SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the fiscal year ended December 31, 1993
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
for the transition period from to
Commission file number 1-8971
Rockefeller Center Properties, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3280472
(State or other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or
organization)
1270 Avenue of the Americas 10020
New York, N.Y. (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: 212-698-1440
Securities registered pursuant to Section 12(b) of the Act:
Name of each
Title of each class exchange
on which registered
Common stock, $.01 Par Value, all of
one class New York
(38,260,704 shares outstanding as of Stock Exchange
March 8, 1994)*
Securities registered pursuant to Section 12(g) of the Act: None
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
* The aggregate market value of Registrant's voting stock held by non-
affiliates as of March 8, 1994, based on the closing price on the New
York Stock Exchange composite tape on that date, was approximately
$229,564,000.
Documents Incorporated by Reference
Registrant has incorporated in this Annual Report on Form 10-K the
information required in Part III from its Proxy Statement, to be filed
with the Securities and Exchange Commission in connection with its 1994
Annual Meeting of Stockholders.
ROCKEFELLER CENTER PROPERTIES, INC.
TABLE OF CONTENTS
Part I Page
Item 1. Business 1
Item 2. Properties 9
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of
Security Holders 10
Part II
Item 5. Market for the Registrant's Common
Equity 11
and Related Stockholder Matters
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis
of 11
Financial Condition and Results of
Operations
Item 8. Financial Statements and Supplementary 11
Data
Item 9. Changes in and Disagreements with
Accountants 11
on Accounting and Financial Disclosure
Part III
Item10. Directors and Executive Officers
of the Registrant 12
Item11. Executive Compensation 12
Item12. Security Ownership of Certain
Beneficial Owners and Management 12
Item13. Certain Relationships and Related
Transactions 12
Part IV
Item14. Exhibits, Financial Statement
Schedules 13
and Report on Form 8-K
Signatures 17
(i)
ROCKEFELLER CENTER PROPERTIES, INC.
PART I
Item 1. Business.
Rockefeller Center Properties, Inc. (the "Company") was
incorporated in Delaware on July 17, 1985. Its principal executive offices
are located at 1270 Avenue of the Americas, New York, New York 10020, and
its telephone number is (212) 698-1440. The Company qualifies and has
elected to be treated, for Federal income tax purposes, as a real estate
investment trust (a "REIT") under the Internal Revenue Code of 1986, as
amended (the "Code"). On September 19, 1985, the Company issued 37,500,000
shares of common stock (the "Common Stock") in an initial public offering
registered under the Securities Act of 1933 (the "Act"). Simultaneously
with the offering of the Common Stock, the Company issued Current Coupon
Convertible Debentures due 2000 and Zero Coupon Convertible Debentures due
2000 (collectively, the "Convertible Debentures"). Except as described
under "Policies" and "Repurchase of Convertible Debentures", the Company
expects to make no investments other than the Loan and the Equity Option
described below and no other offerings of equity securities. In December
1993, 750,704 warrants were exercised and a like number of shares of Common
Stock were issued as discussed in "Item 3, Legal Proceedings".
The Loan and the Equity Option.
The net proceeds of the initial Common Stock offering and the
offerings of Convertible Debentures were used by the Company to make a
convertible, participating mortgage loan (the "Loan") to two partnerships
(collectively, the "Borrower") which together own (except as described
under "NBC Tenancy") most of the land and buildings known as Rockefeller
Center. The partners of the Borrower are Rockefeller Group, Inc. ("RGI")
and a wholly-owned subsidiary of RGI. The real property interests owned by
the Borrower and included in the transaction (the "Property") are described
below. The Loan, in the face amount of $1.3 billion, was made pursuant to
a loan agreement between the Company and the Borrower, dated September 19,
1985 (as amended, the "Loan Agreement"), and is evidenced by two notes
(collectively, as amended, the "Note"). The Note matures on December 31,
2007 and provides for both base interest ("Base Interest") and additional
interest ("Additional Interest") through December 31, 2000 and for floating
interest rates thereafter.
The "Equity Conversion Date" is December 31, 2000 or, if an event
of default under the Loan Agreement has occurred and is continuing, any
earlier date specified by the Company. Base Interest is payable quarterly
at stated annual interest rates ranging from 7.215% (for 1985 and 1986) to
8.43% (for the year 2000). For each year beginning with 1988 through 2000
in which Gross Revenues (as defined in the Note) of the Property exceed
$312.5 million, Additional Interest would accrue in an amount equal to the
sum of (i) 31.5% of such excess plus (ii) $42.95 million. If Additional
Interest is earned by the Company, but cash is unavailable to the Borrower
to pay it, then such Additional Interest would be deferred (without
interest) until the Equity Conversion Date or such earlier time as cash
became available. No Additional Interest has been earned by the Company
through December 31, 1993 and whether or not the Company will earn
Additional Interest will depend upon the ability of the Borrower to re-
lease the approximately 1.76 million square feet (approximately 28.5% of
all space at the Property) covered by leases expiring in 1994 at rates
significantly above the rental rates obtained for new and renewal leases in
1993 (see "Leasing"). Based on present conditions in the Midtown Manhattan
rental market, the Company does not currently expect that it will earn
Additional Interest. As discussed in "NBC Tenancy", the method for
computing the Additional Interest payable to the Company under the Loan has
been amended so that the Additional Interest would not be reduced by reason
of certain rights and privileges granted to National Broadcasting Company,
Inc. ("NBC") in connection with the NBC transaction described under "NBC
Tenancy".
