SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1996 Commission file #0-12791
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(Exact name of registrant as specified in its charter)
Illinois 36-3207212
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . 15
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 18
Item 3. Defaults upon Senior Securities. . . . . . . . . . 18
Item 5. Other Information. . . . . . . . . . . . . . . . . 19
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 20
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 8,758,234 5,908,236
Short-term investments. . . . . . . . . . . . . . . . . . . . . . . . 374,085 2,568,329
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,028,455 1,312,240
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . 3,953,364 2,963,711
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 420,456 289,250
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,027,541 6,191,089
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 25,562,135 19,232,855
------------ ------------
Investment properties, at cost:
Land and leasehold interests. . . . . . . . . . . . . . . . . . . . 19,309,005 20,935,810
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . 404,710,317 412,286,995
------------ ------------
424,019,322 433,222,805
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . 172,851,871 163,309,553
------------ ------------
Total investment properties, net of
accumulated depreciation. . . . . . . . . . . . . . . . . . . 251,167,451 269,913,252
------------ ------------
Investment in unconsolidated ventures, at equity. . . . . . . . . . . . 1,231,962 1,459,879
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,448,962 5,261,096
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 467,013 489,911
Venture partners' deficits in ventures. . . . . . . . . . . . . . . . . 14,341,528 11,103,113
------------ ------------
$298,219,051 307,460,106
============ ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $ 39,449,273 39,666,113
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,953,087 2,858,162
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . 4,410,656 4,249,390
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,145,351 600,610
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 16,290,186 13,252,892
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . 2,434,142 1,330,231
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . 68,682,695 61,957,398
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 2,937,564 1,704,872
Investment in unconsolidated venture, at equity . . . . . . . . . . . . 87,312,342 84,764,207
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 392,468,300 382,303,505
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 551,400,901 530,729,982
Venture partners' subordinated equity in ventures . . . . . . . . . . . 329,798 329,169
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (22,711,995) (21,515,491)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (1,149,967) (1,149,967)
------------ ------------
(23,860,962) (22,664,458)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . . 326,224,167 326,224,167
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (514,916,436) (486,200,337)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (40,958,417) (40,958,417)
------------ ------------
(229,650,686) (200,934,587)
------------ ------------
Total partners' deficits. . . . . . . . . . . . . . . . . . . . (253,511,648) (223,599,045)
------------ ------------
$298,219,051 307,460,106
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . $17,147,370 16,209,286 51,521,252 47,921,257
Interest income . . . . . . . . . . . . . . . . 221,579 266,523 578,848 711,260
----------- ---------- ----------- -----------
17,368,949 16,475,809 52,100,100 48,632,517
----------- ---------- ----------- -----------
Expenses:
Mortgage and other interest . . . . . . . . . . 10,008,788 9,510,277 29,875,398 28,852,133
Depreciation. . . . . . . . . . . . . . . . . . 3,050,118 3,391,079 9,542,318 10,173,236
Property operating expenses . . . . . . . . . . 10,028,703 10,364,692 28,457,206 28,237,348
Professional services . . . . . . . . . . . . . 101,480 -- 275,698 423,016
Amortization of deferred expenses . . . . . . . 409,307 300,267 1,155,596 918,978
General and administrative. . . . . . . . . . . 155,753 200,853 558,325 580,206
Provision for value impairment. . . . . . . . . -- -- 13,100,000 --
----------- ---------- ----------- -----------
23,754,149 23,767,168 82,964,541 69,184,917
----------- ---------- ----------- -----------
Operating earnings (loss) . . . . . . . . (6,385,200) (7,291,359) (30,864,441) (20,552,400)
Partnership's share of gain (loss) from
operations of unconsolidated ventures . . . . . 866,780 (1,012,002) (2,285,947) (4,404,095)
Venture partners' share of earnings (loss)
from ventures' operations . . . . . . . . . . . 1,404,368 2,001,602 3,237,785 4,375,152
----------- ---------- ----------- -----------
Net operating earnings (loss) . . . . . . (4,114,052) (6,301,759) (29,912,603) (20,581,343)
Partnership's share of loss on sale of investment
property by unconsolidated venture. . . . . . . -- (14,789,529) -- (14,789,529)
----------- ---------- ----------- -----------
Net earnings (loss) before
extraordinary item. . . . . . . . . . (4,114,052) (21,091,288) (29,912,603) (35,370,872)
Extraordinary item:
Partnership's share of gain on
extinguishment of indebtedness
of unconsolidated venture . . . . . . -- 15,632,407 -- 15,632,407
----------- ---------- ----------- -----------
Net earnings (loss) . . . . . . . . . . . $(4,114,052) (5,458,881) (29,912,603) (19,738,465)
=========== ========== =========== ===========
Net earnings (loss) per
limited partnership interest:
Net operating earnings (loss) . . . . . $ (10.79) (16.52) (78.42) (53.96)
Partnership's share of gain (loss)
on sale of investment property by
unconsolidated venture. . . . . . . . -- (39.99) -- (39.99)
Partnership's share of gain on
extinguishment of debt of
unconsolidated venture. . . . . . . . -- 42.26 -- 42.26
----------- ---------- ----------- -----------
Net earnings (loss) . . . . . . . . $ (10.79) (14.25) (78.42) (51.69)
=========== ========== =========== ===========
Cash distributions per limited
partnership interest. . . . . . . . . . $ -- -- -- 30.00
=========== ========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $(29,912,603) (19,738,465)
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,542,318 10,173,236
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 1,155,596 918,978
Amortization of discount on long-term debt. . . . . . . . . . . . . . . 109,176 190,143
Partnership's share of operations of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,285,947 4,404,095
Venture partners' share of loss from ventures'
operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,237,785) (4,375,152)
Partnership's share of loss on sale of investment property of
unconsolidated venture. . . . . . . . . . . . . . . . . . . . . . . . -- 14,789,529
Long-term debt - deferred accrued interest. . . . . . . . . . . . . . . 10,116,779 8,864,263
Provision for value impairment. . . . . . . . . . . . . . . . . . . . . 13,100,000 --
Extraordinary item. . . . . . . . . . . . . . . . . . . . . . . . . . . -- (15,632,407)
Changes in:
Restricted funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,716,215) 281,103
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . . (989,653) 1,974,063
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . (131,206) (261,964)
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,836,452) (337,616)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 22,898 25,458
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,094,925 433,690
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . . 161,266 (10,051,364)
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,544,741 (32,972)
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,037,294 2,683,408
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 1,103,911 (74,437)
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 1,232,692 (44,350)
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . . 5,683,629 (5,810,761)
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments. . . . . . 2,194,244 16,793,076
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (3,896,517) (2,200,470)
Partnership's distribution from unconsolidated ventures . . . . . . . . . 490,105 1,041,820
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (1,343,462) (918,917)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . . (2,555,630) 14,715,509
------------ -----------
Cash flows from financing activities:
Cash distributions to limited partners. . . . . . . . . . . . . . . . . . -- (10,983,528)
Cash distributions to general partners. . . . . . . . . . . . . . . . . . -- (110,945)
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (479,437) (3,217,043)
Advance from venture partner. . . . . . . . . . . . . . . . . . . . . . . 201,436 --
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (278,001) (14,311,516)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . 2,849,998 (5,406,768)
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 5,908,236 9,551,909
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 8,758,234 4,145,141
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 15,600,787 18,559,400
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995,
which are included in the Partnership's 1995 Annual Report on Form 10-K
(File No. 0-12791) filed on March 25, 1996, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1995 Annual Report on Form 10-K.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain amounts in the 1995 financial statements have been
reclassified to conform with the 1996 presentation.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates, including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of September 30, 1996 and for the nine months ended
September 30, 1996 and 1995 were as follows:
Unpaid at
September 30,
1996 1995 1996
---------- --------- -------------
Property management
and leasing fees . . . . . . $1,620,062 1,272,024 2,869,267
Insurance commissions . . . . 67,501 65,106 --
Reimbursement (at
cost) for out-of-
pocket salary and
salary-related
expenses related
to the on-site
and other costs
for the Partner-
ship and its
investment
properties . . . . . . . . . 141,345 123,186 115,075
---------- --------- ---------
$1,828,908 1,460,316 2,984,342
========== ========= =========
Payment of certain pre-1993 property management and leasing fees
payable under the terms of the management agreements ($2,821,503 or approx-
imately $8 per $1,000 Interest at September 30, 1996) has been deferred.
All subsequent property management fees and leasing fees are being paid
currently.
The Partnership has an obligation to fund, on demand, $600,000 and
$600,000 to Carlyle Managers, Inc. and Carlyle Investors, Inc.,
respectively, of additional paid-in capital (reflected in amounts due to
affiliates in the accompanying financial statements). As of September 30,
1996, these obligations bore interest at 5.93% per annum and interest
accrued on these obligations was $209,617.
UNCONSOLIDATED VENTURE - SUMMARY INFORMATION
Summary income statement information for JMB/NYC for the nine months
ended September 30, 1996 and 1995 is as follows:
1996 1995
------------ -----------
Total income from
properties
(unconsolidated). . . . . . $106,999,524 103,041,028
============ ===========
Operating loss of ventures. . $ 17,524,116 46,678,713
============ ===========
Partnership's share
of loss from
operations. . . . . . . . . $ 2,548,135 4,401,895
============ ===========
Partnership's share
of loss on sale of
investment property . . . . $ -- 14,789,529
============ ===========
Partnership's share
of gain on extinguish-
ment of indebtedness. . . . $ -- 15,632,407
============ ===========
JMB/NYC
In October 1994, the Partnership and its affiliated partners (together
with the Partnership, the "Affiliated Partners"), through JMB/NYC Office
Building Associates, L.P. ("JMB/NYC"), entered into an agreement (the
"Agreement") with the affiliates (the "Olympia & York affiliates") of
Olympia & York Developments, Ltd. ("O&Y") who are the venture partners in
the joint ventures which own or owned 237 Park Avenue, 1290 Avenue of the
Americas and 2 Broadway, to resolve certain disputes among the Affiliated
Partners and the Olympia and York affiliates. In general, the parties
agreed to: (i) restructure the first mortgage loan; (ii) sell the 2
Broadway Building; (iii) reduce or eliminate approval rights of JMB/NYC
with respect to virtually all property management, leasing, sale or
refinancing; (iv) amend the joint ventures' agreements to eliminate any
funding obligations by JMB/NYC and (v) establish a new preferential cash
distribution level for the Olympia & York affiliates. In accordance with
the Agreement and in anticipation of the sale of the 2 Broadway Building,
the unpaid first mortgage indebtedness previously allocated to 2 Broadway
was allocated in 1994 to 237 Park Avenue and 1290 Avenue of the Americas.
As part of the Agreement, JMB/NYC and the Olympia & York affiliates
agreed to file a pre-arranged bankruptcy plan for reorganization under
Chapter 11 of the Bankruptcy Code in order to facilitate the restructuring
of the joint ventures between JMB/NYC and the Olympia & York affiliates and
the debt encumbering the two properties after the sale of 2 Broadway. In
June 1995, the 2 Broadway joint ventures filed their pre-arranged
bankruptcy plans for reorganization, and in August 1995, the bankruptcy
court entered an order confirming their plans of reorganization. In
September 1995, the sale of the 2 Broadway Building was completed. Such
sale did not result in any distributable proceeds to JMB/NYC or O&Y and its
affiliates.
Bankruptcy filings for the other joint ventures were made in April
1996, and in August 1996, an Amended Plan of Reorganization and Disclosure
Statement (the "Plan") was filed with the Bankruptcy Court for all such
joint ventures. The Plan was accepted by the various classes of debt and
equity holders and confirmed by the Court on September 20, 1996 and became
effective October 10, 1996. The Plan provides that JMB/NYC has an indirect
limited partnership interest which, before taking into account certain
preferences to other partners, equals approximately 4.9% of the reorganized
and restructured ventures owning 237 Park and 1290 Avenue of the Americas
(the "Properties"). Neither O&Y nor any of its affiliates has any direct
or indirect continuing interest in the Properties. The new ownership
structure gives control of the Properties to a newly-organized real estate
investment trust which is owned primarily by holders of the first mortgage
debt which encumbered the Properties prior to the bankruptcy. JMB/NYC has,
under certain circumstances, through January 1, 2001 rights of consent
regarding sale of the Properties or the consummation of certain other
transactions that significantly reduce indebtedness of the Properties.
The restructuring and reorganization discussed above eliminates any
potential additional obligation of the Partnership in the future to provide
additional funds under its previous joint venture agreements. The
Affiliated Partners entered into a joint and several obligation to
indemnify the newly formed real estate investment trust to the extent of
$25 million to ensure their compliance with the terms and conditions
relating to JMB/NYC's indirect limited partnership interest in the
restructured and reorganized joint ventures that own the Properties. As
collateral for such indemnification, $7.8 million of marketable U.S.
government debt securities (of which the Partnership's share was $1.9
million) was provided to the real estate investment trust in October 1996.
Compliance with the provisions of the indemnification agreement is within
the control of the Affiliated Partners and non-compliance with such
provisions by either the Partnership or the other Affiliated Partners is
highly unlikely. Therefore, it is highly likely that the Partnership's
share of the collateral will be returned to it at the termination of the
indemnification agreement.
While JMB/NYC is not expected to terminate in the near term, it
currently appears unlikely that any significant distributions will be made
to the Partnership at any time due to the level of indebtedness remaining
on the Properties, the original purchase money notes payable by JMB/NYC and
the preference levels within the reorganized structure.
ORCHARD ASSOCIATES
The Partnership's interest in Old Orchard shopping center (through
Orchard Associates and Old Orchard Urban Venture ("OOUV") was sold in
September 1993.
Old Orchard Urban Venture still may earn, under certain conditions, up
to an additional $3,400,000 (of which Orchard Associates has a 79.1667
interest) based upon certain future earnings of the property (as defined),
none of which has been earned or received as of the date of this report.
In August 1996, OOUV distributed to Orchard Associates $455,000 in
proceeds from the partial settlement of operating prorations. As a result,
Orchard Associates distributed $227,500 to the Partnership representing its
share of such operating prorations.
COPLEY PLACE
The joint venture modified the existing first mortgage note effective
March 1, 1992. Any cash flow from the property, after all current capital
and leasing expenditures, is being escrowed for the purpose of paying for
future capital and leasing requirements. As a result of the debt
modification, the property produced cash flow in 1993, 1994, 1995 and 1996,
which has been escrowed for future potential leasing requirements as set
forth in the current loan modification. At September 30, 1996, such
escrowed funds approximated $6,629,000.
The Partnership's interest in the joint venture is also subject to a
purchase price note and several recourse loans for past operating deficits.
While these notes and loans are presently due to an affiliate of the
General Partners, they were originally payable to the unaffiliated seller
who was subsequently purchased by an affiliate of the General Partners in
1984.
In May 1996, the venture used approximately $945,000 of Copley Place
cash reserves to repay a 1996 advance of approximately $720,000 from the
affiliated venture partner with the remaining balance applied to accrued
interest on the operating deficit loans.
In 1996, leases for approximately 19% of the tenant space was
scheduled to expire of which approximately 18% of the tenant space was
renewed or leased to new tenants. In July 1996, the joint venture signed a
new five year lease with a tenant whose lease for approximately 129,000
square feet (11% of the tenant space) was scheduled to expire in July 1996.
On October 31, 1996, the Partnership and its joint venture partners
entered into a letter of intent whereby the Partnership would sell its
entire interest in the joint venture, and the joint venture partners would
sell a portion of their interest in the joint venture and certain
associated assets in which the Partnership does not have an interest, to an
unaffiliated third party. Though there can be no assurance that such sale
will ultimately be consummated, or on what terms or timing, in order to
facilitate such sale the Partnership, the joint venture partners and the
holders of the purchase price note and the operating deficit loans have
agreed that the Partnership will receive a nominal amount of net proceeds
after extinguishment of its obligations under the purchase price note and
the operating deficit loans, upon closing. The Partnership has determined
to enter into this agreement and sell its interest in the property at this
time given, among other things, the ability to realize a nominal amount of
proceeds from the transaction despite the current large levels of recourse
and non-recourse debt of the Partnership which would otherwise have
required that all proceeds go to the joint venture partners and the holder
of the purchase price note (even at a significantly higher purchase price
for the Partnership's interest), the risk of future capital calls by the
joint venture and the refinancing risk faced by the Partnership when the
mortgage debt secured by the property comes due in 1998. In the event such
sale is consummated, the Partnership will recognize a significant gain for
financial reporting and federal income tax purposes with only nominal net
proceeds. In addition, the property will be classified as held for sale or
disposition as of October 1, 1996.
SHERRY LANE PLACE
All excess cash flow is remitted to the lender as additional debt
service on the modified mortgage. During 1996, the Partnership has
remitted approximately $195,000 to the lender representing excess cash flow
generated (as defined) through September 1996. The Partnership does not
consider this investment to be a source of future liquidity. The joint
venture may decide not to commit any significant additional amounts to the
property, which may result in the joint venture no longer having an
ownership in the property. In such event, the joint venture would
recognize a gain for financial reporting and Federal income tax purposes
with no corresponding distributable proceeds.
MARSHALL'S AURORA PLAZA
In February 1996, the Partnership was notified by TJX, the new owner
of the Marshall's store, of its intent to sublease or assign its lease as
permitted by Marshall's current lease agreement. The Partnership was
working with TJX to secure another tenant for its 28,000 square foot store
and issued a proposal for a replacement tenant. In May 1996, the
Partnership was notified that an agreement in principle was reached between
TJX and a national retailer specializing in crafts and hobby supplies,
whereby TJX will assign its lease to the national retailer. This
transaction is not expected to have an adverse financial impact on the
property and the new national retailer's store, when open, is expected to
generate additional traffic to the center. There can be no assurance this
transaction will be finalized. The Partnership intends to market the
property for sale once the issue with the Marshall's store is resolved. In
addition, the Partnership had initiated discussions with the first mortgage
lender for a short-term extension of the mortgage loan which was originally
due in November 1996. The lender agreed to a short-term loan extension
until June 2, 1997 with the payment of a loan extension fee (paid on
November 1, 1996) equal to 1.25% of the outstanding balance of
approximately $5,368,000, or $67,100.
PLAZA TOWER
In accordance with the terms of the 1995 refinancing of the Plaza
Tower Office Building, beginning April 1996, the Partnership is obligated
to deposit into escrow $100,000 annually for five years to cover future
tenant improvement obligations pursuant to a lease executed with a major
tenant. Should the current tenant lease be terminated or amended such that
the Partnership's obligation to the tenant is eliminated, such escrowed
funds (plus interest earned thereon) would be released to the Partnership.
CARROLLWOOD APARTMENTS
In September 1993, the venture refinanced the mortgage loan with an
unaffiliated third party. The venture was obligated to establish an escrow
account for future capital improvements. The escrow account was initially
funded by the Partnership's capital contribution to the venture and is
subsequently funded by the operations of the venture. As of the date of
this report, the escrow account has a balance of approximately $123,000 and
no amounts have been withdrawn.
In April 1996, the property manager (an affiliate of the Partnership's
joint venture partner in the property) of the apartment complex notified
the Partnership of potential sub-terranean termite damage at the property.
This damage was discovered as a result of a wood replacement project that
was undertaken to prepare the property to market for sale. The property
manager obtained three competitive bids to repair the damage, each of which
totalled approximately $1,400,000. In addition, the exterminating company
that had been treating the property for several years has been notified of
the extensive damage and is negotiating with the property manager and the
venture partners its liability regarding the damage. The joint venture is
currently exploring its alternatives regarding this issue and if an
agreement with the exterminating company cannot be reached whereby the
exterminating company will agree to pay for substantially all the damage,
the joint venture will likely pursue its remedies against the exterminating
company. Accordingly, the Partnership has recorded for financial reporting
purposes, a liability and a related receivable for the estimated repair
costs and recovery of such repair costs.
LONG BEACH PLAZA
The Partnership has not remitted all of the scheduled debt service
payments for the mortgage loan secured by the Long Beach Plaza shopping
center since June 1993. Accordingly, the combined balances of the mortgage
note and related accrued interest of approximately $46,527,000 at September
30, 1996 and approximately $44,220,000 at December 31, 1995 are in default
and have been classified as current liabilities in the accompanying
consolidated financial statements. The Partnership had initiated
discussions with the first mortgage lender regarding a modification of its
mortgage loan secured by the property, which was originally due in June
1994. The lender agreed to a short-term loan extension until August 31,
1995. The Partnership has been unable to secure a modification or further
extension to the loan. The Partnership has decided not to commit any
significant additional amounts to the property. In March 1996, a receiver
for the property was appointed for the benefit of the lender. As a result,
the Partnership was required to submit to the lender approximately
$1,000,000 of prior years' cash generated from the property. Title is
expected to be transferred in 1997. This will result in the Partnership no
longer having an ownership interest in such property and will result in
gain for financial reporting and Federal income tax purposes to the
Partnership with no corresponding distributable proceeds.
Due to the above default and the likelihood that the lender will
realize upon its security interest in the near term, the property was
classified as held for sale or disposition as of July 1, 1996.
Accordingly, the property has not been subject to continued depreciation.
The accompanying consolidated financial statements include $4,135,460 and
$4,428,274 of revenues and $3,652,955 and $4,493,478 of operating expenses
for the nine months ended September 30, 1996 and 1995, respectively. The
property had a net carrying value of $13,773,431 and $27,239,529 at
September 30, 1996 and December 31, 1995, respectively.
The Partnership recorded a provision for value impairment of
$13,100,000 as of January 1, 1996.
THE GLADES APARTMENTS
The joint venture had commenced marketing the Glades Apartments for
sale. In July 1996, the joint venture signed a letter of intent to sell
the property to an unaffiliated third party. If consummated, the sale
would result in a gain for financial reporting and Federal income tax
purposes. The sale is subject to certain contingencies which must be
satisfied prior to the proposed closing date in November 1996. There can
be no assurances that a sale of the property will be consummated on the
terms outlined in the letter of intent or on any other terms. The property
was classified as held for sale or disposition as of April 1, 1996 and
therefore has not been subject to continued depreciation. The accompanying
consolidated financial statements include $1,708,004 and $1,623,425 of
revenues and $1,645,095 and $1,623,237 of operating expenses for the nine
months ended September 30, 1996 and 1995, respectively. The property had a
net carrying value of $7,938,006 and $7,963,205 at September 30, 1996 and
December 31, 1995, respectively.
ALLIED AUTOMOTIVE CENTER
On October 10, 1990, the Partnership sold the land, building, and
related improvements of the Allied Automotive Center located in Southfield,
Michigan.
The Partnership has retained title to a defined 1.9 acre piece of land
(the "Parcel"). During the buyer's due diligence investigation, the buyer
found traces of contamination located on a portion of the Parcel as well as
on a portion of the land owned by the two affiliated selling entities. It
was subsequently determined that such contamination was most likely the
result of certain activities of the previous owner. As a result, the
purchase price was reduced by approximately $682,000 for the Partnership's
excluded land. The land may be purchased by the buyer after the
environmental clean-up is completed. Recently, the Partnership has been
informed that certain regulatory agencies have approved the clean-up of the
site and approved the shut-down of the clean-up operation. The Partnership
is currently awaiting final written approval from the state regulatory
agency. The gain associated with this Parcel, approximately $543,000, will
be recognized if and when the closing occurs (currently expected to be in
late 1996 or early 1997). There can be no assurance that the sale of this
Parcel will be consummated on these or any other terms.
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments and adjustments to
reflect the treatment given certain transactions in the Partnership's 1995
Annual Report) necessary for a fair presentation have been made to the
accompanying figures as of September 30, 1996 and for the three and nine
months ended September 30, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements for additional information concerning certain of the
Partnership's investments.
At September 30, 1996, the Partnership and its consolidated ventures
had cash and cash equivalents of approximately $8,758,000. Included in
cash and cash equivalents at September 30, 1996 is $5,520,836 of Copley
Place venture cash of which approximately $3,800,000 is to be used for
payment of a portion of the real estate taxes for the property (of which
approximately $1,900,000 was paid in November 1996), approximately $570,730
represents excess cash flow generated by Copley Place related to the second
quarter of 1996, which was remitted to the lender during the fourth
quarter, and approximately $163,000 represents lease termination proceeds
which are being amortized and remitted to the lender over the remaining
terms of the related original leases (as defined). In October 1996, the
Partnership funded $1.9 million as collateral for its indemnification
related to its indirect limited partnership interest in JMB/NYC. Remaining
amounts are available for working capital requirements and potential
leasing, tenant improvement and other costs at certain of the Partnership's
other investment properties. In addition, the consolidated balance sheet
at September 30, 1996 includes approximately $6.6 million of escrowed funds
for potential leasing costs at Copley Place. The Partnership and its
consolidated ventures have currently budgeted in 1996 approximately
$6,078,000 for tenant improvements and other capital expenditures which is
a reduction of approximately $3,344,000 from original budget estimates
primarily due to lower than anticipated re-leasing costs associated with
the renewal of a major tenant's lease at the Copley Place multi-use
complex. The Partnership's share of such items in 1996 is currently
budgeted to be approximately $3,936,000 of which approximately $2,268,000
has been expended on capital improvements at September 30, 1996.
Based upon estimated operations of certain of the Partnership's
investment properties and on the anticipated requirements of the
Partnership to fund its share of potential leasing and capital improvement
costs at these properties, the Partnership suspended operating cash
distributions to the Limited and General Partners effective as of the first
quarter of 1992.
The Partnership has held certain of its investment properties longer
than originally anticipated in an effort to maximize the return to the
Limited Partners. After reviewing the remaining properties and their
competitive marketplace, the General Partners of the Partnership expect to
be able to conduct an orderly liquidation of most of the remaining assets
as quickly as practicable. Therefore, it is currently expected that the
Partnership will sell or dispose of its remaining investment properties,
with the possible exception of the Partnership's interest in the indirect
limited partnership interests related to 237 Park Avenue and 1290 Avenue of
Americas properties, no later than 1999 (sooner if the properties are sold
or disposed of in the nearer term) barring unforeseen economic
developments.
Although the Partnership expects to distribute sale proceeds from the
disposition of certain of the Partnership's remaining investment
properties, aggregate distributions of net cash flow and sale and
refinancing proceeds received by the Limited Partners over the entire term
of the Partnership will be substantially less than half of their original
investment. However, in connection with sales or other dispositions
(including a transfer of title to a lender) of properties (or interests
therein) owned by the Partnership or its ventures, the Limited Partners may
be allocated substantial gain for Federal income tax purposes regardless of
whether any proceeds are distributable from such sales or other
dispositions.
As discussed in more detail in the notes to the accompanying
consolidated financial statements, the Copley Place, Long Beach Plaza and
Glades Apartment investment properties are currently classified as held for
sale or disposition. Due to the default on the mortgage loan secured by
Long Beach Plaza, it is expected that title to the property will be
transferred to the lender or its designee in 1997.
RESULTS OF OPERATIONS
The aggregate increase in cash and cash equivalents and short-term
investments at September 30, 1996 as compared to December 31, 1995 is
primarily due to cash generated from operations at the Copley Place multi-
use complex, a portion of which is reserved as discussed above.
The increase in restricted funds and the corresponding increase in
tenant security deposits at September 30, 1996 as compared to December 31,
1995 is primarily due to additional deposits received from a tenant at
Copley Place as required per the tenant's lease which will be refunded to
the tenant in late 1996 due to the recent renewal of its lease.
The increase in rents and other receivables and the corresponding
increase in accounts payable at September 30, 1996 as compared to December
31, 1995 is primarily due to a recorded liability and a related receivable
at Carrollwood Apartments relating to termite damage for which the
exterminating company is believed to be liable for the repair costs.
The increase in escrow deposits at September 30, 1996 as compared to
December 31, 1995 is primarily due to the excess cash flow being generated
from the Copley Place multi-use complex and deposited with the lender as
required by the loan modification.
The decrease in land and building and improvements at September 30,
1996 as compared to December 31, 1995 is primarily due to the $13,100,000
provision for value impairment recorded for the Long Beach Plaza Shopping
Center at January 1, 1996.
The increase in venture partners' deficits in ventures at September
30, 1996 as compared to December 31, 1995 is primarily due to the
allocation to the venture partner of its share of operating losses being
incurred at the Copley Place multi-use complex.
The increase in unearned rents at September 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of receipt of rental
income at Copley Place multi-use complex.
The increase in accrued interest at September 30, 1996 as compared to
December 31, 1995 is primarily due to the continued suspension of debt
service payments on the long-term mortgage loan secured by Long Beach
Plaza.
The increase in accrued real estate taxes at September 30, 1996 as
compared to December 31, 1995 is due to the timing of real estate tax
payments at certain of the Partnership's investment properties.
The increased deficit in unconsolidated venture at September 30, 1996
as compared to December 31, 1995 is primarily due to the allocation of the
Partnership's share of operating losses from JMB/NYC Office Building
Associates, L.P.
The increase in long-term debt, less current portion at September 30,
1996 as compared to December 31, 1995 is primarily due to the accrual of
long-term deferred interest of approximately $7,079,000 on the Copley Place
purchase price note and the accrual of long-term deferred interest of
approximately $2,788,000 on the Copley Place mortgage note.
The increase in rental income for the three and nine months ended
September 30, 1996 as compared to the three and nine months ended September
30, 1995 is primarily due to higher average occupancy at Copley Place in
1996.
The decrease in interest income for the three and nine months ended
September 30, 1996 as compared to the three and nine months ended September
30, 1995 is primarily due to a lower average balance in short-term
investments in 1996 as a result of the February 1995 distribution to
partners of previous undistributed sales proceeds of $11,094,473 and the
February 1995 payment of $10,000,000 for previously deferred property
management and leasing fees.
The increase in mortgage and other interest for the three and nine
months ended September 30, 1996 as compared to the three and nine months
ended September 30, 1995 is primarily due to the higher average balance in
1996 on the Copley Place purchase price note.
The provision for value impairment in the amount of $13,100,000 for
the nine months ended September 30, 1996 is due to the uncertainty of the
Partnership's ability to recover the net carrying value of the Long Beach
Plaza Shopping Center from future operations or sale.
The decrease in the Partnership's share of loss from operations of
unconsolidated ventures for the three and nine months ended September 30,
1996 as compared to the three and nine months ended September 30, 1995 is
primarily due to the lower interest expense related to the discharge of
principal and accrued interest on the 2 Broadway Purchase Notes of
$62,529,627 as a result of the sale of 2 Broadway in September 1995,
partially offset by a decrease in rental income at the 1290 Avenue of the
Americas office building due to greater vacancy during 1996.
The decrease in venture partners' share of loss from ventures'
operations for the three and nine months ended September 30, 1996 as
compared to the three and nine months ended September 30, 1995 is primarily
due to improved operations at Copley Place as a result of higher rental
income due to increased average occupancy, partially offset by increased
real estate taxes which are only partially recoverable from tenants.
The loss on sale of investment property by unconsolidated venture and
the Partnership's share of gain on extinguishment of indebtedness of
unconsolidated venture for the three and nine months ended September 30,
1995 is primarily due to the disposition of the 2 Broadway Building and the
related gain on the extinguishment of indebtedness.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In February 1996, an action entitled TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA V. CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XIII, JMB
REALTY CORPORATION, et. al. was initiated in California Superior Court of
Orange County, California. In the proceeding, Teachers Insurance and
Annuity Association of America ("Teachers"), as the holder of the mortgage
notes secured by the Long Beach Plaza Shopping Center, sought the
appointment of a receiver for the benefit of the lender to take exclusive
possession, control and operation of the property. Due to declining retail
sales at the shopping center and one of its anchor tenant's previously
vacating its space, the Partnership has not made all of the scheduled debt
service payments on the mortgage notes since June 1993. The Partnership
also did not pay the outstanding principal and accrued interest on the
first mortgage note at its maturity in August 1995 (combined principal and
accrued interest balance at September 30, 1996 was approximately
$46,527,000). The Partnership was unable to obtain a long-term
modification of the mortgage notes from Teachers, and the Partnership
decided not to commit any significant additional amounts to the property.
In March 1996, the Court granted Teachers' application and entered an order
for a receiver to take exclusive possession, control and operation of the
property. Accordingly, the receiver has control of the property and its
operations. An affiliate of the General Partners continues as the property
manager, at the discretion of the receiver. Title to the property is
expected to be transferred to Teachers or its designee in 1997.
The Partnership is not subject to any other material legal
proceedings.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Reference is made to Notes to Consolidated Financial Statements filed
with this report for a discussion of the default under the mortgage loan
secured by Long Beach Plaza, which discussion is hereby incorporated by
reference.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Partnership's
investment properties owned during 1996.
<CAPTION>
1995 1996
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Marshall's Aurora Plaza
shopping center
Aurora (Denver), Colorado. . 94% 94% 92% 92% 95% 96% 96%
2. Carrollwood Station
Apartments
Tampa, Florida . . . . . . . 99% 99% 97% 96% 96% 98% 97%
3. Long Beach Plaza
shopping center
Long Beach, California . . . 55% 53% 53% 55% 55% 55% 55%
4. The Glades Apartments
Jacksonville, Florida. . . . 87% 94% 96% 95% 92% 93% 93%
5. Sherry Lane Place
office building
Dallas, Texas. . . . . . . . 98% 99% 97% 97% 96% 97% 96%
6. Copley Place
multi-use complex
Boston, Massachusetts. . . . 73% 73% 88% 86% 89% 93% 90%
7. Plaza Tower office building
Knoxville, Tennessee . . . . 92% 92% 93% 92% 91% 93% 93%
8. 237 Park Avenue Building
New York, New York . . . . . 98% 98% 98% 98% 98% 98% 98%
9. 1290 Avenue of the Americas
Building
New York, New York . . . . . 94% 94% 94% 78% 78% 71% 81%
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
3-A. Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A to the Prospectus is hereby incorporated by reference to
the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-
12791) dated March 30, 1993.
3-B. Acknowledgement of rights and duties of the General
Partners of the Partnership between ABPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is filed herewith.
4-A. Documents relating to the mortgage loan secured by the
Copley Place multi-use complex, in Boston Massachusetts, are also hereby
incorporated herein by reference to Post-Effective Amendment No. 2 in the
Partnership's Registration Statement on Form S-11 (File No. 2-81125) dated
June 9, 1983.
4-B. Documents relating to the modification of the mortgage
loan secured by the Copley Place multi-use complex are hereby incorporated
by reference to the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-12791) dated March 29, 1993.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Copley Place multi-use complex in Boston,
Massachusetts, are hereby incorporated herein by reference to Post-
Effective Amendment No. 2 to the Partnership's Registration Statement on
Form S-11 (File No. 2-81125) dated June 9, 1983.
10-B. Documents relating to the sale by the Partnership of an
interest in the Allied Automotive Center, in Southfield, Michigan, are
hereby incorporated herein by reference to the Partnership's Report for
October 10, 1990 on Form 8-K (File No. 0-12791) dated October 30, 1990.
10-C. Agreement dated March 25, 1993 between JMB/NYC and the
Olympia & York affiliates regarding JMB/NYC's deficit funding obligations
from January 1, 1992 through June 30, 1993 are hereby incorporated by
reference to the Partnership's report for December 31, 1992 on Form 10-K
(File No. 0-12791) dated March 29, 1993.
10-D. Agreement of Limited Partnership of Carlyle - XIII
Associates L.P. is hereby incorporated by reference to the Partnership's
Report for March 31, 1993 on Form 10-Q (File No. 0-12791) dated May 14,
1993.
10-E. Documents relating to the sale by the Partnership of its
interest in the Old Orchard Urban Venture are herein incorporated by
reference to the Partnership's Report for August 30, 1993 on Form 8-K (File
No. 0-12791) dated November 12, 1993.
10-F. Second Amended and Restated Articles of Partnership of
JMB/NYC Office Building Associates, are herein incorporated by reference to
the Partnership's report for December 31, 1993 on Form 10-K (File No. 0-
12791) dated March 28, 1994.
10-G. Amended and Restated Certificate of Incorporation of
Carlyle-XIV Managers, Inc. (known as Carlyle Managers, Inc.), is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 0-12791) dated March 28, 1994.
10-H. Amended and Restated Certificate of Incorporation of
Carlyle-XIII Managers, Inc. (known as Carlyle Investors, Inc.), is hereby
incorporated by reference to the Partnership's report for December 31, 1993
on Form 10-K (File No. 0-12791) dated March 28, 1994.
10-I. $600,000 demand note between Carlyle-XIII Associates, L.P.
and Carlyle Managers, Inc., are herein incorporated by reference to the
Partnership's report for December 31, 1993 on Form 10-K (File No. 0-12791)
dated March 28, 1994.
10-J. $600,000 demand note between Carlyle-XIII Associates, L.P.
and Carlyle Investors, Inc., are herein incorporated by reference to the
Partnership's report for December 31, 1993 on Form 10-K (File No. 0-12791)
dated March 28, 1994.
10-K. Proposed Restructure of Two Broadway, 1290 Avenue of the
Americas and 237 Park Avenue, New York, New York and Summary of Terms dated
October 14, 1994, is hereby incorporated by reference to the Partnership's
report for December 31, 1994 on Form 10-K (File No. 0-12791) dated March
27, 1995.
10-L. Assumption Agreements dated October 14, 1994 made by 237
Park Avenue Associates and by 1290 Associates in favor and for the benefit
of O&Y Equity Company, L.P., O&Y NY Building Corp. and JMB/NYC Office
Building Associates, L.P., are hereby incorporated by reference to the
Partnership's report for December 31, 1994 on Form 10-K (File No. 0-12791)
dated March 27, 1995.
10-M. Assumption Agreements dated October 14, 1994 made by O&Y
Equity Company, L.P., and by O&Y NY Building Corp. and by JMB/NYC Office
Building Associates, L.P. in favor and for the benefit of 2 Broadway
Associates and 2 Broadway Land Company, are hereby incorporated by
reference to the Partnership's report for December 31, 1994 on Form 10-K
(File No. 0-12791) dated March 27, 1995.
10-N. Amendment No. 1 to the Agreement of Limited Partnership of
Carlyle-XIII Associates, L.P. is hereby incorporated by reference to the
Partnership's report for March 31, 1995 on Form 10-Q (File No. 0-12791)
dated May 11, 1995.
10-O. Amendment No. 1 to the Second Amended and Restated
Articles of Partnership of JMB/NYC Office Building Associates, L.P. is
hereby incorporated by reference to the Partnership's report for March 31,
1995 on Form 10-Q (File No. 0-12791) dated May 11, 1995.
10-P. Agreement of Sale between 2 Broadway Associates, L.P. and
2 Broadway Acquisition Corp. dated August 10, 1995, is hereby incorporated
by reference to the Partnership's report for December 31, 1995 on Form 10-K
(File No. 0-12791) dated March 25, 1996.
10-Q. Agreement of Conversion of 1290 Associates into 1290
Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office Building
Associates, L.P., an Illinois limited partnership, O&Y Equity Company,
L.P., a Delaware limited partnership and O&Y NY Building Corp., a Delaware
corporation, is hereby incorporated by reference to the Partnership's
report for December 31, 1995 on Form 10-K (File No. 0-12791) dated March
25, 1996.
10-R. Agreement of Conversion of 237 Park Avenue Associates into
237 Park Avenue Associates, L.L.C., dated October 10, 1995 among JMB/NYC
Office Building Associates, L.P., an Illinois limited partnership, O&Y
Equity Company, L.P., a Delaware limited partnership and O&Y NY Building
Corp., a Delaware corporation, is hereby incorporated by reference to the
Partnership's report for December 31, 1995 on Form 10-K (File No. 0-12791)
dated March 25, 1996.
10-S. Disclosure Statement for the Second Amended Joint Plan of
Reorganization of 237 Park Avenue Associates, L.L.C. and 1290 Associates,
L.L.C. dated August 9, 1996 is filed herewith.
27. Financial Data Schedule
Although certain additional long-term debt instruments of the
Registrant have been excluded from Exhibit 4 above, pursuant to Rule 601(b)
(4) (iii), the Registrant commits to provide copies of such agreements to
the Securities and Exchange Commission upon request.
(b) No reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: November 8, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 8, 1996
CARLYLE REAL ESTATE LIMITED PARTNERSHIP XIII
ACKNOWLEDGEMENT
---------------
This Acknowledgement is made and executed as of the 31st day of
December, 1995 by ABPP Associates, L.P., a limited partnership organized
under the laws of the State of Illinois ("ABPP"), and JMB Realty
Corporation, a Delaware corporation ("JMBRC").
WHEREAS, ABPP has acquired all of the partnership interests in
Realty Associates-XIII, L.P., an Illinois limited partnership ("Realty-
XIV"), which has served as the Associate General Partner of Carlyle Real
Estate Limited Partnership-XIII, an Illinois limited partnership (the
"Partnership"), and ABPP has elected to continue the business of Realty-
XIII and has agreed to continue as the Associate General Partner of the
Partnership; and
WHEREAS, JMBRC has agreed to continue as the Corporate General
Partner of the Partnership.
NOW, THEREFORE, the parties hereby agree and acknowledge as follows:
1. ABPP and JMBRC both shall continue as general partners of the
Partnership, each with all of the rights and powers of general partners
therein, as set forth in the agreement of limited partnership of the
Partnership, as amended to date (the "Partnership Agreement") and in the
Revised Uniform Limited Partnership Act of the State of Illinois, and the
Partnership and its business shall be continued in all respects.
2. ABPP hereby agrees that it is a signatory to the Partnership
Agreement, together with JMBRC, and adopts and agrees to be bound by all
of the provisions of the Partnership Agreement, as amended from time to
time in accordance with the provisions of the Partnership Agreement.
3. ABPP and JMBRC agree that JMBRC is hereby authorized and
empowered, on behalf of ABPP, JMBRC, the Partnership or any of the
foregoing, to execute any and all documents, enter into any and all
agreements, or take any and all other actions (in each case in accordance
with and subject to the terms of the Partnership Agreement), in the name
of the Partnership or otherwise, as shall be necessary or appropriate in
connection with the business of the Partnership at any time. It is
further understood and agreed that the Chairman, President or any Vice
President of JMBRC (including any partner of ABPP who is Chairman,
President or Vice President of JMBRC) may act for and in the name of JMBRC
in the exercise by JMBRC of any of its rights and powers hereunder. In
dealing with JMBRC (or the Chairman, President or any Vice President
thereof) so acting on behalf of ABPP, JMBRC or the Partnership, no person
shall be required to inquire into the authority of JMBRC or such
individual to bind the Partnership. Persons dealing with the Partnership
are entitled to rely conclusively upon the power and authority of JMBRC
(and of the Chairman, President or any Vice President of JMBRC) as set
forth herein.
4. ABPP and JMBRC agree to take any and all other actions as
shall be necessary or appropriate to reflect the continuation of the
Partnership's business, including the filing with any agency of any
document which shall be necessary or appropriate in connection therewith.
5. Nothing contained herein or contemplated hereby shall be
deemed to render ABPP or JMBRC liable for any obligations for which they
would otherwise not be liable as general partners of the Partnership.
IN WITNESS WHEREOF, the parties hereto have executed this
Acknowledgement as of the date first above written.
ABPP ASSOCIATES, L.P.
By: JMB Realty Corporation
General Partner
By: ____________________
Its: ____________________
Sr. Vice President
JMB REALTY CORPORATION
By: ____________________
Its: ____________________
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
..........................................................................x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors.
(Jointly Administered)
:
......................................................................... x
DISCLOSURE STATEMENT FOR
THE SECOND AMENDED JOINT PLAN
OF REORGANIZATION OF
237 PARK AVENUE ASSOCIATES, L.L.C.
AND 1290 ASSOCIATES, L.L.C.
WEIL, GOTSHAL & MANGES LLP
Attorney for the Debtors
in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Brian S. Rosen, Esq. (BSR 0571)
Dated: New York, New York
August 9, 1996
Ad Hoc Committee of $970 Million Noteholders
August 9, 1996
To 970 Noteholders:
We write this letter to inform you that the Noteholders serving on the Ad
Hoc Committee of $970 Million Noteholders unanimously support the Second
Amended Joint Plan of Reorganization of 237 Park Avenue Associates, L.L.C. and
1290 Associates, L.L.C.
As explained in the Disclosure Statement, the current members of the Ad
Hoc Committee represent 51.9% of the outstanding principal amount of the
Existing Notes. Notably, the Noteholders serving on the Ad Hoc Committee
represent a broad cross-section of Noteholders and include large and small
holders and par and non-par buyers. The Plan represents the product of
extensive negotiations among the Ad Hoc Committee, O&Y (U.S.) and JMB, as well
as the resolution of intercreditor issues among the members of the Ad Hoc
Committee concerning both the economic and non-economic features of the Plan.
The Plan contains provisions which are designed, among other things, to
promote liquidity, to provide Noteholders (within certain parameters) with a
choice of debt or equity securities, to permit a refinancing of all or a
portion of the debt securities to be issued and to protect the rights of all
holders of the REIT Stock to be issued under the Plan. We believe that the
Plan provides the best available means to bring about a speedy, sensible and
fair resolution of the issues relating to 237 Park Avenue and 1290 Avenue of
the Americas.
For the reasons set forth above, in the Disclosure Statement and in the
accompanying letter of John E. Zuccotti, President and Chief Executive Officer
of O&Y (U.S.), WE STRONGLY URGE YOU TO VOTE TO ACCEPT THE PLAN BY MARKING AND
RETURNING THE ENCLOSED BALLOT.
Very truly yours,
The Ad Hoc Committee of
$970 Million Noteholders
TABLE OF CONTENTS
SUMMARY.........................................................
I. INTRODUCTION..................
A. General.........................
B. Summary of the Plan...................
II. GENERAL INFORMATION.............................................
A. Background Information.......................
1. The Debtors and Certain Affiliates.......
2. The Organizational Structure of the Debtors..........
3. Principal Assets and Liabilities of the Debtors.....
4. Description of the Properties........
B. Significant Events Preceding the Commencement of the
Debtors' Reorganization Cases............
1. Formation of the Ad Hoc Committee............
2. Negotiation of Proposed Restructuring.......
3. The Settlement Agreement...............
4. Motion for Approval of the Settlement Agreement.....
5. Commencement of Reorganization Cases.............
III. THE JOINT PLAN OF REORGANIZATION...........
A. Classification and Treatment of Claims and Equity
Interests Under the Plan.....
1. Administrative Expense Claims and
Priority Tax Claims (Article II).....
2. Class 1--Priority Non-Tax Claims (Article IV).....
3. Class 2--Senior Claims (Article V)...
4. Class 3--Other Secured Claims (Article VI).....
5. Class 4--Insured Claims and Tenant Reimbursement
Claims (Article VII)...
6. Class 5--General Unsecured Claims (Article VIII)..
7. Class 6--Affiliate Unsecured Claims (Article IX)....
8. Class 7--Equity Interests (Article X)...
B. Implementation of the Plan (Article XIII)...
1. Formation of the REIT (Article XIII)....
2. Formation of the Partnerships (Article XIII)...
3. Assignment of Tenant Notes......
4. Assignment of JMB Notes.....
5. Transfer of Distributable Cash...
6. Assignment of Certain Assets Related to the
Sale of 2 Broadway...
7. Description of the New Notes and the
Restated Indenture......
8. Description of the Restated Mortgage......
9. Cash Distribution in Lieu of New Notes;
Conventional Financing Alternative..........
10. Description of Registration Rights Agreement
and Stock Option Plan.........
11. Issuance of Securities................
C. Management of Reorganized Debtors (Article XIII)....
D. Provisions Governing Distributions;
Appointment of Disbursing Agent (Articles XIV and XV).....
1. Date of Distributions...
2. Disbursing Agent....
3. Sources of Distributions......
4. Delivery of Distributions......
5. Manner of Payment Under the
6. Exculpation of Disbursing Agent.........
7. Powers of the Disbursing Agent....
E. Disputed Claims (Article XVI).........
1. Prosecution of Objections........
2. Claims Reserve.......
3. Distributions After Allowance....
4. Remaining Funds..........
5. Allowance and Objection to Allowance
of Tenant Reimbursement Claims......
6. Allowance and Objection to Allowance
of Priority Utility Tax Claims.......
i
7. No Distributions Pending Allowance.........
8. Distributions After Effective Date...
F. Executory Contracts and Unexpired Leases
(Article XVII)......
1. The 1290 Ground Lease..........
2. General Treatment....
3. Amendments to Schedule; Effect of Amendments.....
4. Bar to Rejection Damages.........
G. Conditions Precedent to Confirmation
and Consummation (Article XVIII)........
1. Confirmation of the Plan....
2. Consummation of the Plan..........
3. Waiver of Conditions Precedent.....
H. Effects of Confirmation (Article
1. Vesting and Liens........
2. Equityco Claims....
3. 2 Broadway Plan.....
4. Binding Effect......
I. Releases, Injunctions and Waiver of Claims (Article XX)...
1. Release of the O&Y
2. Release of the Plan
3. Injunction......
4. Avoidance and Recovery Actions....
J. Retention of Jurisdiction and Modification of Plan
(Article XXI)......
K. Retiree Benefits........
L. Action By Indenture Trustee...........
M. VCG Fees....................
IV. RISK FACTORS......
1. Ownership by Apollo.........
2. Conflicts of Interest.........
3. Accuracy of Financial Projections..............
4. No Limitation on Debt; Uncertainty of Ability to
Refinance Debt.........
5. Real Estate Investment Risks...........
6. Changes in Policies........
7. Necessity to Maintain Ownership Limit; Anti-Takeover
Effect..............
8. Limits on Changes in Control.........
9. Lack of Appraisals.........
10. Restrictions Imposed by the Restated Indenture.......
11. Issuance of Additional Securities.............
12. Future Sales of REIT Stock and New Notes...........
13. Tax Risks........................
14. Inability to Make Required Distributions to
Stockholders Could Affect Real Estate Investment
Trust Status; Potential Requirement to Borrow..
15. Risks of Third Party Management........
16. Effect of Market Interest Rates on Value of REIT
Stock...........
17. Absence of Public Market.........
V. SECURITIES ACT CONSIDERATIONS...................................
VI. TAX CONSEQUENCES OF THE PLAN TO HOLDERS OF SENIOR CLAIMS........
A. General.........
B. Taxation of the Exchange of Senior Claims.............
C. Transfer Taxes..................
D. Mortgage Recording Tax....
E. REIT Taxation......
F. Taxation of the New Notes...............
G. Foreign Investors............
VII. VOTING PROCEDURES AND REQUIREMENTS.....
A. Holders of Claims and Equity Interests..........
B. Parties in Interest Entitled to Vote........
ii
C. Voting Procedures...........
D. Non-Standard Election and Exercise of Subscription
Rights..
E. Agreements Upon Furnishing Ballots; Modification of the
Plan.
F. Waivers of Defects and Irregularities..
G. Withdrawal of Ballots; Revocation....
VIII. CONFIRMATION AND CONSUMMATION OF THE PLAN.....
A. Confirmation Hearing.....
B. Objections to Confirmation of the Plan.........
C. Confirmation Requirements......
1. Acceptance......
2. 'Unfair Discrimination' and 'Fair and Equitable'
Tests..
3. Feasibility of the Plan...............
4. 'Best Interests' Test............
D. Consummation of the Plan...............
IX. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN
A. Continuation of the Reorganization Case.......
B. Alternative Joint Plan of Reorganization...............
C. Liquidation Under Chapter 7........
D. Section 1129 (b)......
X. CONCLUSION....................
EXHIBITS
Exhibit 1 Second Amended Joint Plan of Reorganization
Exhibit 2 Order Approving the Disclosure Statement and Notice of
Confirmation Hearing
Exhibit 3 Pro Forma Balance Sheet for the REIT and the Property Owning
Partnerships
Exhibit 4 Cash Flow Projections for the Properties and the REIT
Exhibit 5 Property Tenant Stacking Plan for 237 Property and 1290
Property and a Schedule of Lease Expirations for each Property
Exhibit 6 Terms of the Conventional Financing Alternative
Exhibit 7 Terms of the Retention of the Asset Manager by the REIT
Exhibit 8 Terms of the Retention of the Property Manager/Leasing Agent
by the Property Owning Partnerships
Schedule A List of Executory Contracts and Unexpired Leases to be Assumed
iii
SUMMARY
The following summary is qualified in its entirety by reference to the
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. ('237 LLC') and 1290 Associates, L.L.C. ('1290 LLC'), dated August 9,
1996 (the 'Plan'), a copy of which is attached hereto as Exhibit 1, and the
more detailed information contained herein and therein. In the event of any
inconsistency between this Disclosure Statement and the Plan, the terms and
conditions of the Plan shall govern; and, in the event of any inconsistency
between this Disclosure Statement and any exhibit or schedule to this
Disclosure Statement or any exhibit or schedule to the Plan, the terms and
conditions of such exhibit or schedule shall govern. All capitalized terms
used but not defined herein have the meanings assigned to such terms in the
Plan.
PROPONENTS OF THE PLAN
The Plan has been proposed by 237 LLC and 1290 LLC, as debtors and
debtors in possession (collectively, the 'Debtors'), in chapter 11 cases
pending in the United States Bankruptcy Court for the Southern District of New
York (the 'Bankruptcy Court'). The Debtors own the properties (the
'Properties') located at 237 Park Avenue and 1290 Avenue of the Americas in
New York City. The Debtors are also the successors to the issuers of Nine
Hundred Seventy Million Dollars ($970,000,000) in original principal amount of
notes, the obligations of which are secured by the Properties (the 'Existing
Notes').
This Disclosure Statement and the other documents described herein are
being provided by the Debtors to holders of Claims against and Equity
Interests in the Debtors.
The Debtors have identical ownership structures. O&Y Equity Company, L.P.
('Equityco'), a Delaware limited partnership and an O&Y (U.S.) entity, O&Y NY
Building Corp. ('Building Corp.'), a Delaware corporation and an entity that
is wholly owned by Equityco, and JMB/NYC Office Building Associates, L.P., an
Illinois limited partnership ('JMB LP'), are the members of the Debtors.
Equityco, Building Corp. and JMB LP, respectively, hold a forty nine and nine
tenths percent (49.9%), three and six tenths percent (3.6%) and forty six and
five tenths percent (46.5%) membership interest in each of the Debtors.
The following chart depicts the ownership structure of the Debtors prior
to consummation of the Plan.
Chart to be inserted
1
RELATIONSHIP OF THE PLAN TO SETTLEMENT AGREEMENT
The filing of the Debtors' cases under chapter 11 of the Bankruptcy Code
(the 'Reorganization Cases') and the Plan are consistent with and necessary in
order to consummate the transactions contemplated by the Settlement Agreement,
dated January 12, 1996 (as amended, the 'Settlement Agreement'), by and among
several of the principal parties in interest in the O&Y (U.S.) bankruptcy
cases. Upon consummation of the transactions contemplated by the Settlement
Agreement and the Plan, the Debtors will be reorganized into entities
independent of the other O&Y (U.S.) entities and their bankruptcy cases. In
consideration for the holders (the 'Morgan Loan Lenders') of a loan to O&Y
(U.S.) (the 'Morgan Loan') resolving their claims against O&Y (U.S.) in
accordance with the terms of the Settlement Agreement, O&Y (U.S.) has agreed,
pursuant to the Plan, to relinquish any ongoing management or ownership role
in the Properties and to modify the reorganization plan outline for the
Debtors agreed to in June 1994 by representatives of holders of Existing Notes
(the 'Noteholders') to (i) reduce certain fees inherent in such plan; (ii)
provide for the indirect transfer of ownership of the Properties to the
Noteholders consensually, expeditiously and in a tax-efficient manner that
avoids the substantial taxes, costs and delays that would be incurred in
attempting to achieve a comparable result without the assistance and
cooperation of O&Y (U.S.); and (iii) provide for the allocation to the Morgan
Loan Lenders of approximately seven percent (7%) of the equity securities
(i.e., the REIT Stock and the Subscription Rights described below) and two and
twenty five hundredths percent (2.25%) of the debt securities to be issued
under the Plan. See 'GENERAL INFORMATION--Significant Events Preceding the
Commencement of the Debtors' Reorganization Cases--The Settlement
Agreement.'
SECURITIES TO BE ISSUED TO THE HOLDERS OF SENIOR CLAIMS PURSUANT TO THE PLAN
The Plan provides that the holders of Senior Claims will receive (i)
approximately ninety three percent (93%) of the equity securities to be issued
under the Plan which equity interests consist of (a) shares of common stock,
par value Ten Dollars ($10.00) per share (the 'REIT Stock'), of Metropolis
Realty Trust, Inc. (the 'REIT'), a newly-formed Maryland corporation which
intends to qualify as a real estate investment trust for federal income tax
purposes, and (b) uncertificated rights (the 'Subscription Rights') to
purchase an aggregate number of shares of REIT Stock (the 'Offered Shares')
equal to the product of (x) 12,000,000 shares of REIT Stock, multiplied by (y)
a fraction, the numerator of which is $20,000,000 and the denominator of which
is $660,000,000 minus the gross proceeds from the consummation of the
Conventional Financing Alternative (or, if not consummated, $400,000,000) for
a fixed exercise price per share equal to $20,000,000 divided by the number of
Offered Shares (the 'Subscription Price'), such rights to be exercised at the
time of voting on the Plan, and (ii) ninety seven and seventy five one
hundredths percent (97.75%) of the New Notes to be issued in an aggregate
principal amount of Four Hundred Million Dollars ($400,000,000), unless the
Conventional Financing Alternative is consummated, as described in paragraph 7
under the caption titled 'INTRODUCTION--Summary of the Plan.' The REIT Stock,
the Subscription Rights and the New Notes are hereinafter referred to
collectively as the 'Plan Securities.'
The REIT will own a ninety five percent (95%) partnership interest, as
general partner, in a limited partnership (the 'Lower Tier Limited
Partnership') which will own a ninety nine percent (99%) partnership interest,
as limited partner, in each of the limited partnerships (the 'Property Owning
Partnerships') to be formed to own the Properties now owned by the Debtors.
The remaining one percent (1%) interest, in each of the Property Owning
Partnerships will be owned by one of two corporations to be formed (the 'GP
Corps'), as general partner, each of which, in turn, will be wholly owned by
the REIT. The REIT will also succeed to certain other assets held by the
Debtors, and certain affiliates of the Debtors (as further described in
paragraph 8 under the caption titled 'INTRODUCTION--Summary of the Plan'). The
remaining five percent (5%) interest in the Lower Tier Limited Partnership
(the 'LP Interest') not owned by the REIT will be owned by the successor by
merger to the Debtors (the 'Upper Tier Limited Partnership') which, in turn,
will be owned almost entirely by JMB LP, an existing member of the Debtors, as
limited partner, in the Upper Tier Limited Partnership. The five percent (5%)
LP Interest will be subordinated to the ninety five percent (95%) partnership
interest of the REIT with respect to certain priority distributions from the
Lower Tier Limited Partnership. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Formation of the
Partnerships--Description of the Limited Partnership Agreements of the
Partnerships.' The Upper Tier Limited Partnership, the Lower Tier Limited
Partnership and the Property Owning Partnerships are hereinafter referred to,
collectively, as the 'Partnerships.'
2
The following chart depicts the ownership structure of the Partnerships
upon consummation of the Plan, assuming the Conventional Financing Alternative
is not consummated on the Effective Date.
Chart to be inserted
3
The aggregate outstanding principal amount of Existing Notes held by the
holders of Senior Claims is equal to Nine Hundred Two Million Six Hundred
Three Thousand Four Hundred Ninety Two Dollars ($902,603,492) (the 'Election
Amount'). Each such holder's Pro Rata share of the Election Amount will be the
proportion that the amount of Senior Claims held by such holder bears to the
aggregate amount of Senior Claims held by all holders of Senior Claims.
Pursuant to the Plan, holders of Allowed Senior Claims may make (a) a Standard
Election (as described below), pursuant to which each holder of a Senior Claim
will receive, subject to adjustment if the Conventional Financing Alternative
is consummated, for each One Million Dollars ($1,000,000) of such holder's Pro
Rata share of the Election Amount (i) Four Hundred Thirty Three Thousand One
Hundred Ninety One Dollars and Thirty Two Cents ($433,191.32) in principal
amount of New Notes, and (ii) Twelve Thousand Three Hundred Sixty Four and
Twenty Three Hundredths (12,364.23) shares of REIT Stock, or (b) a
Non-Standard Election (as described below), pursuant to which each holder of a
Senior Claim will receive, subject to adjustment if the Conventional Financing
Alternative is consummated, New Notes in an aggregate principal amount equal
to seventy percent (70%) of such holder's Pro Rata share of the Election
Amount, if any, allocated by such holder to New Notes on its Ballot (subject
to reduction if the holders of Senior Claims have elected to receive more than
Three Hundred Ninety One Million Dollars ($391,000,000) in principal amount of
New Notes in the aggregate (the 'Senior Claim Note Cap')) and will receive,
subject to adjustment if the Conventional Financing Alternative is
consummated, up to Thirty Two Thousand Four Hundred Thirty Nine (32,439)
shares of REIT Stock for each One Million Dollars ($1,000,000) of such
holder's Pro Rata share of the Election Amount not allocated by such holder to
New Notes on its Ballot (subject to reduction if the holders of Senior Claims
are deemed to have elected to receive more than Eleven Million One Hundred
Sixty Thousand (11,160,000) shares of REIT Stock, in the aggregate (the
'Senior Claim Equity Cap')). Holders of Senior Claims may exercise all or a
portion of the Subscription Rights distributed to them to purchase ninety
three percent (93%) of the Offered Shares. If such holders do not exercise all
of their Subscription Rights, the Property Manager/Leasing Agent will purchase
any such unsubscribed shares at the Subscription Price.
The following is a summary of the Standard and Non-Standard Election
alternatives, based on a holder's Pro Rata share of the Election Amount equal
to One Million Dollars ($1,000,000), assuming the Conventional Financing
Alternative is not consummated on the Effective Date:
PRINCIPAL AMOUNT NUMBER OF SHARES TYPE OF ELECTION
OF NEW NOTES OF REIT STOCK SUBSCRIPTION RIGHTS
- ---------------- ---------------- ------------------
Standard $433,191.32 12,364.23 shares
Subscription Rights to purchase
up to 951 additional shares of
REIT Stock.
Non-Standard Up to $700,000 Up to 32,439 shares of REIT
(70% of Subscription Rights to purchase
principal amount of Existing
Stock elected by the holder of
up to 951 additional shares of
Notes elected by the holder of
a Senior Claim, subject to
REIT Stock.
a Senior Claim), subject to
reduction if the holders of
reduction if the holders of
Senior Claims, in the
Senior Claims, in the
aggregate, elect to receive
aggregate, elect to receive
more than 11,160,000 shares of
more than $391,000,000 in
REIT Stock.
principal amount of New Notes.
SECURITIES TO BE ISSUED TO THE MORGAN LOAN LENDERS PURSUANT TO THE PLAN
Pursuant to the Plan, the Morgan Loan Lenders will receive, in the
aggregate, assuming the Conventional Financing Alternative is not consummated,
(i) Eight Hundred Forty Thousand (840,000) shares of REIT Stock, (ii) Nine
Million Dollars ($9,000,000) in principal amount of New Notes, and (iii) Sixty
Four Thousand Six Hundred Fifteen (64,615) Subscription Rights to purchase
seven percent (7%) of the Offered Shares. See 'SECURITIES ACT CONSIDERATIONS.'
CONVENTIONAL FINANCING ALTERNATIVE
General. A majority in principal amount of the Noteholders may arrange
for the consummation of third party mortgage financing (including a
securitized financing) for the Property Owning Partnerships (the 'Conventional
Financing Alternative') on the Effective Date in an amount not less than Three
Hundred Twenty Five Million Dollars ($325,000,000), and on terms not less
favorable than those set forth in Exhibit 6 annexed hereto. Generally,
Distributees will receive Cash, in an aggregate amount equal to the net
proceeds therefrom but not in excess of Four Hundred Million Dollars
($400,000,000) (the 'Conventional Financing Cash Distribution'), in lieu of
New Notes. The portion of the Conventional Financing Cash Distribution each
holder of a Senior Claim and Morgan Loan Lender (collectively, the
'Distributees') is entitled to receive is proportionate to the amount of New
Notes such Distributees would otherwise have received if the Conventional
Financing Alternative had not been consummated,
4
subject to certain adjustments being made with respect to holders of Senior
Claims, if required, to reflect an increase in equity resulting from gross
proceeds of any Conventional Financing Alternative being less than Four
Hundred Million Dollars ($400,000,000). Additionally, as a result of such
Conventional Financing Alternative, the allocation of shares of REIT Stock
between the Morgan Loan Lenders and the holders of Senior Claims will be
adjusted so that the value of Cash and REIT Stock to be distributed to the
Morgan Loan Lenders would equal the value of New Notes and REIT Stock that
would have been distributable to them had the Conventional Financing
Alternative not been consummated on the Effective Date based on a combined
valuation (assumed for these purposes only) of Seven Hundred Million Dollars
($700,000,000) for the Twelve Million (12,000,000) shares of REIT Stock to be
issued and the New Notes. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan-- Cash Distribution in Lieu of New
Notes.'
Recent Developments. The Ad Hoc Committee has recently concluded
negotiations with Chemical Bank (now known as The Chase Manhattan Bank
('Chase')) for a mortgage loan in the amount of Four Hundred Twenty Million
Dollars ($420,000,000) having a five year term and requiring Forty Million
Dollars ($40,000,000) of amortization over the loan term and the establishment
of certain reserves. The loan would bear interest at a floating rate equal to
the LIBOR rate (the 'LIBOR Rate') plus 1.565% per annum provided that the
Property Owning Partnerships would be required to purchase an interest rate
cap or swap for a fixed rate such that the LIBOR Rate (prior to the addition
of the 1.565% spread) shall not exceed 7.685% per annum. The Debtors
anticipate seeking Court approval of the commitment and payment of the fees
thereunder on notice to all Noteholders in the immediate future.
PRINCIPAL ADVANTAGES OF THE PLAN
o Noteholders will avoid time-consuming, expensive and uncertain
litigation which would result from a foreclosure action and a contested
bankruptcy and the costs attendant to such proceedings, including the payment
of transfer taxes and, possibly, chapter 7 trustee fees, in connection with a
transfer of the Properties. See 'TAX CONSEQUENCES OF THE PLAN TO HOLDERS OF
SENIOR CLAIMS--Transfer Taxes.'
o The Warburg Pincus Note, a non-interest bearing note in the
principal amount of Four Million Three Hundred Fifty Four Thousand Seven
Hundred Fifty Eight Dollars and Nine Cents ($4,354,758.09), payable on October
31, 1999, and the Robinson Silverman Note, which has an outstanding principal
balance of not less than Five Million Three Hundred Seventeen Thousand Six
Hundred Ninety Dollars ($5,317,690) on the Petition Date,will be transferred
to the respective Property Owning Partnership free and clear of any interests
of third parties pursuant to the terms of the Settlement Agreement. These
notes may not have otherwise been available to satisfy Senior Claims in a
foreclosure action or a chapter 7 liquidation. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Assignment of Tenant Notes.'
o Equityco's share of the 2 Broadway Utility Tax Reserve, which has
an indeterminate value, but could be worth up to One Million Two Hundred
Thousand Dollars ($1,200,000), will be transferred to the REIT. See 'THE JOINT
PLAN OF REORGANIZATION--Implementation of the Plan--Assignment of Certain
Assets Related to the Sale of 2 Broadway.'
o Affiliates of O&Y (U.S.) will waive their respective claims, if
any, against the Debtors for asset management fees and leasing commissions.
See 'GENERAL INFORMATION--Background Information--Description of the
Properties--Cash Management Agreement; Fees to Management Corp.'
o Additional assets on which the Indenture Trustee had a lien for
the benefit of the holders of Existing Notes will be transferred to the REIT
or the Property Owning Partnerships, including the right to any proceeds from
the favorable resolution of tax certiorari proceedings with respect to the 2
Broadway Property (net of costs of collection and required tenant
reimbursements) and any Cash of the Debtors on hand as of the Effective Date
(after payment of claims and reserves required to be funded under the Plan).
See 'GENERAL INFORMATION--Background Information--Principal Assets and
Liabilities of the Debtors.'
o The Plan facilitates the restructuring of the indebtedness
evidenced by the Existing Notes, which restructuring could not otherwise be
accomplished pursuant to the Indenture without the consent of the Debtors and
all of the Noteholders.
o Through their ownership of REIT Stock, Noteholders will control
the management of the Properties and will realize the benefit of any
appreciation in the value of the Properties.
PRINCIPAL CONCESSIONS TO BE MADE BY THE NOTEHOLDERS UNDER THE PLAN
o The limited partnership agreements of the Property Owning
Partnerships restrict the ability of the Property Owning Partnerships to
transfer the Properties or take certain other actions prior to January 2, 2001
without the consent of JMB LP as a limited partner of the Upper Tier Limited
Partnership to the extent it would cause JMB LP to recognize a material amount
of income. See 'THE JOINT PLAN OF REORGANIZATION--Implementation of the
Plan--Formation of the Partnerships--Description of Limited Partnership
Agreements of the Partnerships.'
5
o Under the Plan, and as part of the overall consensual
restructuring of O&Y (U.S.) contemplated by the Settlement Agreement, the
Morgan Loan Lenders will receive approximately four and three tenths percent
(4.3%) of the economic value of the Properties. See 'GENERAL
INFORMATION--Significant Events Preceding the Commencement of the Debtors'
Reorganization Cases--The Settlement Agreement' and 'THE JOINT PLAN OF
REORGANIZATION-- Classification and Treatment of Claims and Equity Interests
under the Plan--Class 2--Senior Claims.'
o Holders of General Unsecured Claims will receive distributions
pursuant to the Plan in an amount equal to their Allowed Claims. Although such
amounts are de minimis in relation to the aggregate distributions under the
Plan, such creditors would likely not receive such distributions in a
foreclosure action or a chapter 7 liquidation. See 'THE JOINT PLAN OF
REORGANIZATION--Classification and Treatment of Claims and Equity Interests
Under the Plan--Class 5--General Unsecured Claims.'
o On the Effective Date, and pursuant to the Settlement Agreement,
any Claim against Equityco or its general partners asserted by or on behalf of
any holder of Existing Notes arising out of the Master Cash Flow Agreement (as
hereinafter defined), the Existing Notes, the Indenture or instruments entered
into in connection therewith will be deemed withdrawn and released with
prejudice. The Indenture Trustee has filed proofs of claim as an unsecured
creditor in Equityco's bankruptcy case in the amount of Twenty Eight Million
Two Hundred Twenty Nine Thousand Three Hundred Ninety Eight Dollars
($28,229,398) under the Master Cash Flow Agreement, plus additional
unliquidated amounts against Equityco and its general partners. Equityco has
objected to the allowance of the Indenture Trustee's proofs of claim for
voting purposes and it is likely that Equityco or its creditors will object to
the allowance of the proofs of claim for purposes of payment. If the Indenture
Trustee's proofs of claim were allowed, it is uncertain what distribution
would be made to unsecured creditors of Equityco. See 'GENERAL
INFORMATION--Background Information--Principal Assets and Liabilities of
the Debtors.'
SCOPE OF THE PLAN
The Plan is a plan of reorganization for the Debtors only and this
Disclosure Statement relates only to the Plan. The Plan also provides for the
distribution of certain assets of 2 Broadway which are subject to the 2
Broadway Plan. A vote to accept or reject the Plan is not a vote to accept or
reject any plan of reorganization relating to any Affiliates of the Debtors.
SOLICITATION OF ACCEPTANCES OF THE PLAN
This Disclosure Statement is being provided for the purpose of, among
other things, soliciting votes on the Plan. A copy of the order of the
Bankruptcy Court, dated August 9, 1996, approving this Disclosure Statement
and the procedures for soliciting votes to accept or reject the Plan (the
'Disclosure Statement Order') and a notice of, among other things, (a) the
dates set for filing objections to the Plan and (b) the date set for the
hearing on confirmation of the Plan (the 'Notice of the Confirmation Hearing')
are also being transmitted with this Disclosure Statement. The Disclosure
Statement Order and Notice of Confirmation Hearing are annexed hereto as
Exhibit 2. The Disclosure Statement Order and the Notice of the Confirmation
Hearing set forth in detail the deadlines and instructions for casting votes
to accept or reject the Plan and for filing objections to confirmation of the
Plan and the principles for tabulating Ballots. In addition, detailed voting
instructions accompany each Ballot.
EACH HOLDER OF A CLAIM OR AN EQUITY INTEREST SHOULD READ THIS DISCLOSURE
STATEMENT, THE PLAN, THE DISCLOSURE STATEMENT ORDER, THE NOTICE OF THE
CONFIRMATION HEARING AND THE INSTRUCTIONS ACCOMPANYING THE BALLOTS IN THEIR
ENTIRETY BEFORE VOTING ON THE PLAN AND, IF APPLICABLE, ELECTING THE FORM OF
DISTRIBUTIONS THEREUNDER. THE DEBTORS ENCOURAGE EACH HOLDER OF A CLAIM OR AN
EQUITY INTEREST TO CONSIDER CAREFULLY AND CONSULT WITH HIS OR ITS OWN LEGAL
ADVISOR(S) WITH RESPECT TO THE MATTERS SET FORTH IN THE PLAN AND THIS
DISCLOSURE STATEMENT. THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION
CONCERNING, AMONG OTHER THINGS, THE CLASSIFICATION AND TREATMENT OF CLAIMS AND
EQUITY INTERESTS UNDER THE PLAN AND THE TABULATION OF VOTES ON THE PLAN.
ALL OF THE CURRENT MEMBERS OF THE AD HOC COMMITTEE, REPRESENTING HOLDERS
OF APPROXIMATELY 51.9% OF THE OUTSTANDING PRINCIPAL BALANCE OF THE EXISTING
NOTES, CERTAIN OTHER PARTIES TO THE SETTLEMENT AGREEMENT HOLDING AT LEAST
14.74% OF THE OUTSTANDING PRINCIPAL BALANCE OF THE EXISTING NOTES, WHITEHALL
STREET REAL ESTATE, L.P. ('WHITEHALL') HOLDING APPROXIMATELY 9.9% OF THE
OUTSTANDING PRINCIPAL BALANCE OF THE EXISTING NOTES, AND JMB LP HAVE INDICATED
THEIR SUPPORT OF THE PLAN.
6
HOLDERS OF CLAIMS AND EQUITY INTERESTS ENTITLED TO VOTE
Under the Bankruptcy Code, only holders of claims and equity interests
that are 'impaired' and that are not deemed to have rejected a plan of
reorganization under section 1126(g) of the Bankruptcy Code are entitled to
vote to accept or reject a proposed plan. A class of claims has accepted a
plan if holders of at least two-thirds in dollar amount, and more than
one-half in number, of the allowed claims of that class on account of which
ballots are actually cast for acceptance or rejection of the plan vote to
accept the plan. A class of equity interests has accepted a plan if holders of
at least two-thirds in amount of allowed equity interests on account of which
ballots are actually cast for acceptance or rejection of the plan vote to
accept the plan. The Bankruptcy Code further provides that a class of claims
or equity interests that is 'unimpaired' under the plan is conclusively
presumed to have accepted the proposed plan.
Under the Plan, six classes of Claims or Equity Interests are impaired:
Class 1 (Priority Non-Tax Claims), Class 2 (Senior Claims), Class 3 (Other
Secured Claims), Class 5 (General Unsecured Claims), Class 6 (Affiliate
Unsecured Claims) and Class 7 (Equity Interests). Accordingly, those six
classes are entitled to vote on the Plan. The Debtors are soliciting votes to
accept the Plan from the holders of the Claims and Equity Interests in those
six classes. The Claims in Class 4 (Insured Claims and Tenant Reimbursement
Claims) are not impaired. Accordingly, the holders of such Class 4 Claims are
conclusively presumed under the Bankruptcy Code to have accepted the Plan and
are not entitled to vote on the Plan. See 'VOTING PROCEDURES AND
REQUIREMENTS--Parties in Interest Entitled to Vote.'
Based upon an agreement set forth in the Settlement Agreement, certain of
the holders of Senior Claims representing approximately 14.74% in outstanding
principal amount of the Existing Notes have agreed to cast their votes to
accept or reject the Plan in accordance with the direction of Apollo Real
Estate Investment Fund, L.P. ('Apollo').
VOTING PROCEDURES
This Disclosure Statement is accompanied by a Ballot for each holder of a
Claim or an Equity Interest entitled to vote on the Plan. After carefully
reviewing this Disclosure Statement, including the attached exhibits, please
indicate on your Ballots (i) your acceptance or rejection of the Plan by
voting in favor of or against the Plan, and (ii) with respect to holders of
Senior Claims (w) whether you are making a Standard Election or a Non-Standard
Election, (x) if you are making a Non-Standard Election, the amount of your
Pro Rata share of the Election Amount that you are allocating to New Notes, if
any, (the balance of your Pro Rata share of the Election Amount, if any, will
be deemed allocated to shares of REIT Stock), (y) whether you are exercising
your Subscription Rights by executing the Subscription Agreement and
indicating on page 1 of the Subscription Agreement whether you are exercising
all of such rights or rights in respect of a lesser amount of REIT Stock, and
(z) whether or not you are an 'accredited investor' under one of the
categories set forth in Rule 501(a)(1) through (8) promulgated under the
Securities Act of 1933, as amended (the 'Securities Act'). Your Claims or
Equity Interests may be classified in multiple classes and, in such event, you
may have received separate Ballots for each class of Claim or Equity Interest.
With respect to the Morgan Loan Lenders, please indicate on your Ballots (i)
whether you are exercising your Subscription Rights by executing the
Subscription Agreement and indicating on page 1 of the Subscription Agreement
whether you are exercising all of such right or rights in respect of a lesser
amount of REIT Stock, and (ii) whether or not you are an 'accredited investor'
under one of the categories set forth in Rule 501(a)(1) through (8)
promulgated under the Securities Act. The Morgan Loan Lenders are not entitled
to vote on the Plan in their capacity as Morgan Loan Lenders.
TO BE COUNTED AS VOTES TO ACCEPT OR REJECT THE PLAN, BALLOTS MUST BE
PROPERLY COMPLETED AND RECEIVED BY THE BALLOT AGENT NO LATER THAN 5:00 P.M.
(NEW YORK CITY TIME) ON SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). See 'VOTING
PROCEDURES AND REQUIREMENTS--VOTING PROCEDURES.' HOLDERS OF SENIOR CLAIMS THAT
SIGN BALLOTS BUT FAIL TO INDICATE A VOTE TO ACCEPT OR REJECT THE PLAN WILL BE
CONCLUSIVELY PRESUMED TO HAVE VOTED TO ACCEPT THE PLAN. If you do not vote to
accept the Plan, or if you are the holder of an impaired Claim or impaired
Equity Interest, you may be bound by the Plan if it is accepted by the
requisite statutory percentage of holders of Claims or Equity Interests and
the Plan is confirmed by the Bankruptcy Court. See 'CONFIRMATION AND
CONSUMMATION OF THE PLAN.'
The Bankruptcy Court has entered an order fixing August 9, 1996 as the
record date for voting on the Plan. Accordingly, any holder of an Allowed
Claim or Allowed Equity Interests may vote on the Plan only if such holder was
a holder of record on the record date.
HOLDERS OF SENIOR CLAIMS DESIRING TO MAKE A NON-STANDARD ELECTION MUST
COMPLETE AND RETURN A BALLOT. HOLDERS OF SENIOR CLAIMS THAT FAIL TO COMPLETE
AND RETURN BALLOTS WILL BE CONCLUSIVELY PRESUMED TO HAVE MADE A STANDARD
ELECTION. HOLDERS OF SENIOR CLAIMS THAT SIGN BALLOTS BUT FAIL TO INDICATE A
VOTE TO ACCEPT OR REJECT THE PLAN WILL BE CONCLUSIVELY PRESUMED TO HAVE VOTED
TO ACCEPT THE PLAN. DISTRIBUTEES DESIRING TO EXERCISE SUBSCRIPTION RIGHTS TO
PURCHASE ADDITIONAL SHARES OF REIT STOCK MUST EXECUTE AND RETURN A
SUBSCRIPTION
7
AGREEMENT. DISTRIBUTEES THAT FAIL TO EXECUTE AND RETURN A SUBSCRIPTION
AGREEMENT WILL BE CONCLUSIVELY PRESUMED TO HAVE NOT EXERCISED THEIR
SUBSCRIPTION RIGHTS.
Questions about the procedure for voting the Claims and Equity Interests
that are entitled to vote on the Plan, or the materials distributed in
connection with the Plan, should be directed to the Ballot Agent. To obtain
copies of the Plan, this Disclosure Statement, or any exhibits to such
documents, please contact the Ballot Agent:
GEORGESON & COMPANY, INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
PHONE: (212) 440-9800
FAX: (212) 440-9009
CONFIRMATION HEARING
The Bankruptcy Court has scheduled the Confirmation Hearing to be held on
September 11, 1996 at 2:00 p.m., before the Honorable James L. Garrity, United
States Bankruptcy Judge, in Room 610-2 of the United States Bankruptcy Court,
Alexander Hamilton Custom House, One Bowling Green, New York, New York
10004-1408. The Bankruptcy Court has directed that objections, if any, to
confirmation of the Plan be served and filed on or before August 28, 1996, at
5:00 p.m., in the manner described in 'VOTING PROCEDURES AND REQUIREMENTS.'
The Confirmation Hearing may be adjourned from time to time by the Bankruptcy
Court without further notice except for an announcement of the adjourned date
made at the Confirmation Hearing or at any adjourned Confirmation Hearing.
8
GEORGESON & COMPANY INC.
C/O 237 PARK AVENUE ASSOCIATES, L.L.C.
AND 1290 ASSOCIATES, L.L.C.
PLAN BALLOTING
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
I. INTRODUCTION
A. GENERAL
The Debtors submit this Disclosure Statement pursuant to section 1125 of
the Bankruptcy Code in connection with the solicitation of votes to accept the
Plan. The purpose of this Disclosure Statement is to set forth information (i)
regarding the history of the Debtors, their businesses and the Reorganization
Cases, (ii) comparing the Plan with the alternatives to the Plan, (iii)
advising Creditors and Equity Interest holders of their rights under the Plan,
(iv) to assist Creditors and Equity Interest holders in making an informed
judgment regarding whether they should vote to accept or reject the Plan, and,
if applicable, the form of distributions thereof (v) to assist the Bankruptcy
Court in determining whether the Plan complies with the provisions of chapter
11 of the Bankruptcy Code and should be confirmed. THE PLAN IS A PLAN OF
REORGANIZATION FOR THE DEBTORS ONLY AND THIS DISCLOSURE STATEMENT RELATES ONLY
TO THE PLAN. NOTWITHSTANDING THE PRECEDING SENTENCE, THE PLAN PROVIDES FOR THE
RELEASE OF O&Y AFFILIATES FROM LIABILITIES RELATING TO, AMONG OTHER THINGS,
THE DEBTORS, THE REORGANIZATION CASES AND THE PLAN. A VOTE TO ACCEPT OR REJECT
THE PLAN IS NOT A VOTE TO ACCEPT OR REJECT ANY PLAN OF REORGANIZATION RELATING
TO ANY AFFILIATES OF THE DEBTORS.
Certain information included in this Disclosure Statement was prepared by
the legal and financial advisors to a committee of certain holders of Existing
Notes, as such committee may be constituted from time to time (the 'Ad Hoc
Committee'). The Debtors disclaim any and all responsibility for the accuracy
and completeness of such information.
Attached as exhibits to and accompanying this Disclosure Statement are
copies of the following:
o The Plan (Exhibit 1) (the Exhibits to the Plan are included in a
Plan Supplement, which may be obtained by writing to the Ballot Agent at the
address on the previous page);
o The Disclosure Statement Order and Notice of Confirmation Hearing
(Exhibit 2);
o Pro Forma Balance Sheets for the REIT and the Property Owning
Partnerships as of September 30, 1996 prepared by the financial advisor to the
Ad Hoc Committee (Exhibit 3);
o Cash Flow Projections for the Properties and the REIT for the
period from October 1, 1996 through December 31, 1996 and for the calendar
years 1997 through 2006 prepared by the financial advisor to the Ad Hoc
Committee (Exhibit 4);
o Property Tenant Stacking Plans for the 237 Property and the 1290
Property and a Schedule of Aggregate Lease Expirations for the period from
April 22, 1996 through December 31, 1996 and for the calendar years 1997
through 2005 prepared by the Debtors (Exhibit 5);
o inimum Parameters of the Conventional Financing Alternative
(Exhibit 6);
o Terms of the Retention of the Asset Manager by the REIT (Exhibit
7); and
o Terms of the Retention of the Property Manager/Leasing Agent by
the Property Owning Partnerships (Exhibit 8).
Attached as a schedule to and accompanying this Disclosure Statement is a
copy of a List of Unexpired Leases and Executory Contracts To Be Assumed
(Schedule A).
By order dated August 9, 1996, after notice and a hearing, the Bankruptcy
Court approved this Disclosure Statement as containing adequate information to
enable hypothetical, reasonable investors typical of the holders of Claims
against and Equity Interests in the Debtors in the Classes which are entitled
to vote on the Plan, to make an informed judgment (i) to accept or reject the
Plan, (ii) to make a Standard Election or a Non-Standard Election with respect
to New Notes and REIT Stock and (iii) to determine whether or not to exercise
Subscription Rights. APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT, HOWEVER,
CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT AS TO THE FAIRNESS OR
MERITS OF THE PLAN.
THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE
DATE HEREOF UNLESS ANOTHER TIME IS SPECIFIED HEREIN, AND THE DELIVERY OF THIS
DISCLOSURE STATEMENT SHALL NOT CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE INFORMATION SET FORTH HEREIN SINCE THE DATE HEREOF.
ADDITIONALLY, CERTAIN OF THE INFORMATION CONTAINED HEREIN HAS BEEN PROVIDED BY
THE LEGAL AND FINANCIAL ADVISORS TO THE AD HOC COMMITTEE. HOLDERS OF IMPAIRED
CLAIMS OR EQUITY INTERESTS IN THE CLASSES THAT ARE ENTITLED TO VOTE AND MAKE
AN ELECTION WITH RESPECT TO DISTRIBUTIONS AND/OR EXERCISE SUBSCRIPTION RIGHTS
PURSUANT TO THE PLAN SHOULD READ CAREFULLY THIS DISCLOSURE STATEMENT PRIOR TO
VOTING ON THE PLAN AND/OR EXERCISING SUCH SUBSCRIPTION RIGHTS.
9
FOR THE CONVENIENCE OF HOLDERS OF IMPAIRED CLAIMS AND EQUITY INTERESTS IN
THE CLASSES WHICH ARE ENTITLED TO VOTE ON THE PLAN, THIS DISCLOSURE STATEMENT
SUMMARIZES THE TERMS OF THE PLAN, BUT SUCH SUMMARIES ARE QUALIFIED IN THEIR
ENTIRETY BY REFERENCE TO THE PLAN. IF ANY INCONSISTENCY EXISTS BETWEEN THE
PLAN AND THIS DISCLOSURE STATEMENT, THE TERMS OF THE PLAN ARE CONTROLLING.
THIS DISCLOSURE STATEMENT MAY NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO
DETERMINE (X) WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN, (Y) WHETHER TO
MAKE A STANDARD ELECTION OR A NON-STANDARD ELECTION WITH RESPECT TO NEW NOTES
AND REIT STOCK PURSUANT TO ARTICLE XII OF THE PLAN AND (Z) WHETHER TO EXERCISE
SUBSCRIPTION RIGHTS TO PURCHASE ADDITIONAL SHARES OF REIT STOCK.
NOTHING CONTAINED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR
LIABILITY BY ANY PARTY, OR BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE
DEBTORS OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE EVIDENCE OF THE TAX OR
OTHER LEGAL EFFECTS OF THE DEBTORS' REORGANIZATION ON THE HOLDERS OF CLAIMS
AGAINST OR EQUITY INTERESTS IN THE DEBTORS. CERTAIN OF THE STATEMENTS
CONTAINED IN THIS DISCLOSURE STATEMENT, BY NATURE, ARE FORWARD-LOOKING AND
CONTAIN ESTIMATES AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH
STATEMENTS WILL BE REFLECTIVE OF ACTUAL OUTCOMES.
THE MORGAN LOAN LENDERS AND HOLDERS OF CLAIMS AGAINST OR EQUITY INTERESTS
IN ANY OF THE DEBTORS ARE ENCOURAGED TO READ AND CAREFULLY CONSIDER THE
MATTERS DESCRIBED IN THIS DISCLOSURE STATEMENT UNDER 'RISK FACTORS' PRIOR TO
SUBMITTING BALLOTS OR EXECUTING SUBSCRIPTION AGREEMENTS PURSUANT TO THE
SOLICITATION.
B. SUMMARY OF THE PLAN
The following is a brief overview of the Plan which does not purport to
be complete and is qualified in its entirety by reference to the Plan, a copy
of which is annexed hereto as Exhibit 1.
Pursuant to the Plan, the following actions will be taken:
1. Pursuant to a series of documents to be executed in accordance with
the Plan, the amount of Senior Claims in excess of Seven Hundred Million
Dollars ($700,000,000) (the 'Excess Amount') will be released. See 'THE JOINT
PLAN OF REORGANIZATION--Implementation of the Plan--Formation of the
Partnerships--Cancellation of Excess Amount' and '-- Assumption of 237 Excess
Amount.'
2. The REIT, the Property Owning Partnerships, the Upper Tier Limited
Partnership, the Lower Tier Limited Partnership, the corporate general partner
of the Upper Tier Limited Partnership (the 'Upper Tier GP Corp') and the GP
Corps will be formed on or prior to the Confirmation Date. The Indenture
Trustee, on behalf of the holders of Existing Notes, will contribute to the
REIT an undivided interest in Three Hundred Million Dollars ($300,000,000)
principal amount of Existing Notes or, if the Conventional Financing
Alternative is consummated in an amount in excess of Four Hundred Million
Dollars ($400,000,000), an undivided outstanding amount of Existing Notes
equal to Three Hundred Million Dollars ($300,000,000) minus such excess (the
'Contributed Debt') in exchange for Eleven Million One Hundred Sixty Thousand
(11,160,000) shares of REIT Stock to be issued under the Plan, the foregoing
number of shares of REIT Stock to be adjusted if a Conventional Financing
Alternative is consummated. Because of the ability of holders of Senior Claims
to make Non-Standard Elections, as described in paragraph 6 below, and because
a consummation of a Conventional Financing Alternative will result in an
adjustment of the number of shares of REIT Stock to be distributed as
described in paragraph 7 below, the exact number of shares of REIT Stock to be
distributed to each holder of a Senior Claim cannot be determined until after
the completion of the balloting process. Pursuant to the Plan, and prior to
the exercise of Subscription Rights, holders of Senior Claims will receive, in
the aggregate, subject to adjustment if the Conventional Financing Alternative
is consummated, Eleven Million One Hundred Sixty Thousand (11,160,000) shares
of REIT Stock and the Morgan Loan Lenders will receive, in the aggregate,
Eight Hundred Forty Thousand (840,000) shares of REIT Stock. See 'THE JOINT
PLAN OF REORGANIZATION--Implementation of the Plan--Formation of the
Partnerships--Capital Contributions to the Partnerships.'
3. Prior to the merger described in paragraph 4 below, the operating
agreement for 237 LLC will be modified pursuant to the 237 Operating Agreement
Modification, to provide that any income arising from the release of the 237
Excess Amount will be allocated to Building Corp. and Equityco. In addition,
prior to the merger and pursuant to the 237 Assumption and Security Agreement,
(i) Building Corp. and Equityco will assume the obligations of the Debtors to
repay the 237 Excess Amount, (ii) Building Corp. and Equityco will grant to
the Indenture Trustee for the benefit of the holders of Senior Claims a first
priority perfected security interest in and lien on their interests in the
Debtors securing their obligation to repay the 237 Excess Amount, and (iii)
the Indenture Trustee will release the Debtors from their obligation to repay
the 237 Excess Amount.
10
4. Initially, Building Corp. will hold a one percent (1%) partnership
interest in the Upper Tier Limited Partnership, as general partner and the
Upper Tier GP Corp. will hold a ninety nine percent (99%) partnership
interest, as limited partner. Each of the Debtors will merge with and into the
Upper Tier Limited Partnership pursuant to the Merger Agreement and Building
Corp., Equityco and JMB LP will receive, respectively, two and six tenths
percent (2.6%), forty nine and nine tenths percent (49.9%), and forty six and
five tenths percent (46.5%) limited partnership interests therein. Upon
consummation of the merger, the Upper Tier GP Corp. will withdraw as the
initial limited partner of the Upper Tier Limited Partnership and Building
Corp. will retain its one percent (1%) general partnership interest and the
Upper Tier Limited Partnership will succeed to the Debtor's ownership of the
Properties. In addition, (i) Building Corp. and Equityco will assume the
obligation of the Upper Tier Limited Partnership to repay the 1290 Excess
Amount pursuant to the 1290 Assumption and Security Agreement, (ii) Building
Corp. and Equityco will grant to the Indenture Trustee for the benefit of the
holders of Senior Claims a first priority perfected security interest in and
lien on their interests in the Upper Tier Limited Partnership (equal in
priority with the security interest granted under the 237 Assumption and
Security Agreement) securing their obligations to repay the 1290 Excess
Amount, and (iii) the Indenture Trustee will release the Upper Tier Limited
Partnership from its obligation to repay the 1290 Excess Amount. The
partnership agreement of the Upper Tier Limited Partnership which will be in
effect prior to the effectiveness of the Redemption and Substitution Agreement
will provide that all items of income, gain, loss or deduction attributable to
the assumption or reduction of the 237 Excess Amount and the 1290 Excess
Amount occurring on or about the date of such agreement will be allocated
solely to Equityco and Building Corp. in such manner as they shall agree. See
'THE JOINT PLAN OF REORGANIZATION--Implementation of the Plan--Formation of
the Partnerships--Description of the Limited Partnership Agreements of the
Partnerships.'
5. Pursuant to the Property Contribution Agreements and the Conveyancing
Documents, the Lower Tier Limited Partnership will direct the Upper Tier
Limited Partnership to transfer and contribute the Properties and certain
other property to the Property Owning Partnerships, subject to the lien of the
Indenture which secures the Existing Notes and, in consideration therefor the
Upper Tier Limited Partnership will receive an aggregate five percent (5%)
partnership interest, as limited partner, in the Lower Tier Limited
Partnership (the 'LP Interest'). See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan-- Formation of the
Partnerships--Description of the Limited Partnership Agreements of the
Partnerships.'
