.
3.1 Termination Event.
(a) Upon the termination of employment with Capital Trust of either
Klopp or Hatkoff for any or no reason, including, without limitation, by reason
of his death or disability, other than voluntary termination by Klopp or Hatkoff
(the "Termination Event"), whomever of Klopp or Hatkoff has not been the subject
of the Termination Event (the "Remaining Individual") shall have the right to
purchase all (but not less than all) of the V2 Units then held by the other
individual (the "Departing Individual") for cash at their Fair Market Value. In
order to exercise his purchase rights, within one hundred fifty (150) days after
the date of the Termination Event, the Remaining Individual shall deliver
written notice concurrently to the Departing Individual (or his estate or
representative) and CRIL of the Remaining Individual's election to purchase all
(but not less than all) of the V2 Units then held by the Departing Individual
(or his estate or representative) for cash at their Fair Market Value.
(b) If the Remaining Individual fails to timely elect to exercise its
purchase rights under Section 3.1(a) within the aforementioned one hundred fifty
(150) day period or fails to close on the purchase within one hundred eighty
(180) days after the date of the Termination Event, CRIL shall have the right to
purchase from V2 fifty percent (50%) of the Veqtor Units then held by V2 for
cash at their Fair Market Value, upon which purchase V2 shall distribute to the
Departing Individual (or his estate or representative) an amount equal to the
net proceeds of such sale reduced by 50% of V2's aggregate liabilities at the
date of distribution in full redemption of the V2 Units then held by the
Departing Individual (or his estate or representative). In order to exercise its
purchase rights under this Section 3.1(b), within CRIL's Election Period (as
hereinafter defined), CRIL shall deliver written notice to V2 of CRIL's election
to purchase from V2 fifty percent (50%) of the Veqtor Units then held by V2 for
cash at their Fair Market Value. As used in this Section 3.1, "CRIL's Election
Period" means (x) the one hundred eighty (180) day period following the date of
the Termination Event, if the Remaining Individual fails to timely make the
election to purchase all (but not less than all) of the V2 Units then held by
the Departing Individual (or his estate or representative) as provided in
Section 3.1(a), or (y) the two hundred ten (210) day period following the date
of the Termination Event, if the Remaining Individual timely makes the election,
but fails to close on the purchase of all (but not less than all) of the V2
Units then held by the Departing Individual (or his estate or representative),
as provided in Section 3.1(a).
(c) If CRIL declines or fails to timely elect to purchase from V2
fifty percent (50%) of the Veqtor Units then held by V2 for cash at their Fair
Market Value as provided in Section 3.1(b): (i) Veqtor shall, as soon as
practicable, but in no event later than thirty (30) days after the date of such
declination or failure to timely elect to purchase, distribute to V2 fifty
percent (50%) of the assets V2 would be entitled to receive from Veqtor if
Veqtor were to liquidate and distribute its assets to its members on the date in
question; (ii) V2's economic interest in Veqtor shall be reduced correspondingly
by fifty percent (50%); and (iii) V2 shall distribute to the Departing
Individual (or his estate or representative), in full redemption of the
Departing Individual's interest in V2, an amount equal to the net assets
received from Veqtor pursuant to subparagraph (i) above reduced by 50% of V2's
aggregate liabilities at the date of distribution.
3.2 Voluntary Termination Event.
(a) Upon the voluntary termination of employment (the "Voluntary
Termination Event") with Capital Trust of either Klopp or Hatkoff (the
"Voluntarily Departing Individual"), CRIL shall have the right to purchase from
V2 fifty percent (50%) of the Veqtor Units then held by V2 for cash at their
Fair Market Value, upon which purchase V2 shall distribute to the Voluntarily
Departing Individual an amount equal to the net proceeds of such sale reduced by
50% of V2's aggregate liabilities at the date of distribution in full redemption
of the V2 Units then held by the Voluntarily Departing Individual. In order to
exercise its purchase rights hereunder, within one hundred fifty (150) days of
the date of the Voluntary Termination Event, CRIL shall deliver written notice
to V2 of CRIL's election to purchase from V2 fifty percent (50%) of the Veqtor
Units then held by V2 for cash at their Fair Market Value.