At the Company's option, the Loan is convertible on the Equity
Conversion Date into a 71.5% general partnership interest (the "Equity
Option") in the partnership (the "Partnership") which will then own the
Property. RGI or a permitted successor will be the managing partner of the
Partnership and will generally have the power to make business decisions
for the Partnership without the consent of the other partners. The
Partnership will terminate on September 30, 2169 unless previously
dissolved pursuant to the terms of the agreement under which the
Partnership will be formed (the "Partnership Agreement").
-1-
While the Loan is outstanding, the Company may transfer
participations in the Loan (but not in the Equity Option), pledge interests
in the Loan (subject to the Borrower's reasonable consent if interests
representing more than 20% of the Loan are pledged during any 12-month
period), and in certain limited circumstances transfer the Loan itself
(including the right to exercise the Equity Option) subject to a right of
first refusal in favor of the Borrower.
RGI has indicated that, in its capacity as managing partner of the
Partnership, it intends to refinance the Property if there is an exercise
of the Equity Option and to distribute the proceeds of such refinancing to
the partners, including the Company. The Partnership Agreement provides
that the Company will have the right, subject to certain limitations, to
require the Partnership to use its best efforts to refinance the Property
and distribute to the Company an amount equal to the Company's percentage
interest in the then fair market value of the Property (but in no event
more than $4.5 billion or a lesser amount if the Loan has been partially
prepaid). However, if such a distribution would exceed the Company's
percentage interest of the refinancing proceeds, then the other partners
may elect to purchase the Company's interest in the Partnership for an
amount equal to what the Company would receive if the Property were sold
for its fair market value and the Partnership dissolved.
The Mortgage.
The Loan is secured by leasehold mortgages in the aggregate amount
of approximately $44.8 million which were assigned to the Company,
consolidated, spread and recorded as a first mortgage lien against the
Property. In addition, the Loan is secured by an unrecorded mortgage (as
amended, the "Mortgage") in the approximate amount of $1,255.2 million.
Prior to its recordation, the Mortgage may be subordinate to the rights of
other persons who acquire and perfect interests in the Property. The
Company may elect to record the Mortgage at its own expense at any time.
The Company may elect to record the Mortgage at the Borrower's expense only
(i) if a material adverse change occurs in the Property or the Borrower's
financial or other condition or prospects or (ii) if liens in excess of $20
million are filed against the Property and are not discharged within five
business days after notice from the Company or (iii) if an event of default
occurs under the Loan Agreement or Mortgage. Recording the Mortgage would
require payment of a mortgage recording tax, which at the current rate is
approximately $35 million. If the Mortgage is to be recorded at the
Borrower's expense, up to $40 million of the Credit Support Facilities
(discussed below) will be available to enable the Company to pay this tax
if the Borrower fails to do so. If the Equity Option has been exercised
and the Mortgage has not been recorded at the expense of the Borrower, RGI
will contribute to the Partnership an amount equal to the recording taxes
saved by not initially recording the Mortgage.
The Credit Support Facilities.
In accordance with the provisions of the Loan Agreement, the
Borrower is required to maintain for the benefit of the Company credit
support facilities ("Credit Support Facilities") to secure payment of (i)
the amount by which Base Interest exceeds the net cash flow (as defined in
the Loan Agreement) from the Property after reflecting required capital
expenditures, (ii) up to $40 million with respect to the costs of recording
the Mortgage and (iii) the unexpended portion of the cost of making certain
required capital improvements to the Property. In April 1993, pursuant to
agreements between the Borrower and the Company, the level at which such
Credit Support Facilities must be maintained was increased to $200 million
until December 31, 1994. On January 1, 1995, the level of the Credit
Support Facilities will revert to the level originally required to be
maintained as of such date under the Loan Agreement, which the Company
expects will be not less than $90 million.
Subject to certain conditions, the Loan Agreement requires the
Borrower, throughout the term of the Loan, to maintain in effect Credit
Support Facilities in the form of letters of credit issued by commercial
banks whose letters of credit are rated AA or better by a nationally
recognized rating agency (or a lower rating if satisfactory to the Company)
and/or pledges of cash or specified investment-grade collateral having a
fair market value equal to the required amount of the Credit Support
Facilities. If the Borrower fails to provide Credit Support Facilities in
the required amounts, or if the Company shall have accelerated the Loan,
the Company may draw or apply the full amount of the Credit Support
Facilities.
-2-
The Property.
Rockefeller Center is among the best-known commercial real estate
complexes in the world, offering an architecturally renowned combination of
office, retail and public space. Occupying most of the three blocks
(approximately 12 acres) between 48th and 51st Streets and Fifth Avenue and
Avenue of the Americas in midtown Manhattan, the Property includes 12
buildings, all but one of which were completed between 1932 and 1940,
having approximately 6.2 million square feet of rentable office, retail,
storage and studio space. The Borrower owns (except as described under
"NBC Tenancy-The Property") the fee interest in the entire Property,
excepting the land (which is owned by an unrelated party and leased to the
Borrower through the year 2000 at an annual rent of $650,000) underlying a
portion of the building at 600 Fifth Avenue. This lease (the "Church
Lease") provides for three renewal periods of 21 years each at annual rents
of 6%, 7% and 8%, respectively, of the value of the land (exclusive of
improvements and unencumbered by the Church Lease) appraised for its
highest and best use, determined at the beginning of each such renewal
term. The Borrower's leasehold interest under the Church Lease is
subordinate to any mortgage placed on the land, the principal amount of
which does not exceed $750,000 and the aggregate payment of principal and
interest on which does not exceed the fixed rent payable under the Church
Lease. The Church Lease, however, contains a non-disturbance provision
which provides that any foreclosure of a superior mortgage will not result
in termination of the Church Lease so long as the tenant is not in default
thereunder. If the opportunity to purchase the land underlying the Church
Lease arises, RGI has agreed to allow the Company to participate with the
Borrower in such purchase (if such opportunity arises during the term of
the Loan) and to allow such opportunity to the Partnership (if such
opportunity arises thereafter).