6. The REIT will contribute the Contributed Debt to the Lower Tier
Limited Partnership in exchange for a ninety five percent (95%) partnership
interest, as general partner, in the Lower Tier Limited Partnership, which
will entitle the REIT to a significant priority in respect of distributions
made by the Lower Tier Limited Partnership. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Formation of the
Partnerships--Description of the Limited Partnership Agreements of the
Partnerships.' The Lower Tier Limited Partnership (i) will contribute the
Contributed Debt to the Property Owning Partnerships (allocated approximately
fifty seven and sixteen hundredths percent (57.16%) to the 1290 Property
Owning Partnership, and approximately forty two and eighty four hundredths
percent (42.84%) to the 237 Property Owning Partnership) and (ii) will cause
the Upper Tier Limited Partnership to transfer and contribute the Properties
to the Property Owning Partnerships in exchange for a ninety nine percent
(99%) partnership interest, as limited partner, in each of the Property Owning
Partnerships. The Property Owning Partnerships and the Indenture Trustee will
then cancel the Contributed Debt (resulting in an aggregate outstanding
indebtedness under the Existing Notes of Four Hundred Million Dollars
($400,000,000)). The GP Corps will hold the remaining one percent (1%)
partnership interest, as general partner, in each of the Property Owning
Partnerships. The REIT will own all of the outstanding shares of capital stock
of the GP Corps. See 'THE JOINT PLAN OF REORGANIZATION-- Implementation of the
Plan--Formation of the Partnerships--Description of the Limited Partnership
Agreements of the Partnerships.'
7. Pursuant to the Redemption and Substitution Agreement (i) the Upper
Tier GP Corp will be admitted to the Upper Tier Limited Partnership as a
general partner, (ii) Building Corp. will withdraw as general partner, (iii)
the Upper Tier GP Corp will receive a one percent (1%) general partner
interest in the Upper Tier Limited Partnership, (iv) Equityco and Building
Corp. will withdraw from the Upper Tier Limited Partnership as limited
partners, and (v) JMB LP will receive a ninety nine percent (99%) limited
partnership interest.
8. The Indenture Trustee, on behalf of the holders of the Existing Notes,
and the Property Owning Partnerships will amend and restate the Indenture
governing the Existing Notes in its entirety (as so amended and restated, the
'Restated Indenture') and the Existing Notes will be amended and restated in
their entirety (as so amended and restated, the 'New Notes') to be replaced by
New Notes issued by the Property Owning Partnerships in the aggregate
principal amount of Four Hundred Million Dollars ($400,000,000). The
obligations of the Property Owning Partnerships under the New Notes will be
secured by an amended and restated mortgage encumbering the Properties (as so
amended and restated, the 'Restated Mortgage').
The New Notes will (i) bear interest at an annual rate equal to two
hundred fifty (250) basis points above the average ten-year Treasury rate for
the ten (10) Business Day period immediately prior to the date that is the
tenth Business Day prior to the Effective Date, (ii) mature ten (10) years
following the Effective Date, (iii) provide that, for the first twelve (12)
months after the Effective Date, only interest will be payable with respect to
the New Notes and, thereafter, monthly payments of principal and interest will
be made based on a twenty five (25) year constant payment amortization
schedule, (iv) require the payment of a prepayment premium
11
(except in certain cases) in connection with a prepayment of the New Notes
after the date which is eighteen (18) months after the Effective Date, (v) be
non-recourse to the Property Owning Partnerships and (vi) be secured by a
first mortgage lien encumbering the Properties. During such eighteen (18)
month period referred to in (iv) above only, the Property Owning Partnerships
may redeem the New Notes in connection with a refinancing for not less than
Three Hundred Twenty Five Million Dollars ($325,000,000) of Cash with any
balance being payable in preferred stock issued by the REIT having an
aggregate liquidation price equal to such shortfall. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Description of the New Notes and
the Restated Indenture.'
The New Notes will not be issued if the Conventional Financing
Alternative as described in paragraph 10 below is consummated on the Effective
Date.
9. In connection with the solicitation of votes from holders of Senior
Claims to accept the Plan, each holder of a Senior Claim will be provided with
a Ballot on which to elect to make either (a) a Standard Election, entitling
the holder of a Senior Claim making such election to receive, subject to
adjustment if a Conventional Financing Alternative is consummated, for each
One Million Dollars ($1,000,000) of such holder's Pro Rata share of the
Election Amount (i) Four Hundred Thirty Three Thousand One Hundred Ninety One
Dollars and Thirty Two Cents ($433,191.32) in principal amount of New Notes,
and (ii) Twelve Thousand Three Hundred Sixty Four and Twenty Three Hundredths
(12,364.23) shares of REIT Stock, or (b) a Non-Standard Election entitling
each holder of a Senior Claim making such election to receive, subject to
adjustment if a Conventional Financing Alternative is consummated, New Notes
in a principal amount of up to seventy percent (70%) of such holder's Pro Rata
share of the Election Amount allocated to New Notes on the Ballot and/or
shares of REIT Stock based on such holder's Pro Rata share of the Election
Amount not allocated to New Notes. If the elections for either New Notes or
REIT Stock exceed the aggregate amounts thereof which are available for
distribution to holders of Senior Claims under the Plan, the excess amounts
unavailable from one category will form the basis of a claim for a pro rata
distribution from the other category. However, each holder of a Senior Claim
making a Standard Election will receive a Standard Distribution
notwithstanding any oversubscription of New Notes or REIT Stock. Unless the
Conventional Financing Alternative is consummated, pursuant to the Plan,
holders of Senior Claims will receive, in the aggregate, Eleven Million
One Hundred Sixty Thousand (11,160,000) shares of REIT Stock and, Three
Hundred Ninety One Million Dollars ($391,000,000) in principal amount of New
Notes. Unless the Conventional Financing Alternative is consummated, pursuant
to the Plan, the Morgan Loan Lenders will receive Eight Hundred Forty Thousand
(840,000) shares of REIT Stock, and Nine Million Dollars ($9,000,000) in
principal amount of New Notes and will not be entitled to make any type of
election between New Notes and REIT Stock.
In addition, Distributees will be distributed Subscription Rights (with
ninety three percent (93%) of such Subscription Rights being distributed to
holders of Senior Claims and the remaining seven percent (7%) being
distributed to the Morgan Loan Lenders) entitling such Distributees to
subscribe to purchase up to their pro rata portion (based upon their Pro Rata
share of the Election Amount of Senior Claims, and with respect to the Morgan
Loan Lenders based upon their percentage share of the Morgan Loan as
determined by the Morgan Loan Agent) of the Offered Shares at the Subscription
Price. If less than all of such shares are purchased by Distributees, the
Property Manager/Leasing Agent will purchase on the Effective Date any
Unsubscribed Shares at a price per share equal to the Subscription Price. See
'THE JOINT PLAN OF REORGANIZATION--Classification and Treatment of Claims and
Equity Interests Under the Plan--Class 2--Senior Claims--Subscription Rights.'
10. Prior to the Effective Date, holders of a majority in principal
amount of Existing Notes (excluding Existing Notes held by O&Y Affiliates) may
arrange for the consummation of the Conventional Financing Alternative on the
Effective Date in an amount not less than Three Hundred Twenty Five Million
Dollars ($325,000,000), and on terms not less favorable than those set forth
in Exhibit 6 annexed hereto. Distributees will receive Cash, in an aggregate
amount equal to the net proceeds therefrom (the 'Conventional Financing Cash
Distribution'), in lieu of New Notes. The portion of the Conventional
Financing Cash Distribution each Distributee is entitled to receive is
proportionate to the amount of New Notes such Distributees would otherwise
have received if the Conventional Financing Alternative had not been
consummated, subject to certain adjustments being made with respect to holders
of Senior Claims if required to reflect an increase in equity resulting from
gross proceeds of any Conventional Financing Alternative being less than Four
Hundred Million Dollars ($400,000,000). Additionally, as a result of such
Conventional Financing Alternative, the allocation of shares of REIT Stock
between the Morgan Loan Lenders and the holders of Senior Claims will be
adjusted so that the value of Cash and REIT Stock to be distributed to the
Morgan Loan Lenders would equal the value of New Notes and REIT Stock that
would have been distributable to them had the Conventional Financing
Alternative not been consummated on the Effective Date based upon a combined
valuation (assumed for these purposes only) of Seven Hundred Million Dollars
($700,000,000) for the Twelve Million (12,000,000) shares of REIT Stock to be
issued and the New Notes. Any net proceeds from the consummation of the
Conventional Financing Alternative in excess of Four Hundred Million Dollars
($400,000,000) will be retained by the Property Owning Partnerships and/or
distributed pursuant to the Property Owning Partnership Agreements.
The Ad Hoc Committee has recently concluded negotiations with Chase for a
mortgage loan in the amount of Four Hundred Twenty Million Dollars
($420,000,000) having a five year term and requiring Forty Million Dollars
($40,000,000) of amortization
12
over the loan term and the establishment of certain reserves. The loan would
bear interest at a floating rate equal to the LIBOR Rate plus 1.565% per annum
provided that the Property Owning Partnerships would be required to purchase
an interest rate cap or swap for a fixed rate such that the LIBOR Rate (prior
to the 1.565% spread) will not exceed 7.685% per annum. The Debtors will seek
Court approval of the commitment and payment of the fees thereunder on notice
to all Noteholders in the immediate future.
11. Pursuant to the Plan, on the Effective Date,
(i) the O&Y Affiliates holding the Tenant Notes will, at the
direction of the REIT, assign and deliver to the applicable Property Owning
Partnership the Tenant Notes and an amount equal to all Cash paid to such O&Y
Affiliates in respect of the Tenant Notes from and after January 1,1996. It is
a condition to consummation of the Plan that the Bankruptcy Court in the
chapter 11 cases of O&Y Financial Company and Baden Real Estate Corp.
('Baden') approve the transfer of the Tenant Notes. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Assignment of Tenant Notes and JMB
Notes.'
(ii) Citibank, N.A. will release its lien on certain notes issued
by JMB LP or its predecessor in interest, which are non-recourse but secured
by a lien on JMB LP's interest in the Debtors (the 'JMB Notes'). O&Y MFC will
assign to the REIT or its designee the JMB Notes and related security
agreements. Immediately prior to such assignment, the REIT or its designee
will enter into a Note Participation Agreement with an affiliate of JMB LP
or another entity acceptable to Noteholders representing a majority in
principal amount of Existing Notes pursuant to which the REIT or its designee
will retain the first Seven Hundred Fifty Thousand Dollars ($750,000) paid
under the JMB Notes. The REIT or its designee and JMB will thereafter enter
into the JMB Notes Restatement Documents. The JMB Notes as restated will
continue to be non-recourse and secured by the JMB LP interests in the Upper
Tier Limited Partnership. The other party to the JMB Notes Participation
Agreement will be entitled to receive all other payments made under the JMB
Notes. See 'THE JOINT PLAN OF REORGANIZATION--Implementation of the
Plan--Assignment of Tenant Notes and JMB Notes.'
(iii) The Indenture Trustee and the Debtors will transfer, convey
and assign all Distributable Cash then in their control to the REIT.
(iv) Certain assets related to 2 Broadway, which were transferred
to 1290 LLC subject to the lien of the Indenture, will be transferred to the
REIT. These assets include net proceeds from existing tax certiorari
proceedings. See 'THE JOINT PLAN OF REORGANIZATION--Implementation of the
Plan--Formation of the Partnerships--Assignment of Certain Assets Related
to the Sale of 2 Broadway.'
12. The REIT will enter into an Asset Management Agreement with Victor
Capital Group, L.P. ('VCG' or the 'Asset Manager') pursuant to which VCG will
receive Twenty Five Thousand Dollars ($25,000) per month as an asset
management fee. Each of the Property Owning Partnerships will enter into a
Property Management and Leasing Agreement with Tishman-Speyer Properties, L.P.
or such other professional property manager designated by Noteholder Consent
(the 'Property Manager/Leasing Agent'), which agreement will become effective
upon the consummation of the transactions contemplated by the Plan, at which
time, the Property Manager/Leasing Agent will also enter into the Property
Manager Subscription Agreement and purchase any Unsubscribed Shares at a price
equal to the Subscription Price. See 'THE JOINT PLAN OF
REORGANIZATION--Management of Reorganized Debtors--Asset Manager' and
'--Property Manager.'
13. If the Conventional Financing Alternative is consummated, the REIT
will pay VCG a fee of One Million Dollars ($1,000,000) in Cash. If the New
Notes are refinanced within eighteen (18) months after the Effective Date, the
REIT will pay VCG a fee of One Million Dollars ($1,000,000) in Cash; provided
however, that if the New Notes are refinanced with respect to only one of the
Properties and in an amount less than Three Hundred Twenty Five Million
Dollars ($325,000,000) on or before eighteen (18) months after the Effective
Date, the REIT will pay VCG an amount to be agreed upon by the REIT and VCG.
See 'THE JOINT PLAN OF REORGANIZATION--Implementation of the Plan--Cash
Distribution in Lieu of New Notes.'
14. On the Effective Date, the REIT will pay VCG a fee equal to (i) Five
Hundred Thousand Dollars ($500,000) in Cash and (ii) Forty Thousand (40,000)
shares of REIT Stock. See 'THE JOINT PLAN OF REORGANIZATION--Implementation of
the Plan--VCG Fees.'
15. On the Effective Date, O&Y (U.S.) Development Company, L.P. ('Devco')
or its designee will be entitled to receive Three Hundred Thousand Dollars
($300,000) from the Property Owning Partnerships, which may be offset against
cash amounts otherwise receivable by the Property Owning Partnerships in
respect of the Tenant Notes.
16. The Indenture Trustee or another entity designated by the Property
Owning Partnerships will act as Disbursing Agent for all distributions under
the Plan to holders of Claims and Equity Interests. See 'THE JOINT PLAN OF
REORGANIZATION-- Provisions Governing Distributions.'
13
II. GENERAL INFORMATION
A. BACKGROUND INFORMATION
1. The Debtors and Certain Affiliates
The Debtors are limited liability companies organized under the laws of
the State of New York. The Debtors are two of the many companies, partnerships
and joint ventures that collectively constitute the United States operations
of the Olympia & York group of companies.
On May 14, 1992, Olympia & York Developments Limited ('OYDL') and four of
its Canadian subsidiaries each filed with the Bankruptcy Court a petition for
relief under chapter 11 of the Bankruptcy Code. The chapter 11 cases of those
five debtors have been procedurally consolidated and jointly administered in
the pending chapter 11 cases known as In re Olympia & York Realty Corp., et
al. (the 'Original Cases'). On March 12, 1993, the Bankruptcy Court entered an
order dismissing the chapter 11 case of OYDL. The remaining four debtors in
the Original Cases continue to operate their businesses as debtors in
possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code and
are referred to herein as the 'Canadian Debtors.'
On October 11, 1995, Devco, O&Y (U.S.) Development General Partner Corp.
('Devco GP'), Equityco (a member of the Debtors), O&Y Equity General Partner
Corp. ('Equityco GP'), Olympia & York Real Estate (U.S.A.) Inc., Baden, O&Y
(U.S.) Financial Company, O&Y WFC Tower Corp., WFC Tower A Company, O&Y 245
Corp. and Olympia & York 245 Park Avenue Holding Company, L.P. (collectively,
the '1995 Debtors') commenced cases in the Bankruptcy Court under chapter 11
of the Bankruptcy Code. The 1995 Debtors continue to operate their businesses
as debtors in possession pursuant to sections 1107(a) and 1108 of the
Bankruptcy Code.
On April 23, 1996, 245 Park Avenue Company, O&Y Financial Company,
Olympia & York OLP Company, Trinity Place Company and O&Y Liberty Plaza
Company (collectively, the '1996 Debtors') commenced cases in the Bankruptcy
Court under chapter 11 of the Bankruptcy Code.
By orders of the Bankruptcy Court, dated October 11, 1995 and April 23,
1996, the chapter 11 cases of the 1995 Debtors, the Canadian Debtors and the
1996 Debtors have been consolidated for procedural purposes only and are being
jointly administered by the Bankruptcy Court.
2. The Organizational Structure of the Debtors
On or about October 10, 1995, each of 237 Park Avenue Associates and 1290
Associates, New York general partnerships, were converted by operation of law
into 237 LLC and 1290 LLC, respectively. As a result of this conversion, all
of the respective assets and liabilities of such predecessors, including their
respective interests in the Properties vested, by operation of law, in the
Debtors. 237 LLC is the current owner of the fee interest in the 237 Property
and 1290 LLC is the current owner of both the fee and ground leasehold
interests in the 1290 Property.
The Debtors have identical ownership structures. Equityco, Building
Corp., and JMB LP are members of the Debtors and hold, respectively, a forty
nine and nine tenths percent (49.9%), three and six tenths percent (3.6%) and
forty six and five tenths percent (46.5%) membership interest in each of the
Debtors. Pursuant to an operating agreement among the members of the Debtors,
Building Corp., as the managing member, is vested with the power and authority
to make decisions or take actions on behalf of the Debtors subject to the
consent of JMB LP as to certain matters. O&Y Management Corp. ('Management
Corp.'), an O&Y (U.S.) entity wholly owned by Equityco, serves as the managing
agent for the Debtors in respect of the operations and management of the
Properties.
3. Principal Assets and Liabilities of the Debtors
The principal properties and interests in property of the Debtors are
their respective interests in the Properties, including the commercial office
buildings and other improvements existing thereon.
The Properties, together with the property located at 2 Broadway, New
York, New York ('2 Broadway') that was owned by 2 Broadway Associates, L.P.
('2 Broadway LP'), an affiliate of the Debtors, secured the indebtedness
evidenced by the Existing Notes and obligations under the Indenture.
On March 20, 1984, the date of the Indenture, the fee and ground
leasehold interests in the 1290 Property and the fee interest in the 237
Property were owned by FAME Associates, O&Y Equity Corp. (the
predecessor-in-interest to Equityco) and Olympia & York Holdings Corp., as
tenants in common (the 'Co-Tenants'), and the fee and ground leasehold
interests in 2 Broadway were owned, respectively, by Olympia & York 2 Broadway
Land Company and Olympia & York 2 Broadway Company (the
predecessors-in-interest to 2 Broadway LP) (all such owners, collectively, the
'Issuers').
Pursuant to that certain Mortgage Spreader and Consolidation Agreement
and Trust Indenture, dated March 20, 1984, as subsequently supplemented and
amended (the 'Indenture'), the Issuers issued and sold Nine Hundred Seventy
Million Dollars
14
($970,000,000) in aggregate original principal amount of Existing Notes
through a private placement offering to sophisticated institutional investors.
The indebtedness evidenced by the Existing Notes was a joint and several
obligation of the Issuers, was and is generally nonrecourse to the Issuers and
any successors-in-interest thereto, and was secured by, among other things, a
first priority mortgage lien on the Properties and 2 Broadway. The Indenture
contains, among other things, an assignment by the Issuers of the leases and
rents from the Properties, in favor of the Indenture Trustee. As of the
Petition Date, the outstanding principal balance of the Existing Notes was
Nine Hundred Two Million Six Hundred Three Thousand Four Hundred Ninety Two
Dollars ($902,603,492) and interest has accrued and remains unpaid since
December 1, 1995.
Equityco provided potential credit support for the Existing Notes
pursuant to that certain Master Cash Flow Agreement (the 'Master Cash Flow
Agreement'), dated March 20, 1984 with Equityco's predecessor-in-interest, O&Y
Equity Corp., as the original obligor. Under such agreement, Equityco is
obligated to pay to the Issuers (or their successors-in-interest) an amount
equal to the rental revenues which would be generated if the unleased space in
all of the Properties as of December 31, 1983 had been leased at 1983 market
terms, including tax and operating expense escalators. The Issuers' rights
under the Master Cash Flow Agreement have been pledged to the Indenture
Trustee. The Indenture Trustee has filed a proof of claim as an unsecured
creditor of Equityco in the bankruptcy cases of the 1995 Debtors in the
aggregate amount of Twenty Eight Million Two Hundred Twenty Nine Thousand
Three Hundred Ninety Eight Dollars ($28,229,398) based upon the Master Cash
Flow Agreement. Equityco has objected to allowance of the Indenture Trustee's
proofs of claim for voting purposes and it is likely that Equityco or its
creditors will object to the allowance of the proofs of claim for purposes of
payment. Such objection will likely be based on the contention that no claim
in favor of the Indenture Trustee arose pursuant to the Master Cash Flow
Agreement until the occurrence of a monetary event of default in January,
1996. The outcome of any such objection is uncertain. The Indenture Trustee
alleges that claims of approximately Two Million Five Hundred Ninety Eight
Thousand Three Hundred Four Dollars ($2,598,304) have accrued under the Master
Cash Flow Agreement for the period January 1, 1996 through April 1, 1996.
Manufacturers Hanover Trust Company ('Manufacturers') was appointed as the
original Indenture Trustee under the Indenture. Pursuant to that certain
Instrument of Resignation, Appointment and Acceptance, dated as of October 28,
1992, Manufacturers resigned as Indenture Trustee and NationsBank of
Tennessee, N.A. ('NationsBank') accepted its appointment as the successor
Indenture Trustee. Pursuant to that certain Instrument of Resignation,
Appointment and Acceptance, dated as of March 29, 1996, NationsBank resigned
as Indenture Trustee and Bankers Trust Company ('Bankers Trust') accepted its
appointment as the successor Indenture Trustee.
Pursuant to Supplemental Indenture Number 1, dated March 20, 1984,
Supplemental Indenture Number 2, dated December 30, 1986, and Supplemental
Indenture Number 3, dated March 30, 1988, the Indenture was supplemented to
reflect, among other things, that 237 Park Avenue Associates and 1290
Associates, as successors-in-interest to the Co-Tenants, became the respective
owners of the Properties, and jointly and severally succeeded to the titles,
interests, rights and obligations of the Co-Tenants evidenced by the Existing
Notes and governed by the Indenture. Supplemental Indenture Number 4, dated as
of August 17, 1995, was executed in connection with an approximately Five
Hundred Thousand (500,000) square foot lease at the 1290 Property with The
Equitable Life Assurance Society of the United States ('Equitable Life').
On June 20, 1995, 2 Broadway LP filed a voluntary petition for relief
under chapter 11 of the Bankruptcy Code. Concurrently with the filing of the
petition, 2 Broadway LP filed its plan of reorganization (the '2 Broadway
Plan') which was pre-negotiated with the Ad Hoc Committee as then constituted.
The objective of 2 Broadway LP's chapter 11 case was to sell 2 Broadway in an
orderly manner under the 2 Broadway Plan, free and clear of the lien of the
Indenture, and to transfer its carrying costs to the highest and best bidder
determined pursuant to certain auction procedures.
On August 28, 1995, the Bankruptcy Court confirmed the 2 Broadway Plan.
By order dated September 6, 1995, the Bankruptcy Court authorized the sale of
2 Broadway to 2 Broadway Acquisition Corp., the entity which submitted the
highest and best offer in accordance with the auction procedures approved by
the Bankruptcy Court. Pursuant to the 2 Broadway Plan and Supplemental
Indenture No. 5, dated September 18, 1995, 2 Broadway LP and its immediate
predecessors were relieved of the obligations under the Existing Notes and the
Indenture, 2 Broadway was sold to 2 Broadway Acquisition Corp. and 2 Broadway
was released from the blanket mortgage lien of the Indenture. The Debtors,
however, continue to be jointly and severally obligated under the Existing
Notes on a non-recourse basis, and their interests in the Properties continue
to be subject to the mortgage lien of the Indenture. Pursuant to the 2
Broadway Plan and certain documents executed and delivered in connection
therewith, the net proceeds from the sale of 2 Broadway in the amount of
Fourteen Million Twenty One Thousand One Hundred Fifty Six Dollars and Ninety
Three Cents ($14,021,156.93) were transferred to the Indenture Trustee and
have been used to pay, among other things, certain property-related expenses
of the Properties, including capital improvement and leasing costs.
Pursuant to the terms of the 2 Broadway Plan, on the consummation date
thereof, segregated reserve accounts were established by the Indenture
Trustee, as disbursing agent under the 2 Broadway Plan, (i) in the amount of
Two Million Four Hundred Thousand Dollars ($2,400,000) for potential utility
tax claims of the taxing authorities of the City and State of New York (the '2
Broadway Priority Utility Tax Claims') and (ii) in the amount of Eight Hundred
Eleven Thousand Two Hundred Seventy
15
Eight Dollars ($811,278), for the payment of all claims which were not then,
but might become allowed claims (other than the 2 Broadway Priority Utility
Tax Claims) in connection with the 2 Broadway Plan.
Pursuant to Supplemental Indenture No. 5 dated September 18, 1995, the
right, title and interest of 2 Broadway LP and its predecessors, 2 Broadway
Associates and 2 Broadway Land Company, in certain assets associated with 2
Broadway were conveyed to 1290 Associates, but all payments with respect
thereto were pledged to the Indenture Trustee for the benefit of the holders
of the Existing Notes. These assets include tax certiorari proceeds (net of
collection costs and tenant reimbursements), cash remaining after paying all
allowed claims in the 2 Broadway bankruptcy case, and certain stock which 2
Broadway Associates received in the bankruptcy case of Drexel Burnham Lambert,
Inc., a former tenant at 2 Broadway.
4. Description of the Properties
(a) The 1290 Property
The 1290 Property, completed in 1963, is a forty three (43) story, first
class commercial office building with approximately one million nine hundred
sixty three thousand (1,963,000) rentable square feet of space. The building
is centrally located in midtown Manhattan and is connected to the famed
'Rockefeller Center' complex via an underground passageway.
As of March 1, 1996, the 1290 Property was approximately ninety seven
percent (97%) leased and there were leases and license agreements with forty
two (42) tenants and seven (7) licensees covering approximately one million
nine hundred twelve thousand (1,912,000) rentable square feet of space. As of
March 1, 1996, the annual average rent (including electricity and additional
rent on this space payable on account of operating expenses and real estate
tax escalations) for space leased in the building was approximately Thirty Two
Dollars ($32.00) per square foot. As of March 1, 1996, approximately forty
nine thousand (49,000) square feet of space was under lease to retail tenants,
at an average annual rent (including electricity and real estate tax
escalations) of approximately Forty Seven Dollars ($47.00) per rentable square
foot. As of March 1, 1996, approximately fifty one thousand (51,000) rentable
square feet of office and retail space was available for rent. Attached as
Exhibits 4 and 5 to this Disclosure Statement are Cash Flow Projections for
the 1290 Property prepared by the financial advisor to the Ad Hoc Committee
and a Property Tenant Stacking Plan for the 1290 Property prepared by O&Y
(U.S.).
The building serves as the corporate headquarters of Equitable Life. In
addition to Equitable Life, the building houses a variety of tenants,
including law firms, financial institutions and entertainment companies.
The largest tenants in the 1290 Property are as follows:
TENANT NATURE OF BUSINESS LEASED SQUARE FOOTAGE
- ---------- -------------------- ----------------------
Equitable Life Insurance/Financial Services Block A--287,664
Block B--135,528
Block C-- 79,288
Warner Communica-
tions, Inc. Entertainment 262,155
Deutsche Bank,
U.S. Financial
Markets Holding
Corp.
Financial Services 179,288
The Bank of
New York Financial Services 155,941
EMI Entertainment
World, Inc. Entertainment 142,525
JHR Entertainment,
Inc. Media 108,970
The lease agreement between Equitable Life and 1290 LLC provides for the
delivery of space to Equitable Life in three separate blocks. Equitable Life
is currently in possession of the space designated as Block A, and is entitled
to a free rent period for such space through June 1997. The space designated
as Block B is currently occupied by Deutsche Bank, U.S. Financial Markets
Holding Corp., whose lease for such space expired June 30, 1996, and such
space is to be delivered to Equitable Life on October 1, 1996. Equitable Life
is entitled to a free rent period for such space of one year following the
date such space is delivered to Equitable Life. The lease agreement provides
that if Block B is not delivered to Equitable Life by July 1, 1997, Equitable
Life will have the right to terminate its entire lease with 1290 LLC or
terminate its obligations to lease any such undelivered space. If Equitable
Life so terminates the lease, Equitable Life may be obligated to return a
portion of the Twenty Million Three Hundred One Thousand Four Hundred Thirty
Three Dollars ($20,301,433) work allowance previously paid by 1290 LLC to
Equitable Life in respect of tenant improvements to be made to Block A and
Block B. The space designated as Block C is currently occupied and such space
is to be delivered to Equitable Life on March 1, 1999. In addition to free
rent, Equitable Life will be entitled to a credit against rent of up to
approximately One Million Six Hundred Thousand Dollars ($1,600,000) for all
three (3) blocks as reimbursement for the cost of certain tenant improvements
made by and paid for by Equitable Life.
The lease agreements between Warner Communications, Inc. ('Warner') and
1290 LLC provide that, with respect to one hundred thirty three thousand
eleven (133,011) square feet of space, Warner Communications will not be
required to pay rent until
16
July 1, 1997. A block of space constituting twenty four thousand three hundred
eighty (24,380) square feet is not scheduled to be delivered to Warner until
June 30, 1998, following which Warner is entitled to a free rent period for
approximately fourteen and one half (14 1/2) months with respect to such
space.
A major capital project is currently in progress at the 1290 Property
which includes a renovation of the building's lobby and the upgrade of certain
building systems. The total budget for the project is Nine Million One Hundred
Twenty Thousand Dollars ($9,120,000). The Debtors estimate that from and after
the Petition Date, Two Million Eight Hundred Fifty Thousand Dollars
($2,850,000) will be required to be expended to complete this project. It is
contemplated that the 1290 Property Owning Partnership will complete the
project to the extent not completed prior to the Effective Date and will
assume any construction contracts related thereto. Anticipated expenditures
for capital projects, tenant improvements and leasing commissions for the 1290
Property are reflected in the Cash Flow Projections for the 1290 Property
prepared by the financial advisor to the Ad Hoc Committee and annexed as
Exhibit 4 to this Disclosure Statement.
An environmental report prepared for the Properties indicates that the
1290 Property contains asbestos or asbestos containing materials in the
mechanical room and certain other locations. The cost of removing the asbestos
in accordance with the operations and maintenance plan for the 1290 Property
is estimated to be between Two Million Dollars ($2,000,000) and Three Million
Dollars ($3,000,000). This cost is reflected in the Cash Flow Projections.
However, there can be no assurance that the cost to remediate the asbestos
will not exceed the amount reflected in such projections.
Attached to this Disclosure Statement as Exhibit 5 is a chart which was
prepared by O&Y (U.S.) and which shows anticipated lease expirations on an
aggregate basis for the period April 22, 1996 through December 31, 1996 and
for each calendar year from 1997 through and including 2005. Such chart
assumes that there are no early terminations of leases and that leases expire
without extension by existing tenants pursuant to lease options.
(b) The 237 Property
The 237 Property is a twenty three (23) story, first class commercial
office building with approximately one million one hundred forty thousand
(1,140,000) rentable square feet of space. The building was completed in 1981
as a comprehensive renovation of an existing structure and now features an
interior layout of an open full atrium. The building, centrally located in
midtown Manhattan, is situated off of one of New York City's prestigious
thoroughfares and is within close proximity to Grand Central Station, a
transportation hub.
As of March 1, 1996, the 237 Property was approximately ninety eight
percent (98%) leased and there were leases and license agreements with
seventeen (17) tenants and two (2) licensees covering approximately one
million one hundred nineteen thousand (1,119,000) rentable square feet of
space. As of March 1, 1996, the annual average rent (including electricity and
additional rent on this space payable on account of operating expenses and
real estate tax escalations) for space leased in the building was
approximately Forty Two Dollars ($42.00) per square foot. As of March 1, 1996,
approximately twenty three thousand (23,000) square feet of space was under
lease to retail tenants, at an average annual rent (including electricity and
real estate tax escalations) of approximately Fifty Three Dollars ($53.00) per
rentable square foot. As of March 1, 1996, approximately twenty three thousand
(23,000) rentable square feet of office and retail space was available for
rent. Attached to this Disclosure Statement as Exhibits 4 and 5, respectively,
are Cash Flow Projections for the 237 Property prepared by the financial
advisor to the Ad Hoc Committee, and Property Tenant Stacking Plans for the
237 Property prepared by O&Y (U.S.).
The largest tenants in the 237 Property are as follows:
TENANT NATURE LEASED
OF BUSINESS SQUARE FOOTAGE
- ------- --------------- ----------------
J. Walter Thompson
Company Advertising 456,130
Swiss Reinsurance
Company, U.S. Branch
(and certain of its Insurance/Financial
afflitates) Services 279,906
E.M. Warburg, Pincus
& Co., Inc. Financial Services 148,197
Champion International
Corporation Pulp and Paper Industry 110,800
The twelfth (12th) floor and a portion of the thirteenth (13th) floor of
the 237 Property serve as headquarters of the U.S. Operations of Olympia &
York. As part of the transactions to be effectuated by the Plan, Olympia &
York will agree to surrender its directly leased space on the twelfth (12th)
floor no later than the end of October 1996. Such space has been leased to
E.M. Warburg, Pincus & Company, Inc.
Anticipated expenditures for capital projects, tenant improvements and
leasing commissions for the 237 Property are reflected in the Cash Flow
Projections for the 237 Property prepared by the financial advisor to the Ad
Hoc Committee.
Attached to this Disclosure Statement as Exhibit 5 is a chart showing
anticipated lease expirations on an aggregate basis for the period from April
22, 1996 through December 31, 1996 and for each calendar year from 1997
through and including 2005. This
17
chart assumes that there are no early terminations of leases and that leases
expire without extension by existing tenants pursuant to lease options.
(c) Provisions of the Cash Collateral Stipulation Relating to New Leases;
Cash Management Agreement; Fees to Management Corp.
The Properties have been managed and operated by Management Corp., an
affiliate of the Debtors, pursuant to the Management and Leasing Agreement,
dated August 14, 1984, as amended, with respect to the 237 Property and July
27, 1984, as amended, with respect to the 1290 Property. Under such
agreements, Management Corp. has been paid a property management fee for such
services equal to one percent (1%) of the gross receipts from the Properties.
In June 1995, in connection with 2 Broadway's chapter 11 case, a Cash
Management Agreement (the 'Cash Management Agreement') was entered into
between the Debtors' predecessors and the Indenture Trustee. Pursuant to the
Cash Management Agreement, Management Corp. was paid property management fees
equal to one percent (1%) of the gross receipts from the Properties and O&Y
(U.S.) was paid amounts characterized by the Debtors as asset management fees
equal to Two Hundred Fifty Thousand Dollars ($250,000) per month and leasing
commissions from the cash flow generated by the Properties. The Cash
Management Agreement provided for the transfer to the Indenture Trustee of the
cash collection accounts for the Properties and required the Indenture Trustee
to hold in a reserve account excess property cash flow not required to fund
Management Corp.'s property operating accounts. The property operating
accounts are funded under the Cash Management Agreement based on a budget, and
unbudgeted expenses are funded pursuant to procedures set forth in the Cash
Management Agreement. The expenditure of funds for capital and leasing
projects requires either (x) pre-approval of such projects by holders of a
majority in principal amount of the Existing Notes or (y) the lapse of a
thirty (30) day period after notice to the Indenture Trustee and the financial
advisor to the Ad Hoc Committee of such capital or leasing project during
which period holders of a majority in principal amount of the Existing Notes
do not object to such funding. Pursuant to the Cash Management Agreement and a
series of monthly letter agreements between the Indenture Trustee and the
Debtors, O&Y (U.S.) has not received asset management fees or leasing
commissions in respect of the Properties since January 1, 1996, but Management
Corp. continues to receive property management fees. The Plan provides that
Equityco and Devco (the entities to whom past payments of asset management
fees and leasing commissions were made) will waive the right to receive all
accrued and unpaid asset management fees and leasing commissions through the
Effective Date and that all agreements with Management Corp. will be rejected
and terminated, but Management Corp. will be entitled to property management
fees for all services performed through the Effective Date.
During the period from the Petition Date to the Effective Date, leases
and lease related transactions will continue to be negotiated for the
Properties. Pursuant to the Cash Collateral Stipulation, approved by the
Bankruptcy Court on May 13, 1996, the Debtors must obtain approval of the
holders of a majority in principal amount of the Existing Notes for new leases
during this period; provided, that the failure of holders of a majority in
principal amount of the Existing Notes to object to a new lease, within twenty
(20) days of notice to the Indenture Trustee and the Ad Hoc Committee of the
intention to enter into such lease, will be deemed approval of such lease.
Leases which are entered into in accordance with the foregoing procedures will
be assumed by the Property Owning Partnerships on the Effective Date.
The Debtors anticipate, and the Cash Collateral Stipulation provides,
that (i) O&Y (U.S.), through Management Corp., will continue to provide
property management services to the Properties and will be compensated for
such services on the terms and conditions provided for in the agreements
described above until the Effective Date, and (ii) the provisions of the Cash
Management Agreement described above with respect to the funding of operating
accounts and the approval of expenditures will generally continue through the
Effective Date. The Plan provides that all Cash remaining on the Effective
Date in any collection, operating or reserve account maintained under the Cash
Management Agreement will be used to pay Claims and to fund the Claims Reserve
under the Plan, with all remaining Cash to be transferred to the REIT. As of
the Petition Date, there was Ten Million Seven Hundred Eighty Five Thousand
Five Hundred Sixty Six Dollars ($10,785,566) on hand in the Indenture
Trustee's reserve account.
(d) Real Estate Taxes
Annual real estate taxes assessed against the 1290 Property and the 237
Property for the fiscal year ended June 30, 1995 were Nineteen Million Ninety
Four Thousand Four Hundred Dollars ($19,094,400) and Eight Million Nine
Hundred Thousand Fifty Six Dollars ($8,900,056), respectively, which amounts
were calculated on assessed values of approximately One Hundred Eighty Million
Dollars ($180,000,000) and One Hundred Two Million Dollars ($102,000,000),
respectively. Annual real estate taxes assessed against the 1290 Property and
the 237 Property for the fiscal year ended June 30, 1996 were Nineteen Million
Twenty Three Thousand One Hundred Seventy Eight Dollars ($19,023,178) and Nine
Million Five Hundred Eleven Thousand Eight Hundred Seven Dollars ($9,511,807),
respectively, which amounts were calculated on assessed values of One Hundred
Eighty Nine Million Dollars ($189,000,000) and One Hundred Eight Million Four
Hundred Fifty Thousand Dollars ($108,450,000), respectively. On July 1, 1996,
the 1290 Debtor paid a portion of the real estate taxes assessed against the
1290 Property for the tax year July 1, 1996 through June 30, 1997 in an amount
equal to Eight Million Seven Hundred Eighty Seven Dollars and Fifty Cents
($8,776,687.50) and the 237 Debtor paid a portion of the real estate taxes
assessed against the 237 Property for such tax year in an
18
amount equal to Four Million Nine Hundred Eighty Nine Thousand Six Hundred
Five Dollars and Thirty Four Cents ($4,989,605.34). The Debtors and their
predecessors-in-interest have commenced tax certiorari proceedings which
remain outstanding against the City of New York for over-assessment of
property taxes for tax years ending June 30, 1991 through June 30, 1996, with
respect to the 1290 Property and the tax year ending June 30, 1996 with
respect to the 237 Property.
B. SIGNIFICANT EVENTS PRECEDING THE COMMENCEMENT OF THE DEBTORS'
REORGANIZATION CASES
Since January 1, 1996, combined cash flows generated from the operations
of the Properties and the proceeds from the sale of 2 Broadway have been
insufficient to service the obligations evidenced by the Existing Notes and to
fund the costs and expenses of operating and maintaining the Properties.
1. Formation of the Ad Hoc Committee
As early as late 1992, O&Y (U.S.) entered into preliminary discussions
with the Ad Hoc Committee and its representatives in connection with the
restructuring of the indebtedness evidenced by the Existing Notes. After its
formation, the Ad Hoc Committee engaged Battle Fowler LLP as independent
counsel and VCG as financial advisor.
The current members of the Ad Hoc Committee, which represent in the
aggregate approximately fifty one and nine tenths percent (51.9%) of the
outstanding principal amount of the Existing Notes, are:
Apollo
Bank of America
Blackacre Capital Group
Elliott Associates, L.P.
Franciscan Sisters of the Poor
Health Systems, Inc.
Oaktree Capital Management, LLC ('Oaktree')
Regents of the University of Michigan
Regency Savings Bank, FSB
Whippoorwill Associates
2. Negotiation of Proposed Restructuring
During the second half of 1993 and continuing through the first half of
1994, O&Y (U.S.) and the Ad Hoc Committee engaged in negotiations of a
consensual restructuring of the indebtedness evidenced by the Existing Notes,
including the sale of 2 Broadway in light of its deteriorating financial
condition. On or about June 30, 1994, certain O&Y (U.S.) entities and the Ad
Hoc Committee, as then constituted, executed and delivered the Restructuring
Proposal (the 'Restructuring Proposal'), which constituted a non-binding
agreement in principle as to the basic economic and other terms of an all debt
restructuring of the obligations evidenced by the Existing Notes. The
Restructuring Proposal contemplated, among other things, the sale of 2
Broadway.
Because the Restructuring Proposal was not timely implemented and in
response to certain developments at the Properties, including scheduled lease
expirations, accelerated leasing activities and the greater near-term funding
requirements associated with, among other things, such leasing activities,
continued amortization payments on account of the Existing Notes and continued
operating deficits at 2 Broadway (which were being funded from the cash flow
generated by the Properties), the parties to the Restructuring Proposal agreed
that it would be in their respective best interests to sell 2 Broadway under
chapter 11 of the Bankruptcy Code prior to finalizing their arrangements as to
the Debtors. 2 Broadway LP filed for bankruptcy on June 20, 1995 and 2
Broadway was sold on September 18, 1995 pursuant to the 2 Broadway Plan. The
net proceeds of Fourteen Million Twenty One Thousand One Hundred Fifty Six
Dollars and Ninety Three Cents ($14,021,156.93) were transferred to the
Indenture Trustee and were used to fund property related expenses of the
Properties.
3. The Settlement Agreement
By late 1995, progress toward the reorganization of the O&Y (U.S.)
companies that had filed chapter 11 petitions (the 'U.S. Debtors') had
stalled, with two competing groups of parties in interest seeking to advance
plan proposals. One of these groups, the 'A/T/S Group,' included Apollo, which
holds approximately Two Hundred Forty Three Million Dollars ($243,000,000) in
original principal amount of Existing Notes. The other group (the 'BPHI
Group'), which had won the support of the Board of Directors of the U.S.
Debtors, purchased approximately One Hundred Forty Three Million Dollars
($143,000,000) in original principal amount of Existing Notes in connection
with the Settlement Agreement described below.
On or about October 5, 1995, the Bankruptcy Court directed the
Court-appointed examiner, Cyrus R. Vance, Esq. (the 'Examiner'), to assess and
evaluate the status of plan negotiations among the parties and the
likelihood of resolving the outstanding exclusivity issues in the near term.
Pursuant to the Bankruptcy Court's direction, on or about October 12, 1995,
the Examiner reported to the Court that, due to the lack of sufficient
progress in consensual negotiations between the A/T/S Group and
19
the BPHI Group, a hearing on the U.S. Debtors' pending exclusivity motion (the
'Exclusivity Motion') would likely be necessary. In light of the Examiner's
report and with a view toward accelerating the process of plan negotiations,
the Bankruptcy Court authorized and directed the Examiner to become directly
involved in such negotiations.
At the request of the Examiner, based on his understanding that the
parties desired to continue their negotiations, the hearing on the Exclusivity
Motion was adjourned through December and into January 1996.
In light of the inability of the A/T/S Group and the BPHI Group to agree
on shared ownership and control of Newco, the negotiations turned to whether
the parties could negotiate a separation of their interests in the U.S.
Operations. The Settlement Agreement was ultimately negotiated to accomplish
this goal by, principally, an exchange of certain of each groups' claims and
collateral.
On January 8, 1996, the Independent Board, by majority vote, approved a
series of recitals and resolutions which, among other things, authorized
management to execute and deliver the Settlement Agreement.
The Settlement Agreement contemplated, among other exchanges and
consideration, a transaction between Apollo, the other holders of the Morgan
Loan and the BPHI Group, in which Apollo and the other holders of the Morgan
Loan would transfer their interests in the Morgan Loan, together with Apollo's
unsecured claims against O&Y (U.S.), to the BPHI Group in exchange for the
Existing Notes held by the BPHI Group. Apollo holds approximately eighty one
and twenty five hundredths percent (81.25%) of the outstanding principal
amount of the Morgan Loan. The other holders are TCW Special Credits Fund IV,
TCW Special Credits Plus Fund, TCW Special Credits Trust IV and TCW Special
Credits Trust IVA and Westdeutsche Landesbank Girozentrale, New York Branch.
Certain significant aspects of the transactions contemplated by the Settlement
Agreement are summarized below:
(1) The Morgan Loan. The Morgan Loan Lenders would transfer their
interests in the Morgan Loan to the BPHI Group. As of October 11, 1995, the
aggregate amount outstanding under the Morgan Loan exceeded One Hundred Sixty
Five Million Five Hundred Thousand Dollars ($165,500,000). Immediately prior
to such transfer, the rights of the Morgan Loan Lenders and O&Y (U.S.) in
11601 Wilshire Boulevard and 400 South Hope Street, would be transferred or
surrendered to the Morgan Loan Lenders, leaving as collateral for the Morgan
Loan the equity interests of the U.S. Operations in Towers A and B of the
World Financial Center and 245 Park Avenue.
(2) The Existing Notes. Under the Settlement Agreement, the BPHI
Group would deliver to the Morgan Loan Lenders approximately One Hundred
Twenty Eight Million One Hundred Fifty Four Thousand Two Hundred Seventy Nine
Dollars ($128,154,279) in original principal amount of Existing Notes held by
the BPHI Group.
(3) Certain Unsecured Claims. Under the Settlement Agreement, Apollo
would transfer certain unsecured claims that it holds against O&Y (U.S.) to
the BPHI Group in exchange for an additional Fifteen Million Forty Five
Thousand Three Hundred Sixty Six Dollars ($15,045,366) in original principal
amount of Existing Notes held by the BPHI Group.
(4) The Debtors' Joint Plan of Reorganization. There are four
provisions in the Settlement Agreement relating to the treatment of the
Existing Notes pursuant to a joint plan of reorganization of the Debtors
contemplated by the Settlement Agreement:
First, subject to certain tax considerations, (i) the Noteholders
would receive in the aggregate ninety five percent (95%) of the economic
benefits and control rights associated with ownership of the Properties, and
(ii) in consideration of the benefits to be afforded the U.S. Operations under
the Settlement Agreement, the U.S. Operations would consent to the allocation
of the remaining five percent (5%) of such economic benefits and control
rights to the Morgan Loan Lenders;
Second, the U.S. Operations would transfer to the Debtors: (i) a
non-interest bearing note, dated August 20, 1985, issued by E.M. Warburg,
Pincus & Co., a tenant at the 237 Property, to Equityco, in the principal
amount of Four Million Three Hundred Fifty Four Thousand Seven Hundred Fifty
Eight Dollars and Nine Cents ($4,354,758.09) payable on October 31, 1999, and
(ii) a note, dated April 1, 1989, issued by Robinson, Silverman, Pearce,
Aronsohn & Berman, a tenant at the 1290 Property, to O&Y Financial Company,
L.P., in the face amount of Six Million Five Hundred Thousand Dollars
($6,500,000);
Third, the Noteholders would release any unsecured claims they may
have arising under the Existing Notes against the U.S. Operations; and
Fourth, management of the reorganized Debtors would be determined
by the holders of a majority in interest of equity securities to be issued
under the contemplated plan and all existing management agreements between O&Y
(U.S.) and its Affiliates and the Debtors would be terminated without penalty.
The Settlement Agreement, generally, and the provisions described above
applicable to the Debtors and the Existing Notes, in particular, formed the
framework for the Plan. Consummation of the Plan is conditioned upon, among
other things, (a) entry of a final order in the cases of the U.S. Debtors
approving the Settlement Agreement and (b) consummation of the transactions
20
contemplated by the Settlement Agreement. See 'THE JOINT PLAN OF
REORGANIZATION--Conditions Precedent to Confirmation and Consummation.'
The Settlement Agreement provides that, (i) for purposes of voting to
approve or reject the U.S. Debtors Second Amended Joint Plan of
Reorganization, dated August 9, 1996, as it may be amended (the 'Newco Plan'),
the Morgan Loan Lenders and Apollo will vote their respective interests as
directed in writing by Carena Bancorp US, Inc., Canadian Imperial Bank of
Commerce, Citibank, N.A., Dragon Holdings Limited, and Battery Park Holdings,
Inc. (the 'Co-Proponents') and for purposes of voting to approve or reject the
Plan, the Co-Proponents will vote their interests as holders of Senior Claims
as directed in writing by Apollo, as agent for the Morgan Loan Lenders;
provided, however, that, if no such written direction is given by the close of
business on the day before the
last day for voting in the Plan and the Newco Plan, the Morgan Loan Lenders as
the Co-Proponents, as the case may be, may vote on the Plan and the Newco
Plan, as applicable, as they so choose.
4. Motion for Approval of the Settlement Agreement
By motion, dated January 12, 1996, the U.S. Debtors requested approval of
the Settlement Agreement (the 'Approval Motion'). Certain parties, including
the committee appointed in the chapter 11 cases for Equityco and the other
U.S. Debtors (the 'Other Committee') and Coopers & Lybrand OYDL Inc. (the
'Administrator') indicated their objection to the Approval Motion and
requested discovery from the BPHI Group. The Bankruptcy Court established a
discovery schedule, including a timetable for all written interrogatories,
production of documents and depositions of the parties, and scheduled hearing
dates for the second week of March 1996.
On February 29, 1996, the Other Committee filed an objection to the
Settlement Agreement stating, among other things, that under the Settlement
Agreement the U.S. Debtors were relinquishing their interests in the Debtors
and the Tenant Notes for insufficient consideration. In March, 1996, the U.S.
Debtors filed their reply to the various objections.
On March 12, 1996, the U.S. Debtors requested a sixty (60) day
adjournment of the hearing on the Approval Motion. At that time, the
Bankruptcy Court again asked the Examiner to become involved in settlement
negotiations among the parties to the Settlement Agreement and the objecting
parties. In mid-April 1996, the U.S. Debtors reached an agreement with the
Other Committee which is now reflected in a chapter 11 plan for the U.S.
Debtors.
5. Commencement of Reorganization Cases
On April 23, 1996, Building Corp. and Equityco filed involuntary
petitions for relief against the Debtors under section 303 of chapter 11 of
the Bankruptcy Code. On April 25, 1996, the Debtors consented to the
commencement of the chapter 11 cases and orders for relief were entered in
connection therewith. By order, dated April 25, 1996, the Reorganization Cases
were procedurally consolidated for administrative purposes only. By order,
dated April 25, 1996, the Bankruptcy Court authorized the retention of Weil,
Gotshal & Manges, LLP, (as bankruptcy reorganization counsel to the Debtors),
Fried, Frank, Harris, Shriver & Jacobson (as real estate counsel to the
Debtors), and Roberts & Holland LLP (as tax counsel to the Debtors).
III. THE JOINT PLAN OF REORGANIZATION
THE FOLLOWING SUMMARY OF THE PLAN DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PROVISIONS OF THE PLAN, A COPY
OF WHICH IS ANNEXED TO THIS DISCLOSURE STATEMENT AS EXHIBIT 1. EACH HOLDER OF
A CLAIM OR AN EQUITY INTEREST SHOULD READ THE PLAN IN ITS ENTIRETY. THE
DEBTORS URGE THE HOLDERS OF CLAIMS AND EQUITY INTERESTS TO CONSIDER CAREFULLY
AND CONSULT WITH HIS OR ITS OWN LEGAL ADVISOR(S) WITH RESPECT TO THE MATTERS
SET FORTH IN THE PLAN.
A. CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE
PLAN
1. Administrative Expense Claims and Priority Tax Claims (Article II)
Administrative Expense Claims are Claims against the Debtors for costs
and expenses of administration of the Reorganization Cases allowed under
sections 503(b) and 507(a)(1) of the Bankruptcy Code. Administrative Expense
Claims include, without limitation, (i) any actual and necessary costs and
expenses of preserving the estates of the Debtors, (ii) any actual and
necessary costs and expenses of operating the businesses of the Debtors, (iii)
any indebtedness or obligations incurred or assumed by the Debtors in
connection with the conduct of their businesses or for the acquisition or
lease of property or the rendition of services, (iv) any costs and expenses of
the Debtors for the management, maintenance, preservation, sale or other
disposition of any assets, the administration and implementation of the Plan,
and the prosecution or defense of claims by or against the Debtors, (v) any
allowances of compensation and reimbursement of expenses to the extent allowed
by Final Order under section 330 or 503 of the Bankruptcy Code, whether
arising before or after the Effective Date and (vi) any fees or charges
assessed against the estate of either Debtor under section 1930, chapter 123,
title 28, United States Code.
The Debtors have been informed by the Ad Hoc Committee that Battle Fowler
LLP, Ballard, Spahr, Andrews & Ingersoll, Deloitte & Touche LLP and VCG, the
attorneys and financial advisers, to the Ad Hoc Committee, intend to file
applications pursuant to sections 503(b)(3) and 503(b)(4) of the Bankruptcy
Code pursuant to which they will seek payment of their fees and
21
reimbursement of their expenses in connection with their representation of the
Ad Hoc Committee. Such applications will be made on the basis that such
professionals have made a substantial contribution to the Reorganization Cases
on the basis, inter alia, that they were integrally involved in the
structuring, drafting and negotiation of the Plan, portions of the Disclosure
Statement, the Plan Supplement and related documents. Further, the Debtors and
the Ad Hoc Committee have been informed that (i) Stroock & Stroock & Lavan,
the attorneys for certain of the Noteholders, intend to file an application
under sections 503(b)(3) and 503(b)(4) of the Bankruptcy Code in an amount not
to exceed One Hundred Thousand Dollars ($100,000), which application will be
supported by Apollo, and (ii) Apollo and its counsel, Wachtell, Lipton, Rosen
& Katz, have agreed to waive their right to file an application under sections
503(b)(3) and 503(b)(4) of the Bankruptcy Code.
The Plan provides that, on the Effective Date, the Disbursing Agent will
pay to each holder of an Allowed Administrative Expense Claim, in Cash, the
full amount of such Allowed Administrative Expense Claim, or upon such other
terms as may be agreed upon by and between the holder of any Administrative
Expense Claim and the Debtors, provided, however, that Administrative Expense
Claims incurred or assumed by the Debtors in Possession in the ordinary course
of business in accordance with the Cash Collateral Stipulation and not
theretofore paid pursuant to the Cash Collateral Stipulation will be paid by
the appropriate Property Owning Partnership in accordance with the terms and
conditions relating thereto; and provided, further, that Administrative
Expense Claims, other than those referred to above and allowances of
compensation or reimbursements of expenses referred to below, asserted after
the Administrative Claims Bar Date will not be paid and neither the Debtors
nor the Property Owning Partnerships will be liable therefor.
Entities that are awarded allowance of compensation or reimbursement of
expenses by the Bankruptcy Court under section 330, 503(b)(2), 503(b)(3),
503(b)(4) or 503(b)(5) of the Bankruptcy Code will be paid by the Disbursing
Agent from Closing Cash, or by the Property Owning Partnerships if Closing
Cash is insufficient, in such amounts as are allowed by the Bankruptcy Court
on the later of the Effective Date and the date upon which the Bankruptcy
Court enters an order allowing any such Administrative Expense Claim or upon
such other terms as may be mutually agreed upon between such holder of an
Administrative Expense Claim and the Debtors, after Bankruptcy Court Approval.
The Debtors estimate that the aggregate amount of such compensation and
reimbursements of expenses as of the Effective Date will be approximately
Three Million Five Hundred Thousand Dollars ($3,500,000).
Priority Tax Claims are Claims of a governmental unit against the Debtors
that are entitled to priority over general unsecured claims under section
507(a)(8) of the Bankruptcy Code. On the Effective Date, each holder of an
Allowed Priority Tax Claim will be paid on account of such Allowed Priority
Tax Claim by the Disbursing Agent from Closing Cash, an amount in Cash equal
to the amount of such Allowed Priority Tax Claim. The Debtors estimate that
the amount of Allowed Priority Tax Claims will be approximately Fifty Thousand
Dollars ($50,000). See '-- Disputed Claims--Allowance and Objection to
Allowance of Priority Utility Tax Claims' for a discussion of the disputed
Utility Tax Claims.
2. Class 1--Priority Non-Tax Claims (Article IV)
The Plan provides that each holder of an Allowed Priority Non-Tax Claim
will be distributed on account of such Allowed Priority Non-Tax Claim a
payment in Cash equal to the amount of its Allowed Priority Non-Tax Claim on
the Effective Date. Claims contained in Class 1 are impaired. The Debtors
estimate that the aggregate amount of Allowed Priority Non-Tax Claims will be
approximately Fifty Thousand ($50,000).
3. Class 2--Senior Claims (Article V)
(a) Distributions of New Notes, REIT Stock and Subscription Rights
On the Effective Date, Senior Claims will be deemed to be Allowed in the
aggregate amount of all principal, interest, fees and charges due and owing as
of the Petition Date under the Existing Notes and the Indenture. Claims
contained in Class 2 are impaired.
Assuming the Conventional Financing Alternative is not consummated, on
the Effective Date each holder of a Senior Claim will receive, subject to the
election and proration procedures described in the Plan, its pro rata share of
(i) Eleven Million One Hundred Sixty Thousand (11,160,000) shares of REIT
Stock, (ii) Three Hundred Ninety One Million Dollars ($391,000,000) of
principal amount in New Notes, and (iii) Eight Hundred Fifty Eight Thousand
Four Hundred Sixty One (858,461) Subscription Rights. The Election Amount is
the aggregate outstanding principal balance of Existing Notes and is equal to
Nine Hundred Two Million Six Hundred Three Thousand Four Hundred Ninety Two
Dollars ($902,603,492). Each holder's Pro Rata portion of the Election Amount
will be the proportion that the amount of Senior Claims held by such holder
bears to the aggregate amount of Senior Claims held by all holders of Senior
Claims.
Assuming the Conventional Financing Alternative is not consummated, on
the Effective Date the Morgan Loan Lenders will receive, in the aggregate, (i)
Eight Hundred Forty Thousand (840,000) shares of REIT Stock, (ii) Nine Million
Dollars ($9,000,000) in principal amount of New Notes, and (iii) Sixty Four
Thousand Six Hundred Fifteen (64,615) Subscription Rights. Except as expressly
specified in the Plan with respect to Plan amendments and waiver of
conditions, nothing in the Plan will grant any of the Morgan Loan Lenders any
right to vote on the Plan or to issue any direction or consent which is to be
issued by the holders of Existing Notes under the Plan or the Indenture (other
than in its capacity as a registered holder of an Existing Note).
Distributions
22
to Morgan Loan Lenders under the Plan will be made through the Morgan Loan
Agent which will make distributions in accordance with the terms of the Morgan
Loan.
Apollo has advised the Ad Hoc Committee that it does not intend to
exercise any Subscription Rights it may receive as a Morgan Loan Lender or as
a holder of a Senior Claim in order to ensure that the Property
Manager/Leasing Agent purchases a significant number of Offered Shares.
(b) Description of Plan Ballots
Each Ballot sent to the holders of Senior Claims will require each such
holder to indicate (i) an acceptance or rejection of the Plan, (ii) whether
such holder is making a Standard Election or a Non-Standard Election, (iii) if
such holder makes a Non-Standard Election, the amount of its Pro Rata portion
of the Election Amount which it wishes to allocate to New Notes, if any, with
the balance, if any, to be deemed allocated to shares of REIT Stock, (iv)
whether or not such holder is an 'accredited investor' under one of the
categories set forth in Rules 501(a) (1) through (8) promulgated under the
Securities Act, and (v) whether such holder is exercising its Subscription
Rights and executing and returning a Subscription Agreement.
The Ballot sent to the Morgan Loan Lenders will require each Morgan Loan
Lender to indicate (i) whether or not it is an 'accredited investor' under
one of the categories set forth in Rule 501(a)(1) through (8) promulgated
under the Securities Act and (ii) whether it is exercising its Subscription
Rights and executing and returning a Subscription Agreement. See '--
Subscription Rights.'
THE DEBTORS ENCOURAGE EACH DISTRIBUTEE WHO RECEIVES A BALLOT TO CONSIDER
CAREFULLY AND CONSULT WITH HIS OR ITS OWN LEGAL ADVISOR(S) WITH RESPECT TO
COMPLETING THE BALLOT.
Assuming the Conventional Financing Alternative is not consummated, on
the Effective Date each holder of a Senior Claim who makes a Standard Election
will receive for each One Million Dollars ($1,000,000) of such holder's Pro
Rata portion of the Election Amount (i) Four Hundred Thirty Three Thousand One
Hundred Ninety One Dollars and Thirty Two Cents ($433,191.32) in principal
amount of New Notes (the 'Standard Note Distribution') and Twelve Thousand
Three Hundred Sixty Four and Twenty Three Hundredths (12,364.23) shares of
REIT Stock (the 'Standard Stock Distribution'), each of the foregoing to be
pro-rated for holders whose Pro Rata portion of the Election Amount is not
evenly divisible by One Million Dollars ($1,000,000). The number of shares of
REIT Stock and the principal amount of New Notes to be distributed to holders
of Senior Claims who make a Standard Election will not be affected in any way
by the proration procedures described below for Non-Standard Elections. EACH
HOLDER OF A SENIOR CLAIM THAT DOES NOT SUBMIT A BALLOT OR MARK ITS
DISTRIBUTION PREFERENCE ON THE BALLOT ON A TIMELY BASIS IN COMPLETE ACCORDANCE
WITH THE INSTRUCTIONS SET FORTH IN THE BALLOT WILL BE CONCLUSIVELY PRESUMED TO
HAVE MADE A STANDARD ELECTION AND SHALL RECEIVE A STANDARD NOTE DISTRIBUTION
AND A STANDARD STOCK DISTRIBUTION.
Each holder of a Senior Claim who desires to make a Non-Standard Election
will indicate on its Ballot the amount of its Pro Rata portion of the Election
Amount which it wishes to allocate to New Notes, if any. The balance of such
holder's Pro Rata portion of the Election Amount, if any, will be deemed to be
allocated to REIT Stock. Subject to the proration procedures described below,
assuming the Conventional Financing Alternative is not consummated, on the
Effective Date each holder of a Senior Claim who makes a Non-Standard Election
will receive (i) New Notes having a principal amount equal to seventy percent
(70%) of such holder's Pro Rata portion of the Election Amount allocated to
New Notes on its Ballot, and (ii) its pro rata share of the Eleven Million One
Hundred Sixty Thousand (11,160,000) shares of REIT Stock available to holders
of Senior Claims (after allocation of shares to holders of Senior Claims
making Standard Elections), based on a fraction, the numerator of which is the
amount, if any, of such holder's Pro Rata share of the Election Amount not
allocated to New Notes and the denominator of which is the portion of the
Election Amount of all holders of Senior Claims making Non-Standard Elections
and not allocated to New Notes.
If there are New Notes remaining unallocated following the allocation of
New Notes to holders of Senior Claims making the Standard Election and the
Non-Standard Election and requesting New Notes (i.e. less than Three Hundred
Ninety One Million Dollars ($391,000,000) in principal amount of New Notes
were elected by holders of Senior Claims), then each holder which has made a
Non-Standard Election will receive, in addition to the distributions to be
made pursuant to the Non-Standard Election, its pro rata share, based on the
fraction described in the preceding paragraph, of the principal amount of New
Notes remaining unallocated.
23
Set forth below is an illustration of how these provisions would be
applied in a hypothetical situation in which less than Three Hundred Ninety
One Million Dollars ($391,000,000) in principal amount of New Notes are
elected by holders of Senior Claims and the Conventional Financing Alternative
is not consummated on the Effective Date.
Total Election Amount....................................... $902,603,492
Senior Claim Note Cap...................................... 391,000,000
Senior Claim Equity Cap.................................... 11,160,000
Maximum Recovery Percentage for Election to Receive all New
Notes.................................................. 70%
Standard Distribution for each $1,000,000 of a Holder's Pro Rata Portion of
the Election Amount:
Principal Amount of New Notes.............................. $ 433,191.32
Shares of REIT Stock....................................... 12,364.23
Illustrative Assumptions:
$2,603,492 of Election Amount makes Standard Election
$500,000,000 of Election Amount elects all New Notes
$400,000,000 of Election Amount elects all REIT Stock
Standard Distribution to Holders Making Standard Election:
Aggregate Principal Amount of New Notes..................... $ 1,127,810
Aggregate Number of Shares of REIT Stock.................... 32,190
Distribution to Holders Electing all New Notes:
$500,000,000*70%............................................ $350,000,000
Distribution to Holders Electing all REIT Stock:
ALLOCATION OF NEW NOTES:
Senior Claim Note Cap....................................... $391,000,000
Less: Distribution to Holders making Standard
Election................................................ (1,127,810)
Less: Distribution to Holders Electing all New Notes........ (350,000,000)
------------
Aggregate Principal Amount of New Notes Distributed
to Holders Electing all REIT Stock.......................... $ 39,872,190
------------
ALLOCATION OF REIT STOCK:
Senior Claim Equity Cap..................................... 11,160,000
Less: Distribution to Holders making Standard Election.. (32,190)
Less: Distribution to Holders Electing all New Notes..... --
------------
Aggregate Number of Shares of REIT Stock Distributed
to Holders Electing all REIT Stock......................... 11,127,810
------------
If holders of Senior Claims making Non-Standard Elections would receive,
based on their elections, New Notes in an aggregate principal amount in excess
of the difference between Three Hundred Ninety One Million Dollars
($391,000,000) and the amount of New Notes to be distributed to holders of
Senior Claims making the Standard Election, each holder making a Non-Standard
Election will instead receive (i) its Pro Rata share of Three Hundred Ninety
One Million Dollars ($391,000,000) in principal amount of New Notes (reduced
by New Notes allocated to holders making Standard Elections), based on a
fraction, the numerator of which is the amount, if any, of such holder's Pro
Rata share of the Election Amount allocated to New Notes and the denominator
of which is the portion of the Election Amount allocated to New Notes and (ii)
its Pro Rata share of Eleven Million One Hundred Sixty Thousand (11,160,000)
shares of REIT Stock (after being reduced by shares allocated to holders
making Standard Elections), based on a fraction (A) the numerator of which is
the amount of such holder's Pro Rata share of the Election Amount, minus the
product of the principal amount of New Notes allocated to such holder,
multiplied by 1.42857 (i.e., the reciprocal of seventy percent (70%)), and (B)
the denominator of which is the portion of the Election Amount represented by
holders of Senior Claims making Non-Standard Elections minus the product of
the principal amount of New Notes issued to all such holders multiplied by
1.42857.
24
Set forth below is an illustration of how these provisions would be
applied in a hypothetical situation in which, more than Three Hundred Ninety
One Million Dollars ($391,000,000) in principal amount of New Notes are
elected by holders of Senior Claims and the Conventional Financing Alternative
is not consummated on the Effective Date.
Total Election Amount.................................. $902,603,492
Senior Claim Note Cap.................................. $391,000,000
Senior Claim Equity Cap.................................. 11,160,000
Maximum Recovery Percentage for Election to Receive all New
Notes............................................... 70%
Standard Distribution for Each $1,000,000 of a Holder's Pro Rata Portion of
the Election Amount:
Principal Amount of New Notes.......................... $ 433,191.32
Shares of REIT Stock................................... 12,364.23
Illustrative Assumptions:
$2,603,492 of Election Amount makes Standard Election
$600,000,000 of Election Amount elects all New Notes
$300,000,000 of Election Amount elects all REIT Stock
Standard Distribution to Holders Making Standard Election:
Aggregate Principal Amount of New
Notes.................................................... $ 1,127,810
Aggregate Number of Shares of REIT Stock........................ 32,190
Distribution to Holders Electing All New Notes:
$556,960,271*70%......................................... $389,872,190
ALLOCATION OF NEW NOTES:
Senior Claim Note Cap.................................... $391,000,000
Less: Distribution to Holders making Standard
Election................................................. (1,127,810)
Less: Distribution to Holders Electing all New
Notes.................................................... (389,872,190)
------------
Remaining all New Note Election Amount.................... --
------------
ALLOCATION OF REIT STOCK TO HOLDERS ELECTING ALL NEW NOTES:
Remaining New Notes Election Amount
($600,000,000--$556,960,271).............................. $ 43,039,729
Total Remaining Election
Amount.................................................... $343,039,729
Senior Claim Equity Cap................................... 11,160,000
Less: Distribution to Holders making Standard
Election.................................................. (32,190)
------------
Remaining Shares of REIT Stock............................ 11,127,810
------------
Distribution of REIT Stock to Holders Electing All New Notes
$43,039,719/$343,039,729*11,127,810.................. 1,396,159 Shares
------------
ALLOCATION OF REIT STOCK TO HOLDERS ELECTING ALL REIT STOCK:
Senior Claim Equity Cap.................................. 11,160,000
Less: Distribution to Holders making Standard
Election................................................. (32,190)
Less: Distribution to Holders Electing all New
Notes..................................................... (1,396,159)
------------
Aggregate Number of Shares to Holders Electing all REIT
Stock..................................................... 9,731,651
------------
(c) Subscription Rights
Each Distributee will receive Subscription Rights entitling such
Distributee to purchase a portion of the Offered Shares at a price per share
of the Subscription Price, with the holders of Senior Claims receiving ninety
three percent (93%) of the Subscription Rights and the Morgan Loan Lenders
receiving seven percent (7%) of the Subscription Rights. The Plan provides
that on the Effective Date, the REIT will sell such Offered Shares for an
aggregate net Cash price of Twenty Million Dollars ($20,000,000) in accordance
with the procedures described in the following paragraphs. If the Conventional
Financing Alternative is not consummated on the Effective Date, there will be
Nine Hundred Twenty Three Thousand Seventy Six (923,076) Offered Shares
subject to Subscription Rights, exercisable at a price of Twenty One Dollars
and Sixty Seven Cents ($21.67) per share and the Offered Shares will represent
approximately seven and one tenth percent (7.1%) of the issued and outstanding
shares of REIT Stock on the Effective Date.
Each holder of a Senior Claim may exercise its Subscription Rights to
purchase up to a number of shares of REIT Stock equal to the fraction
represented by its Pro Rata portion of the Election Amount multiplied by the
number of Offered Shares. The Morgan Loan Lenders may exercise their
Subscription Rights to purchase up to a number of shares of REIT Stock equal
to seven percent
25
(7%) of the Offered Shares. If the Subscription Rights are not exercised for
all of the Offered Shares, any Unsubscribed Shares will be purchased by the
Property Manager/Leasing Agent pursuant to the Property Manager Subscription
Agreement. EACH ELECTION TO EXERCISE SUBSCRIPTION RIGHTS MUST BE MADE BY A
DISTRIBUTEE BY RETURNING WITH ITS BALLOT, A DULY EXECUTED SUBSCRIPTION
AGREEMENT INDICATING THE NUMBER OF SUBSCRIPTION RIGHTS, IF ANY, THAT SUCH
DISTRIBUTEE ELECTS TO EXERCISE. A DISTRIBUTEE WILL BE DEEMED TO HAVE NOT
EXERCISED ITS SUBSCRIPTION RIGHTS UNLESS SUCH DISTRIBUTEE SHALL HAVE RETURNED
WITH ITS BALLOT A DULY EXECUTED SUBSCRIPTION AGREEMENT IN THE FORM OF EXHIBIT
5 CONTAINED IN THE PLAN SUPPLEMENT. Each Distributee will have the right to
exercise Subscription Rights for a number of shares of REIT Stock equal to the
lesser of:
(a) the number of shares of REIT Stock such Distributee designates in its
Subscription Agreement, and
(b) with respect to each holder of a Senior Claim, the fraction
represented by its Pro Rata portion of the Election Amount and, with respect
to each Morgan Loan Lender, its share of the Morgan Loan as determined by the
Morgan Loan Agent, in the case of a holder of a Senior Claim, multiplied by
ninety three percent (93%) of the number of Offered Shares and, in the case of
a Morgan Loan Lender, multiplied by seven percent (7%) of the number of
Offered Shares.
The number of Offered Shares (and the Subscription Price therefor) may
not be determinable prior to the Effective Date because the actual number of
Offered Shares to be issued (and the Subscription Price therefor) will vary if
a Conventional Financing Alternative is consummated. However, the aggregate
Subscription Price of Twenty Million Dollars ($20,000,000) to be raised from
the sale of Offered Shares does not vary in such circumstances, and thus the
total amount to be paid by any holder of a Senior Claim who is to receive
distributions based on such holder's Pro Rata share of the Election Amount or
by any Morgan Loan Lender who is to receive distributions based on its share
of the Morgan Loan, in each case, can be determined prior to the Effective
Date. As soon as practicable after the Confirmation Date, the Debtors will
send a notice to each Distributee that has timely executed and returned a
Subscription Agreement, setting forth the maximum amount that such Distributee
would be required to pay for its subscription to purchase Offered Shares
(assuming for the purposes of determining the amount of Cash to be delivered
to the Escrow Agent that such Distributee is to receive Offered Shares
calculated in accordance with clause (b) above). Within ten (10) days after
the date of such notice, such Distributees will be obligated to deliver the
aggregate maximum purchase price to an escrow agent (selected by the Debtors
upon Noteholder Consent) identified in such notice and otherwise in accordance
with the instructions (approved by order of the Bankruptcy Court) set forth in
such notice. EACH DISTRIBUTEE THAT FAILS TO TIMELY DELIVER THE AGGREGATE
MAXIMUM PURCHASE PRICE IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN THE
NOTICE WILL BE CONCLUSIVELY PRESUMED NOT TO HAVE PURCHASED SUCH OFFERED SHARES
AND SUCH OFFERED SHARES WILL BECOME UNSUBSCRIBED SHARES THAT THE PROPERTY
MANAGER/LEASING AGENT WILL PURCHASE ON THE EFFECTIVE DATE PURSUANT TO THE
PROPERTY MANAGER SUBSCRIPTION AGREEMENT. Any election by a Distributee to
exercise Subscription Rights will be binding on the Distributee making such
election and such Distributee's successors and assigns. All funds held in
escrow pursuant to the Plan for any Distributee will be deemed held for such
Distributee and such Distributee's successors and assigns. When the actual
number of Offered Shares (and the Subscription Price therefor) to be issued is
finally determined, the escrow agent will refund to each Distributee any
excess amount deposited with the escrow agent by any Distributee which has
executed a Subscription Agreement attributable to the excess, if any, of (x)
with respect to each holder of a Senior Claim, the fraction represented by its
Pro Rata portion of the Election Amount and, with respect to each Morgan Loan
Lender, its share of the Morgan Loan as determined by the Morgan Loan Agent,
in the case of a holder of a Senior Claim, multiplied by ninety three percent
(93%) of the number of Offered Shares and, in the case of a Morgan Loan
Lender, multiplied by seven percent (7%) of the number of Offered Shares, over
(y) the number of shares of REIT Stock such Distributee designates in its
Subscription Agreement, multiplied by the Subscription Price.
On the Effective Date, the escrow agent will pay to the REIT all Cash
held in the escrow account (other than any amounts to be refunded to
Distributees as described above). The REIT will deliver to the Disbursing
Agent the number of shares for which the Subscription Price has been received
by the escrow agent for distribution to Distributees that have timely
exercised their Subscription Rights and paid for their portion of the Offered
Shares. A number of shares of REIT Stock equal to the difference between (x)
the aggregate number of OfferedShares and (y) the number of Offered Shares
that are acquired by Distributees, will be purchased for Cash on the Effective
Date by the Property Manager/Leasing Agent for an amount equal to the product
of the Subscription Price multiplied by the number of Unsubscribed Shares.
Apollo has advised the Debtors and the Ad Hoc Committee that it will
refrain from exercising the Subscription Rights it is entitled to receive
either as a Morgan Loan Lender or as a holder of a Senior Claim in order to
ensure that the Property Manager/Leasing Agent will have a material equity
interest in the REIT. The effectiveness of the Property Management Agreement
will be conditioned upon the consummation of the transactions contemplated by
the Property Manager Subscription Agreement. There can be no assurance that
the Property Manager/Leasing Agent will enter into or consummate the
transactions contemplated by the Property Manager Subscription Agreement.
Consummation of the transactions contemplated by the Property
26
Manager/Subscription Agreement is a condition to consummation of the Plan. See
'THE JOINT PLAN OF REORGANIZATION--Conditions Precedent to Confirmation and
Consummation.'
The Plan provides that Subscription Rights are non-transferable and will
expire and become void for all purposes at 5:00 p.m. New York City Time on the
Effective Date.
The REIT will use Cash from the sale of the Offered Shares for working
capital purposes, to provide liquidity in order to facilitate the consummation
of the Conventional Financing Alternative or any subsequent financing of the
Properties and to contribute to the Property Owning Partnerships if and when
needed, as determined by the REIT in its sole and absolute discretion.
(d) Fractional Shares
The distributions described in this Section and Article XII of the Plan
could result in Distributees receiving fractional shares of REIT Stock. The
REIT will not issue fractional shares of REIT Stock. Each Distributee will
receive a number of shares of REIT Stock equal to the first whole number which
is less than the number of shares of REIT Stock to which such Distributee
would otherwise be entitled to receive if fractional shares of REIT Stock were
to be distributed.
4. Class 3--Other Secured Claims (Article VI)
Class 3 consists of all Allowed Other Secured Claims. Claims contained in
Class 3 are impaired. On the Effective Date, each holder of an Allowed Other
Secured Claim will be satisfied and discharged. Not later than ten (10) days
prior to the Confirmation Hearing, upon the direction of the Indenture Trustee
given upon Noteholder Consent, the Debtors will notify each holder of an Other
Secured Claim whether such Other Secured Claim will be satisfied by (i)
payment in Cash equal to the amount of its Allowed Other Secured Claim, (ii)
distributing to the holder of such Allowed Other Secured Claim the Collateral
securing such Claim, or (iii) leaving unaltered the legal, equitable and
contractual rights to which such Allowed Other Secured Claim entitles the
holder thereof in accordance with section 1124(1) of the Bankruptcy Code or
(iv) reinstating such Allowed Other Secured Claim in accordance with section
1124(2) of the Bankruptcy Code. In the event no direction is given by the
Indenture Trustee in accordance with the preceding sentence, the Indenture
Trustee will be conclusively presumed to have directed the Debtors to
reinstate such Other Secured Claim in accordance with section 1124(2) of the
Bankruptcy Code.
The Debtors estimate that the aggregate amount of Allowed Other Secured
Claims will be less than Fifty Thousand Dollars ($50,000).
5. Class 4--Insured Claims and Tenant Reimbursement Claims (Article VII)
Class 4 consists of two subclasses. Subclass 4A consists of all Allowed
Insured Claims. Allowed Insured Claims are Claims against either Debtor
arising out of or in connection with events allegedly causing personal injury
or property damage which events are alleged to have occurred at either
Property prior to the Effective Date. Allowed Insured Claims will be allowed
to the extent that such Claims are covered by an insurance policy or policies
for, covering, or issued to or on behalf of the applicable Debtor. Allowed
Insured Claims will be unimpaired in accordance with section 1124(1) of the
Bankruptcy Code. On the Effective Date, each holder of an Allowed Insured
Claim will be entitled to maintain actions against and obtain payment in full
solely from an insurance company under an insurance policy issued by such
company to, or for the benefit of, the applicable Debtor.
Subclass 4B consists of all Allowed Tenant Reimbursement Claims, which
are Unsecured Claims held by a current or former tenant of either Property
based upon a right to payment provided in the lease of such tenant contingent
upon the realization of Net Tax Proceeds. See--Disputed Claims--Allowance and
Objection to Allowance of Tenant Reimbursement Claims.' Allowed Tenant
Reimbursement Claims will be unimpaired in accordance with section 1124(1) of
the Bankruptcy Code and assumed by the applicable Property Owning Partnership.
6. Class 5--General Unsecured Claims (Article VIII)
Class 5 consists of General Unsecured Claims, which are Unsecured Claims
(including Qualifying Affiliate Unsecured Claims) other than Administrative
Claims, a Priority Non-Tax Claim, a Priority Tax Claim, an Insured Claim, a
Tenant Reimbursement Claim or an Affiliate Unsecured Claim. Claims contained
in Class 5 are impaired. On the Effective Date, the Disbursing Agent will pay
in Cash to each holder of an Allowed General Unsecured Claim the full amount
of its Allowed General Unsecured Claim.
The Debtors estimate that the aggregate amount of Allowed General
Unsecured Claims will be approximately One Hundred Fifty Thousand Dollars
($150,000).
7. Class 6--Affiliate Unsecured Claims (Article IX)
Class 6 consists of Affiliate Unsecured Claims which are Unsecured Claims
against either of the Debtors held by an O&Y Affiliate, other than a
Qualifying Affiliate Unsecured Claim and a Tenant Reimbursement Claim.
Qualifying Affiliate Unsecured Claims are Unsecured Claims against the Debtors
held by an O&Y Affiliate which would be permitted to be paid under the Cash
Collateral Stipulation if such Claims had arisen after the Petition Date.
Qualifying Affiliate Unsecured Claims include Claims relating to payments owed
by either of the Debtors for property management fees, 'E.E.D. Supervision
Services' and 'Special Maintenance and Repair Services' (each as defined in
the Cash Collateral Stipulation) and claims made under any affiliate lease.
Claims contained in Class 6 are impaired. Each holder of an Affiliate
Unsecured Claim will receive in respect of its Claims the aggregate sum of One
Dollar ($1).
27
The Debtors estimate that the aggregate amount of Allowed Affiliate
Unsecured Claims will be approximately Ninety Seven Million Dollars
($97,000,000).
8. Class 7--Equity Interests (Article X)
Class 7 consists of two subclasses. Class 7A consists of the O&Y Equity
Interests, which are Equity Interests in either of the Debtors held by
Building Corp. and Equityco or any of their Affiliates. Equity Interests
contained in Class 7A are impaired.
Subclass 7B consists of the JMB Equity Interests, which are Equity
Interests in either of the Debtors held by JMB LP or any of its Affiliates.
Equity Interests contained in Subclass 7B are impaired.
On the Effective Date, after giving effect to the transactions described
in the section entitled '-- Implementation of the Plan' below, the O&Y Equity
Interests will be cancelled and Building Corp. and Equityco will receive no
distribution in respect of their Equity Interests and will retain no interests
in the successor to the Debtors. On the Effective Date, JMB LP, the holder of
Subclass 7B Equity Interests, will receive a ninety nine percent (99%)
partnership interest, as a limited partner, in the Upper Tier Limited
Partnership, and will become a party to the Upper Tier Limited Partnership
Agreement. See '--Implementation of the Plan-- Formation of the Partnerships.'
B. IMPLEMENTATION OF THE PLAN (ARTICLE XIII)
On or prior to the Effective Date, the following actions will take place
in order to implement the Plan:
1. Formation of the REIT (Article XIII)
The Articles of Incorporation of the REIT were filed on May 13, 1996. On
the Effective Date, the Amended and Restated Articles of Incorporation of the
REIT will be filed with the State Department of Assessments and Taxation of
Maryland and its Amended and Restated Bylaws will be adopted. The REIT will be
the general partner of the Lower Tier Limited Partnership, holding a ninety
five percent (95%) partnership interest, as general partner, therein, and will
also hold all of the outstanding shares of capital stock of the GP Corps and
the Upper Tier GP Corp. The Upper Tier Limited Partnership will hold the
remaining five percent (5%) partnership interest, as limited partner, in the
Lower Tier Limited Partnership.
(a) Description of Stock of the REIT
The following description of the REIT's stock, prepared by legal counsel
to the Ad Hoc Committee, does not purport to be complete and is qualified in
its entirety by reference to the REIT's Amended and Restated Articles of
Incorporation (the 'Charter') and Bylaws, copies of which are included in the
Plan Supplement.
Under the Charter, the REIT has authority to issue up to Sixty Million
(60,000,000) shares of stock, consisting of Fifty Million (50,000,000) shares
of common stock, par value Ten Dollars ($10) per share (the 'Common Stock'),
and Ten Million (10,000,000) shares of preferred stock, par value Ten Dollars
($10.00) per share (the 'Preferred Stock'). The REIT will not issue any shares
of Common Stock or Preferred Stock prior to the Effective Date, and the REIT
will not issue any Preferred Stock pursuant to the Plan. On the Effective
Date, the REIT will issue an aggregate of Twelve Million (12,000,000) shares
of Common Stock to the Morgan Loan Lenders and the holders of Senior Claims
electing to receive or otherwise receiving REIT Stock and will issue the
Offered Shares (Nine Hundred Twenty Three Thousand and Seventy Six (923,076)
shares of REIT Stock if the Conventional Financing Alternative is not
consummated) to Distributees that have exercised Subscription Rights and
purchased such shares pursuant to Subscription Agreements or, to the extent of
any Unsubscribed Shares, the Property Manager/Leasing Agent. The REIT will
also (i) reserve for issuance One Hundred Thousand (100,000) shares of its
Common Stock for issuance to its Directors pursuant to the REIT's 1996
Director Stock Option Plan (the 'Stock Option Plan') and (ii) issue Forty
Thousand (40,000) shares of its Common Stock to VCG as part of VCG's fee. Five
Hundred (500) shares of REIT Stock to be issued to Distributees will instead
be issued to charitable institutions. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Description of Registration Rights
Agreement and Stock Option Plan,' '-- Management of Reorganized Debtors,' and
'-- VCG Fees.'
The Charter authorizes the Directors to classify or reclassify any
unissued shares of stock by setting or changing the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends and
other distributions, qualifications, or terms or conditions of redemption of
such stock; provided, however, that the Charter prohibits the issuance of
nonvoting common or preferred stock and provides as to the several classes of
common or preferred stock possessing voting power, an appropriate distribution
of such power among such classes, including, in the case of any class of stock
having a preference over another class of stock with respect to dividends,
adequate provisions for the election of directors representing such preferred
class in the event of default in the payment of such dividends.
Until the occurrence of a Simplification Event, the Common Stock will be
divided into Class A Common Stock and Class B Common Stock. The Class A Common
Stock and the Class B Common Stock will have identical rights and privileges,
and will be
28
treated as a single class, with respect to all matters (other than certain
voting rights described below) including, without limitation, the payment of
distributions and upon liquidation. Upon consummation of the Plan, Apollo,
with respect to all shares to be delivered to Apollo as a holder of a Senior
Claim or as a Morgan Loan Lender, will receive only Class B Common Stock and
will be the sole holder of all of the outstanding shares of Class B Common
Stock. All other holders of Senior Claims and all other Morgan Loan Lenders
will receive Class A Common Stock with respect to the REIT Stock to be
distributed to them.
Until the occurrence of a Simplification Event, the REIT's nine (9)
member Board of Directors will be divided into five (5) classes. The Class I
Director will be a director designated by Apollo (and after the Effective
Date, by the holders of Class B Common Stock); the Class II Directors will
consist of a director designated by Apollo (and, after the Effective Date, by
the holders of the Class B Common Stock) and a director that is reasonably
acceptable to Apollo designated by Noteholders other than Apollo, Whitehall
and Oaktree (and, after the Effective Date, by the holders of the Class A
Common Stock), the Class III Directors will consist of a director designated
by Apollo (and, after the Effective Date, by the holders of Class B Common
Stock) and a director that is reasonably acceptable to Apollo designated by
Noteholders other than Apollo, Whitehall and Oaktree (and, after the Effective
Date, by the holders of Class A Common Stock); the Class IV Directors will
consist of a director designated by Apollo (and, after the Effective Date, by
the holders of Class B Common Stock) and a director that is reasonably
acceptable to Apollo designated by Whitehall (the 'Whitehall Director'); and
the Class V Directors will consist of a director designated by Oaktree (the
'Oaktree Director') and a director designated by Noteholders (other than
Apollo, Whitehall and Oaktree), in each case, that are reasonably acceptable
to Apollo. The initial Directors will be designated and disclosed by Apollo,
Whitehall, Oaktree and the other Noteholders, as applicable, prior to the
Confirmation Hearing.
The term of the initial Class I Director will terminate on the date of
the 1997 annual meeting of stockholders; the term of the initial Class II
Directors will terminate on the date of the 1998 annual meeting of
stockholders; the term of the initial Class III Directors will terminate on
the date of the 1999 annual meeting of stockholders; the term of the initial
Class IV Directors will terminate on the date of the 2000 annual meeting of
stockholders; and the term of the initial Class V Directors will terminate on
the date of the 2001 annual meeting of stockholders. At the 1997 annual
meeting of stockholders, the successor to the Class I Director will be elected
for a four-year term; at the 1998 annual meeting of stockholders, the
successors to the Class II Directors shall be elected for a three-year term;
at the 1999 annual meeting of stockholders, the successors to the Class III
Directors will be elected for a two-year term; at the 2000 annual meeting of
stockholders, the successors to the Class IV Directors shall be elected for a
one-year term; at the 2001 annual meeting of stockholders, the successors to
the Class I, Class II, Class III, Class IV and Class V Directors will be
elected for a one year term. Directors will hold office until the annual
meeting for the year in which their terms expire and until their successors
shall be elected and qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. The terms of the Initial
Directors will commence on the Effective Date. The Charter provides that the
REIT will at all times have at least two directors that are not affiliated
with Apollo, any Transferee (as hereinafter defined) or any other stockholder
of more than ten percent (10%) of the stock of the REIT.
'Simplification Event' means the earliest to occur of (i) the date on
which Apollo and its affiliates (taken together) or any Transferee and its
affiliates (taken together) no longer hold a number of shares of Common Stock
representing at least thirty percent (30%) of the combined voting power of all
outstanding shares of stock of the REIT; (ii) the date on which Apollo and its
affiliates (taken together) or any Transferee and its affiliates (taken
together) or any other person or entity and its affiliates (taken together)
holds a number of shares of Common Stock representing at least seventy five
percent (75%) of the combined voting power of all outstanding shares of stock
of the REIT; (iii) the fifth anniversary of the Effective Date of the Plan;
and (iv) the date of the annual meeting of stockholders in 2001.
Upon the occurrence of a Simplification Event, the provisions of the
Charter with respect to the classification of the Board of Directors and the
division of Common Stock into Class A Common Stock and Class B Common Stock
shall terminate and shall be of no further force and effect and, thereafter,
the term of each Director shall expire on the date of the annual meeting of
stockholders immediately following or concurrent with such Simplification
Event, and voting for the election of Directors shall be in the manner set
forth in the Bylaws.
Upon a transfer of shares of Class B Common Stock so that such shares are
not beneficially owned by Apollo, a Transferee or their respective affiliates,
such shares shall be automatically converted into shares of Class A Common
Stock. Except as described in the immediately preceding sentence, holders of
Common Stock have no conversion, sinking fund or redemption rights, or
preemptive rights to subscribe for any securities of the REIT.
'Transferee' means, any Person to whom Apollo, its affiliates, or any
Transferee shall transfer shares of Class B Common Stock representing at least
thirty percent (30%) of the aggregate number of shares of Class A and Class B
Common Stock then outstanding.
All shares of REIT Stock issued in accordance with the terms and
conditions of the Plan will be duly authorized, fully paid and nonassessable.
Subject to the preferential rights of any other shares or series of shares and
to the provisions of the Charter regarding shares of Common Stock held by any
person in excess of the Ownership Limit (as hereinafter defined), holders of
29
Common Stock will be entitled to receive distributions on Common Stock if, as
and when authorized and declared by the Board of Directors of the REIT out of
assets legally available therefor and to share ratably in the assets of the
REIT legally available for distribution to its stockholders in the event of
its liquidation, dissolution or winding-up after payment of, or adequate
provision for, all known debts and liabilities of the REIT.
Subject to the provisions of the Charter regarding shares of Common Stock
held by any person in excess of the Ownership Limit, each outstanding share of
Common Stock entitles the holder thereof to one vote on all matters submitted
to a vote of stockholders. There is no cumulative voting in the election of
directors, which means that the holders of a majority of the outstanding stock
of Class A Common Stock or Class B Common Stock can elect all of the directors
then standing for election by such Class, and the holders of the remaining
Common Stock of such Class will not be able to elect any director.
Pursuant to the Maryland General Corporation Law (the 'MGCL'), a
corporation generally cannot dissolve, amend its charter, merge, sell all or
substantially all of its assets or engage in a share exchange unless approved
by the affirmative vote of stockholders holding at least two-thirds of the
shares entitled to vote on the matter, unless a lesser percentage (but not
less than a majority of all of the votes to be cast on the matter) is set
forth in the charter of the corporation. The Charter does not provide for a
lesser percentage in such situations. See '-- Certain Provisions of Maryland
Law and of the REIT's Charter and Bylaws.'
Preferred Stock may be issued from time to time, in one or more series,
as authorized by the Board of Directors. Prior to the issuance of shares of
each series, the Board of Directors is required by the MGCL and the Charter to
fix for each series, subject to the provisions of the Charter regarding shares
of stock held by any Person in excess of the Ownership Limit, such terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms
or conditions of redemption, as are permitted by Maryland law. Such rights,
powers, restrictions and provisions could include the right to receive
specified dividend payments and payments on liquidation prior to any such
payments being made to the holders of some, or a majority, of the shares of
Common Stock. The Board of Directors could authorize the issuance of Preferred
Stock with terms and conditions that could have the effect of discouraging a
takeover or any other transaction that holders of Common Stock might believe
to be in their best interests or in which holders of some, or a majority, of
the shares of Common Stock might receive a premium for their shares over the
then-current market price of such shares. See '--Certain Provisions of
Maryland Law and of the REIT's Charter and Bylaws.' As of the date hereof, no
shares of Preferred Stock are outstanding, and the REIT has no present plans
to issue any Preferred Stock other than in connection with a refinancing of
the New Notes in accordance with the terms of the Restated Indenture. See '--
Description of the New Notes and the Restated Indenture.'