(b) If CRIL fails to timely elect to exercise its purchase rights
under Section 3.2(a) within the aforementioned one hundred fifty (150) day
period or fails to close on the purchase within one hundred eighty (180) days
after the date of the Voluntary Termination Event, whomever of Klopp or Hatkoff
is not the Voluntarily Departing Individual (the "Voluntarily Remaining
Individual") shall have the right to purchase all (but not less than all) of the
V2 Units then held by the Voluntarily Departing Individual for cash at their
Fair Market Value. In order to exercise his purchase rights under this Section
3.2(b), within the Voluntarily Remaining Individual's Election Period (as
hereinafter defined), the Voluntarily Remaining Individual shall deliver written
notice concurrently to the Voluntarily Departing Individual and CRIL of the
Voluntarily Remaining Individual's election to purchase all (but not less than
all) of the V2 Units then held by the Voluntarily Departing Individual for cash
at their Fair Market Value. For purposes of this Section 3.2, "Voluntarily
Remaining Individual's Election Period" means (x) the one hundred eighty (180)
day period following the date of the Voluntary Termination Event, if CRIL fails
to timely make the election to purchase all (but not less than all) of the V2
Units then held by the Voluntarily Departing Individual as provided in Section
3.2(a), or (y) the two hundred ten (210) day period following the date of the
Voluntary Termination Event, if CRIL timely makes the election, but fails to
close on the purchase of all (but not less than all) of the V2 Units then held
by the Voluntarily Departing Individual, as provided in Section 3.2(a).
(c) If the Voluntarily Remaining Individual declines or fails to
timely elect to purchase from the Voluntarily Departing Individual all (but not
less than all) of the V2 Units then held by the Voluntarily Departing Individual
for cash at their Fair Market Value as provided in Section 3.2(b): (i) Veqtor
shall, as soon as practicable, but in no event later than thirty (30) days after
the date of such declination or failure to timely elect to purchase by the
Voluntarily Remaining Individual, distribute to V2 fifty percent (50%) of the
assets V2 would be entitled to receive from Veqtor if Veqtor were to liquidate
and distribute its assets to its members on the date in question; (ii) V2's
economic interest in Veqtor shall be reduced correspondingly by fifty percent
(50%); and (iii) V2 shall distribute to the Departing Individual (or his estate
or representative), in full redemption of the Departing Individual's interest in
V2, an amount equal to the net assets received from Veqtor pursuant to
subparagraph (i) above reduced by 50% of V2's aggregate liabilities at the date
of distribution.
3.3 Concurrent Termination Event.
(a) Upon the termination of employment with Capital Trust of both
Klopp and Hatkoff, within any thirty (30) day period, for any or no reason,
whether voluntary or involuntary, including, without limitation, by reason of
death or disability (the "Concurrent Termination Event"), CRIL shall have the
right to purchase from V2 all (but not less than all) of the Veqtor Units then
held by V2 for cash at their Fair Market Value. In order to exercise its
purchase rights hereunder, within one hundred fifty (150) days after the date of
the Concurrent Termination Event, CRIL shall deliver written notice to V2 of
CRIL's election to purchase from V2 all (but not less than all) of the Veqtor
Units then held by V2 for cash at their Fair Market Value.
(b) If CRIL fails to timely elect to exercise its purchase rights
under Section 3.3(a) within the aforementioned one hundred fifty (150) day
period or fails to close on the purchase within one hundred eighty (180) days
after the date of the Concurrent Termination Event, Veqtor shall, as soon as
practicable, but in no event later than thirty (30) days after the date of such
declination or failure to timely elect to purchase, distribute to V2 one hundred
percent (100%) of the assets V2 would be entitled to receive from Veqtor if
Veqtor were to liquidate and distribute its assets to its members on the date in
question, in full redemption of one hundred percent (100%) of the Veqtor Units
then held by V2.
3.4 Final Termination Event.
(a) Upon the termination of employment with Capital Trust of either
Klopp or Hatkoff for any or no reason, whether voluntary or involuntary,
including, without limitation, by reason of his death or disability, following
by more than thirty (30) days the prior termination of employment with Capital
Trust of the other individual for any or no reason, whether voluntary or
involuntary, including, without limitation, by reason of his death or disability
(the "Final Termination Event"), CRIL shall have the right to purchase from V2
all (but not less than all) of the Veqtor Units then held by V2 for cash at
their Fair Market Value. In order to exercise its purchase rights hereunder,
within one hundred fifty (150) days after the date of the Final Termination
Event, CRIL shall deliver written notice to V2 of CRIL's election to purchase
from V2 all (but not less than all) of the Veqtor Units then held by V2 for cash
at their Fair Market Value.