Also included in the Property is Radio City Music Hall (the "Music
Hall"), which has been leased by the Borrower to Radio City Music Hall
Productions, Inc. ("RCMHP") at a nominal rent through December 31, 2000.
RCMHP is a wholly-owned subsidiary of RGI. RCMHP is obligated under the
lease to pay for the expenses of maintaining the interior of the Music Hall
and the property taxes assessed against the portion of the building housing
the Music Hall. The Borrower is responsible for the expenses of exterior
maintenance. Following the initial term, RCMHP will have rights to renew
the Music Hall lease for ten successive 15-year periods at fair market
rents established at the beginning of each such period.
The following table provides summary information furnished by the
Borrower regarding the buildings included in the Property.
<TABLE>
<CAPTION>
At December 31, 1993
Year Number Rentable area Occupancy
Building opened of (sq.ft.)(1) percentag
stories e
<S> <C> <C> <C> <C>
GE 1933 69 1,874,451 98.6%
NBC Studio 1933 10 384,592 100.0
GE West 1933 16 151,687 100.0
1270 Avenue of the
Americas (2) 1932 32 388,772 83.1
Associated Press 1938 16 400,277 98.1
International 1935 40 1,030,900 93.0
British Empire 1933 9 102,673 90.7
La Maison Francaise 1933 9 104,813 99.9
One Rockefeller Plaza 1937 35 471,538 85.4
Ten Rockefeller Plaza 1939 17 291,519 93.3
Paramount Publishing 1940
and Addition 1955 21 600,519 93.3
600 Fifth Avenue 1952 29 355,296 92.9
Additional Property (3) ---- ---- 28,421 100.0
Total 6,185,458 94.6%
</TABLE>
[FN]
(1) Measured in accordance with the standard for measurement
promulgated by the New York Real Estate Board in 1968.
(2) Radio City Music Hall is included as part of this building but
excluded from the rentable area and occupancy percentage data.
(3) Includes the underground concourse and lower plaza and includes the
Lindy's and Hurley's restaurant buildings.
-3-
Rockefeller Center is one of the world's largest privately-owned
business and entertainment complexes. In addition to the buildings
described above, the Property contains a wide range of amenities including
the Channel Gardens landscaped promenade, the lower plaza used as an ice
skating rink during colder weather and otherwise for outdoor dining, a six-
story 725-car parking garage and extensive off-street truck delivery areas,
an underground retail and pedestrian concourse connecting all buildings and
providing access to an on-site subway station, roof gardens and the Music
Hall. Retail space within the Property includes approximately 200 shops
and 35 restaurants. The murals and statuary which are an integral part of
the Property include over one hundred major works by more than thirty
artists, including the renowned sculpture "Prometheus". A private street,
Rockefeller Plaza, parallels Fifth Avenue and the Avenue of the Americas
and bisects the Property.
Under the existing zoning regulations, there is allocable to the
Property the right to develop up to approximately 2.0 million square feet
of floor area in excess of the floor area presently constructed thereon.
These excess development rights may be transferred to other properties or,
with the approval of the New York City Landmarks Preservation Commission
(the "Landmarks Commission"), used to construct additional floor area
within the Property. The Borrower has reserved the right to transfer these
rights. As part of the settlement of the Pruitt litigation, 100,000 square
feet of these rights have been added to the Mortgage (see Item 3, Legal
Proceedings). The Borrower has also reserved the right to transfer all of
the Borrower's rights to the air space above the Music Hall, together with
easements for support, operations and access.
In April 1985, the Landmarks Commission granted landmark status to
the exterior of all of the buildings in the Property. The Landmarks
Commission has also designated as landmarks portions of the interiors of
the GE and International Buildings and the interior of the Music Hall. As
a result of these designations, alteration, demolition and reconstruction
of the Property will under most circumstances be subject to approval of the
Landmarks Commission.
Appraisal Value. During 1993, the Company engaged Douglas
Elliman Appraisal and Consulting Division ("Douglas Elliman"), an
independent appraisal firm, to appraise the value assigned to the Property.
Douglas Elliman, in a report dated February 15, 1994, concluded that, as of
December 31, 1993, the value assigned to the various fee and leasehold
interests comprising the Property, subject to existing leases, was $1.15
billion, a decrease of $50 million from the value assigned in an appraisal
conducted as of December 31, 1992. A copy of the 1993 appraisal has been
filed as an exhibit to the Company's Current Report on Form 8-K filed on
February 22, 1994 and a copy of the 1992 appraisal was filed as an exhibit
to the Company's Annual Report on Form 10-K for the year ended December 31,
1992.
Appraisals are only estimates of value and should not be relied
upon as a measure of realizable value, for the current market value of a
property is not indicative of the value such property may have at any time
in the future. Future value will depend on a variety of factors, including
the economic success of the property, the impact of inflation on property
values, local competitive conditions, prevailing interest rates and general
economic circumstances.
The Property will be reappraised annually by an independent
appraisal firm and the results will be furnished to the Company's
stockholders.