In order for the REIT to qualify as a REIT under the Internal Revenue
Code of 1986, as amended (the 'Internal Revenue Code'), among other things,
not more than fifty percent (50%) in value of its outstanding stock may be
owned, directly or indirectly, by five or fewer individuals (defined in the
Internal Revenue Code to include certain entities) during the last half of a
taxable year (other than the first year) (the 'Five or Fewer Requirement'),
and such shares of stock must be beneficially owned by one hundred (100) or
more persons during at least three hundred thirty five (335) days of a taxable
year of twelve (12) months (other than the first year) or during a
proportionate part of a shorter taxable year. See 'TAX CONSEQUENCES OF THE
PLAN TO THE HOLDERS OF SENIOR CLAIMS--REIT Taxation.' In order to protect the
REIT against the risk of losing its status as a real estate investment trust
on account of a concentration of ownership among its stockholders, the
Charter, subject to certain exceptions, provides that no Person may
beneficially own, or be deemed to own by virtue of the attribution provisions
of the Internal Revenue Code, more than seven and nine tenths percent (7.9%)
(the 'Ownership Limit') of the aggregate value of the REIT's shares of stock.
Pursuant to the Internal Revenue Code, stock held by certain types of
entities, such as pension trusts qualifying under Section 401(a) of the
Internal Revenue Code, United States investment companies registered under the
Investment Company Act of 1940, as amended, partnerships, trusts and
corporations, will be attributed to the beneficial owners of such entities for
purposes of the Five or Fewer Requirement (i.e., the beneficial owners of such
entities will be counted as holders). Pursuant to the Charter, no person
(other than Apollo or a transferee of at least thirty percent (30%) of the
aggregate number of shares of Class A Common Stock or Class B Common Stock)
may acquire any shares of Common Stock if, as a result of such acquisition,
the fair market value of shares of stock of the REIT owned directly or
indirectly by Non U.S. Persons (as defined in the Charter) would exceed fifty
percent (50%) of the fair market value of all issued and outstanding shares of
stock of the REIT. Any acquisition of shares of stock or of any security
convertible into shares of stock that would result in the disqualification of
the REIT as a real estate investment trust, including any transfer that
results in the REIT being 'closely held' within the meaning of Section 856(h)
of the Internal Revenue Code, shall be null and void, and the intended
transferee will acquire no rights to the shares of stock. The foregoing
restrictions on transferability and ownership will not apply if the Board of
Directors determines that it is no longer in the best interests of the REIT to
attempt to qualify, or to continue to qualify, as a real estate investment
trust. The Board of Directors may, in its sole discretion, waive the Ownership
Limit if evidence satisfactory to the Board of Directors and the REIT's tax
counsel is presented that the changes in ownership will not then or in the
future jeopardize the REIT's status as a real estate investment trust and the
Board of Directors otherwise decides that such action is in the best interest
of the REIT.
The Charter excludes from the foregoing ownership restriction persons
designated by Apollo (or another person designated by Apollo to designate such
persons) to exceed the Ownership Limit; provided that no Individual shall be
permitted, by designation, to
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exceed the Ownership Limit by more than ten percent (10%) (i.e. own more than
seventeen and nine tenths percent (17.9%) of the aggregate value of
outstanding stock of the REIT), and the aggregate percentage by which all
Individuals permitted, by designation, to exceed the Ownership Limit shall not
be greater than ten percent (10%).
Shares of Common Stock owned, or deemed to be owned, or acquired by a
stockholder (other than an Individual permitted, by designation, to exceed the
Ownership Limit) in excess of the Ownership Limit and shares acquired by a
person that would cause more than fifty percent (50%) in value of the
outstanding shares of the REIT Stock to be owned by Non U.S. Persons, will
automatically be transferred to a trustee, in his capacity as trustee of a
trust for the exclusive benefit of one or more charitable beneficiaries. Such
stock held by the trustee will be issued and outstanding stock of the REIT.
However, while such stock is held in trust, it will not be entitled to vote,
it will not be considered for purposes of any stockholder vote or the
determination of a quorum for such vote, and, except upon liquidation, it will
not be entitled to participate in dividends or other distributions. Any
distribution paid to a proposed transferee of such stock prior to the
discovery by the REIT that stock has been transferred in violation of the
provisions of the Charter will be repaid to the trustee upon demand. Within
twenty (20) days after receiving notice from the REIT that stock has been
transferred to the trust, the trustee will sell such stock to a person
designated by the trustee whose ownership of the shares of stock will not
violate the Ownership Limit. Upon such sale, the interest of the charitable
beneficiary will terminate and the trustee will distribute the net proceeds of
such sale to the original transferee-stockholder
and the charitable beneficiary. The original transferee-stockholder will
receive the lesser of (i) the price paid by the original
transferee-stockholder for the shares of stock that were transferred to the
trust, or if the original transferee-stockholder did not give value for such
shares (e.g., such stock was received through a gift, devise or other
transaction), the Market Price (as defined in the Charter) of such shares on
the day of the event causing such shares to be held in trust, and (ii) the
price received by the trustee from the sale of such shares. Any net sales
proceeds in excess of the amount payable to the original
transferee-stockholder will be immediately paid to the charitable beneficiary,
together with any dividends or other distributions thereon. If, prior to the
discovery by the REIT that stock had been transferred to the trustee, such
shares are sold by an original transferee-stockholder then (X) such shares
will be deemed to have been sold on behalf of the trust, (Y) the proceeds of
such sale will be deemed to be held by such original transferee-stockholder as
an agent for the trustee and (Z) to the extent that the original
transferee-stockholder received an amount for such shares that exceeds the
amount that such original transferee-stockholder was entitled to receive
pursuant to the Charter, such excess will be paid to the trustee upon demand.
Stock transferred to the trustee will be deemed to have been offered for sale
to the REIT, or its designee, at a price per share equal to the Market Price
on the date the REIT, or its designee, accepts such offer. The REIT will have
the right to accept such offer until the trustee has sold the shares held in
the trust pursuant to the Charter. Upon such a sale to the REIT, the interest
of the charitable beneficiary in the shares sold will terminate and the
trustee will distribute the net proceeds of the sale to the original
transferee-stockholder and to the charitable beneficiary in the manner
described above. If the foregoing transfer restrictions are determined to be
void or invalid by virtue of any legal decision, statute, rule or regulations,
then the transfer of such stock will be void ab initio.
Each stockholder will upon demand be required to disclose to the REIT in
writing any information with respect to its direct, indirect and constructive
ownership of stock as the Board of Directors deems reasonably necessary to
comply with the provisions of the Code applicable to the REIT, to comply with
the requirements of any taxing authority or governmental agency or to
determine any such compliance.
The Ownership Limit may have the effect of precluding acquisition of
control of the REIT unless the Board of Directors determines that maintenance
of real estate investment trust status is no longer in the best interests of
the REIT.
(b) Certain Provisions of Maryland Law and of the REIT's Charter and
Bylaws
The following summary of certain provisions of Maryland law and the
Charter and Bylaws, prepared by counsel to the Ad Hoc Committee, does not
purport to be complete and is qualified in its entirety by reference to
Maryland law and the Charter and Bylaws, copies of which are included in the
Plan Supplement.
AFFILIATE TRANSACTIONS
The Bylaws provide that the REIT shall not engage in any transaction
(other than transactions entered into in the ordinary course of business,
including payments of dividends, salaries or directors compensation) with any
stockholder holding more than ten percent (10%) of the Common Stock without
the approval of a majority of the REIT's disinterested directors. A director
shall be 'disinterested' for the purposes of the Bylaws if such director is
unaffiliated (which shall be determined by the Board of Directors, of which
determination shall be final) with, and does not receive compensation from the
stockholder with whom the transaction is to be effected or any subsidiaries
thereof.
To the extent the REIT requires investment banking services and so long
as Whitehall remains a significant stockholder of the REIT, the Board of
Directors will, in good faith in light of all appropriate considerations,
consider engaging Goldman Sachs & Company (among any other investment banking
firms it considers) to provide investment banking services to the REIT on
terms
31
customary for such services. Notwithstanding the preceding paragraph, any
director affiliated with Whitehall may vote upon any engagement of investment
bankers, including Goldman Sachs & Company.
BUSINESS COMBINATIONS
Under the MGCL, certain 'business combinations' (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between a Maryland
corporation and any person who beneficially owns ten percent (10%) or more of
the voting power of the corporation's shares or an affiliate of the
corporation who, at any time within the two-year period prior to the date in
question, was the beneficial owner of ten percent (10%) or more of the voting
power of the then-outstanding voting stock of the corporation (an 'Interested
Stockholder') or an affiliate thereof are prohibited for five (5) years after
the most recent date on which the Interested Stockholder becomes an Interested
Stockholder. Thereafter, any such business combination must be recommended by
the board of directors of the corporation and approved by the affirmative vote
of at least (a) eighty percent (80%) of the votes entitled to be cast by
holders of outstanding voting shares of the corporation and (b) two-thirds of
the votes entitled to be cast by holders of outstanding voting shares of the
corporation other than shares held by the Interested Stockholder with whom (or
with whose affiliate) the business combination is to be effected, unless,
among other conditions, the corporation's common stockholders receive a
minimum price (as defined in the MGCL) for their shares and the consideration
is received in Cash or in the same form as previously paid by the Interested
Stockholder for its shares. These provisions of the MGCL do not apply,
however, to business combinations that are approved or exempted by the board
of directors of the corporation prior to the time that the Interested
Stockholder becomes an Interested Stockholder. The Charter exempts from the
provisions of Maryland law all business combinations involving the REIT.
The Charter provides, however, that any Business Combination (as used in
Section 3-601(e)(1) and (e)(2) of the MGCL) with, or involving, an Interested
Stockholder (as hereinafter defined) shall require the affirmative vote of not
less than sixty six and two thirds percent (66 2/3%) of the votes entitled to
be cast by the holders of all the then outstanding shares of Common Stock,
voting together as a single class, excluding Common Stock beneficially owned
by such Interested Stockholder or by any Person having more than fifty percent
(50%) beneficial ownership of the Interested Stockholder or of whom the
Interested Stockholder has more than (50%) beneficial ownership.
'Interested Stockholder' is defined in the Charter to mean any person
(other than an Exempt Person (as hereinafter defined)) that (a) is the
beneficial owner of Common Stock representing twenty percent (20%) or more of
the votes entitled to be cast by the holders of all then outstanding shares of
Common Stock (or an affiliate of such person) and (b) has held such Common
Stock for less than five (5) years.
'Exempt Person' means (a) (i) Apollo, its partners, Affiliates and
Associates (as such terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended, as in effect on May 20, 1996 and including
without limiting the generality of the foregoing any investment fund under
common control with Apollo), (ii) any Transferee or Person that would be a
Transferee, but for the occurrence of a Simplification Event, (iii) with
respect to the interest so transferred and so long as no Simplification Event
shall have occurred, any other transferee of any part of Apollo's interest in
the REIT and (iv) any such Transferee's or transferee's partners,
stockholders, Affiliates and Associates, and (b) any person that prior to the
acquisition of beneficial ownership of Common Stock representing twenty
percent (20%) or more of the votes entitled to be cast by the holders of all
then outstanding shares of Common Stock obtained the approval of a majority of
directors of the REIT to exempt such person from the provisions of the Charter
related to Business Combinations;
provided, however, that a director of the REIT shall not vote in any such
determination if such director has been appointed by the acquiror or any
person acting together with the acquiror in connection with such transaction
as part of a 'group' (as such term is used in Rule 13d-5 under the Exchange
Act or if such person is affiliated with the selling stockholder in the
transaction in which the acquiror exceeds the twenty percent (20%) threshold
referred to above (other than in the case of a tender offer or other
transaction in which there are a substantial number of selling stockholders).
This provision could have the effect of delaying, deferring or preventing
a change in control, or discouraging others from acquiring shares of REIT
Stock and increase the difficulty of consummating any offer to acquire such
shares.
CERTAIN VOTING PROVISIONS
In addition to any vote required by law, the REIT will not take any
action regarding the following matters without the affirmative vote of the
holders of at least sixty six and two-thirds percent (66 2/3%) of the
outstanding shares of stock voting as a single class:
(a) any merger or consolidation of the REIT (other than any merger
between the REIT and any direct or indirect wholly owned subsidiary or the
REIT);
(b) any sale or transfer of either of the real properties owned by
the REIT and its subsidiaries (but excluding any pledge, hypothecation or
encumbrance of such assets to provide security for any bona fide debt);
32
(c) any dissolution or liquidation of the REIT; or
(d) any acquisition in excess of Twenty Five Million Dollars
($25,000,000) (other than in connection with the leasing, improvement and
other operations of the REIT's properties or as contemplated by the annual
budget with respect to such properties, such exclusion to include, without
limitation, any acquisition of, any providers of services to such
properties and any easements, air rights or appurtenances, necessary or
desirable for the operation of the properties).
CONTROL SHARE ACQUISITIONS
The MGCL provides that 'control shares' of a Maryland corporation
acquired in a 'control share acquisition' have no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on
the matter, excluding shares of stock owned by the acquiror or by officers or
by directors who are employees of the corporation. 'Control shares' are voting
shares of stock that, if aggregated with all other shares of stock previously
acquired by that person or in respect of which the acquiror is able to
exercise or direct the exercise of voting power (except solely by virtue of a
revocable proxy), would entitle the acquiror to exercise voting power in
electing directors within one of the following ranges of voting power: (i)
one-fifth or more but less than one-third, (ii) one-third or more but less
than a majority, or (iii) a majority of all voting power. Control shares do
not include shares the acquiring person is then entitled to vote as a result
of having previously obtained stockholder approval. A 'control share
acquisition' means the acquisition of control shares, subject to certain
exceptions.
A person who has made or proposes to make a control share acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the board of directors to call a special meeting of
stockholders to be held within fifty (50) days of demand to consider the
voting rights of the shares. If no request for a meeting is made, the
corporation may itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the corporation
may redeem any or all of the control shares (except those for which voting
rights have previously been approved) for fair value determined, without
regard to the absence of voting rights for the control shares, as of the date
of the last control share acquisition or of any meeting of stockholders at
which the voting rights of such shares are considered and not approved. If
voting rights for control shares are approved at a stockholders meeting and
the acquiror becomes entitled to vote a majority of the shares entitled to
vote, all other stockholders may exercise appraisal rights. The fair value of
the shares as determined for purposes of the appraisal rights referred to in
the preceding sentence may not be less than the highest price per share paid
in the control share acquisition, and certain limitations and restrictions
otherwise applicable to the exercise of dissenter's rights do not apply in the
context of a control share acquisition.
The control share acquisition statute does not apply to certain shares,
including shares acquired in a merger, consolidation or share exchange if the
corporation is a party to the transaction, or to acquisitions approved or
exempted by the corporation's charter or bylaws. The Charter contains
provisions which exempt from the control shares acquisition statute the
issuance of Common Stock on the Effective Date and any and all future
acquisitions by any person of shares of the REIT's stock. There can be no
assurance that such provisions will not be eliminated at any point in the
future.
If the Charter were amended to subject the REIT to the control share
acquisition statute, such amendment could have the effect of delaying,
deferring or preventing a change in control, or discouraging others from
acquiring shares of REIT Stock and increase the difficulty of consummating any
offer to acquire such shares.
Reference is made to the full text of the foregoing statutes for their
entire terms, and the partial summary contained herein is not intended to be
complete.
AMENDMENT OF CHARTER AND BYLAWS
The provisions of the Charter relating to (a) the Board of Directors, (b)
the division of Common Stock into Class A Common Stock and Class B Common
Stock, and (c) voting rights of stockholders (other than super-majority voting
rights), may be amended, prior to the occurrence of a Simplification Event, by
the affirmative vote of two-thirds of the outstanding shares of each of Class
A Common Stock and Class B Common Stock, voting separately as a class. The
provisions of the Charter relating to (a) the super-majority voting rights of
stockholders and (b) the substantive provisions related to the Ownership Limit
and ownership by Non U.S. Persons, may be amended by two-thirds of the
outstanding shares of Class A Common Stock and Class B Common Stock, voting
together as a single class. Provisions of the Charter relating specifically to
Apollo, Transferees (as such term is defined in the Charter) or transferees of
Apollo or the Affiliates or Associates of any such Person may not be amended
or modified without the written consent thereto of Apollo. The stockholders
may amend the REIT's Bylaws, except for its provisions relating to
indemnification of officers and directors and the right of the Board of
Directors and the stockholders to amend the Bylaws, by the affirmative vote of
the holders of two thirds of the outstanding shares of stock of the REIT
entitled to vote. Subject to such stockholder rights, a majority of the Board
of Directors may amend the Bylaws, except that provisions relating to sixty
six and two thirds percent (66 2/3%) and seventy five percent (75%)
super-majority voting of the Board and powers delegated to committees may
33
only be amended by the affirmative vote of not less than sixty six and two
thirds percent (66 2/3%) and seventy five percent (75%), respectively, of
Directors then in office.
DISSOLUTION OF THE REIT
The MGCL permits the dissolution of the REIT by (i) the adoption of a
resolution by a majority of the entire Board of Directors, and (ii) upon
proper notice, approved by the stockholders by the affirmative vote of
two-thirds of all the votes entitled to be cast on the matter.
MEETINGS OF STOCKHOLDERS
The REIT's Bylaws provide for annual meetings of stockholders to be held
during the month of August in each year or at such other time and/or date as
the Board of Directors shall determine. Special meetings of stockholders may
be called by (i) the Chairman of the Board or the President, or (ii) the Board
of Directors and must be called upon the written request of stockholders
entitled to cast at least twenty five percent (25%) of all the votes entitled
to be cast at the meeting.
The REIT's Bylaws provide that any stockholder of record wishing to
nominate a director or to propose any new business at an annual or special
meeting of stockholders must provide written notice to the REIT relating to
the nomination or proposal not less than sixty (60) days nor more than ninety
(90) days prior to the anniversary date of the prior year's annual meeting or
special meeting in lieu thereof.
The purpose of requiring stockholders to give the REIT advance notice of
nominations and other business is to afford the Board of Directors a
meaningful opportunity to consider the qualifications of the proposed nominees
or the advisability of the other proposed business and, to the extent deemed
necessary or desirable by the Board of Directors, to inform stockholders and
make recommendations about the qualifications or business, as well as to
provide a more orderly procedure for conducting meetings of stockholders.
Although the REIT's Bylaws do not give the Board of Directors any power to
disapprove stockholder nominations for the election of directors or proposals
for action, they may have the effect of precluding a contest for the election
of directors or the consideration of stockholder proposals if the proper
procedures are not followed, and of discouraging or deterring a third party
from conducting a solicitation of proxies to elect its own slate of directors
or to approve its own proposal, without regard to whether consideration of the
nominees or proposals might be harmful or beneficial to the REIT and its
stockholders.
ADDITIONAL PROVISIONS RELATED TO THE BOARD OF DIRECTORS
The Charter provides that the number of Directors initially will be nine,
and, after the occurrence of a Simplification Event, may be increased or
decreased from time to time by a vote of the majority of the Directors then in
office; provided, however, that the total number of Directors shall not be
fewer than the minimum number permitted by the MCGL nor more than nine (9). No
reduction in the number of Directors shall cause the removal of any Director
from office prior to the removal of such director in accordance with the
charter of the Corporation or the expiration of his or her term.
Any Director may resign from the Board of Directors or any committee
thereof at any time by written notice to the Board of Directors, effective
upon execution and delivery to the REIT of such notice or upon any future date
specified in the notice. A Director may be removed from office, but only for
cause and only at a meeting of the Stockholders called for that purpose, by
the affirmative vote of the holders of not less than two-thirds of the Stock
then outstanding and entitled to vote in the election of Directors (or, at any
time prior to the occurrence of a Simplification Event, by the affirmative
vote of the holders of not less than two-thirds of the same class of Common
Stock as elected such Director). Any vacancy created by the resignation,
removal or death of a Director (other than the Whitehall Director and the
Oaktree Director) shall be filled by the remaining Directors (or, at any time
prior to the occurrence of a Simplification Event, by the remaining Directors
elected, or entitled to be elected, by the same class of Common Stock as such
Director). Any vacancy created by the resignation, removal or death of a
Whitehall Director or an Oaktree Director, as the case may be, prior to the
expiration of the initial term of such Director and prior to the occurrence of
a Simplification Event will be filled by the remaining Directors elected, or
entitled to be elected, by the same class of Common Stock as such Director who
will elect the nominee of Whitehall or Oaktree, as the case may be. For
purposes of the Charter, the sale, transfer or other disposition by a
stockholder of more than eighty percent (80%) of the shares of Common Stock
distributed to such stockholder pursuant to the Plan will, among other things,
constitute cause for removing a Director that receives compensation directly
or indirectly from such stockholder unless after giving effect to such sale,
the stockholder will continue to hold shares of Common Stock representing at
least five percent (5%) of the combined voting power of all of the outstanding
shares of Common Stock.
Pursuant to the Charter, the Directors will be elected for a term of one
year and serve until their successors are duly elected and qualified.
Directors will receive as an annual retainer (i) Ten Thousand Dollars
($10,000) in Cash, and (ii) Four Hundred (400) shares of Common Stock of the
REIT to be distributed pursuant to the Stock Option Plan. Directors will
receive Seven Hundred
34
Fifty Dollars ($750) for each Board of Directors meeting attended. Any
Director may resign from the Board of Directors at any time by written notice.
The REIT's Bylaws provide that prior to the occurrence of a
Simplification Event, the REIT may not take (or agree to take), and the Board
of Directors shall not authorize the Corporation to take (or agree to take),
any action regarding the following matters without the affirmative vote of
sixty six and two thirds percent (66 2/3%) of the entire Board of Directors:
(a) approval of the annual budget of the REIT, provided that, if,
with respect to a proposed budget for any fiscal year, the requisite
vote of directors is not obtained, the annual budget for the immediately
preceding fiscal year, increased (but in no event decreased) on a line-by-line
basis by the increase in the Consumer Price Index for all Urban Consumers
(1982-1984 = 100 relating to New York-Northern New Jersey-Long Island Region
and issued by the Bureau of Labor Statistics of the United States Department
of Labor or if no longer published, or such publication is temporarily or
indefinitely suspended, then any comparable index issued by the Bureau of
Labor Statistics of the United States Department of Labor or by any successor
agency of the United States, or any other generally recognized and accepted
index for similar determinations of the cost of living, in lieu of the Index)
for the period beginning in January and ending in December of the immediately
preceding fiscal year, shall be the annual budget for such fiscal year;
(b) other than expenditures for tenant improvements and building
improvements in connection with any lease, any individual capital
expenditure in excess of One Million Five Hundred Thousand Dollars
($1,500,000) or aggregate capital expenditures for any fiscal year in
excess of Three Million Five Hundred Thousand Dollars ($3,500,000), in
each case, not provided for in the REIT's annual budget;
(c) any amendment to, modification of, or expenditure (other than
capital expenditures not requiring approval pursuant to paragraph (b)
above) in excess of one hundred ten percent (110%) of, any amounts
included in an annual budget; provided that expenditures in excess of
one hundred ten percent (110%) of budgeted amounts may be made in
order to comply with the provisions of any laws, leases or other
agreements to which the REIT or its properties are subject or to pay
operating expenses in the ordinary course including, without
limitation, debt service, real estate taxes, utilities and insurance,
or to effect repairs or maintenance in an emergency and prompt
notification thereof shall be given to the Board;
(d) authorization, declaration or payment of any distributions
with respect to shares of stock in the form of properties or assets of
the REIT other than cash or stock;
(e) any adoption or modification of significant accounting
policies or practices or any change in the REIT's independent auditors;
(f) termination of any property management contract between the
REIT and a property management company;
(g) refinancing of the indebtedness of the REIT or its properties
(other than pursuant to a commitment letter entered into prior to the
Effective Date in connection with a financing approved by a majority of the
Noteholders);
(h) settlement of any litigation or consent to the entry of any
order,in either case requiring the payment by the REIT of an uninsured
amount greater than Two Million Five Hundred Thousand Dollars ($2,500,000);
(i) entering into any lease with respect to an amount of rentable
square feet of space established by the affirmative vote of seventy five
percent (75%) of the directors; provided, that, if seventy five percent (75%)
of the directors shall fail to establish such amount, such amount shall be one
hundred fifty thousand (150,000) or more rentable square feet of space; or
(j) any acquisition in excess of Two Million Five Hundred
Thousand Dollars ($2,500,000) (other than in connection with the
leasing, improvement and other operations of the REIT's properties or as
contemplated by the annual budget with respect to such properties including,
without limitation, any acquisition of, or investment in, any providers of
services to such properties and any easements, air rights or appurtenances,
necessary or desirable for the operation of the properties) and not subject to
approval of stockholders.
In addition, the Bylaws provide that prior to the occurrence of a
Simplification Event, the REIT shall not take (or agree to take), and the
Board of Directors shall not authorize the REIT to take (or agree to take),
without the affirmative vote of seventy five percent (75%) of the directors,
any action regarding any offering by the REIT of new equity interests in the
REIT pursuant to a single transaction or series of related transactions,
whether public or private, if the aggregate equity interest offered thereby
exceeds twenty five percent (25%) of the equity of the REIT.
The Bylaws provide the Board of Directors will establish an Executive
Committee to oversee the day-to-day operations of the REIT and its properties.
The initial Executive Committee will be comprised of two directors elected by
holders of Class B Common Stock and one director with substantial experience
in the real estate industry elected by holders of Class A Common Stock other
than Whitehall or Oaktree. Thereafter, until the occurrence of a
Simplification Event, directors appointed by holders of Class B Common Stock
will elect two members of the Executive Committee and directors appointed by
holders of Class A
35
Common Stock shall elect one member thereof. The duties and powers of the
Executive Committee will be established by the vote of seventy five percent
(75%) of the entire Board, at its first meeting, The members of the Executive
Committee will serve one-year terms.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The MGCL permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation or its stockholders for money damages, except (i) to the extent
thatit is determined that the person actually received an improper benefit or
profit in money, property or services, or (ii) to the extent that a judgment
or other final adjudication adverse to the person is entered in a proceeding
finding that the person's action or failure to act was the result of active
and deliberate dishonesty material to the cause of action adjudicated in the
proceeding. The Charter contains a provision which eliminates such liability
to the fullest extent permitted from time to time by Maryland law. This
provision does not limit the ability of the REIT or its stockholders to obtain
other relief, such as an injunction or rescission.
The REIT's Bylaws require the REIT to indemnify and to advance expenses
to its directors, officers and certain other parties to the fullest extent
permitted from time to time by Maryland law. The MGCL permits a corporation to
indemnify its directors, officers and certain other parties against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by
them in connection with any proceeding to which they may be made a party by
reason of their service to or at the request of the corporation, unless it is
established that the act or omission of the indemnified party was material to
the matter giving rise to the proceeding and (i) the act or omission was
committed in bad faith or was the result of active and deliberate dishonesty,
(ii) the indemnified party actually received an improper personal benefit, or
(iii) in the case of any criminal proceeding, the indemnified party had
reasonable cause to believe that the act or omission was unlawful.
INDEMNIFICATION AGREEMENTS
Pursuant to the Plan, the REIT will enter into indemnification agreements
with its initial executive officers and directors on the Effective Date. The
indemnification agreements will require, among other things, that the REIT
indemnify its executive officers and directors to the fullest extent permitted
by law and advance to the executive officers and directors all related
expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. Under these agreements, the REIT must also
indemnify and advance all expenses incurred by executive officers and
directors seeking to enforce their rights under the indemnification agreements
and may cover executive officers and directors under the REIT's directors' and
officers' liability insurance. Although the indemnification agreements will
offer substantially the same scope of coverage afforded by law, they will
provide greater assurance to directors and executive officers that
indemnification will be available, because, as a contract, they cannot be
modified unilaterally in the future by the Board of Directors or the
stockholders to eliminate the rights they provide.
2. Formation of the Partnerships (Article XIII)
The certificate of limited partnership of the Upper Tier Limited
Partnership will be filed with the Office of the Secretary of State of the
State of Delaware on or prior to the Confirmation Date. Prior to the merger
of the Debtors into the Upper Tier Limited Partnership, Building Corp., as
general partner, and Upper Tier GP Corp., as limited partner, will form the
Upper Tier Limited Partnership pursuant to an initial limited partnership
agreement and an initial certificate of limited partnership. After the merger
such initial agreement will be amended to provide that all items of income,
gain, loss or deduction attributable to the assumption or reduction of the 237
Excess Amount and the 1290 Excess Amount occurring on or about the date of
such amendment will be allocated solely to Equityco and Building Corp. in such
manner as they shall agree. The certificate of limited partnership of the
Lower Tier Limited Partnership will be filed with the office of the Secretary
of State of the State of Delaware on or prior to the Confirmation Date. On the
Effective Date, the limited partnership agreement of the Lower Tier Limited
Partnership (the 'Lower Tier Limited Partnership Agreement') will become
effective with the REIT holding a ninety five percent (95%) partnership
interest, as general partner, and the Upper Tier Limited Partnership holding a
five percent (5%) partnership interest, as limited partner, therein. The
certificates of limited partnership of the Property Owning Partnerships will
be filed with the Office of the Secretary of State of the State of Delaware on
or prior to the Confirmation Date. On the Effective Date, the limited
partnership agreements of the Property Owning Partnerships (the 'Property
Owning Partnership Agreements') will become effective with the Lower Tier
Limited Partnership holding a ninety nine percent (99%) interest, as limited
partner, and each of the GP Corps holding a one percent (1%) interest, as
general partner, in the respective Property Owning Partnership.
ASSUMPTION OF 237 EXCESS AMOUNT
Prior to the merger of the Debtors into the Upper Tier Limited
Partnership and pursuant to the 237 Assumption and Security Agreement, (i)
Building Corp. and Equityco will assume the obligation of the Debtors to repay
the 237 Excess Amount, (ii) Building Corp. and Equityco will grant to the
Indenture Trustee for the benefit of the holders of Senior Claims a first
priority perfected security interest in and lien on their interests in the
Debtors securing their obligation to repay the 237 Excess Amount and (iii) the
Indenture Trustee will release the Debtors from their obligation to repay the
237 Excess Amount. The 237 Excess Amount
36
is the portion of the Excess Amount equal to Sixty Million Dollars
($60,000,000). Pursuant to the 237 Operating Agreement Modification, the
Operating Agreement for 237 LLC will be modified to provide that any income
arising from the release of the 237 Excess Amount will be allocated to
Building Corp. and Equityco. The foregoing description of the treatment of the
237 Excess Amount does not purport to be complete and is qualified in its
entirety by reference to the 237 Assumption and Security Agreement and the 237
Operating Agreement Modification, copies of which are included in the Plan
Supplement.
MERGER OF DEBTORS INTO THE UPPER TIER LIMITED PARTNERSHIP; REDEMPTION
Initially, Building Corp. will hold a one percent (1%) partnership
interest in the Upper Tier Limited Partnership as general partner and the
Upper Tier GP Corp. will hold a ninety nine percent (99%) partnership interest
as limited partner. Pursuant to the Merger Agreement, each of the Debtors will
merge with and into the Upper Tier Limited Partnership, (i) Building Corp.
will continue to be the general partner of the Upper Tier Limited Partnership
and will retain its one percent (1%) general partner interest, (ii) the Upper
Tier GP Corp.'s limited partnership interest will be redeemed, (iii) the Upper
Tier GP Corp. will withdraw from the Upper Tier Limited Partnership as limited
partner, and (iv) Building Corp., Equityco and JMB LP will receive,
respectively, two and six tenths percent (2.6%), forty nine and nine tenths
percent (49.9%) and forty six and five tenths percent (46.5%) limited
partnership interests therein. As a result of such mergers, the Upper Tier
Limited Partnership will succeed to the Debtors' ownership of the Properties.
In addition, (i) Building Corp. and Equityco will assume the obligations of
the Upper Tier Limited Partnership to repay the 1290 Excess Amount, (ii)
Building Corp. and Equityco will grant to the Indenture Trustee for the
benefit of the holders of Senior Claims a first priority perfected security
interest in and lien on their interests in the Upper Tier Limited Partnership
(equal in priority to the security interest granted under the 237 Assumption
and Security Agreement) securing their obligations to repay the 1290 Excess
Amount, and (iii) the Indenture Trustee will release the Upper Tier Limited
Partnership from its obligation to repay the 1290 Excess Amount. The
partnership agreement of the Upper Tier Limited Partnership which will be in
effect prior to the effectiveness of the Redemption and Substitution Agreement
will provide that all items of income, gain, loss or deduction attributable to
the assumption or reduction of the 237 Excess Amount and the 1290 Excess
Amount occurring on or about the date of such agreement will be allocated
solely to Equityco and Building Corp. in such manner as they shall
agree. See 'THE JOINT PLAN OF REORGANIZATION--Implementation of the
Plan--Formation of the Partnerships--Description of the Limited Partnership
Agreements of the Partnerships.'
The foregoing description of the merger of the Debtors with and into the
Upper Tier Limited Partnership does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement, the Redemption
and Substitution Agreement and Upper Tier Limited Partnership Agreement,
copies of which are included in the Plan Supplement.
CAPITAL CONTRIBUTIONS TO THE PARTNERSHIPS
Pursuant to the Noteholders Contribution and Participation Agreements,
the Indenture Trustee, acting on behalf of the holders of the Senior Claims,
will contribute to the REIT the Contributed Debt which is an undivided
interest in Three Hundred Million Dollars ($300,000,000) principal amount of
the Existing Notes or, if the Conventional Financing Alternative is
consummated in an amount in excess of Four Hundred Million Dollars
($400,000,000), an undivided outstanding amount of the Existing Notes equal to
Three Hundred Million Dollars ($300,000,000) less such excess. In exchange,
the Disbursing Agent, will receive, subject to adjustment if the Conventional
Financing Alternative is consummated, Eleven Million One Hundred Sixty
Thousand (11,160,000) shares of REIT Stock and the Disbursing Agent will
distribute the shares of the REIT Stock in accordance with the procedures
described below. The foregoing description of the contribution of the
Contributed Debt does not purport to be completeand is qualified in its
entirety by reference to the Noteholders Contribution and Participation
Agreement, copies of which are included in the Plan Supplement. See
'--Formation of the REIT.'
Pursuant to the Debt Contribution Agreement, the REIT will contribute the
Contributed Debt to the Lower Tier Limited Partnership in exchange for a
ninety five percent (95%) partnership interest, as general partner, in the
Lower Tier Limited Partnership. Pursuant to the Lower Tier Limited Partnership
Agreement, the REIT's partnership interest, as general partner, in the Lower
Tier Limited Partnership, will entitle the REIT to receive distributions from
the Lower Tier Limited Partnership as set forth below under the caption titled
'--Description of the Limited Partnership Agreements of the
Partnerships--Lower Tier Limited Partnership Agreement.' The foregoing
description of the contributions of the Contributed Debt to the Lower Tier
Limited Partnership is qualified in its entirety by reference to the Debt
Contribution Agreement and the Lower Tier Limited Partnership Agreement,
copies of which are included in the Plan Supplement.
Pursuant to the Property Contribution Agreements and the Conveyancing
Documents, the Lower Tier Limited Partnership will direct the Upper Tier
Limited Partnership to transfer and contribute to the Property Owning
Partnerships the respective Properties, and certain related personalty, in
each case, subject to the lien of the Indenture securing the Existing Notes,
as reduced by the Excess Amount and the Contributed Debt, as well as the right
to pursue tax certiorari proceedings with respect thereto. The Upper Tier
Limited Partnership will convey the Properties and other personalty to the
respective Property Owning Partnership and in consideration therefor the Upper
Tier Limited Partnership will receive the LP Interest. The Lower Tier Limited
Partnership will
37
contribute, subject to adjustment if the Conventional Financing is consummated
in an amount in excess of Four Hundred Million Dollars ($400,000,000), One
Hundred Twenty Eight Million Five Hundred Eight Thousand One Hundred Twenty
Four Dollars ($128,508,124) of the Contributed Debt to 237 Park Partners, L.P.
(the '237 Property Owning Partnership') and One Hundred Seventy One Million
Four Hundred Ninety One Thousand Eight Hundred Seventy Six Dollars
($171,491,876) of the Contributed Debt to 1290 Partners, L.P. (the '1290
Property Owning Partnership'). In consideration for directing the Upper Tier
Limited Partnership to transfer the Properties to the Property Owning
Partnerships and contributing the Contributed Debt as set forth above, the
Lower Tier Limited Partnership will receive a ninety nine percent (99%)
partnership interest, as limited partner, in
each of the Property Owning Partnerships. The Property Owning Partnerships and
the Indenture Trustee will then cancel the Contributed Debt. In connection
with the transfer to the Property Owning Partnerships of the right to pursue
existing tax certiorari claims, the Property Owning Partnerships will retain
Moroze, Sherman, Gordon & Gordon, P.C., the existing tax certiorari counsel.
In addition, the Property Owning Partnerships will assume substantially all
leases, contracts and other obligations related to the Properties including
construction contracts and brokerage agreements. The consummation of the
transfers contemplated by the Property Contribution Agreements and the
Effective Date is conditioned upon the aggregate amount required to cure
certain undisclosed non-permitted exceptions to title or environmental
problems related to the Properties not exceeding, in the aggregate, Two
Million Six Hundred Twenty Five
Thousand Dollars ($2,625,000). See 'TAX CONSEQUENCES OF THE PLAN TO HOLDERS OF
SENIOR CLAIMS--Transfer Taxes' and 'THE JOINT PLAN OF
REORGANIZATION--Conditions Precedent to Confirmation and
Consummation--Consummation of the Plan.'
The Property Owning Partnerships (or the Property Manager/Leasing Agent)
will assume the Debtors' labor agreements with respect to the Properties'union
employees. The Property Owning Partnerships (or the Property Manager/Leasing
Agent) will offer employment to the non-union employees of the Properties and
will continue the Debtors' current non-union employee policies relating to
seniority, vacations and severance. If any non-union employee of a Property
elects not to accept such offer of employment, the respective Property Owning
Partnership will be obligated to make severance and accrued vacation payments
to such employee in accordance with the Debtors' current non-union employee
policies. The Property Owning Partnerships will not be required to make such
payments if a non-union employee rejects a Property Owning Partnership's offer
of employment and instead accepts employment with an O&Y (U.S.) entity.
The Debtors estimate of the aggregate liability of the Property Owning
Partnerships if all of the Properties' non-union employees elect not to accept
such offers of employment is approximately One Hundred Fifty Five Thousand
Dollars ($155,000).
The foregoing description of the capital contributions to the Lower Tier
Limited Partnership and the Property Owning Partnerships does not purport to
be complete and is qualified in its entirety by reference to the Debt
Contribution Agreement, Property Contribution Agreement, the Lower Tier
Limited Partnership Agreement and Property Owning Partnership Agreements,
copies of which are included in the Plan Supplement.
CANCELLATION OF EXCESS AMOUNT
Pursuant to the Excess Amount Release, the Indenture Trustee will forgive
the obligation of Building Corp. and Equityco to repay the Excess Amount and
release such parties and their interest in the Upper Tier Limited Partnership
from the security interest granted to the Indenture Trustee under the 237
Assumption and Security Agreement and the 1290 Assumption and Security
Agreement.
REDEMPTION AND SUBSTITUTION AGREEMENT
Pursuant to the Redemption and Substitution Agreement, (i) the Upper Tier
GP Corp will be admitted to the Upper Tier Limited Partnership as a general
partner, (ii) Building Corp. will withdraw as general partner, (iii) the Upper
Tier GP Corp will receive a one percent (1%) general partner interest in the
Upper Tier Limited Partnership, (iv) Equityco will withdraw from the Upper
Tier Limited Partnership as limited partner, (v) Building Corp. will withdraw
from the Upper Tier Limited Partnership as limited partner, and (vi) JMB LP
will receive a ninety nine percent (99%) limited partnership interest.
38
GENERAL PARTNERS OF THE UPPER TIER LIMITED PARTNERSHIP AND THE PROPERTY
OWNING PARTNERSHIPS
In consideration for agreeing to serve as the general partner of the
Upper Tier Limited Partnership and exposing its assets to the liabilities of
the Upper Tier Limited Partnership, the Upper Tier GP Corp will receive a one
percent (1%) general partnership interest in the Upper Tier Limited
Partnership.
In consideration for agreeing to serve as the general partners of the
Property Owning Partnerships and exposing their respective assets to the
liabilities of the Property Owning Partnerships, 237 GP Corp and 1290 GP Corp
will each receive a one percent (1%) general partnership interest in the
respective Property Owning Partnership.
The certificates of incorporation of the Upper Tier GP Corp and the GP
Corps were filed on May 16, 1996, in the Office of the Secretary of State of
the State of Delaware and their respective by-laws were adopted on May 16,
1996. Other than as contemplated under the Plan, the REIT, the Upper Tier GP
Corp and the GP Corps will not engage in any business activities and will not
enter into any contracts or agreements prior to the Effective Date other than
in connection with their organization.
DESCRIPTION OF THE LIMITED PARTNERSHIP AGREEMENTS OF THE PARTNERSHIPS
Lower Tier Limited Partnership Agreement
The description of the Lower Tier Limited Partnership Agreement set forth
below, prepared by legal counsel to the Ad Hoc Committee, does not purport to
be complete and is qualified in its entirety by reference to the Lower Tier
Limited Partnership Agreement, a copy of which is included in the Plan
Supplement.
Pursuant to the Plan and the various Contribution Agreements, on the
Effective Date, (i) the Lower Tier Limited Partnership will receive the
Contributed Debt as a capital contribution from the REIT, as general partner,
and as a capital contribution from the Debtors, as limited partners, the
Properties and certain related personalty, subject to the lien of the
Indenture, will be transferred at the direction of the Lower Tier Limited
Partnership to the Property Owning Partnerships. The Lower Tier Limited
Partnership Agreement does not require either the Upper Tier Limited
Partnership, as limited partner, or the REIT, as general partner, to make
additional capital contributions. The REIT will have overall management
responsibilities and powers, as the general partner of the Lower Tier Limited
Partnership. The REIT, as general partner, will be required to use its best
efforts to cause the Lower Tier Limited Partnership to make adequate
distributions to the REIT in order to enable the REIT to pay dividends so as
to satisfy the Internal Revenue Code requirements for qualifying as a real
estate investment trust. See 'TAX CONSEQUENCES OF THE
PLAN TO HOLDERS OF SENIOR CLAIMS--REIT Taxation.'
The Lower Tier Limited Partnership Agreement provides that the aggregate
Available Cash (as defined in the Lower Tier Limited Partnership Agreement),
from distributions from the Property Owning Partnerships will be distributed
no less frequently than quarterly to the partners of the Lower Tier Limited
Partnership as follows:
(i) one hundred percent (100%) to the REIT, as general partner, until it
has received, together with all prior distributions pursuant to this clause
and clauses (i) and (iv) of the succeeding paragraph, aggregate distributions
equal to a cumulative compounded return, commencing on the Effective Date (or
with respect to capital contributions made after the Effective Date, the date
of such capital contributions), of twelve percent (12%) per annum on the sum
of (x) the Contributed Debt, (y) any additional capital contributions made by
the REIT, as general partner, to the Lower Tier Limited Partnership, and (z) a
One Hundred Million Dollar ($100,000,000) preference amount (the 'Preference
Amount') (the amounts in (x), (y) and (z), as reduced by distributions in
respect of such amounts and as the same may be increased in the event the
Conventional Financing
Alternative is consummated in an amount less than Four Hundred Million Dollars
($400,000,000)) or if the New Notes are refinanced for less than the then
amortized principal balance thereof and preferred stock is issued in
consideration therefor, referred to herein as the 'Adjusted GP Contribution');
(ii) one hundred percent (100%) to the REIT, as general partner, until it
has received in total, taking into account distributions made to it from
Available Cash and sale or refinancing proceeds, the Adjusted GP Contribution;
and
(iii) the balance, ninety five (95%) to the REIT, as general partner, and
five percent (5%) to the Upper Tier Limited Partnership.
Net proceeds from any distributions from the Property Owning Partnerships
related to any sale, refinancing, condemnation or insurance recovery of the
Properties or any loan made to the Partnership will be distributed by the
Lower Tier Limited Partnership to its partners as follows:
(i) one hundred percent (100%) to the REIT, as general partner, until it
has received, together with all prior distributions pursuant to this clause
(i) and clause (i) of the immediately preceding paragraph, aggregate
distributions equal to the product of
39
(x) 0.5 and (y) a twelve percent (12%) per annum cumulative compounded return
on the Adjusted GP Contribution from the Effective Date (or with respect to
capital contributions made after the Effective Date, the date of such capital
contributions);
(ii) one hundred percent (100%) to the REIT, as general partner, until it
has received, together with all prior distributions pursuant to this clause
(ii) and clause (ii) of the immediately preceding paragraph, aggregate
distributions equal to the product of (x) .75 and (y) the Adjusted GP
Contribution;
(iii) from the next Five Hundred Thousand Dollars ($500,000), ninety
percent (90%) to the Upper Tier Limited Partnership and ten percent (10%) to
the REIT, as general partner;
(iv) one hundred percent (100%) to the REIT, as general partner, until it
has received, together with all prior distributions pursuant to this clause
(iv), clause (i) of this paragraph and clause (i) of the immediately preceding
paragraph, a twelve percent (12%) per annum cumulative compounded return on
the Adjusted GP Contribution commencing with respect to each capital
contribution, on the date such Capital Contribution was made;
(v) one hundred percent (100%) to the REIT, as general partner, until it
has received, together with all prior distributions pursuant to this clause
(v), clause (ii) of this paragraph and clause (ii) of the immediately
preceding paragraph, aggregate distributions equal to the Adjusted GP
Contribution; and (vi) ninety five percent (95%) to the REIT, as general
partner, and five percent (5%) to the Upper Tier Limited Partnership.
The Lower Tier Limited Partnership Agreement provides that the Upper Tier
Limited Partnership may transfer its interests in the Lower Tier Limited
Partnership, as limited partner, only with the written consent of the REIT,
which may be withheld in the sole and absolute discretion of the REIT. Any
attempted or actual transfer by the Upper Tier Limited Partnership to any
person without the approval of the REIT will be null and void ab initio and of
no force and effect.
The REIT will have the right (the 'Purchase Right'), exercisable on or
after the earliest of (i) the Default Date (as hereinafter defined), (ii)
January 2, 2001 and (iii) the date on which JMB LP no longer holds any
partnership interest in the Upper Tier Limited Partnership, to acquire or
cause its designee to acquire the partnership interest of the Upper Tier
Limited Partnership, as limited partner, in the Lower Tier Limited
Partnership, for an amount (the 'Upper Tier Partnership Purchase Price') equal
to the greater of (x) the amount that would be distributed to the Upper Tier
Limited Partnership (after taking into account existing partnership debt and
the distribution priorities of the REIT, as general partner) if the Properties
held by the Property Owning Partnerships were sold (and the proceeds therefrom
distributed in accordance with the Lower Tier Limited Partnership Agreement
and the Property Owning Partnership Agreements) for an amount equal to (a) the
product of two times the Properties' net operating income (excluding
extraordinary items) for the period January 1, 2000 through June 30, 2000, (b)
divided by 0.12, and (y) One Hundred Dollars ($100).
The Upper Tier Limited Partnership will have the right, exercisable at
any time after the Effective Date, to require the REIT to acquire the
partnership interests of the Upper Tier Limited Partnership in the Lower Tier
Limited Partnership (the 'Put Right') based on the same formula described in
the immediately preceding paragraph, except that the Properties' net operating
income shall be for the immediately preceding calendar year and such amount
shall not be multiplied by two (2) (the 'Put Price'). Pursuant to the Upper
Tier Limited Partnership Agreement, JMB LP will have the right (the 'JMB Put
Right') to cause the Upper Tier Limited Partnership to exercise the Put Right.
In each case, JMB LP will be responsible for any transfer taxes, gains taxes
and other similar costs incurred in connection with the exercise of such
rights and also including any additional transfer taxes and transfer gains
taxes which would be retroactively assessed with respect to the transfer of
the Properties to the Property Owning Partnerships pursuant to the Plan by
reason of the exercise of such rights.
Pursuant to the Upper Tier Limited Partnership Agreement, JMB LP
covenants that neither it nor any of its affiliates will intentionally
interfere with (i) the exercise by the REIT of the Purchase Right, (ii) any
disposition, mortgage, pledge, encumbrance, hypothecation or exchange of (a)
the LP Interest by the Upper Tier Limited Partnership, (b) the Lower Tier
Limited Partnership's interest in the Property Owning Partnerships by the
Lower Tier Limited Partnership or (c) the Properties by either Property Owning
Partnership or (iii) the merger or other combination of the Lower Tier Limited
Partnership or the Property Owning Partnerships with or into another entity,
in each case, in accordance with the terms of the Upper Tier Limited
Partnership Agreement, the Lower Tier Limited Partnership Agreement or the
Property Owning Partnership Agreements.
Pursuant to the Lower Tier Limited Partnership Agreement, JMB LP will
arrange for the delivery to the REIT of (i) a marketable treasury security, in
a form reasonably satisfactory to the REIT and with a market value as of
January 2, 2001 of Ten Million Dollars ($10,000,000) guaranteed by the full
faith and credit of the United States of America (the 'JMB Collateral'), and
(ii) an Indemnity Agreement from JMB/Manhattan Associates, Ltd., Carlyle Real
Estate Limited Partnership--XIII and Carlyle Real Estate Limited
Partnership--XIV, the constituent partners of JMB LP (collectively, the 'JMB
Indemnitors') in form and substance satisfactory to the REIT (the 'JMB
Indemnity'). If JMB LP breaches its obligation not to engage in the acts
described in the preceding paragraph beyond the expiration of applicable
notice and cure periods, (i) the REIT may liquidate the JMB Collateral and
distribute such proceeds free and clear of all
encumbrances, and (ii) the JMB Indemnitors will be obligated to pay
40
the REIT an amount equal to Twenty Five Million Dollars ($25,000,000) less any
amounts realized by the REIT upon liquidation of the JMB Collateral. There can
be no assurance that the JMB Indemnitors will have sufficient funds available
to make such payment if required to do so. Furthermore, the REIT's recourse
under the JMB Indemnity is limited to the assets of the JMB Indemnitors and
the REIT will not have recourse against the partners of the JMB Indemnitors.
After the expiration of the Preference Period under section 547 of the
Bankruptcy Code and upon the completion of (i) any transfer of partnership
interests resulting from JMB LP's exercise of the JMB Put Right, the Upper
Tier Limited Partnership's exercise of the Put Right or the REIT's exercise of
the Purchase Right, (ii) a permitted sale of the Properties, or (iii) a
permitted transfer of the Lower Tier Limited Partnership's partnership
interest in the Property Owning Partnerships, the REIT will release its
security interest in and return the JMB Collateral to JMB LP provided,
however, that JMB LP did not interfere with the completion of such transfers
or sale.
The Lower Tier Limited Partnership Agreement provides that, subject to
certain limitations described below, the REIT, as general partner, has full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Lower Tier Limited Partnership, including, without
limitation, (i) the lending or borrowing of money, (ii) the acquisition or
disposition of any assets of the Lower Tier Limited Partnership, and (iii) the
issuance of additional partnership interests to additional limited partners.
The Lower Tier Limited Partnership Agreement also provides that the REIT may
transfer all or any part of its partnership interest, as general partner, in
its sole discretion and without the consent of the limited partners.
The Lower Tier Limited Partnership Agreement also provides that until the
earliest of (i) January 2, 2001, (ii) the date on which the Upper Tier Limited
Partnership no longer holds partnership interests in the Lower Tier Limited
Partnership as a result of the authorized exercise of the Purchase Right or
the Put Right or as otherwise permitted pursuant to the Upper Tier Limited
Partnership Agreement, (iii) the date on which the Lower Tier Limited
Partnership no longer holds partnership interests in the Property Owning
Partnerships to the extent permitted by the Lower Tier Limited Partnership
Agreement, (iv) the date on which JMB LP no longer holds a partnership
interest in the Upper Tier Limited Partnership as a result of the authorized
exercise of the JMB Put Right or as otherwise permitted pursuant to the Upper
Tier Limited Partnership Agreement, and (v) the Default Date (the earliest
such date, the 'Approval Right Termination Date'), the REIT, as general
partner, will not, without the prior written consent of the Upper Tier Limited
Partnership (which, in turn, will be subject to the prior written consent of
JMB LP), cause or permit (to the extent within the REIT's reasonable control)
any Adverse Transaction, provided, however, that the REIT will be under no
obligation to commence litigation or to incur any expense (unless JMB LP funds
such expense)
in order to avoid or prevent an Adverse Transaction. Under the Upper Tier
Limited Partnership Agreement, the Lower Tier Limited Partnership Agreement
and the Property Owning Partnership Agreement, 'Adverse Transaction' means
(i) any sale, disposition, transfer or exchange of the Properties (or the
interests of the Lower Tier Limited Partnership in the Property Owning
Partnerships and the interests of the Upper Tier Limited Partnership in the
Lower Tier Limited Partnership), (ii) any release, discharge or reduction of
the non-recourse indebtedness of the Property Owning Partnerships (other than
through payment of scheduled amortization, actions taken by a secured lender,
such as application of insurance proceeds or condemnation awards or the
exercise of remedies, or where the released indebtedness is concurrently being
replaced with other non-recourse indebtedness complying with the last sentence
of this paragraph), (iii) any distribution of the applicable Partnership
assets (other than the distribution of cash and other distributions by the
Upper Tier Limited Partnership, the Lower Tier Limited Partnership and the
Property Owning Partnerships, in each case, in the ordinary course of
business), or (iv) any other transaction or agreement to which any of the
Upper Tier Limited Partnership, the Lower Tier Limited Partnership or the
Property Owning Partnerships is a party, if as a result of any such
transaction or agreement described in (i), (ii), (iii) or (iv), JMB LP would
be required to recognize a material amount of taxable income or gain prior to
the Approval Right Termination Date. Adverse Transactions specifically exclude
(A) partnership income derived in the ordinary course of the Upper Tier
Limited Partnership's, the Lower Tier Limited Partnership's or the Property
Owning Partnerships' business, (B) non-recourse refinancing of the Properties
on commercially reasonable terms in an aggregate amount equal to not less than
the lesser of Three Hundred Twenty Five Million Dollars ($325,000,000) and the
amortized balance of the then existing non-recourse financing encumbering the
Properties (utilizing an amortization schedule no shorter than twenty (20)
years), (C) payment of amortization on non-recourse financing encumbering the
Properties, provided that the outstanding balance of such financing is not
reduced below Three Hundred Twenty Five Million Dollars ($325,000,000), in the
aggregate, as such amount would be reduced between the Effective Date and the
Approval Right Termination Date based on a twenty (20) year amortization
schedule and except as otherwise provided in clause (ii) above, (D) the
consummation of the transactions contemplated by the Plan (i.e., the property
transfers and the issuance of the securities provided therein), (E) a transfer
of the Properties pursuant to an involuntary foreclosure or similar action
arising from a default by the Property Owning Partnerships with respect to
their obligations under their indebtedness, and (F) a transfer of the
Properties pursuant to a consensual foreclosure or similar action (including,
without limitation, a deed in lieu of foreclosure) arising from a default by
the Property Owning Partnerships with respect to their obligations under their
indebtedness provided that in the case of a consensual foreclosure or deed in
lieu of foreclosure by reason of a default under the New Notes the default is
a bona fide default and the foreclosure or deed in lieu of foreclosure is not
a collusive transaction between the holders of the New Notes and the GP Corps.
attributable to any commonality of ownership between the beneficial ownership
of the New Notes and the GP Corps.
41
Upper Tier Limited Partnership Agreement
The descriptions of the initial limited partnership agreements of the
Upper Tier Limited Partnership and Upper Tier Limited Partnership Agreement
set forth below, prepared by legal counsel to the Ad Hoc Committee, does not
purport to be complete and, with respect to the descriptions of the Upper Tier
Limited Partnership Agreement, is qualified in its entirety by reference to
the Upper Tier Limited Partnership Agreement, a copy of which is included in
the Plan Supplement.
Initially, Building Corp., as general partner, and Upper Tier GP Corp.,
as limited partner, will form the Upper Tier Limited Partnership pursuant to
an initial limited partnership agreement and an initial certificate of limited
partnership. After the merger of 237 LLC and 1290 LLC into the Upper Tier
Limited Partnership, such initial agreement will be amended to provide that
all items of income, gain, loss or deduction attributable to the assumption or
reduction of the 237 Excess Amount and the 1290 Excess Amount occurring on or
about the date of such amendment will be allocated solely to Equityco and
Building Corp. in such manner as they shall agree. After consummation of the
transactions contemplated by the Redemption and Substitution Agreement, the
limited partnership agreement will be amended and restated in its entirety and
will be substantially in the form of the Upper Tier Limited Partnership
Agreement included in the Plan Supplement.
Pursuant to the Upper Tier Limited Partnership Agreement, all
distributions of net cash flow will be distributed in accordance with the
respective ownership interests of the partners, except that all distributions
payable to JMB LP will be applied first to the prepayment of the JMB Notes and
will be distributed to the REIT or its designee as participant in the JMB
Notes with any remainder payable to the other participant therein (subject to
the JMB Note Participation Agreement). See '-- Assignment of JMB Notes' below
for a description of the JMB Notes. Until the Approval Right Termination Date,
the Upper Tier GP Corp as general partner of the Upper Tier Limited
Partnership, may not, on behalf of the Upper Tier Limited Partnership as a
limited partner of the Lower Tier Limited Partnership, take the following
actions without the consent of JMB LP: (i) consent to any Adverse Transaction
pursuant to the Lower Tier Limited Partnership Agreement and the Property
Owning Partnership Agreements, (ii) exercise the Upper Tier Limited
Partnership's Put Right, (iii) effect a sale of the Upper Tier Limited
Partnership's interest in the Lower Tier Limited Partnership if such
transaction would constitute an Adverse Transaction, (iv) consent to certain
amendments of the Lower Tier Limited Partnership Agreement or the Property
Owning Partnership Agreements, (v) consent to the dissolution of the Lower
Tier Limited Partnership or the Property Owning Partnerships pursuant to the
Lower Tier Limited Partnership Agreement, or (vi) cause or permit (to the
extent within the Upper Tier GP Corp's reasonable control) any Adverse
Transaction; provided, however, that the Upper Tier GP Corp will be under no
obligation to commence litigation or to incur any expense (unless JMB LP funds
such expense) in order to avoid or prevent an Adverse Transaction.
Subject to the provisions described below, the Upper Tier Limited
Partnership Agreement provides that limited partners may not transfer their
interests in the Upper Tier Limited Partnership without the prior written
consent of the Upper Tier GP Corp. Such consent may be granted or withheld by
the Upper Tier GP Corp in its sole discretion. Notwithstanding the foregoing
provision at any time after the Effective Date JMB LP will have the right to
cause the Upper Tier GP Corp to purchase or designate an entity to purchase
JMB LP's partnership interest, as a limited partner, in the Upper Tier Limited
Partnership, for a Cash amount calculated in the same manner as the Put Price.
The Upper Tier Limited Partnership Agreement also provides that the Upper Tier
GP Corp. will, at the request of JMB LP, cause the Upper Tier Limited
Partnership to exercise its right under the Lower Tier Limited Partnership
Agreement to cause the REIT to purchase or designate an entity to purchase the
Upper Tier Limited Partnership's interest in the Lower Tier Limited
Partnership. JMB LP will pay all transfer taxes, gains taxes and similar costs
incurred in connection with the exercise of such rights, including any
additional transfer taxes and transfer gains taxes which would be
retroactively assessed with respect to the transfer of the Properties by the
Debtors to the Property Owning Partnerships pursuant to the Plan by reason of
the exercise of such rights.
Property Owning Partnership Agreements
The description of the Property Owning Partnership Agreements set forth
below, prepared by the legal counsel of the Ad Hoc Committee, does not purport
to be complete and is qualified in its entirety by reference to the Property
Owning Partnership Agreements, copies of which are included in the
PlanSupplement.
Pursuant to the Debt Contribution Agreement and the Property Contribution
Agreement, on the Effective Date (i) the Lower Tier Limited Partnership will
contribute to the 1290 Property Owning Partnership One Hundred Seventy One
Million Four Hundred Ninety One Thousand Eight Hundred Seventy Six Dollars
($171,491,876) of the Contributed Debt and the 1290 Property as a capital
contribution in exchange for a ninety nine percent (99%) partnership interest,
as limited partner, and (ii) the Lower Tier Limited Partnership will
contribute to the 237 Property Owning Partnership One Hundred Twenty Eight
Million Five Hundred Eight Thousand One Hundred Twenty Four Dollars
($128,508,124) of the Contributed Debt and the 237 Property as a capital
contribution in exchange for a ninety nine percent (99%) partnership interest,
as limited partner. The Property Owning Partnership Agreements do not require
either the Lower Tier Limited Partnership, as limited partner, or the GP
Corps, as general partner, to make additional capital contributions. The GP
Corps, as general partners of the Property Owning Partnerships will be
required to use their best efforts to cause the Property Owning Partnership to
make adequate distributions to the Lower Tier Limited
42
Partnership so that the Lower Tier Limited Partnership may in turn make
adequate distributions to the REIT in order to enable the REIT to pay
dividends so as to satisfy the Internal Revenue Code requirements for
qualifying as a real estate investment trust. See 'TAX CONSEQUENCES OF THE
PLAN TO HOLDERS OF SENIOR CLAIMS--REIT Taxation.'
The Property Owning Partnership Agreements provide that, except with
respect to Adverse Transactions, in exercising their authority as general
partners, the GP Corps may, but will be under no obligation to, take into
account the tax consequences to any limited partners (and any partners
thereof) of any action taken by the GP Corps, provided, that, if the GP Corps
decide to refinance any outstanding indebtedness of the Property Owning
Partnerships, the GP Corps will, until the Approval Right Termination Date,
use commercially reasonable efforts to structure such refinancing in a manner
that allows all of the Property Owning Partnerships' non-recourse indebtedness
to be included in the tax basis of the limited partners' partnership
interests.
Pursuant to the Property Owning Partnership Agreements, all distributions
of net cash flow will be distributed in accordance with the respective
ownership interests of the partners and will be made from time to time as
determined by the GP Corps but in any event not less frequently than
quarterly. The Property Owning Partnership Agreements may not be amended
without the written consent of both the general partner and limited partner.
Until the Approval Right Termination Date, the GP Corps, as general partners
of the Property Owning Partnerships, may not, without the written consent of
the Lower Tier Limited Partnership cause or permit (to the extent within the
GP Corps' reasonable control) any Adverse Transaction, provided, however, that
the GP Corps will be under no obligation to commence litigation or to incur
any expense (unless JMB LP funds such expense) in order to avoid or prevent an
Adverse Transaction from occurring. All consents of the Lower Tier Limited
Partnership, described in this paragraph, may only be granted with the consent
of JMB LP pursuant to the Upper Tier Limited Partnership Agreement.
The Property Owning Partnership Agreements provide that, subject to
certain limitations relating to Adverse Transactions, the GP Corps, as general
partners, have full power and authority to do all things deemed necessary or
desirable by them to conduct the business of the respective Property Owning
Partnerships, including, without limitation, (i) the lending or borrowing of
money, (ii) the acquisition or disposition of any assets of the Property
Owning Partnerships, and (ii) the issuance of additional partnership interests
to additional limited partners. The Property Owning Partnership Agreements
also provide that the GP Corps may transfer all or any part of their
partnership interest, as general partner, in their sole discretion and without
the consent of the limited partners.
The Property Owning Partnership Agreements provide that the limited
partners may not transfer their interests in the Property Owning Partnerships
without the prior written consent of the respective GP Corps. Such consent may
be granted or withheld by the GP Corps in their sole discretion.
3. Assignment of Tenant Notes
O&Y Financial Company is the holder of a note issued by Robinson,
Silverman, Pearce & Aronsohn ('Robinson Silverman') dated April 1, 1989 in the
face amount of Six Million Five Hundred Thousand Dollars ($6,500,000), which
note was executed in connection with Robinson Silverman's lease at the 1290
Property. In 1991 and 1992, Robinson Silverman claimed certain concessions
regarding the payment terms of such note. Although 1290 LLC cannot locate any
records evidencing an agreement to such concessions, Robinson Silverman has
made payments reflecting such concessions and such payments have not been
rejected by 1290 LLC. Without expressing any opinion with regard thereto, if
such concessions were granted, the Robinson Silverman note would have an
outstanding principal balance as of the Petition Date of Five Million Three
Hundred Seventeen Thousand Six Hundred Ninety Dollars ($5,317,690), would bear
interest at seven and five tenths percent (7.5%) per annum, requires level
monthly payments of interest and principal of Seventy Five Thousand Dollars
($75,000) and would mature on September 1, 1999. If such concessions were not
granted, then the Robinson Silverman Note would bear interest at ten percent
(10%) and, based on the monthly payments of Seventy Five Thousand Dollars
($75,000) received from Robinson Silverman, the outstanding balance as of the
Petition Date would be approximately Six Million Two Hundred Fifty Four
Thousand One Hundred Forty Three Dollars ($6,254,143).
Baden is the holder of a note issued by E.M. Warburg, Pincus & Co., Inc.
('Warburg Pincus'), dated August 20, 1985, in the face amount of Four Million
Three Hundred Fifty Four Thousand Seven Hundred Fifty Eight Dollars and Nine
Cents ($4,354,758.09), which note was executed in connection with Warburg
Pincus' lease at the 237 Property. The note is payable on October 31, 1999 and
does not bear interest prior to its maturity.
On the Effective Date, pursuant to the Settlement Agreement, the O&Y
Affiliates holding the Tenant Notes will, at the REIT's direction, assign and
deliver to the applicable Property Owning Partnership the Tenant Notes and an
amount equal to all Cash paid in respect of the Tenant Notes from and after
January 1, 1996 through the Effective Date; provided, that an amount equal to
Three Hundred Thousand Dollars ($300,000) may be offset against the Cash
amount otherwise receivable in respect of such Tenant Notes, and paid to Devco
or its designee. It is a condition to consummation of the Plan that the
Bankruptcy Court in the chapter 11 cases of O&Y Financial Company and Baden
approve the transfer. The Tenant Notes are unsecured and the Debtors make no
representation as to the ability of Robinson Silverman and Warburg Pincus to
make payments under the Tenant Notes.
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4. Assignment of JMB Notes
The JMB Notes were executed and delivered by JMB LP to O&Y (Delaware)
Finance Corp. in 1984 in connection with the admission of JMB LP as a partner
in 237 Park Avenue Associates, 1290 Associates, 2 Broadway Associates and 2
Broadway Land Company. The JMB Notes are non-recourse to the maker and are
secured by a collateral assignment of JMB LP's interests in the foregoing
partnerships (and their successor entities). The JMB Notes currently bear
interest at the rate of twelve and seventy five hundredths percent (12.75%)
per annum, compounded monthly, and all of the JMB Notes, other than one,
mature on March 20, 1999 with the remaining note maturing on January 1, 2004,
with interest payable solely out of distributions to JMB LP under the
partnership or operating agreements of the foregoing partnerships or their
successor limited liability companies. The amount outstanding on an aggregate
basis under all the JMB Notes, as of April 1, 1996, was Eighty Three Million
Nine Hundred Eighteen Thousand Eight Hundred Fifteen Dollars ($83,918,815).
The JMB Notes were assigned by O&Y (Delaware) Financial Company to O&Y
MFC and pledged to Citibank, N.A. as security for loan(s) made by Citibank,
N.A. to O&Y (U.S.). It is a condition to the consummation of the Plan that, on
the Effective Date, Citibank release its lien on the JMB Notes. O&Y MFC will
assign to the REIT or its designee the JMB Notes and related security
agreements. Immediately prior to such assignment, the REIT or its designee
will enter into a Participation Agreement with an affiliate of JMB LP or
another entity acceptable to the holders of a majority of Existing Notes
pursuant to which the REIT or its designee will receive the first Seven
Hundred Fifty Thousand Dollars ($750,000) of payments made pursuant to, or in
respect of, the JMB Notes. Pursuant to such participation agreement, such
entity will receive any additional payments made pursuant to, or in respect
of, the JMB Notes. Amounts, if any, distributable to JMB LP from the Upper
Tier Limited Partnership, including pursuant to the REIT's
purchase option and JMB LP's put option described above, would first be
applied to the prepayment of the JMB Notes. The REIT or its designee and JMB
LP will thereafter enter into the JMB Notes Restatement Documents. The JMB
Notes as restated will continue to be non-recourse and secured by the JMB LP
interests in the Upper Tier Limited Partnership.
5. Transfer of Distributable Cash
The Indenture Trustee and the Debtors will transfer, convey and assign
all Distributable Cash then in their control to the REIT. Prior to such
transfer, the Indenture Trustee may deduct an amount equal to any reasonable
fees, costs and expenses due and owing to the Indenture Trustee under the
Indenture.
6. Assignment of Certain Assets Related to the Sale of 2 Broadway
1290 LLC will prior to the merger of the Debtors into the Upper Tier
Limited Partnership assign to the REIT all of its rights in certain assets
related to the sale of 2 Broadway (to the extent that the same have not been
paid to the Indenture Trustee prior to the Effective Date), including:
(a) the right to receive any surplus amounts in the Claim Reserve
and one half of any surplus in the Utility Tax Reserve under the 2
Broadway LP Bankruptcy Plan;
(b) the right to proceeds of certain tax certiorari proceedings
existing with respect to 2 Broadway (net of costs of collections and
payments to be made to tenants). See 'GENERAL INFORMATION--Principal Assets
and Liabilities of the Debtors;'
(c) the right to receive any remaining post-closing
apportionments under the contract of sale pursuant to which 2 Broadway
was sold; and
(d) the right to receive dividends and distributions under
certain non-transferable stock received by 2 Broadway LP in connection
with the bankruptcy of Drexel Burnham Lambert, Inc. a former tenant of 2
Broadway.
Upon the request of the REIT, 2 Broadway Associates will seek court
approval to substitute the REIT for 2 Broadway Associates in the above
referenced tax certiorari proceedings.
Although all of the rights in the assets listed above were assigned to
1290 LLC pursuant to the 2 Broadway Plan, 2 Broadway LP, 2 Broadway Associates
and 2 Broadway Land Company will also execute the aforesaid assignment to
convey to the REIT any remaining rights they may have thereto.
The proceeds from the foregoing assets were pledged to the Indenture
Trustee pursuant to Supplemental Indenture No. 5 and will be released from the
lien of the Indenture on the Effective Date. While it is difficult to value
the assets listed above, the Debtors estimate the value of such assets at
between One Million Dollars ($1,000,000) and Eight Million Dollars
($8,000,000) as of the Petition Date.
44
7. Description of the New Notes and the Restated Indenture
GENERAL
Unless a Conventional Financing Alternative is consummated on the
Effective Date, the New Notes will be issued, in an aggregate principal
amount of Four Hundred Million Dollars ($400,000,000) pursuant to the Plan and
the Restated Indenture. The following summary of certain provisions of the
Restated Indenture, prepared by counsel to the Ad Hoc Committee, does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the New Notes and Restated Indenture, including the definitions
therein of certain terms. A copy of the New Notes and Restated Indenture is
included in the Plan Supplement.
PLEDGE OF INTEREST IN TRUST ESTATE; DELIVERY OF INDENTURE
Pursuant to the Restated Indenture, the Property Owning Partnerships will
deliver to the Indenture Trustee, among other things, the Restated Mortgage
constituting a first mortgage lien on the Properties and a commitment or
binder for a mortgagee title insurance policy, with a liability limit at least
equal to Four Hundred Million Dollars ($400,000,000), insuring the validity of
the Restated Mortgage.
NEW NOTES
The New Notes will have a ten (10) year term and will bear interest at an
annual rate equal to Two Hundred Fifty (250) basis points above the average
ten-year Treasury rate over the ten business day period immediately prior to
the date that is the tenth business day prior to the Effective Date. The New
Notes will accrue interest from and including the date of issuance. Such
interest will accrue during each calendar month (based upon a year of twelve
(12) thirty (30) day months) and be payable by the Property Owning
Partnerships in arrears on the first Business Day of each calendar month and
upon the redemption or maturity thereof. Payments of interest only will be
made monthly for the first year. Thereafter, equal monthly payments of
principal and interest will be made based on a twenty five (25) year level
payment amortization schedule.
The New Notes will be prepayable without premium or penalty during the
period commencing on the Effective Date and ending on the date which is
eighteen (18) months after the Effective Date. Thereafter, prepayments will
require the payment of a prepayment premium calculated pursuant to the
Restated Indenture to provide yield maintenance protection. Partial
prepayments are permitted only in connection with a sale or refinancing of a
property or if there are excess casualty or condemnation proceeds. In the
latter case, no prepayment premium will be required.
The Restated Indenture provides that, for a period of eighteen (18)
months following issuance of the New Notes, the New Notes may be redeemed in
full in connection with a refinancing of the Properties for an amount not less
than Three Hundred Twenty Five Million Dollars ($325,000,000). In the event
the net proceeds of such refinancing are less than the then outstanding
principal balance of the New Notes, the holders of the New Notes will receive,
in addition to their share of the net Cash proceeds of the refinancing,
preferred stock issued by the REIT having a liquidation preference equal to
the shortfall. The terms of such preferred stock are set forth in a
Certificate of Designation annexed to the Restated Indenture, which provides
generally that (i) dividends will be paid on a quarterly basis at the same
rate that interest accrued on the New Notes, (ii) to the extent that the REIT
does not have sufficient Cash to pay any dividend, the REIT may pay such
dividend through the issuance of additional preferred stock, (iii) the REIT
may redeem such preferred stock at any time, and (iv) the REIT must redeem
such stock on the date which is two (2) years after the maturity date of the
refinancing in connection with which the preferred stock was issued or, to the
extent of available net proceeds, upon a prior sale or refinancing of a
Property.
Upon the sale or refinancing of a property and payment to the Indenture
Trustee of the net proceeds of such transaction, the applicable Property will
be released from the lien of the Restated Mortgage, with a minimum release
price of Three Hundred Million Dollars ($300,000,000) for the 1290 Property
and One Hundred Eighty Million Dollars ($180,000,000) for the 237 Property.
After such a prepayment, the monthly payment under the New Notes will be
adjusted to reflect the reduced outstanding principal amount and the remainder
of the initial twenty five (25) year amortization term.
RESTRICTIONS ON TRANSFER
Pursuant to the Restated Indenture, a holder of New Notes may not
transfer such holder's New Notes except (i) to qualified institutional buyers
in reliance on the exemption from the registration requirements of the
Securities Act provided by Rule 144A, (ii) pursuant to an effective
registration statement under the Securities Act and any applicable state or
foreign securities laws, or (iii) upon receipt by the Property Owning
Partnerships and the Indenture Trustee of an opinion of counsel reasonably
acceptable to the Property Owning Partnerships and the Indenture Trustee and
their counsel that such registration is not required. See 'SECURITIES ACT
CONSIDERATIONS.'
45
Each New Note authenticated and issued under the Restated Indenture shall
bear a legend substantially as follows:
THIS NOTE HAS BEEN ISSUED PURSUANT TO AN EXEMPTION PROVIDED BY SECTION
1145(a)(i) OF THE UNITED STATES BANKRUPTCY CODE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES ACT') OR ANY STATE
SECURITIES OR 'BLUE SKY' LAWS. NOTWITHSTANDING THE FOREGOING, IN ORDER TO
COMPLY WITH SECTION 304(b)(1) OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
PURSUANT TO THAT CERTAIN AMENDED AND RESTATED INDENTURE, DATED AS OF , 1996
(THE 'RESTATED INDENTURE'), REFERRED TO IN THIS NOTE, THIS NOTE SHALL BE
TREATED AS A 'RESTRICTED SECURITY' WITHIN THE MEANING OF RULE 144 UNDER THE
SECURITIES ACT. NO RESALE OR TRANSFER OF THIS NOTE MAY BE MADE EXCEPT (1) TO
QUALIFIED INSTITUTIONAL BUYERS IN RELIANCE ON THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144A, (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
ANY APPLICABLE STATE OR FOREIGN SECURITIES LAWS OR (3) UPON RECEIPT BY 237
PARK PARTNERS, L.P. AND 1290 PARTNERS, L.P. (COLLECTIVELY, THE 'COMPANY') AND
BANKERS TRUST COMPANY, AS TRUSTEE (THE 'TRUSTEE'), OF AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY AND THE TRUSTEE AND THEIR COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
EVENTS OF DEFAULT 'Events of Default' under the Restated Indenture include:
(a) a default with respect to payment under the New Notes when due of (i) any
interest or regularly scheduled payment of principal on any New Note
continuing for a period of five (5) Business Days after notice thereof to the
Property Owning Partnerships, (ii) any non-scheduled principal payment or
prepayment premium or (iii) any other amount due and payable by the Property
Owning Partnerships pursuant to the New Notes, the Restated Indenture or any
Security Document and the continuation of such default for a period of fifteen
(15) days after notice thereof to the Property Owning Partnerships; (b)(i)
default in the observance or performance of, or breach of, any other term,
condition or covenant made in the New Notes, the Restated Indenture or any
Security Document or (ii) any representation or warranty of the Property
Owning Partnerships in the Restated Indenture, any certificate, report,
financial statement, affidavit or other instrument delivered in connection
therewith, the New Notes or any Security Document is breached, in any material
respect, subject to cure rights of the Property Owning Partnerships (other
than with respect to wilful
misrepresentation); or (c) insolvency, voluntary or involuntary bankruptcy or
other reorganization of, or the appointment of or taking possession by a
custodian, receiver, liquidator, trustee, or similar official of any
substantial part of, a Property Owning Partnership or any general partner
thereof; or (d) the occurrence of any other Event of Default under any
Security Document.
The occurrence of any event which upon the expiration of any applicable
notice and cure periods would constitute an Event of Default described in
clause (a) above is referred to as a 'Monetary Default;' the occurrence of any
event which upon the expiration of any applicable notice and cure periods
would constitute an Event of Default described in clauses (b) and (d) above is
referred to as a 'Non-Monetary Default;' and any Event of Default specified in
clause (c) above is referred to as a 'Bankruptcy Default.'
NOTICES OF DEFAULT
Upon becoming aware of the occurrence of any default under the Restated
Indenture or under the New Notes or any Security Document, the Indenture
Trustee will give written notice of such default to each holder of New Notes.
If such default is a Bankruptcy Default, the Indenture Trustee shall also give
written notice of such default to the Property Owning Partnerships.
Upon the occurrence of a Monetary Default, holders of at least twenty
five percent (25%) in Aggregate Outstanding Principal Balance of outstanding
New Notes may, by written notice to the Indenture Trustee, direct the
Indenture Trustee to deliver a notice of default to the Property Owning
Partnerships. Upon the occurrence of a Non-Monetary Default, a majority in
Aggregate Outstanding Principal Balance of holders of New Notes may, by
written notice to the Indenture Trustee, direct the Indenture Trustee to
deliver a notice of default to the Property Owning Partnerships. Upon the
receipt of any such notice from holders of New Notes, the Indenture Trustee
will give notice of the default to the Property Owning Partnerships and each
holder of New Notes.
RIGHTS UPON AN EVENT OF DEFAULT
If any Event of Default should occur and be continuing, the Indenture
Trustee, upon the written request of holders of at least twenty five percent
(25%) in Aggregate Outstanding Principal Balance of New Notes, will, by a
notice in writing to the Property Owning Partnerships, declare all New Notes
to be due and payable immediately, and upon any such declaration, the New
Notes will become immediately due and payable. The Indenture Trustee may not
accelerate the payment of New Notes without such direction.
46
Upon the occurrence of any Bankruptcy Default, without any notice to the
Property Owning Partnerships or any other act by the Indenture Trustee, or the
holders of New Notes, the principal of all of the New Notes (together with
accrued interest thereon) will become immediately due and payable.
If, at any time after the acceleration of the New Notes by reason of the
occurrence of a Monetary Default but before any sale of the Trust Estate, or
any part thereof, has been made, all arrears of principal and interest upon
the New Notes, together with all sums paid or advanced by the Indenture
Trustee or the holders of New Notes under any provision of the Restated
Indenture and the reasonable and proper charges, expenses and liabilities of
the Indenture Trustee and its agents and counsel, and all other sums then
payable by the Property Owning Partnerships under the Restated Indenture
(except the principal of, and interest on, such New Notes due and payable
solely by virtue of such acceleration), will either be paid by or for the
account of the Property Owning Partnerships and/or collected out of the Trust
Estate or provision satisfactory to the Indenture Trustee will be made for
such payment, then, holders of a majority in Aggregate Outstanding Principal
Balance of New Notes, by written notice to the Property Owning Partnerships
and to the Indenture Trustee, may rescind and annul the acceleration of the
New Notes.
If, at any time after the acceleration of the New Notes by reason of the
occurrence of a Non-Monetary Default, but before any sale of the Trust Estate,
or any part thereof, will have been made, such Non-Monetary Default will
either be remedied or provisions satisfactory to the Indenture Trustee will be
made therefor, then, the holders of sixty six and two thirds percent (66 2/3%)
in Aggregate Outstanding Principal Balance of the New Notes, by written notice
to the Property Owning Partnerships and to the Indenture Trustee, may waive
the Non-Monetary Default and rescind and annul the acceleration of the New
Notes.
The holders of a majority in Aggregate Outstanding Principal Balance of
the New Notes will have the right, during the continuance of an Event of
Default:
(1) to require the Indenture Trustee to proceed to enforce the
Restated Indenture (to the extent permitted by law) either by judicial
proceedings for the enforcement of the payment of the New Notes and the
foreclosure of the Restated Indenture and (subject to the terms of the
Restated Indenture) the Security Documents securing the New Notes and the sale
of the Trust Estate or, at the election of the Indenture Trustee, by the
exercise of the power of sale conferred by the Restated Indenture or in any
Security Document; and
(2) to the extent permitted by law, to direct the time, method
and place of conducting any proceeding for any remedy available to the
Indenture Trustee or exercising any trust or power conferred upon it under the
Restated Indenture or any Security Document; provided, however, that the
Indenture Trustee will have the right to decline to follow any such direction
if the Indenture Trustee is advised by counsel that the action or proceeding
so directed may not lawfully be taken or if the Indenture Trustee in good
faith determines that the action or proceeding so directed would involve the
Indenture Trustee in personal liability or would be unjustly prejudicial to
holders of New Notes not parties to such direction.
WAIVER OF DEFAULTS
An Event of Default by the Property Owning Partnerships will be deemed
waived under the Restated Indenture upon receipt by the Indenture Trustee of
the written consent of holders of New Notes as follows: (i) a Monetary Default
and a Bankruptcy Default will be deemed waived only upon the written consent
of each holder of New Notes and (ii) provided that the Indenture Trustee has
not, by a notice in writing to the Property Owning Partnerships, declared all
New Notes to be due and payable following a Non-Monetary Default, a
Non-Monetary Default will be deemed waived upon the written consent of the
holders of a majority in Aggregate Outstanding Principal Balance of the New
Notes.
Upon any such waiver, such default will cease to exist, and any Event of
Default arising therefrom will be deemed to have been cured for every purpose
of the Restated Indenture, but no such waiver will extend to any subsequent or
other default or impair any right resulting from such default or impairment.
SUPPLEMENTAL INDENTURES
With the consent of the holders of a majority of the Aggregate
Outstanding Principal Balance of the New Notes, the Property Owning
Partnerships and the Indenture Trustee may enter into an indenture or
indentures supplemental to the Restated Indenture for the purpose of changing
the provisions of the Restated Indenture and the New Notes; provided that no
such supplemental indenture may, without the consent of the holder of each New
Note affected thereby, change certain material provisions of the Restated
Indenture such as the interest rate and payment dates.
The Indenture Trustee may in its discretion determine whether or not and
the extent to which any New Notes would be affected by any amendment of the
New Notes or the Restated Indenture or by a supplemental indenture and any
such determination will be conclusive upon the holders of all New Notes. The
Indenture Trustee will not be liable for any such determination made in good
faith.
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In connection with the redemption in full of the New Notes, upon the
Property Owning Partnerships' request, (i) the Trustee will assign the
Restated Mortgage to the Property Owning Partnerships' designee, (ii) the
holders of the New Notes will deliver the New Notes to the Trustee, and (iii)
the Trustee will endorse such notes in accordance with the Property Owning
Partnerships' direction pursuant to a power of attorney granted to the Trustee
for that purpose by the holders of the New Notes under the Restated Indenture.
In the event that the Property Owning Partnerships request the holders of
New Notes to deliver their New Notes to the Trustee for endorsement to a
successor mortgagee in connection with a redemption in full, the redemption
price payable to any such holder which does not deliver its New Note on a
timely basis may be reduced by the amount of any mortgage recording tax which
may be payable with respect to the outstanding principal balance of such New
Note. Themortgage recording tax currently applicable in the County of New York
is two and seventy five hundredths (2.75%) percent.
In the case of a partial redemption of the New Notes in connection with a
sale or refinancing of one (but not both) of the Properties, at the Property
Owning Partnerships' request:
(i) the Property Owning Partnerships will deliver to the Trustee,
with respect to each Note, one substitute note ('Substitute Note A') in
the principal amount required to be purchased from each Noteholder in
compliance with the release provisions of the Restated Mortgage and the
Restated Indenture and a second substitute note ('Substitute Note B') in the
principal amount of the then outstanding principal amount of the Note for
which it is being substituted minus the principal amount of the Substitute
Note A;
(ii) the Trustee and the Property Owning Partnerships will
execute a mortgage severance agreement, pursuant to which the lien of
the Restated Mortgage will be severed and apportioned into two mortgage liens,
which will be evidenced by two substitute mortgages one of which will encumber
the Property to be released ('Substitute Mortgage A') and the other shall
encumber the Property to remain subject to the Indenture ('Substitute Mortgage
B'); and
(iii) the Trustee (a) will endorse for each Noteholder each
Substitute Note A at the direction of the Property Owning Partnerships
pursuant to a power of attorney granted to the Trustee for that purpose by the
holders of the New Notes under the Restated Indenture, (b) will assign to the
Property Owning Partnerships' designee Substitute Mortgage A, and (c) will
deliver to each Noteholder in substitution for its New Notes, the Substitute
Notes B.
TRUST INDENTURE ACT OF 1939
With respect to the issuance of the New Notes, the Debtors intend to
satisfy the requirements for the exemption from registration under the
Securities Act provided by section 4(2) thereof. On that basis, the Restated
Indenture will be exempt from the indenture qualification requirements of the
Trust Indenture Act of 1939 (the 'TIA') by virtue of the exemption contained
in section 304(b)(1) of the TIA. Accordingly, the Restated Indenture will not
satisfy all of the requirements of an indenture required to be qualified under
the TIA. See 'THE JOINT PLAN OF REORGANIZATION--Risk Factors--Ownership by
Apollo.'
In connection with such exemption, each Distributee will be required to
represent on its Ballot whether or not it is an 'accredited investor' under
one of the categories set forth in Rule 501(a)(1) through (8) promulgated
under the Securities Act and whether or not it is acquiring Plan Securities
with a view to distribution. If Distributees fail to provide such information,
the Debtors will, pursuant to an order of the Bankruptcy Court, undertake
discovery to determine whether such persons are accredited investors. THE
PROPERTY OWNING PARTNERSHIPS ENCOURAGE EACH DISTRIBUTEE WHO RECEIVES A BALLOT
TO CONSIDER CAREFULLY AND CONSULT WITH HIS OR ITS OWN LEGAL ADVISOR(S) WITH
RESPECT TO SUCH DISTRIBUTEE'S STATUS AS AN 'ACCREDITED INVESTOR.'
8. Description of the Restated Mortgage
The following summary of certain provisions of the Restated Mortgage,
prepared by legal counsel to the Ad Hoc Committee, does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Restated Mortgage, including the definition therein of certain terms. A
copy of the Restated Mortgage is included in the Plan Supplement.
The Property Owning Partnerships will be permitted to undertake leasing
activity on market terms without the consent of the Indenture Trustee. The
Indenture Trustee will upon the request of the Property Owning Partnerships
enter into non-disturbance agreements for leases covering fifty thousand
(50,000) or more rentable square feet of space at the Properties.
Modifications and terminations of leases are subject to certain limitations
set forth in the Restated Mortgage.
Any transfer of a Property or any interest therein or in the Property
Owning Partnerships requires the consent of the Indenture Trustee, provided
that transfers of interests among direct or indirect partners in the Property
Owning Partnership, of shares of stock of the REIT and interests in JMB LP and
Equityco do not require Indenture Trustee consent.
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The Restated Mortgage requires the Property Owning Partnerships to
maintain customary insurance with respect to the Properties. The Property
Owning Partnerships are entitled to adjust and settle insurance claims without
the consent of the Indenture Trustee if no Event of Default has occurred and
the estimated cost of repair or restoration does not exceed Two Million
Dollars ($2,000,000). The Property Owning Partnerships are required to restore
any casualty affecting the Properties, whether or not sufficient proceeds are
available, and the Indenture Trustee must make insurance proceeds available to
pay the cost of restoration provided (i) no Event of Default shall have
occurred and be continuing, (ii) the restoration can be completed on or before
the earlier to occur of six months prior to the maturity date of the New Notes
and a date which is twenty four months after the occurrence of the casualty,
and (iii) not more than fifty percent (50%) of the improvements on the
affected Property have been damaged or destroyed or Leases demising, in the
aggregate, not more than fifty percent (50%) of the total net rentable square
feet of space in the affected Property shall have been terminated as a result
of the casualty.
The Restated Mortgage requires the Property Owning Partnerships to
maintain an escrow with the Indenture Trustee to ensure the payment of real
estate taxes and insurance premiums.
The Restated Mortgage and Restated Indenture require the Property Owning
Partnerships to deliver to the Indenture Trustee copies of the rent rolls and
audited financial statements with respect to the Properties within ninety (90)
days after the end of each fiscal year of the Property Owning Partnerships and
unaudited statements within forty five (45) days after the end of each fiscal
quarter of the Property Owning Partnerships.
The Restated Mortgage requires that the Properties be managed at all
times by a prominent professional property manager and leasing agent which at
the time of its engagement manages an aggregate of at least eight million
(8,000,000) square feet of net rentable space in first class urban office
buildings in the United States.
The Property Owning Partnerships' obligation to repay the New Notes is,
in general, without recourse to other assets of the Property Owning
Partnerships or to the partners thereof.
EVENTS OF DEFAULT UNDER THE RESTATED MORTGAGE
In addition to the Events of Default under the Restated Indenture
described above, the Restated Mortgage provides that any of the following
events will constitute an event of default under the Restated Mortgage:
(1) if either Property Owning Partnership fails to pay, within
fifteen (15) days after notice and demand by the Indenture Trustee, any
installment then due and payable of any assessment against the Properties for
local improvements which may become a lien on the Properties; or
(2) if any of the provisions in the Restated Mortgage restricting
transfers of the Properties, interests in the Properties or interests in
the Property Owning Partnerships are in any way contravened; or
(3) if any of the insurance policies required by the Restated
Mortgage are not kept in full force and effect; or
(4) if a default, beyond any applicable grace and cure periods,
occurs under any other mortgage covering any part of either Property,
whether superior or inferior in lien to the Restated Mortgage; or
(5) if a default occurs and is continuing under any of the other
terms, covenants or conditions of the Loan Documents for fifteen (15)
days after notice from the Indenture Trustee, in the case of any default which
can be cured by the payment of a sum of money, or for thirty (30) days after
notice from the Indenture Trustee in the case of any other default, provided
that if such default cannot reasonably be cured within such thirty (30) day
period and the Property Owning Partnerships have commenced to cure such
default within such thirty (30) day period and thereafter diligently and
expeditiously proceed to cure the same, such thirty (30) day period will be
extended for so long as the Property Owning Partnerships in the exercise of
due diligence require to cure such default, but in any event, not for more
than one hundred eighty (180) days.
9. Cash Distribution in Lieu of New Notes; Conventional Financing
Alternative
The holders of a majority in principal amount of Existing Notes
(excluding Existing Notes held by O&Y Affiliates) may obtain a commitment for
non-participating mortgage loan financing to be consummated on the Effective
Date on terms acceptable to such holders from a bank, insurance company or
other financial institution or pursuant to a securitized financing
transaction, in either case secured by the Properties, in an amount not less
than Three Hundred Twenty Five Million Dollars ($325,000,000) in lieu of
issuing New Notes and on terms otherwise not less favorable than those set
forth in Exhibit 6 to the Disclosure Statement.
On May 23, 1996, the Bankruptcy Court entered an order authorizing the
Debtors to pay Chase a due diligence fee equal to Two Hundred Fifty Thousand
Dollars ($250,000). Such fee was paid to Chase and Chase is currently
conducting due diligence and engaging in syndication efforts.
49
Pursuant to a commitment letter (the 'Commitment Letter') to be issued
upon Bankruptcy Court approval of the payment of fees in connection therewith
dated August 5, 1996, Chase has agreed to provide the Property Owning
Partnerships with a mortgage loan that will equal Four Hundred Twenty Million
Dollars ($420,000,000), of which Two Hundred Forty Million Dollars
($240,000,000) will be allocated to the 1290 Property Owning Partnership and
One Hundred Eighty Million Dollars ($180,000,000) will be allocated to the 237
Property Owning Partnership. The loan will have a term of five years and Chase
will be the administrative agent of the loan. Chase intends to syndicate the
loan to other lenders.
The loan will require the Property Owning Partnerships to make fixed
principal amortization payments equal to, in the aggregate, Forty Million
Dollars ($40,000,000). However, in the event that any such scheduled payments
would cause the REIT to fail to comply with any income test requirements,
then the Property Owning Partnerships may, in lieu of such payment, post an
irrevocable letter of credit in the amount of such payment.
The loan will bear interest at the LIBOR Rate plus 1.565%. In addition,
Chase and the other lenders will receive certain fees. The Property Owning
Partnerships will be required to purchase interest rate protection product,
such as an interest rate swap or interest rate cap for a fixed rate such that
the LIBOR Rate (prior to the additions of the 1.565% spread) shall not exceed
7.685% for the entire principal amount of the loan.
Under the loan, the lenders will receive as collateral (i) first fee
mortgages on the land and improvements of the Properties, and (ii) assignments
of leases, rents, security interests in all reserves, interest rate protection
products, and personal property related to the Properties. The lenders will
also receive a pledge of the Warburg Pincus Note and the Robinson Silverman
Note. The loan will require the Property Owning Partnerships to enter into
lock box agreements for the collection of rents and the establishment of
escrow accounts for real estate taxes and insurance. Commencing thirty six
(36) months from the closing of the loan, the Property Owning Partnership will
also be required to establish a reserve account pursuant to which each of the
Property Owning Partnerships will deposit 50% of its monthly net cash flow
into a reserve account until the combined balance of the reserve accounts is
equal to Fifteen Million Dollars ($15,000,000). In lieu of any payment to such
reserve account, a Property Owning Partnership may post an irrevocable letter
of credit.