(b) If CRIL fails to timely elect to exercise its purchase rights
under Section 3.4(a) within the aforementioned one hundred fifty (150) day
period or fails to close on the purchase within one hundred eighty (180) days
after the date of the Final Termination Event, Veqtor shall, as soon as
practicable, but in no event later than thirty (30) days after the date of such
declination or failure to timely elect to purchase, distribute to V2 one hundred
percent (100%) of the assets V2 would be entitled to receive from Veqtor if
Veqtor were to liquidate and distribute its assets to its members on the date in
question, in full redemption of one hundred percent (100%) of the Veqtor Units
then held by V2.
3.5 Determination of Fair Market Value.
(a) For purposes of this Article 3, Fair Market Value of Veqtor Units
or V2 Units shall be determined by mutual agreement of the seller and the buyer,
or, if they fail to agree within thirty (30) days after the date that a party
elects or otherwise becomes bound to purchase, then by an independent third
party appraiser of national reputation jointly selected by the seller and buyer.
If seller and buyer fail to agree on the selection of an appraiser within
fifteen (15) days after the expiration of the thirty (30) day period referred to
above, on the application of either buyer or seller, an appraiser shall be
appointed by the American Arbitration Association, whose appointment shall be
final and binding upon the parties, absent manifest error or fraud. The
appraiser's decision shall be final and binding upon the parties, absent
manifest error or fraud, and judgment may be entered on the appraiser's
decision. Buyer and seller each will bear one-half of all fees and expenses of
the appraiser. Buyer and seller shall each pay their own costs and expenses
(including attorney's, accountant's and expert's fees) incurred by them in
connection with the settlement of any dispute regarding Fair Market Value. In
the event of a dispute concerning Fair Market Value, the date by which a closing
must occur or payment must be made for the Veqtor Units or V2 Units in question
as otherwise provided in this Article 3 shall be tolled until the dispute is
resolved as provided in this Section 3.6. In determining Fair Market Value of
Veqtor Units or V2 Units, seller, buyer and the appraiser shall follow the
principles set forth below, in addition to any other suitable methods or
approaches not in conflict with such principles.
(b) The Fair Market Value of V2 Units which are the subject of a sale
shall be equal to the Fair Market Value of the "Seller's Pro Rata Share" of
Veqtor Units then held by V2 (determined in accordance with paragraph (c) below,
as if said Veqtor Units were the subject of the sale). As used herein, "Seller's
Pro Rata Share" means the percentage interest in V2 represented by the V2 Units
which are the subject of the sale.
(c) The Fair Market Value of Veqtor Units which are the subject of a
sale shall be determined based on the fair market value of the assets of Veqtor
(determined in accordance with paragraphs (d) and (e) below) which would be
distributed in respect of such Veqtor Units if Veqtor were to liquidate and
distribute its assets to its members on the date in question, without discount
for minority interest or illiquidity and without markup for control premium.
(d) The fair market value of the Capital Trust Voting Common will be
equal to the average closing price of the Capital Trust Voting Common during the
twenty (20) trading days commencing ten (10) trading days prior to the date of
the event requiring valuation of the Capital Trust Voting Common.
(e) The fair market value of the Capital Trust Voting Preferred will
be equal to the greater of (i) the fair market value of the Capital Trust Voting
Common issuable upon conversion of the Capital Trust Voting Preferred (as
determined in accordance with paragraph (d) above) and (ii) the liquidation
preference of the Capital Trust Voting Preferred.
3.6 Determination of Employment Status. Notwithstanding anything to the
contrary in this Agreement, the status of Klopp's or Hatkoff's employment with
Capital Trust and the nature of any termination thereof as determined under, and
for purposes of, the Employment Agreement, including, without limitation,
whether Klopp's or Hatkoff's employment has terminated, the effective date of
termination and whether the termination was voluntary, involuntary or by reason
of death or disability, all as determined under, and for purposes of, the
Employment Agreement, shall constitute the status of Klopp's or Hatkoff's
employment with Capital Trust and the nature of any termination thereof for
purposes of this Article 3, including, without limitation, whether Klopp's or
Hatkoff's employment has terminated, the effective date of termination and
whether the termination was voluntary, involuntary or by reason of death or
disability. Article 4. Restrictions on Transfer and Rights of First Offer.