Capital Improvement Program. In connection with the making of
the Loan, independent consulting firms conducted structural, mechanical,
systems and engineering analyses of the Property. Their reports
(collectively, the "Engineering Reports") indicated that the Property was
in generally good condition and recommended a program of capital
improvements over the term of the Loan. The Borrower agreed to make all of
the improvements recommended in the Engineering Reports as well as other
major capital improvements to the Property. At the time of the Company's
initial public offerings, the Borrower projected for its capital
improvement program an aggregate expenditure (after adjusting for
inflation) of approximately $260 million for the period from 1985 through
the year 2000, which amount substantially exceeds the cost of the capital
improvements recommended in the Engineering Reports ($197.6 million). On a
cumulative basis since the inception of the Loan and through December 31,
1993, the Borrower has spent $209 million in connection with the capital
improvements required in the Engineering Reports (including $45.9 million
of expenditures in excess of the amounts recommended for certain projects)
and an additional $95 million for other capital improvements.
-4-
In 1993, 1992 and 1991, the Borrower spent approximately $27
million, $25 million and $42 million, respectively, under its capital
improvement program. Progress continued on elevator replacements and
upgrades, roof repairs, and fire safety systems. During 1993, work began
on the renovation of the lobby of the Paramount Publishing Building and
emergency power systems.
NBC Tenancy. In December 1988, the Borrower and NBC signed lease
agreements extending NBC's lease at Rockefeller Center. NBC currently
leases approximately 1.2 million square feet of space in three
interconnected Rockefeller Center buildings (the GE Building, the Studio
Building and the GE West Building) and will continue to occupy its space
through September 1997 under the terms of its lease existing prior to the
extension.
NBC's lease has been extended through the year 2022. In addition,
NBC has options for three successive ten-year renewal periods after 2022
and has rights to lease certain additional space. The lease agreement
calls for NBC to pay rent on a "net" basis, that is, without including
amounts normally payable with regard to real estate taxes and certain
operating expenses, which NBC would pay directly. The method for computing
the Additional Interest payable to the Company under the Loan has been
amended so that the Additional Interest would not be reduced by reason of
certain rights and privileges granted to NBC in connection with the NBC
transaction.
Pursuant to an agreement dated as of March 12, 1993, RCP and NBC
terminated NBC's option to purchase the GE West and Studio Buildings in
2022.
The transaction has been structured to accommodate arrangements
made between the New York City Industrial Agency ("IDA") and NBC for
certain financial assistance in connection with the project. Accordingly,
the three interconnected buildings have been made into a condominium and
the NBC-occupied areas were conveyed to IDA subject to the Loan and the NBC
lease. These areas were then leased back to the Borrower at nominal rents
and then subleased to NBC under the terms of the lease. If NBC exercises
any of its rights to lease additional space, the condominium units in which
the additional space is located will be similarly conveyed to IDA, leased
back to the Borrower and subleased to NBC. Upon the expiration of the
period of IDA benefits, ownership of the IDA owned units will revert to the
Borrower. IDA ownership of the condominium units occupied by NBC is a
technical structuring required to effectuate the transaction and has no
adverse economic effect upon the Borrower or the Company.
Leasing. The average annual office rent (base rent plus
escalations) at the Property at December 31, 1993 was $34.40 per square
foot, while 1993 leases for office space in the Property have been signed
and have taken effect at average net effective rents of $31.54 per square
foot and with lease terms which generally range from 5 to 15 years. These
rents are comparable with current midtown Manhattan asking market rents for
office buildings. See "Competitive Market".
Recent leases for space in the Property typically provide for
proportionate pass-throughs of 100% to 110% of increases in certain
operating expenses and 100% of increases in real estate taxes and
electricity recoveries at the wholesale rate plus a 9% administrative
charge.
For lease expiration information for the Property, see Results of
Operations - The Property.
-5-
At December 31, 1993, the occupancy rate for the Property was
approximately 94.6%. The following table shows the historical occupancy
rates, average annual rent per square foot (base rent plus escalations) and
average net effective new and renewal rates for all leases (office, retail
and storage) at the Property for the past thirteen years. While the
average net effective rental rates for new and renewal space were generally
consistent with those prevailing in the midtown Manhattan market during
this period, the Property's occupancy rates were higher.
<TABLE>
<CAPTION>
Average net
Occupancy Average annual effective rent
Year percentage rent per sq. ft. for
per sq.ft. for new and renewal
all leases leases
<S> <C> <C> <C>
1981 99.5% $16.84 $32.44
1982 99.4 20.28 17.19*
1983 98.6 21.36 37.12
1984 98.3 23.37 41.98
1985 98.0 27.05 43.42
1986 98.3 28.53 40.65
1987 98.2 29.34 42.70
1988 98.4 30.98 42.04
1989 96.2 31.99 45.82
1990 95.7 33.98 43.43
1991 95.9 34.57 41.34
1992 94.0 33.47 33.76
1993 94.6 32.97 35.93
</TABLE>
[FN]
*Includes a substantial amount of space leased to NBC and RCA at below
market rates on exercise of renewal options.
Competitive Market. The information set forth in this section is
based upon data supplied by Cushman & Wakefield, Inc. ("C&W") and publicly
available sources. The statements with respect to real estate markets and
market trends made in this section and elsewhere in this Report are based
upon the conclusions of C&W as experts. C&W is an affiliate of RGI.
New York City is the largest office real estate market in the
United States. Its central business district has two primary
concentrations, midtown and downtown Manhattan. The Property is located in
Manhattan's midtown office market. The midtown market comprises
approximately 250 million square feet of rentable office space, of which
174 million square feet of existing space is considered prime. The market
principally serves corporate headquarters and financial, legal,
communications, advertising and other service firms, as well as foreign
businesses and governments, for which prestige, central location and
amenities are factors justifying the higher rental rates charged for prime
office space.