The loan will require the consent of Chase for the transfer of any direct
or indirect interest in the Property Owning Partnerships, except with respect
to the transfer of all or any portion of the interest owned by JMB LP in the
Upper Tier Partnership as to which transfer, no consent shall be required.
Transfers of REIT Stock will be subject to the following restriction: at all
times, not less than 30% of the shares of the REIT will be held by 'Permitted
Owners.' Chase will preapprove as Permitted Owners, Apollo, Whitehall,
Oaktree, Tishman Speyer and such other existing Noteholders as Chase may agree
at or prior to closing of the Loan. Permitted Owners would also include real
estate investors experienced in the ownership and management of major office
buildings, with a current net worth of at least $100,000,000 and total assets
of at least $200,000,000 and approved by Chase (not to be unreasonably
withheld) and any other holder approved in its sole discretion. The Property
Owning Partnerships will be required to cause the REIT's transfer agent to
provide to Chase, monthly, a list of the then current stockholders of the
REIT, indicating, with respect to each stockholder, the percentage of total
outstanding shares owned by it. If at any time, Permitted Owners shall own
less than 30% of the total outstanding shares of the REIT, the loan would be
subject to acceleration if such event continued for a period of six months
after notice from Chase, unless the Property Owning Partnerships shall have
obtained a commitment for refinancing in form and substance acceptable to
Chase during such six month period, in which case acceleration would not occur
for an additional three months after the expiration of such six month period.
The Debtors anticipate seeking Court approval of the commitment and
payment of the fees thereunder on notice to all Noteholders in the immediate
future. There can be no assurance that the Conventional Financing Alternative
will be consummated.
GROSS PROCEEDS LESS THAN $400,000,000
If the Conventional Financing Alternative is consummated on the Effective
Date and the gross proceeds derived therefrom are less than Four Hundred
Million Dollars ($400,000,000), (x) the Senior Claim Note Cap will be adjusted
to an amount (as so adjusted, the 'Adjusted Note Cap') equal to ninety seven
and seventy five hundredths percent (97.75%) of the gross proceeds from the
consummation of the Conventional Financing Alternative and (y) the Senior
Claim Equity Cap will be adjusted to an amount (as so adjusted, the 'Adjusted
Equity Cap') equal to Twelve Million (12,000,000) shares less the MLL Equity
Allocation. 'MLL Equity Allocation' means the number of shares calculated by
multiplying Twelve Million (12,000,000) shares times a fraction, (x) the
numerator of which will be Thirty Million Dollars ($30,000,000) less two and
twenty five hundredths percent (2.25%) of the Conventional Financing Cash
Distribution, and (y) the denominator of which is (i) Seven Hundred Million
Dollars ($700,000,000) less (ii) the gross proceeds from the consummation of
the Conventional Financing Alternative plus (iii) the net proceeds, if any,
from such Conventional Financing Alternative above Four Hundred Million
Dollars ($400,000,000). In such event, (a) the Standard Note Distribution will
be recalculated to equal the product of Four Hundred Thirty Three Thousand One
Hundred Ninety One Dollars and Thirty Two Cents ($433,191.32) times a
fraction, the numerator of which will be the Adjusted Note Cap and the
denominator of which will be the Senior Claim Note Cap, (b) the Standard Stock
Distribution will be recalculated to equal the product of Twelve Thousand
Three Hundred Sixty Four and Twenty Three Hundredths (12,364.23) shares of
REIT
50
Stock times a fraction, the numerator of which will be the Adjusted Equity Cap
and the denominator of which will be the Senior Claim Equity Cap and (c) the
amount of New Notes and REIT Stock to be distributed to any holder of an
Allowed Senior Claim electing a Non-Standard Election will be recalculated
using the Adjusted Note Cap in lieu of the Senior Claim Note Cap and the
Adjusted Equity Cap in lieu of the Senior Claim Equity Cap, wherever the
Senior Claim Note Cap and Senior Claim Equity Cap, respectively, are used in
calculating distributions to holders of Senior Claims electing Non-Standard
Elections. Upon such recalculation, the holders of Allowed Senior Claims
otherwise entitled to receive New Notes (whether pursuant to a Standard
Election or a Non-Standard Election) will receive, in lieu of New Notes, an
amount, in Cash, equal to (A) ninety seven and seventy five hundredths percent
(97.75%) of the Conventional Financing Cash Distribution, multiplied by (B) a
fraction, the numerator of which will be the amount of New Notes which would
otherwise be distributed to such holder (after any recalculation described
above) and the denominator of which will be the Adjusted Note Cap. The Morgan
Loan Lenders will be entitled to receive, in lieu of New Notes, an aggregate
amount, in Cash, equal to two and twenty five hundredths percent (2.25%) of
the Conventional Financing Cash Distribution and in lieu of the distribution
of Eight Hundred and Forty Thousand (840,000) shares of REIT Stock, a number
of shares of REIT Stock equal to the MLL Equity Allocation.
GROSS PROCEEDS GREATER THAN OR EQUAL TO $400,000,000
If the Conventional Financing Alternative is consummated on the Effective
Date, and the gross proceeds derived therefrom are greater than or equal to
Four Hundred Million Dollars ($400,000,000), then (A) each holder of an
Allowed Senior Claim who is otherwise entitled to receive New Notes and each
Morgan Loan Lender will receive, in lieu of the New Notes they would otherwise
be entitled to receive, a Cash distribution in an amount equal to the product
of (i) the principal amount of New Notes it would have otherwise received
multiplied by (ii) a fraction, the numerator of which will be the Conventional
Financing Cash Distribution (which, by definition, may not exceed Four Hundred
Million Dollars ($400,000,000), and the denominator of which is Four Hundred
Million Dollars ($400,000,000), (B) the Standard Stock Distribution will be
recalculated to equal the product of Twelve Thousand Three Hundred Sixty Four
and Twenty Three Hundredths shares of REIT Stock (12,364.23) multiplied by a
fraction, the numerator of which will be the Adjusted Equity Cap and the
denominator of which will be the Senior Claim Equity Cap, (C) the amount of
REIT Stock to be distributed to any holder of an Allowed Senior Claim electing
a Non-Standard Election will be recalculated using the Adjusted Equity Cap in
lieu of the Senior Claim Equity Cap wherever the Senior Claim Equity Cap is
used in calculating distributions to holders of Senior Claims electing
Non-Standard Distributions, and (D) the amount of REIT Stock to be distributed
to the Morgan Loan Lenders will be changed from Eight Hundred Forty Thousand
(840,000) shares of REIT Stock to the MLL Equity Allocation. If the net
proceeds of any mortgage loan financing consummated pursuant to the
Conventional Financing Alternative are greater than Four Hundred Million
Dollars ($400,000,000), such excess will be held by the Property Owning
Partnerships and/or distributed in accordance with the Property Owning
Partnership Documents. If the mortgage loan negotiated by the Ad Hoc Committee
with Chase is consummated, there would be gross proceeds of Four Hundred
Twenty Million Dollars ($420,000,000).
VCG CONVENTIONAL FINANCING FEE
If the Conventional Financing Alternative (including the proposed
mortgage loan to be provided by Chase) is consummated, VCG will be paid a fee
of One Million Dollars ($1,000,000) by the REIT on the Effective Date.
10. Description of Registration Rights Agreement and Stock Option Plan
The descriptions of the Registration Rights Agreement and the Stock
Option Plan set forth below, prepared by legal counsel to the Ad Hoc
Committee, do not purport to be complete and are qualified in their entirety
by reference to the Registration Rights Agreement and the Stock Option Plan,
copies of which are included in the Plan Supplement.
REGISTRATION RIGHTS AGREEMENT
On the Effective Date, the Registration Rights Agreement, between the
REIT and the holders of REIT Stock distributed under the Plan, will become
effective. Pursuant to the Registration Rights Agreement, Apollo is given the
right to 'demand' that the REIT register for sale its REIT Stock on three
occasions and Oaktree, Whitehall and any other stockholder from whom a
director of the REIT receives compensation are given the right to demand such
registration on one occasion. These rights will become effective on January 1,
1997. If a holder of Registrable Securities making a 'demand' cannot dispose
of at least seventy five percent (75%) of its Registrable Securities in such
registered offering, such holder's demand right will be reinstated. A holder
of Registrable Securities that has been granted demand rights may not exercise
such rights within the twelve (12) month period immediately following the sale
of Registrable Securities pursuant to a previously exercised demand if such
holder did not exercise its right to cause all of its Registrable Securities
to be included in such prior registered offering. Other holders of Registrable
Securities are granted 'piggy-back' registration rights in connection with the
sale by the REIT of its securities in a registered offering. 'Registrable
Securities' means (i) the shares of REIT Stock issued pursuant to the Plan to
the stockholders of the REIT and (ii) any securities issued or issuable with
respect to such shares of REIT Stock by way of a stock dividend or stock split
or in
51
connection with a combination of shares, recapitalization, merger,
consolidationor other reorganization. Any particular Registrable Securities
will cease to besuch when (y) a registration statement under the Registration
Rights Agreement covering such Registrable Securities has been declared
effective and such Registrable Securities have been disposed of pursuant to
such effective registration statement, or (z) such Registrable Securities have
been distributed to the public pursuant to Rule 144 promulgated under the
Securities Act. See 'RISK FACTORS--Absence of Public Market.' Holders of
Registrable Securities will be subject to customary pro rata cutbacks on the
number of shares they intend to sell, if, in the opinion of the underwriter,
the sale of all such shares would adversely affect the offering. Expenses in
connection with an offering will be paid pro rata by the holders of
Registrable Securities participating in the
offering.
STOCK OPTION PLAN
On the Effective Date, the Board of Directors will adopt the Stock Option
Plan, the purpose of which is to attract and retain qualified persons as
directors. Pursuant to the Stock Option Plan, the Board of Directors of the
REIT will have the authority to issue to members of the REIT's Board of
Directors options to purchase, in the aggregate, One Hundred Thousand
(100,000) shares of REIT Stock. Pursuant to the Plan and the Stock Option
Plan, on the Effective Date, the initial members of the REIT's Board of
Directors will be granted options entitling each director to purchase an
aggregate of Three Thousand (3,000) shares of REIT Stock at an exercise price
of Twenty Five Dollars ($25) per share. Thereafter, each Director who is
elected or appointed after the Effective Date will be granted options to
purchase Three Thousand (3,000) shares of REIT Stock on the date of the
meeting of the REIT's stockholders at which a Director is first elected to the
Board of Directors or the date of the Board of
Directors meeting at which a Director is first appointed to the Board of
Directors to fill a vacancy on the Board of Directors. Each holder of an
option issued under the Stock Option Plan will be entitled to exercise the
option to purchase one-third of the shares of REIT Stock covered by such
option on the date of original issuance thereof, one-third on the first
anniversary of such date and one-third on the second anniversary of such date,
in each case, any time prior to the tenth anniversary of the Effective Date
(the 'Expiration Date'). Pursuant to the Stock Option Plan, Directors will
receive Four Hundred (400) shares of REIT Stock on the date of each annual
meeting of the REIT's stockholders beginning with the annual meeting of
stockholders in 1997.
If the holder of an option ceases to serve as a Director of the REIT for
any reason, options that have been previously granted to such holder and that
have not been vested will be forfeited and options that are vested as of the
date of such cessation may be exercised by such holder in accordance with and
subject to the Stock Option Plan. If the holder of an option dies while
serving as a director of the REIT, options that have been previously granted
to such holder and that are vested as of the date of such holder's death may
be exercised by such holder's legal representative in accordance with and
subject to the Stock Option Plan.
The REIT intends to file with the Securities and Exchange Commission, on
or before sixty (60) days after the Effective Date, a Registration Statement
on Form S-8 with respect to the shares of REIT Stock to be issued pursuant to
the Stock Option Plan. Shares of REIT Stock issued to Directors pursuant to
the Stock Option Plan prior to the date on which each of (a) the REIT's
Registration Statement on Form 10 has been declared effective and (b) the
REIT's Registration Statement on Form S-8 becomes effective will be restricted
securities in the hands of the holders thereof. Shares of REIT Stock to be
issued pursuant to the Stock Option Plan after the date on which the REIT's
Registration Statement on Form S-8 (which will be filed by the REIT promptly
after the REIT's Form 10 is declared effective) becomes effective, will be
registered under the Securities Act pursuant to such Form S-8.
11. Issuance of Securities
On the Effective Date, (i) the REIT will issue and deliver to the
Disbursing Agent for distribution certificates representing the shares of REIT
Stock to be issued pursuant to the Plan, (ii) unless the financing
contemplated by the Conventional Financing Alternative is consummated, the
Property Owning Partnerships will issue and, the Indenture Trustee will
authenticate and deliver to the Disbursing Agent for distribution to the
Distributees, New Notes, and (iii) the Debtors and the Indenture Trustee will
deliver to the Disbursing Agent the Closing Cash. The Disbursing Agent will
distribute the shares of REIT Stock, Closing Cash and New Notes (or
Conventional Financing Cash Distribution, if the Conventional Financing
Alternative is consummated) to be distributed in accordance with the Plan.
For purposes of any distribution (but not with respect to the making of
any elections in respect thereof) to holders of Allowed Senior Claims under
the Plan, the Indenture Trustee will be deemed to be the sole holder of all
Allowed Claims in respect of the Existing Notes issued under the Indenture.
The Disbursing Agent will receive the REIT Stock and the New Notes on
behalf of the Distributees and will, as soon as practicable, economically and
administratively, in accordance with the Indenture or applicable law and the
Plan, deliver such REIT Stock or New Notes to the Distributees as provided in
Articles V, XI and XII of the Plan; provided, that the Disbursing Agent will
not deliver any REIT Stock or New Notes to any Distributee until such
Distributee has complied with the provisions of the Plan. The Property Owning
Partnerships will, promptly after being billed therefor, pay the reasonable
fees, costs and expenses of the Disbursing Agent incurred in connection with
the distribution made by the Disbursing Agent in accordance with the Plan.
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Each holder of Existing Notes will surrender instruments representing
such Existing Notes held by it to the Indenture Trustee in accordance with the
instructions to be provided by the Indenture Trustee as soon as practicable
after the Effective Date. Upon surrender of Existing Notes to the Indenture
Trustee, the Indenture Trustee will cancel such Existing Notes. On and after
the Effective Date, the Indenture Trustee will make a distribution only to
holders of Existing Notes that have surrendered or are deemed to have
surrendered such instruments in accordance with the instructions described
above.
Until the fifth (5th) year after the Effective Date, any property not
distributed to holders of an Allowed Senior Claim will be held by the
Indenture Trustee in trust for the benefit of such holders.
Any holder of an Allowed Senior Claim that does not surrender instruments
representing its Existing Notes in accordance with the instructions for
surrender of Existing Notes within five (5) years after the Effective Date
will receive no distributions on account of such Claim under the Plan and will
be forever barred from asserting any claim thereon. In such case, the
Indenture Trustee will return the New Note and shares of REIT Stock that
otherwise would have been distributed to such holders of Allowed Senior Claims
as well as any property being held for the benefit of such holders of Allowed
Senior Claims to the REIT.
The Disbursing Agent will withhold from any property distributed under
the Plan in accordance with the express instructions of the Debtors any
property which must be withheld for taxes payable by the Person entitled to
such property to the extent required by applicable law. In the absence of
instructions, the Disbursing Agent may conclusively assume that no property
need be withheld.
On the Effective Date, Distributees that have purchased Offered Shares
pursuant to their Subscription Agreements and the Property Manager/Leasing
Agent will be issued an aggregate of Nine Hundred Twenty Three Thousand
Seventy Sixty (923,076) shares of REIT Stock (such number of shares to be
adjusted if the Conventional Financing Alternative is consummated) against the
payment to the REIT of an aggregate of Twenty Million Dollars ($20,000,000) in
Cash.
The aggregate number of shares of REIT Stock otherwise distributable to
Distributees pursuant to the Plan will be reduced by Five Hundred (500) shares
of REIT Stock (with distributions to each Distributee reduced on a pro rata
basis) and as soon as practicable after the Effective Date, the Board of
Directors of the REIT will cause donations of ten (10) shares of REIT Stock to
be made to fifty (50) Entities qualifying under section 501(c)(3) of the
Internal Revenue Code. These donations are intended to assist the REIT in
qualifying as a real estate investment trust pursuant to the Internal Revenue
Code.
C. MANAGEMENT OF REORGANIZED DEBTORS (ARTICLE XIII)
DIRECTORS AND OFFICERS
The initial Directors and executive officers of the REIT, the Upper Tier
GP Corp and the GP Corps will be identical and will consist of individuals
designated on or prior to the Confirmation Date in a notice to be filed with
the Bankruptcy Court by the Debtors, with Noteholder Consent. See 'THE JOINT
PLAN OF REORGANIZATION--Implementation of the Plan--Formation of the Board of
Directors.'
The members of the Board of Directors of the REIT will each receive as an
annual retainer (i) Ten Thousand Dollars ($10,000) which will be paid in
Cash, and (ii) Four Hundred (400) shares of Common Stock of the REIT to be
issued under the Stock Option Plan. Directors will receive an additional
payment of Seven Hundred Fifty Dollars ($750) for each Board of Directors
meeting attended. Upon a Director's initial election to the Board of
Directors, such Director will receive options to purchase Three Thousand
(3,000) shares of the REIT's common stock which will vest over two years and
will be exercisable at Twenty Five Dollars ($25.00) per share. See '--
Implementation of the Plan--Description of the Registration Rights Agreement
and Stock Option Plan--Stock Option Plan.'
The REIT will purchase a directors and officers liability insurance
policy in the amount of Ten Million Dollars ($10,000,000).
The Directors and executive officers of the Upper Tier GP Corp and the GP
Corps will not receive any compensation from the Upper Tier GP Corp or the GP
Corps.
ASSET MANAGER
The REIT will retain VCG to provide general oversight for the assets of
the REIT. VCG will be retained initially as asset manager for the REIT for a
one year term and will be paid an asset management fee of Twenty Five Thousand
Dollars ($25,000) per month. The Asset Manager's retention will be on terms no
less favorable to the REIT than those set forth in Exhibit 7 to this
Disclosure Statement.
53
PROPERTY MANAGER
Each Property Owning Partnership will retain the Property Manager/Leasing
Agent to manage the day to day operations of the Properties and to act as
exclusive leasing agent for the Properties. It is anticipated that Tishman
Speyer Properties, L.P. ('Tishman Speyer') will be retained initially as
property manager and leasing agent. The Property Manager/Leasing Agent will be
retained for a term not to exceed two years and on other terms that will be no
less favorable to the Property Owning Partnerships than those set forth in
Exhibit 8 to this Disclosure Statement.
D. PROVISIONS GOVERNING DISTRIBUTIONS; APPOINTMENT OF
DISBURSING AGENT (ARTICLES XIV AND XV)
PROVISIONS GOVERNING DISTRIBUTIONS
1. Date of Distributions
Except as otherwise provided in the Plan, all distributions will be made
on the Effective Date or as soon as practicable thereafter. If any payment or
act under the Plan is required to be made or performed on a date that is not a
Business Day, then the making of such payment or the performance of such act
may be completed on the next succeeding Business Day, but shall be deemed to
have been completed as of the required date. Distributions made within thirty
(30) days of the Effective Date will be deemed made as of the Effective Date.
2. Disbursing Agent
All distributions under the Plan with respect to Classes 1, 2, 3, 4 and 5
will be made by the Indenture Trustee, as Disbursing Agent or any other Entity
designated by the Limited Partner Entities as Disbursing Agent. In making
distributions under the Plan, the Disbursing Agent (i) will make payments and
fund reserves in accordance with the instructions of the Debtors, and (ii)
will distribute New Notes or the Conventional Financing Cash Distribution, as
the case may be, and REIT Stock in accordance with the instructions of the
REIT. The Disbursing Agent will not be required to give any bond or surety or
other security for the performance of its duties unless otherwise ordered by
the Bankruptcy Court. If so ordered, all costs and expenses of procuring any
such bond or security will be paid from Distributable Cash.
3. Sources of Distributions
All Cash distributions required to be made under the Plan on or after the
Effective Date will be made from Closing Cash; provided, however, that if
Closing Cash is insufficient to pay all Allowed Administrative Expense Claims
and Allowed Priority Tax Claims, in full, such deficiency amount will be paid
by the applicable Property Owning Partnership. On the Effective Date, Closing
Cash believed to be sufficient to fully fund the Claims Reserve will be
transferred to the Claims Reserve. The Claims Reserve will be maintained by
the Disbursing Agent in a segregated account. See '-- Disputed Claims' below.
4. Delivery of Distributions
Subject to Bankruptcy Rule 9010 of the Bankruptcy Rules, distributions to
holders of Allowed Claims and Allowed Equity Interests will be made at the
address of each such holder as set forth on the Schedules filed with the
Bankruptcy Court unless superseded by the address set forth on proofs of claim
or proofs of equity interest filed by such holders (or at the last known
address of such a holder if no proof of claim or proof of equity is filed or
if the Debtors have been notified in writing of a change of address). If any
distribution to any holder is returned as undeliverable, the Disbursing Agent
will use its reasonable efforts to determine the current address of such
holder, but no distribution to such holder will be made unless and until the
Disbursing Agent has determined the then current address of such holder, at
which time such distribution will be made to such holder without interest.
Amounts in respect of any undeliverable distributions made through a
Disbursing Agent will be returned to the Disbursing Agent making such
distribution until such distribution is claimed. Checks issued by the
Disbursing Agent on account of Allowed Claims will be null and void if not
negotiated within sixty (60) days after the date of issuance thereof. Requests
for reissuance of any check will be made directly to the Disbursing Agent by
the holder of the Allowed Claim with respect to which such check originally
was issued. Any Claim in respect of such a voided check must be made on or
before the later of the second anniversary of the Effective Date or ninety
(90) days after the date of issuance of such check. After such date, all
Claims in respect of void checks will be discharged and forever barred. This
paragraph will not apply to distributions to Distributees.
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5. Manner of Payment Under the Plan
At the option of the Debtors, any Cash payment to be made by the Debtors
pursuant to the Plan may be made by a check or wire transfer or as otherwise
required or provided in applicable agreements.
6. Exculpation of Disbursing Agent
From and after the Effective Date, the Disbursing Agent will be
exculpated by all Entities, including all holders of Claims and Equity
Interests and other parties in interest, from any and all claims, causes of
action, and other assertions of liability (including breach of fiduciary duty)
arising from or related to the discharge by the Disbursing Agent of the powers
and duties conferred upon it by the Plan or any order of the Bankruptcy Court
entered pursuant to or in furtherance of the Plan, or applicable law, except
solely for actions or omissions arising out of the gross negligence or willful
misconduct of the Disbursing Agent. No holder of a Claim or an Equity Interest
or other party in interest will have or pursue any claim or cause of action
against the Disbursing Agent for making distributions in accordance with the
Plan or for implementing the provisions of the Plan.
7. Powers of the Disbursing Agent
The Disbursing Agent will be empowered to (a) effect all actions and
execute all instruments and documents necessary to perform its duties under
the Plan, (b) make all distributions contemplated by the Plan, (c) comply with
the Plan and the obligations thereunder, (d) employ professionals to represent
it with respect to its responsibilities and (e) exercise such other powers as
may be vested in the Disbursing Agent pursuant to an order of the Bankruptcy
Court, pursuant to the Plan, or as deemed by the Disbursing Agent to be
necessary and proper to implement the provisions of the Plan.
E. DISPUTED CLAIMS (ARTICLE XVI)
1. Prosecution of Objections
Objections to Claims, other than Administrative Expense Claims, Tenant
Reimbursement Claims and Insured Claims, must be filed on or before the
Effective Date. From and after the Confirmation Date, the Property Owning
Partnerships, or such other Entity as they direct, may prosecute any
objections to the allowance of any Claim which may be then pending. Objections
to Insured Claims may be interposed by the Upper Tier Limited Partnership in
accordance with applicable non-bankruptcy law. Objections to Administrative
Expense Claims under Bankruptcy Code sections 330, 331 and 503(b) may be filed
by the United States Trustee and any party within the deadlines to be
established by order of the Bankruptcy Court. Claims for which no objection is
filed within the time so limited, and Senior Claims, will be deemed Allowed
Claims, not subject to set-off, avoidance, subordination or disallowance,
entitled to receive and retain distributions in respect of the full amount set
forth in proofs of claim filed with the Bankruptcy Court, or, if less, as
listed in the Schedules and not identified as disputed, contingent or
unliquidated as to amount.
2. Claims Reserve
On the Effective Date, the Disbursing Agent will transfer to one or more
segregated accounts as the Claims Reserve an amount of Closing Cash required
to pay or projected to be required to pay in Cash, in full, to the extent the
same are not paid on the Effective Date, all Administrative Expense Claims,
Priority Tax Claims (other than Priority Utility Tax Claims), Priority Non-Tax
Claims, General Unsecured Claims and Other Secured Claims that are either
Allowed Claims or are Disputed Claims, as if such Disputed Claims were Allowed
Claims, on the Effective Date. The Cash held in the Claims Reserve will be
held in trust for the benefit of holders of such Claims pending determination
of their entitlement thereto. The Disbursing Agent will also hold in the
Claims Reserve (a) the Net Tax Proceeds, if any, transferred to the Disbursing
Agent in accordance with the Plan and (b) Distributable Cash on account of
Priority Utility Tax Claims in accordance with the Plan.
3. Distributions After Allowance
Payments and distributions to each holder of a Disputed Claim, to the
extent that such Claim ultimately becomes an Allowed Claim, in whole or in
part, will be made in accordance with the provisions of the Plan governing the
Class of Claims in which such Claim is classified. As soon as practicable
after the date that the order or judgment of the Bankruptcy Court allowing any
Disputed Claim or any other Claim that is not an Allowed Claim becomes a Final
Order, the Disbursing Agent will distribute to the holders of such Claim any
payment or property that would have been distributed to such holder if the
Claim had been allowed on the Effective Date, without any interest thereon,
which in the case of Cash distributions shall be made from Closing Cash held
in the Claims Reserve.
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4. Remaining Funds
In the event that any Cash held in the Claims Reserve remains after all
Claims have been allowed or disallowed and distributions have been made in
accordance with the Plan, such Cash will be transferred to the REIT.
5. Allowance and Objection to Allowance of Tenant Reimbursement Claims
Upon realization of the proceeds, if any, of any tax certiorari
proceedings which have been commenced by the Debtors for the fiscal tax years
ending June 30, 1991 through June 30, 1996 with respect to the 1290 Property
and the tax year ending June 30, 1996 with respect to the 237 Property, net of
any amounts required to pay or reimburse the customary and reasonable
third-party attorneys' fees and other reasonable out-of-pocket expenses
incurred in collecting such proceeds (including such fees and expenses
incurred to prepare for, institute and prosecute tax certiorari proceedings)
(the 'Net Tax Proceeds'), the Property Owning Partnerships receiving such Net
Tax Proceeds will cause an amount of such funds necessary, in its sole
determination, to reserve in full for all Tenant
Reimbursement Claims to be transferred to the Disbursing Agent for deposit in
the Claims Reserve. Within thirty (30) days after the date of such deposit,
the Property Owning Partnerships will determine the entitlement of holders of
Tenant Reimbursement Claims to payment of such Tenant Reimbursement Claims by
reason of the receipt of such Net Tax Proceeds and, in making such
determination, will be entitled to give effect to any rights of setoff,
recoupment or other claims that the Property Owning Partnerships or any
predecessor-in-interest may have against the holders of such Tenant
Reimbursement Claims. Thereafter, the Property Owning Partnerships will
transmit a copy of such determination to each holder of a Tenant Reimbursement
Claim. Each holder of a Tenant Reimbursement Claim will
have thirty (30) days from the date of transmission of such determination to
object to the determination by the Property Owning Partnerships of the amount
to which such holder of a Tenant Reimbursement Claim is entitled. If the
holder of a Tenant Reimbursement Claim does not object on a timely basis to
any determination by the Property Owning Partnerships of the entitlement of
such holder to a payment from such Net Tax Proceeds, then, with respect to
such Net Tax Proceeds, such Tenant Reimbursement Claim will be an Allowed
Tenant Reimbursement Claim in the amount so determined and will then be paid
from the Claims Reserve at the request of the Property Owning Partnerships,
without the necessity of Bankruptcy Court approval. If the holder of a Tenant
Reimbursement Claim objects on a timely basis to the determination by the
Property Owning Partnerships of the entitlement of such holder to a payment
from such Net Tax Proceeds, then, with respect to such Net Tax Proceeds, such
Tenant Reimbursement Claim will be a Disputed Claim and no distribution will
be made on account of such Tenant Reimbursement Claim until such Claim becomes
an Allowed Claim, in whole or in part, by a Final Order. All remaining Net Tax
Proceeds realized will be transferred by the Property Owning Partnerships to
the Lower Tier Limited Partnership which will in turn transfer such Net Tax
Proceeds to the REIT, provided, that, the Property Owning Partnerships retain
sufficient Cash to pay all disputed Tenant Reimbursement Claims until such
Claims have been allowed or disallowed.
6. Allowance and Objection to Allowance of Priority Utility Tax Claims
On the Effective Date, the Disbursing Agent will deposit in the Claims
Reserve an amount of Closing Cash equal to the amount claimed in any proof or
proofs of claim on account of Priority Utility Tax Claims or, if no such
proof or proofs of claim have been filed on or prior to the Effective Date or
if proofs of claim have been filed by some but not all of the potential
holders of Priority Utility Tax Claims, an amount determined by the Debtors,
with the consent of the Indenture Trustee, which consent will not be
unreasonably withheld or delayed, to be sufficient to pay in full any Priority
Utility Tax Claims on account of which proofs of claim may be filed after the
Effective Date. The Debtors will be deemed to have objected to all Priority
Utility Tax Claims evidenced by a filed proof of claim. From and after the
Effective Date, the Upper Tier Limited Partnership will have the exclusive
right to prosecute any objection to Priority Utility Tax Claims, any
litigation related to any objection to Priority Utility Tax Claims and to
compromise or settle any such objection or litigation. In the event that the
Upper Tier Limited Partnership compromises any objection to any Priority
Utility Tax Claim, the Property Owning Partnership owning the Property in
question will be deemed to have indemnified the holders of Equity Interests in
the Debtor which had formerly owned the Property in question (and their
successors and assigns) from all claims which may be made by the City or State
of New York in respect of utility taxes, interest and penalties in connection
with such Property unless such compromise includes a release of such holders
from all such claims. At such time as the Priority Utility Tax Claims are
disallowed or allowed, the Disbursing Agent will determine the amount of the
Priority Utility Tax Claim Excess, if any. Allowed Priority Tax Claims will be
paid in Cash by the Disbursing Agent from Closing Cash held in the Claims
Reserve. After determining such amount, the Disbursing Agent will distribute
such Priority Utility Tax Claim Excess to the REIT.
7. No Distributions Pending Allowance
Notwithstanding any other provision of the Plan, if any portion of a
Claim is a Disputed Claim, no payment or distribution provided hereunder will
be made on account of the portion of such Claim that is a Disputed Claim
unless and until such Disputed Claim becomes an Allowed Claim.
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8. Distributions After Effective Date
Distributions made after the Effective Date to holders of Claims that are
not Allowed Claims as of the Effective Date but which later become Allowed
Claims will be made without interest and will be deemed to have been made on
the Effective Date.
F. EXECUTORY CONTRACTS AND UNEXPIRED LEASES (ARTICLE XVII)
1. The 1290 Ground Lease
1290 LLC held the interests of both the lessor and the lessee in the 1290
Ground Lease which expired on May 31, 1996. Two (2) retail occupancy leases
with tenants of the 1290 Property provide that if the 1290 Ground Lease was
not renewed, then the terms of such occupancy leases would expire concurrently
with the 1290 Ground Lease. The Debtors believe that the expiration of such
retail leases will not have a material adverse effect on the 1290 Property
Owning Partnership. The Plan provides that, after the expiration of the 1290
Ground Lease and prior to the Effective Date, any unexpired leases will
continue as direct leases between the tenants thereunder and 1290 LLC as the
fee owner of the 1290 Property pursuant to either the attornment provisions of
such leases or nondisturbance agreements between 1290 LLC or its predecessors
and the tenants under such leases and such leases to the extent set forth on
Schedule A to this Disclosure Statement will be assigned to and assumed by the
1290 Property Owning Partnership on the Effective Date.
2. General Treatment
On the Effective Date, all executory contracts and unexpired leases to
which either Debtor is a party, except for any executory contract or unexpired
lease that (a) has been assumed pursuant to Final Order of the Bankruptcy
Court prior to the Effective Date, or (b) is specifically listed on Schedule A
to this Disclosure Statement as executory contracts and unexpired leases to be
assumed, will be deemed rejected. For purposes hereof, each executory contract
and unexpired lease listed on Schedule A to the Disclosure Statement that
relates to the use or occupancy of real property will include modifications,
amendments, supplements, restatements, or other agreements made directly or
indirectly by any agreement, instrument, or other document that affect such
executory contract or unexpired lease. Executory contracts or unexpired leases
appurtenant to the premises including easements, licenses, permits, rights,
privileges, immunities, options, rights of first refusal, powers, uses,
reciprocal easement agreements, vault, tunnel or bridge agreements or
franchises, and any other interests in real estate or rights in rem relating
to such premises will be assumed to the extent any of the foregoing items are
(i) executory contracts or unexpired leases, and (ii) are listed on Schedule A
to the Disclosure Statement.
3. Amendments to Schedule; Effect of Amendments
On the Effective Date, each of the Debtors will assume and, as
applicable, assign to one of the Property Owning Partnerships each of the
executory contracts and unexpired leases listed on Schedule A to this
Disclosure Statement as executory contracts and unexpired leases to be
assumed. The fact that any contract or lease is identified on such schedule
will not constitute or be construed to constitute an admission by either
Debtor that such contract or lease (including related things and rights) is an
executory contract or unexpired lease within the meaning of section 365 of the
Bankruptcy Code or that either of the Debtors, the Upper Tier Limited
Partnership, the Lower Tier Limited Partnership or the Property Owning
Partnerships have any liability thereunder.
4. Bar to Rejection Damages
If the rejection of an executory contract or unexpired lease by either
Debtor results in damages to the other party or parties to such contract or
lease, a Claim for such damages, if not heretofore evidenced by a filed proof
of claim, will be forever barred and will not be enforceable against the
Debtors, or its properties or its interests in property or agents, successors,
partners, members or assigns, unless a proof of claim is filed with the
Bankruptcy Court and served upon counsel for the Debtors and the Indenture
Trustee on or before the date of the Confirmation Hearing.
G. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION (ARTICLE XVIII)
1. Confirmation of the Plan
(a) Form of Confirmation Order. The Clerk of the Bankruptcy Court will
have entered the Confirmation Order of the Bankruptcy Court, either
substantially in a form to be filed by the Debtors, upon Noteholder Consent,
with the Bankruptcy Court not later than five (5) days prior to the
commencement of the Confirmation Hearing or in such other form that does not
materially and adversely affect the benefits to be received by the holders of
Senior Claims as determined by Noteholder Consent. Notwithstanding the
preceding sentence, such Confirmation Order shall not modify the rights of the
Morgan Loan Lenders in a manner which materially and adversely affects the
Morgan Loan Lenders disproportionately (in relation to the amount of their
57
respective distributions to be received under the Plan) to its impact on other
Distributees, unless the consent of the Morgan Loan Agent with respect thereto
has been obtained in the exercise of its sole and absolute discretion.
(b) Confirmation Date. The Confirmation Date shall be not later than
September 15, 1996.
2. Consummation of the Plan
The occurrence of the Effective Date of the Plan is subject to
satisfaction of the following conditions precedent:
(a) Finality of Confirmation Order. The Confirmation Order will have
become a Final Order.
(b) Plan Documents. All Plan Documents will have been executed and
delivered in accordance with the Plan.
(c) JMB Collateral. The JMB Collateral will have been delivered to the
REIT (or its designee).
(d) Tenant Notes. The holders of the Tenant Notes will have endorsed and
assigned such notes pursuant to the Tenant Note Assignments to the applicable
Property Owning Partnership, free and clear of any interest of third parties,
and delivered to the applicable Property Owning Partnership an amount of Cash
equal to all payments made in respect to the Tenant Notes from and after
January 1, 1996.
(e) Bankruptcy Court Approvals. The Bankruptcy Court will have entered a
Final Order or Final Orders reasonably satisfactory to the holders of a
majority in principal amount of the Existing Notes (excluding Existing Notes
held by O&Y Affiliates), and in the case of item (i) below, reasonably
satisfactory to the Morgan Loan Agent, on notice to all parties in interest
who have filed requests for notice, in the chapter 11 cases of the relevant
O&Y (U.S.) Entities, the Other Committee in those cases and the office of the
United States Trustee approving:
(i) the Settlement Agreement;
(ii) the delivery of the Tenant Notes to the applicable Property Owning
Partnership;
(iii) the assignment by Equityco to the REIT or its designee of all of its
right, title and interest in and to the 2 Broadway Utility Tax Reserve;
(iv) the forgiveness by Equityco and Devco of all unpaid asset management
fees and leasing commissions;
(v) the CIBC Settlement (as described in paragraph (j) below);
(vi) the assignment by 2 Broadway Associates and 2 Broadway Land Company
of all of their interests, if any, in the Remaining 2 Broadway Assets (as
defined in the Indenture) to the REIT;
(vii) the O&Y Lease Agreement; and
(viii) the assignment by O&Y MFC of the JMB Notes to the REIT or its
designee.
(f) Delivery of JMB Notes. O&Y MFC will have endorsed and/or assigned
the JMB Notes and the related security agreements to the REIT or its designee
free and clear of liens or interests of third parties, including, without
limitation, Citibank, N.A. which shall have delivered the Citibank Release,
duly executed, to the REIT or its designee.
(g) Execution of Documents. All other actions, documents, financing
statements and instruments necessary to implement the provisions of the Plan
having been, respectively, effected or executed and delivered.
(h) Conditions to Closing in Property Contribution Agreements. The
conditions to closing set forth in paragraph 2.2 of the Property Contribution
Agreements will have been satisfied. The closing of the Property Contribution
Agreements is conditioned upon the aggregate amount to cure certain
undisclosed non-permitted exceptions to title or environmental problems
related to the Properties not exceeding, in the aggregate, Two Million Six
Hundred Twenty Five Thousand Dollars ($2,625,000).
(i) Consummation of Settlement Agreement. The parties to the Settlement
Agreement will have notified the Debtors that the transactions contemplated by
the Settlement Agreement to be consummated on or before the Effective Date
have been consummated.
(j) Consummation of CIBC Settlement. The CIBC Settlement will have been
consummated. The CIBC Settlement involves the settlement of a dispute among
237 LLC, CIBC, and Devco relating to the lease of space at the 237 Property
between 237 LLC and CIBC and a sublease of such space between CIBC and Devco.
At present, Devco has been in default under its sublease from June 1, 1993
through the Petition Date and CIBC has similarly been in default under its
lease from June 1, 1993 through the Petition Date. The settlement of this
dispute will involve a release by 237 LLC of the obligations of CIBC and Devco
the payment by CIBC to 237 LLC of Four Million Five Hundred Thousand Dollars
($4,500,000), and a claim against Devco by CIBC with respect to such payment
made by CIBC to 237 LLC. The leased space is currently occupied by a
sub-sublessee.
58
(k) Effective Date. The Effective Date will be not later than September
30, 1996.
(l) Cap on General Unsecured Claims. Allowed Class 5 Claims (General
Unsecured Claims) will not exceed an amount equal to the amount of all Allowed
General Unsecured Claims relating to or arising from the operation of the
Properties in the ordinary course of business, plus One Hundred Thousand
Dollars ($100,000).
3. Waiver of Conditions Precedent
The conditions precedent of the Plan may be waived by Noteholder Consent.
Notwithstanding the preceding sentence, in order to be effective, any waiver
of a condition precedent contained in the Plan, which would materially and
adversely affect the Morgan Loan Lenders in amounts disproportionate (in
relation to their respective distributions to be received under the Plan) to
its impact on other Distributees must also be waived by the Morgan Loan Agent
in the exercise of its sole and absolute discretion. Further, in order to be
effective, any waiver of condition precedent contained in Sections 18.1 or
18.2(2) (to the extent applicable to the Debtors or any O&Y (U.S.) Entity),
(5)(a),(b),(c),(e),(g) and (h), and Sections (7) (to the extent applicable to
the Debtors or any O&Y (U.S.) Entity), (9) and (10) of the Plan must also be
waived by the Debtors in the exercise of their sole and absolute discretion.
Any such waiver may be effected at any time, without leave or order of the
Bankruptcy Court and without any formal action.
H. EFFECTS OF CONFIRMATION (ARTICLE XIX)
Until the Effective Date, the Bankruptcy Court will retain custody and
jurisdiction of the Debtors, their properties and interests in property and
their operations. On the Effective Date, the Debtors, their properties and
their interests in property and their operations will be released from the
custody and jurisdiction of the Bankruptcy Court, except as provided in
Article XXI of the Plan.
1. Vesting and Liens
On the Effective Date, the Property Owning Partnerships or the REIT, as
applicable, will be vested with all of the Plan Assets in accordance with the
Plan Documents. On the Effective Date, all Liens against any Plan Asset,
except to the extent provided in the Plan Documents, will be deemed
extinguished and discharged.
2. Equityco Claims
On the Effective Date, any Claim against Equityco or its general partners
asserted by or on behalf of any holder of Existing Notes arising out of the
Master Cash Flow Agreement, the Existing Notes, the Indenture or instruments
entered into in connection therewith will be deemed withdrawn with prejudice
upon the receipt of the Plan Securities (or Cash in the event of consummation
of the Conventional Financing Alternative) by the Indenture Trustee.
3. 2 Broadway Plan
(a) Notwithstanding the provisions of the 2 Broadway Plan, all Cash to be
paid to the 'Trustee's Account' pursuant to Sections 9.5 and 9.7 of the 2
Broadway Plan will be distributed to the REIT at the same time as such Cash
would have been paid to the 'Trustee's Account' in accordance with the 2
Broadway Plan.
(b) The REIT will have all of the rights of 2 Broadway LP and Building
Corp. pursuant to Sections 9.6 and 9.7 of the 2 Broadway Plan. In the event
that the REIT compromises any objection to any Priority Utility Tax Claim (as
defined in the 2 Broadway Plan), the REIT will be deemed to have indemnified
the holders of Equity Interests (as defined in the 2 Broadway Plan) in 2
Broadway LP and their successors and assigns from all claims which may be made
by the City or State of New York in respect of utility taxes, interest and
penalties in connection with the real property located at 2 Broadway, New
York, New York, unless such compromise includes a release of such holders from
such claims.
(c) The REIT will assume all of the obligations of 2 Broadway LP and
Building Corp. under Section 9.6 of the 2 Broadway Plan.
4. Binding Effect
On the Effective Date, the Plan will become binding upon all parties in
interest in accordance with its terms and conditions.
59
I. RELEASES, INJUNCTIONS AND WAIVER OF CLAIMS (ARTICLE XX)
1. Release of the O&Y Releasees
General Release. As of the Effective Date, the Debtors are released from
all Liabilities from the beginning of time. The Plan does not release the
Upper Tier Limited Partnership or any other Entity from any obligations
arising under the Plan or the Plan Documents which are expressly stated to
survive the Effective Date or which by the nature of their terms are to be
performed after the Effective Date.
O&Y Releases. Without limiting the foregoing but subject to the second
sentence of the first paragraph of this Section, as of the Effective Date, the
O&Y Releasees are released from all Liabilities in any way relating to either
Debtor, either Debtor in Possession, each predecessor in interest of either
Debtor, the Reorganization Cases, the Plan, either Property, the Existing
Notes the Indenture or the Offering Memorandum. The release of the O&Y
Releasees provided in Article XX of the Plan includes a release from all
Liabilities from the beginning of time relating to:
(a) the offer, sale, purchase, resale or ownership of the Existing Notes
(including any previously issued notes which were replaced by Existing Notes),
the Offering Memorandum, any sales brochure, registration statement,
preliminary prospectus, prospectus, appraisal, report or inspection, or any
disclosure or omission related to any of the foregoing, and any engagement,
underwriting, placement agency or other role of, or services rendered by, any
Entity in connection with any of the foregoing;
(b) the involvement of any of the O&Y Releasees in or with the sale of
the Existing Notes (including any previously issued notes which were replaced
by Existing Notes);
(c) the ownership, management and operation of the Properties by any of
the O&Y Releasees;
(d) the preparation by any of the O&Y Releasees of financial statements
in respect of either Debtor or any predecessor in interest of either Debtor or
any entity obligated under the Master Cash Flow Agreement;
(e) the actions, payments and obligations required of any of the O&Y
Releasees under, among other things, the Indenture, the Cash Management
Agreement, the Existing Notes (including any previously issued notes which
were replaced by Existing Notes), the Master Cash Flow Agreement, the 1290
Ground Lease and all agreements, instruments and documents executed and
delivered in connection with any of the foregoing or the 2 Broadway Plan;
(f) the use of proceeds by any of the O&Y Releasees from the Existing
Notes or revenues of the Properties;
(g) the obligations under leases, subleases, licenses or other agreements
regarding use and occupancy of all or any portion of the Properties, whether
as landlord, sublandlord, licensor, tenant, subtenant, licensee or otherwise
other than obligations of Devco under the O&Y Lease Amendment, but only to the
extent not then performed;
(h) the undertaking by the O&Y Releasees to restructure the obligations
governed by the Indenture and evidenced by the Existing Notes and to
restructure the obligations of the partners/members of the Debtors among
themselves, including any actions taken or not taken in respect of
formulating, negotiating and implementing the Plan;
(i) all obligations or liabilities of the O&Y Releasees relating to
Building Corp. being the initial general partner of the Upper Tier Limited
Partnership;
(j) all claims and causes of action arising out of the Limited Liability
Company Agreement for either Debtor or the Partnership Agreements for the
Debtors' predecessors in interest or any liabilities as direct or indirect
partners or members thereof; and
(k) all claims and causes of action held by parties in interest in the
Reorganization Cases in their capacity as such arising out of the O&Y
Releasees' acts, omissions or status as parties in interest in the chapter 11
cases of O&Y (U.S.) or as a participant in the restructuring of O&Y (U.S.),
including, without limitation, claims and causes of action based upon the
attempted proposal (alone or with others) of a plan of reorganization for O&Y
(U.S.) and all matters raised in pleadings filed with the Bankruptcy Court or
exchanged among parties in interest with respect to O&Y (U.S.)'s exclusive
right to file a plan of reorganization.
2. Release of the Plan Releasees
As of the Effective Date, but subject to the second sentence of the first
paragraph of Section 1 above, the Plan Releasees will be released from all
Liabilities from the beginning of time in any way relating to (a) either
Debtor, either Debtor in Possession, each predecessor in interest of either
Debtor, the Reorganization Cases, the Plan or either Property, or (b) the
Existing Notes (including any previously issued notes which were replaced by
Existing Notes), the Indenture or the Offering Memorandum.
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Without limiting the generality of the foregoing, but subject to the second
sentence of the first paragraph of Section 1 above, such release of the Plan
Releasees includes a release from Liabilities from the beginning of time
relating to:
(a) the undertaking by the Plan Releasees to restructure the obligations
governed by the Indenture and evidenced by the Existing Notes (including any
previously issued notes which were replaced by Existing Notes), including any
actions taken or not taken in respect of formulating, negotiating and
implementing the Plan;
(b) all actions taken or not taken, at any time, by any Plan Releasees
under or in connection with the Existing Notes (including any previously
issuednotes which were replaced by Existing Notes), the Indenture, the Master
Cash Flow Agreement, the Cash Management Agreement, or the 2 Broadway Plan;
(c) all claims and causes of action held by parties in interest in the
Reorganization Cases in their capacity as such arising out of the Plan
Releasees' acts, omissions or status as parties in interest in the chapter 11
cases of O&Y (U.S.) or as a participant in the restructuring of O&Y (U.S.),
including without limitation claims and causes of action based upon the
enforcement or attempted enforcement of creditors' remedies, the attempted
proposal (alone or with others) of a plan of reorganization for O&Y (U.S.) and
all matters raised in pleadings filed with the Bankruptcy Court or exchanged
among parties in interest with respect to O&Y (U.S.)'s exclusive right to file
a plan of reorganization; and
(d) all waivers or releases of debt and withdrawals of claims effected
pursuant to the Plan and the Settlement Agreement.
3. Injunction
The Confirmation Order will be an injunction to permanently enjoin and
restrain all Entities from asserting against the O&Y Releasees or the Plan
Releasees, or their respective properties or interests in property, any
Liabilities that are released by the Plan Releases, or from taking any of the
following actions against such Entities in respect of any such Liabilities to
the extent so released:
(1) the commencement or continuation of any action or proceeding;
(2) the enforcement, attachment, collection or recovery by any manner or
means of any judgment, award, decree or order;
(3) creating, perfecting, or enforcing any encumbrance of any kind; and
(4) asserting any right of setoff, subrogation, or recoupment of any kind
against any obligation due from any such Entity.
4. Avoidance and Recovery Actions
Effective as of the Effective Date, the Debtors waive the right to
prosecute and release any avoidance, subordination or recovery actions under
sections 510, 544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code
or any other causes of action, or rights to payments of claims, that belong to
the Debtors or Debtors in Possession, other than any such actions that may be
pending on such date or that the Debtors may have on the Effective Date
against the holder of a Tenant Reimbursement Claim (but in such case only with
respect to any right of set off that would exist against the holder of such
Tenant Reimbursement Claim). The Upper Tier Limited Partnership may retain and
may prosecute any such actions that may be pending on such date.
J. RETENTION OF JURISDICTION AND MODIFICATION OF PLAN (ARTICLE XXI)
The Bankruptcy Court may retain jurisdiction, and if the Bankruptcy Court
exercises its retained jurisdiction, will have exclusive jurisdiction, of all
matters arising out of, and related to, the Reorganization Cases and the Plan
pursuant to, and for the purposes of, sections 105(a) and 1142 of the
Bankruptcy Code and for, among other things, the following purposes:
(a) to hear and determine pending applications for the assumption or
rejection of executory contracts or unexpired leases, if any are pending, and
the allowance of Claims resulting therefrom;
(b) to determine any and all adversary proceedings, applications and
contested matters;
(c) to ensure that distributions to holders of Allowed Claims are
accomplished as provided herein;
(d) to hear and determine any timely objections to Administrative Expense
Claims or to proofs of claim and equity interests filed, both before and after
the Confirmation Date, including any objections to the classification of any
Claim or Equity Interest, and to allow or disallow any Disputed Claim, in
whole or in part;
(e) to enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified, or
vacated;
(f) to issue such orders in aid of execution of the Plan, to the extent
authorized by section 1142 of the Bankruptcy Code;
61
(g) to consider any modifications of the Plan, to cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including the Confirmation Order;
(h) to hear and determine all applications for awards of compensation for
services rendered and reimbursement of expenses related to implementation and
consummation of the Plan;
(i) to hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan;
(j) to hear and determine matters concerning state, local and federal
taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code
including, without limitation, the New York Real Property Transfer Gains Tax,
Article 31-B of the New York Tax Law; and
(k) to enter a final decree closing the Reorganization Cases.
Modifications of the Plan may be proposed in writing by the Debtors at
any time before confirmation, provided that (x) the Debtors have obtained
Noteholder Consent, and (y) the Plan, as modified, satisfies the requirements
of sections 1122 and 1123 of the Bankruptcy Code and (z) the Debtors have
complied with section 1125 of the Bankruptcy Code. The Plan may be modified at
any time after confirmation hereof and before substantial consummation hereof,
provided that (x) the Debtors will have obtained Noteholder Consent and (y)
the Plan, as modified, satisfies the requirements of sections 1122 and 1123 of
the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing
confirms the Plan as modified under section 1129 of the Bankruptcy Code and
the circumstances warrant such modifications. A holder of a Claim or Equity
Interest that has accepted the Plan shall be deemed to have accepted the Plan
as modified in accordance with the foregoing if the proposed modification does
not materially and adversely change the treatment of the Claim or Equity
Interest of such holder. Notwithstanding the foregoing, the Plan may not be
amended, modified or supplemented if the proposed amendment, modification or
supplement would materially and adversely affect the Morgan Loan Lenders in a
manner disproportionate (in relation to the amount of their respective
distributions to be received under the Plan) to its impact on other
Distributees, unless the consent of the Morgan Loan Agent has been given in
the exercise of its sole and absolute discretion.
K. RETIREE BENEFITS
On and after the Effective Date, pursuant to section 1129(a)(13) of the
Bankruptcy Code, the Property Owning Partnerships or their successors and
assigns will continue to pay all retiree benefits related to the Properties
(within the meaning of section 1114 of the Bankruptcy Code), at the level
established in accordance with subsection (e)(1)(B) or (g) of section 1114 of
the Bankruptcy Code at any time prior to the Confirmation Date for the
duration of the period the Debtors have obligated themselves to provide such
benefits. Newco LP will assume the liability of the Debtors with respect to
the Devco Retirement Plan.
L. ACTION BY INDENTURE TRUSTEE
Pursuant to the Plan, whenever the Plan grants the Indenture Trustee the
discretion to take any action or give any consent or direction, the Indenture
Trustee will act in accordance with Noteholder Consent and, in the absence of
such instruction, may act in accordance with its own discretion; provided,
however, that, in the event and to the extent that Section 22.10 of the Plan
conflicts with Section 7.9 of the Indenture, the provisions of Section 7.9 of
the Indenture will govern; and provided, further, that wherever the Plan
expressly requires the Indenture Trustee to act reasonably, the Indenture
Trustee will so act notwithstanding any contrary direction from Noteholders.
M. VCG FEES
On the Effective Date, the REIT will distribute to VCG Five Hundred
Thousand Dollars ($500,000), in Cash and Forty Thousand (40,000) shares of
REIT Stock. If the Conventional Financing Alternative (including the proposed
mortgage loan by Chase) is consummated, VCG will be paid a fee of One Million
Dollars ($1,000,000), in Cash. If (i) a Conventional Financing Alternative is
not consummated and (ii) the New Notes are refinanced on or before eighteen
(18) months after the Effective Date, the REIT shall pay VCG a fee of One
Million Dollars ($1,000,000); provided, however, that, if the New Notes are
partially redeemed during such period in an amount less than Three Hundred
Twenty Five Million Dollars ($325,000,000) as part of the refinancing of one
Property, the REIT shall pay VCG an amount to be agreed upon between the REIT
and VCG. VCG will receive fees in accordance with the Asset Management
Agreement.
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IV. RISK FACTORS
The holders of Claims and Equity Interests that are entitled to vote on
the Plan should carefully review the following factors together with the other
information contained in this Disclosure Statement prior to voting on the Plan
and, with respect to holders of Senior Claims, making their elections to
receive New Notes and/or REIT Stock:
1. Ownership by Apollo
Upon consummation of the Plan, Apollo will, assuming it makes a Standard
Election, hold approximately forty percent (40%) of the outstanding REIT Stock
and New Notes through a combination of its current holdings of Existing Notes,
Existing Notes it will receive from other holders of Existing Notes through an
exchange of claims provided for under the Settlement Agreement and the
distribution it will receive as a Morgan Loan Lender. However, Apollo's actual
percentage ownership of the outstanding REIT Stock and New Notes upon
consummation of the Plan is dependent upon the elections for shares of REIT
Stock and New Notes made by Apollo and the other holders of Senior Claims and
may be less than or greater than forty percent (40%). Under certain
circumstances, it is possible for Apollo to own more than fifty percent (50%)
of the REIT Stock.
Four (4) of the nine (9) initial directors of the REIT will be
representatives of Apollo and until the occurrence of a Simplification Event,
Apollo, as the holder of Class B Common Stock, will continue to have four (4)
representatives on the Board of Directors. Apollo's reasonable approval is
required as to the remaining directors until a Simplification Event occurs.
Although it is expected that Apollo will hold less than fifty percent (50%) of
the outstanding REIT Stock, because Apollo will be the largest single
stockholder of the REIT, Apollo may have the ability to significantly
influence (i) the policies of the REIT, including investment, financing and
distribution policies, and (ii) the outcome of any matters submitted to the
holders of REIT Stock for a vote. The exercise of such influence may or may
not be consistent with the interests of other stockholders.
As a projected holder of a significant percentage of the New Notes,
Apollo is likely to be able to (i) initiate actions to be taken under the
Restated Indenture requiring the consent of holders of twenty five percent
(25%) in principal amount of the New Notes (including an acceleration of the
New Notes), (ii) significantly influence any actions requiring the action of
the holders of a majority in principal amount of the New Notes and (iii)
prevent any act ions requiring the action of the holders of two-thirds in
principal amount of New Notes.
2. Conflicts of Interest
None of the holders of REIT Stock will be limited in any manner with
respect to the investments such holders may hold or make, and such holders may
therefore engage in real estate activities which could be directly competitive
with the Properties.
Tishman-Speyer, which is anticipated to be retained initially as property
manager and leasing agent for the Properties, is the owner or manager of
numerous office buildings in midtown Manhattan, some of which may be
competitive with the Properties. Tishman-Speyer or any other property manager
selected to manage the Properties will agree to purchase Unsubscribed Shares
of REIT Stock pursuant to the Property Manager Subscription Agent. Based upon
the ownership of REIT Stock by Tishman-Speyer or such other property manager,
it is expected that Tishman-Speyer's or such other property manager's
interests will be more closely aligned with those of other stockholders.
Similarly, VCG, the Asset Manager, will be receiving Forty Thousand (40,000)
shares of REIT Stock on the Effective Date.
To the extent that a party holds both REIT Stock and New Notes, such
party may choose to exercise its rights as a holder of such instruments in a
manner that may not be consistent with interests of parties who hold only one
type of instrument.
3. Accuracy of Financial Projections
Annexed as exhibits to this Disclosure Statement are Pro Forma Balance
Sheets for the REIT and the Property Owning Partnerships and Cash Flow
Projections for the Properties and the REIT, each prepared by the financial
advisor to the Ad Hoc Committee. The Pro Forma Balance Sheets and Cash Flow
Projections, as well as the fair market value range set forth in the section
entitled 'Lack of Appraisals,' below, while presented with numerical
specificity, are based upon a number of estimates and assumptions which,
though considered reasonable by the financial advisor to the Ad Hoc Committee,
are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the control of the
REIT and the Property Owning Partnerships, and upon assumptions with respect
to future business strategies and decisions which are subject to change. There
can be no assurance that those estimates and assumptions are accurate, that
such projections will be achieved or that the value of the Properties actually
falls within the range of values set forth under 'Confirmation Requirements--
Best Interests Test.' The projections and range of values were not prepared
with a view toward compliance with published guidelines of the Securities and
Exchange Commission, The American Institute of Certified Public Accountants,
any regulatory or professional agency or body or generally accepted accounting
principles ('GAAP'). The projections and range of values are necessarily
speculative in nature, and it is usually the case that one or more of the
assumptions underlying such projections or
63
valuations may not materialize. Distributees are cautioned not to place undue
reliance on the Pro Forma Balance Sheets, the Cash Flow Projections or the
range of fair market values for the Properties set forth in the section
entitled 'Lack of Appraisals,' below.
The most significant assumptions on which the Pro Forma Balance Sheets,
the Cash Flow Projections and the range of fair market values for the
Properties set forth in the section entitled 'Lack of Appraisals,' below, are
based relate to (a) future rental rates at the Properties, (b) the likelihood
that existing tenants of the Properties will renew their leases, (c)
concessions that will have to be made to new tenants in order to induce them
to enter into a lease or to existing tenants in order to induce them to renew
their leases, (d) the length of time it will take to find new tenants for
vacant space, (e) with respect to the Properties' fair market value, the
capitalization rate and discount rates, (f) interest rates and (g) the timing
of various events including the Effective Date. To the extent that these or
other assumptions prove too optimistic, there may be a negative impact on the
value of the Plan Securities. THE CASH FLOW PROJECTIONS ASSUME THAT THE NEW
NOTES ARE NOT REFINANCED. IF THE NEW NOTES ARE REFINANCED, THERE MAY BE A
NEGATIVE IMPACT ON CASH FLOW FROM THE PROPERTY OWNING PARTNERSHIPS. The
determination by holders of Senior Claims regarding whether to make Standard
or Non-Standard Elections and the Distributees' determination regarding
whether to subscribe for Offered Shares should take into account that the
actual valuations of the Properties may be greater than or less than the
projected values of the Properties contained or referenced herein. See '--
Lack of Appraisals.'
4. No Limitation on Debt; Uncertainty of Ability to Refinance Debt
No Limitation on Debt. The organizational documents of the Property
Owning Partnerships and the REIT do not limit the amount of indebtedness the
Property Owning Partnerships or the REIT may incur; however, the Restated
Indenture provides that the Property Owning Partnerships may not incur any
indebtedness other than the New Notes. On the Effective Date, the REIT will
have no debt and the Properties held by the Property Owning Partnerships will
be subject to the obligations under the New Notes, the Restated Indenture and
the Restated Mortgage and/or the documents securing a Conventional Financing
Alternative. The REIT could incur debt and, provided, that the Property Owning
Partnerships are not subject to the Restated Indenture, the Property Owning
Partnerships could become more highly leveraged resulting in an increased risk
of default on the obligations of the Property Owning Partnerships and the REIT
and an increase in debt service requirements which could adversely affect the
financial condition and results of operations of the Property Owning
Partnerships and the REIT, and consequently, the REIT's ability to make
distributions to holders of REIT Stock.
Inability to Pay Debt Service. Unless the Conventional Financing
Alternative is consummated on the Effective Date, the Properties will be
encumbered by the New Notes in an aggregate principal amount of Four Hundred
Million Dollars ($400,000,000), which mature ten (10) years after the
Effective Date or if the Conventional Financing Alternative is consummated,
other mortgage debt. The Property Owning Partnerships will be subject to the
risks normally associated with debt financing, including the risk that the
Property Owning Partnerships' cash flow will be insufficient to meet required
payments of principal and interest, the risk that the New Notes or such other
debt cannot be refinanced or that the terms of such refinancing will not be as
favorable as the terms of the New Notes or such other debt.
Refinancing Risks. It may be necessary for the Property Owning
Partnerships to refinance debt or obtain additional debt through additional
debt financing or equity offerings, however, the Restated Indenture provides
that the Property Owning Partnerships may not incur any indebtedness other
than the New Notes. If the Property Owning Partnerships are unable to
refinance their indebtedness (or obtain additional indebtedness), on
acceptable terms, or at all, the Property Owning Partnerships might be forced
to dispose of one or both of the Properties upon disadvantageous terms, which
might result in losses to the Property Owning Partnerships, and consequently,
the REIT, and might adversely affect cash available for distribution. If
prevailing interest rates or other factors at the time of a refinancing result
in higher interest rates, the Property Owning Partnerships' debt service would
increase, which would in turn adversely affect the REIT's cash available for
distribution and its ability to make distributions to its stockholders.
5. Real Estate Investment Risks
General Risks. The investment of the REIT in the Lower Tier Limited
Partnership, the investment of the Lower Tier Limited Partnership in the
Property Owning Partnerships and the investment of the Property Owning
Partnerships in the Properties will be subject to the risks incident to the
ownership and operation of commercial real estate, generally. Real property
investments are subject to varying degrees of risk. The yields available from
equity investments in real estate depend on the amount of income and capital
appreciation generated by the related properties. If the Properties do not
generate sufficient revenue the Property Owning Partnerships may not be able
to make required principal and interest payments on the New Notes and the
REIT's income and ability to make distributions to its stockholders will be
adversely affected.
The Properties' revenues and value may be adversely affected by a number
of factors, including the general economic climate; local economic conditions
in the New York City area such as oversupply of space or a reduction in demand
for commercial rental space; the attractiveness of the Properties to tenants;
competition from other available space; the ability of the Property Owning
64
Partnerships to provide for adequate maintenance and insurance; the ability to
timely collect all rent from tenants; the expense of periodically renovating,
repairing and reletting spaces; and increased operating costs. There is also
the risk that as leases on the Properties expire, tenants will enter into new
leases on terms that are less favorable to the Property Owning Partnerships
than existing leases. Certain significant expenditures associated with
investments in real estate (such as debt service payments, real estate taxes,
insurance and maintenance costs) are generally not reduced when circumstances
cause a reduction in rental revenues from a property. If the Property Owning
Partnerships are unable to meet their debt service payments on the New Notes
or any refinancing thereof, a loss could be sustained as a result of
foreclosure on a Property or the exercise of other remedies by the Indenture
Trustee or any refinancing creditor.
Limited Geographic Diversification. Both the 237 Property and the 1290
Property are located in mid-town Manhattan in New York City. As a result of
this geographic concentration, the performance of the commercial real estate
market in the New York City area will affect the value of the Properties and,
in turn, the value of the Property Owning Partnerships and of the REIT. The
performance of the New York City area economy affects occupancy, market rental
rates and expenses and, consequently, has an impact on the income from the
Properties and their underlying values. Although the New York City area
continues to experience some recovery from a severe economic downturn in
commercial real estate markets that occurred in the late 1980s and early
1990s, there can be no assurance that economic conditions in the New York City
area, in general, or mid-town Manhattan, in particular, will continue to
improve.
Tenant Defaults. Substantially all of the Property Owning Partnerships'
income and consequently, the REIT's income, is derived from rental income from
the Properties and, consequently, the Property Owning Partnerships' ability to
make debt service payments on the New Notes or any refinancing thereof and the
REIT's ability to make distributions to holders of the REIT Stock would be
adversely affected if a significant number of tenants at the Properties failed
to meet their lease obligations or the Property Owning Partnerships are unable
to lease on economically favorable terms a significant amount of space in, or
collect rental payments on, the Properties. In the event of a default by a
lessee, the Property Owning Partnerships may experience delays in enforcing
their rights as lessor and may incur substantial costs in protecting their
investment in the Properties. Additionally, as a significant number of the
Properties' tenants are in the financial services, legal and accounting
businesses, the Property Owning Partnerships' revenues and the REIT's ability
to make distributions to its stockholders could be adversely affected if these
industries experience a significant economic downturn. At any time, a tenant
of the Properties may also seek protection under the bankruptcy laws, which
could result in rejection and termination of such tenant's lease and thereby
cause a reduction in the cash available for distribution by the Property
Owning Partnerships, and, consequently, the REIT. If a tenant rejects its
lease, the Property Owning Partnerships' claim for breach of the lease would
(absent collateral securing the claim) be treated as a general unsecured
claim. The amount of the claim would be capped at the amount owed for unpaid
pre-petition lease payments unrelated to the rejection, plus the greater of
the rent reserved for one year, or fifteen percent (15%) of the remaining term
of the lease, not to exceed three years. No assurance can be given that the
Properties will not experience significant tenant defaults in the future.
Marketing Illiquidity. Equity real estate investments are relatively
illiquid. Such illiquidity will tend to limit the ability of the REIT to sell
the Properties promptly in response to changes in economic or other
conditions. In addition, provisions of the Internal Revenue Code limit the
REIT's ability to sell properties held for fewer than four years, which may
affect the REIT's ability to sell the Properties without adversely affecting
returns to holders of REIT Stock.
Required Consent of JMB LP for the Sale of the Properties. The Property
Owning Partnership Agreements provide that the Property Owning Partnerships
may not until the Approval Right Termination Date cause any Adverse
Transaction to occur without the consent of such Partnerships' limited
partners. Pursuant to the Lower Tier Limited Partnership Agreement, the Lower
Tier Limited Partnership must obtain the consent of the Upper Tier Limited
Partnership prior to granting such consent to the Property Owning Partnerships
and the Upper Tier Limited Partnership Agreement provides that the Upper Tier
Limited Partnership must obtain the consent of JMB LP prior to granting such
consent to the Lower Tier Limited Partnership. This consent requirement will
limit the ability of the Property Owning Partnerships to sell the Properties
prior to January 2, 2001. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Formation of the
Partnerships--Description of the Limited Partnership Agreements of the
Partnerships.'
Operating Risks. The Properties will be subject to operating risks common
to commercial real estate in general, any and all of which may adversely
affect occupancy or rental rates. The Properties are subject to increases in
operating expenses such as cleaning; electricity; heating, ventilation and air
conditioning; elevator repair and maintenance; insurance and administrative
costs; and other general costs associated with security, landscaping, repairs
and maintenance. A portion of such operating expense increases, but not all,
may be paid by tenants under the operating expense escalation provisions in
their leases. There can be no assurance that new tenants will agree to pay
such expenses. If operating expenses increase, the local rental market may
limit the extent to which rents may be increased to meet increased expenses
without decreasing occupancy rates. If any of the foregoing risks are
realized, the Property Owning Partnerships' ability to make debt service
payments on the New Notes or any refinancing thereof, and, consequently, the
REIT's ability to make distributions to stockholders could be adversely
affected.
65
Competition. Numerous office and office/service properties compete with
the Properties in attracting tenants to lease space. Some of these competing
properties are newer, better located or better capitalized than the
Properties. The number of competitive commercial properties in the New York
City area could have a material effect on the Property Owning Partnerships'
ability to lease space in the Properties and on the rents charged.
Uninsured Loss. The Property Owning Partnerships will carry comprehensive
liability, fire, flood, extended coverage and rental loss insurance with
respect to the Properties, with policy specifications, insured limits and
deductibles customarily carried for similar properties. There are, however,
certain types of extraordinary losses that are not generally insured which may
be either uninsurable or not economically insurable. Should an uninsured loss
or a loss in excess of insured limits occur, the Property Owning Partnerships,
and, consequently, the REIT, could lose the capital invested in a Property, as
well as the anticipated future revenues from such Property and may be unable
to make debt service payments on the New Notes or any refinancing thereof or
pay other obligations related to the Property. Any such loss would adversely
affect the business of the Property Owning Partnerships, the REIT and their
respective financial condition and results of operations.
Regulation. A number of Federal, state and local laws exist, such as the
Americans with Disabilities Act, may require modifications to existing
buildings to improve, or restrict certain renovations by requiring, access to
such buildings by disabled persons. Additional legislation may impose further
requirements on owners. The costs of compliance with such laws may be
substantial, and may reduce overall returns on the REIT's and the Property
Owning Partnerships' investment in the Properties. The Property
Manager/Leasing Agent will periodically review the Properties to determine
continuing compliance with existing laws and the effects of any laws
promulgated in the future affecting the Properties.
Possible Environmental Liabilities. Under various Federal, state and
local laws, ordinances and regulations, an owner or operator of real estate is
liable for the costs of removal or remediation of certain hazardous or toxic
substances on or in such property. Such laws often impose such liability
without regard to whether the owner or operator knew of, or was responsible
for, the presence of such hazardous or toxic substances. The presence of such
substances, or the failure to properly remediate such substances, may
adversely affect the owner's or operator's ability to sell or rent such
property or to incur debt using such property as collateral. Persons who
arrange for the disposal or treatment of hazardous or toxic substances may
also be liable for the costs of removal or remediation of such substances at a
disposal or treatment facility, whether or not such facility is owned or
operated by such person. Certain environmental laws impose liability for
release of asbestos-containing materials ('ACMs') into the air, and third
parties may seek recovery from owners or operators of real properties for
personal injuries associated with ACMs. In connection with the REIT's
ownership of partnership interests, as general partner, in the Lower Tier
Limited Partnership which owns partnership interests, as limited partner, in
the Property Owning Partnerships or as owner of all of the stock of the GP
Corps, the REIT may be considered an owner or operator of the Properties or as
having arranged for the disposal or treatment of hazardous or toxic substances
and, therefore, may be potentially liable for removal or remediation costs, as
well as certain other costs, including governmental fines and injuries to
persons and property.
The Properties have been the subject of Phase I environmental site
assessments by independent environmental consultants dated June 27, 1994
(which involved general inspections without soil sampling or ground water
analysis). The 237 Property was subject to an update on April 15, 1996 and the
1290 Property was subject to an update on April 16, 1996. An operations and
maintenance program is currently in place to manage and maintain asbestos
containing materials found in certain mechanical rooms and certain other
locations at the 1290 Property and the applicable Phase I environmental site
assessment has concluded that such program is adequate. The Phase I
environmental site assessment found no other environmentally hazardous
conditions at the Properties. No assurance can be given that existing
environmental studies with respect to either of the Properties reveal all
environmental liabilities and that a material environmental condition does not
otherwise exist as to either of the Properties. The Debtors estimate that the
remediation costs related to the 1290 Property as to asbestos that is to be
removed under the existing operations and maintenance plan will range between
Two Million Dollars ($2,000,000) and Three Million Dollars ($3,000,000).
6. Changes in Policies
The investment, financing, borrowing and distribution policies of the
REIT and its policies with respect to all other activities, including
qualification as a real estate investment trust, growth, debt, capitalization
and operations, will be determined by its Board of Directors, except certain
investment decisions requiring the consent of two-thirds of the stockholders.
These policies may be amended or revised at any time and from time to time at
the discretion of the Board of Directors without a vote of the stockholders of
the REIT. Accordingly, holders of REIT Stock generally will have no direct
control over changes in strategies and policies of the REIT, and such changes
may not serve the interests of the holders of the REIT Stock and could
adversely affect the REIT's financial condition, results of operations or the
market value of the REIT Stock. Numerous significant decisions regarding the
REIT's policies and activities are subject to super-majority voting of the
Board of Directors. These provisions may restrict the ability of the REIT to
implement certain policies and take certain actions which a super-majority of
the Board of Directors is required to approve. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan-- Formation of the REIT--
Description of Stock of the REIT.'
66
7. Necessity to Maintain Ownership Limit; Anti-Takeover Effect
For the REIT to maintain its qualification as a real estate investment
trust it is required to satisfy the Five or Fewer Requirement at any time
during the last half of any taxable year of the REIT other than the first
taxable year for which the election to be taxed as a real estate investment
trust has been made and shares of capital stock must be beneficially owned by
one hundred (100) or more persons during at least three hundred thirty five
(335) days of a taxable year of twelve (12) months (other than the first year)
or during a proportionate part of a shorter taxable year. The Charter contains
certain restrictions on the ownership and transfer of REIT Stock, described
below, which are intended to prevent concentration of stock ownership. These
restrictions, however, may not ensure that the REIT will be able to satisfy
the Five or Fewer Requirement in all cases. If the REIT fails to satisfy such
requirement, the REIT's status as a real estate investment trust will
terminate, and the REIT will not be able to prevent such termination. If the
REIT were to fail to qualify as a real estate investment trust in any taxable
year, the REIT would be subject to Federal income tax (including any
applicable alternative minimum tax) on its taxable income at regular corporate
rates, and would not be allowed a deduction in computing its taxable income
for amounts distributed to its stockholders. Moreover, unless entitled to
relief under certain statutory provisions, the REIT also would be ineligible
for qualification as a real estate investment trust for the four (4) taxable
years following the year during which qualification was lost. Such
disqualification would reduce the net earnings of the REIT available for
investment or distribution to its stockholders due to the additional tax
liability of the REIT for the years involved. See 'TAX CONSEQUENCES OF THE
PLAN TO HOLDERS OF SENIOR CLAIMS--REIT Taxation.'
Subject to certain exceptions, the Charter does not permit any person to
acquire or own (either actually or constructively under the applicable
attribution rules of the Code) more than the Ownership Limit. In addition, no
holder may own or acquire (either actually or constructively under the
applicable attribution rules of the Code) shares of any class of REIT Stock if
such ownership or acquisition (i) would cause more than fifty percent (50%) in
value of the outstanding REIT Stock to be owned by five or fewer individuals
or (ii) would otherwise result in the REIT failing to qualify as a real estate
investment trust. The Charter provides that the foregoing ownership
restrictions will not apply to persons designated by Apollo provided that the
aggregate percentage by which all individuals permitted, by designation, to
exceed the Ownership Limit will not be greater than ten percent (10%).
Any attempted acquisition (actual or constructive) of REIT Stock by a
person who, as a result of such acquisition, would violate certain of the
limitations set forth in the Charter will cause the REIT Stock purportedly
transferred to be automatically transferred to the trustee of a trust and such
shares will not be entitled to voting rights or rights to distributions and
the transfer resulting in such violation may be deemed void ab initio.
Violations of the ownership limitations may result in a repurchase by the REIT
of the shares in excess of the Ownership Limit. See 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan--Formation of the REIT--Description
of Stock of the REIT' for additional information regarding the aforementioned
limits.
Limiting the ownership of more than seven and nine tenths percent (7.9%)
ofthe outstanding shares of REIT Stock may (i) discourage a change of control
of the REIT, (ii) deter tender offers for REIT Stock, which offers may be
attractive to the REIT's stockholders, or (iii) limit the opportunity for
stockholders to receive a premium for the REIT Stock that might otherwise
exist if an individual investor attempted to assemble a block of REIT Stock in
excess of seven and nine tenths percent (7.9%) of the outstanding shares of
REIT Stock or to effect a change of control of the REIT.
8. Limits on Changes in Control
General. In addition to the significant ownership of the REIT Stock by
Apollo and, possibly, Oaktree and Whitehall, certain provisions contained in
the Charter and Bylaws and under Maryland law may have the effect of
discouraging a third party from making an acquisition proposal for the REIT
and may thereby inhibit a change in control of the REIT. For example, such
provisions may (i) deter tender offers for the REIT Stock, which offers may be
attractive to the stockholders, or (ii) deter purchases of large blocks of the
REIT Stock, thereby limiting the opportunity for stockholders to receive a
premium for their REIT Stock over then-prevailing market prices.
New Classes and Series of Stock. The Charter authorizes the board of
directors to create new classes and series of securities and to establish the
preferences and rights of any such classes and series without further action
of the holders of the REIT Stock. The issuance of additional classes or series
of capital stock may have the effect of delaying, deferring or preventing a
change in control of the REIT.
9. Lack of Appraisals
The relative valuation of the Properties was considered by the Ad Hoc
Committee. Although no formal appraisals of the Properties or any other assets
related to the Properties have been obtained, the financial advisor to the Ad
Hoc Committee believes that the fair market value of the Properties ranges
between Six Hundred Twenty Five Million Dollars ($625,000,000) and Seven
Hundred Twenty Million Dollars ($720,000,000). The financial advisor believes
that in a chapter 7 liquidation the Properties would sell for less than their
fair market value. No assurance can be given that such valuation of the
Properties is not greater or less than
67
the aggregate value of the Properties that might have obtained from an
independent appraisal. See 'CONFIRMATION AND CONSUMMATION OF THE
PLAN--Confirmation Requirements--Best Interests Test.'
10. Restrictions Imposed by the Restated Indenture
The Restated Indenture contains certain significant covenants that will,
among other things, restrict the ability of the Property Owning Partnerships
to incur debt, create liens, make certain investments or acquisitions and
engage in any business other than that arising out of the ownership of the
Properties. The breach of any of these covenants could result in a default
under the Restated Indenture. In the event of any such default, the Indenture
Trustee, at the direction of the holders of twenty five percent (25%) or more
of the principal amount of New Notes, could declare the New Notes immediately
due and payable. If the indebtedness under the Restated Indenture were to be
accelerated, there can be no assurance that the assets of the Property Owning
Partnerships would be sufficient to repay such indebtedness in full. It is
anticipated that any Conventional Financing Alternative may contain similar
restrictions. See 'THE JOINT PLAN OF REORGANIZATION--Implementation of the
Plan--Description of the New Notes and the Restated Indenture.'
11. Issuance of Additional Securities
The REIT has authority to offer REIT Stock or other equity or debt
securities in exchange for money, property or otherwise. Holders of the REIT
Stock will have no preemptive right to acquire any such securities, and any
such issuance of equity securities could result in dilution of an existing
holder's investment in the REIT.
12. Future Sales of REIT Stock and New Notes
Upon consummation of the Plan, (i) shares of REIT Stock will be held by
Distributees, the Property Manager/Leasing Agent and VCG and (ii) New Notes
will be held by Distributees (unless the Conventional Financing Alternative is
consummated). Under certain circumstances, sales of shares of REIT Stock
received by Distributees, sales of shares of REIT Stock received by the
Property Manager/Leasing Agent and VCG, and sales of any New Notes received by
Distributees, may not be made in a public distribution unless registered under
the Securities Act or sold pursuant to an exemption therefrom. See 'SECURITIES
ACT CONSIDERATIONS.'
13. Tax Risks
Adverse Tax Consequences of Failure to Qualify as a REIT. The REIT
intends to operate so as to qualify as a real estate investment trust under
the Internal Revenue Code commencing with its taxable year ending December 31,
1996. A real estate investment trust generally is not taxed at the corporate
level on income it currently distributes to stockholders so long as it
distributes at least ninety five percent (95%) of its real estate investment
trust taxable income. Although the REIT believes that it will be organized and
will operate in such a manner so as to qualify and remain so qualified,
qualification as a real estate investment trust involves the application of
highly technical and complex Internal Revenue Code provisions for which there
are only limited judicial or administrative interpretations. The determination
of various factual matters and circumstances not entirely within the REIT's
control may affect its ability to qualify and to continue to qualify as a real
estate investment trust. Moreover, no assurance can be given that legislation,
new regulations, administrative interpretations or court decisions will not
change the tax laws with respect to qualification as a real estate investment
trust or the Federal income tax consequences of such qualification. It is
expected that the REIT will receive an opinion of Battle Fowler LLP, counsel
to the Ad Hoc Committee, to the effect that, based on various assumptions
relating to the organization and operation of the REIT and representations
made by the REIT as to certain factual matters, the REIT's proposed method of
operation will enable it to meet the requirements for qualification and
taxation as a real estate investment trust. Such legal opinion is not binding
on the Internal Revenue Service ('IRS'). See 'TAX CONSEQUENCES OF THE PLAN TO
HOLDERS OF SENIOR CLAIMS--REIT Taxation.'
Other Tax Liabilities. Even if the REIT qualifies as a real estate
investment trust, it will be subject to certain taxes, such as real estate
taxes, transfer taxes, utility taxes and mortgage recording taxes.
14. Inability to Make Required Distributions to Stockholders Could Affect
Real Estate Investment Trust Status; Potential Requirement to Borrow
To obtain the favorable tax treatment accorded to a real estate
investment trust under the Internal Revenue Code, the REIT generally will be
required each year to distribute to its stockholders at least ninety five
percent (95%) of its REIT taxable income. The REIT will be subject to income
tax on any undistributed REIT taxable income and net capital gain, and to a
four percent (4%) nondeductible excise tax on the amount, if any, by which
certain distributions paid by it with respect to any calendar year are less
than the sum of eighty five percent (85%) of its ordinary income plus ninety
five percent (95%) of its capital gain net income for the calendar year, plus
one hundred percent (100%) of its undistributed income from prior years.
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The REIT intends to make distributions to its stockholders to comply with
the distribution provisions of the Internal Revenue Code and to avoid Federal
income taxes and the nondeductible four percent (4%) excise tax. A substantial
portion of the REIT's income will consist of the income of the Property Owning
Partnerships and the REIT's cash flow will consist primarily of distributions
from the Property Owning Partnerships through the Lower Tier Limited
Partnership.
Differences in timing between the receipt of income and the payment of
expenses in arriving at taxable income (of the REIT, the Upper Tier Limited
Partnership, the Lower Tier Limited Partnership or the Property Owning
Partnerships), the effect of nondeductible capital expenditures, the creation
of reserves or required debt amortization payments could require the REIT to
borrow funds on a short-term or long-term basis to meet the distribution
requirements that are necessary to continue to qualify as a real estate
investment trust. In such circumstances, the REIT might need to borrow funds
to avoid adverse tax consequences even if the REIT's management believes that
the then prevailing market conditions generally are not favorable for such
borrowings or that such borrowings are not advisable in the absence of such
tax considerations. There is no assurance that the REIT will be able to
continue to satisfy the annual distribution requirement so as to qualify as a
real estate investment trust.
15. Risks of Third Party Management
The Plan contemplates that the Property Owning Partnerships will retain
Tishman-Speyer as property manager and leasing agent for the Properties
(although the holders of a majority in principal amount of the Existing Notes
may select a different professional property manager) and the REIT will retain
VCG as asset manager. Tishman-Speyer (or such other property manager) will be
retained initially as property manager for a term not to exceed two (2) years
and on such other terms as are no less favorable to the REIT than the terms in
Exhibit 8 to this Disclosure Statement. VCG will be retained initially as
asset manager for a term of one (1) year and on such other terms as are no
less favorable to the REIT than the terms described in Exhibit 7 to this
Disclosure Statement. The Debtors make no representations with respect to the
qualification of (i) Tishman-Speyer to act as property manager and leasing
agent for the Properties and (ii) VCG to act as asset manager for the REIT.
The REIT does not own any equity interests in Tishman-Speyer or VCG and,
therefore, will not be able to influence the day-to-day decisions of such
entities. As a result, Tishman-Speyer and VCG may implement business policies
or decisions that would not have been implemented by persons controlled by the
REIT and that are adverse to the REIT or the Property Owning Partnerships or
that lead to adverse financial results which could impact the REIT's and the
Property Owning Partnerships' financial condition.
16. Effect of Market Interest Rates on Value of REIT Stock
One of the factors that will influence the value of REIT Stock will be
the annual distribution rate per share for shares of REIT Stock as compared
with the rates on alternative investments. An increase in general interest
rate levels may lead purchasers of REIT Stock to demand a higher annual
distribution rate which could adversely affect the market price of the REIT
Stock.
17. Absence of Public Market
The REIT does not intend to list the REIT Stock and the Property Owning
Partnerships do not intend to list the New Notes on any securities exchange or
to seek approval for quotation through any automated quotation systems.
Accordingly, the Debtors are unable to predict whether a market for such
securities will develop. In addition, holders of REIT Stock or New Notes who
are deemed to be 'underwriters' as defined in subsection 1145(b) of the
Bankruptcy Code, or who are otherwise deemed to be 'affiliates' of, or persons
who exercise 'control' over, the REIT within the meaning of the Securities
Act, will be unable to freely transfer or sell their respective securities,
except pursuant to an available exemption from registration under the
Securities Act and under equivalent state securities or 'blue sky' laws. See
'SECURITIES ACT CONSIDERATIONS.' In order to enable holders of REIT Stock to
sell their securities in an underwritten offering, the REIT has agreed to
provide the holders of REIT Stock with certain registration rights pursuant to
the Registration Rights Agreements. The Charter also provides for certain
transfer restrictions with respect to the REIT Stock and the Restated
Indenture also provides for certain transfer restrictions with respect to the
New Notes. See 'THE JOINT PLAN OF REORGANIZATION-- Implementation of the
Plan--Formation of the REIT-- Description of Stock of the REIT' and '--
Description of New Notes and
the Restated Indenture.'
V. SECURITIES ACT CONSIDERATIONS
The offer and issuance of Plan Securities pursuant to the Plan are exempt
from the registration requirements of the Securities Act and applicable
provisions of applicable state securities or 'blue sky' laws. THE DEBTORS AND
THEIR COUNSEL MAKE NO REPRESENTATION AS TO THE APPLICABILITY OF SUCH
EXEMPTIONS.
With respect to the offer and issuance of REIT Stock and New Notes to
holders of Senior Claims and the issuance of REIT Stock upon the exercise of
Subscription Rights, the REIT and the Property Owning Partnerships are relying
upon the exemption from the registration requirements of the Securities Act
provided by section 1145(a)(1) of the Bankruptcy Code. Generally,
69
section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of
securities pursuant to a plan of reorganization from the registration
requirements of the Securities Act and equivalent state securities and 'blue
sky' laws if the following conditions are satisfied: (i) the securities are
issued by a debtor (or its affiliate or successor) under a plan of
reorganization; (ii) the recipients of the securities hold a claim against, an
interest in, or a claim for an administrative expense against, the debtor; and
(iii) the securities are issued entirely in exchange for the recipient's claim
against or interest in the debtor, or are issued 'principally' in such
exchange and 'partly' for Cash or property. Assuming an equity valuation of
the shares of REIT Stock to be distributed to holders of Senior Claims under
the Plan of Two Hundred Ninety Seven Million Six Hundred Thousand Dollars
($297,600,000) and a valuation of New Notes to be distributed to holders of
Senior Claims under the Plan of Three Hundred Ninety One Million Dollars
($391,000,000), approximately ninety seven percent (97%) of the distribution
to holders of Senior Claims of REIT Stock and New Notes are on account of
Senior Claims and approximately three percent (3%) are in exchange for Cash.
Accordingly, the distribution of REIT Stock and New Notes is principally in
exchange for the Senior Claims and partly in exchange for Cash paid upon the
exercise of Subscription Rights. Similarly, the issuance of Subscription
Rights to holders of Senior Claims pursuant to Plan would be exempt from the
registration requirements of the Securities Act.
Subject to the transfer restrictions set forth in the Charter with
respect to the REIT Stock and in the Restated Indenture with respect to the
New Notes, the REIT Stock and New Notes issued to holders of Senior Claims
pursuant to the Plan may be resold by such holders without restriction unless,
as more fully described below, any such holder is deemed to be an
'underwriter' with respect to such securities, as defined in section
1145(b)(1) of the Bankruptcy Code. Generally, section 1145(b)(1) of the
Bankruptcy Code defines an 'underwriter' as any person who (A) purchases a
claim against, or interest in, the debtor in a bankruptcy case, with a view
towards the distribution of any security to be received in exchange for such
claim or interest, (B) offers to sell securities issued under a bankruptcy
plan on behalf of the holders of such securities, (C) offers to buy securities
issued under a bankruptcy plan from persons receiving such securities, if the
offer to buy is made with a view towards distribution of such securities, or
(D) is an 'issuer,' as such term is used in section 2(11) of the Securities
Act. The reference contained in section 1145(b)(1)(D) of the Bankruptcy Code
to section 2(11) of the Securities Act would include as 'underwriters' all
persons who, directly or indirectly, through one or more intermediaries,
control, are controlled by, or are under common control with, an issuer of
securities. 'Control' (as such term is defined in Rule 405 of Regulation C
under the Securities Act) means the possession, direct or indirect, of the
power to direct or cause the direction of the policies of a person, whether
through the ownership of voting securities, by contract, or otherwise.
Rule 144A, promulgated under the Securities Act, provides a non-exclusive
safe harbor exemption from the registration requirements of the Securities Act
for resales to certain 'qualified institutional buyers' of securities which
are 'restricted securities' within the meaning of the Securities Act,
irrespective of whether the seller of such securities purchased his or its
securities with a view towards reselling such securities under the provisions
of Rule 144A. Under Rule 144A, a 'qualified institutional buyer' is defined to
include, among other Persons (e.g., 'dealers' registered as such pursuant to
section 15 of the Exchange Act and 'banks' as defined in section 3(a)(2) of
the Securities Act), any entity which purchases securities for its own account
or for the account of another qualified institutional buyer and which (in the
aggregate) owns and invests on a discretionary basis at least One Hundred
Million Dollars ($100,000,000) in the securities of unaffiliated issuers.
Subject to certain qualifications, Rule 144A does not exempt the offer or sale
of securities which, at the time of their issuance, were securities of the
same class of securities then listed on a national securities exchange
(registered as such under section 6 of the Exchange Act), or quoted in a U.S.
automated inter-dealer quotation system (e.g., NASDAQ). Given that none of the
shares of the REIT Stock to be issued on the Effective Date will be securities
of a class then listed or quoted as described above, holders of REIT Stock who
are deemed to be 'underwriters' within the meaning of section 1145(b)(1) of
the Bankruptcy Code or who may otherwise be deemed to be 'affiliates' of, or
to exercise 'control' over, the REIT within the meaning of Rule 405 of
Regulation C under the Securities Act should, assuming that all other
conditions of Rule 144A are met, be entitled to avail themselves of the safe
harbor resale provisions thereof.
To the extent that Rule 144A is unavailable, holders of Senior Claims
receiving REIT Stock may, under certain circumstances, be able to sell their
securities pursuant to the more limited safe harbor resale provisions of Rule
144 under the Securities Act. Generally, Rule 144 provides that if certain
conditions are met (e.g., two year holding period with respect to 'restricted
securities,' volume limitations, manner of sale, availability of current
information about the issuer, etc.), specified persons who (a) resell
'restricted securities' or (b) resell securities which are not restricted but
who are 'affiliates' of the issuer of the securities sought to be resold, will
not be deemed to be 'underwriters' as defined in section 2(11) of the
Securities Act. Under paragraph (k) of Rule 144, the aforementioned conditions
to resale will no longer apply to restricted securities sold for the account
of a holder who is not an affiliate of the REIT at the time of such resale and
who has not been such during the three-month period next preceding such
resale, so long as a period of at least three years have elapsed since the
later of (i) the Effective Date and (ii) the date on which such holder
acquired his or its securities from an affiliate of the REIT.
The issuance of Plan Securities to the Morgan Loan Lenders pursuant to
the Plan is exempt from the registration requirements of the Securities Act
(and equivalent state securities or 'blue sky' laws) pursuant to an exemption
provided by section 4(2) of the Securities Act. The REIT Stock and New Notes
held by the Morgan Loan Lenders will be restricted securities (and
appropriately
70
legended) that may only be sold in compliance with the Securities Act (and
applicable state securities and 'blue sky' laws) or pursuant to an exemption
therefrom.
The issuance of REIT Stock to VCG pursuant to the Plan, upon consummation
of the transactions contemplated by the Plan, is exempt from the registration
requirements of the Securities Act (and equivalent state securities or 'blue
sky' laws) pursuant to an exemption provided by section 4(2) of the Securities
Act. The REIT Stock held by VCG will be restricted securities (and
appropriately legended) that may only be sold in compliance with the
Securities Act (and applicable state securities and 'blue sky' laws) or
pursuant to an exemption therefrom.