4.1 Restrictions on Transfer / Permitted Transferees.
(a) Except as otherwise provided in this Agreement, no Holder shall
Transfer any Veqtor Units or V2 Units, whether now owned or hereafter acquired,
prior to the Third Anniversary. If any Transfer is made or attempted contrary to
the provisions of this Agreement, such purported Transfer shall be void ab
initio; the Holders not involved in such transfer shall have, in addition to any
other legal or equitable remedies which they may have, the right to enforce the
provisions of this Agreement by actions for specific performance (to the extent
permitted by law); and both the Holders not involved in such purported Transfer
and Veqtor shall refuse to recognize any such purported transferee of Veqtor
Units as a holder of Veqtor Units for any purpose, and both the Holders not
involved in such purported Transfer and V2 shall refuse to recognize any such
purported transferee of V2 Units as a holder of V2 Units for any purpose.
(b) Notwithstanding anything to the contrary in Section 4.1(a) hereof,
a Holder may Transfer Veqtor Units or V2 Units to a Permitted Transferee of such
Holder without complying with the provisions of Section 4.2, Section 4.3 and
Section 4.4. As a condition to the effectiveness of any Transfer of Veqtor Units
or V2 Units to a Permitted Transferee, the Permitted Transferee shall execute a
counterpart to this Agreement, whereupon the Permitted Transferee shall hold
Veqtor Units or V2 Units, as the case may be, subject to all of the provisions
of this Agreement, as if: (a) in the case of a Permitted Transferee of Klopp,
Klopp were the holder of the V2 Units actually held by his Permitted Transferee;
(b) in the case of a Permitted Transferee of Hatkoff, Hatkoff were the holder of
the V2 Units actually held by his Permitted Transferee; (c) in the case of a
Permitted Transferee of V2, V2 were the holder of the Veqtor Units actually held
by its Permitted Transferee; and (d) in the case of a Permitted Transferee of
CRIL, CRIL were the holder of the Veqtor Units actually held by its Permitted
Transferee. No Permitted Transferee shall make any further Transfer of Veqtor
Units or V2 Units other than as permitted by this Agreement in conformance with
Section 4.1(b). Notwithstanding anything to the contrary in this Agreement: (i)
all rights and benefits originally granted to Klopp, Hatkoff, V2 or CRIL under
this Agreement shall remain with each of them, and shall not be assigned or
transferred to their Permitted Transferees, notwithstanding any Transfer of
Veqtor Units or V2 Units by them to their Permitted Transferees, as if Klopp,
Hatkoff, V2 and CRIL were the holders of the Veqtor Units or V2 Units actually
held by their Permitted Transferees; and (ii) no Permitted Transferee shall be
entitled to satisfy any obligation or otherwise take any action or do anything
under this Agreement, except through Klopp, Hatkoff, V2 or CRIL, as the case may
be, as the representative for all of such party's Permitted Transferees.
4.2 Right of First Offer on Transfer by V2.
(a) From and after the Third Anniversary, in the event that V2 wishes
to Transfer all or any portion of the Veqtor Units held by V2, V2 shall first
notify CRIL in writing of the number of Veqtor Units offered for sale by V2 and
the proposed price, form of consideration and other terms of sale. CRIL
thereupon shall have the right to purchase all (but not less than all) of the
offered Veqtor Units at the proposed price in the proposed form of consideration
and on the other proposed terms of sale. In order to exercise its purchase
rights, within one hundred fifty (150) days after receiving written notice from
V2, CRIL shall deliver to V2 a written election to purchase all (but no less
than all) of the offered Veqtor Units.
(b) If CRIL does not exercise its purchase rights with respect to all
(and not less than all) of the offered Veqtor Units within the aforementioned
one hundred fifty (150) day period as provided in Section 4.2(a), V2 may, at any
time during the one hundred eighty (180) day period commencing on the earlier of
(i) the date V2 receives written notice from CRIL that CRIL declines to exercise
its purchase rights hereunder or (ii) the expiration of the aforementioned one
hundred fifty (150) day period, Transfer the offered Veqtor Units to any Person
at or above the price in the same form of consideration and on substantially the
same other terms of sale as set forth in V2's notice of intended sale. If such
Transfer is not consummated within the aforementioned one hundred eighty (180)
day period by V2, the offered Veqtor Units shall again be subject to be offered
for sale to CRIL under the provisions of this Section 4.2.