The midtown Manhattan office space market has historically been
cyclical. Following a low point in 1975, the market rebounded sharply at
the end of the decade because of the low level of new construction and
improvement in the local and national economies. During the period 1975-
1979, vacancies decreased sharply from approximately 15% to approximately
2% and average asking rents doubled to approximately $20.50 per square foot
at the start of 1980. By 1985, rents had reached $38 per square foot, and
vacancies had risen to over 9%. An unprecedented amount of new
construction accounted for over 18 million square feet added to the market
from 1986 to 1991. The level of new construction activity has since
decreased, with 2.5 million square feet and 210,616 square feet added in
1992 and 1993, respectively. For prime space, vacancy levels reached 17.2%
and average asking rents topped $40 per square foot in 1990; by December
1993, the vacancy rate had decreased to 15.5%, while average asking rents
softened to $33.17 per square foot.
The Property competes with a large number of existing prime office
properties in the midtown Manhattan market, including other buildings in
which RGI has an interest. RGI and its affiliates have ownership interests
in and manage (or, in the case of two buildings, manage without having an
ownership interest) the four other buildings which are a part of the entire
Rockefeller Center complex but are not included in the Property. One of
these four buildings, Time & Life Building, is primarily occupied under a
long-term lease and in recent years has had little or no vacant space; the
McGraw-Hill Building, 1251 Avenue of the Americas and 1211 Avenue of the
Americas Buildings had vacancy levels which ranged from 14.4% to 1% at
-6-
December 31, 1993. Rockefeller Center Management Corporation ("RCMC"), a
wholly-owned subsidiary of RGI, performs services for these buildings and
C&W performs services for other office buildings. Depending on the nature
of their interests in these other properties, RGI and its affiliates might
have an incentive to favor them. In addition, RGI owns property adjacent
to the 1251 Avenue of the Americas Building, on which it may construct a
building (which would be an addition to the Rockefeller Center complex, but
which would not be included in the Property) of up to 1.5 million rentable
square feet. RGI and the Borrower have agreed, however, that RCMC, or any
successor or replacement management company which is an affiliate of the
Borrower, will not favor the leasing of other buildings over the Property.
The Borrower makes periodic reports to the Company regarding space leased
in buildings other than those included in the Property in which RGI and its
affiliates have ownership interests.
The Property will be subject to competition in the future from
continuing new office construction in midtown Manhattan. As of December
31, 1993, 752,000 square feet of additional rentable space was under
construction in the midtown market. RGI might in the future (including by
use of the development rights and air rights excluded from the Property)
build, acquire or expand, and RCMC or C&W might perform leasing and
management services for other properties in the midtown market.
Within the midtown market, certain high quality office buildings
have historically achieved above-average rents and rent rate stability due
to various factors including their location, amenities and name
recognition. Change in local, national and international economic
conditions will continue to affect the midtown Manhattan office space
market, so it is anticipated that there will be fluctuations of both
occupancy levels and rental rates.
Real Estate Taxes. The targeted and actual assessed valuation of
the Property and the real estate taxes payable by the Property are set
forth in the following schedule for the fiscal year periods encompassing
the years ended December 31, 1990, 1991, 1992 and 1993. Increases in
targeted assessed valuation are required to be phased-in over a five-year
period commencing with the fiscal year for which it is first increased.
Accordingly, the actual assessed valuation for any given fiscal
year is the result of layers of phased-in increases. The Borrower has
filed appeals for reduction of targeted assessed valuation with the Tax
Commission of the City of New York for the fiscal years 1989/90, 1990/91,
1991/92, 1992/93 and 1993/94.
<TABLE>
<CAPTION>
($ in millions)
Fiscal Year Targeted Actual Real Estate
July 1-June 30 Assessed Assessed Taxes
Valuation(1) Valuation(1) Payable(1)
<S> <C> <C> <C>
1990/91 $450.7(2) $401.5(2) $40.2(2)
1991/92 $430.8(2) $413.8(2) $44.0(2)
1992/93 $433.5(2) $432.8(2) $46.3(2)
1993/94 $393.9(2) $393.8(2) $42.2(2)
</TABLE>
[FN]
(1) Excludes amounts applicable to Radio City Music Hall. Real
estate taxes assessed against the Music Hall portions of the Property
are not charged to the Property.
(2) Excludes amounts applicable to the NBC space, see "NBC Tenancy-
The Property".
Property Management. The Borrower has entered into a Management
and Rental Agreement, dated as of September 1, 1985 (the "Property
Management Agreement"), engaging RCMC to manage the Property and appointing
RCMC as the Borrower's exclusive rental agent for the Property. RCMC was
organized by RGI in 1973 to manage Rockefeller Center and has 1,012
employees. RCMC's duties include, among other things, the management of
the Property and the supervision of its maintenance, repair, alteration and
operation and the preparation of operating and capital improvement budgets.
As exclusive rental agent, RCMC is required to use reasonable efforts to
keep the Property at all times fully rented. RCMC has agreed not to favor
the leasing of other buildings managed by RCMC over the Property. The
Property Management Agreement will expire on the Equity Conversion Date,
unless terminated prior to such date, and thereafter may
be renewed by agreement of the Borrower and RCMC for successive three-year
periods. During the 15-year
-7-
term of the Property Management Agreement, RCMC will be reimbursed for
Property operating costs and will be paid a fee at the initial rate of
approximately $1.8 million (or $.30 per square foot of rentable area)
escalating as of each December 1st thereafter (commencing December 1, 1986)
with the Consumer Price Index. RCMC's fee for the period December 1, 1993
through November 30, 1994 will be approximately $2.6 million. RCMC also
receives leasing commissions for rental services payable at rates and in
accordance with terms set forth in the Property Management Agreement.
Repurchase of Convertible Debentures.