Pursuant to the Property Manager Subscription Agreement, on the Effective
Date, the Property Manager/Leasing Agent will purchase from the REIT any
Unsubscribed Shares, i.e. shares of REIT Stock not purchased by Distributees
receiving Subscription Rights. The Property Manager/Leasing Agent will
represent in the Property Manager Subscription Agreement that it is an
'accredited investor' under one of the categories set forth in Rule 501(a)(1)
through (8) promulgated under the Securities Act. Accordingly, the issuance of
REIT Stock to the Property Manager/Leasing Agent is exempt from the
registration requirements of the Securities Act (and equivalent state
securities or 'blue sky' laws) pursuant to the exemption provided by section
4(2) of the Securities Act. The REIT Stock held by the Property
Manager/Leasing Agent will be restricted securities (and appropriately
legended) that may only be sold in compliance with the Securities Act (and
applicable state securities and 'blue sky' laws) or pursuant to an exemption
therefrom.
With respect to the issuance of the New Notes, the Debtors intend to
satisfy the requirements for the exemption from registration under the
Securities Act provided by section 4(2) thereof. On that basis, the Restated
Indenture will be exempt from the indenture qualification requirements of the
TIA by virtue of the exemption contained in section 304(b)(1) of the TIA.
Accordingly, the Restated Indenture will not satisfy all of the requirements
of an indenture required to be qualified under the TIA. See 'RISK
FACTORS--Conflicts of Interest' and 'THE JOINT PLAN OF
REORGANIZATION--Implementation of the Plan-- Description of the New Notes and
the Restated Indenture--New Notes.'
In connection with such exemption, each Distributee will represent on its
Ballot whether or not it is an 'accredited investor' under one of the
categories set forth in Rule 501(a)(1) through (8) promulgated under the
Securities Act and whether or not it is acquiring Plan Securities with a view
to distribution. If Distributees fail to provide such information, the Debtors
will, pursuant to an order of the Bankruptcy Court, undertake discovery to
determine whether such persons are accredited investors. THE PROPERTY OWNING
PARTNERSHIPS ENCOURAGE EACH DISTRIBUTEE WHO RECEIVES A BALLOT TO CONSIDER
CAREFULLY AND CONSULT WITH HIS OR ITS OWN LEGAL ADVISOR(S) WITH RESPECT TO
SUCH DISTRIBUTEE'S STATUS AS AN 'ACCREDITED INVESTOR.'
The REIT intends to file with the Securities and Exchange Commission, on
or before sixty (60) days after the Effective Date, a Registration Statement
on Form 10 with respect to the REIT Stock, pursuant to which, among other
things, the REIT will become subject to the periodic reporting requirements of
the Exchange Act. Such filing, together with the REIT's timely compliance with
the Exchange Act's reporting requirements, will enable holders of REIT Stock
to utilize the safe harbor provisions of Rule 144, as described above.
In order to enable holders of REIT Stock to sell their securities in an
underwritten offering, the REIT will agree to provide the holders of the REIT
Stock with certain registration rights pursuant to the Registration Rights
Agreement.
THE FOREGOING SUMMARY DISCUSSION IS GENERAL IN NATURE AND HAS BEEN
INCLUDED IN THIS DISCLOSURE STATEMENT SOLELY FOR INFORMATIONAL PURPOSES. THE
DEBTORS DO NOT MAKE ANY REPRESENTATIONS CONCERNING, AND DO NOT PROVIDE ANY
OPINION OR ADVICE WITH RESPECT TO, THE SECURITIES LAW AND BANKRUPTCY LAW
MATTERS DESCRIBED ABOVE. THE DEBTORS ENCOURAGE EACH PERSON WHO IS TO RECEIVE
REIT STOCK OR NEW NOTES PURSUANT TO THE PLAN TO CONSIDER CAREFULLY AND CONSULT
WITH HIS OR ITS OWN LEGAL ADVISOR(S) WITH RESPECT TO SUCH (AND ANY RELATED)
MATTERS, IN VIEW OF THE UNCERTAINTY CONCERNING THE AVAILABILITY OF EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND EQUIVALENT STATE
SECURITIES AND 'BLUE SKY' LAWS TO A RECIPIENT OF REIT STOCK OR NEW NOTES WHO
MAY BE DEEMED TO BE AN 'UNDERWRITER' (WITHIN THE MEANING OF SECTION 1145(B)(1)
OF THE BANKRUPTCY CODE) AND/OR AN 'AFFILIATE' OF, OR A PERSON WHO EXERCISES
'CONTROL' OVER, THE REIT UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
VI. TAX CONSEQUENCES OF THE PLAN TO HOLDERS OF SENIOR CLAIMS
The following discussion is a brief outline of certain federal income tax
consequences of the Plan to the holders of the Senior Claims, but is not a
complete discussion of all such consequences. No discussions of tax
consequences to holders of Classes of Claims other than the Senior Claims is
included herein. This discussion, prepared by Battle Fowler LLP as counsel for
the Ad Hoc Committee, is intended only as an outline of certain probable
federal income tax consequences, some of which involve issues
71
which are very complex and capable of alternative resolutions, and is not
intended to be exhaustive, nor does it constitute legal or tax advice. Federal
income tax consequences will vary depending on the particular circumstances of
each affected party, such as the tax characteristics of the holders of the
Senior Claims (for example, whether such holders are foreign corporations,
nonresidents individuals, or persons subject to special rules, such as life
insurance companies and tax-exempt organizations). This discussion is limited
to holders of Senior Claims who have held such debt obligations as 'capital
assets' (generally, property held for investment) within the meaning of
section 1221 of the Internal Revenue Code. The following discussion does not
address all material tax aspects of the Plan to any affected party, nor does
it address any state or local tax consequences or any federal tax consequences
other than income tax consequences. Additionally, some of the issues raised by
the Plan are the subject of recent amendments to the Internal Revenue Code
which may be subject to conflicting interpretations, and may be the subject of
regulatory projects within the IRS. The tax consequences set forth herein may
be modified by administrative, legislative or judicial action at any time,
retroactively or prospectively. Further, no ruling has been requested from the
IRS as to any tax issue and there can be no assurance as to the interpretation
the IRS will adopt as to certain of the issues raised.
BECAUSE THE TAX CONSEQUENCES OF THE PLAN ARE HIGHLY UNCERTAIN AND IN
ADDITION MAY BE BASED ON INDIVIDUAL CIRCUMSTANCES, EACH HOLDER OF A CLAIM OR
AN EQUITY INTEREST IS URGED TO CONSULT ITS OWN TAX ADVISOR CONCERNING THE
CONSEQUENCES OF THE PLAN UNDER FEDERAL AND APPLICABLE STATE OR LOCAL TAX LAWS.
IN ADDITION, THIS SUMMARY DOES NOT ADDRESS THE TAX CONSEQUENCES OF THE PLAN TO
ANY CLAIM HOLDER OTHER THAN HOLDERS OF SENIOR CLAIMS, EACH OF WHOM MUST
CONSULT AND RELY UPON ITS OWN TAX ADVISORS WITH RESPECT THERETO.
A. GENERAL
It is expected that, on the Effective Date, Battle Fowler LLP, counsel to
the Ad Hoc Committee, will render its opinion that, subject to the assumptions
and conditions stated therein, for federal income tax purposes, the REIT will
be treated as a real estate investment trust pursuant to section 856 et seq.
of the Internal Revenue Code and each of the Property Owning Partnerships and
the Lower Tier Limited Partnership will be treated as a partnership, and not
as an association taxable as a corporation. Such opinion, however, will not be
binding on the IRS or any court and will have no official status of any kind,
and there can be no assurance that such opinion would be sustained by a court
if contested by the IRS.
B. TAXATION OF THE EXCHANGE OF SENIOR CLAIMS
Holders of Senior Claims who receive shares of REIT Stock and New Notes
in satisfaction of such claims will recognize gain or loss in an amount equal
to the difference between (a) their 'amount realized,' i.e., the fair market
value of the shares of REIT Stock and the issue price of the New Notes (other
than amounts attributable to accrued interest) and (b) the holder's adjusted
tax basis in the Senior Claim. In general, the issue price of a debt
instrument that is publicly traded is based on its trading price, while the
issue price of a debt instrument that is not traded on an established
securities market (and is not given in exchange for publicly traded property)
equals its principal amount if it bears interest at least equal to the
'applicable federal rate.' If the Property Owning Partnerships obtain
conventional financing and the holders of Senior Claims receive Cash or Cash
and shares of REIT Stock, instead of New Notes, the Cash received will be
treated as part of the 'amount realized' by the holders of Senior Claims,
except to the extent such Cash is attributable to accrued interest. If the
Subscription Elections have any value, such amount will be treated as part of
the 'amount realized' by the holders of Senior Claims, except to the extent
such amount is attributable to accrued interest.
Any capital gain will be long-term for holders of Senior Claims who have
held such Claims for more than one year. Certain taxpayers who hold Senior
Claims, such as individuals, may qualify for a reduced rate to the extent gain
qualifies as long-term capital gain. A portion of any such gain may constitute
ordinary income, rather than capital gain, to the extent of accrued interest
and accrued market discount. If consideration received by a holder is
allocable to interest accrued on the claim, a holder that is a cash method
taxpayer (or who otherwise was not previously required to include such
interest in income) will be required to include the fair market value of the
consideration, if any, allocable to such interest in income. A holder that is
an accrual method taxpayer (or who otherwise was previously required to
include such interest in income) may be entitled to recognize loss to the
extent that the fair market value of the consideration, if any, allocable to
such interest is less than the amount previously included in income by the
holder with respect to such interest.
Holders of Senior Claims who receive shares of REIT Stock will take a tax
basis in the shares of REIT Stock equal to their fair market value at the time
of receipt. Holders of Senior Claims who receive New Notes will take a tax
basis in the New Notes equal to their issue price at the time of receipt. The
holding period for such property will commence on the day following the
receipt of such property.
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C. TRANSFER TAXES
It is intended that the Confirmation Order will provide that, pursuant to
section 1146(c) of the Bankruptcy Code, all filing officers are directed to
accept for recording and record the deeds effectuating the transfer of the
Properties without the payment of any Transfer Taxes, including the New York
State Real Estate Transfer Tax, the New York City Real Property Transfer Tax
or any other stamp tax or similar tax within the meaning of section 1146(c) of
the Bankruptcy Code. All of the governmental units which administer and
collect the foregoing Transfer Taxes will be given due and proper notice of
the Plan and the proceedings to confirm the Plan, and it is intended that the
form of Confirmation Order contain an express adjudication by the Court that
the transfer of the Properties is exempt from all of the foregoing Transfer
Taxes pursuant to section 1146(c) of the Bankruptcy Code.
D. MORTGAGE RECORDING TAX
It is intended that the form of Confirmation Order will provide that the
recording of the Restated Mortgages, which will secure the New Notes, will be
exempt from New York State and New York City mortgage recording tax.
E. REIT TAXATION
The tax consequences with respect to the ownership, operation, and
disposition of the Properties by the Property Owning Partnerships and of the
REIT's ownership of its interest in the Lower Tier Limited Partnership are
complex, and are not discussed comprehensively herein. However, in general, it
is expected that, for federal income tax purposes, (a) the Property Owning
Partnerships and the Lower Tier Limited Partnership will be treated as
partnerships, and therefor their taxable income and tax loss will flow through
to their partners, (b) items of taxable income and tax loss will be allocated
by the Partnerships to their partners in accordance with the distributions to
be made to the partners and the partners' capital contributions, subject to
the allocation of built-in gain inherent in the Properties to the Upper Tier
Limited Partnership and (c) the REIT will qualify as a real estate investment
trust, and therefore will not be subject to tax to the extent it makes
distributions as required by the Internal Revenue Code.
The Internal Revenue Code defines a real estate investment trust as a
corporation, trust or association (i) that is managed by one or more directors
or trustees; (ii) the beneficial ownership of which is evidenced by
transferable shares, or by transferable certificates of beneficial interest;
(iii) that would be taxable as a domestic corporation, but for sections 856
through 860 of the Internal Revenue Code; (iv) that is neither a financial
institution nor an insurance company subject to certain provisions of the
Internal Revenue Code; (v) the beneficial ownership of which is held by one
hundred (100) or more persons; (vi) not more than fifty percent (50%) in value
of the outstanding capital stock of which is owned, directly or indirectly, by
five or fewer individuals (as defined in the Internal Revenue Code to include
certain entities) during the last half of each taxable year (the '5/50 Rule');
(vii) that makes an election to be a real estate investment trust (or has made
such election for a previous taxable year) and satisfies all relevant filing
and other administrative requirements established by the IRS that must be met
in order to elect and to maintain real estate investment trust status; (viii)
that uses a calendar year for federal income tax purposes and complies with
the
recordkeeping requirements of the Internal Revenue Code and Treasury
Regulations promulgated thereunder; and (ix) that meets certain other tests
regarding the nature of its income and assets. The Internal Revenue Code
provides that conditions (i) to (iv), inclusive, must be met during the entire
taxable year and that condition (v) must be met during at least three hundred
thirty five (335) days of a taxable year of twelve (12) months, or during a
proportionate part of a taxable year of less than twelve (12) months.
Conditions (v) and (vi) will not apply until after the first taxable year for
which an election is made by the REIT to be taxed as a real estate investment
trust. The REIT anticipates issuing sufficient Common Stock with sufficient
diversity of ownership to allow it to satisfy requirements (v) and (vi). See
'THE JOINT PLAN OF REORGANIZATION--Implementation of the Plan-- Formation of
the REIT.' In
addition, the Charter will provide for restrictions regarding transfer of the
Common Stock that are intended to assist the REIT in continuing to satisfy the
share ownership requirements described in (v) and (vi) above. Qualification as
a real estate investment trust involves the application of highly technical
and complex Internal Revenue Code provisions, for which there are only limited
judicial and administrative interpretations. The determination of various
factual matters and circumstances not entirely within the REIT's control may
affect the REIT's ability to qualify as a real estate investment trust. For
example, in order to qualify as a real estate investment trust, at least
ninety five percent (95%) of the REIT's gross income in any year must be
derived from qualifying sources, and the REIT must pay dividends to
stockholders aggregating annually at least ninety five percent (95%) of its
real estate investment trust taxable income (excluding capital gains). In
order to ensure its continuing
qualification as a real estate investment trust, the REIT may also be
prevented from disposing of its interest in the Properties for at least four
(4) years.
As long as the REIT qualifies as a real estate investment
trust,distributions made to the REIT's taxable U.S. stockholders out of
current or accumulated earnings and profits (and not designated as capital
gain dividends) will be taken into account by such U.S. stockholders as
ordinary income and will not be eligible for the dividends received deduction
generally available to corporations. Distributions that are designated as
capital gain dividends will be taxed as long-term capital gains (to the extent
they do not exceed the REIT's actual net capital gain for the taxable year)
without regard to the period for which the stockholder has held his Common
Stock. However, corporate stockholders may be required to treat up to twenty
percent (20%) of certain capital
73
gain dividends as ordinary income. Distributions in excess of current and
accumulated earnings and profits will not be taxable to a stockholder to the
extent that they do not exceed the adjusted basis of the stockholder's Common
Stock, but rather will reduce the adjusted basis of such stock. To the extent
that such distributions in excess of current and accumulated earnings and
profits exceed the adjusted basis of a stockholder's Common Stock, such
distributions will be included in income as long-term capital gain (or
short-term capital gain if the Common Stock has been held for one year or
less) assuming the Common Stock is a capital asset in the hands of the
stockholder. In addition, any distribution declared by the REIT in October,
November, or December of any year and payable to a stockholder of record on a
specified date in any such month shall be treated as both paid by the REIT and
received by the stockholder on December 31 of such year, provided that the
distribution is actually paid by the REIT during January of the following
calendar year.
Stockholders may not include in their individual income tax returns any
net operating losses or capital losses of the REIT. Instead, such losses would
be carried over by the REIT for potential offset against its future income
(subject to certain limitations). Taxable distributions from the REIT and gain
from the disposition of the Common Stock will not be treated as passive
activity income and, therefore, stockholders generally will not be able to
apply any 'passive activity losses' (such as losses from certain types of
limited partnerships in which the stockholder is a limited partner) against
such income. In addition, taxable distributions from the REIT generally will
be treated as investment income for purposes of the investment interest
limitations. Capital gains from the disposition of Common Stock (or
distributions treated as such) will be treated as investment income only if
the stockholder so elects, in which case such capital gains will be taxed at
ordinary income rates. The REIT will notify stockholders after the close of
the REIT's taxable year as to the portions of the distributions attributable
to that year that constitute ordinary income, return of capital, and capital
gain.
In general, any gain or loss realized upon a taxable disposition of the
Common Stock by a stockholder who is not a dealer in securities will be
treated as long-term capital gain or loss if the Common Stock has been held
for more than one year and otherwise as short-term capital gain or loss.
However, any loss upon a sale or exchange of Common Stock by a stockholder who
has held such stock for six months or less (after applying certain holding
period rules), will be treated as a long-term capital loss to the extent of
distributions from the REIT required to be treated by such stockholder as
long-term capital gain. All or a portion of any loss realized upon a taxable
disposition of the Common Stock may be disallowed if other Common Stock is
purchased within thirty (30) days before or after the disposition.
F. TAXATION OF THE NEW NOTES
The New Notes generally will be treated for federal income tax purposes
as newly-originated debt instruments. In general, interest, original issue
discount ('OID') and market discount on a debt instrument are treated as
ordinary income to the holder, and principal payments (other than partial
principal payments that do not exceed accrued market discount) will be treated
as a return of capital to the extent of the holder's basis allocable thereto.
Holders of debt instruments issued with OID generally must include OID in
ordinary income for federal income tax purposes as it accrues, in accordance
with a constant interest method that takes into account the compounding of
interest, in advance of receipt of the Cash attributable to such income. The
following discussion will apply if the New Notes are considered to have been
issued with OID. The total amount of OID on a debt instrument is the excess of
the 'stated redemption price at maturity' of the debt instrument over its
'issue price.' The issue price of a debt instrument is the price at which such
instruments are first sold to a buyer. The issue price of a debt instrument
generally also includes the amount paid by an initial holder of such debt
instrument for accrued interest that relates to a period prior to the issue
date of such debt instrument. The stated redemption price at maturity of a
debt instrument is the sum of all payments provided by the debt instrument
other than qualified stated interest payments. Qualified stated interest
generally includes interest payable at a single fixed rate if such interest
payments are unconditionally payable at intervals of one year or less during
the entire term of the obligation. Under a de minimis rule, OID on a debt
instrument will be considered to be zero (and all stated interest will be
treated as qualified stated interest) if such OID is less than twenty five
hundredths percent (0.25%) of the product of the stated redemption price at
maturity of the debt instrument and the number of complete years until
maturity. Holders generally must report de minimis OID pro rata as principal
payments are received, and such income will be capital gain if the debt
instrument is held as a capital asset. A holder generally must include in
gross income for any taxable year the sum of the daily portions of the OID, if
any, on the debt instrument accrued during an accrual period for each day on
which it holds the debt instrument, including the date of
purchase but excluding the date of disposition.
A subsequent purchaser of a debt instrument issued with OID at a price
greater than its adjusted issue price and less than its remaining stated
redemption price at maturity will be required to include in gross income the
daily portions of the OID on the debt instrument reduced pro rata by a
fraction, the numerator of which is the excess of its purchase price over such
adjusted issue price and the denominator of which is the excess of the
remaining stated redemption price at maturity over the adjusted issue price.
A purchaser of a debt instrument after original issuance may be subject
to the market discount rules of Internal Revenue Code sections 1276 through
1278. Under these Internal Revenue Code sections, 'market discount' is the
amount by which the purchaser's original basis in the debt instrument is
exceeded by the adjusted issue price of such debt instrument at the time of
74
purchase. Such purchaser generally will be required to recognize ordinary
income to the extent of accrued market discount on such debt instrument as
distributions includable in the stated redemption price at maturity thereof
are received, in an amount not exceeding any such distribution. Such market
discount would accrue in a manner to be provided in Treasury regulations and
should take into account prepayment assumptions. The Conference Committee
Report to the 1986 Act provides that until such regulations are issued, such
market discount would accrue either (i) on the basis of a constant interest
rate or (ii) either in the ratio of interest accrued for the relevant period
to the sum of interest accrued for such period plus the remaining interest as
of the beginning of such period or in the ratio of original issue discount
accrued for the relevant period to the sum of the original issue discount
accrued for such period plus the remaining original issue discount as of the
beginning of such period. Such purchaser also generally will be required to
treat a portion of any gain on a sale or exchange of the debt instrument as
ordinary income to the extent of the market discount accrued to the date of
disposition under one of the foregoing methods, less any accrued market
discount previously reported. Such purchaser will be required to defer
deduction of a portion of the excess of the interest paid or accrued on
indebtedness incurred to purchase or carry the debt instrument over the
interest (including original issue discount) distributable thereon. The
deferred portion of such interest expense in any taxable year generally will
not exceed the accrued market discount on the debt instrument for such year.
Any such deferred interest expense is, in general, allowed as a deduction not
later than the year in which the related market discount income isrecognized
or the debt instrument is disposed of. As an alternative to the inclusion of
market discount in income on the foregoing basis, the holder may elect to
include market discount in income currently as it accrues on all market
discount instruments acquired by such holder in that taxable year or
thereafter, in which case the interest deferral rule will not apply. Market
discount with respect to a debt instrument will be considered to be zero if
such market discount is less than twenty five hundredths percent (0.25%) of
the remaining stated redemption price at maturity of such debt instrument
multiplied by the weighted average maturity of the debt instrument remaining
after the date of purchase.
Debt instruments may be purchased at a premium for federal income tax
purposes, i.e., at a cost greater than their remaining stated redemption price
at maturity. Debt instruments may also be purchased at a premium subsequent to
initial issuance. If the holder holds such a debt instrument as a 'capital
asset' within the meaning of Internal Revenue Code section 1221, the holder
may elect under Internal Revenue Code section 171 to amortize such premium
under the constant interest method. The Conference Committee Report to the
1986 Act indicates a Congressional intent that the same rules that will apply
to the accrual of market discount on installment obligations will also apply
to amortizing bond premium under Internal Revenue Code section 171 on
installment obligations such as the debt instruments, although it is unclear
whether the alternatives to the constant interest method described above are
available. Amortizable premium will be treated as an offset to interest income
on a debt instrument rather than as a separate deduction item.
If a holder sells or exchanges a New Note, the holder will recognize gain
or loss equal to the difference, if any, between the amount realized and its
adjusted basis in the New Note. The adjusted basis of a New Note generally
will equal the cost of the New Note to the seller, increased by any original
issue discount or market discount previously included in the seller's gross
income with respect to the New Note and reduced by amounts included in the
stated redemption price at maturity of the New Note that were previously
received by the seller and by any amortized premium. Except as described above
with respect to market discount, and except as provided in this paragraph, any
gain or loss on the sale or exchange of a New Note realized by an investor who
holds the New Note as a capital asset will be capital gain or loss and will be
long-term or short-term depending on whether the debt instrument has been held
for the long-term capital gain holding period (more than one year). Such gain
will be treated as ordinary income if there was an 'intention to call' the New
Note prior to maturity.
G. FOREIGN INVESTORS
The rules governing United States federal income taxation of nonresident
alien individuals, foreign corporations, foreign partnerships, foreign estates
and foreign trusts (collectively, 'Foreign Investors') are complex, and no
attempt will be made herein to provide more than a summary of such rules.
Foreign Investors who hold Senior Claims should consult their own tax advisors
to determine the impact of federal, state and local income tax laws on the
transactions described herein, including any reporting requirements, as well
as the tax treatment of the transactions described herein under their home
country laws.
The taxation of distributions by the REIT to Foreign Investors will
depend upon whether such distributions are attributable to operating income or
are attributable to sales or exchanges by the REIT of its United States Real
Property Interests ('USRPIs'). USRPIs are generally interests in real property
located in the United States and interests in domestic corporations in which
the fair market value of its USRPIs exceeds a certain percentage.
The REIT anticipates that a substantial portion of the distributions to
holders of shares of Common Stock will be attributable to rents. To the extent
that such distributions do not exceed the current or accumulated earnings and
profits of the Company, they will be treated as dividends and will be subject
to a withholding tax equal to thirty percent (30%) of the gross amount of the
dividend, which tax will be withheld and remitted to the IRS by the REIT. Such
thirty percent (30%) rate may be reduced by United States income tax treaties
in effect with the country of residence of the Foreign Investor; however, a
Foreign Investor must furnish a completed IRS Form 1001 to the REIT to secure
such a reduction. Distributions in excess of the REIT's earnings and profits
will be treated as a nontaxable return of capital to a Foreign Investor to the
extent of the basis of his shares of Common
75
Stock, and any excess amount will be treated as an amount received in exchange
for the sale of his shares of Common Stock and treated under the rules
described below for the sale of Common Stock.
Distributions which are attributable to net capital gains realized from
the disposition of USRPIs by the REIT will be taxed as though the Foreign
Investors were engaged in a trade or business in the United States and the
distributions were gains effectively connected with such trade or business.
Thus, a Foreign Investor would be entitled to offset its gross income by
allowable deductions and would pay tax on the resulting taxable income at the
graduated rates applicable to United States citizens or residents. For both
individuals and corporations, the REIT must withhold a tax equal to thirty
five percent (35%) of all dividends that could be designated by the REIT as
capital gain dividends. To the extent that such withholding exceeds the actual
tax owed by the Foreign Investor, a Foreign Investor may claim a refund from
the IRS.
The REIT or any nominee (e.g., a broker holding shares in street name)
may rely on a certificate of non-foreign status on Form W-8 or Form W-9 to
determine whether withholding is required on gains realized from the
disposition of USRPIs.
If the shares owned directly or indirectly by Foreign Investors will be
less than fifty percent (50%) in value of the shares of Common Stock, the REIT
will be a 'domestically controlled REIT.' In such case, shares of Common Stock
held by Foreign Investors in the United States will not be considered USRPIs
and gains on sales of such shares will not be taxed to such Foreign Investors
as long as the seller is not otherwise considered to be engaged in a trade or
business in the United States. (The same rule applies to gains attributable to
distributions in excess of the Foreign Investor's cost for its shares,
discussed above.)
A Foreign Investor who receives and will hold New Notes should consult
its own tax advisor to determine whether the receipt of New Notes is subject
to taxation in the United States, whether interest received on the New Notes
is exempt from withholding (either as portfolio interest or pursuant to a
treaty) and whether any gain realized on the disposition of New Notes may be
exempt from taxation in the United States.
VII. VOTING PROCEDURES AND REQUIREMENTS
A. HOLDERS OF CLAIMS AND EQUITY INTERESTS
IT IS IMPORTANT THAT THE HOLDERS OF THE CLAIMS OR EQUITY INTERESTS THAT
ARE ENTITLED TO VOTE EXERCISE THEIR RIGHT TO VOTE TO ACCEPT OR REJECT THE
PLAN. Each of the holders of Claims or Equity Interests who are members of
Classes 1, 2, 3, 5, 6 and 7 has been sent a Ballot, together with instructions
for voting, along with a copy of this Disclosure Statement. Each of those
holders of Claims or Equity Interests should read the Ballot carefully and
follow the instructions contained therein. Please use only the Ballot or
Ballots that accompany this Disclosure Statement.
FOR YOUR VOTE TO COUNT, YOUR BALLOT MUST BE RECEIVED BY THE BALLOT AGENT
NO LATER THAN THE VOTING DEADLINE. THE VOTING DEADLINE TO ACCEPT OR REJECT
THE PLAN IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 UNLESS
EXTENDED.
IF A BALLOT IS DAMAGED OR LOST, YOU MAY CONTACT THE BALLOT AGENT. ANY
BALLOT WHICH IS EXECUTED AND RETURNED BUT WHICH DOES NOT INDICATE AN
ACCEPTANCE OR REJECTION OF THE PLAN WILL BE DEEMED AN ACCEPTANCE OF THE PLAN.
IF YOU HAVE ANY QUESTIONS CONCERNING VOTING PROCEDURES, YOU MAY CONTACT THE
BALLOT AGENT AT THE ADDRESS OR TELEPHONE NUMBER SPECIFIED BELOW.
GEORGESON & COMPANY, INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
PHONE: (212) 440-9800
FAX: (212) 440-9009
B. PARTIES IN INTEREST ENTITLED TO VOTE
Any holder of a Claim against or Equity Interest in the Debtors at the
date on which the order is entered approving this Disclosure Statement whose
Claim or Equity Interest has not previously been disallowed by the Bankruptcy
Court and has not been objected to is entitled to vote to accept or reject the
Plan if such Claim or Equity Interest is impaired under the Plan and is not a
member of a class that is deemed to have rejected the Plan under section
1126(g) of the Bankruptcy Code and either the Claim of such holder has been
scheduled by the Debtor (and such Claim is not scheduled as disputed,
contingent or unliquidated) or such holder or the Indenture Trustee on behalf
of such holder has filed a proof of claim or proof of equity interest on or
before the Bar Date (the last date set by the Bankruptcy Court for such
filings) or, in the case of Claims based on the rejection of executory
contracts and unexpired leases, the Bar Date as set by the Bankruptcy Court
for such Claims. The Morgan Loan Lenders do not hold Claims against or Equity
Interest in the Debtors and are not entitled to vote to accept or reject the
Plan.
76
Any Claim or Equity Interest as to which an objection has been filed is
not entitled to vote, unless the Bankruptcy Court, upon application of the
holder to whose Claim or Equity Interest an objection has been made, on or
before the Voting Deadline temporarily allows such Claim or Equity Interest
pursuant to Bankruptcy Rule 3018(a) to the extent that it deems proper for the
purpose of accepting or rejecting the Plan.
The following classes of Claims are impaired under the Plan: Class 1
(Priority Non-Tax Claims), Class 2 (Senior Claims), Class 3 (Other Secured
Claims), Class 5 (General Unsecured Claims), Class 6 (Affiliate Unsecured
Claims) and Class 7 (Equity Interests). Accordingly, the holders of Claims or
Equity Interests in such Classes are entitled to vote to accept or reject the
Plan. For purposes of calculating the number of Allowed Claims held by holders
of Allowed Claims that have voted to accept or reject the Plan under section
1126(c) of the Bankruptcy Code, all Allowed Claims held by an Entity or any
Affiliate thereof that acquired record ownership of such Allowed Claim after
the Petition Date will be aggregated and treated as one Allowed Claim. Each
holder of a Senior Claim will have only one vote.
The Bankruptcy Code defines acceptance of a plan by a class of claims as
acceptance by holders of at least two-thirds in dollar amount, and more than
one-half in number, of the claims of that class which actually cast Ballots to
vote on the plan. Accordingly, acceptance by a class of claims occurs only if
at least two-thirds in amount and a majority in number of the holders of
claims voting cast their Ballots in favor of acceptance. The Bankruptcy Code
defines acceptance of a plan by a class of equity interests as acceptance by
holders of at least two-thirds in dollar amount of that class which actually
cast Ballots for acceptance of the plan. A vote may be disregarded if the
Bankruptcy Court determines, after notice and a hearing, that such acceptance
of rejection was not solicited or procured in good faith or in accordance with
the provisions of the Bankruptcy Code.
C. VOTING PROCEDURES
A vote to accept or reject the Plan must be cast by using the Ballot
enclosed with this Disclosure Statement. A purported vote which is cast in any
other manner will not be counted. Consistent with the provisions of Rule 3018
of the Bankruptcy Rules, the Court has fixed 5:00 p.m. (New York City Time) on
August 9, 1996 (the 'Record Date') as the time and date for the determination
of holders of record of Claims and Equity Interests who are entitled to
receive a copy of this Disclosure Statement and all of the related materials,
and to vote to accept or reject the Plan. Ballots must be received by the
Ballot Agent, or by such other entity designated by the Bankruptcy Court, no
later than the Voting Deadline.
The Debtors reserve the right to amend the Plan in accordance with the
provisions for modification described in the Plan. See '-- Agreements Upon
Furnishing Ballots--Modification of the Plan.' Amendments to the Plan which
have been approved in writing in the sole and absolute discretion of a
majority in principal amount of the holders of Existing Notes (excluding
Existing Notes held by O&Y Affiliates) and, where required by the Plan, the
Morgan Loan Agent may be approved by the Bankruptcy Court at a hearing on
confirmation thereof without the necessity of resoliciting votes. However, if
resolicitation is required by the Bankruptcy Court, the Ballot Agent will
furnish new Ballots to those holders whose votes are required by the
Bankruptcy Court to be resolicited, to be used to vote to accept or reject the
Plan, as amended.
If a Ballot is signed by a trustee, executor, administrator,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should indicate such
capacity when signing and, unless otherwise determined by the Ballot Agent,
must submit proper evidence satisfactory to the Ballot Agent of his or her
authority to so act.
Except as provided below, unless the Ballot being furnished is timely
submitted to the Ballot Agent, or to such other entity designated by the
Bankruptcy Court, on or prior to the Voting Deadline together with any other
documents required by such Ballot, the Ballot Agent may, in consultation with
the Debtors with Noteholder Consent, reject such Ballot as invalid and,
therefore, decline to utilize it in connection with seeking confirmation of
the Plan by the Bankruptcy Court.
Unless otherwise directed by the Bankruptcy Court, a Ballot which is
signed, dated and timely received, but on which a vote to accept or reject the
Plan has not been indicated, will be regarded as a vote for acceptance of the
Plan. In addition, unless otherwise indicated, a vote cast by such holder will
constitute an acceptance of the Plan with respect to each Allowed Claim or
Allowed Equity Interest held, directly or indirectly, by such holder. In the
event of a dispute with respect to a Claim or Equity Interest, any vote to
accept or reject the Plan cast with respect to such Claim or Equity Interest
will not be counted for purposes of determining whether the Plan has been
accepted or rejected, unless the Bankruptcy Court orders otherwise.
D. NON-STANDARD ELECTION AND EXERCISE OF SUBSCRIPTION RIGHTS
Holders of Senior Claims desiring to make a Non-Standard Election must
complete and return a Ballot. HOLDERS OF SENIOR CLAIMS THAT FAIL TO COMPLETE
AND RETURN BALLOTS WILL BE CONCLUSIVELY PRESUMED TO HAVE MADE A STANDARD
ELECTION. HOLDERS OF SENIOR CLAIMS THAT SIGN BALLOTS, BUT FAIL TO INDICATE A
VOTE TO ACCEPT OR REJECT THE PLAN, WILL BE CONCLUSIVELY PRESUMED TO HAVE VOTED
TO ACCEPT THE PLAN. DISTRIBUTEES DESIRING TO EXERCISE SUBSCRIPTION RIGHTS TO
PURCHASE ADDITIONAL SHARES OF REIT STOCK MUST EXECUTE AND RETURN A
SUBSCRIPTION AGREEMENT. DISTRIBUTEES THAT
77
FAIL TO EXECUTE AND RETURN A SUBSCRIPTION AGREEMENT WILL BE CONCLUSIVELY
PRESUMED TO HAVE NOT EXERCISED THEIR SUBSCRIPTION RIGHTS.
E. AGREEMENTS UPON FURNISHING BALLOTS; MODIFICATION OF THE PLAN
The delivery of a Ballot pursuant to one of the procedures set forth
herein will constitute the agreement of such holder to accept (a) all the
terms of, and conditions to, this solicitation, and (b) the terms of the Plan,
subject to the provisions of the Plan relating to modifications of the Plan as
set forth below.
Modifications of the Plan may be proposed in writing by the Debtors at
any time before confirmation, provided that (x) the Debtors have obtained
Noteholder Consent and (y) the Plan, as modified, satisfies the requirements
of sections 1122 and 1123 of the Bankruptcy Code and (z) the Debtors have
complied with section 1125 of the Bankruptcy Code. The Plan may be modified at
any time after confirmation hereof and before substantial consummation of the
Plan, provided that (x) the Debtors have obtained Noteholder Consent and (y)
the Plan, as modified, satisfies the requirements of sections 1122 and 1123 of
the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing,
confirms the Plan as modified under section 1129 of the Bankruptcy Code and
the circumstances warrant such modifications. A holder of a Claim or Equity
Interest that has accepted the Plan will be deemed to have accepted the Plan
as modified in accordance with the foregoing if the proposed modification does
not materially and adversely change the treatment of the Claim or Equity
Interest of such holder. Notwithstanding the foregoing, the Plan may not be
amended, modified or supplemented if the proposed amendment, modification or
supplement would materially and adversely affect the Morgan Loan Lenders in a
manner disproportionate (in relation to the amount of their respective
distributions to be received under the Plan) to its impact on other
Distributees, unless the consent of the Morgan Loan Agent has been given in
the exercise of its sole and absolute discretion.
F. WAIVERS OF DEFECTS AND IRREGULARITIES
Unless otherwise directed by the Bankruptcy Court, all questions as to
the validity, form, eligibility (including the time of receipt), acceptance
and revocation or withdrawal of Ballots will be determined by the Ballot
Agent, in consultation with the Debtors with Noteholder Consent, whose
determination will be final and binding. As indicated under '-- Withdrawal of
Ballots; Revocation,' effective withdrawals of Ballots must be delivered to
the Ballot Agent, or to such other entity designated by the Bankruptcy Court,
prior to the Voting Deadline.
The Debtors, with Noteholder Consent, reserve the right to contest the
validity of any such withdrawal. The Debtors also reserve the right with
Noteholder Consent to reject any and all Ballots not in proper form, the
acceptance of which would, in the opinion of the Debtors or its counsel, be
unlawful. The Debtors further reserve the right with Noteholder Consent to
waive any defects or irregularities of delivery as to any particular Ballot.
The interpretation of defects or irregularities (including the Ballot and the
instructions thereto) by the Ballot Agent, in consultation with the Debtors
with Noteholder Consent, unless otherwise directed by the Bankruptcy Court,
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with deliveries of Ballots must be cured within
such time as the Ballot Agent (or the Bankruptcy Court) determines. Neither
the Ballot Agent nor any other Entity will be under any duty to provide
notification of defects or irregularities with respect to deliveries of
Ballots nor will any of them incur any liabilities for failure to provide such
notification. Unless otherwise directed by the Bankruptcy Court, delivery of
such Ballots will not be deemed to have been made until such irregularities
have been cured or waived. Ballots previously furnished and as to which any
irregularities have not theretofore been cured or waived will be invalidated.
G. WITHDRAWAL OF BALLOTS; REVOCATION
A holder of a Claim or Equity Interest who has delivered a valid Ballot
for acceptance of the Plan may withdraw such vote by delivering a written
notice of withdrawal to the Ballot Agent at any time prior to the Voting
Deadline. As indicated, the Debtors reserve the right with Noteholder Consent
to contest the validity of any such withdrawal. Unless otherwise directed by
the Bankruptcy Court, a purported notice of withdrawal of a Ballot which is
not received in a timely manner by the Ballot Agent will not be effective to
withdraw a previously furnished Ballot.
A holder of a Claim or Equity Interest who has previously submitted to
the Ballot Agent prior to the Voting Deadline a properly completed Ballot may
revoke such Ballot and change its vote by submitting to the Ballot Agent, or
to such other entity designated by the Bankruptcy Court, prior to the Voting
Deadline, a subsequent properly completed Ballot for acceptance or rejection
of the Plan. In the case where more than one timely, properly completed Ballot
is received, only the Ballot which bears the latest date will be counted for
purposes of determining whether the relevant requirements for voting on the
Plan have been satisfied.
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VIII. CONFIRMATION AND CONSUMMATION OF THE PLAN
A. CONFIRMATION HEARING
Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court,
after notice, to hold a hearing on confirmation of the Plan. By order of the
Bankruptcy Court, the Confirmation Hearing has been scheduled for September
11, 1996 at 2:00 p.m. (New York City time), at the United States Bankruptcy
Court for the Southern District of New York, Alexander Hamilton Custom House ,
Room 610-2, One Bowling Green, New York, New York 10004-1408. The Confirmation
Hearing may be adjourned from time to time by the Bankruptcy Court without
further notice except for an announcement made at the Confirmation Hearing or
at any adjourned Confirmation Hearing.
B. OBJECTIONS TO CONFIRMATION OF THE PLAN
Section 1128(b) of the Bankruptcy Code provides that any party in
interest may object to confirmation of a plan. Any objection to confirmation
of the Plan must be made in writing, state that it is an objection to
confirmation of the Plan, indicate the nature of the objection and the legal
basis therefor, and be filed with and received by the Bankruptcy Court and
served upon and received by the parties listed on the service list established
in the Reorganization Cases, together with proof of service, on or before
August 28, 1996 at 5:00 p.m. (New York City time).
Without limiting the foregoing, objections must be served on the
following:
237 Park Avenue Associates, L.L.C
1290 Associates, L.L.C.
c/o Olympia & York Companies (U.S.A.)
237 Park Avenue, 12th Floor
New York, New York 10017
Attn: Managing Attorney
Weil, Gotshal & Manges LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
Attn: Brian S. Rosen, Esq.
Kelley Drye & Warren LLP
Attorneys for the Indenture Trustee
101 Park Avenue
New York, New York 10178
Attn: David E. Retter, Esq.
Battle Fowler LLP
Attorneys for the Ad Hoc
Committee
75 East 55th Street
New York, New York 10022
Attn: Douglas L. Furth, Esq.
Office of the United States Trustee
80 Broad Street--3rd Floor
New York, New York 10004
Attn: Mary Tom, Esq.
Objections to confirmation of the Plan are governed by Bankruptcy Rule
9014. UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, IT WILL
NOT BE CONSIDERED BY THE BANKRUPTCY COURT.
C. CONFIRMATION REQUIREMENTS
At the Confirmation Hearing, the Bankruptcy Court will confirm the Plan
only if all of the requirements of section 1129 of the Bankruptcy Code are
satisfied. Among the requirements for confirmation of a plan are that the plan
is (a) accepted by all impaired classes of claims and equity interests or, if
rejected by an impaired class, that the plan 'does not discriminate unfairly'
and is 'fair
79
and equitable' as to such class, (b) accepted by at least one impaired class
of claims, (c) feasible and (d) in the 'best interests' of holders of claims
and equity interests impaired under the plan.
1. Acceptance
The Claims contained in Class 4 (Unimpaired Unsecured Claims) are
unimpaired under the Plan and the holders thereof are conclusively presumed to
have accepted the Plan under the Bankruptcy Code.
Claims and Equity Interests contained in Class 1 (Priority Non-Tax
Claims), Class 2 (Senior Claims), Class 3 (Other Secured Claims), Class 5
(General Unsecured Claims), Class 6 (Affiliated Unsecured Claims) and Equity
Interests in Class 7 (Equity Interests) are impaired under the Plan.
Accordingly, the holders of Claims in each of Class 1, Class 2, Class 3, Class
5, Class 6 and Class 7 are entitled to vote on the Plan. Under the Bankruptcy
Code, a plan must be accepted by at least one impaired class of claims
determined without including any acceptance of the plan by any insider to
satisfy the confirmation requirements of section 1129. Therefore, the Plan
must be accepted by holders of Claims in any of Class 1, Class 2, Class 3 or
Class 5.
2. 'Unfair Discrimination' and 'Fair and Equitable' Tests
In the event that any impaired class does not accept the Plan, the
Debtors nevertheless may seek confirmation of the Plan. To obtain
confirmation, the Debtors must demonstrate to the Bankruptcy Court that the
Plan 'does not discriminate unfairly' and is 'fair and equitable' with respect
to such class. A plan does not discriminate unfairly if the legal rights of a
dissenting class are treated in a manner consistent with the treatment of
other classes whose legal rights are similar in priority to those of the
dissenting class.
The Bankruptcy Code establishes different 'fair and equitable' tests for
secured creditors, unsecured creditors and equity holders as follows:
(a) Secured Creditors. Either (i) each impaired secured creditor
retains its liens securing its secured claim and receives on account of
its secured claim deferred Cash payments having a present value equal to the
allowed amount of its secured claim or (ii) each impaired secured creditor
realizes the 'indubitable equivalent' of its allowed secured claim, or (iii)
the property securing the claim is sold free and clear of Liens, with such
Liens to attach to the sale proceeds and the treatment of such Liens on
proceeds as provided in clause (i) or (ii) of section 1129(b)(2)(A) of the
Bankruptcy Code.
(b) Unsecured Creditors. Either (i) each impaired unsecured
creditor receives or retains under the plan property of a value equal to
the allowed amount of its claim, or (ii) all holders of claims and interests
that are junior to the claims of the dissenting class may not receive or
retain any property under the plan, subject to the possible applicability of a
judicially-created exception relating to the contribution of 'new value' by
holders of equity interests.
Based upon the participation of the Noteholders serving on the Ad Hoc
Committee in the development of the Plan, their expressions of support for the
Plan and expressions of support of the Plan by Whitehall, and certain other
Noteholders (all of the foregoing Noteholders representing, in the aggregate,
approximately seventy five percent (75%) of Senior Claims), the Debtors
believe that Class 2 (Senior Claims) will vote to accept the Plan. Because
Class 3 (Other Secured Claims) will either be paid in full, in Cash, on the
Effective Date, have their claims reinstated or receive the property securing
their claims, the Debtors believe that Class 3 will vote to accept the Plan.
With respect to Class 1 (Priority Non-Tax Claims) and Class 5 Claims (General
Unsecured Claims), the Plan provides that the holders of such claims will be
paid in full in Cash on the Effective Date and Debtors believe that Class 1
and 5 will vote to accept the Plan. Because Affiliates of the Debtors control
all of the Class 6 Claims (Affiliate Unsecured Claims) the Debtors believe
that Class 6 will vote to accept the Plan. Additionally, because all of the
Equity Interests in Class 7 (Limited Partner Equity Interests) are either
controlled by Affiliates of the Debtors or, with respect to JMB LP, have
indicated their support of the Plan, the Debtors believe that Class 7 will
vote to accept the Plan.
Accordingly, the Debtors do not anticipate that any impaired class
entitled to vote will vote to reject the Plan and, consequently, the Debtors
do not believe that the 'unfair discrimination' and 'fair and equitable' tests
will need to be satisfied. However, the Debtors reserve the right to seek
confirmation of the Plan pursuant to section 1129(b)(2)(B) if any class of
Claims which is impaired and entitled to vote does not vote to accept the Plan
by the statutory majorities required by the Bankruptcy Code.
3. Feasibility of the Plan
For the Plan to be confirmed, the Bankruptcy Court must determine that it
is 'feasible' as required by section 1129(a)(11) of the Bankruptcy Code. This
test has been construed to mean that the Debtor will have sufficient resources
to meet its obligations under the Plan on a timely basis according to its
terms.
Except for Class 2 Claims (Senior Claims) and Class 7 Interests (Equity
Interests), Closing Cash will be used to satisfy all Claims under the Plan.
With respect to Class 2 Claims (Senior Claims), based upon the Cash Flow
Projections for the REIT and the Properties annexed hereto as Exhibit 4, VCG
believes that the Property Owning Partnerships will have sufficient cash flow
to pay debt service obligations in respect of the New Notes, or any
indebtedness incurred pursuant to a Conventional Financing
80
Alternative, and to refinance such indebtedness as it matures. See 'RISK
FACTORS--Accuracy of Financial Projections.' With respect to Class 7 Interests
(Equity Interests), no Cash payments are required under the Plan. Based on the
estimated amount of Claims and the Debtors' Cash anticipated to be on hand on
the Effective Date and based on the anticipated operations of the Debtors,
prior to the Effective Date, the Debtors believe that they have sufficient
resources to satisfy all of its obligations under the Plan and, therefore, the
Plan is feasible as required by the Bankruptcy Code.
4. 'Best Interests' Test
With respect to each impaired class of Claims and Equity Interests,
confirmation of the Plan requires that each holder of a Claim or Equity
Interest in such class either (a) vote to accept the Plan or (b) receive or
retain under the Plan property of a value, as of the Effective Date of the
Plan, that is not less than the value that such holder would receive or retain
if the Debtors were liquidated in a hypothetical liquidation under chapter 7
of the Bankruptcy Code.
Although no formal appraisals of the Properties or any other assets
related to the Properties have been obtained, the financial advisor to the Ad
Hoc Committee believes that the fair market value of the Properties ranges
between Six Hundred Twenty Five Million ($625,000,000) and Seven Hundred
Twenty Million Dollars ($720,000,000). The financial advisor to the Ad Hoc
Committee believes that in a chapter 7 liquidation the Properties would sell
for less than the fair market value of the Properties.
Additionally, in a chapter 7 liquidation there would not be any
distribution for the Claims or Equity Interests in Classes 1 (Priority Non-Tax
Claims), 5 (General Unsecured Claims), 6 (Affiliate Unsecured Claims) and 7
(Equity Interests) because the Debtors have no unencumbered assets and all of
the Debtors' assets would be distributed to the Indenture Trustee.
Accordingly, the 'best interest' test is satisfied for such Classes. Each of
the four alternative treatments for the holders of Claims in Class 3 (Other
Secured Claims) provides the holders of such Claims with distributions which
are equal in value to the value of their Claims. Accordingly the 'best
interest' test is satisfied for Class 3. Because Class 4 (Unimpaired Unsecured
Claims) is unimpaired, and is deemed to have accepted the Plan, the best
interests test need not be applied to the recoveries of Class 4.
Under the Plan, the holders of Senior Claims will receive, subject to
adjustment if the Conventional Financing Alternative is consummated, (i)
Eleven Million One Hundred Sixty Thousand (11,160,000) shares of REIT Stock,
(ii) Three Hundred Ninety One Million Dollars ($391,000,000) in principal
amount of New Notes, and (iii) ninety three percent (93%) of the Subscription
Rights. These Plan Securities, together with the Plan Securities issued to the
Morgan Loan Lenders, will evidence all but a very small and difficult to
quantify percentage of the economic value inherent in the Properties. In
addition, the Plan Securities will evidence the same extremely high percentage
of the economic value of (a) the Tenant Notes, in which the Indenture Trustee
does not have a perfected security interest, and (b) Equityco's interest
(estimated at up to One Million Two Hundred Thousand Dollars ($1,200,000)) in
a reserve for payment of utility taxes established pursuant to the 2 Broadway
Plan, which would not be available to holders of Existing Notes in a
liquidation scenario. The claim against Equityco will, however, be withdrawn.
If the Debtors were liquidated in a chapter 7 case, two significant costs
would be incurred that would adversely affect the recovery of holders of
Senior Claims. First, a chapter 7 liquidation would require the estate to
incur the increased costs and expenses of a chapter 7 liquidation, including,
possibly, commissions of up to three percent (3%) payable to a trustee in
bankruptcy and professional advisors to such trustee. Second, in a chapter 7
liquidation, the holders of the Existing Notes would have to pay New York City
and State real property transfer taxes of three and twenty five thousandths
percent (3.025%) of the value of the Properties. Moreover, due to an inability
to lease the Properties in chapter 7, the value of the Properties may decline
in a chapter case of indeterminate duration. Finally, any sale in chapter 7
liquidation would likely result in a distress sales price.
On balance, the Debtors believe that the holders of Senior Claims will
receive more under the Plan than in a liquidation scenario.
D. CONSUMMATION OF THE PLAN
The Plan will be consummated on the Effective Date. The Effective Date
will occur on the later to occur of (a) the first
Business Day which is no less than eleven (11) days after the Confirmation
Date, or (b) such other date as is fixed from time to time by the Debtors,
upon Noteholder Consent, by filing a notice thereof with the Bankruptcy Court,
but in no event will the Effective Date occur earlier than the date on which
each of the conditions precedent to the occurrence of the Effective Date
contained in Section 18.2 of the Plan has been waived or satisfied in
accordance with Section 18.3 of the Plan.
The Plan is to be implemented in compliance with the provisions of the
Bankruptcy Code.
IX. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN
The Debtors believe that the Plan provides the holders of Claims with the
potential for the greatest realization on the Properties and interests in
property of the Debtors and, therefor, is in the best interests of such
holders. If the Plan is not confirmed, the Reorganization Cases could
continue, alternative plan or plans of reorganization could be proposed and
confirmed, or the estates of the Debtors could be liquidated under chapter 7
or chapter 11 of the Bankruptcy Code.
81
A. CONTINUATION OF THE REORGANIZATION CASES
If the Debtors remain in chapter 11, they may be able to continue for an
unspecified period of time to operate their businesses and manage the
Properties as debtors in possession, assuming that the Indenture Trustee
consents to the Debtors' continued use of Cash collateral or that the Debtors
could successfully assert their right to use Cash collateral. However, the
Debtors would remain subject to the restrictions imposed by the Bankruptcy
Code and to the operating and financial constraints associated with the
bankruptcy proceedings, and would incur continuing significant expenses
associated with such proceedings.
B. ALTERNATIVE JOINT PLAN OF REORGANIZATION
If the Plan is not confirmed, and the transactions contemplated
thereunder cannot be implemented, the Debtors or any other party in interest
in the Reorganization Cases could undertake to formulate, propose and solicit
acceptances to an alternate plan of organization. Such an alternative plan
might involve a reorganization and continuation of the business of the Debtors
or a liquidation of their properties or interests in property. Any such plan
may be similar in certain respects to the Plan or might involve the sale of
the Properties.
C. LIQUIDATION UNDER CHAPTER 7
Alternatively, a liquidation of the Debtor under chapter 7 of the
Bankruptcy Code could be effected, with the results described above under
'Best Interests Test.'
D. SECTION 1129 (B)
The Debtors reserve the right to request confirmation of the Plan in
accordance with the 'cram down' provisions of section 1129(b) of the
Bankruptcy Code.
X. CONCLUSION
The Debtors believe that the Plan is in the best interests of all holders
of Claims and Equity Interests and urge all holders of impaired Claims and
Equity Interests to vote to accept the Plan and to evidence such acceptance by
returning their Ballots so that they will be received by the Ballot Agent by
the Voting Deadline.
Dated: New York, New York
August 9, 1996
Respectfully submitted,
237 PARK AVENUE ASSOCIATES, L.L.C.
By: O&Y NY Building Corp., its
Managing Member
By: /s/ JOHN A.MOORE____________________
Name: John A. Moore
Title: Authorized Representative
1290 ASSOCIATES, L.L.C.
By: O&Y NY Building Corp., its Managing
Member
By: /s/ JOHN A. MOORE____________________
Name: John A. Moore
Title: Authorized Representative
/s/ BRIAN S. ROSEN_____________________
Brian S. Rosen, Esq.
(BSR 0571)
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Brian S. Rosen, Esq. (BSR 0571)
82
EXHIBIT
1
SECOND AMENDED PLAN OF REORGANIZATION
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
......................................................................... X
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
......................................................................... X
SECOND AMENDED JOINT PLAN OF
REORGANIZATION
OF 237 PARK AVENUE ASSOCIATES, L.L.C.
AND 1290 ASSOCIATES, L.L.C.
WEIL, GOTSHAL &
MANGES LLP
Attorney for the Debtors
in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Brian S. Rosen, Esq. (BR0571)
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS............................. 1
ARTICLE II
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS
AND PRIORITY TAX CLAIMS................................... 11
2.1 Expenses ofAdministration.......... 2.2
Priority Tax Claims............ 2.3
Professional Fees..............
ARTICLE III OF CLAIMS AND EQUITY INTERESTS...
3.1 Classification...
3.2 Voting.........................
ARTICLE III
ARTICLE IV PROVISIONS
FOR TREATMENT OF PRIORITY NON-TAX CLAIMS...
4.1 Classification...
4.2 Treatment........
ARTICLE V PROVISIONS
FOR TREATMENT OF SENIOR CLAIMS...
5.1 Classification...
5.2 Allowance..............
5.3 Treatment...........
ARTICLE VI PROVISIONS
FOR TREATMENT OF OTHER SECURED CLAIMS...
6.1 Classification...
6.2 Treatment.....
ARTICLE VII FOR TREATMENT OF
INSURED CLAIMS AND TENANT REIMBURSEMENT
CLAIMS...
7.1 Classification...
7.2 Treatment..........
ARTICLE VIII PROVISIONS
FOR TREATMENT OF GENERAL UNSECURED CLAIMS...
8.1 Classification...
8.2 Treatment....
ARTICLE IX PROVISIONS
FOR TREATMENT OF AFFILIATE UNSECURED CLAIMS...
9.1 Classification...
9.2 Treatment.....
ARTICLE X PROVISIONS FOR TREATMENT OF EQUITY INTERESTS...
10.1 Classification...
10.2 Treatment.....
ARTICLE XI DISTRIBUTIONS TO CONSUMMATE
SETTLEMENT AGREEMENT.....
ARTICLE XII OPTIONAL DISTRIBUTIONS....
12.1 General Provisions Regarding Distributions
to Distributees......
12.2 Election Procedure..
12.3 Standard Election...................
12.4 Non-Standard Election..................
12.5 Subscription Rights.................
12.6 Fractional Shares...................
ARTICLE XIII IMPLEMENTATION OF THE PLAN...
13.1 Delivery of Plan Documents...
13.2 Cash Distribution in Lieu of New Notes....
13.3 Certain Other Agreements.................
13.4 Issuance of Securities...................
13.5 Distributions to Indenture Trustee and Security Holders..
13.6 Surrender of Securities.....
13.7 Withholding of Taxes................
13.8 Boards of Directors of REIT, GP Corps. and Upper Tier GP Corp.....
13.9 Qualification as REIT...............
13.10 Registration Statement...............
i
ARTICLE XIV PROVISIONS GOVERNING DISTRIBUTIONS...
ARTICLE XIV
14.1 Date of Distributions........................
14.2 Disbursing Agent...................
14.3 Source of Distributions................................
14.4 Delivery of Distributions..............................
14.5 Time Bar to Cash Payments..................................
14.6 Manner of Payment Under the Plan..................
ARTICLE XV RIGHTS AND POWERS OF DISBURSING AGENT...
15.1 Exculpation...
15.2 Powers of the Disbursing Agent......
ARTICLE XVI RESOLVING
AND TREATING DISPUTED CLAIMS UNDER THE PLAN...
16.1 Prosecution of Objections...
16.2 No Distributions Pending Allowance.........................
16.3 Claims Reserve............................
16.4 Distributions After Allowance........................
16.5 Remaining Funds..........................
16.6 Allowance and Objection to Allowance of Tenant
Reimbursement Claims......................................
16.7 Allowance and Objection to Allowance of Priority Utility
Tax Claims......................................
16.8 Distributions After Effective Date............
ARTICLE XVII EXECUTORY CONTRACTS AND UNEXPIRED LEASES...
17.1 General Treatment...
17.2 Amendments to Schedule; Effect of Amendments..............
17.3 Bar to Rejection Damages.....................
ARTICLE XVIII CONDITIONS
PRECEDENT TO CONFIRMATION OF PLAN AND TO EFFECTIVE DATE...
18.1 Conditions Precedent to Confirmation
of the Plan...
18.2 Conditions Precedent to Effective Date of the
Plan..........
18.3 Waiver of Conditions Precedent.....................
ARTICLE XIX EFFECT OF CONFIRMATION...
19.1 Jurisdiction...
19.2 Vesting and Liens...................
19.3 Equityco Claims.....................
19.4 2 Broadway Plan..........................
19.5 Binding Effect..........................
ARTICLE XX RELEASES,
INJUNCTIONS AND WAIVER OF CLAIMS...
20.1 Release of the O&Y Releasees...
20.2 Release of the Plan Releasees.......................
20.3 Injunction..........................................
20.4 Avoidance and Recovery Actions.............
ARTICLE XXI RETENTION OF JURISDICTION...
21.1 Retention of Jurisdiction...
21.2 Modification of Plan.............................
ARTICLE XXII MISCELLANEOUS PROVISIONS...
22.1 Payment of Statutory Fees...
22.2 Retiree Benefits..............................
22.3 Dissolution of Creditors' Committee....................
22.4 Post-Effective Date Fees and Expenses.................
22.5 Severability of Plan Provisions.........................
22.6 Governing Law.....................
22.7 Time of the Essence.............................
22.8 Reasonable Cooperation.................................
22.9 Notices.................................
22.10 Action By Indenture Trustee........................
22.11 O&Y Administrative Expense Claim...
22.12 VCG Fees...........................
22.13 Confirmation Request.................................
ii
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
........................................................................ X
In re:
: Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C. 96 B 42177 (JLG) and: 96 B 42178 (JLG)
and 1290 ASSOCIATES, L.L.C., (Jointly Administered)
: Debtors.
:
......................................................................... X
SECOND AMENDED JOINT PLAN
OF REORGANIZATION
OF 237 PARK AVENUE ASSOCIATES, L.L.C.
AND 1290 ASSOCIATES, L.L.C.
237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C. hereby
propose the following joint plan of reorganization pursuant to sections
1121(a) and (c) of title 11 of the United States Code.
WEIL, GOTSHAL & MANGES LLP
Attorney for the Debtors
in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Brian S. Rosen, Esq. (BR 0571)
ARTICLE I
DEFINITIONS
As used in the Plan, each of the following terms shall have the
respective meaning specified below and such meaning shall be equally
applicable to the singular and plural forms of the terms defined. All of the
definitions and provisions contained in this Article I are and shall be
regarded as integral, substantive and operative provisions of the Plan.
1.1 2 Broadway L.P.: 2 Broadway Associates, L.P., a Delaware limited
partnership.
1.2 2 Broadway Plan: The Plan of Reorganization of 2 Broadway
Associates, L.P., dated June 20, 1995, in Case No. 95 B 42724 (JLG), and
confirmed by order of the Bankruptcy Court, dated August 28, 1995.
1.3 2 Broadway Tax Certiorari Proceeds: The Net Tax Proceeds remaining
after payment of Allowed Tenant Reimbursement Claims, both as defined in the 2
Broadway Plan, pursuant to the 2 Broadway Plan.
1.4 2 Broadway Utility Tax Reserve: The reserve established pursuant to
Section 9.7 of the 2 Broadway Plan for the payment of Priority Utility Tax
Claims, as defined in the 2 Broadway Plan.
1.5 237 Assumption and Security Agreement: The Debt Assumption, Release
and Security Agreement, dated as of the Effective Date, by and among the
Debtors, Building Corp., Equityco and the Indenture Trustee, substantially in
the form contained in the Plan Supplement.
1.6 237 Corp.: 237 GP Corp., a Delaware corporation and a wholly-owned
subsidiary of the REIT.
1.7 237 Excess Amount: A portion of the Excess Amount equal to Sixty
Million Dollars ($60,000,000).
1.8 237 L.L.C.: 237 Park Avenue Associates, L.L.C., a New York limited
liability company, formerly 237 Park Avenue Associates, a New York general
partnership.
1.9 237 Operating Agreement Modification: The Modification of Operating
Agreement of 237 L.L.C., dated as of the Effective Date, by and among the JMB
LP, Equityco and Building Corp., substantially in the form contained in the
Plan Supplement.
1.10 237 Park Partners, L.P.: 237 Park Partners, L.P., a Delaware
limited partnership.
1.11 237 Property: The real property and improvements commonly referred
to as 237 Park Avenue, New York, New York.
1.12 1290 Assumption and Security Agreement: The Debt Assumption,
Release and Security Agreement, dated as of the Effective Date, by and among
the Upper Tier Limited Partnership, Building Corp., Equityco and the Indenture
Trustee, substantially in the form contained in the Plan Supplement.
1.13 1290 Corp.: 1290 GP Corp., a Delaware corporation and a
wholly-owned subsidiary of the REIT.
1.14 1290 Excess Amount: The difference between the Excess Amount and
the 237 Excess Amount.
1.15 1290 Ground Lease: That certain Lease, dated February 25, 1959,
between Martha F. Keeping, as landlord, and 91078 Corporation, as tenant,
recorded in the Office of the Register of The City of New York, New York
County in Liber 5068, cp. 489, as modified and amended by certain agreements
recorded in the Office of the Register of the City of New York, New York
County in Liber 5122, cp. 139 and Liber 5122, cp. 584 and by certain
unrecorded Lease Extension Agreements, dated February 25, 1994, January 1,
1995, August 31, 1995, January 31, 1996 and March 14, 1996, and as to which
the interests of landlord and tenant were assigned (following mesne
assignments) to 1290 L.L.C.
1.16 1290 L.L.C.: 1290 Associates, L.L.C., a New York limited liability
company, formerly 1290 Associates, a New York general partnership.
1.17 1290 Partners, L.P.: 1290 Partners, L.P., a Delaware limited
partnership.
1.18 1290 Property: The real property and improvements commonly
referred to as 1290 Avenue of the Americas, New York, New York.
1.19 Administrative Claims Bar Date: 4:00 p.m., New York City time, on
the ninetieth (90th) day following the Effective Date.
1.20 Administrative Expense Claim: Any claim constituting a cost or
expense of administration of the Reorganization Cases asserted under section
503(b) of the Bankruptcy Code, including, without limitation, (a) any actual
and necessary costs and expenses of preserving the estates of the Debtors, (b)
any actual and necessary costs and expenses of operating the businesses of the
Debtors in Possession, (c) any indebtedness or obligations incurred or assumed
by the Debtors in Possession in connection with the conduct of their
businesses or for the acquisition or lease of property or the rendition of
services, (d) any costs and expenses of the Debtors in Possession for the
management, maintenance, preservation, sale or other disposition of any
assets, the administration and implementation of the Plan, and the prosecution
or defense of claims by or against the Debtors, (e) any allowances of
1
compensation and reimbursement of expenses to the extent allowed by Final
Order under section 330 or 503 of the Bankruptcy Code, whether arising before
or after the Effective Date and (f) any fees or charges assessed against the
estate of either Debtor under section 1930, chapter 123, title 28, United
States Code.
1.21 Affiliate: With reference to any Entity, any other Entity that,
within the meaning of Rule 12b-2 promulgated under the Securities Exchange Act
of 1934, as amended, 'controls,' is 'controlled by' or is under 'common
control with' such Entity.
1.22 Affiliate Unsecured Claim: Any Unsecured Claim against either of
the Debtors held by an O&Y Affiliate, other than a Qualifying Affiliate
Unsecured Claim and a Tenant Reimbursement Claim.
1.23 Allowed: With reference to any Claim or Equity Interest, (i) any
Claim against or Equity Interest in either Debtor allowed hereunder, (ii) any
Claim against or Equity Interest in either Debtor, proof of which was filed on
or before the date designated by the Bankruptcy Court in accordance with Rule
3003(c)(3) of the Bankruptcy Rules as the last date for filing proofs of claim
against the Debtors or such other date as has been authorized by an order of
the Bankruptcy Court, or (iii) if no proof of claim was so filed, any Claim
against or Equity Interest in either Debtor which has been listed by such
Debtor in its Schedules, as such Schedules may be amended from time to time in
accordance with Rule 1009 of the Bankruptcy Rules, as liquidated in amount and
not disputed or contingent; provided, however, that with respect to the
preceding clauses (ii) and (iii) no objection to the allowance thereof has
been interposed within the applicable period of limitation fixed by the Plan,
the Bankruptcy Code, the Bankruptcy Rules or a Final Order or as to which an
objection has been interposed, to the extent such Claim or Equity Interest has
been allowed, in whole or in part, by a Final Order. For purposes of
determining the amount of an 'Allowed Claim', there shall be deducted
therefrom an amount equal to the amount of any claim which a Debtor may hold
against the holder thereof, to the extent such claim may be set off pursuant
to section 553 of the Bankruptcy Code.
1.24 Asset Management Agreement: An agreement between the REIT and the
Asset Manager, executed on or before the Effective Date, upon Noteholder
Consent, providing for the general oversight of the assets of the REIT from
and after the Effective Date and otherwise on terms no less favorable to the
REIT than those set forth in the Disclosure Statement.
1.25 Asset Manager: VCG.
1.26 Assignment of the Remaining 2 Broadway Assets: The Assignment of
Remaining 2 Broadway Assets, dated as of the Effective Date, by and among 1290
L.L.C., 2 Broadway L.P., 2 Broadway Associates and 2 Broadway Land Company,
substantially in the form contained in the Plan Supplement.
1.27 Ballot: The form or forms distributed to each holder of an
impaired Claim or Equity Interest on which is to be indicated acceptance or
rejection of the Plan and, to the extent applicable, the election of
distributions and the subscription of additional shares of REIT Stock
contained in Article XII hereof.
1.28 Ballot Agent: The Entity designated by the Debtors and approved by
the Bankruptcy Court to, among other things, receive and tabulate acceptances
and rejections of the Plan and the election of distributions and the
subscriptions of additional shares of REIT Stock hereunder.
1.29 Ballot Date: The date set by the Bankruptcy Court by which all
Ballots for acceptance or rejection of the Plan and, to the extent applicable,
the election of distributions and the subscription for additional shares of
REIT Stock contained in Article XII hereof, must be received by the Ballot
Agent.
1.30 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as codified
under title 11 of the United States Code and as in effect on the Confirmation
Date.
1.31 Bankruptcy Court: The United States Bankruptcy Court for the
Southern District of New York having jurisdiction over the Reorganization
Cases.
1.32 Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure as in
effect on the Confirmation Date.
1.33 Bar Date: May 15, 1996, the date established by the Bankruptcy
Court as the last date for filing proofs of claim, other than proofs of claim
with respect to Administrative Expense Claims, in the Reorganization Cases.
1.34 Building Corp.: O&Y NY Building Corp., a Delaware corporation.
1.35 Business Day: Any day other than (i) a Saturday, (ii) a Sunday,
(iii) any other day on which banking institutions in New York, New York are
required or authorized to be closed by law or executive order or (iv) Rosh
Hashanah (first day), Yom Kippur and the Friday after Thanksgiving.
1.36 Cash: Legal tender of the United States of America.
1.37 Cash Collateral Stipulation: That certain Stipulation and Order
Pursuant to Sections 361 and 363 of the Bankruptcy Code and Fed. R. Bankr. P.
2002 and 4001 Authorizing Debtors to Use Cash Collateral, dated April 25,
1996, by and among the Indenture Trustee, the Debtors and O&Y Management
Corp., as amended or modified.
1.38 Cash Management Agreement: That certain Cash Management Agreement,
dated June 20, 1995, by and among 1290 Associates, 237 Park Avenue Associates,
NationsBank of Tennessee, N.A., as Indenture Trustee, and O&Y Management
Corp.,
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together with that certain letter agreement, dated September 18, 1995, by and
among 1290 Associates, 237 Park Avenue Associates and NationsBank of
Tennessee, N.A., as Indenture Trustee, as each of the foregoing has been
amended to date.
1.39 Causes of Action: Any and all actions, liabilities, obligations,
rights, suits, debts, sums, of money, damages, judgments, claims and demands
whatsoever, whether known or unknown, in law, equity or otherwise.
1.40 CIBC: The Canadian Imperial Bank of Commerce.
1.41 CIBC Settlement: An agreement, to be entered into upon Noteholder
Consent, providing for a settlement by and among 237 L.L.C., CIBC and Devco of
all claims relating to or arising out of CIBC's lease of space at the 237
Property, including payment by CIBC to 237 L.L.C. of Four Million Five Hundred
Thousand Dollars ($4,500,000).
1.42 Citibank Release: A release of the lien on and any claim to the
JMB Notes to be executed and delivered by Citibank, N.A., on or prior to the
Effective Date, such release in form and substance satisfactory to the
Indenture Trustee in the exercise of its reasonable discretion.
1.43 Claim: Any right to payment from either Debtor, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured, known or unknown or any right to an equitable remedy
for breach of performance if such breach gives rise to a right of payment from
either Debtor, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured.
1.44 Claims Reserve: One or more segregated accounts in which Closing
Cash shall be held for distribution in accordance with Section 16.3 hereof.
1.45 Class: A category of holders of Claims or Equity Interests as set
forth in Article III of the Plan.
1.46 Closing Cash: The amount of Cash to be determined by the Debtors,
with the consent of the Indenture Trustee, which consent shall not be
unreasonably withheld or delayed, to be the amount necessary to pay all Claims
and fund all reserves required to be funded on the Effective Date pursuant to
the Plan.
1.47 Collateral: Any property or interest in property of the estate of
either Debtor subject to an unavoidable Lien to secure the payment or
performance of a Claim.
1.48 Confirmation Date: The date upon which the Clerk of the Bankruptcy
Court enters the Confirmation Order.
1.49 Confirmation Hearing: The hearing held by the Bankruptcy Court to
consider confirmation of the Plan in accordance with section 1129 of the
Bankruptcy Code, as such hearing may be adjourned or continued from time to
time.
1.50 Confirmation Order: The order of the Bankruptcy Court confirming
the Plan in accordance with the provisions of chapter 11 of the Bankruptcy
Code and Section 18.1 hereof.
1.51 Contributed Debt: An undivided Three Hundred Million Dollars
($300,000,000) in outstanding principal amount of Existing Notes, or, if the
Conventional Financing Alternative is consummated in an amount in excess of
Four Hundred Million Dollars ($400,000,000), an undivided outstanding amount
of Existing Notes equal to Three Hundred Million Dollars ($300,000,000) minus
such excess, in either case (a) to be contributed by the Indenture Trustee, on
behalf of the Noteholders, to the REIT pursuant to the Noteholders
Contribution and Participation Agreement, (b) to be contributed by the REIT to
the Lower Tier Limited Partnership and (c) to be contributed by the Lower Tier
Limited Partnership to the Property Owning Partnerships and allocated between
237 Park Partners, L.P. and 1290 Partners, L.P. as set forth in the Debt
Contribution Agreement.
1.52 Conventional Financing Alternative: The mortgage loan financing
which may be consummated by the Property Owning Partnerships pursuant to
Section 13.2 hereof, the net proceeds of which would be distributed in lieu of
New Notes.
1.53 Conventional Financing Cash Distribution: A distribution of Cash
in accordance with Section 13.2 hereof, which distribution shall be in an
amount equal to the net proceeds from the consummation of the Conventional
Financing Alternative available for distribution after payment of all
commitment or financing fees, legal fees, customary closing costs, recording
fees and similar charges but in no event greater than Four Hundred Million
Dollars ($400,000,000).
1.54 Conveyancing Documents: The documents, substantially in the forms
contained in the Plan Supplement or as Exhibits to the Property Contribution
Agreements, each dated as of the Effective Date, providing for the transfer
and assignment of the Properties and certain other property of the Debtors to
the Property Owning Partnerships or the REIT, as the case may be, and certain
agreements related thereto.
1.55 Creditors' Committee: Any statutory unsecured creditors' committee
which may be appointed by the Bankruptcy Court and the United States Trustee
in the Reorganization Cases pursuant to section 1102 of the Bankruptcy Code.
1.56 Debt Contribution Agreement: The Debt Contribution Agreement,
dated as of the Effective Date, by and among the REIT, the Lower Tier Limited
Partnership and the Property Owning Partnerships, substantially in the form
contained in the Plan Supplement.
3
1.57 Debtors: 237 L.L.C. and 1290 L.L.C., the debtors in the
Reorganization Cases.
1.58 Debtors in Possession: The Debtors in their capacity as debtors in
possession under sections 1107(a) and 1108 of the Bankruptcy Code.
1.59 Devco: O&Y (U.S.) Development Company, L.P., a Delaware limited
partnership.
1.60 Disbursing Agent: The Indenture Trustee and/or such other
Entity as may be designated by the Property Owning Partnerships, serving in
the capacity of disbursing agent. References in the Plan or any Plan Document
to the Indenture Trustee in its capacity as, or in discharging the functions
of, the Disbursing Agent shall be construed as references to the Indenture
Trustee or such other Entity as may be acting in the capacity of disbursing
agent in such context.
1.61 Disclosure Statement: The disclosure statement related to the
Plan, dated as of the date hereof, including the exhibits thereto, as the same
may be amended, modified or supplemented from time to time and approved by the
Bankruptcy Court in accordance with section 1125 of the Bankruptcy Code.
1.62 Disputed Claim: A Claim against either of the Debtors which has
not been Allowed hereunder, to the extent that the allowance of such Claim is
the subject of a timely objection or request for estimation in accordance with
the Plan, the Bankruptcy Code, or the Bankruptcy Rules or is otherwise
disputed in accordance with applicable law, which objection, request for
estimation or dispute has not been withdrawn or determined by Final Order;
provided, however, that, for purposes of determining the aggregate amount of
Disputed Claims against the Debtors' chapter 11 estates, 'Disputed Claims'
shall mean the lesser of (a) Disputed Claims as filed with the Bankruptcy
Court, or (b) Disputed Claims as estimated by the Bankruptcy Court pursuant to
section 502(c) of the Bankruptcy Code; and provided, further, that, in the
event that the Bankruptcy Court shall estimate a Disputed Claim pursuant to
section 502(c) of the Bankruptcy Code, such estimation shall constitute and
represent the maximum amount in which such Claim may ultimately become an
Allowed Claim.
1.63 Distributable Cash: All Cash owned by (i) the Debtors on the
Effective Date, including, without limitation, amounts held by the Indenture
Trustee pursuant to the Indenture, the Cash Management Agreement or the Cash
Collateral Stipulation, net of Closing Cash and (ii) the Limited Partner
Entities from and after the Effective Date (other than partnership
distributions from the respective Property Owning Partnerships).
1.64 Distributees: The holders of Senior Claims and the Morgan Loan
Lenders.
1.65 Effective Date: The later to occur of (a) the first Business Day
which is no less than eleven (11) days (calculated under Rule 9006 of the
Bankruptcy Rules) after the Confirmation Date, or (b) such other date as is
fixed from time to time by the Debtors, upon Noteholder Consent, by filing a
notice thereof with the Bankruptcy Court, but in no event shall the Effective
Date occur earlier than the date on which each of the conditions precedent to
the occurrence of the Effective Date contained in Section 18.2 hereof has been
satisfied or waived in accordance with Section 18.3 hereof.
1.66 Election Amount: The Nine Hundred Two Million Six Hundred Three
Thousand Four Hundred Ninety Two Dollars ($902,603,492) of aggregate unpaid
principal in respect of the Existing Notes.
1.67 Entity: An individual, a corporation, a partnership, a limited
liability company, an association, a joint stock company, a joint venture, an
estate, a trust, an unincorporated organization, a government or any
subdivision thereof or any other entity.
1.68 Equityco: O&Y Equity Company L.P., a Delaware limited partnership.
1.69 Equity Election Ratio: The fraction set forth in Section
12.4(a)(ii) hereof.
1.70 Equity Interest: Any equity interest in either of the Debtors or
any interest or a right to convert into an interest or acquire any equity
interest which was in existence immediately prior to the Petition Date.
1.71 Excess Amount: The excess of (i) the full amount in the aggregate
of all principal, interest, fees and charges due and owing as of the Petition
Date under the Indenture, the Existing Notes and all documents and instruments
related thereto, over (ii) Seven Hundred Million Dollars ($700,000,000).
1.72 Excess Amount Release: The Release of Assumed Debt and Termination
of Security Agreement, dated as of the Effective Date, by the Indenture
Trustee in favor of Building Corp. and Equityco, substantially in the form
contained in the Plan Supplement; provided, however, that such agreement shall
not in any way impair the right of the Indenture Trustee to receive payment in
full for its fees and charges as Administrative Expense Claims under the Plan.
1.73 Exchange Act: The Securities Exchange Act of 1934, as amended.
1.74 Existing Notes: The notes in the aggregate original principal
amount of Nine Hundred Seventy Million Dollars ($970,000,000) issued under the
Indenture, the outstanding principal amount of which, as of the Petition Date,
was approximately Nine Hundred Two Million Six Hundred Three Thousand Four
Hundred Ninety Two Dollars ($902,603,492).
1.75 Final Order: An order of the Bankruptcy Court as to which the time
to appeal, petition for certiorari or move for reargument or rehearing has
expired and as to which no appeal, petition for certiorari or other
proceedings for reargument or rehearing shall then be pending; and if an
appeal, writ of certiorari, reargument or rehearing thereof has been sought,
such order of
4
the Bankruptcy Court shall have been affirmed by the highest court to which
such order was appealed, or certiorari shall have been denied or reargument or
rehearing shall have been denied or resulted in no modification of such order,
and the time to take any further appeal, petition for certiorari or move for
reargument or rehearing shall have expired; provided, however, that the
possibility that a motion under Rule 59 or Rule 60 of the Federal Rules of
Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be but
has not then been filed with respect to such order, shall not cause such order
not to be a Final Order.
1.76 General Unsecured Claim: Any Unsecured Claim (including any
Qualifying Affiliate Unsecured Claim), other than an Administrative Expense
Claim, a Priority Non-Tax Claim, a Priority Tax Claim, an Insured Claim, a
Tenant Reimbursement Claim or an Affiliate Unsecured Claim.
1.77 GP Corps: 237 Corp. and 1290 Corp., collectively.
1.78 GP Corp. Documents: The certificates of incorporation and by-laws
of the GP Corps, substantially in the forms contained in the Plan Supplement.
1.79 GP Interest: A ninety five percent (95%) interest, as a general
partner, in the Lower Tier Limited Partnership.
1.80 Indemnification Agreement: The Indemnification Agreement, dated as
of the Effective Date, by and among the REIT and its initial officers and
directors, substantially in the form contained in the Plan Supplement.
1.81 Indenture: That certain Mortgage Spreader and Consolidation
Agreement and Trust Indenture, dated as of March 20, 1984, by and among O&Y
Equity Corp., OYHC, FAME Associates, Olympia & York 2 Broadway Land Company,
Olympia & York 2 Broadway Company and Manufacturers Hanover Trust Company, as
Trustee, as supplemented by that certain (i) Supplemental Indenture No. 1,
dated as of March 20, 1984, (ii) Supplemental Indenture No. 2, dated as of
December 30, 1986, (iii) Supplemental Indenture No. 3, dated as of March 30,
1988, (iv) Instrument of Resignation, Appointment and Acceptance, dated as of
October 28, 1992, by and among 2 Broadway Associates, 2 Broadway Land Company,
237 Park Avenue Associates, 1290 Associates, NationsBank of Tennessee, N.A.,
and Manufacturers Hanover Trust Company, (v) Supplemental Indenture No. 4,
dated as of August 17, 1995, (vi) Supplemental Indenture No. 5, dated as of
September 18, 1995, and (vii) Instrument of Resignation, Appointment and
Acceptance, dated as
of March 29, 1996, by and among the Debtors, NationsBank of Tennessee, N.A.,
and the Indenture Trustee, as the same may be further supplemented from time
to time in accordance with the terms thereof prior to the Effective Date.
1.82 Indenture Trustee: Bankers Trust Company, in its capacity as
successor indenture trustee under the Indenture, or any successor indenture
trustee to Bankers Trust Company, appointed in accordance with the terms of
the Indenture.
1.83 Initial Upper Tier LP Documents: The agreement of limited
partnership and certificate of limited partnership for the Upper Tier Limited
Partnership, substantially in the forms contained in the Plan Supplement.
1.84 Insured Claim: Any Claim based on the alleged tort liability of
either Debtor arising out of or in connection with events allegedly causing
personal injury or property damage, which events are alleged to have occurred
at or on either Property prior to the Effective Date, to the extent that such
Claim is covered by an insurance policy or policies for, covering or issued to
or on behalf of either Debtor.
1.85 JMB: JMB/NYC Office Building Associates, an Illinois general
partnership.
1.86 JMB Collateral: A marketable security, acceptable upon Noteholder
Consent, having a market value as of January 2, 2001 of Ten Million Dollars
($10,000,000), guaranteed by the full faith and credit of the United States of
America, and to be held by the REIT to secure the obligations of JMB LP under
the Lower Tier Limited Partner Documents.
1.87 JMB Indemnitors: JMB/Manhattan Associates, Ltd., Carlyle Real
Estate Limited Partnership-XIII and Carlyle Real Estate Limited
Partnership-XIV, the constituent partners of JMB LP.
1.88 JMB Indemnity: The Indemnification Agreement to be executed by the
JMB Indemnitors, dated as of the Effective Date, substantially in the form
contained in the Plan Supplement.
1.89 JMB Equity Interest: Any Equity Interest held by JMB LP or any of
its Affiliates.
1.90 JMB LP: JMB/NYC Office Building Associates, L.P., an Illinois
limited partnership.
1.91 JMB Note Assignment: The Assignment of Promissory Notes and
Security Agreements, dated as of the Effective Date, substantially in the form
contained in the Plan Supplement.
1.92 JMB Notes: The (i) Promissory Note, dated July 27, 1984, reissued
July 25, 1985, made by JMB to O&Y DFC in the original principal amount of
$9,758,363 and the Security Agreement, dated July 27, 1984, between JMB and
OYHC, as assigned by O&Y DFC to O&Y MFC pursuant to that certain Assignment
and Assumption Agreement, dated September 28, 1987; (ii) Promissory Note,
dated August 14, 1984, reissued July 25, 1985, made by JMB to O&Y DFC in the
original principal amount of $4,514,229 and the Security Agreement, dated
August 14, 1984, between JMB and OYHC, as assigned by O&Y DFC to O&Y MFC
pursuant to that certain Assignment and Assumption Agreement, dated September
28, 1987; and (iii) Amended, Restated and Consolidated Promissory Note, dated
May 31, 1995, between JMB LP and O&Y MFC in the original principal amount of
5
$78,605,779 and the Amended, Restated and Consolidated Security Agreement,
dated May 31, 1995, between JMB LP and O&Y MFC.
1.93 JMB Note Participation Agreement: The Participation Agreement,
substantially in the form contained in the Plan Supplement, dated as of the
Effective Date, between the REIT or its designee and an Affiliate of JMB LP or
another Entity upon Noteholder Consent, which, in this instance, will not be
unreasonably withheld or delayed.
1.94 JMB Note Restatement Documents: The Second Amended, Restated and
Consolidated Promissory Note and the Second Amended, Restated and Consolidated
Security Agreement, each dated as of the Effective Date, substantially in the
form contained in the Plan Supplement.
1.95 Liabilities: Any and all costs, expenses, actions, causes of
action, suits, controversies, damages, claims, liabilities or demands of any
nature, whether known or unknown, foreseen or unforeseen, existing or
hereinafter arising, liquidated or unliquidated, matured or not matured,
contingent or direct, whether arising at common law, in equity, or under any
statute, based in whole or in part upon any act or omission or other
occurrence taking place on or prior to the Effective Date.
1.96 Lien: Any charge against or interest in property to secure payment
of a debt or performance of an obligation.
1.97 Limited Partner Entities: The Upper Tier Limited Partnership and
the Lower Tier Limited Partnership, collectively.
1.98 Lower Tier Limited Partner Documents: The agreement of limited
partnership and certificate of limited partnership for the Lower Tier Limited
Partnership, substantially in the form contained in the Plan Supplement.
1.99 Lower Tier Limited Partnership: 237/1290 Lower Tier Associates,
L.P., a Delaware limited partnership.
1.100 LP Interest: A five percent (5%) limited partnership interest in
the Lower Tier Limited Partnership.
1.101 Master Cash Flow Agreement: The Master Cash Flow Agreement, dated
as of March 20, 1984, by and among O&Y Equity Corp., FAME Associates, OYHC,
Olympia & York 2 Broadway Land Company, Olympia & York 2 Broadway Company and
Manufacturers Hanover Trust Company, as Trustee.
1.102 Merger Agreement: The Agreement and Plan of Merger, dated as of
the Effective Date, among the Debtors and the Upper Tier Limited Partnership,
substantially in the form contained in the Plan Supplement.
1.103 Morgan Loan: The obligations of Devco and other O&Y (U.S.)
Affiliates under, pursuant to or in connection with the Revolving Credit
Agreement, dated as of June 21, 1991, by and among Devco, Morgan Guaranty
Trust Co. of New York, as Agent, and the banks parties thereto, or their
respective successors and assigns, and other related documents, instruments
and agreements, each as from time to time amended, modified or supplemented.
1.104 Morgan Loan Agent: Apollo Real Estate Investment Fund, L.P., in
its capacity as agent for the Morgan Loan Lenders or any successor.
1.105 Morgan Loan Lenders: Apollo Real Estate Investment Fund, L.P.,
Westdeustsche Landesbank Girozentrale, New York Branch, TCW Special Credits
Fund IV, TCW Special Credits Plus Fund, TCW Special Credits Trust IV and TCW
Special Credits Trust IVA, or such transferees, successors or assigns as
provide notice of any transfer or assignment to the parties set forth in
Section 22.9 hereof, in their capacity as holders of a portion of the Morgan
Loan.
1.106 Net Tax Proceeds: The proceeds, if any, of any tax certiorari
proceedings which have been commenced by 1290 L.L.C. for the fiscal tax years
ending June 30, 1991 through June 30, 1996 and by 237 L.L.C. for the fiscal
tax year ending June 30, 1996 and, if the Effective Date is after tax
certiorari proceedings have begun for fiscal tax year July 1, 1996 through
June 30, 1997, such year as well, net of any amounts required to pay or
reimburse the customary and reasonable third-party attorneys' fees and other
reasonable out-of-pocket expenses incurred in collecting such proceeds
(including such fees and expenses incurred to prepare for, institute and
prosecute tax certiorari proceedings).
1.107 Newco LP: Newco Limited Partnership, a Delaware limited
partnership to be formed in accordance with that certain Second Amended Joint
Plan of Reorganization, dated August 9, 1996, for O&Y (U.S.) and certain
affiliates.
1.108 New Notes: The Amended and Restated Mortgage Notes to be issued
by the Property Owning Partnerships on the Effective Date in the aggregate
original principal amount of Four Hundred Million Dollars ($400,000,000),
substantially in the form contained in the Plan Supplement.
1.109 Non-Standard Election: An election of a Distributee pursuant to
Section 12.4 hereof.
1.110 Noteholder: Any holder of an Existing Note.
1.111 Noteholder Consent: The written consent delivered by the holders
of a majority in principal amount of the Existing Notes (excluding Existing
Notes held by O&Y Affiliates), which consent may be given or withheld in the
sole and absolute discretion of each holder of Existing Notes.
6
1.112 Noteholders Contribution and Participation Agreement: The
Noteholders Contribution and Participation Agreement, dated as of the
Effective Date, between the Indenture Trustee and the REIT, substantially in
the form contained in the Plan Supplement.
1.113 O&Y Administrative Expense Claim: A Three Hundred Thousand Dollar
($300,000) Administrative Expense Claim in favor of Devco or its designee.
1.114 O&Y Affiliate: Each of the Entities identified on Schedule 1
hereto.
1.115 O&Y DFC: O&Y (Delaware) Finance Corp., a Delaware corporation.
1.116 O&Y Equity Interest: An Equity Interest held by Building Corp.
and Equityco or any other O&Y Affiliate.
1.117 O&Y Lease: The Lease, dated November 17, 1983, between O&Y Equity
Corp., OYHC and FAME Associates, as landlord, and O&Y Equity Corp., as tenant,
as amended by Amendment of Lease, dated August 19, 1991, letter, dated March
1, 1993 and the O&Y Lease Agreement.
1.118 O&Y Lease Agreement: The Agreement, dated as of the Effective
Date, and effective as of September 1, 1994, by and between 237 L.L.C., as
Landlord, and Devco, as Tenant, substantially in the form contained in the
Plan Supplement.
1.119 O&Y MFC: Olympia & York Massachusetts Financial Company, a
Massachusetts general partnership.
1.120 O&Y Releasees: Collectively, (a) the Debtors and Debtors in
Possession, (b) the O&Y Affiliates, (c) the respective successors,
predecessors, assignors or assignees of any of the foregoing, (d) all current
or former partners or owners of any of the foregoing (including JMB and JMB LP
and all current or former owners of any direct or indirect interest in any of
the foregoing) and (e) all current and former officers, directors, trustees,
employees, agents, attorneys, accountants, financial advisors, investment
bankers, appraisers and engineers of any of the foregoing.
1.121 O&Y (U.S.): Any or all of the O&Y Affiliates named on the
signature page of the Settlement Agreement or any Entity controlled by such
signatories.
1.122 Offered Shares: The number of shares of REIT Stock to be
distributed in accordance with Section 12.5 of the Plan, which number of
shares shall be computed as follows: 12,000,000 shares of REIT Stock
multiplied by a fraction, the numerator of which shall be $20,000,000 and the
denominator of which shall be $660,000,000 minus the lesser of $400,000,000
and the gross proceeds derived from the consummation of the Conventional
Financing Alternative or, if no Conventional Financing Alternative is
consummated, $400,000,000.
1.123 Offering Memorandum: That certain offering memorandum, dated as
of February 6, 1984, pursuant to which the Existing Notes were offered for
sale, as the same may have been amended, modified or supplemented.
1.124 Other Secured Claim: Any Secured Claim, other than a Senior
Claim.
1.125 OYHC: Olympia & York Holdings Corporation.
1.126 Petition Date: April 23, 1996, the date on which Equityco and
Building Corp. filed involuntary petitions for relief under chapter 11 of the
Bankruptcy Code against each of the Debtors.
1.127 Plan: This Second Amended Joint Plan of Reorganization of 237
Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C., including the
exhibits and schedules hereto, either in their present form or as the same may
be amended, modified or supplemented from time to time in accordance with the
terms and provisions hereof.
1.128 Plan Assets: All of the property of the Debtors, whether real or
personal, including, without limitation, the Properties and the 2 Broadway Tax
Certiorari Proceeds.
1.129 Plan Documents: The documents listed on the Schedule of Documents
attached to the Disclosure Statement.
1.130 Plan Releasees: Collectively, (a) the Indenture Trustee, the
holders of the Existing Notes, the members of the Creditors' Committee, any
informal group of holders of Existing Notes as from time to time constituted,
the Morgan Loan Lenders and the Limited Partner Entities (b) the respective
successors, predecessors, assignors or assignees of any of the foregoing, (c)
all current or former partners or owners of any of the foregoing (including
current or former owners of any direct or indirect interest in any of the
foregoing) and (d) all current and former officers, directors, trustees,
employees, agents, attorneys, accountants, financial advisors, investment
bankers, appraisers and engineers of any of the foregoing.
1.131 Plan Releases: The releases granted pursuant to Sections 20.1 and
20.2 hereof.
1.132 Plan Securities: The REIT Stock, the New Notes and the
Subscription Rights.
1.133 Plan Supplement: A separate volume of agreements, exhibits and
schedules to be filed with the Bankruptcy Court not later than twenty (20)
days prior to the commencement of the Confirmation Hearing.
1.134 POP LP Interests: Ninety-nine percent (99%) limited partnership
interests in each of the Property Owning Partnerships.
7
1.135 Priority Non-Tax Claim: Any Claim against the Debtors of a kind
specified in section 507(a)(3), (4), (5), (6), (7) or (9) of the Bankruptcy
Code.
1.136 Priority Tax Claim: Any Claim against the Debtors of a
governmental unit of the kind specified in section 507(a)(8) of the Bankruptcy
Code.
1.137 Priority Utility Tax Claim: A Priority Tax Claim arising from the
nonpayment by either of the Debtors of New York State or New York City utility
taxes.
1.138 Priority Utility Tax Excess: The excess of (a) the Closing Cash
held in the Claims Reserve on account of Priority Utility Tax Claims over (b)
the aggregate amount of Allowed Priority Utility Tax Claims.