4.3 Right of First Offer on Transfer by CRIL.
(a) From and after the Third Anniversary, in the event that CRIL
wishes to Transfer all or any portion of the Veqtor Units held by CRIL, CRIL
shall first notify V2 in writing of the number of Veqtor Units offered for sale
by CRIL and the proposed price, form of consideration and other terms of sale.
V2 thereupon shall have the right to purchase all (but not less than all) of the
offered Veqtor Units at the proposed price in the proposed form of consideration
and on the other proposed terms of sale. In order to exercise its purchase
rights, within one hundred fifty (150) days after receiving written notice from
CRIL, V2 shall deliver to CRIL a written election to purchase all (but no less
than all) of the offered Veqtor Units.
(b) If V2 does not exercise its purchase rights with respect to all
(and not less than all) of the offered Veqtor Units within the aforementioned
one hundred fifty (150) day period as provided in Section 4.3(a), CRIL may, at
any time during the one hundred eighty (180) day period commencing on the
earlier of (i) the date CRIL receives written notice from V2 that V2 declines to
exercise its purchase rights hereunder or (ii) the expiration of the
aforementioned one hundred fifty (150) day period, Transfer the offered Veqtor
Units to any Person at or above the price in the same form of consideration and
on substantially the same other terms of sale as set forth in CRIL's notice of
intended sale. If such Transfer is not consummated within the aforementioned one
hundred eighty (180) day period by CRIL, the offered Veqtor Units shall again be
subject to be offered for sale to V2 under the provisions of this Section 4.3.
4.4 Right of First Offer on Transfer by Klopp or Hatkoff.
(a) From and after the Third Anniversary, in the event that Klopp or
Hatkoff (the "Disposing Party") wishes to Transfer all or any portion of the V2
Units then held by the Disposing Party, the Disposing Party shall first notify
the other individual (the "Non Disposing Party") and CRIL at the same time in
writing of the number of V2 Units offered for sale by the Disposing Party, the
proposed price, form of consideration and other terms of sale. The Non Disposing
Party thereupon shall have the right to purchase all (but not less than all) of
the offered V2 Units at the proposed price in the proposed form of consideration
and on the other proposed terms of sale. In order to exercise his purchase
rights, within one hundred fifty (150) days after receiving written notice from
the Disposing Party, the Non Disposing Party shall deliver to the Disposing
Party and CRIL a written election to purchase all (but no less than all) of the
offered V2 Units.
(b) If the Non Disposing Party does not exercise his purchase rights
with respect to all (and not less than all) of the offered V2 Units within the
aforementioned one hundred fifty (150) day period as provided in Section 4.4(a),
CRIL shall have the right to purchase all (but not less than all) of the offered
V2 Units at the proposed price in the proposed form of consideration and on the
other proposed terms of sale. In order to exercise its purchase rights, within
one hundred twenty (120) days after the earlier of (i) the date CRIL receives
written notice from the Non Disposing Party that the Non Disposing Party
declines to exercise his purchase rights hereunder (provided, however, if CRIL
receives such written notice from the Non Disposing Party within thirty (30)
days after receiving the notice of intended sale from the Disposing Party, for
purposes of this provision, the date CRIL receives written notice from the Non
Disposing Party that the Non Disposing Party declines to exercise his purchase
rights hereunder shall be deemed to be thirty (30) days after the actual date of
receipt) or (ii) the expiration of the aforementioned one hundred fifty (150)
day period, CRIL shall deliver to the Disposing Party and the Non Disposing
Party a written election to purchase all (but no less than all) of the offered
V2 Units.
(c) If CRIL does not exercise its purchase rights with respect to all
(and not less than all) of the offered V2 Units within the aforementioned one
hundred twenty (120) day period as provided in Section 4.4(b), the Disposing
Party may, at any time during the one hundred eighty (180) day period commencing
on the earlier of (i) the date the Disposing Party receives written notice from
CRIL that CRIL declines to exercise its purchase rights hereunder or (ii) the
expiration of the aforementioned one hundred twenty (120) day period, Transfer
the offered V2 Units to any Person at or above the price in the same form of
consideration and on substantially the same other terms of sale as set forth in
the Disposing Party's notice of intended sale. If such Transfer is not
consummated within the aforementioned one hundred eighty (180) day period by the
Disposing Party, the offered V2 Units shall again be subject to be offered for
sale to the Non Disposing Party and CRIL under the provisions of this Section
4.4.