Between 1987 and 1992, the Company repurchased and retired a
portion of its Convertible Debentures and financed these repurchases with
unsecured short term non-convertible borrowings. The Company and the four
banks which comprise the lending syndicate for the letter of credit
originally scheduled to expire in May 1993 agreed that the banks would
extend this facility, subject to regularly scheduled reductions until
December 15, 1994 (See Note 5-Debt, page F-10). In connection therewith
the Company has agreed, among other things, that during the term of this
facility it will not repurchase any of its Convertible Debentures.
At December 31, 1993, Current Coupon and Zero Coupon Convertible
Debentures with face values of $121,830,000 and $366,065,000, respectively,
had been cumulatively repurchased at an aggregate cost of $217,295,000. At
December 31, 1993, commercial paper in the face amount of $247,650,000 had
been issued by the Company. The funds from these borrowings were used by
the Company to finance the repurchases of its Convertible Debentures and
for other general corporate purposes. These borrowings, at various rates,
create current interest payment obligations in lieu of non-cash interest
accrual related to the repurchased Zero Coupon Convertible Debentures. The
Company has entered into interest rate swap agreements in order to
establish fixed rates of interest payable on the majority of borrowings
under the Company's commercial paper program.
The Administrator.
Pursuant to an Administrative Services Agreement, dated September
11, 1985, Cushman & Wakefield Realty Advisors, Inc. ("C&W Realty"), a
subsidiary of C&W, performed until June 2, 1993, certain administrative and
other services for the Company. Such services included, among other
things, managing the day-to-day operations and affairs of the Company,
monitoring the Borrower's compliance with the provisions of the Loan
Agreement, the Note, the Mortgage and related documents, managing the
Company's short-term investments, maintaining compliance with all pertinent
local, state and federal laws, and providing administrative, record-
keeping, accounting and secretarial services for the Company. The
Administrative Services Agreement was terminated by the Company as of June
2, 1993. As of June 3, 1993, all of the aforementioned administrative
duties are performed by the three officers and four employees of the
Company.
Income Tax Matters.
The Company qualifies and has elected to be treated as a REIT
under the Code, commencing with its taxable year ending December 31, 1985.
The election to be a REIT continues unless terminated or revoked.
In brief, if the Code requirements for qualification as a REIT continue to
be met, the Company (which would otherwise be subject to taxation as a
corporation) is, with limited exceptions, not taxed at the corporate level
on taxable income that is currently distributed to its stockholders. In
any taxable year for which the Company would not qualify as a REIT, the
Company would be subject to Federal income tax as an ordinary corporation
without any deduction for distributions to stockholders, and generally
would not be eligible again to elect REIT status for four years following
the year in which such qualification is lost. To the extent that the
Company would as a consequence be subject to significant tax liability for
any such year, the amount of cash available for satisfaction of its
liabilities and distribution to its stockholders would be reduced or
eliminated and the Company could be required to borrow to pay such
liabilities and make such distributions.
The Company must meet and maintain certain requirements in order
to qualify as a REIT. These requirements relate principally to the
Company's organizational structure, the nature of its assets, the sources
of its income, and the distribution of its income to its stockholders.
-8-
The statutory provisions relating to REIT qualification are highly
technical and complex. While management of the Company believes that the
Company will continue to remain qualified as a REIT, no assurance of
continuing qualification can be given.
Policies.
Business Activity. The Company's Certificate of Incorporation
precludes it from engaging in any business other than as lender under the
Loan Agreement and holding the Equity Option and activities related
thereto. The provision to this effect in the Certificate of Incorporation
may be amended only by the holders of at least 80% of the Common Stock
entitled to vote thereon.
Distributions from Operations. The Company intends to make four
distributions annually to its stockholders during the months of April,
July, October and December. To the extent that such distributions exceed
annual net income as computed for tax purposes, the excess will be treated
as a return of capital.
The Company also has made and intends to continue to make
sufficient distributions to meet the requirements for being treated as a
REIT for federal income tax purposes. Since the applicable distribution
requirements are calculated after inclusion of certain non-cash income and
deduction of certain non-cash charges, including amortization of original
issue discount in connection with the Convertible Debentures, distributions
by the Company may exceed such distribution requirements. However, as
discussed in Note 5 (See page F-10), the Company has agreed that so long as
the letter of credit facility expiring on December 15, 1994 is outstanding,
distributions will be limited to the higher of $1.00 per share or 95% of
annual net income as computed for tax purposes. Also, the Company has
stated that its policy with respect to future dividends is to limit such
dividends to the level required to maintain REIT status while using excess
cash to reduce debt.
Investments. The Company may make investments which will not
result in the Company's being disqualified as a REIT.
Dilution. Other than issuances of shares of Common Stock on
conversion of the Convertible Debentures or in connection with any debt
refinancing, the Company does not intend to issue any additional capital
stock or any rights, warrants or options to purchase any additional Common
Stock.
Borrowings. The Company may borrow, on an unsecured basis or on
a secured basis, to participate in the development of certain improvements
at the Property, refinance debt including the debt represented by the
Convertible Debentures, make any distributions to stockholders (including
distributions to stockholders in order to maintain its qualification as a
REIT), obtain working capital, and pay any taxes which might become due if
the Company failed to qualify as a REIT or repurchase its securities.
Other Activities and Investments. It is the policy of the
Company not to (i) invest in the securities of other issuers for the
purpose of exercising control, (ii) underwrite securities of other issuers,
or (iii) offer securities in exchange for property.
Investment by Mitsubishi Estate Company, Limited in RGI.
In 1990, Mitsubishi Estate Company, Limited acquired a controlling
interest in the outstanding stock of RGI. RGI, through affiliate
partnerships, is the equity owner of Rockefeller Center. RCPI has no
interest in RGI and this change in the ownership of RGI has no effect on
RCPI's rights under its mortgage on Rockefeller Center.