1.139 Property: The 237 Property and/or the 1290 Property, as the case
may be.
1.140 Property Contribution Agreements: The 237 Property Contribution
Agreement and the 1290 Property Contribution Agreement, each dated as of the
Effective Date, by and among the Upper Tier Limited Partnership, the Lower
Tier Limited Partnership and the respective Property Owning Partnership,
substantially in the forms contained in the Plan Supplement.
1.141 Property Management and Leasing Agreements: Agreements, dated as
of the Effective Date, between the Property Owning Partnerships and the
Property Manager/Leasing Agent, entered into upon Noteholder Consent,
providing for the day-to-day management by the Property Manager/Leasing Agent
of the Properties and its services as leasing agent, for a term not to exceed
two years and otherwise on terms no less favorable to the Property Owning
Partnerships than those set forth in the Disclosure Statement.
1.142 Property Manager/Leasing Agent: Tishman-Speyer Properties, L.P.
or such other professional property manager designated upon Noteholder
Consent.
1.143 Property Manager Subscription Agreement: A Subscription
Agreement, dated as of the Effective Date, between the REIT and the Property
Manager/Leasing Agent, substantially in the form contained in the Plan
Supplement.
1.144 Property Owning Partnership Documents: The Agreement of Limited
Partnership and Certificate of Limited Partnership for each of the Property
Owning Partnerships, substantially in the forms contained in the Plan
Supplement.
1.145 Property Owning Partnerships: 237 Park Partners, L.P. and 1290
Partners, L.P.
1.146 Pro Rata: With respect to holders of Senior Claims, the
proportion that the amount of Senior Claims held by any holder of Senior
Claims bears to the aggregate amount of Senior Claims held by all holders of
Senior Claims.
1.147 Qualifying Affiliate Unsecured Claim: An Unsecured Claim against
either of the Debtors held by an O&Y Affiliate which would be permitted to be
paid under the Cash Collateral Stipulation if such Claim had arisen after the
Petition Date.
1.148 Redemption and Substitution Agreement: The Redemption and
Substitution Agreement, dated as of the Effective Date, by and among the Upper
Tier Limited Partnership, Building Corp., Equityco, JMB LP and the Upper Tier
GP Corp., substantially in the form contained in the Plan Supplement.
1.149 Registration Rights Agreement: The Registration Rights Agreement,
dated as of the Effective Date, substantially in the form contained in the
Plan Supplement.
1.150 REIT: Metropolis Realty Trust, Inc., a Maryland corporation,
which intends to qualify as a real estate investment trust for federal income
tax purposes and which is the general partner of the Lower Tier Limited
Partnership.
1.151 REIT Documents: The certificate of incorporation and by-laws of
the REIT, substantially in the forms contained in the Plan Supplement.
1.152 REIT Stock: The shares of common stock, par value $10.00 per
share, of the REIT to be issued on the Effective Date pursuant to the Plan.
1.153 REIT Stock Option Plan: The 1996 Directors' Stock Option Plan,
dated as of the Effective Date, of the REIT, substantially in the form
contained in the Plan Supplement.
1.154 Remaining 2 Broadway Assets: The meaning given to such term in
the Indenture.
1.155 Reorganization Cases: The Debtors' cases under chapter 11 of the
Bankruptcy Code.
1.156 Restated Indenture: That certain Amended and Restated Trust
Indenture, dated as of the Effective Date, by and among the Property Owning
Partnerships and the Indenture Trustee, substantially in the form contained in
the Plan Supplement.
1.157 Restated Mortgage: The Amended and Restated Mortgage and Security
Agreement, dated as of the Effective Date, from the Property Owning
Partnerships to the Indenture Trustee, substantially in the form contained in
the Plan Supplement.
1.158 Robinson Silverman Note: That certain promissory note in the face
amount of $6,500,000, dated as of March 1, 1989, made by Robinson, Silverman,
Pearce & Berman in connection with its lease of space at the 1290 Property.
8
1.159 Schedules: The respective schedules of assets and liabilities and
the statements of financial affairs filed by the Debtors under section 521 of
the Bankruptcy Code and the Official Bankruptcy Forms of the Bankruptcy Rules,
as such schedules and statements have been or may be supplemented or amended.
1.160 Secured Claim: A Claim against either Debtor secured by a Lien on
Collateral to the extent of the value of the Collateral or that is entitled to
the benefit of setoff under section 553 of the Bankruptcy Code, as applicable,
as determined in accordance with section 506(a) of the Bankruptcy Code.
1.161 Security: The meaning ascribed to such term in section 101(49) of
the Bankruptcy Code.
1.162 Senior Claim: Any Claim against the Debtors governed by, arising
under or related to the Indenture or evidenced by any of the Existing Notes.
1.163 Senior Claim Equity Cap: Eleven Million One Hundred Sixty
Thousand (11,160,000) shares of REIT Stock.
1.164 Senior Claim Note Cap: Three Hundred Ninety One Million Dollars
($391,000,000).
1.165 Settlement Agreement: The Settlement Agreement, dated January 12,
1996, by and among Carena Bancorp U.S., Inc., Canadian Imperial Bank of
Commerce, Citibank, N.A., Battery Park Holdings, Inc., Apollo Real Estate
Investment Fund, L.P. and certain O&Y Affiliates, as the same has been or may
be amended from time to time.
1.166 Standard Election: An election of a holder of a Senior Claim
pursuant to Section 12.3 of the Plan to receive a Standard Note Distribution
and a Standard Stock Distribution.
1.167 Standard Note Distribution: With respect to each holder of a
Senior Claim making a Standard Election in accordance with Section 12.3 of the
Plan, subject to Section 13.2 hereof, for each One Million Dollars
($1,000,000) of such holder's Pro Rata share of the Election Amount, Four
Hundred Thirty Three Thousand One Hundred Ninety One Dollars and Thirty Two
Cents ($433,191.32) of New Notes.
1.168 Standard Stock Distribution: With respect to each holder of a
Senior Claim making a Standard Election in accordance with Section 12.3 of the
Plan, subject to Sections 13.2 and 13.9 hereof, for each One Million Dollars
($1,000,000) of such holder's Pro Rata share of the Election Amount, Twelve
Thousand Three Hundred Sixty-Four and Twenty-Three One-Hundredths (12,364.23)
shares of REIT Stock.
1.169 State: The meaning ascribed to such term in section 101(52) of
the Bankruptcy Code.
1.170 Subscription Agreement: The Subscription Agreement relating to
the exercise by Distributees of subscription rights and the purchase of REIT
Stock pursuant to Section 12.5 of the Plan, substantially in the form
contained in the Plan Supplement.
1.171 Subscription Price: The price per share of Offered Shares
expressed in dollars and cents, rounded to the nearest cent, equal to a
fraction, the numerator of which is Twenty Million Dollars ($20,000,000) and
the denominator of which is the number of Offered Shares.
1.172 Subscription Proceeds: Twenty Million Dollars ($20,000,000),
which represents the aggregate proceeds from the sale of REIT Stock pursuant
to the Subscription Agreements and the Property Manager Subscription
Agreement.
1.173 Subscription Right: An uncertificated right that entitles the
holder thereof to purchase one share of REIT Stock at the Subscription Price
on the terms and subject to the conditions of Section 12.5 hereof, the
aggregate amount of which shall be the same as the number of Offered Shares.
1.174 Tenant Note Assignments: Collectively, (a) the Assignment of
Promissory Note, dated as of the Effective Date, by Baden Real Estate Corp. to
237 Partners, L.P. with respect to the Warburg Pincus Note and (b) the
Assignment of Promissory Note, dated as of the Effective Date, by O&Y
Financial Company to 1290 Partners, L.P. with respect to the Robinson
Silverman Note.
1.175 Tenant Notes: The Robinson Silverman Note and the Warburg Pincus
Note.
1.176 Tenant Reimbursement Claim: Unsecured Claim against the Debtors
held by a current or former tenant of either Property based upon a right to
payment provided in the lease of such tenant contingent upon the realization
by one of the Property Owning Partnerships of Net Tax Proceeds.
1.177 Transfer Taxes: Any and all transfer, stamp, sales or similar
taxes including any interest, penalties and additions to the tax that may be
required to be paid in connection with the transactions contemplated by the
Plan, which taxes shall include the New York State Real Estate Transfer Taxes
imposed under Article 31 of the New York State Tax Law, the New York City Real
Property Transfer Taxes imposed under Title 11, Chapter 21 of the New York
City Administrative Code and any mortgage recording tax imposed under Section
250 et seq. of the New York State Tax Law and Section 11-2601 of the New York
City Administrative Code.
1.178 Unimpaired Unsecured Claim: Any Insured Claim or Tenant
Reimbursement Claim.
1.179 Unsecured Claim: Any Claim against either of the Debtors that is
not an Other Secured Claim or a Senior Claim.
9
1.180 Unsubscribed Shares: Offered Shares (i) for which Subscription
Rights have not been exercised or which have not been purchased pursuant to
the Subscription Agreements and (ii) which will be purchased by the Property
Manager/Leasing Agent pursuant to the Property Manager Subscription Agreement.
1.181 Upper Tier GP Corp.: 237/1290 Upper Tier GP Corp., a Delaware
corporation and a wholly-owned subsidiary of the REIT.
1.182 Upper Tier GP Corp. Documents: The certificate of incorporation
and by-laws of the Upper Tier GP Corp., substantially in the forms contained
in the Plan Documents.
1.183 Upper Tier Limited Partner Documents: The amended and restated
agreement of limited partnership and amendment to certificate of limited
partnership for the Upper Tier Limited Partnership, substantially in the forms
contained in the Plan Supplement.
1.184 Upper Tier Limited Partnership: 237/1290 Upper Tier Associates,
L.P., a Delaware limited partnership.
1.185 U.S. Trustee: The United States Trustee appointed under section
581, title 28, United States Code to serve in the Southern District of New
York.
1.186 VCG: The Victor Capital Group, L.P., a New York limited
partnership.
1.187 Waived Payments: All leasing commissions relating to the
Properties and payments characterized as asset management fees in the Cash
Management Agreement, in each case, earned by any O&Y Affiliate prior to the
Effective Date and remaining unpaid as of the Effective Date.
1.188 Warburg Pincus Note: That certain non-interest bearing promissory
note, dated August 20, 1985, made by E.M. Warburg Pincus & Co., Inc. providing
for the payment of $4,354,758.09 on October 31, 1999.
1.189 Other Terms: Any term that is used in the Plan and not defined
herein, but that is defined in the Bankruptcy Code or in the Bankruptcy Rules,
shall have the meaning set forth therein as of the Petition Date. Any
reference contained in the Plan to a particular exhibit, paragraph or article
shall be deemed to be a reference to an exhibit, paragraph or article of the
Plan.
1.190 Rules of Construction: The rules of construction set forth in
section 102 of the Bankruptcy Code shall be applicable to all of the
provisions of the Plan. Without in any way limiting the foregoing, as used in
the Plan, the words 'includes' and 'including' are without limitation. The
words 'herein,' 'hereof,' 'hereto,' 'hereunder,' and other words of similar
import refer to the Plan as a whole and not to any particular section,
subsection or clause contained in the Plan. Any reference to a document,
agreement or instrument means such document, agreement or instrument as from
time to time amended, modified or supplemented in accordance with its terms.
ARTICLE II
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
2.1 Expenses of Administration. On the Effective Date, the Disbursing
Agent shall pay to each holder of an Allowed Administrative Expense Claim, in
Cash, from Closing Cash, the full amount of such Allowed Administrative
Expense Claim, or upon such other terms as may be agreed upon by and between
the holder of any Administrative Expense Claim and the Debtors; provided,
however, that Administrative Expense Claims incurred or assumed by the Debtors
in Possession in the ordinary course of business in accordance with the Cash
Collateral Stipulation and not theretofore paid pursuant to the Cash
Collateral Stipulation shall be paid by the appropriate Property Owning
Partnership in accordance with the terms and conditions relating thereto; and
provided, further, that Administrative Expense Claims, other than those
referred to above and in Section 2.3 hereof, asserted after the Administrative
Claims Bar Date shall not be paid and none of the Debtors, the Property Owning
Partnerships, the REIT and the Limited Partner Entities shall be liable
therefor.
2.2 Priority Tax Claims. On the Effective Date, each holder of an
Allowed Priority Tax Claim shall be distributed on account of such Allowed
Priority Tax Claim by the Disbursing Agent from Closing Cash an amount, in
Cash, equal to the amount of such Allowed Priority Tax Claim.
2.3 Professional Fees. All Entities that are awarded allowance of
compensation or reimbursement of expenses by the Bankruptcy Court under
sections 330, 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy
Code shall be paid by the Disbursing Agent from Closing Cash, in full, or by
the Property Owning Partnerships if Closing Cash is insufficient, in such
amounts as are allowed by the Bankruptcy Court (a) upon the later of (i) the
Effective Date and (ii) the date upon which the Bankruptcy Court enters an
order allowing any such Administrative Expense Claim or (b) upon such other
terms as may be mutually agreed upon between such holder of an Administrative
Expense Claim and the Debtors.
10
ARTICLE III
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
3.1 Classification. Claims and Equity Interests are classified as
follows:
Class 1-- Priority Non-Tax Claims
Class 2-- Senior Claims
Class 3-- Other Secured Claims
Class 4-- Unimpaired Unsecured Claims
Subclass 4A--Insured Claims
Subclass 4B--Tenant Reimbursement Claims
Class 5-- General Unsecured Claims
Class 6-- Affiliate Unsecured Claims
Class 7-- Equity Interests
Subclass 7A--O&Y Equity Interests
Subclass 7B--JMB Equity Interests
3.2 Voting.
(a) Claims Not Entitled to Vote. The Claims in Class 4 of the
Plan are not impaired within the meaning of section 1124 of the
Bankruptcy Code. Pursuant to section 1126(f) of the Bankruptcy Code, Class 4
and the holder of any Claim in such Class is and shall be conclusively deemed
to have accepted the Plan.
(b) Claims and Equity Interests Entitled to Vote. The Claims
and Equity Interests in Classes 1, 2, 3, 5, 6 and 7 are impaired within
the meaning of section 1124 of the Bankruptcy Code, and the holders of Claims
or Equity Interests in such Classes are entitled to vote to accept or reject
the Plan. Each holder of an Allowed Claim or an Allowed Equity Interest in an
impaired Class of Claims or Equity Interests shall be entitled to vote
separately to accept or reject the Plan as provided in the order entered by
the Bankruptcy Court governing the voting and balloting procedures applicable
to the Plan. For purposes of calculating the number of Allowed Claims in a
Class that has voted to accept or reject the Plan under section 1126(c) of the
Bankruptcy Code, all Allowed Claims in such Class of which any Entity or any
Affiliate thereof acquired record ownership after the Petition Date shall be
aggregated and treated as one Allowed Claim.
(c) Elimination of Classes. Any Class of Claims that is not
occupied as of the date of the commencement of the Confirmation Hearing
by an Allowed Claim or a Claim temporarily allowed under Rule 3018 of the
Bankruptcy Rules shall be deemed deleted from the Plan for purposes of voting
on acceptance or rejection of the Plan and for purposes of determining
acceptance or rejection of the Plan by such Class pursuant to section
1129(a)(8) of the Bankruptcy Code.
ARTICLE IV
PROVISIONS FOR TREATMENT OF PRIORITY NON-TAX CLAIMS
4.1 Classification. Class 1 shall consist of all Priority Non-Tax
Claims. Claims contained in Class 1 are impaired.
4.2 Treatment. On the Effective Date, each holder of an Allowed
Priority Non-Tax Claim shall be distributed on account of such Allowed
Priority Non-Tax Claim by the Disbursing Agent from Closing Cash a payment in
Cash equal to the amount of its Allowed Priority Non-Tax Claim.
ARTICLE V
PROVISIONS FOR TREATMENT OF SENIOR CLAIMS
5.1 Classification. Class 2 shall consist of all Senior Claims. Claims
contained in Class 2 are impaired.
5.2 Allowance. On the Effective Date, the Senior Claims shall be deemed
to be Allowed in the aggregate amount of all principal, interest, fees and
charges due and owing as of the Petition Date under the Existing Notes and the
Indenture.
5.3 Treatment. On the Effective Date, each holder of an Allowed Senior
Claim shall be entitled to receive its Pro Rata share of (a) Eleven Million
One Hundred Sixty Thousand (11,160,000) shares of REIT Stock, subject to the
provisions of Sections 13.2 and 13.9 hereof, (b) Three Hundred Ninety One
Million Dollars ($391,000,000) of New Notes, subject to the provisions of
Section 13.2 hereof, and (c) ninety three percent (93%) of the aggregate
amount of Subscription Rights issued hereunder, on account of such Allowed
Senior Claim or, upon the election made in accordance with Section 12.4
hereof, distributions in accordance with Sections 12.4 and 12.5 hereof.
11
ARTICLE VI
PROVISIONS FOR TREATMENT OF OTHER SECURED CLAIMS
6.1 Classification. Class 3 shall consist of all Allowed Other Secured
Claims. Claims contained in Class 3 are impaired.
6.2 Treatment. On the Effective Date, each Allowed Other Secured Claim
shall be satisfied and discharged. Not later than ten (10) days prior to the
Confirmation Hearing, upon the direction of the Indenture Trustee, given upon
Noteholder Consent, the Debtors shall notify each holder of an Other Secured
Claim whether such Other Secured Claim shall be satisfied by (i) a payment in
Cash equal to the amount of its Allowed Other Secured Claim, (ii) distributing
to the holder of such Allowed Other Secured Claim the Collateral securing such
Claim, (iii) leaving unaltered the legal, equitable and contractual rights to
which such Allowed Other Secured Claim entitles the holder thereof in
accordance with section 1124(1) of the Bankruptcy Code or (iv) reinstating
such Allowed Other Secured Claim in accordance with section 1124(2) of the
Bankruptcy Code. In the event no direction is given by the Indenture Trustee
in accordance with the preceding sentence, the Indenture Trustee will be
conclusively presumed to have directed the Debtors to reinstate such Allowed
Other Secured Claim in accordance with section 1124(2) of the Bankruptcy Code.
ARTICLE VII
PROVISIONS FOR TREATMENT OF INSURED
CLAIMS AND TENANT REIMBURSEMENT CLAIMS
7.1 Classification. Class 4A shall consist of all Allowed Insured
Claims and Class 4B shall consist of Allowed Tenant Reimbursement Claims.
Claims contained in Classes 4A and 4B are not impaired.
7.2 Treatment.
(a) Insured Claims. On the Effective Date, Allowed Insured
Claims shall be unimpaired in accordance with section 1124(1) of the
Bankruptcy Code.
(b) Tenant Reimbursement Claims. From and after the Effective
Date, Allowed Tenant Reimbursement Claims shall be unimpaired in
accordance with section 1124(1) of the Bankruptcy Code and assumed by the
applicable Property Owning Partnership. The allowance and payment of Tenant
Reimbursement Claims shall be governed by the provisions of Section 16.6
hereof.
ARTICLE VIII
PROVISIONS FOR TREATMENT OF GENERAL UNSECURED CLAIMS
8.1 Classification. Class 5 shall consist of General Unsecured Claims.
Claims contained in Class 5 are impaired.
8.2 Treatment. On the Effective Date, the Disbursing Agent shall pay to
each holder of an Allowed General Unsecured Claim a payment, in Cash, equal to
the full amount of its Allowed General Unsecured Claim.
ARTICLE IX
PROVISIONS FOR TREATMENT OF AFFILIATE UNSECURED CLAIMS
9.1 Classification. Class 6 shall consist of all Affiliate Unsecured
Claims. Claims contained in Class 6 are impaired.
9.2 Treatment. On the Effective Date, each holder of an Allowed
Affiliate Unsecured Claim shall receive $1 in respect of such Allowed
Affiliate Unsecured Claim.
ARTICLE X
PROVISIONS FOR TREATMENT OF EQUITY INTERESTS
10.1 Classification. Class 7A shall consist of the O&Y Equity Interests
and Class 7B shall consist of the JMB Equity Interests. Equity Interests
contained in Classes 7A and 7B are impaired.
10.2 Treatment.
(a) O&Y Equity Interests. On the Effective Date, the O&Y Equity
Interests shall be cancelled and Building Corp. and Equityco shall
receive no distribution in respect of their Equity Interests.
12
(b) JMB Equity Interests. Subject to the provisions of 10.1(a)
hereof, on the Effective Date, after giving effect to the transactions
described in Article XIII hereof, the holder of the JMB Equity Interests shall
receive a ninety nine percent (99%) limited partnership interest in the Upper
Tier Limited Partnership and become a party to the limited partnership
agreement for the Upper Tier Limited Partnership, as set forth in the Upper
Tier Limited Partner Documents.
ARTICLE XI
DISTRIBUTIONS TO CONSUMMATE SETTLEMENT AGREEMENT
On the Effective Date, and in order to consummate the Settlement
Agreement, the Morgan Loan Agent shall be entitled to receive, for and on
behalf of the Morgan Loan Lenders for distribution in accordance with the
terms and conditions of the Morgan Loan, (a) Eight Hundred Forty Thousand
(840,000) shares of REIT Stock, subject to the provisions of Sections 13.2 and
13.9 hereof, (b) Nine Million Dollars ($9,000,000) of New Notes, subject to
the provisions of Section 13.2 hereof, and (c) seven percent (7%) of the
aggregate amount of Subscription Rights issued hereunder.
ARTICLE XII
OPTIONAL DISTRIBUTIONS
12.1 General Provisions Regarding Distributions to Distributees. On the
Effective Date, the Disbursing Agent shall distribute to each Distributee such
Distributee's share of New Notes, REIT Stock and Subscription Rights in
accordance with Articles V, XI and XII hereof. Notwithstanding any other
provisions hereof, distributions for the benefit of the Morgan Loan Lenders
shall be made to the Morgan Loan Agent for allocation and distribution to the
Morgan Loan Lenders in accordance with the terms and conditions of the Morgan
Loan documents. For purposes of all distributions made under this Article XII,
each holder of a Senior Claim shall be treated as holding a Pro Rata share of
the Election Amount. Except as expressly set forth in this Plan or any
document contained in the Plan Supplement, nothing contained in this Article
XII shall grant the Morgan Loan Lenders any right to vote on the Plan or to
issue any direction or consent which is to be issued by the holders of
Existing Notes under the Plan or the Indenture (other than in its capacity as
a registered holder of an Existing Note).
12.2 Election Procedure. Each holder of a Senior Claim will have the
opportunity to indicate on a Ballot, whether such holder wishes to make a
Standard Election or a Non-Standard Election. Each holder of a Senior Claim
that does not submit a Ballot or fails to mark its distribution preference on
the Ballot on a timely basis in complete accordance with the instructions set
forth in the Ballot shall be conclusively deemed to have exercised a Standard
Election and shall receive a Standard Note Distribution and a Standard Stock
Distribution. The allocation of REIT Stock and/or New Notes that a holder of a
Senior Claim will receive will depend on whether a Conventional Financing
Alternative is consummated as well as the stated preferences of the holders of
Senior Claims on the Ballots and the proration procedures to be applied if the
number of shares of REIT Stock requested exceeds Eleven Million One Hundred
Sixty Thousand (11,160,000) shares or the principal amount of New Notes
requested exceeds Three Hundred Ninety One Million Dollars ($391,000,000).
12.3 Standard Election. Holders of Senior Claims who make a Standard
Election will receive for each One Million Dollars ($1,000,000) of such
holders' Pro Rata share of the Election Amount (i) a Standard Note
Distribution subject to the provisions of Section 13.2 hereof, and (ii)
subject to the provisions of Sections 13.2 and 13.9 hereof, a Standard Stock
Distribution, each of the foregoing to be pro-rated if such Pro Rata share of
the Election Amount is not evenly divisible by One Million Dollars
($1,000,000). The number of shares of REIT Stock and the amount of New Notes
to be distributed to holders of Senior Claims who make a Standard Election
will not be affected in any way by the proration procedures described in
Sections 12.4(b) and (c) of the Plan.
12.4 Non-Standard Election.
(a) Procedures. Each holder of a Senior Claim who desires to
make a Non-Standard Election will indicate on its Ballot the amount of
its Pro Rata share of Election Amount which it wishes to allocate to New
Notes, if any. The balance of such holder's Pro Rata share of Election Amount
shall be deemed to be allocated to REIT Stock. Subject to the proration
procedures provided in paragraphs (b) and (c) below, each holder of a Senior
Claim who makes a Non-Standard Election will receive (i) New Notes having a
principal amount equal to seventy (70%) percent of its Pro Rata share of
Election Amount allocated to New Notes on its Ballot, subject to the
provisions of Sections 13.2 hereof, and (ii) subject to the provisions of
Sections 13.2 and 13.9 hereof, its portion of the Eleven Million One Hundred
Sixty Thousand (11,160,000) shares of REIT Stock (reduced by the number of
shares allocated to holders of Senior Claims making Standard Elections), based
on a fraction the numerator of which is the amount, if any, of such holder of
a Senior Claim's Pro Rata share of Election Amount not allocated to New Notes
and the denominator of which is the portion of the Election Amount not
allocated to New Notes of all holders of Senior Claims making Non-Standard
Elections.
13
(b) Equity Oversubscription. In the event that there are New
Notes to be distributed to holders of Senior Claims which remain
unallocated following the allocation of New Notes to holders of Senior Claims
making the Standard Election and the Non-Standard Election (i.e., less than
Three Hundred Ninety One Million Dollars ($391,000,000) of New Notes were
requested by holders of Senior Claims), then each holder of a Senior Claim
which has made a Non-Standard Election will receive, in addition to the
distributions to be made pursuant to Section 12.4(a) hereof, its pro rata
share, based on the fraction set forth in Section 12.4(a)(ii), of the
principal amount of New Notes remaining unallocated.
(c) Debt Oversubscription. Subject to the provisions of Section
13.2 hereof, in the event that holders of Senior Claims exercising
Non-Standard Elections elect New Notes in an aggregate principal amount in
excess of the Three Hundred Ninety One Million Dollars ($391,000,000) of New
Notes available, each holder of a Senior Claim exercising a Non-Standard
Election will receive (i) its portion of Three Hundred Ninety One Million
Dollars ($391,000,000) of New Notes (reduced by the amount of New Notes
allocated to holders of Senior Claims making Standard Elections), based on a
fraction the numerator of which is the amount, if any, of such holder's Pro
Rata share of the Election Amount allocated to New Notes and the denominator
of which is the aggregate portion of the Election Amount allocated to New
Notes of all holders of Senior Claims making Non-Standard Elections, and (ii)
subject to the provisions of Section 13.9 hereof, its portion of the Eleven
Million One Hundred Sixty Thousand (11,160,000) shares of REIT Stock (reduced
by the number of shares allocated to holders of Senior Claims making Standard
Elections), based on a fraction, the numerator of which is the amount of such
holder's Pro Rata share of the Election Amount minus the product of the
principal amount of New Notes allocated to such holder times 1.42857, and the
denominator of which is the portion of the Election Amount represented by
holders of Senior Claims making Non-Standard Elections minus the product of
the principal amount of New Notes issued to all such holders times 1.42857.
12.5 Subscription Rights. On the Effective Date, the REIT shall sell
the Offered Shares for an aggregate net cash price equal to the Subscription
Proceeds. Each Distributee may elect to exercise its Subscription Rights to
purchase a number of shares of REIT Stock equal to its share of the Offered
Shares as calculated below. If the Subscription Rights are not exercised for
all of the Offered Shares, the Unsubscribed Shares shall be purchased by the
Property Manager/Leasing Agent. Each election to exercise Subscription Rights
shall be made by a Distributee by returning, with its Ballot, a duly executed
Subscription Agreement indicating the number of Subscription Rights, if any,
that such Distributee elects to exercise. Each Distributee that does not
return an executed Subscription Agreement shall be conclusively deemed to have
not exercised its Subscription Rights. Each Distributee shall have the right
to exercise Subscription Rights for a number of shares of REIT Stock equal to
the
lesser of (a) the number of shares of REIT Stock such Distributee designates
in its Subscription Agreement, and (b) its Pro Rata portion of ninety-three
percent (93%) of all Offered Shares, with respect to the holders of Senior
Claims, and each Morgan Loan Lender's share (as determined by the Morgan Loan
Agent) of seven percent (7%) of all Offered Shares. As soon as practicable
after the Confirmation Date, the Debtors shall send a notice by overnight
delivery service to each Distributee that has timely executed and returned a
Subscription Agreement, setting forth the maximum amount to be paid to an
escrow agent (selected by the Debtors upon Noteholder Consent) identified in
such notice and otherwise in accordance with the instructions (approved by
order of the Bankruptcy Court) set forth in such notice, which amount shall be
equal to its Pro Rata share of ninety-three percent (93%) of $20,000,000 for
holders of Senior Claims and with respect to each Morgan Loan Lender, its
share (as determined by the Morgan Loan Agent) of seven percent (7%) of
$20,000,000. Within ten (10) days of the date of such notice, each
Distributee shall deliver the aggregate purchase price to the escrow agent.
Each Distributee that fails to timely deliver an amount of Cash provided in
the instructions set forth in the notice shall be conclusively deemed to have
not purchased such Offered Shares and such Offered Shares shall become
Unsubscribed Shares to be purchased by the Property Manager/Leasing Agent
pursuant to the Property Manager Subscription Agreement. Any election
hereunder shall be binding on the Distributee making such election and such
Distributee's successors and assigns; provided, however, that no Distributee
may transfer Subscription Rights pending exercise thereof other than in
connection with a transfer of such Distributee's Senior Claim or share of the
Morgan Loan, as the case may be. All funds held in escrow for any Distributee
pursuant to this Section 12.5 shall be deemed held for any successor or assign
of such Distributee, if applicable. On the Effective Date, the escrow agent
shall pay to the REIT all Cash held in the escrow account, other than amounts
to be refunded to Distributees as provided below. The REIT shall deliver to
the Disbursing Agent the number of shares for which the Subscription Price has
been received by such escrow agent for distribution to Distributees that have
timely exercised their Subscription Rights and paid for their share of Offered
Shares. A number of shares of REIT Stock equal to the difference between (x)
the number of Offered Shares and (y) the number of shares of REIT Stock which
are acquired by the Distributees pursuant to this Section 12.5 shall be
purchased for Cash on the Effective Date by the Property Manager/Leasing Agent
for an amount equal to the product of the Subscription Price times the number
of Unsubscribed Shares. The Debtors and their agents may rely upon the advice
of the Morgan Loan Agent as to the allocation of REIT Stock, Subscription
Rights and Offered Shares among the Morgan Loan Lenders. When the actual
number of Offered Shares (and the Subscription Price therefor) to be issued is
finally determined, the escrow agent will refund to each Distributee any
excess amount deposited with the escrow agent by any Distributee which has
executed a Subscription Agreement attributable to the excess, if any, of (x)
with respect to each holder of a Senior Claim, the fraction represented by its
Pro Rata portion of the Election Amount and, with respect to each Morgan Loan
Lender, its share of the Morgan Loan as determined by the Morgan Loan Agent,
in the case of a holder of a Senior Claim, multiplied by ninety-three percent
(93%) of the number of Offered Shares and, in the case of a Morgan Loan
Lender, multiplied by seven percent (7%) of the number of
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Offered Shares, over (y) the number of shares of REIT Stock such Distributee
designates in its Subscription Agreement, multiplied by the Subscription
Price.
12.6 Fractional Shares. The REIT will not issue fractional shares of
REIT Stock. Each Distributee will receive a number of shares of REIT Stock
equal to the first whole number which is less than the number of shares of
REIT Stock to which such Distributee would otherwise be entitled to receive if
fractional shares of REIT Stock were to be distributed.
ARTICLE XIII
IMPLEMENTATION OF THE PLAN
13.1 Delivery of Plan Documents. On the Effective Date, the following
actions will take place in the following order (except as specifically set
forth) to implement the Plan:
(a) Formation of Entities. To the extent not previously formed,
the REIT, the Property Owning Partnerships, the Upper Tier Limited
Partnership, the Lower Tier Limited Partnership, the GP Corps and the Upper
Tier GP Corp. shall be formed pursuant to the REIT Documents, the Property
Owning Partnership Documents, the Initial Upper Tier Limited Partner
Documents, the Lower Tier Limited Partner Documents, the GP Corp. Documents
and the Upper Tier GP Corp. Documents, respectively.
(b) Modification of 237 Operating Agreement. Pursuant to the
237 Operating Agreement Modification, the operating agreement for 237
L.L.C. will be modified to provide that any income arising from the release of
the 237 Excess Amount will be allocated to Building Corp. and Equityco.
(c) Assumption of 237 Excess Amount. Pursuant to the 237
Assumption and Security Agreement, (i) Building Corp. and Equityco shall
assume the obligations of the Debtors to repay the 237 Excess Amount, (ii)
Building Corp. and Equityco shall grant to the Indenture Trustee for the
benefit of the Noteholders a first priority perfected security interest in and
lien on their interests in the Debtors securing their obligation to repay the
237 Excess Amount, and (iii) the Indenture Trustee shall release the Debtors
from their obligation to repay the 237 Excess Amount.
(d) Merger of Debtors with and into the Upper Tier Limited
Partnership and Assumption of Certain Indebtedness. The Debtors will
merge with and into the Upper Tier Limited Partnership pursuant to the Merger
Agreement and Building Corp. shall be the initial general partner of the Upper
Tier Limited Partnership. Each of the Debtors and the Upper Tier Limited
Partnership will file Certificates of Merger with the Secretary of State of
the State of Delaware. Upon consummation of the mergers, the Upper Tier
Limited Partnership will succeed to all of the remaining assets of the
Debtors. Pursuant to the 1290 Assumption and Security Agreement, (i) Building
Corp. and Equityco shall assume the obligation of the Upper Tier Limited
Partnership to repay the 1290 Excess Amount, (ii) Building Corp. and Equityco
shall grant to the Indenture Trustee for the benefit of the Noteholders a
first priority perfected security interest in and lien on their interests in
the Upper Tier Limited Partnership (equal in priority with the security
interest granted under the 237 Assumption and Security Agreement) securing its
obligation to repay the 1290 Excess Amount, and (iii) the Indenture Trustee
shall release the Upper Tier Limited Partnership from its obligation to repay
the 1290 Excess Amount. Initially, Building Corp., as general partner, and
Upper Tier GP Corp., as limited partner, will form the Upper Tier Limited
Partnership pursuant to an initial limited partnership agreement and an
initial certificate of incorporation. After the merger of the Debtors into the
Upper Tier Limited Partnership, such initial partnership agreement will be
amended to provide that any income arising from the release of the 1290 Excess
Amount will be allocated to Building Corp. and Equityco.
(e) Contribution of the Properties to Property Owning
Partnerships. Pursuant to the Property Contribution Agreements and the
Conveyancing Documents, the Lower Tier Limited Partnership will direct the
Upper Tier Limited Partnership to transfer and contribute the Properties and
certain other property to the Property Owning Partnerships subject to the lien
of the Indenture securing the Existing Notes and, in consideration therefor
(i) the Upper Tier Limited Partnership will receive the LP Interest and (ii)
the Lower Tier Limited Partnership will receive the POP LP Interests (which
also reflects the contribution to the Property Owning Partnerships of the
Contributed Debt as provided for in Section 13.1(f) hereof).
(f) Contribution by Holders of Existing Notes to REIT. Pursuant
to the terms of the Noteholders Contribution and Participation
Agreement, the Indenture Trustee, acting on behalf of the holders of the
Existing Notes, will contribute to the REIT, on a pro rata basis, an undivided
interest in Three Hundred Million Dollars ($300,000,000) of Existing Notes and
will receive shares of REIT Stock to be distributed to the holders of Senior
Claims by the Disbursing Agent in accordance with Articles V and XII hereof.
(g) Contribution of the Contributed Debt to Property Owning
Partnerships. Pursuant to the terms of the Debt Contribution Agreement,
(i) the REIT will contribute the Contributed Debt to the Lower Tier Limited
Partnership and will receive the GP Interest in consideration therefore and
(ii) the Lower Tier Limited Partnership will contribute such Contributed
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Debt to the Property Owning Partnerships. Upon receipt of the
Contributed Debt by the Property Owning Partnerships, the Contributed Debt
will be extinguished. In consideration for agreeing to serve as the general
partner of 237 Park Partners, L.P. and exposing its assets to the liabilities
thereof, 237 Corp. will receive a one percent (1%) interest as general partner
in 237 Park Partners, L.P. In consideration for agreeing to serve as the
general partner of 1290 Partners, L.P. and exposing its assets to the
liabilities thereof, 1290 Corp. will receive a one percent (1%) interest as
general partner in 1290 Partners, L.P.
(h) Cancellation of Excess Amount. Pursuant to the Excess Amount
Release, the Indenture Trustee shall forgive the obligation of Building
Corp. and Equityco to repay the Excess Amount and release such parties
and their interests in the Upper Tier Limited Partnership from the
security interests granted to the Indenture Trustee under the 237
Assumption and Security Agreement and the 1290 Assumption and
Security Agreement.
(i) Redemption of O&Y, Substitution of General Partners and
Restatement of Upper Tier Limited Partnership Agreement. Pursuant to
the Redemption and Substitution Agreement, and subject to the provisions of
Section 10.2 hereof, (i) the Upper Tier GP Corp will be admitted to the Upper
Tier Limited Partnership as a general partner, (ii) Building Corp. will
withdraw as general partner, (iii) the Upper Tier GP Corp. will receive a one
percent (1%) general partnership interest in the Upper Tier Limited
Partnership, (iv) Equityco's and Building Corp.'s limited partner interests
will be redeemed and Equity Co. and Building Corp. will withdraw from the
Upper Tier Limited Partnership as limited partners, and (v) JMB LP will
receive a ninety-nine percent (99%) limited partnership interest. Thereafter,
the Upper Tier GP Corp. and JMB LP will enter into the Upper Tier Limited
Partner Documents.
(j) Delivery of JMB Indemnity and JMB Collateral to the REIT.
The JMB Indemnity will be executed by the JMB Indemnitors and delivered
to the REIT and JMB LP will deliver the JMB Collateral to the REIT.
(k) Restatement of Existing Notes and Indenture/Issuance of New
Notes. Subject to Section 13.2 hereof, the Indenture will be amended
and restated by the Property Owning Partnerships and the Indenture Trustee as
the Restated Indenture and the Restated Mortgage. Subject to Section 13.2
hereof, the Existing Notes will be amended and restated by the Property Owning
Partnerships and the Indenture Trustee in the aggregate principal amount of
Four Hundred Million Dollars ($400,000,000) as the New Notes.
(l) Treatment of Other Assets and Liabilities:
(i) Assignment of Tenant Notes. Pursuant to the Settlement
Agreement, the O&Y Affiliates holding the Tenant Notes will, at
the REIT's direction, assign and deliver to the applicable Property Owning
Partnership, pursuant to the Tenant Note Assignments, the Tenant Notes and an
amount equal to all Cash paid in respect of the Tenant Notes from and after
January 1, 1996; provided, however, that the O&Y Administrative Expense Claim
may constitute a setoff against such Cash payment.
(ii) Assignment and Amendment of JMB Notes. Citibank, N.A.
will release its lien on the JMB Notes. O&Y MFC will assign to the
REIT or its designee the JMB Notes and security agreements pursuant to the JMB
Note Assignment. Immediately prior to such assignments, the REIT (or its
designee) and the other party thereto will enter into the Note Participation
Agreement. The REIT (or its designee) and JMB LP will thereafter enter into
the JMB Note Restatement Documents.
(iii) Transfer of Distributable Cash. The Indenture
Trustee and the Debtors will transfer, convey and assign all
Distributable Cash then in their control to the REIT. Prior to such transfer,
the Indenture Trustee may deduct an amount equal to any reasonable fees, costs
and expenses due and owing to the Indenture Trustee under the Indenture.
(m) Contribution of Subscription Proceeds. On the Effective
Date, Distributees that have entered into a Subscription Agreement and,
to the extent applicable, the Property Manager/Leasing Agent shall be issued
in accordance with Section 12.5 hereof the Offered Shares against the payment
to the REIT by the escrow agent referenced in Section 12.5 and the Property
Manager/Leasing Agent of an aggregate amount of Cash equal to the Subscription
Proceeds.
(n) Management of REIT and the Properties. The REIT will enter
into the Asset Management Agreement with the Asset Manager. Each of the
Property Owning Partnerships will enter into a Property Management and Leasing
Agreement with the Property Manager/Leasing Agent.
(o) Remaining 2 Broadway Assets. Prior to the merger described
in paragraph 13.1(d) above, the Assignment of the Remaining 2 Broadway
Assets shall be executed and delivered by the parties thereto. The Indenture
Trustee shall take all actions necessary, including executing UCC-3's and a
release of such assets from the lien of the Indenture, to release any Lien
held by it on the Remaining 2 Broadway Assets.
13.2 Cash Distribution in Lieu of New Notes. The holders of a majority
in amount of Existing Notes (excluding Existing Notes held by O&Y may obtain a
commitment for non-participating mortgage loan to be
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consummated on the Effective Date on terms acceptable to such holders from a
insurance company or other financial institution or pursuant to a financing
transaction, in either case secured by the Properties, in amount not less than
Three Hundred Twenty Five Million Dollars ($325,000,000) lieu of issuing New
Notes and on terms otherwise not less favorable than set forth in the
Disclosure Statement.
(a) Gross Proceeds Less than $400,000,000. If the Conventional
Financing Alternative is consummated on the Effective Date and the gross
proceeds from the consummation of the Conventional Financing Alternative are
less than $400,000,000, (x) the Senior Claim Note Cap will be adjusted to an
amount (as so adjusted, the 'Adjusted Note Cap') equal to 97.75% of the gross
proceeds from the consummation of the Conventional Financing Alternative and
(y) the Senior Claim Equity Cap will be adjusted to an amount (as so adjusted,
the 'Adjusted Equity Cap') equal to 12,000,000 shares less the MLL Equity
Allocation. For purposes of the Plan, 'MLL Equity Allocation' shall mean the
number of shares calculated by multiplying 12,000,000 shares times a fraction,
(x) the numerator of which shall be $30,000,000 less 2.25% of the Conventional
Financing Alternative, and (y) the denominator of which is (i) $700,000,000
less (ii) the gross proceeds from the consummation of the Conventional
Financing Alternative plus (iii) the net proceeds, if any, from such
Conventional Financing Alternative above $400,000,000. In such event, (a) the
Standard Note Distribution shall be recalculated to equal the product of Four
Hundred Thirty Three Thousand One Hundred Ninety One Dollars and Thirty-Two
Cents ($433,191.32) times a fraction, the numerator of which will be the
Adjusted Note Cap and the denominator of which will be the Senior Claim Note
Cap, (b) the Standard Stock Distribution shall be recalculated to equal the
product of Twelve Thousand Three Hundred Sixty Four and Twenty-Three
Hundredths (12,364.23) shares of REIT Stock times a fraction, the numerator of
which will be the Adjusted Equity Cap and the denominator of which will be the
Senior Claim Equity Cap and (c) the amount of New Notes and REIT Stock to be
distributed to any holder of an Allowed Senior Claim electing a Non-Standard
Election shall be recalculated using the Adjusted Note Cap in lieu of the
Senior Claim Note Cap and the Adjusted Equity Cap in lieu of the Senior Claim
Equity Cap, wherever the Senior Claim Note Cap and Senior Claim Equity Cap,
respectively, are used in calculating distributions to holders of Senior
Claims electing Non-Standard Elections. Upon such recalculation, the holders
of Allowed Senior Claims otherwise entitled to receive New Notes (whether
pursuant to a Standard Election or a Non-Standard Election) will receive, in
lieu of New Notes, an amount, in Cash, equal to (A) 97.75% of the Conventional
Financing Cash Distribution, multiplied by (B) a fraction, the numerator of
which shall be the amount of New Notes which would otherwise be distributed to
such holder (after any recalculation described above) and the denominator of
which shall be the Adjusted Note Cap. The Morgan Loan Lenders will be entitled
to receive, in lieu of New Notes, an aggregate amount, in Cash, equal to 2.25%
of the Conventional Financing Cash Distribution and in lieu of the
distribution of 840,000 shares of REIT Stock, a number of shares of REIT Stock
equal to the MLL Equity Allocation.
(b) Gross Proceeds Greater Than or Equal to $400,000,000. If
the Conventional Financing Alternative is consummated, and the gross
proceeds derived therefrom are greater than or equal to Four Hundred Million
Dollars ($400,000,000), then (A) each holder of an Allowed Senior Claim who is
otherwise entitled to receive New Notes and each Morgan Loan Lender will
receive, in lieu of the New Notes they would otherwise be entitled to receive,
a Cash distribution in an amount equal to the product of (i) the principal
amount of New Notes it would have otherwise received multiplied by (ii) a
fraction, the numerator of which will be the lesser of Four Hundred Million
Dollars ($400,000,000) and the Conventional Financing Cash Distribution and
the denominator of which is Four Hundred Million Dollars ($400,000,000), (B)
the Standard Stock Distribution shall be recalculated to equal the product of
Twelve Thousand Three Hundred Sixty Four and Twenty-Three Hundredths shares of
REIT Stock (12,364.23) multiplied by a fraction, the numerator of which will
be the Adjusted Equity Cap and the denominator of which will be the Senior
Claim Equity Cap, (C) the amount of REIT Stock to be distributed to any holder
of an Allowed Senior Claim electing a Non-Standard Election shall be
recalculated using the Adjusted Equity Cap in lieu of the Senior Claim Equity
Cap wherever the Senior Claim Equity Cap is used in calculating distributions
to holders of Senior Claims electing Non-Standard Distributions, and (D) the
amount of REIT Stock to be distributed to the Morgan Loan Lenders will be
changed from 840,000 shares of REIT Stock to the MLL Equity Allocation. If the
net proceeds of any mortgage loan financing consummated pursuant to the
Conventional Financing Alternative are greater than Four Hundred Million
Dollars ($400,000,000), such excess will be held by the Property Owning
Partnerships and/or distributed in accordance with the Property Owning
Partnership Documents.
In connection with the consummation of any Conventional Financing
Alternative, the Debtors and the Indenture Trustee shall take such actions and
shall execute and deliver such documents and instruments as may be reasonably
required to effect an assignment of the Indenture and the Existing Notes to a
mortgagee in accordance with the provisions of the Indenture relating In the
event that a Conventional Financing Alternative is consummated, shall be paid
a fee of One Million Dollars ($1,000,000) by the REIT on the Date.
13.3 Certain Other Agreements. On the Effective Date, (1) the
Registration Rights Agreement shall become effective in accordance with its
terms, (2) the REIT Stock Option Plan will become effective in accordance with
its terms, (3) the REIT will execute and deliver the Indemnification Agreement
its officers and directors and (4) in accordance with the REIT Stock Option
the REIT will issue stock options entitling each director to purchase of REIT
Stock.
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13.4 Issuance of Securities. On the Effective Date, (i) the REIT will
and deliver to the Disbursing Agent certificates representing the shares REIT
Stock to be issued hereunder; (ii) unless the financing contemplated by
Conventional Financing Alternative is consummated, the Property Owning will
issue and the Indenture Trustee will authenticate and deliver the Disbursing
Agent for distribution to the Distributees, New Notes in an principal amount
of Four Hundred Million Dollars ($400,000,000), (iii) Debtors will deliver the
portion of the Closing Cash not then held by the Trustee to the Disbursing
Agent, and (iv) the Indenture Trustee, if the Disbursing Agent, will deliver
to the Disbursing Agent the Closing Cash held by the Indenture Trustee. The
Disbursing Agent will distribute the of REIT Stock, Closing Cash and New Notes
(or if the Conventional Alternative is consummated, the Conventional Financing
Cash
Distribution) to be distributed in accordance with the Plan.
13.5 Distributions to Indenture Trustee and Security Holders.
(a) For purposes of any distribution to holders of Allowed Senior
Claims under the Plan, the Indenture Trustee shall be deemed to be the
sole holder of all Allowed Claims in respect of an Existing Note issued under
the Indenture.
(b) The Disbursing Agent will receive the REIT Stock and the New
Notes on behalf of the Distributees and will, as soon as practicable,
economically and administratively, in accordance with the Indenture or
applicable law and the Plan, deliver such REIT Stock or New Notes to the
Distributees as provided in Articles V, XI and XII of the Plan; provided,
however, that the Disbursing Agent will not deliver any REIT Stock or New
Notes to any holder of an Allowed Senior Claim until such Distributee shall
have complied with the provisions of Section 13.6 hereof. The Property Owning
Partnerships will, promptly after being billed therefor, pay the reasonable
fees, costs and expenses of the Disbursing Agent incurred in connection with
the distribution made by such Disbursing Agent in accordance with this Article
XIII.
13.6 Surrender of Securities.
(a) Each holder of Existing Notes will surrender instruments
representing such Existing Notes held by it to the Indenture Trustee in
accordance with the instructions to be provided by the Indenture Trustee as
soon as practicable after the Effective Date. Upon surrender of Existing Notes
to the Indenture Trustee, the Indenture Trustee shall cancel such Existing
Notes. On and after the Effective Date, the Indenture Trustee shall make a
distribution to holders of Existing Notes only if they have surrendered or are
deemed to have surrendered such instruments or such certificates in accordance
with the instruction provided pursuant to this Section 13.6(a).
(b) Until the fifth (5th) year after the Effective Date, any
property not distributed to holders of an Allowed Senior Claim will be
held by the Indenture Trustee in trust for the benefit of the holders of such
Allowed Senior Claim entitled to receive such property.
(c) Any holder of an Allowed Senior Claim that does not surrender
or is not deemed to have surrendered instruments or certificates
representing its Existing Notes in accordance with the instructions for
surrender of Existing Notes within five (5) years after the Effective Date
shall receive no distributions on account of such Claim under the Plan and
shall be forever barred from asserting any claim thereon. In such case, the
Indenture Trustee for the holders of such Claims shall return the New Note,
and shares of REIT Stock that otherwise would have been distributed to such
holder of Existing Notes as well as any property being held for the benefit of
such holder of Existing Notes to the REIT.
13.7 Withholding of Taxes. The Disbursing Agent shall withhold from any
distributed under the Plan, in accordance with the express instructions the
Debtors, any property which must be withheld for taxes payable by the entitled
to such property to the extent required by applicable law. In absence of
instructions, the Disbursing Agent may conclusively presume that
no property need be withheld.
13.8 Boards of Directors of REIT, GP Corps. and Upper Tier GP Corp. On
Effective Date, the Boards of Directors of the REIT, the GP Corps. and the
Tier GP Corp. shall consist of the individuals designated on or prior to
Confirmation Date in a notice filed with the Bankruptcy Court by the Debtors
Noteholder Consent.
13.9 Qualification as REIT. The aggregate number of shares of REIT
Stock distributable to Distributees pursuant to the Plan will be reduced by
hundred (500) shares (with distributions to each Distributee reduced on a rata
basis) and, as soon as practicable after the Effective Date, the Board
Directors of the REIT will cause donations of ten (10) shares of REIT Stock
to be made to fifty (50) Entities qualifying under section 501(c)(3) of the
United States Internal Revenue Code with the number of Entities to receive
such donations to be determined by the Board of Directors.
13.10 Registration Statement. The REIT will file with the Securities
and Commission on or before the date which is sixty (60) days after the Date,
a Registration Statement on Form 10 with respect to the REIT pursuant to
which, among other things, the REIT will become subject to the reporting
requirements of the Exchange Act.
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ARTICLE XIV
PROVISIONS GOVERNING DISTRIBUTIONS
14.1 Date of Distributions. Except as expressly provided herein, any
distributions and deliveries to be made hereunder shall be made on the
Effective or as soon as practicable thereafter. If any payment or act under
the Plan required to be made or performed on a date that is not a Business
Day, then making of such payment or the performance of such act may be
completed on next succeeding Business Day, but shall be deemed to have been
completed as of the required date. Distributions made within thirty (30) days
of the Effective Date shall be deemed made as of the Effective Date.
14.2 Disbursing Agent. All distributions under the Plan in respect of
1, 2, 3, 4 and 5 shall be made by the Disbursing Agent. In making hereunder,
the Disbursing Agent shall (i) make payments and fund in accordance with the
instructions of the Debtors and (ii) shall New Notes, or the Conventional
Financing Cash Distribution, as the
case may be, and REIT Stock in accordance with the instructions of the REIT.
The Disbursing Agent shall not be required to give any bond or surety or other
security for the performance of its duties unless otherwise ordered by the
Bankruptcy Court; if so otherwise ordered, all costs and expenses of procuring
any such bond or surety shall be paid from the Distributable Cash.
14.3 Source of Distributions. All Cash distributions required to be
made under the Plan on and after the Effective Date shall be made from Closing
Cash; provided, however, that if Closing Cash is insufficient to pay all
Allowed Expenses Claims, in full, such deficiency amount shall be paid by
applicable Property Owning Partnership. On the Effective Date, Closing Cash to
fully fund the Claims Reserve as provided in Section 16.3 hereof be
transferred to the Claims Reserve. The Claims Reserve shall be by the
Disbursing Agent in a separate account.
14.4 Delivery of Distributions. Subject to Bankruptcy Rule 9010,
distributions to holders of Allowed Claims and Allowed Equity Interests shall
be at the address of each such holder as set forth on the Schedules filed with
Bankruptcy Court unless superseded by the address set forth on proofs of or
proofs of equity interest filed by such holders (or at the last known of such
a holder if no proof of claim or proof of equity interest is or if the Debtors
have been notified in writing of a change of address). any distribution to any
holder is returned as undeliverable, the Disbursing shall use reasonable
efforts to determine the current address of such but no distribution to such
holder shall be made unless and until the
Disbursing Agent has determined the then current address of such holder, at
which time such distribution shall be made to such holder without interest.
Amounts in respect of any undeliverable distributions made through a
Disbursing shall be returned to the Disbursing Agent making such distribution
until distribution is claimed. If no proofs of claim are filed and the
Schedules with the Bankruptcy Court fail to state addresses for holders of
Allowed such Allowed Claims shall be deemed unclaimed property under section
of the Bankruptcy Code at the expiration of one year from the Effective After
such date, all unclaimed property shall be delivered to the REIT and claims of
any holders to such property shall be discharged and forever This Section 14.4
shall not apply to distributions to Distributees.
14.5 Time Bar to Cash Payments. Checks issued by the Disbursing Agent
on of Allowed Claims shall be null and void if not negotiated within sixty
days after the date of issuance thereof. Requests for reissuance of any shall
be made directly to the Disbursing Agent by the holder of the Claim with
respect to which such check originally was issued. Any claim respect of such a
voided check shall be made on or before the later of the anniversary of the
Effective Date or ninety (90) days after the date of of such check. After such
date, all claims in respect of void checks be discharged and forever barred.
14.6 Manner of Payment Under the Plan. At the option of the Debtors,
any Cash payment to be made by the Debtors pursuant to the Plan may be made by
a check or wire transfer or as otherwise required or provided in applicable
agreements.
ARTICLE XV
RIGHTS AND POWERS OF DISBURSING AGENT
15.1 Exculpation. The Disbursing Agent, from and after the Effective
Date, is hereby exculpated by all Entities, including all holders of Claims
and Interests and other parties in interest, from any and all claims, causes
action and other assertions of liability (including breach of fiduciary duty)
out of the discharge by the Disbursing Agent of the powers and duties upon it
by the Plan or any order of the Bankruptcy Court entered to or in furtherance
of the Plan, or applicable law, except solely for or omissions arising out of
the gross negligence or willful misconduct the Disbursing Agent. No holder of
a Claim or an Equity Interest or other in interest shall have or pursue any
claim or cause of action against the
Disbursing Agent for making distributions in accordance with the Plan or for
implementing the provisions of the Plan.
15.2 Powers of the Disbursing Agent. The Disbursing Agent shall be
empowered to (a) effect all actions and execute all instruments and documents
necessary to perform its duties under the Plan, (b) make all distributions
contemplated by the Plan, (c) comply with the Plan and the obligations
thereunder, (d) employ professionals to represent it with respect to its
responsibilities and (e) exercise such other powers as may be vested in the
Disbursing Agent pursuant to an order of the Bankruptcy Court, pursuant to the
Plan, or as deemed by the Disbursing Agent to be necessary and proper to
implement the provisions of the Plan.
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ARTICLE XVI
PROCEDURE FOR RESOLVING AND TREATING
DISPUTED CLAIMS UNDER THE PLAN
16.1 Prosecution of Objections. Objections to Claims, other than
Administrative Expense Claims, Tenant Reimbursement Claims and Insured Claims,
be filed on or before the Effective Date. From and after the Confirmation the
Property Owning Partnerships, or such other Entity as they direct, may any
objections to the allowance of any Claim which may be then Objections to
Tenant Reimbursement Claims and Priority Utility Tax shall be governed by the
provisions of Sections 16.7 and 16.8 hereof. to Insured Claims may be
interposed by the Upper Tier Limited in accordance with applicable
non-bankruptcy law. Objections to Expense Claims under Bankruptcy Code
sections 330, 331 and 503(b) be filed by the United States Trustee and any
party within the deadlines to established by order of the Court. Claims for
which no objection is filed the time so limited, and Senior Claims, shall be
deemed Allowed Claims, subject to set-off, avoidance, subordination or
disallowance, entitled to and retain distributions in respect of the full
amount set forth in of claim filed with the Bankruptcy Court, or, if less, as
listed in the and not identified as disputed, contingent or unliquidated as to
16.2 No Distributions Pending Allowance. Notwithstanding any other
provision hereof, if any portion of a Claim is a Disputed Claim, no payment or
provided hereunder shall be made on account of the portion of such that is a
Disputed Claim unless and until such Disputed Claim becomes an Claim.
16.3 Claims Reserve. On the Effective Date, the Disbursing Agent shall
to one or more segregated accounts as the Claims Reserve an amount of Cash
held by the Indenture Trustee or transferred to the Disbursing and required to
pay or projected to be required to pay in Cash, in full, the extent the same
are not paid on the Effective Date, all Administrative
Expense Claims, Priority Tax Claims (other than Priority Utility Tax Claims),
Non-Tax Claims, General Unsecured Claims and Other Secured Claims that either
Allowed Claims or are Disputed Claims, as if such Disputed Claims Allowed
Claims, on the Effective Date. The Cash held in the Claims Reserve be held in
trust for the benefit of holders of such Claims pending
determination of their entitlement thereto. The Disbursing Agent shall also
hold the Claims Reserve (a) the Net Tax Proceeds, if any, transferred to the
Agent in accordance with Section 16.6 hereof and (b) Distributable on account
of Priority Utility Tax Claims in accordance with Section 16.7
hereof.
16.4 Distributions After Allowance. Payments and distributions to each
of a Disputed Claim, to the extent that such Claim ultimately becomes an
Claim, in whole or in part, shall be made in accordance with the of the Plan
governing the Class of Claims in which such Claim is As soon as practicable
after the date that the order or judgment of Bankruptcy Court allowing any
Disputed Claim or any other Claim that is not Allowed Claim becomes a Final
Order, the Disbursing Agent shall distribute to holders of such Claim any
payment or property that would have been to such holder if the Claim had been
allowed on the Effective Date, any interest thereon, which in the case of Cash
distributions shall be from Closing Cash held in the Claims Reserve.
16.5 Remaining Funds. In the event that any Cash held in the Claims
Reserve remains after all Claims have been allowed or disallowed and
distributions have been made in accordance with this Article XVI, such Cash
shall be transferred to the REIT.
16.6 Allowance and Objection to Allowance of Tenant Reimbursement
Claims. Upon realization of the Net Tax Proceeds, the Property Owning
Partnership receiving such Net Tax Proceeds shall cause an amount of such
funds in its sole determination, to reserve in full for all Tenant Claims to
be transferred to the Disbursing Agent for deposit in Claims Reserve. Within
thirty (30) days after the date of such deposit, such Owning Partnership shall
determine the entitlement of holders of Tenant
Reimbursement Claims to payment of such Tenant Reimbursement Claims by reason
of receipt of such Net Tax Proceeds and, in making such determination, shall
be to give effect to any rights of setoff, recoupment or other claims that
Property Owning Partnership or any predecessor-in-interest may have against
holders of such Tenant Reimbursement Claims. Thereafter, such Property
Partnership shall transmit a copy of such determination to each holder of
Tenant Reimbursement Claim. Each holder of a Tenant Reimbursement Claim shall
thirty (30) days from the date of transmission of such determination to to the
determination by such Property Owning Partnership of the amount to such holder
of a Tenant Reimbursement Claim is entitled. If the holder of Tenant
Reimbursement Claim does not object on a timely basis to any by such Property
Owning Partnership of the entitlement of such to a payment from such Net Tax
Proceeds, then, with respect to such Net
Tax Proceeds, such Tenant Reimbursement Claim shall be an Allowed Tenant
Reimbursement Claim in the amount so determined and shall then be paid from
the Reserve at the request of the Property Owning Partnership, without the of
further Bankruptcy Court approval. If the holder of a Tenant Claim objects on
a timely basis to the determination by such Owning Partnership of the
entitlement of such holder to a payment from Net Tax Proceeds, then, with
respect to such Net Tax Proceeds, such Tenant Claim shall be a Disputed Claim
and no distribution shall be made account of such Tenant Reimbursement Claim
until such Claim becomes an Claim, in whole or in part, by a Final Order. All
remaining Net Tax realized shall be transferred by the applicable Property
Owning to the Lower Tier Limited Partnership which will in turn transfer Net
Tax Proceeds to the REIT;
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provided, however, that such Property Owning Partnership shall retain
sufficient to pay all disputed Tenant Reimbursement Claims until such Claims
have been or disallowed.
16.7 Allowance and Objection to Allowance of Priority Utility Tax
Claims. On the Effective Date, the Disbursing Agent shall deposit in the
Claims an amount of Closing Cash equal to the amount claimed in any proof or
of claim on account of Priority Utility Tax Claims or, if no such proof proofs
of claim have been filed on the Effective Date or if proofs of claim been
filed by some but not all of the potential holders of Priority Utility Claims,
an amount determined by the Debtors, with the consent of the Trustee, which
consent shall not be unreasonably withheld or delayed, be sufficient to pay in
full any Priority Utility Tax Claims on account of proofs of claim may be
filed after the Effective Date. The Debtors shall
be deemed to have objected to all Priority Utility Tax Claims evidenced by a
proof of claim. From and after the Effective Date, the Upper Tier Limited
shall have the exclusive right to prosecute any objection to Utility Tax
Claims, any litigation related to any objection to Priority Tax Claims and to
compromise or settle any such objection or litigation. the event that the
Upper Tier Limited Partnership compromises any objection any Priority Utility
Tax Claim, the Property Owning Partnership owning the in question shall be
deemed to have indemnified the holders of Equity in the Debtor which had
formerly owned the Property in question (and successors and assigns) from all
claims which may be made by the City or of New York in respect of utility
taxes, interest and penalties in with such Property unless such compromise
includes a release of such from all such claims. At such time as the Priority
Utility Tax Claims disallowed or allowed, the Disbursing Agent shall determine
the amount of Priority Utility Tax Claim Excess, if any. Allowed Priority Tax
Claims shall paid in Cash by the Disbursing Agent from Closing Cash held in
the Claims After determining such amount, the Disbursing Agent shall
distribute such Priority Utility Tax Excess to the REIT.
16.8 Distributions After Effective Date. Distributions made after the
Date to holders of Claims that are not Allowed Claims as of the Date but which
later become Allowed Claims shall be made without interest and shall be deemed
to have been made on the Effective Date.
ARTICLE XVII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
17.1 General Treatment. On the Effective Date, all executory contracts
unexpired leases to which either Debtor is a party, except for any executory
or unexpired lease that (a) has been assumed pursuant to Final Order of
Bankruptcy Court prior to the Effective Date, or (b) is specifically listed
the Schedule of Executory Contracts to Be Assumed attached to the Disclosure
hereto shall be deemed rejected; provided, however, that (x) 1290 shall
neither assume nor reject the 1290 Ground Lease which shall expire its own
terms and the attornment provisions contained in all then unexpired and
related non-disturbance agreements with 1290 L.L.C. or its in interest as fee
owner of the 1290 Property which are not shall be deemed to be effective, and
(y) all unexpired leases with of either Property shall be assumed. For
purposes hereof, each executory and unexpired lease listed on the Schedule of
Executory Contracts to Be attached to the Disclosure Statement that relates to
the use or of real property shall include (a) modifications, amendments,
restatements, or other agreements made directly or indirectly by agreement,
instrument, or other document that affect such executory contract unexpired
lease and (b) executory contracts or unexpired leases appurtenant the premises
including easements, licenses, permits, rights, privileges, options, rights of
first refusal, powers, uses, usufructs, easement agreements, vault, tunnel or
bridge agreements or and any other interests in real estate or rights in rem
relating to premises to the extent any of the foregoing items described in
this clause are (i) executory contracts or unexpired leases, and (ii) are
listed on the of Executory Contracts to Be Assumed to be attached as an
Exhibit to the Disclosure Statement.
17.2 Amendments to Schedule; Effect of Amendments. On the Effective
Date, of the Debtors shall assume and, as applicable, assign to one of the
Owning Partnerships each of the executory contracts and unexpired listed on
the Schedule of Executory Contracts to Be Assumed attached to Disclosure
Statement; provided, however, that, either Debtor may at any time or before
five (5) Business Days prior to the Confirmation Date amend the of Executory
Contracts to Be Assumed attached to the Disclosure to delete therefrom or add
thereto any executory contract or unexpired thereto, in which event such
executory contract or unexpired lease shall deemed to be rejected or assumed,
respectively, as of the Effective Date; and further, that any such amendment
shall be subject to Noteholder The Debtors shall provide notice of any such
amendments to the parties the executory contracts or unexpired leases affected
thereby and to parties the primary service list or master service list, as
applicable. The fact that contract or lease is listed on the Schedule of
Executory Contracts to Be attached to the Disclosure Statement shall not
constitute or be to constitute an admission by either Debtor that such
contract or (including related things and rights) is an executory contract or
lease within the meaning of section 365 of the Bankruptcy Code or that Debtor
or Limited Partner Entity has any liability thereunder. 17.3 Bar to
Rejection Damages. If the rejection of an executory contract unexpired lease
by either Debtor results in damages to the other party or to such contract or
lease, a Claim for such damages shall be forever and shall not be enforceable
against the Debtor, or its properties or its interests in property or agents,
successors, partners, members or assigns,
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unless a proof of claim is filed with the Bankruptcy Court and served upon
counsel for the Debtors and the Indenture Trustee on or before the date of the
Confirmation Hearing.
ARTICLE XVIII
CONDITIONS PRECEDENT TO CONFIRMATION OF PLAN
AND TO EFFECTIVE DATE
18.1 Conditions Precedent to Confirmation of the Plan. Confirmation of
the Plan is subject to satisfaction of the following conditions precedent:
(a) Form of Confirmation Order. The Clerk of the Bankruptcy
Court shall have entered the Confirmation Order either substantially in
a form to be filed by the Debtors, upon Noteholder Consent, with the
Bankruptcy Court not later than five (5) days prior to the commencement of the
Confirmation Hearing or in such other form that does not materially and
adversely affect the benefits to be received by the holders of Senior Claims,
as determined by Noteholder Consent. Notwithstanding the preceding sentence,
such Confirmation Order shall not modify the rights of the Morgan Loan Lenders
in a manner which materially and adversely affects the Morgan Loan Lenders
disproportionately (in relation to the amount of their respective
distributions to be received under the Plan) to its impact on other
Distributees, unless the consent of the Morgan Loan Agent with respect thereto
has been obtained in the exercise of its sole and absolute discretion.
(b) Confirmation Date. The Confirmation Date shall be no later
than September 15, 1996.
18.2 Conditions Precedent to Effective Date of the Plan. The occurrence
the Effective Date of the Plan is subject to satisfaction of the following
precedent:
(a) Finality of Confirmation Order. The Confirmation Order
shall have become a Final Order.
(b) Plan Documents. All Plan Documents shall have been
executed and delivered in accordance with the Plan.
(c) JMB Collateral. The JMB Collateral shall have been
delivered to the REIT.
(d) Tenant Notes. The holders of the Tenant Notes shall have
endorsed and assigned such notes, pursuant to the Tenant Note
Assignments, to the applicable Property Owning Partnership free and clear of
any interest of third parties and delivered to the applicable Property Owning
Partnership an amount of Cash equal to all payments made in respect of the
Tenant Notes from and after January 1, 1996; provided, however, that the O&Y
Administrative Expense Claim may constitute a setoff against such Cash
payment.
(e) Bankruptcy Court Approvals. The Bankruptcy Court shall
have entered a Final Order or Final Orders reasonably satisfactory to
the holders of a majority in principal amount of the Existing Notes (excluding
Existing Notes held by O&Y Affiliates), and in the case of item 1 below
reasonably satisfactory to the Morgan Loan Agent, on notice to all parties in
interest who have filed requests for notice in the chapter 11 cases of the
relevant O&Y (U.S.) Entities, the creditors' committee in those cases and the
Office of the United States Trustee approving:
(1) the Settlement Agreement;
(2) the delivery of the Tenant Notes to the applicable
Property Owning Partnership;
(3) the assignment by Equityco to the REIT or its designee
of all of its right, title and interest in and to the 2 Broadway
Utility Tax Reserve;
(4) the forgiveness by Equityco and Devco of all Waived
Payments;
(5) the CIBC Settlement;
(6) the assignment by 2 Broadway Associates and 2 Broadway
Land Company of all of their interests, if any, in the Remaining 2
Broadway Assets (as defined in the Indenture) to the REIT;
(7) the O&Y Lease Agreement; and
(8) the assignment by O&Y MFC of the JMB Notes to the REIT
or its designee.
(f) Delivery of JMB Notes. O&Y MFC shall have endorsed and/or
assigned the JMB Notes and the related security agreements to the REIT
or its designee free and clear of liens or interests of third parties,
including, without limitation, Citibank, N.A. which shall have delivered the
Citibank, N.A. Release, duly executed, to the REIT or its designee.
(g) Execution of Documents. All other actions, documents,
financing statements and instruments necessary to implement the
provisions of the Plan having been, respectively, effected or executed and
delivered.
(h) Conditions to Closing in Property Contribution Agreements.
The conditions to closing set forth in paragraph 2.2 of the Property
Contribution Agreements shall have been satisfied.
(i) Consummation of Transactions. The parties to the
Settlement Agreement shall have notified the Debtors that the
transactions contemplated by the Settlement Agreement to be consummated on or
before the Effective Date have been consummated.
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(j) Consummation of CIBC Settlement. The CIBC Settlement shall
have been consummated.
(k) Effective Date. The Effective Date shall be not later than
September 30, 1996.
(l) Cap on General Unsecured Claims. Allowed Class 5 Claims
(General Unsecured Claims) shall not exceed an amount equal to the
amount of all Allowed General Unsecured Claims relating to or arising from the
operation of the Properties in the ordinary course of business, plus One
Hundred Thousand Dollars ($100,000).
18.3 Waiver of Conditions Precedent.
The conditions precedent contained in Sections 18.1 and 18.2 hereof may
be by Noteholder Consent. Notwithstanding the preceding sentence, in order be
effective, any waiver of a condition precedent contained in Sections
18.2(e)(l) or 18.2(i) or any other condition precedent contained in Section
18.1 or 18.2 hereof which would materially and adversely affect Morgan Loan
Lenders in amounts disproportionate (in relation to the amount their
respective distributions to be received under the Plan) to its impact other
Distributees must also be waived by the Morgan Loan Agent in the of its sole
and absolute discretion. Further, in order to be effective,
any waiver of the conditions precedent contained in Sections 18.1 or 18.2(2)
(to extent applicable to the Debtors or any O&Y (U.S.) Entity), (e)(1), (2),
(5), (7) and (8), (g) (to the extent applicable to the Debtors or any O&Y
Entity), (i) and (j) hereof must also be waived by the Debtors in the of their
sole and absolute discretion. Any waiver contemplated by this 18.3 may be
effected at any time, without leave or order of the
Bankruptcy Court and without any formal action.
ARTICLE XIX
EFFECT OF CONFIRMATION
19.1 Jurisdiction. Until the Effective Date, the Bankruptcy Court shall
custody and jurisdiction of the Debtors, their properties and interests
property and their operations. On the Effective Date, the Debtors, their and
their interests in property and their operations shall be from the custody and
jurisdiction of the Bankruptcy Court, except as
provided in Article XXI hereof.
19.2 Vesting and Liens. On the Effective Date, the Property Owning
Partnerships or the REIT, as applicable, shall be vested with all of the Plan
in accordance with the Plan Documents. On the Effective Date, all Liens any
Plan Asset, except to the extent provided in the Plan Documents, be deemed
extinguished and discharged.
19.3 Equityco Claims. On the Effective Date, any Claim against Equityco
its general partners asserted by any holder of Existing Notes arising out of
Master Cash Flow Agreement, the Existing Notes, the Indenture or instruments
into in connection therewith shall be deemed withdrawn with prejudice the
receipt of the Plan Securities (or Cash in the event of consummation of
Conventional Financing Alternative) by the Indenture Trustee.
19.4 2 Broadway Plan.
(a) Notwithstanding the provisions of the 2 Broadway Plan, all
Cash to be paid to the 'Trustee's Account' pursuant to Sections 9.5 and
9.7 of the 2 Broadway Plan shall be distributed to the REIT at the same time
as such Cash would have been paid to the 'Trustee's Account' in accordance
with the 2 Broadway Plan.
(b) The REIT shall have all of the rights of 2 Broadway, L.P.
pursuant to Sections 9.6 and 9.7 of the 2 Broadway Plan. In the event
that the REIT compromises any objection to any Priority Utility Tax Claim (as
defined in the 2 Broadway Plan), the REIT shall be deemed to have indemnified
the holders of Equity Interests (as defined in the 2 Broadway Plan) in 2
Broadway L.P. and their successors and assigns from all claims which may be
made by the City or State of New York in respect of utility taxes, interest
and penalties in connection with the real property located at 2 Broadway, New
York, New York unless such compromise includes a release of such holders from
such claims.
(c) The REIT will assume all of the obligations of 2 Broadway,
L.P. and O&Y NY Building Corp. under Section 9.6 of the 2 Broadway Plan
and 2 Broadway, L.P. and O&Y NY Building Corp. shall have no further
obligations thereunder.
19.5 Binding Effect. On the Effective Date, the Plan shall become
binding upon parties in interest in accordance with its terms and conditions.
ARTICLE XX
RELEASES, INJUNCTIONS AND WAIVER OF CLAIMS
20.1 Release of the O&Y Releasees.
(a) General Release. As of the Effective Date, the Debtors are released
all Liabilities from the beginning of time. Notwithstanding the provisions
this Section 20.1 or any release contained in Section 20.2 of the Plan, the
does not release the Upper Tier Limited Partnership or any other Entity any
obligations arising under the Plan or the Plan Documents which are stated to
survive the Effective Date or which by the nature of their terms are to be
performed after the Effective Date.
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(b) O&Y Releases. Without limiting the release provided in Section
20.1(a) as of the Effective Date, the O&Y Releasees are released from all in
any way relating to either Debtor, either Debtor in Possession, predecessor in
interest of either Debtor, the Reorganization Cases, the either Property, the
Existing Notes, the Indenture or the Offering The release of the O&Y Releasees
provided in this Section 20.2(b)
includes a release from all Liabilities from the beginning of time relating
to:
(1) the offer, sale, purchase, resale or ownership of the
Existing Notes (including any previously issued notes which were
replaced by Existing Notes), the Offering Memorandum, any sales brochure,
registration statement, preliminary prospectus, prospectus, appraisal, report
or inspection, or any disclosure or omission related to any of the foregoing,
and any engagement, underwriting, placement agency or other role of, or
services rendered by, any Entity in connection with any of the foregoing;
(2) the involvement of any of the O&Y Releasees in or with
the sale of the Existing Notes (including any previously issued
notes which were replaced by Existing Notes);
(3) the ownership, management and operation of the
Properties by any of the O&Y Releasees;
(4) the preparation by any of the O&Y Releasees of financial
statements in respect of either Debtor or any predecessor in
interest of either Debtor or any entity obligated under the Master Cash Flow
Agreement;
(5) the actions, payments and obligations required of any of
the O&Y Releasees under, among other things, the Indenture, the
Cash Management Agreement, the Existing Notes (including any previously issued
notes which were replaced by Existing Notes), the Master Cash Flow Agreement,
the 1290 Ground Lease and all agreements, instruments and documents executed
and delivered in connection with any of the foregoing or the 2 Broadway Plan;
(6) the use of proceeds by any of the O&Y Releasees from the
Existing Notes or revenues of the Property;
(7) the obligations under leases, subleases, licenses or
other agreement regarding use and occupancy of all or any portion
of the Properties whether, as landlord, sublandlord, licensor, tenant,
subtenant, licensee or otherwise other than obligations of Devco under the O&Y
Lease Amendment, but only to the extent not then performed;
(8) the undertaking by the O&Y Releasees to restructure the
obligations governed by the Indenture and evidenced by the
Existing Notes and to restructure the obligations of the partners/members of
the Debtors among themselves, including any actions taken or not taken in
respect of formulating, negotiating and implementing the Plan;
(9) all obligations or liabilities of the O&Y Releasees
relating to Building Corp. being the initial general partner of
the Upper Tier Limited Partnership;
(10) all claims and causes of action arising out of the
Limited Liability Company Agreement for either Debtor or the
Partnership Agreements for the Debtors' predecessors in interest or any
liabilities as direct or indirect partners or members thereof; and
(11) all claims and causes of action held by parties in
interest in the Reorganization Cases in their capacity as such
arising out of the O&Y Releasees' acts, omissions or status as parties in
interest in the chapter 11 cases of O&Y (U.S.) or as a participant in the
restructuring of O&Y (U.S.), including, without limitation, claims and causes
of action based upon the attempted proposal (alone or with others) of a plan
of reorganization for O&Y (U.S.) and all matters raised in pleadings filed
with the Bankruptcy Court or exchanged among parties in interest with respect
to O&Y (U.S.)'s exclusive right to file a plan of reorganization.
20.2 Release of the Plan Releasees. As of the Effective Date, the Plan
shall be released from all Liabilities from the beginning of time in way
relating to (a) either Debtor, either Debtor in Possession, each in interest
of either Debtor, the Reorganization Cases, the Plan or Property, or (b) the
Existing Notes (including any previously issued which were replaced by
Existing Notes), the Indenture or the Offering Without limiting the generality
of the foregoing, the release of the Releasees provided herein includes a
release from Liabilities from the beginning of time relating to:
(a) the undertaking by the Plan Releasees to restructure the
obligations governed by the Indenture and evidenced by the Existing
Notes (including any previously issued notes which were replaced by Existing
Notes), including any actions taken or not taken in respect of formulating,
negotiating and implementing the Plan;
(b) all actions taken or not taken, at any time, by any Plan
Releasee under or in connection with the Existing Notes (including any
previously issued notes which were replaced by Existing Notes), the Indenture,
the Master Cash Flow Agreement or the Cash Management Agreement or the 2
Broadway Plan;
(c) all claims and causes of action held by parties in interest
in the Reorganization Cases in their capacity as such arising out of the
Plan Releasees' acts, omissions or status as parties in interest in the
chapter 11 cases of O&Y (U.S.) or as a participant in the restructuring of O&Y
(U.S.), including, without limitation, claims and causes of action based upon
the attempted proposal (alone or with others) of a plan of reorganization for
O&Y (U.S.) and all matters raised in pleadings filed
24
with the Bankruptcy Court or exchanged among parties in interest with
respect to O&Y (U.S.)'s exclusive right to file a plan of reorganization; and
(d) all waivers or releases of debt and withdrawals of claims
effected pursuant to the Plan and the Settlement Agreement.
20.3 Injunction. The Confirmation Order shall be an injunction to
permanently enjoin and restrain all Entities from asserting against the O&Y
Releasees or the Plan Releasees, or their respective properties or interests
in property, any Liabilities that are released by the Plan Releases, or from
taking any of the following actions against such Entities in respect of any
such Liabilities to the extent so released:
(a) the commencement or continuation of any action or proceeding;
(b) the enforcement, attachment, collection or recovery by any
manner or means of any judgment, award, decree or order;
(c) creating, perfecting, or enforcing any encumbrance of any
kind; and
(d) asserting any right of setoff, subrogation, or recoupment of
any kind against any obligation due from any such Entity.
20.4 Avoidance and Recovery Actions. Effective as of the Effective
Date, Debtors waive the right to prosecute and release any avoidance, or
recovery actions under sections 510, 544, 545, 547, 548, 549, 551 and 553 of
the Bankruptcy Code or any other causes of action, or rights payments of
claims, that belong to the Debtors or Debtors in Possession, than any such
actions that may be pending on such date or that the Debtors have on the
Effective Date against the holder of a Tenant Reimbursement (but in such case
only with respect to any right of setoff that would against the holder of such
Tenant Reimbursement Claim). The Upper Tier Limited Partnership shall retain
and may prosecute any such actions that may be pending on such date.
ARTICLE XXI
RETENTION OF JURISDICTION
21.1 Retention of Jurisdiction. The Bankruptcy Court may retain
jurisdiction, and if the Bankruptcy Court exercises its retained jurisdiction,
have exclusive jurisdiction, of all matters arising out of, and related the
Reorganization Cases and the Plan pursuant to, and for the purposes of, 105(a)
and 1142 of the Bankruptcy Code and for, among other things, the following
purposes:
(a) To hear and determine pending applications for the assumption
or rejection of executory contracts or unexpired leases, if any are
pending, and the allowance of Claims resulting therefrom;
(b) To determine any and all adversary proceedings, applications
and contested matters;
(c) To ensure that distributions to holders of Allowed Claims are
accomplished as provided herein;
(d) To hear and determine any timely objections to Administrative
Expense Claims or to proofs of claim and equity interests filed, both
before and after the Confirmation Date, including any objections to the
classification of any Claim or Equity Interest, and to allow or disallow any
Disputed Claim, in whole or in part;
(e) To enter and implement such orders as may be appropriate in
the event the Confirmation Order is for any reason stayed, revoked,
modified, or vacated;
(f) To issue such orders in aid of execution of the Plan, to the
extent authorized by section 1142 of the Bankruptcy Code;
(g) To consider any modifications of the Plan, to cure any defect
or omission, or reconcile any inconsistency in any order of the
Bankruptcy Court, including the Confirmation Order;
(h) To hear and determine all applications for awards of
compensation for services rendered and reimbursement of expenses related
to implementation and consummation of the Plan;
(i) To hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan;
(j) To hear and determine matters concerning state, local and
federal taxes in accordance with sections 346, 505 and 1146 of the
Bankruptcy Code including, without limitation, the New York Real Property
Transfer Gains Tax, Article 31-B of the New York Tax Law; and
(k) To enter a final decree closing the Reorganization Cases.
21.2 Modification of Plan. Modifications of the Plan may be proposed in
by the Debtors at any time before confirmation, provided that (x) the have
obtained Noteholder Consent, and (y) this Plan, as modified, the requirements
of sections 1122 and 1123 of the Bankruptcy Code and the Debtors have complied
with section 1125 of the Bankruptcy Code. The Plan be modified at any time
after confirmation hereof and before substantial hereof, provided that (x) the
Debtors shall have obtained Consent and (y) the Plan, as modified, satisfies
the requirements of 1122 and 1123 of the Bankruptcy Code and the Bankruptcy
Court, after and a hearing, confirms this Plan as modified under section 1129
of the Code and the circumstances warrant such modifications. A holder of a or
25
Equity Interest that has accepted the Plan shall be deemed to have accepted
the as modified in accordance with the foregoing if the proposed modification
not materially and adversely change the treatment of the Claim or Equity of
such holder. Notwithstanding the foregoing, the Plan may not be modified or
supplemented if the proposed amendment, modification or would materially and
adversely affect the Morgan Loan Lenders in a disproportionate (in relation to
the amount of their respective to be received under the Plan) to its impact on
other unless the consent of the Morgan Loan Agent shall have been given in the
exercise of its sole and absolute discretion.
ARTICLE XXII
MISCELLANEOUS PROVISIONS
22.1 Payment of Statutory Fees. All fees payable pursuant to section
1930, title 28, United States Code shall be paid on the Effective Date.
22.2 Retiree Benefits. On and after the Effective Date, pursuant to
section 1129(a)(13) of the Bankruptcy Code, the Property Owning Partnerships
or successors and assigns shall continue to pay all retiree benefits (within
meaning of section 1114 of the Bankruptcy Code), at the level established in
with subsection (e)(1)(B) or (g) of section 1114 of the Bankruptcy at any time
prior to the Confirmation Date for the duration of the period Debtors have
obligated themselves to provide such benefits; provided, that nothing herein
or elsewhere in this Plan shall be construed as an on the part of the Property
Owning Partnerships, the Limited Partner or the REIT to assume any obligation
relating to properties other than
the Properties with respect to retiree benefits. Newco LP will assume the
liability of the Debtors with respect to the Devco Retirement Plan.
22.3 Dissolution of Creditors' Committee. The Creditors' Committee, if
any, shall be dissolved on the Effective Date.
22.4 Post-Effective Date Fees and Expenses. Except as may otherwise be
or been ordered by the Bankruptcy Court, the Indenture Trustee, the Disbursing
and all professionals seeking payment from the Upper Tier Limited the REIT or
the Property Owning Partnerships for reasonable fees expenses incurred after
the Effective Date in connection with the of the Plan shall transmit a written
invoice of such request to Property Owning Partnerships and the Disbursing
Agent. If no written to the payment of such fees and expenses is received by
the Disbursing within ten (10) days of the transmission of such request, the
Disbursing shall pay from the Closing Cash held in the Claims Reserve or if
Closing is insufficient the Property Owning Partnership shall pay such fees
and If an objection to the payment of such fees and expenses is received the
Disbursing Agent within such 10-day period, the Disbursing Agent shall such
fees and expenses only upon order of the Bankruptcy Court or the of such
objection.
22.5 Severability of Plan Provisions. If, prior to the Confirmation
Date, term or provision of the Plan is held by the Bankruptcy Court to be
invalid, or unenforceable, the Bankruptcy Court shall have the power to alter
and such term or provision to make it valid or enforceable to the maximum
practicable, consistent with the original purpose of the term or held to be
invalid, void or unenforceable, and such term or provision then be applicable
as altered or interpreted; provided, however, that the Court shall not have
the power to alter the Plan in a manner which materially and adversely affects
the benefits to be received by holders of Notes without Noteholder Consent, or
(b) materially and adversely the benefits to be received by the Morgan Loan
Lenders in a manner (in relation to the amount of their respective
distributions to received under the Plan) to its impact on other Distributees,
unless the of the Morgan Loan Agent has been obtained in the exercise of its
sole absolute discretion. Notwithstanding any such holding, alteration or the
remainder of the terms and provisions of the Plan shall in full force and
effect and shall in no way be affected, impaired or by such holding,
alteration or interpretation. The Confirmation shall constitute a judicial
determination and shall provide that each term provision of the Plan, as it
may have been altered or interpreted in
accordance with the foregoing, is valid and enforceable pursuant to its terms.
22.6 Governing Law. Except to the extent that the Bankruptcy Code or
other federal law is applicable, or to the extent an Exhibit hereto provides
the rights, duties and obligations arising under the Plan shall be by, and
construed and enforced in accordance with, the laws of the of New York.
22.7 Time of the Essence. Time shall be of the essence with respect to
all dates and deadlines set forth herein.
22.8 Reasonable Cooperation. On and after the Effective Date, each of
the and their Affiliates shall, at the sole expense of the Property Owning
reasonably cooperate with the GP Corps., the Upper Tier GP Corp., Upper Tier
Limited Partnership, the Lower Tier Limited Partnership, the Owning
Partnerships, the REIT, the Property Manager/Leasing Agent and Asset Manager
(i) to assure the consummation of the Plan, (ii) to assist objections to
claims, (iii) to facilitate the transfer of the Properties to Property Owning
Partnerships without disruption to any tenants of the and (iv) to enable the
REIT to prepare the Registration Statement provided for in Section 13.10
above, including, without limitation, the of audited financial statements
which may be required in connection Such cooperation shall include delivery to
the Property Owning Partnerships of (X) all leases and executory contracts
assumed pursuant
26
to Article XVII hereof and (Y) all of the books and records of the Debtors and
2 Associates, L.P. and their affiliated predecessors in interest in each then
in such Debtor's or such Affiliate's possession, custody or control.
22.9 Notices. All notices, requests, and demands to be effective shall
be writing (including by facsimile transmission) and, unless otherwise
expressly herein, shall be deemed to have been duly given or made when
actually or, in the case of notice by facsimile transmission, when received
and confirmed, addressed as follows:
If to the Debtor:
237 Park Avenue Associates, L.L.C.
1290 Associates, L.L.C.
c/o Olympia & York Companies (U.S.A.)
237 Park Avenue, 12th Floor
New York, New York 10017
Attn: Managing Attorney
Telephone: (212) 850-9600
Telecopier: (212) 850-9872
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attn: Brian S. Rosen, Esq.
Telephone: (212) 310-8000
Telecopier: (212) 310-8007
and
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attn: Joshua Mermelstein, Esq.
Joel London, Esq.
Telephone: (212) 859-8000
Telecopier: (212) 859-4000
If to the Indenture Trustee:
Bankers Trust Company
Four Albany Street, 4th Floor
New York, New York 10006
Attn: Stanley Burg
Corporate Market Services
Telephone: 250-6526
Telecopier: 250-0392
and
Kelley, Drye & Warren LLP
101 Park Avenue
New York, New York 10178
Attn: David Retter, Esq.
Susan Carney, Esq.
Telephone: 808-7576
Telecopier: 808-7897
If to the Limited Partner Entities, the Property Owning Partnerships or
the
REIT:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attn: Douglas L. Furth, Esq.
Kenneth J. Friedman, Esq.
Telephone: (212) 856-7000
Telecopier: (212) 856-7807 and
(212) 856-7802
27
and
Victor Capital Group
885 Third Avenue, Suite 1240
New York, New York 10022
Attn: John Klopp
Jeremy FitzGerald
Telephone: (212) 593-5400
Telecopier: (212) 593-0316
All notices, requests, and demands to be provided to any Creditors'
Committee that may be appointed in the Reorganization Cases shall be made to
the attorneys of record for such Creditors' Committee.
22.10 Action By Indenture Trustee. Whenever the provisions of the Plan
the Indenture Trustee the discretion to take any action or give any or
direction, the Trustee shall act in accordance with Noteholder and, in the
absence of such instruction, may act in accordance with its discretion;
provided, however, that, in the event and to the extent that Section 22.10
conflicts with the provisions of Section 7.9 of the the provisions of Section
7.9 of the Indenture shall govern; and further, that wherever the Plan
expressly requires the Trustee to act the Trustee shall so act notwithstanding
any contrary direction from any Noteholders.
22.11 O&Y Administrative Expense Claim. On the Effective Date, the O&Y
Administrative Expense Claim shall be deemed Allowed and paid in full or
pursuant to the terms of Sections 13.1(l) and 18.2(d) hereof.
22.12 VCG Fees. On the Effective Date, the REIT shall distribute to VCG
Hundred Thousand Dollars ($500,000), in Cash and Forty Thousand (40,000) of
REIT stock. If the Conventional Financing Alternative is consummated, shall
also receive the Cash fee referenced in Section 13.2 hereof. In the that (i) a
Conventional Financing Alternative is not consummated and (ii) New Notes are
refinanced on or before eighteen (18) months after the Date, the REIT shall
pay VCG a fee of One Million Dollars provided, however, that, if the New Notes
are partially redeemed such period in an amount less than Three Hundred Twenty
Five Million ($325,000,000) as part of the refinancing of one Property, the
REIT pay VCG an amount to be agreed upon between the REIT and VCG. VCG will
fees in accordance with the Asset Management Agreement.
22.13 Confirmation Request. The Debtors reserve the right to request
confirmation of the Plan under section 1129(b) of the Bankruptcy Code if any
impaired Class does not accept the Plan.