(d) Notwithstanding anything to the contrary in this Agreement, the
provisions of this Section 4.4 shall be subject to, and preempted by, the
provisions of Article III.
4.5 Restrictions Applicable to Third Party Transferees. Each Third Party
Transferee shall be subject to all of the provisions of this Article 4 and shall
make no further Transfers other than as permitted in this Article 4. As a
condition to the effectiveness of any Transfer of Veqtor Units or V2 Units to
any Third Party Transferee, such Third Party Transferee shall execute a
counterpart to this Agreement.
Article 5. Management of Veqtor.
5.1 Voting Agreement. In the event that at any time, as a result of any of
the transactions contemplated by Articles 2, 3 or 4 hereof or otherwise, V2 and
CRIL do not hold the same number of Veqtor Units, then, notwithstanding anything
to the contrary in the Veqtor LLC Agreement, all matters to be determined by V2
and CRIL as the managing members of Veqtor shall be determined as between V2 and
CRIL by an affirmative vote of a majority of the Veqtor Units then held by V2
and CRIL, and V2 and CRIL shall be bound to act on such matter as managing
members in the manner determined by such vote. No Permitted Transferee or Third
Party Transferee shall be entitled to be appointed, or otherwise act as, a
managing member of Veqtor.
5.2 Nomination of Capital Trust Trustees. Notwithstanding anything to the
contrary in the Veqtor LLC Agreement, as long as V2 and CRIL hold the same
number of Veqtor Units, each shall be entitled to direct the nomination of an
equal number of trustees/directors of Capital Trust, and if Veqtor shall be
entitled to nominate an odd number of trustees/directors, V2 and CRIL shall
jointly select one of the trustee/director nominees. In the event that at any
time, as a result of any of the transactions contemplated by Articles 2, 3 or 4
hereof or otherwise, V2 and CRIL do not hold the same number of Veqtor Units,
then, notwithstanding anything to the contrary in the Veqtor LLC Agreement, V2
and CRIL each shall be entitled to direct the nomination of a number of
trustees/directors equal to their relative percentage holdings of Veqtor Units
multiplied by the total number of trustees/directors which Veqtor is then
entitled to nominate (rounded to the nearest whole number). V2 and CRIL shall
cause Veqtor to, and Veqtor shall, vote all shares of beneficial interest,
capital stock or other securities of Capital Trust entitled to vote held by
Veqtor, or over which Veqtor has voting control, and take all other necessary or
desirable actions within Veqtor's control, to effect the nomination and election
of trustee/director nominees selected by V2 and/or CRIL as provided in this
Section 5.3.
Article 6. Representations and Warranties.
6.1 General. Each party hereto, individually and not jointly, hereby
represents, warrants and covenants to the remaining parties as follows: (a) such
party has full authority and power under its governing limited liability company
or limited partnership agreement or comparable document to enter into this
Agreement (and, in the case of individuals, such individual has full capacity to
execute, deliver and perform this Agreement); (b) this Agreement constitutes the
valid and binding obligation of such party except (i) as the same may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the
application of equitable principles, whether applied by a court of equity or
law; and (c) the execution, delivery and performance by such party of this
Agreement: (i) does not and will not violate any laws, rules or regulations of
the United States or any state or other jurisdiction applicable to such party,
or require such party to obtain any approval, consent or waiver of, or to make
any filing with, any Person that has not been obtained or made; and (ii) does
not and will not result in a breach of, constitute a default under, accelerate
any obligation under or give rise to a right of termination of any indenture or
loan or credit agreement or any other agreement, contract, instrument, mortgage,
lien, lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such party is a party or by which
the property of such party is bound or affected, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the assets or properties of such party. No Holder shall
enter into any agreement or other arrangement of any kind with any Person with
respect to Veqtor Units or V2 Units inconsistent with the provisions of this
Agreement or which may impair its ability to comply with this Agreement.