Item 2. Properties.
None. The principal assets of the Company are the mortgage loan
receivable secured by the Property and the Equity Option described in Item
1. Business above.
-9-
Item 3. Legal Proceedings.
On February 23, 1993 the judge before whom the Pruitt litigation
described in Note 9 to the Company's 1993 audited financial statements was
pending signed a Final Order and Judgment (the "Final Order and Judgment")
approving the terms of a Stipulation and Agreement of Settlement dated as
of May 31, 1992, as supplemented (the "Settlement Agreement"), which would
settle this litigation.
Under the terms of the Settlement Agreement, the collateral
provided to the Company by the Borrower to secure certain obligations of
the Borrower was increased from $126 million to $200 million subject to
reduction. (Pursuant to a separate agreement between the Company and the
Borrower the amount of such collateral will be maintained at the level of
$200 million until December 31, 1994.) The Settlement Agreement also
called for 100,000 square feet of development rights associated with
Rockefeller Center to be added to the mortgage.
In accordance with the terms of the Settlement Agreement, on
November 3, 1993 the Company issued warrants to purchase 3,000,098 shares
of the Company's common stock to persons eligible under provisions of the
Settlement Agreement. The warrants were exercisable during the 30-day
period ending December 3, 1993 at an exercise price of $7.00 per share of
common stock. A total of 750,704 warrants were exercised and a like number
of shares of Common Stock were issued. During the year ended December 31,
1993, the Company received $5,086,000 in proceeds from the issuance of
common stock. At December 31, 1993 the Company had 38,260,704 shares of
Common Stock outstanding.
Other than the action described above, the Company is not a party
to any material legal proceeding or environmental litigation, nor is it
aware of any such proceeding or litigation pending or threatened against
it.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
-10-
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The principal market for the Company's Common Stock is the New
York Stock Exchange. For quarterly price information with respect to the
Company's Common Stock for the two years ended December 31, 1993, see
"Quarterly Stock Information" at page F-26 herein, which information is
incorporated herein by reference.
As of February 17, 1994, there were 13,118 stockholders of record.
For information on the frequency and amount of dividends paid with
respect to the Company's Common Stock during the two years ended December
31, 1993, see Note 7 "Income Taxes and Distributions" at page F-12 herein,
which information is incorporated herein by reference.
Item 6. Selected Financial Data.
Selected financial information of the Company for the five years
ended December 31, 1993 is set forth at page F-17 herein and is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
The information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
on pages F-18 through F-25 herein is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary data of the Company and
the report of independent auditors thereon are set forth at pages F-2
through F-16 herein and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
None.
-11-
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this item is hereby incorporated by
reference from the Company's definitive Proxy Statement for the 1994 Annual
Meeting of Stockholders (to be filed).
Item 11. Executive Compensation.
The information required by this item is hereby incorporated by
reference from the Company's definitive Proxy Statement for the 1994 Annual
Meeting of Stockholders (to be filed).
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is hereby incorporated by
reference from the Company's definitive Proxy Statement for the 1994 Annual
Meeting of Stockholders (to be filed).
Item 13. Certain Relationships and Related Transactions.
The information required by this item is hereby incorporated by
reference from the Company's definitive Proxy Statement for the 1994 Annual
Meeting of Stockholders (to be filed).
-12-
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Documents Filed as Part of the Report.
1. Financial Statements and Report of Independent Auditors.
A. Registrant-See Item 8.
B. Rockefeller Center Properties and RCP Associates.
(1) Combined Statements of Operations for the years ended
December 31, 1993, 1992 and 1991.
(2) Notes to Combined Statements of Operations.
(3) Report of Independent Auditors.
2. Financial Statement Schedule.
A. Registrant-Schedule I - Marketable Securities
B. Other schedules have not been included
since the required information is not present or is not
present in amounts sufficient to require submission of the
schedules, or because the information required is included
in the financial statements and notes thereto.
3. Exhibits.
Documents Incorporated by Reference:
(4.1) Indenture dated as of September 15, 1985 between the
registrant and Manufacturers Hanover Trust Company, as
Trustee (the "Trustee"), including the forms of Current
Coupon Convertible Debenture, Zero Coupon Convertible
Debenture and Floating Rate Note, is incorporated by
reference to Exhibit 4 to the registrant's Quarterly
Report on Form 10-Q for the period ended September 30,
1985.
(4.2) First Supplemental Indenture dated as of December 15, 1985
between the registrant and the Trustee, is incorporated by
reference to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1985.
(4.3) Form of definitive share certificate for Common Stock, is
incorporated by reference to Exhibit 4.3 to the
registrant's Annual Report on Form 10-K for the year ended
December 31, 1985.
(4.4) Restated Certificate of Incorporation of the registrant,
as amended June 15, 1988, is incorporated by reference to
Exhibit 3.4 to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1988.
(10.1) Loan Agreement dated as of September 19, 1985 among the
registrant, RCP Associates ("Associates") and Rockefeller
Center Properties ("RCP"), is incorporated by reference to
Exhibit 19.1 to the registrant's Quarterly Report on Form
10-Q for the period ended September 30, 1985.
-13-
(10.4) Consolidated Mortgage Note of Associates and RCP dated
September 19, 1985, is incorporated by reference to
Exhibit 19.4 to the registrant's Quarterly Report on Form
10-Q for the period ended September 30, 1985.
(10.5) Mortgage Note of Associates and RCP dated September 19,
1985, is incorporated by reference to Exhibit 19.5 to the
registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 1985.