Dated: New York, New York
August 9, 1996
Respectfully submitted,
237 Park Avenue Associates, L.L.C.
By: O&Y NY Building Corp., its
Authorized Member
By: /s/_JOHN A.MOORE____________________
Name: John A. Moore
Title: Authorized Representative
1290 ASSOCIATES, L.L.C.
By: O&Y NY Building Corp., its
Authorized Member
By: /s/_JOHN A. MOORE____________________
Name: John A. Moore
Title: Authorized Representative
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
in Possession
767 Fifth Avenue
New York, New York
(212) 310-8000
Brian S. Rosen, Esq. (BR 0571)
28
SCHEDULE 1 TO PLAN
SCHEDULE OF O&Y AFFILIATES
O&Y Affiliates means the following Entities and any other Entity that
controls, is controlled by, or is under common control with such Entities:
1. Amland Properties Corp.
2. Olympia & York and Andrews Associates Venture
3. Baden Real Estate Corp.
4. Brunswash Development Corporation
5. Olympia & York Bryan Holding Company
6. Cabot Estate Development Company
7. Olympia & York Cherry Creek Company
8. Chicago-Superior Associates
9. Olympia & York Co., Inc.
10. Olympia & York Colorado Development Corp.
11. Olympia & York Communications, Inc.
12. Olympia & York Companies (U.S.A.), Inc.
13. O&Y Concord 60 Broad Street Company
14. O&Y Construction Corp.
15. Olympia & York Cypress Corp.
16. O&Y Cypress Florida Inc.
17. O&Y Dalland Corp.
18. Olympia & York Denver Properties Corp.
19. Devco--11601-A, L.P.
20. Devco--11601-B, L.P.
21. Dev GP 53 Holding Corp.
22. O&Y Devcon, Inc.
23. O&Y Development Holding Corp.
24. Olympia & York Development (Seattle) Company
25. O&Y Equity (Canada) Ltd.
26. O&Y Equity Company, L.P.
27. O&Y Equity General Partner Corp.
28. Olympia & York FCA Inc.
29. O&Y FEC Corp.
30. O&Y FEC Corp. Venture
31. Federal Center Associates
32. O&Y Financial Company
33. Financial Plaza Trust
34. O&Y Fiscal Corporation
35. Olympia & York Florida Equity Corp.
36. Forum Properties Corp.
37. Olympia & York Fountain Plaza Company
38. Olympia & York Grampian Corp.
39. Hartford Park Associates
40. Olympia & York Homes Corporation
41. O&Y Hope Street, Inc.
42. O&Y I/S Guide Inc.
43. Izzard Corp.
44. Olympia & York Jefferson Street Company
45. Olympia & York KOIN Center Company
46. O&Y Liberty Plaza Company
47. Olympia & York Maiden Lane Company
48. Olympia & York Maiden Lane Finance Corp.
49. O&Y Maintenance Corp.
50. O&Y Management Corp.
51. Olympia & York Mass. Investment Corp.
52. Olympia & York Massachusetts Financial Company
53. Miami Center Joint Venture
54. NH Corp.
55. O&Y NY Building Corp.
56. O&Y OCP Corp.
57. Olympia & York OLP Company
58. Olympia/Roberts Company
59. Olympia Centre Holding Company, L.P.
60. One Commercial Plaza (Unnamed Co-Tenancy)
61. One Financial Plaza (Unnamed Joint Venture)
62. Orion Limited Partnership
63. OYCI Video, Inc.
64. Pennland Properties Corp.
65. Perkins Realty Trust
66. O&Y Plaza Corp.
67. Olympia & York Properties (Portland) Company
68. Olympia & York Real Estate (USA) Inc.
69. Olympia & York Realty Corp.
70. Olympia & York Residential Corp.
71. O&Y REUSA TALP Subsidiary Corp.
72. Senior Associates
73. Olympia & York SF Holdings Corporation
74. South Brunswick Industrial Properties Limited Partnership
75. Brunswash Development Corporation
76. Olympia (U.S.) Development Subsidiary Corp.
77. Olympia & York Southeast Equity Corp.
78. Olympia & York State Limited Partnership
79. Olympia & York State Street Company
80. SYR Mall Corp.
81. O&Y Tower A Holding Company
82. O&Y Tower A Limited Partnership
83. Olympia & York Tower B Company
84. O&Y Tower B Holding Company I
85. Olympia & York Tower B Lease Company
86. O&Y Tower D Holding Company I
87. O&Y Tower D Holding Company II
88. Trinity Place Company
89. O&Y (U.S.) Development Canada Ltd.
90. O&Y (U.S.) Development Company, L.P.
91. O&Y (U.S.) Development General Partner Corp.
92. O&Y (U.S.) Financial Company
93. O&Y Venture Corp.
94. Olympia & York Water Street Company
2
95. West 31st Street Associates
96. O&Y WFC Maintenance Corp.
97. Olympia & York WFC Retail Company
98. WFC Tower A Company
99. O&Y WFC Tower Corp.
100. WFC Tower D Company
101. Olympia & York World Financial Center Finance Corp.
102. O&Y YBG Corp.
103. O&Y YBG L.P.
104. Yerba Buena Gardens, L.P.
105. York Venture Co.
106. 2 Broadway Associates
107. 2 Broadway Land Company
108. O&Y 7 Hanover Leasing Company, L.P.
109. O&Y 53 Finance Corp.
110. 53 Holding Company, L.P.
111. 53 State Street Corp.
112. O&Y 55 WS Lease Co., L.P.
113. 60 Broad Street Management Corp.
114. 125 Broad Street Company
115. O&Y 233 Park South Company, L.P.
116. 237 Park Avenue Associates, L.L.C.
117. O&Y 245 Corp.
118. Olympia & York 245 Lease Company
119. 245 Park Avenue Company
120. Olympia & York 245 Park Avenue Holding Company, L.P.
121. Olympia & York 320 G.O.T. Company
122. Olympia & York 320 Park Company
123. O&Y 320 Park Corp.
124. 1290 Associates, L.L.C.
125. 1999 Bryan Street Ltd.
126. 11601 Holding Corp.
127. 11601 Holdings, L.P.
128. 11601 Wilshire Associates
3
EXHIBIT
2
ORDER APPROVING THE DISCLOSURE STATEMENT
AND NOTICE OF CONFIRMATION
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
........................................................................ X
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
...................................................................... X
ORDER (A) PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY
RULE 3017(B) APPROVING THE DEBTORS' DISCLOSURE STATEMENT, (B) PURSUANT TO
BANKRUPTCY RULE 3017(C) FIXING TIME WITHIN WHICH CLAIM HOLDERS AND EQUITY
INTEREST HOLDERS MAY ACCEPT OR REJECT THE DEBTORS' PLAN OF REORGANIZATION, (C)
APPROVING THE EMPLOYMENT OF GEORGESON & COMPANY INC. AS BALLOT SOLICITATION
AGENT AND VOTE TABULATION AGENT, (D) PURSUANT TO BANKRUPTCY RULE 3017(C)
FIXING DATE, TIME AND PLACE OF HEARING ON CONFIRMATION OF THE DEBTORS' PLAN OF
REORGANIZATION, (E) APPROVING FORM OF BALLOT, (F) APPROVING NOTICE OF (I) THE
LAST DAY FOR RECEIPT OF BALLOTS WITH RESPECT TO THE PLAN OF REORGANIZATION,
(II) THE LAST DAY FOR FILING OBJECTIONS TO CONFIRMATION OF THE DEBTORS' PLAN
OF REORGANIZATION, AND (III) THE HEARING ON CONFIRMATION OF THE DEBTORS' PLAN
OF REORGANIZATION, AND (G) ESTABLISHING PROCEDURES FOR SOLICITATION AND
TABULATION OF VOTES TO ACCEPT OR REJECT THE JOINT PLAN OF REORGANIZATION,
ELECTION OF DISTRIBUTIONS WITH RESPECT THERETO AND SUBSCRIPTION OF ADDITIONAL
SHARES OF REIT STOCK THEREUNDER
- --------------------------------------------------------------------------
Upon the record of the hearing held on May 20, 1996 (the 'Disclosure
Hearing') to consider the request of 237 Park Avenue Associates, L.L.C. and
1290 L.L.C., the debtors in the above-captioned chapter 11 cases the
'Debtors'), for approval of the Debtors' proposed Disclosure for the Amended
Joint Plan of Reorganization of 237 Park Avenue L.L.C. and 1290 Associates,
L.L.C., dated May 20, 1996 (the 'May Statement'); and the Debtors having filed
the Second Amended Joint of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 L.L.C., dated August 9, 1996 (the 'Joint Plan') and a related
statement (the 'August Disclosure Statement')1, which reflects, among things,
the resolution of certain issues; and the Court having found that of the
Disclosure Statement and the Disclosure Hearing has been provided the Debtors
as directed by the Court pursuant to an order, dated April 25, (i) fixing the
date, time and place for a hearing to consider (a) approval Debtors'
Disclosure Statement And Solicitation Procedures, and (b) of the Debtors'
Joint Plan, (iii) fixing the date, time and place voting on the Debtors' Joint
Plan, and (iii) prescribing the form and manner notice therefor (the
'Scheduling Order'), and it appearing that no further need be given; and an
objection with respect to the May Disclosure having been filed by Coopers &
Lybrand OYDL Inc. (the 'Objection'); the Objection having been overruled by
the Court or rendered moot by reason modifications made to the May Disclosure
Statement; and it appearing that the Disclosure Statement does not materially
differ from the May Disclosure except to further describe structural changes
of the Joint Plan and Debtors as reorganized; and the Court having determined
after due that the August Disclosure Statement contains adequate information
as such term is defined in section 1125 of the Bankruptcy Code; and sufficient
cause appearing therefor, it is
ORDERED that, in accordance with section 1125 of the Bankruptcy Code and
Rule 3017(b), (a) the August Disclosure Statement (and all exhibits schedules
thereto), as the same may be amended and modified from time to to incorporate
any modifications that the Debtors determine to be and which do not materially
change the Disclosure Statement or affect any rights of a party in interest,
and (b) the cover letters the August Disclosure Statement from the Debtors and
the Ad Hoc Committee of Million Noteholders, substantially in the form of the
letters annexed as Exhibit 'A' (collectively, the 'Letters'), be, and each of
them hereby is, approved as containing 'adequate information' within the
meaning of section 1125(a) of the Bankruptcy Code; and it is further
ORDERED that a hearing (the 'Confirmation Hearing') to consider
confirmation of the Joint Plan and any amendments thereto shall be held before
the Court in Room 610-2 of the United States Bankruptcy Court, Alexander
Hamilton Custom House, One Bowling Green, New York, New York on September 11,
1996 at 2:00 p.m., or as soon thereafter as counsel may be heard; and it is
further
- ------------------
1 Unless otherwise defined herein, capitalized terms used herein shall have
the meaning ascribed to them in the Joint Plan.
1
ORDERED that ballots for (a) accepting or rejecting the Joint Plan, (b)
forms of distribution under the Joint Plan and (c) subscribing for shares of
REIT Stock, substantially in the form annexed hereto as 'B' (the 'Ballots'),
be, and each of them hereby is, approved in all pursuant to Bankruptcy Rule
3018(c) as conforming with Official Form No. 14; and it is further
ORDERED that, pursuant to Bankruptcy Rule 3018(a) and the Joint Plan, the
date for determining the holders of Claims and Equity Interests who may to
accept or reject the Joint Plan shall be August 9, 1996 (the 'Record and it is
further
ORDERED that, on or prior to August 12, 1996, the Indenture Trustee shall
provide the Debtors with a list of holders of Senior Claims as of the Record
Date; and it is further
ORDERED that only the holders of Claims and Equity Interests as of the
Record Date that are impaired under the Joint Plan may vote to accept or
reject the Joint Plan by indicating their acceptance or rejection of the Joint
Plan on the Ballots provided therefor; and it is further
ORDERED that, pursuant to Bankruptcy Rule 3017(c), in order to be
considered as acceptances or rejections of the Joint Plan, all Ballots must be
completed, executed, marked and received by Georgeson & Company Inc., Street
Plaza, New York, New York 10005 on or before 5:00 p.m. (New York Time) on
September 4, 1996 (the 'Voting Deadline'); and it is further
ORDERED that, pursuant to Bankruptcy Rule 3017(d), the form of the notice
'Notice') of, among other things, the Voting Deadline, the Objection as
defined below, and the Confirmation Hearing, substantially in the annexed
hereto as Exhibit 'C', be, and it hereby is, approved in all
respects; and it is further
ORDERED that, the Debtors be, and they hereby are, authorized and
directed mail, or cause to be mailed, by first-class mail, no later than
August 16, a copy of the Notice and the August Disclosure Statement and all
exhibits attachments thereto (collectively, the 'Disclosure Package'), to the
persons or entities, unless such person or entity shall receive a Package, as
hereinafter defined, pursuant to this Order: (1) all or entities that have
filed proofs of claim or equity interests with the on or before the Record
Date, other than any person or entity that has with the Court a notice (or
notices) of transfer of claim under Bankruptcy 3001(e) on or before the Record
Date reflecting the transfer of all of such Claims; (2) all persons or
entities listed in the Schedules and lists Equity Interest holders and all
amendments thereto through the Record Date, than any person or entity that has
filed with the Court a notice (or of transfer of claim under Bankruptcy Rule
3001(e) on or before the Date reflecting the transfer of all of such holder's
claims; (3) all known holders of record of Claims against or Equity Interests
in the if any, as of the Record Date; (4) all persons or entities that have a
Claim pursuant to a notice of the transfer of a claim under Rule 3001(e) filed
with the Court on or before the Record Date; (5) parties in interest that have
filed a notice pursuant to Bankruptcy Rule in the Debtors' chapter 11 cases on
or before the Record Date; (6) the Trustee; and (7) any other party as may be
entitled to notice in accordance with Bankruptcy Rule 2002; and it is further
ORDERED that, the Debtors be, and they hereby are, authorized and
directed mail, or cause to be mailed, by first-class mail, no later than
August 16, to the holders of record on the Record Date of all Claims and
Equity that are entitled to vote on the Joint Plan as specified herein in with
Bankruptcy Rule 3018(a), and such other entities entitled to forms of
distributions under the Joint Plan and subscribe for additional of REIT Stock,
including, without limitation, the Morgan Loan Agent for on behalf of the
Morgan Loan Lenders, (a) the Notice, (b) the August Statement and all exhibits
and attachments thereto, (c) an form of Ballot, and (d) the Letters
(collectively, a 'Solicitation provided, however, that Solicitation Packages
for (i) holders of against or Equity Interests in any Debtor placed within a
class under the Plan that is deemed to accept or reject the Joint Plan under
section or 1126(g) of the Bankruptcy Code and (ii) holders of Claims or Equity
that have been objected to for voting purposes in accordance with the Order
and who have not filed a Temporary Allowance Motion (as defined the Scheduling
Order) on or prior to the Temporary Allowance Motion Deadline defined in the
Scheduling Order) shall not include a Ballot and a Ballot envelope; and it is
further
ORDERED that, notwithstanding anything contained herein to the contrary,
Debtors shall file the Plan Supplement with the Court on or before the date
(20) days prior to the commencement of the Confirmation Hearing; however, that
the Debtors shall be under no obligation to serve the Supplement in accordance
with the preceding decretal paragraphs; and, further,that the Plan Supplement
shall be available for review in the Office of the Clerk of the Bankruptcy
Court during normal business hours; and it is further
ORDERED that, upon the written request of any party in interest, the
Debtors shall provide a copy of the Plan Supplement; and it is further
2
ORDERED that, for purposes of calculating the number of Claims in a class
vote to accept or reject the Joint Plan, all Claims in a class held by one or
any affiliate thereof (as defined in the Securities Act of 1933 and rules and
regulations promulgated thereunder), including any entity that record
ownership of such Claims after April 23, 1996, the Petition be, and they
hereby are, aggregated and treated as one Claim in such class
for voting purposes; and it is further
ORDERED that, the Debtors' appointment of the firm of Georgeson & Company
('Georgeson') as the Debtors' ballot solicitation agent (the 'Ballot Agent')
in connection with (i) the accommodation of requests for concerning the Joint
Plan, the August Disclosure Statement, the the Ballots or other related
matters; (ii) the distribution of copies of the Joint Plan, the August
Disclosure Statement, the Letters, the Ballots and this Order; and (iii) the
solicitation of Ballots in respect of the Joint Plan, in a reasonable and
customary manner, is hereby approved; and it is further
ORDERED that, the Debtors' appointment of Georgeson as the Debtors' vote
agent (the 'Tabulation Agent') in connection with the review, of validity, and
tabulation of (i) votes for acceptance and of the Joint Plan, (ii) elections
of Standard Elections and Non-Standard Elections, and (iii) subscription for
additional shares of REIT Stock, Offered Shares, as well as reporting with
respect thereto, in a reasonable and customary manner, is hereby approved; and
it is further
ORDERED that, pursuant to Bankruptcy Rule 3017(e), in the event that the
of holders of Senior Claims to be provided by the Indenture Trustee the
'record' rather than the 'beneficial' holder of a Senior Claim, the shall
mail, or cause to be mailed, by first-class mail, by August 16, a Solicitation
Package(s) to the 'record' holder(s) of such Senior Claims the 'record'
holder(s) thereof are hereby directed to (i) distribute such Packages to the
'beneficial' holders of such Senior Claims, and to the extent that a
'beneficial' holder returns its respective Ballot to 'record' holder thereof,
return such Ballots, or replacement Ballots in the name of the 'record' holder
thereof, to the Tabulation Agent by the Voting Deadline; and it is further
ORDERED that, any Ballot that is properly completed, executed and timely
to the Tabulation Agent, but does not indicate an acceptance or a of the Joint
Plan be, and it hereby is, deemed to be a vote to accept Joint Plan; and it is
further
ORDERED that, notwithstanding the provisions of Bankruptcy Rule 3018(a),
in event a holder of a Claim or Equity Interest holder casts more than one
voting the same Claim or Equity Interest, as applicable, prior to the
Deadline, the subsequently-dated Ballot, if received by the Tabulation prior
to the Voting Deadline, shall be deemed to reflect such holder's and thus
supersede any prior Ballots received by the Tabulation Agent;
and it is further
ORDERED that, any holder of a Senior Claim that does not submit a Ballot
or its election preference (Standard or Non-Standard) on the Ballot on a basis
shall conclusively be deemed to have executed a Standard Election shall
receive a Standard Note Distribution and a Standard Stock and it is further
ORDERED that, in order for a subscription of additional REIT Stock to be
each holder of a Senior Claim or Morgan Loan Lender electing to subscribe
additional shares of REIT Stock must properly (i) execute and deliver to the
Agent a Ballot electing to subscribe to purchase a portion of shares of REIT
Stock, and (ii) execute and deliver to the Tabulation a Subscription
Agreement; and it is further
ORDERED that, any properly executed Ballot of a holder of a Senior Claim
or Loan Lender which is timely received, but which does not indicate an to
subscribe to purchase a portion of additional REIT Stock or fails to an
executed Subscription Agreement, shall be deemed to constitute an
election to not purchase a portion of additional REIT Stock; and it is further
ORDERED that objections, if any, to confirmation of the Joint Plan must
be writing, state the name and address of the objecting party and the nature
of claim or interest of such party, state with particularity the basis and of
each objection and the specific grounds therefor and be filed, with proof of
service, with the Court (with a copy to Chambers ) and so that such objections
are received no later than August 28, 1996 at 5:00 p.m., (New York City Time)
(the 'Objection Deadline'), by the Court, Chambers and the following parties:
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Attn: Brian S. Rosen, Esq.
Attorneys for the Debtors
3
BATTLE FOWLER LLP
75 East 55th Street
New York, NY 10022
Attn: Douglas Furth, Esq.
Attorneys for the Ad Hoc Committee of
$970 Million Noteholders
237 PARK AVENUE ASSOCIATES, L.L.C.
1290 ASSOCIATES, L.L.C.
c/o Olympia & York Companies (USA)
237 Park Avenue
New York, NY 10017
Attn: Andrew P. Seidman, Esq.
OFFICE OF THE UNITED STATES TRUSTEE
80 Broad Street
New York, NY 10004
Attn: Mary Tom, Esq.
; and it is further
ORDERED that responses to objections, if any, to confirmation of the
Joint by any party in interest be filed with the Court together with proof of
and served in a manner so as to be received on or before 5:00 p.m. (New City
Time) on September 6, 1996 by the Abbreviated Service List; and it is
ORDERED that the Confirmation Hearing may be adjourned from time to time
prior notice to holders of Claims, holders of Equity Interests or in interest
other than the announcement of the adjourned hearing date at Confirmation
Hearing; and it is further
ORDERED that, the Debtors be, and they hereby are, directed to cause the
to be published one time no later than twenty-five (25) days prior to the of
the Confirmation Hearing in The Wall Street Journal (National Edition) The
Toronto Globe and Mail; and it is further
ORDERED that the provisions of notice in accordance with the procedures
set in this Order shall be deemed good and sufficient notice of the Hearing,
the time fixed for filing objections to the Joint Plan and time within which
holders of Claims and Equity Interests may vote to accept reject the Joint
Plan, elect distributions thereunder and subscribe for additional shares of
REIT Stock; and it is further
ORDERED that the Debtors be, and hereby are, authorized and empowered to
take such steps and perform such acts as may be necessary to implement and
effectuate this Order.
Dated: New York, New York
August 9, 1996
_____/s/_JAMES L. GARRITY, JR._____
United States Bankruptcy Judge
4
EXHIBIT C TO ORDER APPROVING DISCLOSURE STATEMENT
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
......................................................................... x
In re: :
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.: 96 B 42177 and 1290 ASSOCIATES, L.L.C.
96 B 42178 (JLG)
:
Debtors.
(Jointly Administered)
........................................................................ x
NOTICE OF (A) HEARING TO CONSIDER CONFIRMATION OF
DEBTORS' JOINT PLAN OF REORGANIZATION AND (B) DEADLINE FOR
(I) VOTING ON DEBTORS' JOINT PLAN OF REORGANIZATION,
ELECTING FORMS OF DISTRIBUTIONS THEREUNDER AND SUBSCRIBING
FOR ADDITIONAL SHARES OF REIT STOCK AND (II) OBJECTING TO
CONFIRMATION OF THE JOINT PLAN OF REORGANIZATION
NOTICE IS HEREBY GIVEN THAT:
1. A hearing to consider confirmation of that certain Second Amended
Joint of Reorganization of 237 Park Avenue Associates, L.L.C. and 1290
Associates dated August 9, 1996 (the 'Joint Plan') and any objections or
proposed thereto and any other matter that may properly come before the Court
be held before the Honorable James L. Garrity, Jr., United States Judge in
Room 610-2 of the United States Bankruptcy Court, Alexander Hamilton Custom
House, One Bowling Green, New York, New York 10004-1408, on September 11,
1996, at 2:00 p.m., or such later date and time determined by the Court.
2. Any objection to confirmation of the Joint Plan must be made in
writing, state that it is an objection to confirmation of the Joint Plan,
indicate the nature of the objection and the legal basis therefor, and be
filed and received by the Bankruptcy Court, with two (2) copies to chambers,
and upon and received by the parties listed below, together with proof of on
or before August 28, 1996 at 5:00 p.m. (Eastern Daylight Time):
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Attn: Brian S. Rosen, Esq.
Attorneys for the Debtors
BATTLE FOWLER LLP
75 East 55th Street
New York, NY 10022
Attn: Douglas Furth, Esq.
Attorneys for the Ad Hoc Committee
of $970 Million Noteholders
237 PARK AVENUE ASSOCIATES, L.L.C.
1290 ASSOCIATES, L.L.C.
c/o Olympia & York Companies (USA)
237 Park Avenue
New York, NY 10017
Attn: Andrew P. Seidman
OFFICE OF THE UNITED STATES TRUSTEE
80 Broad Street
New York, NY 10004
Attn: Mary Tom, Esq.
UNLESS AN OBJECTION IS TIMELY SERVED AND FILED IN ACCORDANCE WITH THIS NOTICE,
SUCH OBJECTION WILL NOT BE CONSIDERED BY THE BANKRUPTCY COURT.
1
3. The date and time fixed as the last date to (i) vote to accept or
reject the Joint Plan, (ii) electing forms of distributions under the Joint
Plan (iii) subscribing for additional shares of REIT Stock is September 4,
1996 5:00 p.m., New York City time (the 'Voting Deadline'). In order to be
ballots must be received by the Voting Deadline by Georgeson & Company Wall
Street Plaza, New York, New York 10005. Any requests for the Joint and/or a
ballot should be made to Georgeson & Company Inc. at the above-listed address
or (212) 440-9800.
Dated: New York, New York
August 9, 1996
BY ORDER OF THE COURT
___/s/_JAMES L. GARRITY, JR.___
United States Bankruptcy Judge
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
2
BALLOT NO. 1
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
........................................................................ x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
......................................................................... x
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 1: PRIORITY NON-TAX CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT
AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT
WILL NOT BE COUNTED
This Ballot is submitted to you to solicit your vote to accept or reject
certain Second Amended Joint Plan of Reorganization of 237 Park Avenue L.L.C.
and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint described in the
accompanying disclosure statement, dated August 9, 1996 'Disclosure
Statement'). PLEASE READ THE VOTING INFORMATION AND INSTRUCTIONS ON THE
REVERSE SIDE BEFORE COMPLETING THIS BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby made
upon you if it is accepted by the holders of at least two-thirds in and more
than one-half in number of the Claims in each impaired Class vote on the Joint
Plan, and if it otherwise satisfies the requirements of 1129(a) of the
Bankruptcy Code. If the requisite acceptances are not the Bankruptcy Court may
nonetheless confirm the Joint Plan if it that the Joint Plan provides fair and
equitable treatment to, and does not unfairly against, the Class or Classes
rejecting it, and otherwise the requirements of section 1129(b) of the
Bankruptcy Code. To have vote counted, you must complete, sign and return this
Ballot to: GEORGESON COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK
10005. COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX IS
IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN ACCEPTANCE. IF BALLOT
IS NOT SIGNED ON THE APPROPRIATE LINES BELOW, THIS BALLOT WILL NOT VALID OR
COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder of
(as defined in the Joint Plan) against the Debtors, which Claims are in Class
1 (Priority Non-Tax Claims) under the Joint Plan, in the unpaid principal
amount of $________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 1 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant or
has power and authority to vote to accept or reject the Joint Plan on behalf
of claimant. The undersigned understands that if this Ballot is validly but
does not indicate either acceptance or rejection of the Joint Plan, this
Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to provide
237 Avenue Associates, L.L.C. and 1290 Associates, L.L.C. (collectively, the
your correct taxpayer identification number ('TIN'). If you are an your TIN is
your social security number. If the Debtors are not with your correct TIN, you
may be subject to a $50 penalty imposed by Internal Revenue Service. In
addition, payments and distributions to be made you pursuant to that certain
Second Amended Joint Plan of Reorganization of Park Avenue Associates, L.L.C.
and 1290 Associates, L.L.C., dated August 9, (the 'Joint Plan'), may be
subject to 'backup withholding' for federal income tax purposes.
Each holder generally is required to provide the Debtors with its correct TIN
on Form W-9 below. Certain holders (including, among others, all and certain
foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See enclosed 'Guidelines for
Certification of Taxpayer Identification Number on Form W-9' for additional
information.
If backup withholding applies, the Debtors are required to withhold 31% of any
dividends or other reportable payments made to you. Backup withholding not an
additional federal income tax. Rather, the federal income tax of a holder
subject to backup withholding will be reduced by the withheld. If withholding
results in an overpayment of taxes, a refund may obtained from the Internal
Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE DISTRIBUTIONS TO BE MADE
TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD. IN
SUCH EVENT, THE WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING THE SALE OF A
SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT FROM YOU OF
CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING OBLIGATION IN
RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please out Item
Number 2 in Part IV of the Substitute Form W-9. If you have not issued a TIN
and have applied for one, or if you intend to apply for one in near future,
please check the box in Part II of the Substitute Form W-9, and and date both
the Substitute Form W-9 and the 'Certificate of Taxpayer Identification
Number'. Please return the Substitute Form W-9 with your to the Ballot Agent
by 5:00 p.m., New York City Time, on September 4, If you fail to do so, the
Debtors will withhold 31% from any payments and made to you thereafter until a
TIN and new Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to report.
SUBSTITUTE PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN FORM W-9 IN THE SPACE PROVIDED AND
CERTIFY BY ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO DEPARTMENT OF
THE TREASURY SIGNING AND DATING BELOW. APPLY FOR ONE IN THE NEAR FUTURE,
PLEASE CHECK THE INTERNAL REVENUE SERVICE BOX PROVIDED AND CERTIFY BY SIGNING
AND DATING PART PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR IV AND
THE 'CERTIFICATE OF TAXPAYER IDENTIFICATION NUMBER (TIN) EMPLOYER
IDENTIFICATION NUMBER AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE (OR I
INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE). I UNDERSTAND
THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE DEBTORS BY
5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED
TO WITHHOLD 31% OF ALL REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I
PROVIDE A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. THIS BALLOT IS SUBMITTED TO YOU TO SOLICIT YOUR VOTE TO ACCEPT OR
REJECT THE DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION OF
237 PARK AVENUE ASSOCIATES, L.L.C. AND 1290 ASSOCIATES, L.L.C.,
DATED AUGUST 9, 1996 (THE 'JOINT PLAN'), DESCRIBED IN THE
ACCOMPANYING DISCLOSURE STATEMENT, DATED AUGUST 9, 1996
(THE'DISCLOSURE STATEMENT').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER THE
VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE BALLOT
AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. YOU MUST VOTE ALL OF YOUR CLAIMS WITHIN A SINGLE CLASS UNDER THE JOINT
PLAN TO EITHER ACCEPT OR REJECT THE JOINT PLAN. ACCORDINGLY, A BALLOT THAT
PARTIALLY REJECTS AND PARTIALLY ACCEPTS THE JOINT PLAN WILL NOT BE COUNTED.
4. THE BALLOT DOES NOT CONSTITUTE AND SHALL NOT BE DEEMED A PROOF OF CLAIM
OR EQUITY INTEREST OR AN ASSERTION OF A CLAIM OR EQUITY INTEREST.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE ANY
QUESTIONS CONCERNING THE DISCLOSURE STATEMENT, THE JOINT PLAN, THIS BALLOT OR
THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
5
BALLOT NO. 2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
........................................................................ x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
................................................................... x
BALLOT FOR (A) ACCEPTING OR REJECTING THE DEBTORS'
SECOND AMENDED JOINT PLAN OF REORGANIZATION PURSUANT
TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE,
(B) ELECTION OF DISTRIBUTIONS THEREUNDER AND
(C) SUBSCRIBING FOR ADDITIONAL SHARES OF REIT STOCK
CLASS 2: SENIOR CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT
AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT
WILL NOT BE COUNTED
This Ballot is submitted to you to (a) solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the Plan'), described in the accompanying disclosure statement, dated August
1996 (the 'Disclosure Statement'), (b) elect the form of distribution and (c)
subscribe for additional shares of REIT Stock. Unless otherwise defined
herein, capitalized terms used herein shall have the meaning ascribed to them
in the Joint Plan. PLEASE READ THE VOTING INFORMATION AND INSTRUCTIONS ON THE
REVERSE SIDE BEFORE COMPLETING THIS BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby made
upon you if it is accepted by the holders of at least two-thirds in and more
than one-half in number of the Claims in each impaired Class vote on the Joint
Plan, and if it otherwise satisfies the requirements of 1129(a) of the
Bankruptcy Code. If the requisite acceptances are not the Bankruptcy Court may
nonetheless confirm the Joint Plan if it that the Joint Plan provides fair and
equitable treatment to, and does not unfairly against, the Class or Classes
rejecting it, and otherwise the requirements of section 1129(b) of the
Bankruptcy Code. To have your vote counted, you must complete, sign and return
this Ballot to: GEORGESON & COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW
YORK, 10005.
PLEASE COMPLETE ITEMS 1, 2, 3, 4, 5, 6 AND 7. IF NEITHER THE 'ACCEPT' NOR
'REJECT' BOX IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS
AN ANY HOLDER THAT DOES NOT SUBMIT A BALLOT OR MARK ITS ELECTION ON THE BALLOT
ON A TIMELY BASIS WILL BE DEEMED TO HAVE EXERCISED A ELECTION ' AND SHALL
RECEIVE A 'STANDARD NOTE DISTRIBUTION' AND A STOCK DISTRIBUTION.' ANY EXECUTED
BALLOTS WHICH ARE TIMELY RECEIVED WHICH DO NOT INDICATE AN ELECTION TO
PURCHASE A PORTION OF ADDITIONAL REIT PURSUANT TO SECTION 12.5 OF THE JOINT
PLAN SHALL BE DEEMED TO CONSTITUTE ELECTION TO NOT PURCHASE A PORTION OF
ADDITIONAL REIT STOCK. IF THIS BALLOT NOT SIGNED ON THE APPROPRIATE LINES
BELOW, THIS BALLOT WILL NOT BE VALID OR AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder of
(as defined in the Joint Plan) against the Debtors, which Claims are in Class
2 (Senior Claims) under the Joint Plan, in the aggregate principal amount of
$___________ (the 'Election Amount'). SUCH ELECTION MAY BE DETERMINED BY (A)
MULTIPLYING (i) THE FACE AMOUNT OF THE EXISTING NOTES WHICH YOU HOLD, TIMES
(ii) $902,603,492.00 AND (B) DIVIDING SUCH AMOUNT BY $970,000,000.00.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 2 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan. / / to REJECT the Joint Plan.
2
ITEM 3. ELECTION. The undersigned hereby chooses
/ / A STANDARD ELECTION.
/ / A NON-STANDARD ELECTION.
IF YOU CHOOSE A NON-STANDARD ELECTION, YOU MUST COMPLETE ITEM 4,
BELOW.
ITEM 4. AMOUNT OF NEW NOTE ALLOCATION. The undersigned chooses to
allocate of its Election Amount (as calculated in Item 1 above) to New Notes.
The of the undersigned's Election Amount, if any, will be deemed to be to REIT
Stock.
ITEM 5. REIT STOCK SUBSCRIPTION. The undersigned chooses
/ / to ELECT to purchase a portion of additional REIT Stock.
/ / Not to ELECT to purchase a portion of additional REIT
If you choose to purchase a portion of additional REIT Stock.
Stock, Offered Shares, YOU MUST RETURN A DULY EXECUTED SUBSCRIPTION AGREEMENT
WITH YOUR BALLOT.
ITEM 6. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant or
has power and authority to vote to accept or reject the Joint Plan on behalf
of claimant. The undersigned understands that if this Ballot is validly but
does not indicate either acceptance or rejection of the Joint Plan, this
Ballot will be counted as an acceptance.
ITEM 7. ACCREDITED INVESTOR. In order to receive New Notes and shares of
Stock, each holder must be an 'accredited investor.' By checking the box, the
undersigned has read the instructions contained in paragraph with respect to
the parties recognized by the Securities and Exchange Commission as
'accredited investors' and acknowledges that the undersigned is an
accredited investor.
/ / The undersigned is an 'ACCREDITED INVESTOR,' as defined in
Regulation D of the Securities Act of 1933, as amended.
PRINT OR TYPE NAME OF CLAIMANT: _____________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL): _________________________________________
SIGNATURE: __________________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE: _____________
NAME OF INSTITUTION: ________________________________
STREET ADDRESS: _____________________________________
CITY, STATE, ZIP CODE: ______________________________
TELEPHONE NUMBER: ___________________________________
DATE COMPLETED: _____________________________________
3
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to provide
237 Avenue Associates, L.L.C. and 1290 Associates, L.L.C. (collectively, the
your correct taxpayer identification number ('TIN'). If you are an your TIN is
your social security number. If the Debtors are not with your correct TIN, you
may be subject to a $50 penalty imposed by Internal Revenue Service. In
addition, payments and distributions to be made you pursuant to that certain
Second Amended Joint Plan of Reorganization of Park Avenue Associates, L.L.C.
and 1290 Associates, L.L.C., dated August 9, (the 'Joint Plan'), may be
subject to 'backup withholding' for federal income tax purposes.
Each holder generally is required to provide the Debtors with its correct TIN
on Form W-9 below. Certain holders (including, among others, all and certain
foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See the enclosed 'Guidelines
for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of any
dividends or other reportable payments made to you. Backup withholding not an
additional federal income tax. Rather, the federal income tax of a holder
subject to backup withholding will be reduced by the withheld. If withholding
results in an overpayment of taxes, a refund may obtained from the Internal
Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE DISTRIBUTIONS TO BE MADE
TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD. IN
SUCH EVENT, THE WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING THE SALE OF A
SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT FROM YOU OF
CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING OBLIGATION IN
RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please cross
out Item Number 2 in Part IV of the Substitute Form W-9. If you have not been
issued a TIN and have applied for one, or if you intend to apply for one in
the near future, please check the box in Part II of the Substitute Form W-9,
and sign and date both the Substitute Form W-9 and the 'Certificate of
Taxpayer Identification Number'. Please return the Substitute Form W-9 with
your to the Ballot Agent by 5:00 p.m., New York City Time, on September 4, If
you fail to do so, the Debtors will withhold 31% from any payments and made to
you thereafter until a TIN and new Substitute Form W-9 are provided to the
Debtors.
4
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN PART II--AWAITING TIN--IF YOU HAVE NOT
BEEN FORM W-9 IN THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE
APPLIED FOR ONE, OR INTEND TO DEPARTMENT OF THE TREASURY SIGNING AND DATING
BELOW. APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE INTERNAL REVENUE
SERVICE BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART PAYER'S REQUEST
FOR TAXPAYER SOCIAL SECURITY NUMBER OR IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER AWAITING
IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN
THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
5
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit (i) your vote to accept or
reject the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement, dated
August 9, 1996 (the 'Disclosure Statement'), (ii) whether you elect a Standard
or Non-Standard Election, and if you elect a Non-Standard Election, the amount
of New Notes you elect to allocate and (iii) whether you elect to subscribe to
purchase a portion of additional REIT Stock, Offered Shares.
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. IN ADDITION, PLEASE INDICATE WHETHER YOU ELECT TO RECEIVE A
STANDARD ELECTION OR A NON-STANDARD ELECTION AND IF YOU ELECT A
NON-STANDARD ELECTION, THE AMOUNT OF NEW NOTES YOU ELECT TO ALLOCATE
(SEE INSTRUCTION 4 BELOW). FURTHER, PLEASE INDICATE WHETHER OR NOT YOU
ELECT TO SUBSCRIBE TO PURCHASE A PORTION OF ADDITIONAL REIT STOCK (SEE
INSTRUCTION 5 BELOW). COMPLETE THE BALLOT BY PROVIDING ALL OF THE
INFORMATION REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR
OVERNIGHT COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE
FOLLOWING ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO
THE BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot
that partially rejects and partially accepts the Joint Plan will not be
counted.
4. Under the Joint Plan, each holder of a Senior Claim entitled to vote may
elect a Standard Election or a Non-Standard Election. If a Non-Standard
Election is elected, such holder of a Senior Claim should indicate the amount
of its Election Amount it wishes to allocate to New Notes. The balance of such
holder's Election Amount, if any, will be deemed to be allocated to REIT
Stock. EACH HOLDER THAT DOES NOT SUBMIT A BALLOT OR MARK ITS ELECTION
PREFERENCE ON THE BALLOT ON A TIMELY BASIS IN COMPLETE ACCORDANCE WITH THESE
INSTRUCTIONS WILL BE CONCLUSIVELY DEEMED TO HAVE EXERCISED A STANDARD ELECTION
AND SHALL RECEIVE A STANDARD NOTE DISTRIBUTION AND A STANDARD STOCK
DISTRIBUTION.
5. In addition, each holder of a Senior Claim entitled to vote may elect to
subscribe to purchase a portion of additional REIT Stock equal to the product
of such holder's pro rata share of the Senior Claim Election Amount (i.e., the
amount set forth in Item 1 of the Ballot divided by $902,603,492) multiplied
by 923,076, as modified to the extent and the amount of a Conventional
Financing Alternative. The price per share of additional REIT Stock will be
calculated on the Confirmation Date and each holder of a Senior Claim
subscribing to additional shares of REIT Stock will receive a notice on or
after the Confirmation Date setting forth such price per share. ANY EXECUTED
BALLOTS WHICH ARE TIMELY RECEIVED BUT WHICH DO NOT INDICATE AN ELECTION TO
PURCHASE ADDITIONAL REIT STOCK PURSUANT TO SECTION 12.5 OF THE JOINT PLAN
SHALL BE DEEMED TO CONSTITUTE AN ELECTION TO NOT PURCHASE ADDITIONAL REIT
STOCK.
6. The Securities and Exchange Commission recognizes the following parties as
accredited investors, capable of understanding and attending the financial
risks associated with acquisition of unregistered securities: (i) financial
institutions such as banks, savings and loan associations, insurance
companies, registered investment companies, broker/dealer organizations,
employee benefit/retirement plans, business development companies, or small
business investment companies; (ii) directors, officers or general partners of
the issuer, (iii) individuals who alone, or with a spouse, have net worths of
over $1 million; (iv) individuals who alone had income in excess of $200,000
in the past two years (or with a spouse, in excess of $300,000) and had a
reasonable expectation of doing as well in the current year, (v) trusts or
business partnerships, with assets in excess of $5 million, that weren't
formed for the purpose of acquiring the unregistered securities; and (vi)
entities wholly owned by accredited investors. Please indicate if you are such
an accredited investor by checking the appropriate box on the Ballot. The
Ballot does not constitute and shall not be deemed a proof of Claim or Equity
Interest or an assertion of a Claim or Equity Interest.
6
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR
IF YOU HAVE ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT,
THE JOINT PLAN, THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL
THE BALLOT AGENT AT (212) 440-9800.
7
BALLOT NO. 3
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
................................................................... x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
....................................................................... x
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 3: OTHER SECURED CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT
AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT
WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or reject
certain Second Amended Joint Plan of Reorganization of 237 Park Avenue L.L.C.
and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint described in the
accompanying disclosure statement, dated August 9, 1996 'Disclosure
Statement'). PLEASE READ THE VOTING INFORMATION AND
INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby made
upon you if it is accepted by the holders of at least two-thirds in and more
than one-half in number of the Claims in each impaired Class vote on the Joint
Plan, and if it otherwise satisfies the requirements of 1129(a) of the
Bankruptcy Code. If the requisite acceptances are not the Bankruptcy Court may
nonetheless confirm the Joint Plan if it that the Joint Plan provides fair and
equitable treatment to, and does not unfairly against, the Class or Classes
rejecting it, and otherwise the requirements of section 1129(b) of the
Bankruptcy Code. To have your vote counted, you must complete, sign and return
this Ballot to: GEORGESON & COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW
YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX IS
IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN ACCEPTANCE. IF BALLOT
IS NOT SIGNED ON THE APPROPRIATE LINES BELOW, THIS BALLOT WILL NOT VALID OR
COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder
of Claims (as defined in the Joint Plan) against the Debtors, which Claims are
classified in Class 3 (Other Secured Claims) under the Joint Plan, in the
aggregate unpaid principal amount of $____________________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 3 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint
Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant or
has power and authority to vote to accept or reject the Joint Plan on behalf
of claimant. The undersigned understands that if this Ballot is validly but
does not indicate either acceptance or rejection of the Joint Plan, this
Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number. If
Debtors are not provided with your correct TIN, you may be subject to a $50
imposed by the Internal Revenue Service. In addition, payments and to be made
to you pursuant to that certain Second Amended Joint of Reorganization of 237
Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9,
1996 (the 'Joint Plan'), may be subject to 'backup withholding' for federal
income tax purposes.
Each holder generally is required to provide the Debtors with its correct
on Substitute Form W-9 below. Certain holders (including, among others, all
and certain foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See the enclosed 'Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9'
for additional information.
If backup withholding applies, the Debtors are required to withhold 31%
of interest, dividends or other reportable payments made to you. Backup is not
an additional federal income tax. Rather, the federal income liability of a
holder subject to backup withholding will be reduced by the withheld. If
withholding results in an overpayment of taxes, a refund may obtained from the
Internal Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE DISTRIBUTIONS TO
BE MADE TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT REQUIRED TO BE
WITHHELD. IN SUCH EVENT, THE WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT
FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING
OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please out Item
Number 2 in Part IV of the Substitute Form W-9. If you have not issued a TIN
and have applied for one, or if you intend to apply for one in near future,
please check the box in Part II of the Substitute Form W-9, and and date both
the Substitute Form W-9 and the 'Certificate of Taxpayer Identification
Number'. Please return the Substitute Form W-9 with your to the Ballot Agent
by 5:00 p.m., New York City Time, on September 4, If you fail to do so, the
Debtors will withhold 31% from any payments and made to you thereafter until a
TIN and new Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to report.
SUBSTITUTE PART I--TIN--PLEASE PROVIDE YOUR TIN PART II--AWAITING TIN--IF YOU
HAVE NOT BEEN FORM W-9 IN THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT
HAVE APPLIED FOR ONE, OR INTEND TO DEPARTMENT OF THE TREASURY SIGNING AND
DATING BELOW. APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE INTERNAL
REVENUE SERVICE BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART PAYER'S
REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR IV AND THE 'CERTIFICATE OF
TAXPAYER IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER AWAITING
IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN
THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or reject
the Debtors' Second Amended Joint Plan of Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the
'Joint Plan'), described in the accompanying disclosure statement, dated
August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO
THE BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim or
Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE ANY
CONCERNING THE DISCLOSURE STATEMENT,THE JOINT PLAN, THIS BALLOT OR THE
PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
5
BALLOT NO. 4
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
.................................................................. x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
........................................................................ x
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 5: GENERAL UNSECURED CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT
AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT
WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or reject
certain Second Amended Joint Plan of Reorganization of 237 Park Avenue L.L.C.
and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint described in the
accompanying disclosure statement, dated August 9, 1996 'Disclosure
Statement'). PLEASE READ THE VOTING INFORMATION AND INSTRUCTIONS ON THE
REVERSE SIDE BEFORE COMPLETING THIS BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby made
upon you if it is accepted by the holders of at least two-thirds in and more
than one-half in number of the Claims in each impaired Class vote on the Joint
Plan, and if it otherwise satisfies the requirements of 1129(a) of the
Bankruptcy Code. If the requisite acceptances are not the Bankruptcy Court may
nonetheless confirm the Joint Plan if it
finds that the Joint Plan provides fair and equitable treatment to, and does
not unfairly against, the Class or Classes rejecting it, and otherwise the
requirements of section 1129(b) of the Bankruptcy Code. To have vote counted,
you must complete, sign and return this Ballot to: GEORGESON
& COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX IS
IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN ACCEPTANCE. IF BALLOT
IS NOT SIGNED ON THE APPROPRIATE LINES BELOW, THIS BALLOT WILL NOT VALID OR
COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder
of (as defined in the Joint Plan) against the Debtors, which Claims are in
Class 5 (General Unsecured Claims) under the Joint Plan, in the
aggregate unpaid principal amount of $____________________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 5 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint
Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant or
has the power and authority to vote to accept or reject the Joint Plan on
behalf of the claimant. The undersigned understands that if this Ballot is
validly executed but does not indicate either acceptance or rejection of the
Joint Plan, this Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number. If
Debtors are not provided with your correct TIN, you may be subject to a $50
imposed by the Internal Revenue Service. In addition, payments and to be made
to you pursuant to that certain Second Amended Joint of Reorganization of 237
Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9,
1996 (the 'Joint Plan'), may be subject to
'backup withholding' for federal income tax purposes.
Each holder generally is required to provide the Debtors with its correct
on Substitute Form W-9 below. Certain holders (including, among others, all
and certain foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See the enclosed 'Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9'
for additional information.
If backup withholding applies, the Debtors are required to withhold 31%
of interest, dividends or other reportable payments made to you. Backup is not
an additional federal income tax. Rather, the federal income liability of a
holder subject to backup withholding will be reduced by the withheld. If
withholding results in an overpayment of taxes, a refund may obtained from the
Internal Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE DISTRIBUTIONS TO
BE MADE TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT REQUIRED TO BE
WITHHELD. IN SUCH EVENT, THE WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT
FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING
OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please out Item
Number 2 in Part IV of the Substitute Form W-9. If you have not issued a TIN
and have applied for one, or if you intend to apply for one in near future,
please check the box in Part II of the Substitute Form W-9, and and date both
the Substitute Form W-9 and the 'Certificate of Taxpayer Identification
Number'. Please return the Substitute Form W-9 with your to the Ballot Agent
by 5:00 p.m., New York City Time, on September 4, If you fail to do so, the
Debtors will withhold 31% from any payments and made to you thereafter until a
TIN and new Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN PART II--AWAITING TIN--IF YOU HAVE NOT
BEEN FORM W-9 IN THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE
APPLIED FOR ONE, OR INTEND TO DEPARTMENT OF THE TREASURY SIGNING AND DATING
BELOW. APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE INTERNAL REVENUE
SERVICE BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART PAYER'S REQUEST
FOR TAXPAYER SOCIAL SECURITY NUMBER OR IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER AWAITING
IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN
THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or reject
the Debtors' Second Amended Joint Plan of Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the
'Joint Plan'), described in the accompanying disclosure statement, dated
August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim or
Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE ANY
QUESTIONS CONCERNING THE DISCLOSURE STATEMENT, THE JOINT PLAN, THIS BALLOT OR
THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
5
BALLOT NO. 5
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
......................................................................... x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
................................................................... x
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 6: AFFILIATE UNSECURED CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE
BALLOTING AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR
BALLOT WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or reject
certain Second Amended Joint Plan of Reorganization of 237 Park Avenue L.L.C.
and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint described in the
accompanying disclosure statement, dated August 9, 1996 'Disclosure
Statement'). PLEASE READ THE VOTING INFORMATION AND
INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby made
upon you if it is accepted by the holders of at least two-thirds in and more
than one-half in number of the Claims in each impaired Class vote on the Joint
Plan, and if it otherwise satisfies the requirements of 1129(a) of the
Bankruptcy Code. If the requisite acceptances are not the Bankruptcy Court may
nonetheless confirm the Joint Plan if it that the Joint Plan provides fair and
equitable treatment to, and does not unfairly against, the Class or Classes
rejecting it, and otherwise the requirements of section 1129(b) of the
Bankruptcy Code. To have your vote counted, you must complete, sign and return
this Ballot to: GEORGESON & COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW
YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX IS
IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN ACCEPTANCE. IF BALLOT
IS NOT SIGNED ON THE APPROPRIATE LINES BELOW, THIS BALLOT WILL NOT VALID OR
COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder
of Claims (as defined in the Joint Plan) against the Debtors, which Claims are
classified in Class 6 (Affiliate Unsecured Claims) under the Joint Plan, in
the aggregate unpaid principal amount of $________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 7 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint
Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant or
has power and authority to vote to accept or reject the Joint Plan on behalf
of claimant. The undersigned understands that if this Ballot is validly but
does not indicate either acceptance or rejection of the Joint Plan, this
Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Avenue Associates, L.L.C.
the 'Debtors') your correct taxpayer identification number If you are an
individual, your TIN is your social security number. If Debtors are not
provided with your correct TIN, you may be subject to a $50 imposed by the
Internal Revenue Service. In addition, payments and to be made to you pursuant
to that certain Second Amended Joint of Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290 L.L.C., dated August 9, 1996 (the 'Joint Plan'),
may be subject to 'backup withholding' for federal income tax purposes.
Each holder generally is required to provide the Debtors with its correct
on Substitute Form W-9 below. Certain holders (including, among others, all
and certain foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See enclosed 'Guidelines for
Certification of Taxpayer Identification Number on Form W-9' for additional
information.
If backup withholding applies, the Debtors are required to withhold 31%
of interest, dividends or other reportable payments made to you. Backup is not
an additional federal income tax. Rather, the federal income liability of a
holder subject to backup withholding will be reduced by the withheld. If
withholding results in an overpayment of taxes, a refund may obtained from the
Internal Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE DISTRIBUTIONS TO
BE MADE TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT REQUIRED TO BE
WITHHELD. IN SUCH EVENT, THE WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT
FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING
OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please out Item
Number 2 in Part IV of the Substitute Form W-9. If you have not issued a TIN
and have applied for one, or if you intend to apply for one in near future,
please check the box in Part II of the Substitute Form W-9, and and date both
the Substitute Form W-9 and the 'Certificate of Taxpayer Identification
Number'. Please return the Substitute Form W-9 with your to the Ballot Agent
by 5:00 p.m., New York City Time, on September 4, If you fail to do so, the
Debtors will withhold 31% from any payments and made to you thereafter until a
TIN and new Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to report.
SUBSTITUTE PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN FORM W-9 IN
THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR
INTEND TO DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE INTERNAL REVENUE SERVICE
BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART PAYER'S REQUEST FOR
TAXPAYER SOCIAL SECURITY NUMBER OR IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER AWAITING
IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN
THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or reject
the Debtors' Second Amended Joint Plan of Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the
'Joint Plan'), described in the accompanying disclosure statement, dated
August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO
THE BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim or
Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE ANY
CONCERNING THE DISCLOSURE STATEMENT,THE JOINT PLAN, THIS BALLOT OR THE
PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
5
BALLOT NO.
6
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
........................................................... x
In re: :
Chapter 11 Case No.
237 PARK AVENUE ASSOCIATES, L.L.C.,: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly
Administered)
:
....................................................................... x
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 7: EQUITY INTERESTS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT
AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT
WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or reject
certain Second Amended Joint Plan of Reorganization of 237 Park Avenue L.L.C.
and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint described in the
accompanying disclosure statement, dated August 9, 1996
(the 'Disclosure Statement'). PLEASE READ THE VOTING INFORMATION AND
INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby made
upon you if it is accepted by the holders of at least two-thirds in and more
than one-half in number of the Claims in each impaired Class vote on the Joint
Plan, and if it otherwise satisfies the requirements of 1129(a) of the
Bankruptcy Code. If the requisite acceptances are not the Bankruptcy Court may
nonetheless confirm the Joint Plan if it that the Joint Plan provides fair and
equitable treatment to, and does not unfairly against, the Class or Classes
rejecting it, and otherwise the requirements of section 1129(b) of the
Bankruptcy Code. To have your vote counted, you must complete, sign and return
this Ballot to: GEORGESON & COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW
YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX IS
IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN ACCEPTANCE. IF BALLOT
IS NOT SIGNED ON THE APPROPRIATE LINES BELOW, THIS BALLOT WILL NOT VALID OR
COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder of
Interests (as defined in the Joint Plan) against the Debtors, which Interests
are classified in Class 7 (Equity Interests) under the Joint in the aggregate
unpaid principal amount of $________________________.
ITEM 2. VOTE. The undersigned votes all of its Equity Interests in Class
7 as described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned acknowledges
of the Disclosure Statement and other applicable solicitation materials
certifies that the undersigned is the claimant or has the power and authority
to vote to accept or reject the Joint Plan on behalf of the claimant. The
undersigned understands that if this Ballot is validly executed but does not
indicate either acceptance or rejection of the Joint Plan, this Ballot will be
counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to provide
237 Avenue Associates, L.L.C. and 1290 Associates, L.L.C. (collectively, the
your correct taxpayer identification number ('TIN'). If you are an your TIN is
your social security number. If the Debtors are not with your correct TIN, you
may be subject to a $50 penalty imposed by Internal Revenue Service. In
addition, payments and distributions to be made you pursuant to that certain
Second Amended Joint Plan of Reorganization of Park Avenue Associates, L.L.C.
and 1290 Associates, L.L.C., dated August 9, (the 'Joint Plan'), may be
subject to 'backup withholding' for federal income tax purposes.
Each holder generally is required to provide the Debtors with its correct TIN
on Form W-9 below. Certain holders (including, among others, all and certain
foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See the enclosed 'Guidelines
for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of any
dividends or other reportable payments made to you. Backup withholding not an
additional federal income tax. Rather, the federal income tax of a holder
subject to backup withholding will be reduced by the withheld. If withholding
results in an overpayment of taxes, a refund may obtained from the Internal
Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE DISTRIBUTIONS TO BE MADE
TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD. IN
SUCH EVENT, THE WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING THE SALE OF A
SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT FROM YOU OF
CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING OBLIGATION IN
RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please out Item
Number 2 in Part IV of the Substitute Form W-9. If you have not issued a TIN
and have applied for one, or if you intend to apply for one in near future,
please check the box in Part II of the Substitute Form W-9, and and date both
the Substitute Form W-9 and the 'Certificate of Taxpayer Identification
Number'. Please return the Substitute Form W-9 with your to the Ballot Agent
by 5:00 p.m., New York City Time, on September 4, If you fail to do so, the
Debtors will withhold 31% from any payments and made to you thereafter until a
TIN and new Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to report.
SUBSTITUTE PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9 IN THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE APPLIED
FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW. APPLY
FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART
PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR IV AND
THE 'CERTIFICATE OF TAXPAYER IDENTIFICATION NUMBER (TIN)
EMPLOYER IDENTIFICATION NUMBER AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN
THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or reject
the Debtors' Second Amended Joint Plan of Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the
'Joint Plan'), described in the accompanying disclosure statement, dated
August 9, 1996 (the 'Disclosure Statement'). PLEASE INDICATE ACCEPTANCE OR
REJECTION OF THE JOINT PLAN IN THE BOX INDICATED. COMPLETE THE BALLOT BY
PROVIDING ALL OF THE INFORMATION REQUESTED AND SIGN, DATE AND RETURN THIS
BALLOT BY MAIL OR OVERNIGHT COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'),
AT THE FOLLOWING ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO
THE BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim or
Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE ANY
CONCERNING THE DISCLOSURE STATEMENT, THE JOINT PLAN, THIS BALLOT OR VOTING
PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
5
BALLOT NO. 7
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
.................................................................. x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
......................................................................... x
BALLOT FOR SUBSCRIBING FOR ADDITIONAL SHARES OF REIT STOCK
UNDER THE DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
MORGAN LOAN LENDERS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT
AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT
WILL NOT BE COUNTED
This Ballot is submitted to you for subscription of additional shares of
Stock pursuant to that certain Second Amended Joint Plan of Reorganization 237
Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 1996
(the 'Joint Plan'), described in the accompanying disclosure statement, August
9, 1996 (the 'Disclosure Statement'). Unless otherwise defined capitalized
terms used herein shall have the meaning ascribed to them in the Joint Plan.
PLEASE READ THE VOTING INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE
COMPLETING THIS BALLOT.
PLEASE COMPLETE ITEMS 1, 2, 3, AND 4. ANY HOLDER THAT DOES NOT SUBMIT A BALLOT
WHICH DOES NOT INDICATE AN ELECTION TO PURCHASE A PORTION OF ADDITIONAL REIT
PURSUANT TO SECTION 12.5 OF THE JOINT PLAN SHALL BE DEEMED TO CONSTITUTE
ELECTION TO NOT PURCHASE A PORTION OF ADDITIONAL REIT STOCK. IF THIS BALLOT
NOT SIGNED ON THE APPROPRIATE LINES BELOW, THIS BALLOT WILL NOT BE VALID OR AS
HAVING BEEN CAST.
ITEM 1. ELECTION CLASSIFICATION AND AMOUNT. The undersigned is a holder
of an election amount in the aggregate unpaid principal amount of
$________________________ (the 'Election Amount').
ITEM 2. REIT STOCK SUBSCRIPTION. The undersigned chooses / / to ELECT to
purchase a portion of additional REIT Stock. If you / / Not to ELECT to
purchase a choose to purchase a portion of additional REIT Stock, Offered
portion of additional REIT Shares, YOU MUST RETURN A DULY EXECUTED
SUBSCRIPTION AGREEMENT WITH Stock. YOUR BALLOT.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is a Morgan Loan
Lender.
ITEM 4. ACCREDITED INVESTOR. In order to receive New Notes and shares of
REIT Stock, each holder must be an 'accredited investor.' By checking the
following box, the undersigned has read the instructions contained in
paragraph 6 with respect to the parties recognized by the Securities and
Exchange Commission as 'accredited investors' and acknowledges that the
undersigned is an accredited investor.
/ / The undersigned is an 'ACCREDITED INVESTOR,' as defined in Regulation D of
the Securities Act of 1933, as amended.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to provide
237 Avenue Associates, L.L.C. and 1290 Associates, L.L.C. (collectively, the
your correct taxpayer identification number ('TIN'). If you are an your TIN is
your social security number. If the Debtors are not with your correct TIN, you
may be subject to a $50 penalty imposed by Internal Revenue Service. In
addition, payments and distributions to be made you pursuant to that certain
Second Amended Joint Plan of Reorganization of Park Avenue Associates, L.L.C.
and 1290 Associates, L.L.C., dated August 9, (the 'Joint Plan'), may be
subject to 'backup withholding' for federal income tax purposes.
Each holder generally is required to provide the Debtors with its correct TIN
on Form W-9 below. Certain holders (including, among others, all and certain
foreign individuals) are not subject to these backup and reporting
requirements. Exempt holders must still provide the with their TIN on
Substitute Form W-9, and should indicate their exempt by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for foreign individual to
qualify as an exempt recipient, that holder must submit statement, signed
under penalties of perjury, attesting to that individual's status. Forms for
such statement can be obtained from the Debtors. See the enclosed 'Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9'
for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of any
interest, dividends or other reportable payments made to you. Backup
withholding not an additional federal income tax. Rather, the federal income
tax of a holder subject to backup withholding will be reduced by the withheld.
If withholding results in an overpayment of taxes, a refund may obtained from
the Internal Revenue Service. IT IS POSSIBLE THAT THE CASH OF THE
DISTRIBUTIONS TO BE MADE TO YOU UNDER THE PLAN MAY BE TO SATISFY THE AMOUNT
REQUIRED TO BE WITHHELD. IN SUCH EVENT, THE WILL HOLD BACK THE ENTIRE
DISTRIBUTION PENDING THE SALE OF A SUFFICIENT OF THE NON-CASH DISTRIBUTION, OR
THE RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT
OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors your correct TIN by completing the Substitute Form W-9 below,
certifying the TIN provided on Substitute Form W-9 is correct and that either
(1) you not been notified by the Internal Revenue Service that you are subject
to withholding or (2) the Internal Revenue Service has notified you that you
no longer subject to backup withholding. If you are an exempt holder, you also
provide the Debtors with your correct TIN by completing the Substitute W-9,
and should indicate your exempt status by writing 'EXEMPT' in Part III the
Substitute Form W-9. If you are subject to backup withholding, please out Item
Number 2 in Part IV of the Substitute Form W-9. If you have not issued a TIN
and have applied for one, or if you intend to apply for one in near future,
please check the box in Part II of the Substitute Form W-9, and and date both
the Substitute Form W-9 and the 'Certificate of Taxpayer Identification
Number'. Please return the Substitute Form W-9 with your to the Ballot Agent
by 5:00 p.m., New York City Time, on September 4, If you fail to do so, the
Debtors will withhold 31% from any payments and made to you thereafter until a
TIN and new Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by you.
If Claim is in more than one name or is not in the name of the actual owner,
the enclosed 'Guidelines for Certification of Taxpayer Identification on
Substitute Form W-9' for additional guidance on which number to
SUBSTITUTE PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9 IN THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE APPLIED
FOR ONE, OR INTEND TO DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART
PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR IV AND THE
'CERTIFICATE OF TAXPAYER IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION
NUMBER AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return. However,
if you have since been notified by the IRS that you are no longer subject to
back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN
THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit whether you elect to
subscribe to purchase a portion of additional REIT Stock, Offered Shares,
under the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement, dated
August 9, 1996 (the 'Disclosure Statement'). PLEASE INDICATE WHETHER OR NOT
YOU ELECT TO SUBSCRIBE TO PURCHASE A PORTION OF ADDITIONAL REIT STOCK (SEE
INSTRUCTION 3 BELOW). COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT COURIER
TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER THE
VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE BALLOT
AGENT IS ENCLOSED FOR YOUR CONVENIENCE. Under the Joint Plan, each Morgan
Loan Lender may elect to subscribe to purchase a portion of additional REIT
Stock equal to the product of such holder's pro rata share of the Morgan Loan
Election Amount (i.e., the amount set forth in Item 1 of the Ballot divided by
$902,603,492) multiplied by 923,076, as modified to the extent and the amount
of a Conventional Financing Alternative. The price per share of additional
REIT Stock will be calculated on the Confirmation Date and each Morgan Loan
Lender subscribing to additional shares of REIT Stock will receive a notice on
or after the Confirmation Date setting forth such price per share. ANY
EXECUTED BALLOTS WHICH ARE TIMELY RECEIVED BUT WHICH DO NOT INDICATE AN
ELECTION TO PURCHASE ADDITIONAL REIT STOCK PURSUANT TO SECTION 12.5 OF THE
JOINT PLAN SHALL BE DEEMED TO CONSTITUTE AN ELECTION TO NOT PURCHASE
ADDITIONAL REIT STOCK.
4. The Securities and Exchange Commission recognizes the following parties
as accredited investors, capable of understanding and attending the financial
risks associated with acquisition of unregistered securities: (i) financial
institutions such as banks, savings and loan associations, insurance
companies, registered investment companies, broker/dealer organizations,
employee benefit/retirement plans, business development companies, or small
business investment companies; (ii) directors, officers or general partners of
the issuer, (iii) individuals who alone, or with a spouse, have net worths of
over $1 million; (iv) individuals who alone had income in excess of $200,000
in the past two years (or with a spouse, in excess of $300,000) and had a
reasonable expectation of doing as well in the current year, (v) trusts or
business partnerships, with assets in excess of $5 million, that weren't
formed for the purpose of acquiring the unregistered securities; and (vi)
entities wholly owned by accredited investors. Please indicate if you are such
an accredited investor by checking the appropriate box on the Ballot.
5. The Ballot does not constitute and shall not be deemed a proof of Claim
or Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR
IF YOU HAVE ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT,
THE JOINT PLAN, THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL
THE BALLOT AGENT AT (212) 440-9800.
5
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
.................................................................... x
In re:
:
Chapter 11 Case Nos.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) and
and 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
Debtors. (Jointly Administered)
:
...................................................................... x
NOTICE OF (A) HEARING TO CONSIDER CONFIRMATION OF
DEBTORS' JOINT PLAN OF REORGANIZATION AND (B) DEADLINE FOR
(I) VOTING ON DEBTORS' JOINT PLAN OF REORGANIZATION,
ELECTING FORMS OF DISTRIBUTIONS THEREUNDER AND SUBSCRIBING
FOR ADDITIONAL SHARES OF REIT STOCK AND (II) OBJECTING TO
CONFIRMATION OF THE JOINT PLAN OF REORGANIZATION
NOTICE IS HEREBY GIVEN THAT:
1. A hearing to consider confirmation of that certain Second Amended
Joint Plan of Reorganization of 237 Park Avenue Associates, L.L.C. and 1290
Associates L.L.C., dated August 9, 1996 (the 'Joint Plan') and any
objections or proposed amendments thereto and any other matter that may
properly come before the Court will be held before the Honorable James L.
Garrity, Jr., United States Bankruptcy Judge in Room 610-2 of the United
States Bankruptcy Court, Alexander Hamilton Custom House, One Bowling
Green, New York, New York 10004-1408, on September 11, 1996, at 2:00 p.m.,
or such later date and time determined by the Court.
2. Any objection to confirmation of the Joint Plan must be made in
writing, state that it is an objection to confirmation of the Joint Plan,
indicate the nature of the objection and the legal basis therefor, and be
filed with and received by the Bankruptcy Court, with two (2) copies to
chambers, and served upon and received by the parties listed below, together
with proof of service, on or before August 28, 1996 at 5:00 p.m. (Eastern
Daylight Time): WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Attn: Brian S. Rosen, Esq.
Attorneys for the Debtors
BATTLE FOWLER LLP
75 East 55th Street
New York, NY 10022
Attn: Douglas Furth, Esq.
Attorneys for the Ad Hoc Committee of
$970 Million Noteholders
237 PARK AVENUE ASSOCIATES, L.L.C.
1290 ASSOCIATES, L.L.C.
c/o Olympia & York Companies (U.S.A.)
237 Park Avenue
New York, NY 10017
Attn: Andrew P. Seidman
OFFICE OF THE UNITED STATES TRUSTEE
80 Broad Street
New York, NY 10004
Attn: Mary Tom, Esq.
UNLESS AN OBJECTION IS TIMELY SERVED AND FILED IN ACCORDANCE WITH THIS NOTICE,
SUCH OBJECTION WILL NOT BE CONSIDERED BY THE BANKRUPTCY COURT.
3. The date and time fixed as the last date to (i) vote to accept or
reject the Joint Plan, (ii) electing forms of distributions under the Joint
Plan and (iii) subscribing for additional shares of REIT Stock is September 4,
1996 by 5:00 p.m., New York City time (the 'Voting Deadline'). In order to be
counted, ballots must be received by the Voting Deadline by Georgeson &
Company Inc., Wall Street Plaza, New York, New York 10005. Any requests for
the Joint Plan and/or a ballot should be made to Georgeson & Company Inc. at
the above-listed address or (212) 440-9800.
Dated: New York, New York
August 9, 1996
BY ORDER OF THE COURT
____/S/ JAMES L. GARRITY, JR.____
UNITED STATES BANKRUPTCY JUDGE
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
2
EXHIBIT
3
PRO FORMA BALANCE SHEETS
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Equitable Real Estate Investment Management Brokerage
Agreement dated 7/20/95 re: The Equitable Life
787 Seventh Avenue Assurance
Society of the United States. $971,941 is due on
New York, NY 10019 3/1/99.
Kenneth D. Laub & Company, Inc. Brokerage
Agreement dated 8/8/75 re: Amchuck, Inc. (Simco
163 East 64th Street Stores). Commission due on options to extend in the
lease New York, NY 10021 computed at 1%/year.
Joseph P. Hilton & Associates, Inc. Brokerage
Agreement dated 7/2/90 re: Straight Arrow Publishers
444 Madison Avenue
Inc. Additional commission due if tenant leases additional
New York, NY space on 2nd floor by 11/30/98 not pursuant to any right in the
lease.
Jones, Lang Wootten USA Brokerage
Agreement dated 1/15/96 re: Warner Communications
101 E. 52nd Street
Inc. contingent broker commission.
New York, NY 10022
Madison Cleaning Services Group Service
Contract for: Cleaning
36-31 38th Street
Long Island City, NY 11101
Madison Cleaning Services Group Service
Contract for: Exterminating
36-31 38th Street
Long Island City, NY 11101
Madison Cleaning Services Group Service
Contract for: Window Cleaning
36-31 38th Street
Long Island City, NY 11101
Petrocelli Electric Service
Contract for: Light Maintenance
12-12 43 Avenue
Long Island City, NY 11101
USA Waste of New York City Service
Contract for: Rubbish Removal
2 North Fifth Street
Brooklyn, NY 11211
Nielsen-Elefante Service
Contract for: Exterior Landscaping
660 Pine Brook Road
Lincoln Park, NJ 07035
Nielsen-Elefante Service
Contract for: Interior Landscaping
660 Pine Brook Road
Lincoln Park, NJ 07035
East Coast Industrial Uniform Corp.
Open purchase order for: Elevator Department Uniforms
39 Skillman Street
Brooklyn, NY 11205
W.H. Christian & Sons
Open purchase order for: Engineering Department Uniforms
P.O. Box 229030
Brooklyn, NY 11222
FRCM Case-Acme Service
Contract for: Class E System Security
39-27 59th Street
Woodside, NY
1
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
AFA Protection Systems Service
contract for: Central Station
155 Michael Drive
Syosset, NY 11791
Drew Water Service Service
Contract for: Water Treatment
P.O. Box 371709M
Pittsburgh, PA 15251
Paging Network of New York Service
Contract for: Paging Services
Two World Trade Center
Suite 1428
New York, NY 10048
Filtered Water Service Service
Contract for: Equipment Rental
419-421 W. 55th Street
New York, NY 10019
Filtered Water Service Service
Contract for: Building Office Water
419-421 W. 55th Street
New York, NY 10019
Realty Advisory Board on Labor Relations
Membership Dues
292 Madison Avenue
New York, NY 10017
AT&T Wireless Service
Contract for: Portable Phone Service
P.O. Box 35005
Newark, NJ 07193
Consolidated Edison Service
Contract for: Electric Services
4 Irving Plaza
New York, NY 10003
Consolidated Edison Service
Contract for: Steam Services
4 Irving Plaza
New York, NY 10003
NYNEX Service
Contract for: Telephone Services
P.O. Box 100
Albany, NY 12250
Mulligan Security Corp. Service
Contract for: Security Guards
11 Penn Plaza
New York, NY 10012
Healthy Buildings International Service
Contract for: Air Quality Testing
10378 Democracy Lane
Fairfax, VA 22030
Commercial Building Agreement between Local 32B-32J, SEIU, Health Fund
AFL-CIO and the Realty Advisors Board on Labor Relations, Inc., Pension
Fund effective 1/1/96 through 12/31/98. (Debtor is employer of union Training,
Scholarship and Safety Fund workers covered under collective bargaining
agreement) Group Prepaid Legal Fund Training Fund
2
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Craft Agreement between the Maintenance Division of the Health Fund
Building and Construction Trades Council of Greater New York Pension Fund
and Realty Advisors Board on Labor Relations, Inc., effective Training,
Scholarship and Safety Fund
1/1/93 through 12/31/95. (Debtor is employer of union workers Group
Prepaid Legal Fund
covered under collective bargaining agreement) Training
Fund
Budd Looms Service
Contract for: new carpeting in lobby
306 East 61st Street
New York, NY 10021
Ferran Enterprises Open
purchase order for: Replacement Pavers
44-05 55th Avenue
Maspeth, NY 11378
Industrial Sales & Service Service
Contract for: emergency installations in domestic water
P.O. Box 1578
W. Babylon, NY 11704
Simplex Time Recorder Open
purchase order for: Racks for time cards
Department CH 10320
Palatine, IL 60055
Ludwig Datene Service
Contract for: Art exhibit
525 Linda Avenue
Thornwood, NY 10504
Alliance Service
Contract for: Welding
23 Van Siclen Avenue
Floral Park, NY 11001
Brookside Contracting Co., Inc. General
Contracting
475 Fifth Avenue
Pelham, NY 10605
Coleman Electric Open purchase order for: Electrical Parts
P.O. Box 9190
Plainview, NY 11805
Honeywell Open purchase order for: Control Parts
75-20 Astoria Boulevard
Jackson Heights, NY 11570
James Ruderman Open purchase order for: Professional Services
15 West 36th Street
New York, NY 10018
Multiplex Electrical Service Open purchase order for: Class E Equipment
25 East 21st Street
New York, NY 10010
New York Replacement Parts Open purchase order for: Plumbing Parts
19 School Street
Yonkers, NY 10701
Pneutech Inc. Open purchase order for: Pneutech Controls
901 Huguenot Avenue
Staten Island, NY 10512
3
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Remco Maintenance Service
contract for: Metal Maintenance
900 Tenth Avenue
New York, NY 10018
Triangle Maintenance Service
contract for: Cleaning Company
830 Third Avenue
New York, NY 10057
Zee Medical Open purchase order for: First Aid Supplies
6 Westchester Plaza
Elmsford, NY 10525
Tishman Interiors Construction Service
contract for: Lobby Renovations
666 Fifth Avenue
New York, NY 10103
Triangle Maintenance Service
contract for: Cleaning
830 Third Avenue
New York, NY 10057
Triangle Maintenance Service
Contract for: Window Cleaning
830 Third Avenue
New York, NY 10057
Petrocelli Electric Service
Contract for: Light Maintenance
12-12 43 Avenue
Long Island City, NY 11101
B.F.I. Service
Contract for: Rubbish Removal
72 Scott Avenue
Brooklyn, NY 11237
East Coast Industrial Uniform Corp. Open purchase order for: Engineers
Uniforms
39 Skillman Street
Brooklyn, NY 11205
East Coast Industrial Uniform Corp. Open purchase order for: Elevator
Department Uniforms
39 Skillman Street
Brooklyn, NY 11205
Multiplex Electrical Service Service
Contract for: Class E Services
25 East 21st Street
New York, NY 10010
ADT Security Systems Central
Station
P.O. Box 371968M
Pittsburgh, PA 15250
Drew Water Service Service
Contract for: Water Treatment (Main)
P.O. Box 371709M
Pittsburgh, PA 15251
Drew Water Service Service
Contract for: Water Treatment (Ten)
P.O. Box 371709M
Pittsburgh, PA 15251
4
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Paging Network of New York Service
Contract for: Paging Services
Two World Trade Center
Suite 1428
New York, NY 10048
Realty Advisory Board on Labor Relations
Membership Dues
292 Madison Avenue
New York, NY 10017
Great Bear Spring Water Service
Contract for: Building Office Water
P.O. Box 85071
Louisville, KY 40285-5071
N.Y. Supply & Inspection Electric
Rent Inclusion
225 West 57th Street
New York, NY 10019
Hillman Environmental Co. Service
Contract for: Air Quality Testing
1089 Cedar Avenue
P.O. Box 1597
Union, NJ 07083
AT&T Service
Contract for: Portable Phone Service
P.O. Box 371302
Pittsburgh, PA 15250
Consolidated Edison Service
Contract for: Electric Services
4 Irving Place
New York, NY 10003
Consolidated Edison Service
Contract for: Steam Services
4 Irving Place
New York, NY 10003
NYNEX Service
Contract for: Local Telephone Service
P.O. Box 100
Albany, NY 12250
AT&T Service
Contract for: Long Distance Telephone Service
P.O. Box 371302
Pittsburgh, PA 15250
Engineering Agreement between Local 94-94A-94B, 100E, AFL-CIO Health and
Benefit Fund and the Realty Advisory Board on Labor Relations, Inc., Central
Pension Fund effective 1/1/95 through 12/31/97. (Debtor is employer of union
Annuity Fund workers covered under collective bargaining agreement) Sick Pay
Fund Training Fund
Commercial Building Agreement between Local 32B-32J, SEIU, Health Fund
AFL-CIO and the Realty Advisory Board on Labor Relations, Inc., Pension Fund
effective 1/1/96 through 12/31/98. (Debtor is employer of union Training,
Scholarship and Safety Fund workers covered under collective bargaining
agreement) Group Prepaid Legal Fund
Annuity
Fund
NYC Water Board Service
Contract for: Water Services
P.O. Box 410
Church Street Station
New York, NY 10008
5
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Craft Agreement between the Maintenance Division of the Health Fund
Building and Construction Trades Council of Greater New York Pension Fund
and Realty Advisory Board on Labor Relations, Inc., effective Training,
Scholarship and Safety Fund 1/1/93 through 12/31/95. (Debtor is employer of
union workers Group Prepaid Legal Fund covered under collective bargaining
agreement) Annuity Fund
Healthy Buildings International Service
Contract for: Air Quality Test
10378 Democracy Lane
Fairfax, VA 22030
Mulligan Security Corp. Service
Contract for: Security Guards
11 Penn Plaza
New York, NY 10001
Alex Brown
Debtor is Lessor; Lease is for Nonresidential Real Property
P.O. Box 515
Baltimore, MD 21202-160
Lease Dated 11/11/94
Americas Office Products Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
52 West 52nd Street
New York, NY 10019
Lease Dated 07/02/84
Americas Office Products Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
52 West 52nd Street
New York, NY 10019
Lease Dated 07/01/94
Americas Office Products Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
52 West 52nd Street
New York, NY 10019
Lease Dated 08/01/93
AT&T Global Information Solutions
Debtor is Lessor; Lease is for Nonresidential Real Property
Lease # 2C1A69149-NY7390
1290 Avenue of the Americas
Lease Dated 12/01/83
New York, NY 10104
Li's Instant Cakes, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
The Tom James Company
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
The Ardis Company
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Bolt, Beranek & Newman, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
Accounts Payable Department
P.O. Box 9186
Lease Dated 03/30/87
Cambridge, MA 02139-9183
Brothers Gourmet Coffees Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
2255 Glades Road
Boca Raton, FL 33431
Lease Dated 10/31/94
6
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Bank of New York
Debtor is Lessor; Lease is for Nonresidential Real Property
48 Wall Street
24th Floor
Lease Dated 05/01/93
New York, NY 10286
The Bank of New York
Debtor is Lessor; Lease is for Nonresidential Real Property
Property Management A-Level
One Wall Street
Lease Dated 04/23/87
New York, NY 10286
Bank of New York
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 07/01/93
Cosmopolitan Decorating Co.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 01/01/93
Cosmopolitan Decorating
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 07/01/93
Duane Reade
Debtor is Lessor; Lease is for Nonresidential Real Property
49-29 30th Place
Long Island City, NY 11101
Lease Dated 05/10/90
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
810 Seventh Avenue
36th Floor
Lease Dated 03/31/88
New York, NY 10019
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 10/05/95
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 02/28/92
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 05/04/92
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 05/04/93
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 04/01/93
EMI Entertainment World, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
810 Seventh Avenue
36th Floor
Lease Dated 03/31/88
New York, NY 10019
7
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
The Equitable Life Assurance Debtor is Lessor;
Lease is for Nonresidential Real Property Society of the United States
1290 Avenue of the Americas
Lease Dated 07/20/95
New York, NY 10104
French Broadcasting Co.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 05/01/88
Federal Express Corp.
Debtor is Lessor; Lease is for Nonresidential Real Property
Lease #80-0540
Lease Dated 05/01/90
2003 Corporate--2nd Flr
Memphis, TN 38134
Honda North America, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
700 Vanness Avenue
Torrance, CA
Lease Dated 03/25/88
International Paper Company
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
9th Floor
Lease Dated 01/23/87
New York, NY 10104
John Blair Communications
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 07/01/94
Local Area Telecommunications
Debtor is Lessor; Lease is for Nonresidential Real Property
17 Battery Place
Suite 1200
Lease Dated 07/03/90
New York, NY
MCI Metro Access Transmission Services, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
2250 Lakeside Boulevard
Richardson, TX
Lease Dated 07/15/95
Morrison & Foerster
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 11/28/89
Morrison & Foerster Debtor is Lessor; Lease is for Nonresidential Real
Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 09/01/88
Deutsche Bank Financial
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 08/15/94
Deutsche Bank Financial Products Corporation
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 07/12/94
Deutsche Bank Financial Product Corp.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 07/01/88
8
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Morgan Grenfell Finance Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 04/01/89
Deutsche Bank Financial Products Corporation
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 12/19/90
Metropolitan Fiber System of NY
Debtor is Lessor; Lease is for Nonresidential Real Property
c/o Metropltn Fiber Systm, Inc.
One Tower Lane
Lease Dated 04/23/91
Oakbrook Terrace, IL 60181
Metro Southworth, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
c/o Hunger-Southworth, Inc.
10 Post Office Square
Lease Dated 07/14/94
Boston, MA 02109
AT&T Global Information Soluti
Debtor is Lessor; Lease is for Nonresidential Real Property
AT&T Global Real Estate, U.S.AR
Caldwell & Brown Streets, EMD4Lease Dated 08/31/88
Dayton, OH 45429-0001
AT&T Global Information Soluti
Debtor is Lessor; Lease is for Nonresidential Real Property
AT&T Global Real Estate, U.S.
Caldwell & Brown Streets, EMD4
Lease Dated 04/01/95
Dayton, OH 45429
AT&T Global Information Soluti
Debtor is Lessor; Lease is for Nonresidential Real Property
AT&T Global Real Estate, U.S.AR
Caldwell & Brown Streets, EMD4
Lease Dated 08/12/88
Dayton, OH 45429-0001
AT&T Global Information Solutions
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 04/01/91
Phillips-Van Heusen Corp.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 07/01/94
Pasqua, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Broadway, First Floor
San Francisco, CA 94111-1428
Lease Dated 04/05/93
Prudential Bache Securities Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
One Seaport Plaza
New York, NY 10292-0123
Lease Dated 11/01/93
Rockefeller Brothers Fund
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 09/16/90
Rockefeller Brothers Fund
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 01/01/89
9
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Rockefeller Brothers Fund
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 09/15/78
Alphagraphics: Affiliate of R.R. Donnelley
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 02/12/91
Robinson, Silverman, Pearce,
Debtor is Lessor; Lease is for Nonresidential Real Property
Aronsohn & Berman
1290 Avenue of the Americas
Lease Dated 04/04/89
New York, NY 10104
Robinson, Silverman, Pearce,
Debtor is Lessor; Lease is for Nonresidential Real Property
Aronsohn & Berman
1290 Avenue of the Americas
Lease Dated 04/13/89
New York, NY 10104
Robinson, Silverman, Pearce,
Debtor is Lessor; Lease is for Nonresidential Real Property
Aronsohn & Berman
1290 Avenue of the Americas
Lease Dated 06/01/90
New York, NY 10104
Robinson, Silverman, Pearce,
Debtor is Lessor; Lease is for Nonresidential Real Property
Aronsohn & Berman
1290 Avenue of the Americas
Lease Dated 01/01/90
New York, NY 10104
Recordtown Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
38 Corporate Circle
Albany, NY 12203
Lease Dated 03/02/93
Straight Arrow Publishers
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 11/01/93
Sedgwick James of New York Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 05/20/94
Sedgwick James
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 10/01/86
Sweet-Orr, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 09/01/88
Tri-M Construction
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 10/28/95
Tri-M Construction
Debtor is Lessor; Lease is for Nonresidential Real Property
1290 Avenue of the Americas
New York, NY 10104
Lease Dated 11/01/93
10
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
47th St. United Empire Dining
Debtor is Lessor; Lease is for Nonresidential Real Property
D/B/A YIPS
1290 Avenue of the Americas
Lease Dated 08/01/95
New York, NY 10104-6103
Unisys Corporation
Debtor is Lessor; Lease is for Nonresidential Real Property
P.O. Box 500
Blue Bell, PA 19424
Lease Dated 01/01/87
United Parcel Service
Debtor is Lessor; Lease is for Nonresidential Real Property
643 West 43rd Street
New York, NY 10036
Lease Dated 01/01/93
Warner Communications
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 02/01/96
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 04/19/89
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, New York 10019
Lease Dated 06/01/89
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 09/04/89
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 03/22/90
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 06/01/91
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, New York 10019
Lease Dated 07/24/91
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 03/06/92
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 03/20/90
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 06/19/95
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, New York 10019
Lease Dated 01/09/95
11
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Warner Communications, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
75 Rockefeller Plaza
New York, NY 10019
Lease Dated 03/31/95
Weight Watchers North America, Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
P.O. Box 649
Jericho, NY 11753
Lease Dated 06/14/89
Yasuda Kasai Intnl (USA) Inc.
Debtor is Lessor; Lease is for Nonresidential Real Property
c/o Brinson Partners Inc.
209 South Las Sale Street
Lease Dated 05/02/88
Chicago, IL 60604
Hatsuhana
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0101
New York, NY 10017
International News & Candy
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0103
New York, NY 10017
Colors Restaurant
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0105
New York, NY 10017
Colors Restaurant
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0106
New York, NY 10017
California Burritos
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0107
New York, NY 10017
The Market Basket
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0107
New York, NY 10017
Ottomanelli's Cafe
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0108
New York, NY 10017
Ottomanelli's Cafe
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0109
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0201
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0301
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0401
New York, NY 10017
12
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0501
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0601
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0701
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0801
New York, NY 10017
J. Walter Thompson
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 0901
New York, NY 10017
Warburg Pincus & Co.
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1001
New York, NY 10017
Korn/Ferry International
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1101
New York, NY 10017
Warburg Pincus & Co.
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1103
New York, NY 10017
Warburg Pincus & Co.
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1104
New York, NY 10017
O&Y (US) Development Co.
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1201
New York, NY 10017
Swiss RE America
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1301
New York, NY 10017
Swiss RE America
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1401
New York, NY 10017
Swiss RE America
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1501
New York, NY 10017
Swiss RE America
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1601
New York, NY 10017
13
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED--(CONTINUED)
NAME OF OTHER PARTIES TO LEASE OR CONTRACT
DESCRIPTIONS OF CONTRACT OR LEASE
Swiss RE America
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1701
New York, NY 10017
Jennison Associates
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1801
New York, NY 10017
Jennison Associates
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1802
New York, NY 10017
Haythe & Curley
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1901
New York, NY 10017
Atrium Card
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L01
New York, NY 10017
General Nutrition Center
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L03
New York, NY 10017
Zaro's Bread Basket
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L04
New York, NY 10017
Colors Restaurant
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L05
New York, NY 10017
The Market Basket
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L06
New York, NY 10017
Ottomanelli's Cafe
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L07
New York, NY 10017
Eastside Luggage Shop
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 1L08
New York, NY 10017
Haythe & Curley
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 2001
New York, NY 10017
Executive Office Network
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 2101
New York, NY 10017
Metro, Fiber Systems of New York
Debtor is Lessor; Lease is for Nonresidential Real Property
237 Park Avenue, Suite Id: 9902
New York, NY 10017
14
METROPOLIS REALTY TRUST, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(000'S)
ASSETS
PROPERTY...................................................... $677,000
CASH.......................................................... 20,299
RESTRICTED CASH............................................... 11,261
NOTES RECEIVABLE.............................................. 9,456
ACCOUNTS RECEIVABLE AND PREPAID EXPENSES...... ............. 8,219
--------
TOTAL ASSETS............................................ $726,235
--------
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Secured Notes............................................. $400,000
Accounts payable and accrued expenses..................... 5,750
Security deposits for tenants............................. 485
--------
TOTAL LIABILITIES......................,,,.................. 406,235
--------
PARTNERS' EQUITY............................................ 320,000
--------
TOTAL LIABILITIES AND PARTNERS' EQUITY.................. $726,235
--------
1
237 PARK PARTNERS, L.P.
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
(000'S)
ASSETS
PROPERTY..................................................... $290,000
CASH......................................................... 11,839
RESTRICTED CASH.............................................. 2,850
NOTES RECEIVABLE............................................. 4,366
ACCOUNTS RECEIVABLE AND PREPAID EXPENSES..................... 2,836
--------
TOTAL ASSETS............................................ $311,891
--------
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Secured Notes................................................. $171,344
Accounts payable and accrued expenses......................... 380
Security deposit for tenants.................................. 303
--------
TOTAL LIABILITIES............................................... 172,027
--------
PARTNERS' EQUITY............................................... 139,864
--------
TOTAL LIABILITIES AND PARTNERS' EQUITY.................... $311,891
--------
2
1290 PARTNERS, L.P.
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
(000'S)
ASSETS
PROPERTY........................................................ $387,000
CASH............................................................ 8,460
RESTRICTED CASH................................................. 5,592
NOTES RECEIVABLE.................................,.............. 5,090
ACCOUNTS RECEIVABLE AND PREPAID EXPENSES........................ 5,383
--------
TOTAL ASSETS............................................... $411,525
--------
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Secured Notes....... ........................................ $228,656
Accounts payable and accrued expenses......................... 2,551
Security deposits for tenants................................. 182
--------
TOTAL LIABILITIES............................................... 231,389
--------
PARTNERS' EQUITY................................................ 180,136
--------
TOTAL LIABILITIES AND PARTNERS' EQUITY..................... $411,525
--------
3
METROPOLIS REALTY TRUST, INC.
NOTES TO PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
(000'S OMITTED)
1. ORGANIZATION
The accompanying unaudited pro forma balance sheets were prepared by Victor
Capital Group, L.P., advisors to the Metropolis Realty Trust, Inc.
('Metropolis'), and represent the projected pro forma information as of
September 30, 1996, the assumed confirmation date. The pro forma balance
sheets include the consolidated pro forma balance sheet of Metropolis, and two
Property Owning Limited Partner Entities: 237 Park Partners, L.P. and
Partners, L.P. ('Property Owning Partnerships'). Assets and liabilities not to
a specific property have been allocated to the Property Owning based upon the
properties' estimated fair values. The pro forma balance sheets represent
estimates of value; however, the actual information may differ and the
differences may be significant.
2. BASIS OF PRESENTATION
The pro forma balance sheets have been prepared using 'fresh start' accounting
in accordance with AICPA Statement of Position No. 90-7.
3. REAL ESTATE
Real Estate includes the land, building, tenant improvements and building
equipment of the properties of the Property Owning Partnerships located at 237
Avenue and 1290 Avenue of the Americas in New York City. The real estate is at
its estimated fair value as determined by the Victor Capital Group, These
values were not the result of appraisals. The estimates and opinions made
based upon information and assumptions considered by Victor Capital L.P. to be
adequate and appropriate in the circumstances; however, they are not subject
to precise quantification or verification and may change as economic and
market factors change.
4. CASH AND RESTRICTED CASH
Cash represents estimated cash and cash equivalents as of September 30, 1996,
assured confirmation date, and assumes that certain transaction costs have
paid, settlement proceeds have been received and $20,000 in proceeds from
subscription rights offering has been received. Restricted cash includes
$3,474 of cash reserves for payment of utility tax claims and amounts for
tenant security deposits, real estate tax escrows and other
reserves.
5. NOTES RECEIVABLE
Included in Notes Receivable are the estimated fair value of two tenant notes
of $9,418. The first note (Robinson Silverman Note), dated April 1, with a
face amount of $6,500, has been valued at $5,063, based on certain claimed by
the tenant regarding its payment terms. The concessions include an interest
rate of 7.5%, a level monthly payment of thousand to be applied first to
interest and with the remainder to and a maturity date of September 1, 1999.
The second note ('Warburg Note') dated August 20, 1985, has been valued at its
face amount of The Warburg Pincus Note does not bear interest and is payable
on October 31, 1999.
6. LONG-TERM DEBT
Long-term debt consists of the fair value of new mortgage notes cross
collateralized by the underlying properties ('New Notes'). The New Notes have
a year term and are expected to bear interest at an annual rate equal to two
fifty (250) basis points above a defined average of the ten (10) year rate.
The annual rate at September 30, 1996 is estimated at 9.28%. of interest only
will be made monthly for the first year. Thereafter, monthly payments of
principal and interest will be made based on a twenty five (25) year level
payment amortization schedule.
7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts Payable and Accrued Expenses includes funded reserves for utility tax
totaling approximately $3,474. $2,474 pertains to claims for the 2 building, a
property disposed of prior to September 30, 1996. $1,000 to the property
located at 1290 Avenue of the Americas. In addition to reserves for utility
tax claims, amounts include, other reserves, tenant deposits and a provision
for estimated property operating expenses payable at September 30, 1996.
8. PARTNERS EQUITY
Partners Equity includes 12,040 shares of common stock with a par value of ten
per share and additional shares of 923 purchased as part of a rights offering
for $20,000. The subscription rights offering is to have occurred prior to
September 30, 1996.
4
EXHIBIT
4
CASH FLOW PROJECTIONS
Attached are Cash Flow Projections for the REIT and the underlying Properties
Pro Forma Balance Sheets for the REIT and the underlying Property Owning each
prepared by Victor Capital Group, L.P. ('VCG'). The Cash Flow and Pro Forma
Balance Sheets, while presented with numerical are based upon a number of
estimates and assumptions which, though reasonable by VCG, are inherently
subject to significant business, and competitive uncertainties and
contingencies, many of which are the control of the REIT and the Property
Owning Partnerships, and upon with respect to future business strategies and
decisions which are to change. There can be no assurance that those estimates
and are accurate or that such Cash Flow Projections will be achieved. Cash
Flow Projections were not prepared with a view toward compliance with
guidelines of the Securities and Exchange Commission, the American of
Certified Public Accountants, any regulatory or professional agency body or
generally accepted accounting principles ('GAAP'). The Cash Flow are
necessarily speculative in nature, and it is usually the case one or more of
the assumptions underlying such projections or valuations not materialize.
Distributees are cautioned not to place undue reliance on Cash Flow
Projections or the Pro Forma Balance Sheets.
The most significant assumptions on which the Cash Flow Projections and the
Pro Balance Sheets are based relate to (a) future rental rates at the (b) the
likelihood that existing tenants of the Properties will their leases, (c)
concessions that will have to be made to new tenants in to induce them to
enter into a lease or to existing tenants in order to them to renew their
leases, (d) the length of time it will take to find tenants for vacant space,
(e) with respect to the Properties' fair market the capitalization and
discount rates, (f) interest rates, and (g) the of various events including
the effective date of the Plan. To the extent these or other assumptions prove
too optimistic, there may be a negative on the value of the Plan Securities.
THE CASH FLOW PROJECTIONS ASSUME
THAT THE NEW NOTES ARE NOT REFINANCED. IF THE NEW NOTES ARE REFINANCED, THERE
BE A NEGATIVE IMPACT ON CASH FLOW. The determination by holders of Senior
regarding whether to make Standard or Non-Standard Elections and the
determination regarding whether to subscribe for Offered Shares take into
account that the actual valuations of the Properties may be than or less than
the projected values of the Properties contained or referenced herein.