6.2 Upon Transfer. Whenever a Person (the "Transferor") Transfers any
Veqtor Units or V2 Units to any other Person, other than a Permitted Transferee
of the Transferor, (the "Transferee") pursuant to any provision of Article 3 or
Article 4 of this Agreement: (a) the Transferor shall be deemed to represent and
warrant to the Transferee at the time of Transfer that the Transferor owns
beneficially and of record all right, title and interest in and to the Veqtor
Units or V2 Units being Transferred, free and clear of all Claims, other than
any Claims arising under this Agreement, the DOT or the Veqtor LLC Agreement;
and (b) the Transferor shall Transfer to the Transferee all right, title and
interest in and to the Veqtor Units or V2 Units, as the case may be, free and
clear of all Claims, other than any Claims arising under this Agreement, the DOT
or the Veqtor LLC Agreement.
Article 7. Miscellaneous.
7.1 No Assignment. Except as set forth in this Agreement, a party may not
assign its rights or delegate its obligations hereunder.
7.2 Notices. Any notices or other communications required or permitted
hereunder shall be sufficient if in writing and delivered by hand or sent by
facsimile, or sent, postage prepaid, by registered, certified or express-mail,
or by recognized overnight air courier service and shall be deemed given when so
delivered by hand or facsimile, or if mailed or sent by overnight courier
service, on the fifth (5) business day after mailing (one business day in the
case of express mail or overnight courier service) to the parties at the
following addresses:
(a) If to Veqtor:
To V2 and CRIL at the addresses indicated below.
(b) If to V2, Klopp or Hatkoff:
c/o Victor Capital Group, L.P.
885 Third Avenue, 12th Floor
New York, New York 10002
Attention: John R. Klopp and Craig
Hatkoff Facsimile: 212.593.0316
with a copy to:
Battle Fowler LLP
East 55th Street
New York, New York 10022
Attention: Thomas E. Kruger
Facsimile: 212.856.7815
(c) If to CRIL:
c/o Equity Group Investments, Inc.
Two North Riverside Plaza, 7th Floor
Chicago, Illinois 60606
Attention: Gary R. Garrabrant
Facsimile: 312.454.0157
<PAGE>
with a copy to:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza
Suite 1600
Chicago, Illinois 60606
Attention: Alisa M. Singer
Facsimile: 312.454.0335
or to such other address as a party may instruct by notice to the other parties
hereto in accordance with this Section 7.2.
7.3 Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
7.4 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
7.5 Remedies. The parties acknowledge that money damages may not be an
adequate remedy for violations of this Agreement and that any party may, in its
sole discretion, apply to any court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may deem just and
proper in order to enforce this Agreement or prevent any violation hereof and,
to the extent permitted by applicable law, each party waives any objection to
the imposition of such relief.
7.6 Entire Agreement. This Agreement including the other documents referred
to herein embodies the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof, and, when executed by the
parties hereto, supersedes all prior agreements and communications, either oral
or in writing, among the parties hereto with respect to the subject matter
contained herein. None of the Holders shall have any power to legally bind the
other Holders, except as specifically provided in this Agreement.
7.7 Waiver. Any failure by a party hereto to comply with any obligation,
agreement or condition herein may by waived only be a written instrument
executed by each party adversely affected by such failure to comply, with such
waiver or failure to insist upon strict compliance with such obligation,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any such subsequent or other failure.
7.8 Amendments. This Agreement may be modified or amended only pursuant to
a written instrument executed by the V2, Veqtor, CRIL, Klopp and Hatkoff.
7.9 Variations in Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the antecedent person or persons or entity or entities may
require.
7.10 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the internal laws of the State of New York without
giving effect to the conflicts of laws provisions of such jurisdiction.
7.11 Counterparts. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
executed and to be fully performed in such State, without giving effect to its
choice of law provisions.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereto set their hands as of the
day and year first above written.
VEQTOR FINANCE COMPANY, LLC
By: V2 Holdings LLC
Its: Managing Member
By: ___________________________
Its:
By: CalREIT Investors Limited Partnership
Its: Managing Member
By: SZ Investments, LLC
Its: General Partner
By: Zell General Partnership, Inc.
Its: Managing Member
By:_________________________
Its:
V2 HOLDINGS LLC
By:________________________________
Its:
CALREIT INVESTOR LIMITED PARTNERSHIP
By: SZ Investments, LLC
Its: General Partner
By: Zell General Partnership, Inc.
Its: Managing Member
By:_________________________
Its:
-----------------------------------
John R. Klopp
-----------------------------------
Craig M. Hatkoff