1
METROPOLIS REALTY TRUST, INC.
SUMMARY OF CASH FLOW ASSUMPTIONS
The attached projections reflect a consolidation of the cash flows of the
properties underlying the REIT: 1290 Avenue of the Americas and 237 Park The
REIT Cash Flow Projections include REIT administrative expenses and debt
service component.
REIT Administrative Expense -- Projected expenses include accounting,
legal, directors' compensation, directors' and officers' insurance, offsite
property management reimbursables, asset management fees and a reserve.
Debt Service -- Assumes New Notes are issued and bear interest at an
annual rate equal to 250 basis points above the 10 year Treasury Rate. The
projections assume an interest rate of 9.28% based upon the 10 year Treasury
Rate as of 7/19/96 of 6.78%. The New Notes are interest only for the first
year and thereafter, equal monthly payments of principal and interest are
based on a 25 year level payment amortization schedule. The projected balance
at maturity of the New Notes (9/30/06) is $342,857,779 and is assumed to be
refinanced at 9% interest only.
2
METROPOLIS REALTY TRUST, INC.
(000'S)
OCT-DEC
1996 1997 1998 1999 2000 2001 2002 2003 2004
- ----- ------- ------ ------- ------ ------ ------- ------ --------
REVENUE:
Base Rent........................... $20,208 $87,510 $104,497 $102,528
$110,566 $108,479 $101,565 $115,802 $117,246
Escalations/Other................... 5,768 21,790 24,293 26,723
28,332 27,766 23,706 25,388 22,694
Tenant Loan Repayment............... 225 900 900 8,403
-- -- -- -- --
Contingency......................... (303 ) (1,386) (1,668) (1,675)
(1,814) (1,796) (1,678) (1,850) (1,826)
------- ------- -------- --------
- -------- -------- -------- -------- --------
Total Revenue......................... 25,898 108,814 128,022 135,980
137,084 134,449 123,593 139,340 138,113
EXPENSES:
Operating Expenses.................. 4,900 21,582 22,517 23,459
24,493 25,343 26,303 27,522 28,488
Real Estate Taxes................... -- 26,280 24,924 26,688
28,540 29,252 30,275 31,271 31,491
Property Management Fee............. 385 1,619 1,907 1,914
2,056 2,017 1,854 2,090 2,072
------- ------- -------- --------
- -------- -------- -------- -------- --------
Total Expenses........................ 5,285 49,481 49,347 52,060
55,089 56,612 58,432 60,884 62,051
NET OPERATING INCOME.................. 20,613 59,333 78,674 83,920
81,995 77,837 65,161 78,457 76,063
OTHER EXPENDITURES:
Leasing Commissions................. -- 2,320 1,917 4,443
940 11,445 7,461 1,380 6,658
Tenant Improvements................. -- 695 4,947 6,504
3,441 133 13,639 5,529 6,187
Capital Improvements................ 826 1,417 2,116 1,659
4,453 2,735 2,170 1,753 2,256
------- ------- -------- --------
- -------- -------- -------- -------- --------
TOTAL OTHER EXPENDITURES.............. 826 4,432 8,980 12,607
8,834 14,314 23,270 8,663 15,100
PROPERTY NET CASH FLOW................ 19,787 54,901 69,695 71,313
73,161 63,523 41,890 69,794 60,963
------- ------- -------- --------
- -------- -------- -------- -------- --------
------- ------- -------- --------
- -------- -------- -------- -------- --------
REIT ADMINISTRATIVE EXPENSES.......... 375 1,500 1,500 1,500
1,500 1,500 1,500 1,500 1,500
DEBT SERVICE:
Interest............................ 9,280 37,112 36,842 36,419
35,956 35,447 34,890 34,278 33,607
Principal........................... -- 1,029 4,364 4,786
5,250 5,758 6,316 6,928 7,599
------- ------- -------- --------
- -------- -------- -------- -------- --------
NET CASH FLOW......................... $10,132 $15,259 $ 26,989 $ 28,607 $
30,455 $ 20,817 $ (815) $ 27,088 $ 18,257
------- ------- -------- --------
- -------- -------- -------- -------- --------
------- ------- -------- --------
- -------- -------- -------- -------- --------
2005 2006
-------- --------
REVENUE:
Base Rent........................... $125,024 $121,316
Escalations/Other................... 24,056 22,449
Tenant Loan Repayment............... -- --
Contingency......................... (1,930) (1,890)
-------- --------
Total Revenue......................... 147,149 141,875
EXPENSES:
Operating Expenses.................. 29,739 30,758
Real Estate Taxes................... 31,387 31,994
Property Management Fee............. 2,192 2,128
-------- --------
Total Expenses........................ 63,318 64,880
NET OPERATING INCOME.................. 83,831 76,995
OTHER EXPENDITURES:
Leasing Commissions................. 673 18,884
Tenant Improvements................. 273 511
Capital Improvements................ 1,878 2,833
-------- --------
TOTAL OTHER EXPENDITURES.............. 2,823 22,229
PROPERTY NET CASH FLOW................ 81,008 54,766
-------- --------
-------- --------
REIT ADMINISTRATIVE EXPENSES.......... 1,500 1,500
DEBT SERVICE:
Interest............................ 32,871 31,842
Principal........................... 8,335 6,777
-------- --------
NET CASH FLOW......................... $ 38,302 $ 14,647
-------- --------
-------- --------
3
1290 AVENUE OF THE AMERICAS
CASH FLOW ASSUMPTIONS
REVENUE:
--
Base Rent
--
--
REVENUE:
Base rent is projected based upon the March 1996 Rent Roll.
Base Rent At 4/1/96, the building is 97% leased.
Rent-Up Assumptions
The projection assumes the following lease-up of currently available space
(50,751 RSF):
LEASE
COMMENCEMENT RSF
- ------------- ------
7/1/97 50,751
--
The assumed market rents for available space and future rollovers for
calendar 1996 are as
FLOORS $/RSF
- ------------------ -----
2-7 $ 31
8-13 33
14-16 34
17-23 36
24-29 38
30-39 40
40-43 42
Retail 6th
Avenue 104
Retail Side Street 52
--
Market rents are assumed to increase as follows:
1996 0%
1997 5%
1998 7%
1999 & Beyond 4%
--
--
The projection assumes 15 year terms for office leases and 10 year terms for
retail leases.
Except for the leases listed below, upon rollover blended rates for vacancy,
free rent and tenant improvements are projected based upon a 75% renewal
probability. The following tenants are assumed to vacate at lease expiration:
TENANT RSF EXPIRATION
- --------------------- ------ ----------
RR Donnelly
(Alphagraphics) 1,799 8/31/96
Cosmopolitan Decor 1,414 12/31/96
Simco (Amchuck) 9,737 12/31/96
LI's Instant Cakes 848 12/31/96
Unisys 44,914 12/31/96
1290 Operating Inc. 2,900 12/31/96
International Paper 26,074 7/31/97
Bolt, Beranek 5,178 9/31/97
Honda North America 2,625 9/31/97
Yasuda Kasai
International 2,553 9/31/97
Deutsche Bank 43,760 12/31/97
Bank of New York 24,380 5/31/98
Phillips-Van Heusen 79,288 12/31/98
John Blair & Co. 16,914 12/31/98
-- --
Vacancy Period: 6 months Free Rent:
NEW
LEASES RENEWALS
- ---------- --------
1996
12 mos. 6 mos
1997 and after
9 mos. 4.5 mos
--
Equitable will lease 79,288 sf of space as it is vacated by Phillips-Van
Heusen at lease
4
1290 AVENUE OF THE AMERICAS
CASH FLOW ASSUMPTIONS--(CONTINUED)
--
--
--
Escalations
--
--
Contingency
--
Tenant Loan
EXPENSES:
--
Building Operations Expense
--
--
Property Management Fee
--
Real Estate Taxes
OTHER EXPENDITURES:
--
Commissions
Warner Music will lease 24,380 sf of space as it is vacated by Bank of New
York at lease expiration on 5/31/98.
In November of 1997 Robinson Silverman is assumed to lease 10,356 sf of
space as it is vacated by the current tenants. (Bolt, Beranek, Honda North
America and Yasuda Kasai International).
Escalations reflect the pass through to tenants of the estimated operating
expenses and real estate taxes in excess of the tenant's base year costs.
Operating escalations have been calculated on a calendar year basis and real
estate tax escalations on a fiscal (July-June) year basis. Respective base
year amounts for projected tenants are assumed to be costs of the calendar or
fiscal year of move-in. For pass-through purposes, certain expenses are
grossed-up to represent full occupancy. Escalations
Certain tenants pay operating escalations based on the Porter Wage rate, which
was $14.337 without fringe benefits and $23.4199 with fringe benefits in 1995.
Succeeding years are assumed to increase 4% per annum. The projection assumes
a contingency of 1.5% on gross revenues.
Contingency
The projection assumes proceeds of $75,000 per month through 8/99 and a
$3,447,666 balloon payment at maturity (9/1/99) of the Robinson Silverman
tenant loan.
Tenant Loan
EXPENSES:
Expenses are based upon historical experience and the current contracts in
effect and generally include a 4% inflation factor. Electric and cleaning
expenses have been adjusted reflect occupancy levels.
Building Operations Expense
Maintenance and repairs includes estimated non-recurring major repairs.
Fees are based on 1.5% of gross tenant revenue on new and existing leases.
Property Management Fee Real estate taxes are based on New York City's tax
methodology. Increases or decreases in assessed values are phased in over a
five year period to arrive at a transitional value. The transitional value (or
assessed value if lower) is multiplied by the tax rate.
Real Estate Taxes
OTHER EXPENDITURES:
The projection assumes a commission based on a sliding scale over a 15 year
lease term, applied to base rent plus rent steps plus CPI escalations as
follows:
Commissions
Year 1 6.88%
Year 2 5.50%
Years 3-5 4.81%
Years 6-10 3.44%
Years 11-15 2.75%
--
--
Tenant Improvements
The rate includes a 'full' commission to the outside broker and '3/8'
commission to the The projection assumes that commissions will be paid on the
lease commencement date. The projection reflects payment of current
outstanding liabilities. In addition, projected tenant improvement allowances
have been calculated based on the following assumptions.
These rates are blended for rollover space using the building's turnover rate.
Projected tenant improvements are assumed to be paid six months after the
lease commences.
Tenant Improvements
OFFICE RETAIL
------------- -------------
New Leases 1996 $45.00
New Leases $50.00
New Leases 1997 $40.00
Renewals 1996 $50.00
Renewals 1996 $22.50
Renewals 1997 $45.00
Renewals 1997 $20.00
Renewals 1998 $40.00
Renewals 1999 $35.00
-- --
Capital Improvements
--
Tenant improvements are assumed to remain constant for the remainder of the
projection. Capital improvements includes costs for asbestos removal in
mechanical rooms; elevator conversions; lobby renovation; electrical capacity
upgrades and C.F.C. code compliance.
Additionally, a capital reserve is included to provide for future capital
expenditures that may be required.
Capital Improvements
The capital budget also includes certain landlord's work for tenant spaces
as they become available.
5
1290 AVENUE OF THE AMERICAS
(000'S)
OCT-DEC
1996 1997 1998 1999 2000 2001 2002 2003 2004
- ---- ----- ----- ----- ----- ----- ----- ----- -----
REVENUE
Base Rent........
$11,864 $53,126 $68,658 $67,548 $74,975 $75,809 $73,515 $74,749
$76,293
Escalations/Other.................... 2,517 7,287 9,170 10,745
11,874 12,989 14,033 15,271 12,176
Tenant Loan Repayment................ 225 900 900 4,048
-- -- -- -- --
Contingency.......................... (141) (894) (1,155)
(1,162) (1,289) (1,318) (1,299) (1,335) (1,311)
------- ------- ------- -------
------- ------- ------- ------- -------
Total Revenue.......................... 14,465 60,418 77,572 81,179
85,559 87,480 86,249 88,685 87,157
EXPENSES
Operating Expenses................... 3,733 16,294 17,032 17,767
18,574 19,293 19,959 20,874 21,576
Real Estate Taxes.................... -- 16,175 14,746 16,069
17,356 17,628 18,590 19,654 19,805
Property Management Fee.............. 214 893 1,150 1,157
1,283 1,312 1,294 1,330 1,307
------- ------- ------- -------
------- ------- ------- ------- -------
Total Expenses......................... 3,947 33,361 32,928 34,992
37,213 38,233 39,843 41,859 42,688
NET OPERATING INCOME................... 10,518 27,056 44,645 46,186
48,345 49,247 46,406 46,826 44,469
OTHER EXPENDITURES
Leasing Commissions.................. -- 2,171 1,639 3,631
836 2,426 7,461 1,311 5,849
Tenant Improvements.................. -- 410 4,947 5,708
3,307 62 2,418 5,450 5,697
Capital Improvements................. 819 1,132 1,911 1,423
1,249 1,794 1,600 1,160 1,416
------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL OTHER EXPENDITURES............... 819 3,714 8,498 10,762
5,392 4,282 11,479 7,921 12,962
NET CASH FLOW.......................... 9,699 23,343 36,147 35,424
42,954 44,965 34,927 38,906 31,507
------- ------- ------- -------
------- ------- ------- ------- -------
2005 2006
------- -------
REVENUE
Base Rent............................ $82,892 $82,177
Escalations/Other.................... 13,009 13,499
Tenant Loan Repayment................ -- --
Contingency.......................... (1,407) (1,418)
------- -------
Total Revenue.......................... 94,494 94,258
EXPENSES
Operating Expenses................... 22,546 23,382
Real Estate Taxes.................... 19,632 20,170
Property Management Fee.............. 1,402 1,414
------- -------
Total Expenses......................... 43,580 44,966
NET OPERATING INCOME................... 50,914 49,292
OTHER EXPENDITURES
Leasing Commissions.................. 673 2,674
Tenant Improvements.................. 52 511
Capital Improvements................. 1,078 1,265
------- -------
TOTAL OTHER EXPENDITURES............... 1,803 4,451
NET CASH FLOW.......................... 49,111 44,841
------- -------
6
237 PARK AVENUE
CASH FLOW ASSUMPTIONS
REVENUE:
Base Rent
REVENUE:
Base Rent
Base rent is projected based upon the March 1996 Rent Roll.
At 4/1/96, the building is 98% leased.
Rent-Up Assumptions
The projection assumes the following lease-up of currently available space
(23,899 RSF):
LEASE
COMMENCEMENT RSF
- ------------ ------
1/1/97 5,700
1/1/98 18,199
The assumed market rents for available space and future rollovers for
calendar
FLOORS $/RSF
- -------------- ------
2-11 $36.50
12-21 38.50
Retail Park Lane 47.00
Retail Lexington 75.00
Atrium Space 25.00
Market rents are assumed to increase as follows:
1996 0%
1997 5%
1998 7%
1999 & Beyond 4%
The projection assumes 15 year terms for office leases and 10 year terms for
Upon rollover blended rates for vacancy, free rent and tenant improvements
are projected based upon a 75% renewal probability.
Vacancy Period: 6 months
Free Rent:
NEW LEASES RENEWALS
- ----------- ---------
1996 12 Mos.
6 Mos.
1997 and after 9 Mos.
4.5 Mos.
Escalations
The twelfth floor (56,243 sf) serves as headquarters of the US operations
of North American Reinsurance Co. (279,906 sf) is projected to vacate at lease
expiration (8/31/01). The space is assumed to be released with 6 months
downtime at market rates.
Escalations
Escalations reflect the pass through to tenants of the estimated
operating expenses and real estate taxes in excess of the tenant's base year
costs.
Operating escalations have been calculated on a calendar year basis and
real estate tax escalations on a fiscal (July-June) year basis. Respective
base year amounts for projected tenants are assumed to be costs of the
calendar or fiscal year of move-in. For pass-through purposes, certain
expenses are grossed-up to represent full occupancy.
7
Contingency
Tenant Loan
EXPENSES:
Building Operating Expenses
Property Management Fee
Real Estate Taxes
OTHER EXPENDITURES:
Commissions
Certain tenants pay operating escalations based on the Porter Wage rate,
which was $14.337 without fringe benefits and $23.4199 with fringe benefits in
1995.
Succeeding years are assumed to increase 4% per annum.
Contingency
The projection assumes a contingency of 1% on gross revenues.
Tenant Loan
The projection assumes proceeds of $4,354,758 at maturity (10/31/99) of
Warburg Pincus tenant loan.
EXPENSES:
Building Operating Expenses
Expenses are based upon historical experience and the current contracts
in effect and generally include a 4% inflation factor. Electric and cleaning
expenses have been adjusted to reflect occupancy levels.
Maintenance and repairs includes estimated non-recurring major repairs.
Property Management Fee
Fees are based on 1.5% of gross tenant revenue on new and existing
leases.
Real Estate Taxes
Real estate taxes are based on New York City's tax methodology. Increases
or decreases in assessed values are phased in over a five year period to
arrive at a transitional value. The transitional value (or assessed value if
lower) is multiplied by the tax rate.
OTHER EXPENDITURES:
Commissions
The projection assumes a commission based on a sliding scale over a 15
year lease term, applied to base rent plus rent steps plus CPI escalations as
follows:
Year 1 6.88%
Year 2 5.50%
Years 3-5 4.81%
Years 6-10 3.44%
Years 11-15 2.75%
Tenant Improvements
The rate includes a 'full' commission to the outside broker and '3/8'
The projection assumes that commissions will be paid on the lease
commencement date.
Tenant Improvements
The projection reflects payment of current outstanding liabilities. In
addition, projected tenant improvement allowances have been calculated based
on the following assumptions. These rates are blended for rollover space using
the building's turnover rate. Projected tenant improvements are assumed to be
paid six months after the lease commences.
OFFICE RETAIL
- ---------------- --------------
New Leases 1996 $45.00 New Leases $50.00
New Leases 1997 $40.00 Renewals 1996 $50.00
Renewals 1996 $22.50 Renewals 1997 $45.00
Renewals 1997 $20.00 Renewals 1998 $40.00
Renewals 1999 $35.00
Capital Improvement
Tenant improvements are assumed to remain constant for the remainder of
the Capital Improvement
Capital improvements includes costs for electrical capacity upgrades and
C.F.C. code compliance. Additionally, a capital reserve is included to provide
for uture capital expenditures that may be required.
The capital budget also includes certain landlord's work for tenant
spaces as they become available.
8
<PAGE>
<TABLE>
237 PARK AVENUE
(000'S)
<CAPTION>
OCT-DEC
1996 1997 1998 1999 2000 2001 2002 2003
----- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Base Rent................. $8,344 $34,384 $35,839 $34,980 $35,591 $32,670 $28,050 $41,053
Escalations/Other......... 3,251 14,503 15,123 15,979 16,458 14,777 9,673 10,116
Tenant Loan Repayment..... -- -- -- 4,355 -- -- -- --
Contingency............... (162) (492) (513) (513) (524) (478) (380) (514)
------- ------- ------- ------- ------- ------- ------- -------
Total Revenue............... 11,433 48,396 50,449 54,801 51,525 46,968 37,343 50,655
EXPENSES
Operating Expenses...... 1,167 5,288 5,485 5,692 5,919 6,050 6,344 6,648
Real Estate Taxes....... -- 10,106 10,178 10,619 11,184 11,624 11,685 11,617
Property Management Fee.. 171 726 757 757 773 705 560 760
------- ------- ------- ------- ------- ------- ------- -------
Total Expenses.............. 1,338 16,119 16,419 17,068 17,876 18,379 18,589 19,025
NET OPERATING INCOME......... 10,095 32,277 34,030 37,733 33,650 28,590 18,754 31,630
OTHER EXPENDITURES
Leasing Commissions....... -- 149 278 812 104 9,019 -- 70
Tenant Impovements........ -- 285 -- 796 134 71 11,221 79
Capital Improvements...... 7 285 204 236 3,205 941 570 593
------- ------- ------- ------- ------- ------- ------- -------
TOTAL OTHER EXPENDITURES...... 7 719 482 1,845 3,442 10,031 11,791 742
------- ------- ------- ------- ------- ------- ------- -------
NET CASH FLOW.................$10,088 $31,558 $33,548 $35,889 $30,207 $18,559 $ 6,963 $30,888
------- ------- ------- ------- ------- ------- ------- -------
/TABLE
<PAGE>
2004 2005 2006
------- ------- -------
REVENUE
Base Rent............................... $40,954 $42,132 $39,139
Escalations/Other....................... 10,517 11,046 8,950
Tenant Loan Repayment................... -- -- --
Contingency............................. (515) (523) (472)
------- ------- -------
Total Revenue............................... 50,956 52,655 47,617
EXPENSES
Operating Expenses...................... 6,913 7,193 7,375
Real Estate Taxes....................... 11,686 11,755 11,825
Property Management Fee................. 764 790 714
------- ------- -------
Total Expenses.............................. 19,363 19,738 19,914
NET OPERATING INCOME........................ 31,594 32,917 27,703
OTHER EXPENDITURES
Leasing Commissions..................... 808 -- 16,210
Tenant Impovements...................... 490 221 --
Capital Improvements.................... 840 800 1,568
------- ------- -------
TOTAL OTHER EXPENDITURES.................... 2,138 1,021 17,778
------- ------- -------
NET CASH FLOW............................... $29,456 $31,897 $ 9,925
------- ------- -------
------- ------- -------
9
EXHIBIT 5
PROPERTY TENANT STACKING PLANS
AND SCHEDULE OF LEASE EXPIRATIONS
EXHIBIT 6
CONVENTIONAL FINANCING ALTERNATIVE
CONVENTIONAL FINANCING ALTERNATIVE
Debt
Indebtedness secured by first mortgage liens on the Properties and
related assets. The debt may take the form of: (i) one or more direct loans
held by a single institutional lender or group of lenders, (ii) one or more
classes of securities issued by an affiliate of the REIT or third-party
issuer, or (iii) such other form as may be appropriate.
Amount
In aggregate, not less than $325,000,000.
Maturity
Not less than 5 years from closing.
Interest Rate
A fixed interest rate (or floating interest rate with interest rate
protection) not greater than the rate on U.S. Treasury securities with a
remaining term closest to the maturity of the debt plus 2.50%.
Amortization
Cumulative principal amortization over the term of the debt not
greater than that which would have been paid under an assumed 15 year
self-liquidating amortization schedule.
Financing Fees
Financing fees (payable to the provider of the debt) of not more than
2.0% of the debt amount.
2
EXHIBIT 7
ASSET MANAGEMENT AGREEMENT TERMS
o VCG acts as 'Owner's Representative,' monitoring and managing the
activities of the Property Manager/Leasing Agent on behalf of the
Board.
o $25,000 per month plus out-of-pocket expenses.
o 1 year contract, automatically renewed if not cancelled by the
Board.
2
EXHIBIT 8
PROPERTY MANAGEMENT AGREEMENT TERMS
o Property Manager/ Leasing Agent
o Term
o Annual Management Fee
o Reimbursables/Off-Sites
o Leasing Overrides
o Termination
o Annual Budgets
o Leasing Guidelines
o Affiliate Contracts
o Subscription Obligations
Tishman Speyer Properties, L.P.
2 years.
o
1.50% of Gross Revenues (as defined), payable monthly.
o
Per Annual Budget, subject to Owner approval.
o
37.5% of a Full Commission (as defined), payable 50% upon lease
execution and 50% upon rent commencement.
o
Contract is terminable at any time without penalty in the event
of a sale of the properties or the REIT. Also terminable 'for
cause'.
o
Manager will submit a detailed Annual Operating and Capital
Budget to Owner
for approval. Variances from budget subject to approval by
Owner.
o
Manager will submit detailed annual leasing guidelines to Owner
for approval.
Specific leases will be subject to approval by Owner.
o
Service contracts (if any) with affiliates of Tishman Speyer
(e.g., cleaning, metal and marble maintenance, security)
subject to approval of Owner (sole discretion).
o
Manager to subscribe for Unsubscribed Shares. Management
agreement conditional on performance under Subscription
Agreement.
o
2
SCHEDULE A
EXECUTORY CONTRACTS AND UNEXPIRED
LEASES TO BE ASSUMED
1290 AVENUE OF THE AMERICAS
TENANT STACKING PLAN
FLOOR RSF TENANT
43 16,554 EMI Entertainment World, Inc.
42 25,123 EMI Entertainment World, Inc.
41 25,158 Morrison & Foerster
40 25,158 Morrison & Foerster
39 25,158 EMI Entertainment World, Inc.
38 25,158 EMI Entertainment World, Inc.
37 25,158 EMI Entertainment World, Inc.
36 25,158 Prudential Bache
35 25,374 EMI Entertainment World, Inc.
34 4,397 French Broadcasting
34 4,115 Sweet Orr & Co.
34 15,573 Rockefeller Brothers
34 1,156 Available
33 5,178 Bolt, Beranek & Newman
33 2,625 Honda North America
33 14,885 Robinson, Silverman
33 2,553 Yasuda Kasai
32 25,238 Robinson, Silverman
31 23,825 Robinson, Silverman
30 23,850 Robinson, Silverman
29 24,380 Warner Music
(Bank of New York until 5/31/98)
28 24,281 Warner Music
27 24,281 Warner Music
26 24,281 Warner Music
25 11,606 Warner Music
24 24,281 Warner Music
23 24,281 Warner Music
22 24,281 Equitable Life
21 24,281 Equitable Life
20 23,035 Equitable Life
19 24,380 Equitable Life
18 24,380 Equitable Life
17 23,051 Equitable Life
16 47,903 Equitable Life
15 48,453 Equitable Life
14 47,900 Equitable Life
13 63,505 Equitable Life
(Deutsche Bank until 6/30/96)
12 72,023 Equitable Life
(Deutsche Bank until 6/30/96)
1
FLOOR RSF TENANT
11 79,288 Equitable Life (Phil. Van-Heusen until
12/31/98)
10 78,008 Alex. Brown & Sons
9 23,399 Deutsche Bank
9 26,074 International Paper
9 28,056 Warner Communications
9 25 Available
8 20,361 Deutsche Bank
8 16,914 John Blair & Co.
8 372 John Blair & Co.
8 3,396 Tri-M Construction
8 9,487 Available
7 91,684 John Blair & Co.
6 96,700 Sedgwick James of NY, Inc.
5 48,917 AT&T Global Information
5 44,914 Unisys
5 6,298 Available
4 23,324 AT&T Global Information
4 76,708 Warner Communications
4 127 Mechanical Space
3 100,159 The Bank of New York
2 1,624 Simco (Amchuck)
2 88,610 Straight Arrow Publishers
2 7,032 The Bank of New York
0 25,807 The Bank of New York
0 31,915 Various
0 2,915 Available
Sublevel-1 10,574 Equitable Life
Sublevel-1 11,188 The Bank of New York
Sublevel-1 2,139 Building Space
Sublevel-1 33,153 Various
Sublevel-1 21,681 Available
Sublevel-2 4,500 Building Space
Sublevel-2 16,769 Various
Sublevel-2 9,603 Available
TOTAL 1,963,698
2
237 PARK AVENUE
TENANT STACKING PLAN
FLOOR RSF TENANT
21 25,080 Executive Office Network
20 55,400 Champion International
19 55,400 Champion International
18 28,930 Jennison Associates
18 27,110 Jennison Associates
17 56,010 North American Reinsurance Co.
16 56,042 North American Reinsurance Co.
15 56,042 North American Reinsurance Co.
14 55,905 North American Reinsurance Co.
13 55,907 North American Reinsurance Co.
12 56,243 Warburg, Pincus (O&Y until 10/31/96)
11 19,591 Korn Ferry International
11 36,652 Warburg, Pincus
10 55,302 Warburg, Pincus
9 55,302 J. Walter Thompson
8 55,305 J. Walter Thompson
7 54,889 J. Walter Thompson
6 54,889 J. Walter Thompson
5 60,294 J. Walter Thompson
4 60,191 J. Walter Thompson
3 60,258 J. Walter Thompson
2 55,004 J. Walter Thompson
1 713 California Burrito
1 4,000 Cobtro, Inc.
1 3,000* Cobtro, Inc.
1 1,693 Hatsuhana Park, Inc.
1 900 International News
1 1,400 O&Y Building Office
1 1,840 Ottomanelli's Cafe
1 17,980 Available
0 1,000 Cobtro Inc.
0 650 Eastside Luggage
0 3,450 JAI International, Inc.
0 150* Ottomanelli's Cafe
0 2,050 Vitamin Quota
0 3,372 Zaro Lexington, Inc.
0 5,700 Available
0 219 Available
TOTAL 1,140,713
3
BALLOT NO. 1
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
........................................................................ X
IN RE: :
CHAPTER 11 CASE NO.
237 PARK AVENUE ASSOCIATES, L.L.C.,
: 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
DEBTORS. (JOINTLY ADMINISTERED)
........................................................................
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 1: PRIORITY NON-TAX CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE
BALLOT AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR
BALLOT WILL NOT BE COUNTED
This Ballot is submitted to you to solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'). PLEASE READ THE VOTING
INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS
BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby
made binding upon you if it is accepted by the holders of at least
two-thirds in amount and more than one-half in number of the Claims in each
impaired Class that vote on the Joint Plan, and if it otherwise satisfies
the requirements of section 1129(a) of the Bankruptcy Code. If the
requisite acceptances are not obtained, the Bankruptcy Court may
nonetheless confirm the Joint Plan if it finds that the Joint Plan provides
fair and equitable treatment to, and does not discriminate unfairly
against, the Class or Classes rejecting it, and otherwise satisfies the
requirements of section 1129(b) of the Bankruptcy Code. To have your vote
counted, you must complete, sign and return this Ballot to: GEORGESON
& COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX
IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN
ACCEPTANCE. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE LINES BELOW,
THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder
of Claims (as defined in the Joint Plan) against the Debtors, which Claims
are classified in Class 1 (Priority Non-Tax Claims) under the Joint Plan,
in the aggregate unpaid principal amount of $________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 1 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant
or has the power and authority to vote to accept or reject the Joint Plan
on behalf of the claimant. The undersigned understands that if this Ballot
is validly executed but does not indicate either acceptance or rejection of
the Joint Plan, this Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET
ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number.
If the Debtors are not provided with your correct TIN, you may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments and distributions to be made to you pursuant to that certain
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint
Plan'), may be subject to 'backup withholding' for federal income tax
purposes.
Each holder generally is required to provide the Debtors with its correct
TIN on Substitute Form W-9 below. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Exempt holders must still
provide the Debtors with their TIN on Substitute Form W-9, and should
indicate their exempt status by writing 'EXEMPT' in Part III of the
Substitute Form W-9. In order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms
for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of
any interest, dividends or other reportable payments made to you. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a holder subject to backup withholding will be
reduced by the amount withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE
RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors with your correct TIN by completing the Substitute Form W-9 below,
certifying that the TIN provided on Substitute Form W-9 is correct and that
either (1) you have not been notified by the Internal Revenue Service that
you are subject to backup withholding or (2) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. If
you are an exempt holder, you must also provide the Debtors with your
correct TIN by completing the Substitute Form W-9, and should indicate your
exempt status by writing 'EXEMPT' in Part III of the Substitute Form W-9.
If you are subject to backup withholding, please cross out Item Number 2 in
Part IV of the Substitute Form W-9. If you have not been issued a TIN and
have applied for one, or if you intend to apply for one in the near future,
please check the box in Part II of the Substitute Form W-9, and sign and
date both the Substitute Form W-9 and the 'Certificate of Taxpayer Awaiting
Identification Number'. Please return the Substitute Form W-9 with your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4, 1996. If you fail to do so, the Debtors will withhold 31% from any
payments and distributions made to you thereafter until a TIN and new
Substitute Form W-9 are provided to the Debtors.
2
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9
IN THE SPACE PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE APPLIED FOR
ONE, OR INTEND TO DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE INTERNAL REVENUE SERVICE
BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART PAYER'S REQUEST FOR
TAXPAYER SOCIAL SECURITY NUMBER OR IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER
AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if you have since been notified by the IRS that you are no longer
subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE
(OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE). I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO
THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996, THE
DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL REPORTABLE PAYMENTS THEREAFTER
MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
3
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. THIS BALLOT IS SUBMITTED TO YOU TO SOLICIT YOUR VOTE TO ACCEPT OR
REJECT THE DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION OF 237 PARK
AVENUE ASSOCIATES, L.L.C. AND 1290 ASSOCIATES, L.L.C., DATED AUGUST 9,
1996 (THE 'JOINT PLAN'), DESCRIBED IN THE ACCOMPANYING DISCLOSURE
STATEMENT, DATED AUGUST 9, 1996 (THE 'DISCLOSURE STATEMENT').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. YOU MUST VOTE ALL OF YOUR CLAIMS WITHIN A SINGLE CLASS UNDER THE
JOINT PLAN TO EITHER ACCEPT OR REJECT THE JOINT PLAN. ACCORDINGLY, A BALLOT
THAT PARTIALLY REJECTS AND PARTIALLY ACCEPTS THE JOINT PLAN WILL NOT BE
COUNTED.
4. THE BALLOT DOES NOT CONSTITUTE AND SHALL NOT BE DEEMED A PROOF OF
CLAIM OR EQUITY INTEREST OR AN ASSERTION OF A CLAIM OR EQUITY INTEREST.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE
ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT, THE JOINT PLAN, THIS
BALLOT OR THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212)
440-9800.
4
BALLOT NO. 2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
........................................................................
IN RE: :
CHAPTER 11 CASE NO.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
DEBTORS. (JOINTLY ADMINISTERED)
:
.........................................................................
BALLOT FOR (A) ACCEPTING OR REJECTING THE DEBTORS'
SECOND AMENDED JOINT PLAN OF REORGANIZATION PURSUANT
TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE,
(B) ELECTION OF DISTRIBUTIONS THEREUNDER AND
(C) SUBSCRIBING FOR ADDITIONAL SHARES OF REIT STOCK
CLASS 2: SENIOR CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE
BALLOT AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR
BALLOT WILL NOT BE COUNTED
This Ballot is submitted to you to (a) solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'), (b) elect the form of
distribution thereunder and (c) subscribe for additional shares of REIT
Stock. Unless otherwise defined herein, capitalized terms used herein shall
have the meaning ascribed to them in the Joint Plan. PLEASE READ THE VOTING
INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS
BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby
made binding upon you if it is accepted by the holders of at least
two-thirds in amount and more than one-half in number of the Claims in each
impaired Class that vote on the Joint Plan, and if it otherwise satisfies
the requirements of section 1129(a) of the Bankruptcy Code. If the
requisite acceptances are not obtained, the Bankruptcy Court may
nonetheless confirm the Joint Plan if it finds that the Joint Plan provides
fair and equitable treatment to, and does not discriminate unfairly
against, the Class or Classes rejecting it, and otherwise satisfies the
requirements of section 1129(b) of the Bankruptcy Code. To have your vote
counted, you must complete, sign and return this Ballot to: GEORGESON &
COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK, 10005.
PLEASE COMPLETE ITEMS 1, 2, 3, 4, 5, 6 AND 7. IF NEITHER THE 'ACCEPT' NOR
'REJECT' BOX IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED
AS AN ACCEPTANCE. ANY HOLDER THAT DOES NOT SUBMIT A BALLOT OR MARK ITS
ELECTION PREFERENCE ON THE BALLOT ON A TIMELY BASIS WILL BE DEEMED TO HAVE
EXERCISED A 'STANDARD ELECTION ' AND SHALL RECEIVE A 'STANDARD NOTE
DISTRIBUTION' AND A 'STANDARD STOCK DISTRIBUTION.' ANY EXECUTED BALLOTS
WHICH ARE TIMELY RECEIVED BUT WHICH DO NOT INDICATE AN ELECTION TO PURCHASE
A PORTION OF ADDITIONAL REIT STOCK PURSUANT TO SECTION 12.5 OF THE JOINT
PLAN SHALL BE DEEMED TO CONSTITUTE AN ELECTION TO NOT PURCHASE A PORTION OF
ADDITIONAL REIT STOCK. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE
LINES BELOW, THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder
of Claims (as defined in the Joint Plan) against the Debtors, which Claims
are classified in Class 2 (Senior Claims) under the Joint Plan, in the
aggregate unpaid principal amount of $___________ (the 'Election Amount').
SUCH ELECTION AMOUNT MAY BE DETERMINED BY (A) MULTIPLYING (i) THE FACE
AMOUNT OF THE EXISTING NOTES WHICH YOU HOLD, TIMES (ii) $902,603,492.00 AND
(B) DIVIDING SUCH AMOUNT BY $970,000,000.00.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 2 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ELECTION. The undersigned hereby chooses
/ / A STANDARD ELECTION.
/ / A NON-STANDARD ELECTION. IF YOU CHOOSE A
NON-STANDARD ELECTION, YOU MUST COMPLETE ITEM 4,
BELOW.
ITEM 4. AMOUNT OF NEW NOTE ALLOCATION. The undersigned chooses to
allocate $______ of its Election Amount (as calculated in Item 1 above) to
New Notes. The balance of the undersigned's Election Amount, if any, will
be deemed to be allocated to REIT Stock.
ITEM 5. REIT STOCK SUBSCRIPTION. The undersigned chooses
/ / to ELECT to purchase a portion of additional REIT Stock.
/ / Not to ELECT to purchase a portion of additional REIT
If you choose to purchase a portion of additional REIT
Stock.
Stock, Offered Shares, YOU MUST RETURN A DULY EXECUTED
SUBSCRIPTION AGREEMENT WITH YOUR BALLOT.
ITEM 6. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant
or has the power and authority to vote to accept or reject the Joint Plan
on behalf of the claimant. The undersigned understands that if this Ballot
is validly executed but does not indicate either acceptance or rejection of
the Joint Plan, this Ballot will be counted as an acceptance.
ITEM 7. ACCREDITED INVESTOR. In order to receive New Notes and shares
of REIT Stock, each holder must be an 'accredited investor.' By checking
the following box, the undersigned has read the instructions contained in
paragraph 6 with respect to the parties recognized by the Securities and
Exchange Commission as 'accredited investors' and acknowledges that the
undersigned is an accredited investor.
/ / The undersigned is an 'ACCREDITED INVESTOR,' as defined in
Regulation D of the Securities Act of 1933, as amended.
PRINT OR TYPE NAME OF CLAIMANT: _____________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL): _________________________________________
SIGNATURE: __________________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE: _____________
NAME OF INSTITUTION: ________________________________
STREET ADDRESS: _____________________________________
CITY, STATE, ZIP CODE: ______________________________
TELEPHONE NUMBER: ___________________________________
DATE COMPLETED: _____________________________________
2
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number.
If the Debtors are not provided with your correct TIN, you may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments and distributions to be made to you pursuant to that certain
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint
Plan'), may be subject to 'backup withholding' for federal income tax
purposes.
Each holder generally is required to provide the Debtors with its correct
TIN on Substitute Form W-9 below. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Exempt holders must still
provide the Debtors with their TIN on Substitute Form W-9, and should
indicate their exempt status by writing 'EXEMPT' in Part III of the
Substitute Form W-9. In order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms
for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of
any interest, dividends or other reportable payments made to you. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a holder subject to backup withholding will be
reduced by the amount withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE
RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors with your correct TIN by completing the Substitute Form W-9 below,
certifying that the TIN provided on Substitute Form W-9 is correct and that
either (1) you have not been notified by the Internal Revenue Service that
you are subject to backup withholding or (2) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. If
you are an exempt holder, you must also provide the Debtors with your
correct TIN by completing the Substitute Form W-9, and should indicate your
exempt status by writing 'EXEMPT' in Part III of the Substitute Form W-9.
If you are subject to backup withholding, please cross out Item Number 2 in
Part IV of the Substitute Form W-9. If you have not been issued a TIN and
have applied for one, or if you intend to apply for one in the near future,
please check the box in Part II of the Substitute Form W-9, and sign and
date both the Substitute Form W-9 and the 'Certificate of Taxpayer Awaiting
Identification Number'. Please return the Substitute Form W-9 with your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4, 1996. If you fail to do so, the Debtors will withhold 31% from any
payments and distributions made to you thereafter until a TIN and new
Substitute Form W-9 are provided to the Debtors.
3
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN FORM W-9 IN THE SPACE
PROVIDED AND CERTIFY BY ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW. APPLY FOR ONE IN THE
NEAR FUTURE, PLEASE CHECK THE INTERNAL REVENUE SERVICE BOX PROVIDED AND
CERTIFY BY SIGNING AND DATING PART PAYER'S REQUEST FOR TAXPAYER SOCIAL
SECURITY NUMBER OR IV AND THE 'CERTIFICATE OF TAXPAYER IDENTIFICATION
NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER AWAITING IDENTIFICATION
NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and (2) I am not subject to backup withholding
either because I have not been notified by the Internal Revenue Service
('IRS') that I am subject to backup withholding as a result of failure to
report all interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
Certification Instructions--You must cross out item (2) above
if you have been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends on your tax
return. However, if you have since been notified by the IRS that you are no
longer subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION
IN THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A
TAXPAYER IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK
CITY TIME, ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD
31% OF ALL REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE
A NUMBER.
SIGNATURE DATE
4
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit (i) your vote to accept or
reject the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'), (ii) whether you elect a
Standard or Non-Standard Election, and if you elect a Non-Standard
Election, the amount of New Notes you elect to allocate and (iii) whether
you elect to subscribe to purchase a portion of additional REIT Stock,
Offered Shares.
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. IN ADDITION, PLEASE INDICATE WHETHER YOU ELECT TO RECEIVE A
STANDARD ELECTION OR A NON-STANDARD ELECTION AND IF YOU ELECT A
NON-STANDARD ELECTION, THE AMOUNT OF NEW NOTES YOU ELECT TO ALLOCATE (SEE
INSTRUCTION 4 BELOW). FURTHER, PLEASE INDICATE WHETHER OR NOT YOU ELECT TO
SUBSCRIBE TO PURCHASE A PORTION OF ADDITIONAL REIT STOCK (SEE INSTRUCTION 5
BELOW).
COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION REQUESTED AND
SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT COURIER TO THE
BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. Under the Joint Plan, each holder of a Senior Claim entitled to vote may
elect a Standard Election or a Non-Standard Election. If a Non-Standard
Election is elected, such holder of a Senior Claim should indicate the
amount of its Election Amount it wishes to allocate to New Notes. The
balance of such holder's Election Amount, if any, will be deemed to be
allocated to REIT Stock. EACH HOLDER THAT DOES NOT SUBMIT A BALLOT OR MARK
ITS ELECTION PREFERENCE ON THE BALLOT ON A TIMELY BASIS IN COMPLETE
ACCORDANCE WITH THESE INSTRUCTIONS WILL BE CONCLUSIVELY DEEMED TO HAVE
EXERCISED A STANDARD ELECTION AND SHALL RECEIVE A STANDARD NOTE
DISTRIBUTION AND A STANDARD STOCK DISTRIBUTION.
5. In addition, each holder of a Senior Claim entitled to vote may elect to
subscribe to purchase a portion of additional REIT Stock equal to the
product of such holder's pro rata share of the Senior Claim Election Amount
(i.e., the amount set forth in Item 1 of the Ballot divided by
$902,603,492) multiplied by 923,076, as modified to the extent and the
amount of a Conventional Financing Alternative. The price per share of
additional REIT Stock will be calculated on the Confirmation Date and each
holder of a Senior Claim subscribing to additional shares of REIT Stock
will receive a notice on or after the Confirmation Date setting forth such
price per share. ANY EXECUTED BALLOTS WHICH ARE TIMELY RECEIVED BUT WHICH
DO NOT INDICATE AN ELECTION TO PURCHASE ADDITIONAL REIT STOCK PURSUANT TO
SECTION 12.5 OF THE JOINT PLAN SHALL BE DEEMED TO CONSTITUTE AN ELECTION TO
NOT PURCHASE ADDITIONAL REIT STOCK.
6. The Securities and Exchange Commission recognizes the following parties
as accredited investors, capable of understanding and attending the
financial risks associated with acquisition of unregistered securities: (i)
financial institutions such as banks, savings and loan associations,
insurance companies, registered investment companies, broker/dealer
organizations, employee benefit/retirement plans, business development
companies, or small business investment companies; (ii) directors, officers
or general partners of the issuer, (iii) individuals who alone, or with a
spouse, have net worths of over $1 million; (iv) individuals who alone had
income in excess of $200,000 in the past two years (or with a spouse, in
excess of $300,000) and had a reasonable expectation of doing as well in
the current year, (v) trusts or business partnerships, with assets in
excess of $5 million, that weren't formed for the purpose of acquiring the
unregistered securities; and (vi) entities wholly owned by accredited
investors. Please indicate if you are such an accredited investor by
checking the appropriate box on the Ballot.
7. The Ballot does not constitute and shall not be deemed a proof of Claim
or Equity Interest or an assertion of a Claim or Equity Interest.
5
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR
IF YOU HAVE ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT,
THE JOINT PLAN, THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL
THE BALLOT AGENT AT (212) 440-9800.
6
BALLOT NO. 3
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
...........................................................................
IN RE: :
CHAPTER 11 CASE NO.
:
237 PARK AVENUE ASSOCIATES, L.L.C. 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
: (JOINTLY ADMINISTERED)
DEBTORS.
:
..........................................................................
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN
OF REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY
CODE CLASS 3: OTHER SECURED CLAIMS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE
BALLOT AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR
BALLOT WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'). PLEASE READ THE VOTING
INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS
BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby
made binding upon you if it is accepted by the holders of at least
two-thirds in amount and more than one-half in number of the Claims in each
impaired Class that vote on the Joint Plan, and if it otherwise satisfies
the requirements of section 1129(a) of the Bankruptcy Code. If the
requisite acceptances are not obtained, the Bankruptcy Court may
nonetheless confirm the Joint Plan if it finds that the Joint Plan provides
fair and equitable treatment to, and does not discriminate unfairly
against, the Class or Classes rejecting it, and otherwise satisfies the
requirements of section 1129(b) of the Bankruptcy Code. To have your vote
counted, you must complete, sign and return this Ballot to: GEORGESON
& COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX
IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN
ACCEPTANCE. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE LINES BELOW,
THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a
holder of Claims (as defined in the Joint Plan) against the Debtors, which
Claims are classified in Class 3 (Other Secured Claims) under the Joint
Plan, in the aggregate unpaid principal amount of
$____________________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 3 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant
or has the power and authority to vote to accept or reject the Joint Plan
on behalf of the claimant. The undersigned understands that if this Ballot
is validly executed but does not indicate either acceptance or rejection of
the Joint Plan, this Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number.
If the Debtors are not provided with your correct TIN, you may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments and distributions to be made to you pursuant to that certain
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint
Plan'), may be subject to 'backup withholding' for federal income tax
purposes.
Each holder generally is required to provide the Debtors with its
correct TIN on Substitute Form W-9 below. Certain holders (including, among
others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. Exempt holders must
still provide the Debtors with their TIN on Substitute Form W-9, and should
indicate their exempt status by writing 'EXEMPT' in Part III of the
Substitute Form W-9. In order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms
for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold
31% of any interest, dividends or other reportable payments made to you.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a holder subject to backup withholding will
be reduced by the amount withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE
RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors with your correct TIN by completing the Substitute Form W-9 below,
certifying that the TIN provided on Substitute Form W-9 is correct and that
either (1) you have not been notified by the Internal Revenue Service that
you are subject to backup withholding or (2) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. If
you are an exempt holder, you must also provide the Debtors with your
correct TIN by completing the Substitute Form W-9, and should indicate your
exempt status by writing 'EXEMPT' in Part III of the Substitute Form W-9.
If you are subject to backup withholding, please cross out Item Number 2 in
Part IV of the Substitute Form W-9. If you have not been issued a TIN and
have applied for one, or if you intend to apply for one in the near future,
please check the box in Part II of the Substitute Form W-9, and sign and
date both the Substitute Form W-9 and the 'Certificate of Taxpayer Awaiting
Identification Number'. Please return the Substitute Form W-9 with your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4, 1996. If you fail to do so, the Debtors will withhold 31% from any
payments and distributions made to you thereafter until a TIN and new
Substitute Form W-9 are provided to the Debtors.
2
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9
IN THE SPACE PROVIDED AND CERTIFY BY
ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY
SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE
BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART
PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR
IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN) EMPLOYER IDENTIFICATION NUMBER
AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if you have since been notified by the IRS that you are no longer
subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION
IN THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY
TIME, ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31%
OF ALL REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A
NUMBER.
SIGNATURE DATE
3
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or
reject the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim
or Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE
ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT,THE JOINT PLAN, THIS
BALLOT OR THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212)
440-9800.
4
BALLOT NO. 4
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
.........................................................................
IN RE: :
CHAPTER 11 CASE NO.
:
237 PARK AVENUE ASSOCIATES, L.L.C. 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
: (JOINTLY ADMINISTERED)
DEBTORS.
:
....................................................................
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN
OF REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY
CODE CLASS 5: GENERAL UNSECURED CLAIMS THE DATE AND TIME BY WHICH YOUR
BALLOT MUST BE ACTUALLY RECEIVED BY THE BALLOT AGENT IS 5:00 P.M., NEW YORK
CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'). PLEASE READ THE VOTING
INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS
BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby
made binding upon you if it is accepted by the holders of at least
two-thirds in amount and more than one-half in number of the Claims in each
impaired Class that vote on the Joint Plan, and if it otherwise satisfies
the requirements of section 1129(a) of the Bankruptcy Code. If the
requisite acceptances are not obtained, the Bankruptcy Court may
nonetheless confirm the Joint Plan if it finds that the Joint Plan provides
fair and equitable treatment to, and does not discriminate unfairly
against, the Class or Classes rejecting it, and otherwise satisfies the
requirements of section 1129(b) of the Bankruptcy Code. To have your vote
counted, you must complete, sign and return this Ballot to: GEORGESON
& COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX
IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN
ACCEPTANCE. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE LINES BELOW,
THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a
holder of Claims (as defined in the Joint Plan) against the Debtors, which
Claims are classified in Class 5 (General Unsecured Claims) under the Joint
Plan, in the aggregate unpaid principal amount of
$____________________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 5 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant
or has the power and authority to vote to accept or reject the Joint Plan
on behalf of the claimant. The undersigned understands that if this Ballot
is validly executed but does not indicate either acceptance or rejection of
the Joint Plan, this Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number.
If the Debtors are not provided with your correct TIN, you may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments and distributions to be made to you pursuant to that certain
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint
Plan'), may be subject to 'backup withholding' for federal income tax
purposes. Each holder generally is required to provide the Debtors
with its correct TIN on Substitute Form W-9 below. Certain holders
(including, among others, all corporations and certain foreign individuals)
are not subject to these backup withholding and reporting requirements.
Exempt holders must still provide the Debtors with their TIN on Substitute
Form W-9, and should indicate their exempt status by writing 'EXEMPT' in
Part III of the Substitute Form W-9. In order for a foreign individual to
qualify as an exempt recipient, that holder must submit a statement, signed
under penalties of perjury, attesting to that individual's exempt status.
Forms for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold
31% of any interest, dividends or other reportable payments made to you.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a holder subject to backup withholding will
be reduced by the amount withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE
RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors with your correct TIN by completing the Substitute Form W-9 below,
certifying that the TIN provided on Substitute Form W-9 is correct and that
either (1) you have not been notified by the Internal Revenue Service that
you are subject to backup withholding or (2) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. If
you are an exempt holder, you must also provide the Debtors with your
correct TIN by completing the Substitute Form W-9, and should indicate your
exempt status by writing 'EXEMPT' in Part III of the Substitute Form W-9.
If you are subject to backup withholding, please cross out Item Number 2 in
Part IV of the Substitute Form W-9. If you have not been issued a TIN and
have applied for one, or if you intend to apply for one in the near future,
please check the box in Part II of the Substitute Form W-9, and sign and
date both the Substitute Form W-9 and the 'Certificate of Taxpayer Awaiting
Identification Number'. Please return the Substitute Form W-9 with your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4, 1996. If you fail to do so, the Debtors will withhold 31% from any
payments and distributions made to you thereafter until a TIN and new
Substitute Form W-9 are provided to the Debtors.
2
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN FORM W-9
IN THE SPACE PROVIDED AND CERTIFY BY
ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY
SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE
BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART
PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR
IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN)
EMPLOYER IDENTIFICATION NUMBER
AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if you have since been notified by the IRS that you are no longer
subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
II OF SUBSTITUTE FORM W-9 ABOVE CERTIFICATE OF TAXPAYER AWAITING
IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE
(OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE). I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE
DEBTORS BY 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996, THE DEBTORS
ARE REQUIRED TO WITHHOLD 31% OF ALL REPORTABLE PAYMENTS THEREAFTER MADE TO
ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
3
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or
reject the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim
or Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE
ANY CONCERNING THE DISCLOSURE STATEMENT, THE JOINT PLAN, THIS BALLOT OR
THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
4
BALLOT NO. 5
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
.....................................................................
IN RE: :
CHAPTER 11 CASE NO.
237 PARK AVENUE ASSOCIATES, L.L.C.,
: 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
DEBTORS.
(JOINTLY ADMINISTERED)
......................................................................
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
CLASS 6: AFFILIATE UNSECURED CLAIMS THE DATE AND TIME BY WHICH YOUR BALLOT
MUST BE ACTUALLY RECEIVED BY THE BALLOTING AGENT IS 5:00 P.M., NEW YORK
CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR BALLOT WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'). PLEASE READ THE VOTING
INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS
BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby
made binding upon you if it is accepted by the holders of at least
two-thirds in amount and more than one-half in number of the Claims in each
impaired Class that vote on the Joint Plan, and if it otherwise satisfies
the requirements of section 1129(a) of the Bankruptcy Code. If the
requisite acceptances are not obtained, the Bankruptcy Court may
nonetheless confirm the Joint Plan if it finds that the Joint Plan provides
fair and equitable treatment to, and does not discriminate unfairly
against, the Class or Classes rejecting it, and otherwise satisfies the
requirements of section 1129(b) of the Bankruptcy Code. To have your vote
counted, you must complete, sign and return this Ballot to: GEORGESON &
COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX
IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN
ACCEPTANCE. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE LINES BELOW,
THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a
holder of Claims (as defined in the Joint Plan) against the Debtors, which
Claims are classified in Class 6 (Affiliate Unsecured Claims) under the
Joint Plan, in the aggregate unpaid principal amount of
$________________________.
ITEM 2. VOTE. The undersigned votes all of its Claims in Class 7 as
described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant
or has the power and authority to vote to accept or reject the Joint Plan
on behalf of the claimant. The undersigned understands that if this Ballot
is validly executed but does not indicate either acceptance or rejection of
the Joint Plan, this Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Avenue Associates,
L.L.C. (collectively, the 'Debtors') your correct taxpayer identification
number ('TIN'). If you are an individual, your TIN is your social security
number. If the Debtors are not provided with your correct TIN, you may be
subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments and distributions to be made to you pursuant to that
certain Second Amended Joint Plan of Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the
'Joint Plan'), may be subject to 'backup withholding' for federal income
tax purposes.
Each holder generally is required to provide the Debtors with its
correct TIN on Substitute Form W-9 below. Certain holders (including, among
others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. Exempt holders must
still provide the Debtors with their TIN on Substitute Form W-9, and should
indicate their exempt status by writing 'EXEMPT' in Part III of the
Substitute Form W-9. In order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms
for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold
31% of any interest, dividends or other reportable payments made to you.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a holder subject to backup withholding will
be reduced by the amount withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE
DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING THE SALE OF A
SUFFICIENT
PORTION OF THE NON-CASH DISTRIBUTION, OR THE RECEIPT FROM YOU OF CASH,
SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS WITHHOLDING OBLIGATION IN
RESPECT
OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors
with your correct TIN by completing the Substitute Form W-9 below,
certifying
that the TIN provided on Substitute Form W-9 is correct and that either (1)
you
have not been notified by the Internal Revenue Service that you are subject
to
backup withholding or (2) the Internal Revenue Service has notified you
that you
are no longer subject to backup withholding. If you are an exempt holder,
you
must also provide the Debtors with your correct TIN by completing the
Substitute
Form W-9, and should indicate your exempt status by writing 'EXEMPT' in
Part III
of the Substitute Form W-9. If you are subject to backup withholding,
please
cross out Item Number 2 in Part IV of the Substitute Form W-9. If you have
not
been issued a TIN and have applied for one, or if you intend to apply for
one in
the near future, please check the box in Part II of the Substitute Form
W-9, and
sign and date both the Substitute Form W-9 and the 'Certificate of Taxpayer
Awaiting Identification Number'. Please return the Substitute Form W-9 with
your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4,
1996. If you fail to do so, the Debtors will withhold 31% from any payments
and
distributions made to you thereafter until a TIN and new Substitute Form
W-9 are
provided to the Debtors.
2
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9
IN THE SPACE PROVIDED AND CERTIFY BY
ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY
SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE BOX PROVIDED AND CERTIFY BY SIGNING AND DATING
PART
PAYER'S REQUEST FOR TAXPAYER
SOCIAL SECURITY NUMBER OR
IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN)
EMPLOYER IDENTIFICATION NUMBER
AWAITING IDENTIFICATION NUMBER'.
/
/ AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if you have since been notified by the IRS that you are no longer
subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE
(OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE). I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE
DEBTORS BY 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996, THE DEBTORS
ARE REQUIRED TO WITHHOLD 31% OF ALL REPORTABLE PAYMENTS THEREAFTER MADE TO
ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
3
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or
reject the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim
or Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE
ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT,THE JOINT PLAN, THIS
BALLOT OR THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212)
440-9800.
4
BALLOT NO. 6
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
.........................................................................
IN RE: :
CHAPTER 11 CASE NO.
237 PARK AVENUE ASSOCIATES, L.L.C.,
: 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
DEBTORS.
(JOINTLY ADMINISTERED)
...................................................................
BALLOT FOR ACCEPTING OR REJECTING THE DEBTORS' SECOND AMENDED JOINT PLAN
OF REORGANIZATION PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY
CODE CLASS 7: EQUITY INTERESTS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE
BALLOT AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR
BALLOT WILL NOT BE COUNTED.
This Ballot is submitted to you to solicit your vote to accept or
reject that certain Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement'). PLEASE READ THE VOTING
INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING THIS
BALLOT.
The Joint Plan can be confirmed by the Bankruptcy Court and thereby
made binding upon you if it is accepted by the holders of at least
two-thirds in amount and more than one-half in number of the Claims in each
impaired Class that vote on the Joint Plan, and if it otherwise satisfies
the requirements of section 1129(a) of the Bankruptcy Code. If the
requisite acceptances are not obtained, the Bankruptcy Court may
nonetheless confirm the Joint Plan if it finds that the Joint Plan provides
fair and equitable treatment to, and does not discriminate unfairly
against, the Class or Classes rejecting it, and otherwise satisfies the
requirements of section 1129(b) of the Bankruptcy Code. To have your vote
counted, you must complete, sign and return this Ballot to: GEORGESON
& COMPANY INC., WALL STREET PLAZA, NEW YORK, NEW YORK 10005.
PLEASE COMPLETE ITEMS 1, 2 AND 3. IF NEITHER THE 'ACCEPT' NOR 'REJECT' BOX
IS CHECKED IN ITEM 2, THIS BALLOT, IF SIGNED, WILL BE COUNTED AS AN
ACCEPTANCE. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE LINES BELOW,
THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. VOTING CLASSIFICATION AND AMOUNT. The undersigned is a holder
of Equity Interests (as defined in the Joint Plan) against the Debtors,
which Equity Interests are classified in Class 7 (Equity Interests) under
the Joint Plan, in the aggregate unpaid principal amount of
$________________________.
ITEM 2. VOTE. The undersigned votes all of its Equity Interests in
Class 7 as described in Item 1 above (check one box):
/ / to ACCEPT the Joint Plan.
/ / to REJECT the Joint Plan.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is the claimant
or has the power and authority to vote to accept or reject the Joint Plan
on behalf of the claimant. The undersigned understands that if this Ballot
is validly executed but does not indicate either acceptance or rejection of
the Joint Plan, this Ballot will be counted as an acceptance.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number.
If the Debtors are not provided with your correct TIN, you may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments and distributions to be made to you pursuant to that certain
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint
Plan'), may be subject to 'backup withholding' for federal income tax
purposes.
Each holder generally is required to provide the Debtors with its correct
TIN on Substitute Form W-9 below. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Exempt holders must still
provide the Debtors with their TIN on Substitute Form W-9, and should
indicate their exempt status by writing 'EXEMPT' in Part III of the
Substitute Form W-9. In order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms
for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of
any interest, dividends or other reportable payments made to you. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a holder subject to backup withholding will be
reduced by the amount withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE
RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors with your correct TIN by completing the Substitute Form W-9 below,
certifying that the TIN provided on Substitute Form W-9 is correct and that
either (1) you have not been notified by the Internal Revenue Service that
you are subject to backup withholding or (2) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. If
you are an exempt holder, you must also provide the Debtors with your
correct TIN by completing the Substitute Form W-9, and should indicate your
exempt status by writing 'EXEMPT' in Part III of the Substitute Form W-9.
If you are subject to backup withholding, please cross out Item Number 2 in
Part IV of the Substitute Form W-9. If you have not been issued a TIN and
have applied for one, or if you intend to apply for one in the near future,
please check the box in Part II of the Substitute Form W-9, and sign and
date both the Substitute Form W-9 and the 'Certificate of Taxpayer Awaiting
Identification Number'. Please return the Substitute Form W-9 with your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4, 1996. If you fail to do so, the Debtors will withhold 31% from any
payments and distributions made to you thereafter until a TIN and new
Substitute Form W-9 are provided to the Debtors.
2
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9
IN THE SPACE PROVIDED AND CERTIFY BY
ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY
SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE
BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART
PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR
IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN)
EMPLOYER IDENTIFICATION NUMBER
AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
lease indicate your exempt status by writing 'EXEMPT' in the space provided
to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if you have since been notified by the IRS that you are no longer
subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE
(OR I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE). I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE
DEBTORS BY 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996, THE DEBTORS
ARE REQUIRED TO WITHHOLD 31% OF ALL REPORTABLE PAYMENTS THEREAFTER MADE TO
ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
3
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit whether you elect to
subscribe to purchase a portion of additional REIT Stock, Offered Shares,
under the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE WHETHER OR NOT YOU ELECT TO SUBSCRIBE TO PURCHASE A
PORTION OF ADDITIONAL REIT STOCK (SEE INSTRUCTION 3 BELOW). COMPLETE THE
BALLOT BY PROVIDING ALL OF THE INFORMATION REQUESTED AND SIGN, DATE AND
RETURN THIS BALLOT BY MAIL OR OVERNIGHT COURIER TO THE BALLOT AGENT (THE
'BALLOT AGENT'), AT THE FOLLOWING ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. Under the Joint Plan, each Morgan Loan Lender may elect to subscribe
to purchase a portion of additional REIT Stock equal to the product of such
holder's pro rata share of the Morgan Loan Election Amount (i.e., the
amount set forth in Item 1 of the Ballot divided by $902,603,492)
multiplied by 923,076, as modified to the extent and the amount of a
Conventional Financing Alternative. The price per share of additional REIT
Stock will be calculated on the Confirmation Date and each Morgan Loan
Lender subscribing to additional shares of REIT Stock will receive a notice
on or after the Confirmation Date setting forth such price per share. ANY
EXECUTED BALLOTS WHICH ARE TIMELY RECEIVED BUT WHICH DO NOT INDICATE AN
ELECTION TO PURCHASE ADDITIONAL REIT STOCK PURSUANT TO SECTION 12.5 OF THE
JOINT PLAN SHALL BE DEEMED TO CONSTITUTE AN ELECTION TO NOT PURCHASE
ADDITIONAL REIT STOCK.
4. The Securities and Exchange Commission recognizes the following
parties as accredited investors, capable of understanding and attending the
financial risks associated with acquisition of unregistered securities:
(i) financial institutions such as banks, savings and loan
associations, insurance companies, registered investment companies,
broker/dealer organizations, employee benefit/retirement plans, business
development companies, or small business investment companies; (ii)
directors, officers or general partners of the issuer, (iii) individuals
who alone, or with a spouse, have net worths of over $1 million; (iv)
individuals who alone had income in excess of $200,000 in the past two
years (or with a spouse, in excess of $300,000) and had a reasonable
expectation of doing as well in the current year, (v) trusts or business
partnerships, with assets in excess of $5 million, that weren't formed for
the purpose of acquiring the unregistered securities; and (vi) entities
wholly owned by accredited investors. Please indicate if you are such an
accredited investor by checking the appropriate box on the Ballot.
5. The Ballot does not constitute and shall not be deemed a proof of
Claim or Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR
IF YOU HAVE ANY QUESTIONS CONCERNING THE DISCLOSURE STATEMENT,
THE JOINT PLAN, THIS BALLOT OR THE VOTING PROCEDURES, PLEASE CALL
THE BALLOT AGENT AT (212) 440-9800.
4
BALLOT NO. 7
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
......................................................................
IN RE: :
CHAPTER 11 CASE NO.
237 PARK AVENUE ASSOCIATES, L.L.C.,
: 96 B 42177 (JLG) AND
AND 1290 ASSOCIATES, L.L.C., 96 B 42178 (JLG)
:
DEBTORS.
(JOINTLY ADMINISTERED)
...............................................................
BALLOT FOR SUBSCRIBING FOR ADDITIONAL SHARES OF REIT STOCK
UNDER THE DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
MORGAN LOAN LENDERS
THE DATE AND TIME BY WHICH YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE
BALLOT AGENT IS 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 4, 1996 OR YOUR
BALLOT WILL NOT BE COUNTED
This Ballot is submitted to you for subscription of additional shares
of REIT Stock pursuant to that certain Second Amended Joint Plan of
Reorganization of 237 Park Avenue Associates, L.L.C. and 1290 Associates,
L.L.C., dated August 9, 1996 (the 'Joint Plan'), described in the
accompanying disclosure statement, dated August 9, 1996 (the 'Disclosure
Statement'). Unless otherwise defined herein, capitalized terms used herein
shall have the meaning ascribed to them in the Joint Plan. PLEASE READ THE
VOTING INFORMATION AND INSTRUCTIONS ON THE REVERSE SIDE BEFORE COMPLETING
THIS BALLOT.
PLEASE COMPLETE ITEMS 1, 2, 3, AND 4. ANY HOLDER THAT DOES NOT SUBMIT A
BALLOT OR WHICH DOES NOT INDICATE AN ELECTION TO PURCHASE A PORTION OF
ADDITIONAL REIT STOCK PURSUANT TO SECTION 12.5 OF THE JOINT PLAN SHALL BE
DEEMED TO CONSTITUTE AN ELECTION TO NOT PURCHASE A PORTION OF ADDITIONAL
REIT STOCK. IF THIS BALLOT IS NOT SIGNED ON THE APPROPRIATE LINES BELOW,
THIS BALLOT WILL NOT BE VALID OR COUNTED AS HAVING BEEN CAST.
ITEM 1. ELECTION CLASSIFICATION AND AMOUNT. The undersigned is a
holder of an election amount in the aggregate unpaid principal amount of
$________________________ (the 'Election Amount').
ITEM 2. REIT STOCK SUBSCRIPTION. The undersigned chooses
/ / to ELECT to purchase a portion of additional REIT Stock. If you
/ / Not to ELECT to purchase a
choose to purchase a portion of additional REIT Stock, Offered
portion of additional REIT Shares, YOU MUST RETURN A DULY EXECUTED
SUBSCRIPTION AGREEMENT WITH Stock.
YOUR BALLOT.
ITEM 3. ACKNOWLEDGMENTS. By signing this Ballot, the undersigned
acknowledges receipt of the Disclosure Statement and other applicable
solicitation materials and certifies that the undersigned is a Morgan Loan
Lender.
ITEM 4. ACCREDITED INVESTOR. In order to receive New Notes and shares
of REIT Stock, each holder must be an 'accredited investor.' By checking
the following box, the undersigned has read the instructions contained in
paragraph 6 with respect to the parties recognized by the Securities and
Exchange Commission as 'accredited investors' and acknowledges that the
undersigned is an accredited investor.
/ / The undersigned is an 'ACCREDITED INVESTOR,' as defined in Regulation D
of the Securities Act of 1933, as amended.
PRINT OR TYPE NAME OF CLAIMANT:_________________
SOCIAL SECURITY OR FEDERAL TAX I.D. NO.
(OPTIONAL):_____________________________________
SIGNATURE:______________________________________
IF BY AUTHORIZED AGENT, NAME AND TITLE:_________
NAME OF INSTITUTION:____________________________
STREET ADDRESS:_________________________________
CITY, STATE, ZIP CODE:__________________________
TELEPHONE NUMBER:_______________________________
DATE COMPLETED:_________________________________
IMPORTANT TAX INFORMATION
Under federal income tax laws, you (as payee) are required by law to
provide 237 Park Avenue Associates, L.L.C. and 1290 Associates, L.L.C.
(collectively, the 'Debtors') your correct taxpayer identification number
('TIN'). If you are an individual, your TIN is your social security number.
If the Debtors are not provided with your correct TIN, you may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments and distributions to be made to you pursuant to that certain
Second Amended Joint Plan of Reorganization of 237 Park Avenue Associates,
L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996 (the 'Joint
Plan'), may be subject to 'backup withholding' for federal income tax
purposes.
Each holder generally is required to provide the Debtors with its correct
TIN on Substitute Form W-9 below. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. Exempt holders must still
provide the Debtors with their TIN on Substitute Form W-9, and should
indicate their exempt status by writing 'EXEMPT' in Part III of the
Substitute Form W-9. In order for a foreign individual to qualify as an
exempt recipient, that holder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Forms
for such statement can be obtained from the Debtors. See the enclosed
'Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9' for additional information.
If backup withholding applies, the Debtors are required to withhold 31% of
any interest, dividends or other reportable payments made to you. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a holder subject to backup withholding will be
reduced by the amount withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the Internal Revenue Service. IT IS
POSSIBLE THAT THE CASH PORTION OF THE DISTRIBUTIONS TO BE MADE TO YOU UNDER
THE PLAN MAY BE INSUFFICIENT TO SATISFY THE AMOUNT REQUIRED TO BE WITHHELD.
IN SUCH EVENT, THE DEBTORS WILL HOLD BACK THE ENTIRE DISTRIBUTION PENDING
THE SALE OF A SUFFICIENT PORTION OF THE NON-CASH DISTRIBUTION, OR THE
RECEIPT FROM YOU OF CASH, SUFFICIENT TO ALLOW THE DEBTORS TO SATISFY ITS
WITHHOLDING OBLIGATION IN RESPECT OF DISTRIBUTIONS TO BE MADE TO YOU.
COMPLETING SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
distributions to be received pursuant to the Plan, you must provide the
Debtors with your correct TIN by completing the Substitute Form W-9 below,
certifying that the TIN provided on Substitute Form W-9 is correct and that
either (1) you have not been notified by the Internal Revenue Service that
you are subject to backup withholding or (2) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding. If
you are an exempt holder, you must also provide the Debtors with your
correct TIN by completing the Substitute Form W-9, and should indicate your
exempt status by writing 'EXEMPT' in Part III of the Substitute Form W-9.
If you are subject to backup withholding, please cross out Item Number 2 in
Part IV of the Substitute Form W-9. If you have not been issued a TIN and
have applied for one, or if you intend to apply for one in the near future,
please check the box in Part II of the Substitute Form W-9, and sign and
date both the Substitute Form W-9 and the 'Certificate of Taxpayer Awaiting
Identification Number'. Please return the Substitute Form W-9 with your
ballot to the Ballot Agent by 5:00 p.m., New York City Time, on September
4, 1996. If you fail to do so, the Debtors will withhold 31% from any
payments and distributions made to you thereafter until a TIN and new
Substitute Form W-9 are provided to the Debtors.
2
WHAT TAXPAYER IDENTIFICATION NUMBER TO PROVIDE
You are required to provide the Debtors the social security number or
employer identification number of the record holder of the Claim held by
you. If the Claim is in more than one name or is not in the name of the
actual owner, consult the enclosed 'Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9' for additional
guidance on which number to report.
SUBSTITUTE
PART I--TIN--PLEASE PROVIDE YOUR TIN
PART II--AWAITING TIN--IF YOU HAVE NOT BEEN
FORM W-9
IN THE SPACE PROVIDED AND CERTIFY BY
ISSUED A TIN BUT HAVE APPLIED FOR ONE, OR INTEND TO
DEPARTMENT OF THE TREASURY
SIGNING AND DATING BELOW.
APPLY FOR ONE IN THE NEAR FUTURE, PLEASE CHECK THE
INTERNAL REVENUE SERVICE
BOX PROVIDED AND CERTIFY BY SIGNING AND DATING PART
PAYER'S REQUEST FOR TAXPAYER SOCIAL SECURITY NUMBER OR
IV AND THE 'CERTIFICATE OF TAXPAYER
IDENTIFICATION NUMBER (TIN)
EMPLOYER IDENTIFICATION NUMBER
AWAITING IDENTIFICATION NUMBER'.
/ / AWAITING TIN
PART III--EXEMPT HOLDERS--If you are an exempt holder, you must still
certify your TIN by completing Part I and by signing and dating below.
Please indicate your exempt status by writing 'EXEMPT' in the space
provided to the right.
PART IV--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup
withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if you have since been notified by the IRS that you are no longer
subject to back-up withholding, do not cross out item (2).
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS AND DISTRIBUTIONS TO BE MADE TO YOU
PURSUANT TO THE PLAN. PLEASE REVIEW THE ENCLOSED 'GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9'.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART II OF SUBSTITUTE FORM W-9 ABOVE
CERTIFICATE OF TAXPAYER AWAITING IDENTIFICATION NUMBER
I CERTIFY, UNDER PENALTIES OF PERJURY, THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND THAT I MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE (OR I INTEND TO MAIL OR DELIVER AN APPLICATION
IN THE NEAR FUTURE). I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER TO THE DEBTORS BY 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER 4, 1996, THE DEBTORS ARE REQUIRED TO WITHHOLD 31% OF ALL
REPORTABLE PAYMENTS THEREAFTER MADE TO ME UNTIL I PROVIDE A NUMBER.
SIGNATURE DATE
3
VOTING INFORMATION AND INSTRUCTIONS
FOR COMPLETING THE BALLOT
1. This Ballot is submitted to you to solicit your vote to accept or
reject the Debtors' Second Amended Joint Plan of Reorganization of 237 Park
Avenue Associates, L.L.C. and 1290 Associates, L.L.C., dated August 9, 1996
(the 'Joint Plan'), described in the accompanying disclosure statement,
dated August 9, 1996 (the 'Disclosure Statement').
2. PLEASE INDICATE ACCEPTANCE OR REJECTION OF THE JOINT PLAN IN THE BOX
INDICATED. COMPLETE THE BALLOT BY PROVIDING ALL OF THE INFORMATION
REQUESTED AND SIGN, DATE AND RETURN THIS BALLOT BY MAIL OR OVERNIGHT
COURIER TO THE BALLOT AGENT (THE 'BALLOT AGENT'), AT THE FOLLOWING
ADDRESSES:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BALLOTS MUST BE ACTUALLY RECEIVED BY 5:00 P.M., NEW YORK CITY TIME, ON
SEPTEMBER 4, 1996 (THE 'VOTING DEADLINE'). IF A BALLOT IS RECEIVED AFTER
THE VOTING DEADLINE, IT WILL NOT BE COUNTED. AN ENVELOPE ADDRESSED TO THE
BALLOT AGENT IS ENCLOSED FOR YOUR CONVENIENCE.
3. You must vote all of your Claims within a single Class under the Joint
Plan to either accept or reject the Joint Plan. Accordingly, a Ballot that
partially rejects and partially accepts the Joint Plan will not be counted.
4. The Ballot does not constitute and shall not be deemed a proof of Claim
or Equity Interest or an assertion of a Claim or Equity Interest.
PLEASE RETURN YOUR BALLOT PROMPTLY TO:
PLAN BALLOTS
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
THE BALLOT AGENT WILL NOT
ACCEPT BALLOTS BY FACSIMILE TRANSMISSION
IF YOU RECEIVED A DAMAGED BALLOT OR LOST YOUR BALLOT, OR IF YOU HAVE
ANY CONCERNING THE DISCLOSURE STATEMENT, THE JOINT PLAN, THIS BALLOT OR
THE VOTING PROCEDURES, PLEASE CALL THE BALLOT AGENT AT (212) 440-9800.
4
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
.........................................................................
IN RE: :
CHAPTER 11 CASE NOS.
237 PARK AVENUE ASSOCIATES, L.L.C.
: 96 B 42177 AND
AND 1290 ASSOCIATES, L.L.C. 96 B 42178 (JLG)
:
DEBTORS.
(JOINTLY ADMINISTERED)
........................................................................
NOTICE OF (A) HEARING TO CONSIDER CONFIRMATION OF
DEBTORS' JOINT PLAN OF REORGANIZATION AND (B) DEADLINE FOR
(I) VOTING ON DEBTORS' JOINT PLAN OF REORGANIZATION,
ELECTING FORMS OF DISTRIBUTIONS THEREUNDER AND SUBSCRIBING
FOR ADDITIONAL SHARES OF REIT STOCK AND (II) OBJECTING TO
CONFIRMATION OF THE JOINT PLAN OF REORGANIZATION
NOTICE IS HEREBY GIVEN THAT:
1. A hearing to consider confirmation of that certain Second
Amended Joint Plan of Reorganization of 237 Park Avenue Associates, L.L.C.
and 1290 Associates L.L.C., dated August 9, 1996 (the 'Joint Plan') and any
objections or proposed amendments thereto and any other matter that may
properly come before the Court will be held before the Honorable James L.
Garrity, Jr., United States Bankruptcy Judge in Room 610-2 of the United
States Bankruptcy Court, Alexander Hamilton Custom House, One Bowling
Green, New York, New York 10004-1408, on September 11, 1996, at 2:00 p.m.,
or such later date and time determined by the Court.
2. Any objection to confirmation of the Joint Plan must be made
in writing, state that it is an objection to confirmation of the Joint
Plan, indicate the nature of the objection and the legal basis therefor,
and be filed with and received by the Bankruptcy Court, with two (2) copies
to chambers, and served upon and received by the parties listed below,
together with proof of service, on or before August 28, 1996 at 5:00 p.m.
(Eastern Daylight Time):
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Attn: Brian S. Rosen, Esq.
Attorneys for the Debtors
BATTLE FOWLER LLP
75 East 55th Street
New York, NY 10022
Attn: Douglas Furth, Esq.
Attorneys for the Ad Hoc Committee of
$970 Million Noteholders
237 PARK AVENUE ASSOCIATES, L.L.C.
1290 ASSOCIATES, L.L.C.
c/o Olympia & York Companies (U.S.A.)
237 Park Avenue
New York, NY 10017
Attn: Andrew P. Seidman
OFFICE OF THE UNITED STATES TRUSTEE
80 Broad Street
New York, NY 10004
Attn: Mary Tom, Esq.
UNLESS AN OBJECTION IS TIMELY SERVED AND FILED IN ACCORDANCE WITH THIS
NOTICE, SUCH OBJECTION WILL NOT BE CONSIDERED BY THE BANKRUPTCY COURT.
3. The date and time fixed as the last date to (i) vote to accept
or reject the Joint Plan, (ii) electing forms of distributions under the
Joint Plan and (iii) subscribing for additional shares of REIT Stock is
September 4, 1996 by 5:00 p.m., New York City time (the 'Voting Deadline').
In order to be counted, ballots must be received by the Voting Deadline by
Georgeson & Company Inc., Wall Street Plaza, New York, New York 10005. Any
requests for the Joint Plan and/or a ballot should be made to Georgeson &
Company Inc. at the above-listed address or (212) 440-9800.
Dated: New York, New York
August 9, 1996
BY ORDER OF THE COURT
____/S/ JAMES L. GARRITY, JR.____
UNITED STATES BANKRUPTCY JUDGE
WEIL, GOTSHAL & MANGES LLP
Attorneys for the Debtors
and Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
2
SUBSCRIPTION AGREEMENT
(DISTRIBUTEES)
SUBSCRIPTION AGREEMENT (this 'Agreement'), dated as of ,
1996 by and between Metropolis Realty Trust, Inc., a Maryland corporation
(the 'Company') and a ('Purchaser'). Capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in the Second
Amended Joint Plan of Reorganization of 237 Park Avenue Associates, L.L.C.
and 1290 Associates, L.L.C. filed under title 11 of the United States Code,
11 U.S.C. Sections 101 et seq. (the 'Plan').
R E C I T A L S:
WHEREAS, pursuant to the Plan, the Company has distributed
Subscription Rights to Distributees, entitling such Distributees to
exercise such Subscription Rights to purchase up to an aggregate number of
shares (the 'Offered Shares') of the Company's common stock, par value
$10.00 per share (the 'Common Stock') equal to the product of (x)
12,000,000 shares of REIT Stock, multiplied by (y) a fraction, the
numerator of which is $20,000,000 and the denominator of which is
$660,000,000 minus the gross proceeds from the consummation of the
Conventional Financing Alternative (or, if the Conventional Financing
Alternative is not consummated, $400,000,000), for a fixed exercise price
per share equal to $20,000,000 divided by the number of Offered Shares (the
'Subscription Price'), pursuant to the terms and conditions of the Plan;
WHEREAS, Purchaser is a Distributee under the Plan; and
WHEREAS, Purchaser desires to exercise Subscription Rights to purchase
from the Company, and the Company desires to issue and sell to Purchaser,
the number of shares of Common Stock (the 'Shares') for which Distributee
has exercised Subscription Rights.
NOW, THEREFORE, in consideration of the mutual covenants and on the
terms and conditions contained herein, and for other good, valid and
binding consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Exercise of Subscription Rights and Purchase of Shares
1.1. Exercise of Subscription Rights for Shares by the Purchaser.
Upon the terms and subject to the conditions of this Agreement, Purchaser
hereby exercises Subscription Rights for and agrees to purchase, and the
Company hereby agrees to issue and sell to Purchaser, at the Closing (as
hereinafter defined) the number of Shares for which Purchaser has elected
to exercise Subscription Rights as set forth in this Section 1.1 for an
aggregate purchase price (the 'Purchase Price') equal to the number of
Shares for which Purchaser has elected to exercise Subscription Rights as
set forth in this Section 1.1, multiplied by the Subscription Price;
provided, that (i) if the Purchaser is a holder of a Senior Claim, the
Company shall not be required to sell to Purchaser a number of Shares
greater than an amount equal to the Offered Shares multiplied by such
Purchaser's Pro Rata portion of the Election Amount, and (ii) if the
Purchaser is a Morgan Loan Lender, the Company shall not be required to
sell to Purchaser a number of Shares greater than an amount equal to the
Offered Shares multiplied by such Purchaser's share of the Morgan Loan, as
determined by the Morgan Loan Agent. The maximum number of shares
(determined in the manner set forth in clause (i) or clause (ii), as
applicable, of the immediately preceding sentence) that the Company is
required to sell to a Purchaser is hereinafter referred to as the 'Maximum
Share Number.'
CHECK ONE BOX ONLY. IF YOU CHECK THE FIRST BOX, FILL IN THE BLANK ON
THE FIRST LINE OPPOSITE SUCH BOX.
/ / Purchaser hereby exercises Subscription Rights to purchase
Shares of Common Stock. (If you enter a number of Shares of
Common Stock greater than the Maximum Share Number, you will
only be entitled to purchase, and the Company will only be
required to sell to you, a number of Shares of Common Stock
equal to the Maximum Share Number.)
/ / If Purchaser is a holder of a Senior Claim, Purchaser hereby
exercises Subscription Rights to purchase a number of Shares
equal to 93% of the Offered Shares multiplied by such Purchaser's
Pro Rata portion of the Election Amount.
/ / If Purchaser is a Morgan Loan Lender, Purchaser hereby exercises
Subscription Rights to purchase a number of Shares equal to 7%
of the Offered Shares multiplied by such Purchaser's share of
the Morgan Loan, as determined by the Morgan Loan Agent.
1.2. Closing; Deliveries.
(a) As soon as practicable after the Confirmation Date, the Company
shall cause a notice to be sent by overnight delivery service to Purchaser,
setting forth the maximum amount of cash that Purchaser is required to pay
for Shares subject to its Subscription Rights (assuming for purposes of
determining the amount of cash to be delivered to the Escrow Agent (as
hereinafter defined) that Purchaser is to receive the Maximum Share
Number). Within ten (10) Business Days after the date of such notice,
Purchaser shall deliver such amount to an escrow agent (selected by the
Debtors upon Noteholder Consent) identified in such notice (the 'Escrow
Agent') and otherwise in accordance with the instructions (approved by
order of the Bankruptcy Court) set forth in such notice. If Purchaser fails
to deliver such amount in accordance with the instructions set forth in the
notice, Purchaser shall be conclusively deemed not to have purchased such
Shares and such Shares shall become Unsubscribed Shares to be purchased by
the Property Manager/Leasing Agent pursuant to the Property Manager
Subscription Agreement. All funds held in escrow by the Escrow Agent, as
agent for the Purchaser, pursuant to the Plan shall be deemed held for any
successor or assign of Purchaser. When the actual number of Offered Shares
to be issued (and the Subscription Price therefor) is finally determined,
the Escrow Agent will refund to Purchaser any amount deposited with the
Escrow Agent by Purchaser in excess of the Purchase Price.
(b) The closing (the 'Closing') of the transactions contemplated by
this Agreement shall take place at the offices of Battle Fowler LLP, 75
East 55th Street, New York, New York 10022 or such other place as may be
agreed to by the parties at 9:00 A.M. New York City Time on the Effective
Date. The date of such Closing is hereinafter referred to as the 'Closing
Date.'
(c) At the Closing, the Escrow Agent, as agent for the Purchaser,
shall deliver to the Company, against delivery of a stock certificate or
stock certificates (the 'Stock Certificates') representing the number of
Shares purchased by Purchaser hereunder, an amount in cash (payable by wire
transfer or intrabank transfer to the Company to a bank account to be
designated by the Company at least two Business Days prior to the Closing)
equal to the Purchase Price.
(d) At the Closing, the Company shall deliver to the Escrow Agent, as
agent for the Purchaser, against delivery by the Escrow Agent, as agent for
the Purchaser, of the Purchase Price, a duly issued Stock Certificate or
Stock Certificates, representing the number of Shares for which Purchaser
has elected to exercise Subscription Rights as set forth in Section 1.1
hereof.
2. Representations, Warranties and Acknowledgments of Purchaser.
Purchaser hereby represents, warrants and acknowledges to the Company
as follows:
2.1. Execution, Delivery and Performance. Purchaser has full right,
power and authority to execute and deliver this Agreement and to perform
Purchaser's obligations hereunder. This Agreement has been duly authorized,
executed and delivered by or on behalf of Purchaser and is valid, binding
and enforceable against Purchaser in accordance with its terms subject, as
to enforcement, to bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect and affecting creditors' rights
generally and to general equity principles.
2.2. Investment and Other Representations.
(a) Purchaser is acquiring the Shares solely for investment for
Purchaser's account and not with a view to, or for resale in connection
with, the distribution or other disposition thereof, except for such
distributions and dispositions which are effected in compliance with (i)
the Securities Act of 1933, as amended (the 'Securities Act'), and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder and (ii) applicable state securities laws.
(b) Purchaser understands that (i) the purchase of the Shares involves
a high degree of risk of loss of Purchaser's investment therein, (ii) there
are substantial restrictions on the transferability of the Shares under the
provisions of the Securities Act and applicable state securities laws, and
(iii) on the Closing Date and for an indeterminate period following the
Closing there will be no public market readily available to liquidate
Purchaser's investment in the Shares.
(c) Purchaser has been given the opportunity to examine all documents
which the Company has delivered to or made available for inspection by
Purchaser related to and, if applicable, to be entered into by the Company
in connection with the transactions contemplated by this Agreement,
including, without limitation, (a) the articles of incorporation of the
Company as filed with the Department of Assessments and Taxation of the
State of Maryland and the form of by-laws adopted by the board of directors
of the Company and (b) a copy of all documents annexed as Exhibits to the
Plan. The Company has also provided Purchaser with the opportunity to ask
questions of, and receive answers from, the Company and its representatives
concerning the terms and conditions of the purchase of the Shares and to
obtain any additional information necessary to verify the information
contained in the aforementioned documents.
(d) Purchaser is an 'accredited investor' under one of the categories
set forth in Rule 501(a)(1) through (8) (inclusive) promulgated under the
Securities Act.
2.3. Shares Unregistered. Purchaser acknowledges that Purchaser has
been advised that: (i) the Shares have not been registered under the
Securities Act, (ii) a transfer of the Shares will require the availability
of an exemption under the Securities Act (it being understood that Rule 144
promulgated under the Securities Act is not presently available with
respect to the sales of any securities of the Company, and when and if the
Shares may be disposed of without registration in reliance on Rule 144,
such disposition can be made only in limited amounts in accordance with the
terms and conditions of such Rule), (iii) restrictive legends in the form
set forth in Section 5.1 hereof shall be placed on the certificates and
(iv) a notation shall be made in the appropriate records of the Company
indicating that the Shares are subject to restrictions on transfer and, if
the Company should at some time in
2
the future engage the service of a securities transfer agent, appropriate
stop-transfer instructions will be issued to such transfer agent with
respect to the Shares.
3. Representations and Warranties of the Company
The Company represents and warrants to the Purchaser as follows:
3.1 Execution, Delivery and Performance. The Company has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement has been duly authorized,
executed and delivered by the Company and is valid, binding and enforceable
against the Company in accordance with its terms.
3.2. Shares Duly Authorized. The Shares to be issued to Purchaser
pursuant to this Agreement, when issued and delivered in accordance with
the terms of this Agreement and upon receipt by the Company of the Purchase
Price from Escrow Agent, as agent for the Purchaser, will be duly and
validly issued and will be fully paid and non-assessable.
3.3. No Conflict. Neither the execution and delivery nor the
performance of this Agreement by the Company will conflict with the
Company's articles of incorporation or by-laws or result in a breach of any
terms or provisions of, or constitute a default under, the Plan, or any
contract, agreement or instrument to which the Company is a party or by
which the Company is bound.
3.4. Capitalization. The Company is authorized to issue 50,000,000
shares of Common Stock. After giving effect to the transactions
contemplated by the Plan, this Agreement and all other agreements (the
'Other Subscription Agreements'), with the other purchasers (the 'Other
Purchasers') pursuant to which the Company will issue shares of Common
Stock, 12,000,000 shares of Common Stock plus the Offered Shares will be
issued and outstanding. Except as described above and except for the
transactions contemplated by this Agreement and the Other Subscription
Agreements, the Company will not (a) have outstanding any capital stock or
securities convertible into or exchangeable for any shares of its capital
stock and no person will have any right to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the
issuance of, any calls, commitments or other claims relating to, any
capital stock or any stock or securities convertible into or exchangeable
for any capital stock of the Company or (b) be subject to any obligation to
repurchase or otherwise acquire or retire any shares of its capital stock
or any convertible securities, rights or options of the type described in
clause (i) above.
4. Conditions to Closing
The obligations of each party hereto to effect the transactions
contemplated by this Agreement are subject to the fulfillment at or prior
to the Closing of the following conditions:
4.1. Representations and Warranties. The representations and
warranties of the Company and Purchaser contained in this Agreement shall
be true and correct in all material respects when made and at and as of the
Closing.
4.2. Concurrent Sales. The Company shall have contemporaneously
delivered to the Escrow Agent, as agent for the Other Purchasers, and sold
to Purchaser and each Other Purchaser the shares of Common Stock to be
purchased by such Other Purchasers pursuant to the Other Subscription
Agreements and shall have received payment therefor in full.
4.3. Compliance with Securities Laws. The offering and sale of the
Shares to be issued at the Closing under this Agreement shall have complied
with all applicable requirements of Federal and state securities law.
4.4. Effective Date. The Effective Date shall have occurred on or
prior to the Closing Date.
5. Miscellaneous
5.1. Legend. Each Stock Certificate issued to Purchaser hereunder
shall bear the restrictive legend set forth in this Section 5.1:
'THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, ASSIGNED, OR OTHERWISE TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH SUCH ACT AND THE APPLICABLE RULES AND REGULATIONS
THEREUNDER.'
5.2. Survival of Representations and Warranties. All covenants,
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement and delivery of the Shares and
payment therefor and, notwithstanding any investigation heretofore or
hereafter made by Purchaser or on Purchaser's behalf, shall continue in
full force and effect.
5.3. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto in respect of the subject matter contained
herein and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
3
5.4. Binding Effect, Benefits. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the
parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
5.5. Amendment, Modification and Waiver. This Agreement may be
amended or modified, or any provision hereof may be waived, provided that
such amendment or waiver is set forth in a writing executed by the Company
and Purchaser. No course of dealing between or among any parties to this
Agreement will be deemed effective to modify, amend or discharge any part
of this Agreement or any rights or obligations of any party hereto.
5.6. Headings. The headings of the sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
5.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same instrument.
5.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
giving effect to the conflicts of law provisions thereof.
5.9. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated thereby.
5.10. Termination. Purchaser may terminate this Agreement, upon
written notice to the Company, at any time after December 15, 1996.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by an officer duly authorized and Purchaser has caused this
Agreement to be executed by a duly authorized signatory or officer in each
case as of the date first above written.
METROPOLIS REALTY TRUST, INC.
By:______________________________________
Name:
Title:
PURCHASER
By:______________________________________
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 8,758,234
<SECURITIES> 374,085
<RECEIVABLES> 16,429,816
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 25,562,135
<PP&E> 424,019,322
<DEPRECIATION> 172,851,871
<TOTAL-ASSETS> 298,219,051
<CURRENT-LIABILITIES> 68,682,695
<BONDS> 392,468,300
<COMMON> 0
0
0
<OTHER-SE> (253,511,648)
<TOTAL-LIABILITY-AND-EQUITY>298,219,051
<SALES> 51,521,252
<TOTAL-REVENUES> 52,100,100
<CGS> 0
<TOTAL-COSTS> 39,155,120
<OTHER-EXPENSES> 834,023
<LOSS-PROVISION> 13,100,000
<INTEREST-EXPENSE> 29,875,398
<INCOME-PRETAX> (30,864,441)
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,912,603)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,912,603)
<EPS-PRIMARY> (78.42)
<EPS-DILUTED> (78.42)
</TABLE>