(10.8) Letter Agreement dated September 12, 1985 among
Rockefeller Group, Inc. ("RGI"), Radio City Music Hall
Productions, Inc. ("RCMHP"), the registrant, Goldman,
Sachs & Co. and Shearson Lehman Brothers Inc., as
representatives of the several Underwriters with respect
to the registrant's Common Stock, and Goldman Sachs
International Corp. and certain other Representatives, as
representatives of the several Underwriters with respect
to the registrant's Convertible Debentures, is
incorporated by reference to Exhibit 19.8 to the
registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 1985.
(10.9) Management and Rental Agreement dated as of September 1,
1985 among RCP, Associates and Rockefeller Center
Management Corporation, is incorporated by reference to
Exhibit 19.9 to the registrant's Quarterly Report on Form
10-Q for the period ended September 30, 1985.
(10.10) Administrative Services Agreement dated September 11, 1985
between the registrant and Cushman & Wakefield Realty
Advisors, Inc., is incorporated by reference to Exhibit
19.10 to the registrant's Quarterly Report on Form 10-Q
for the period ended September 30, 1985.
(10.11) Form of Amended and Restated Partnership Agreement of RCP
among RGI, RCMHP and the registrant, is incorporated by
reference to Exhibit 19.11 to the registrant's Quarterly
Report on Form 10-Q for the period ended September 30,
1985.
(10.12) Form of Amended and Restated Agreement of Limited
Partnership of Associates among RGI, RCMHP and the
registrant, is incorporated by reference to Exhibit 19.12
to the registrant's Quarterly Report on Form 10-Q for the
period ended September 30, 1985.
(10.13) Dividend Reinvestment Plan of the registrant, is
incorporated by reference to Exhibit 10.14 to the
registrant's Annual Report on Form 10-K for the year ended
December 31, 1985.
(10.14) Amended and Restated Consolidated Mortgage and Security
Agreement, dated as of December 1, 1988 among Associates,
RCP and the registrant, is incorporated by reference to
Exhibit 10.15 to the registrant's Annual Report on Form 10-
K for the year ended December 31, 1988.
(10.15) Amended and Restated Mortgage and Security Agreement,
dated as of December 1, 1988 among Associates, RCP and the
registrant, is incorporated by reference to Exhibit 10.16
to the registrant's Annual Report on Form 10-K for the
year ended December 31, 1988.
(10.16) Amended and Restated Assignment of Rents, dated as of
December 1, 1988 among Associates, RCP and the registrant,
is incorporated by reference to Exhibit 10.17 to the
registrant's Annual Report on Form 10-K for the year ended
December 31, 1988.
(10.17) Amended and Restated Purchase Option, dated as of December
1, 1988 among Associates, RCP and the registrant, is
incorporated by reference to Exhibit 10.18 to the
registrant's Annual Report on Form 10-K for the year ended
December 31, 1988.
-14-
(10.18) Consent and Agreement, dated as of December 1, 1988 among
Associates, RCP and the registrant, is incorporated by
reference to Exhibit 10.19 to the registrant's Annual
Report on Form 10-K for the year ended December 31, 1988.
(10.19) Credit Agreement dated as of May 22, 1990 among the
registrant, certain banks and Credit Suisse, New York
Branch, as issuer of the letter of credit and as agent, is
incorporated by reference to Exhibit 28.1 to the
registrant's Current Report on Form 8-K dated May 22,
1990.
(10.20) Credit Agreement dated as of July 20, 1990 among the
registrant, certain banks and The Dai-Ichi Kangyo Bank,
Limited, New York Branch, as issuer of the letter of
credit and as agent, is incorporated by reference to
Exhibit 19.1 to the registrant's Quarterly Report on Form
10-Q for the period ended June 30,1990.
(10.21) Second Amendment dated April 6, 1993 to the Loan Agreement
is incorporated by reference to Exhibit 10.22 to the
registrant's Current Report on Form 8-K dated April 23,
1993.
(10.22) Third Amendment dated April 6, 1993 to the Loan Agreement
is incorporated by reference to Exhibit 10.23 to the
registrant's Current Report on Form 8-K dated April 23,
1993.
(10.23) Amendment to Amended and Restated Consolidated Mortgage
dated as of April 6, 1993 by the Borrowers to the Company
is incorporated by reference to Exhibit 10.24 to the
registrant's Current Report on Form 8-K dated April 23,
1993.
(10.24) Amendment to Amended and Restated Mortgage dated as of
April 6, 1993 by the Borrowers to the Company is
incorporated by reference to Exhibit 10.25 to the
registrant's Curent Report on Form 8-K dated April 23,
1993.
(10.25) Amendment to Amended and Restated Purchase Option dated as
of April 6, 1993 by the Borrowers to the Company is
incorporated by reference to Exhibit 10.26 to the
registrant's Current Report on Form 8-K dated April 23,
1993.
(10.26) Amendment to Amended and Restated Assignment of Rents
dated as of April 6, 1993 by the Borrowers to the Company
is incorporated by reference to Exhibit 10.27 to the
registrant's Current Report on Form 8-K dated April 23,
1993.
(10.27) Letter of Credit dated April 8, 1993 from The Mitsubishi
Bank, Limited to the Company is incorporated by reference
to Exhibit 10.28 to the registrant's Curent Report on Form
8-K dated April 23, 1993.
(10.28) Letter of Credit dated April 8, 1993 from The Mitsubishi
Trust and Banking Corporation, New York Branch, to the
Company, as beneficiary is incorporated by reference to
Exhibit 10.29 to the registrant's Current Report on Form 8-
K dated April 23, 1993.
(10.29) First Amendment dated as of April 27, 1993 among the
Company, Credit Suise, New York Branch, as agent and
issuer of the letter of credit and the banks party to the
Credit Agreement dated as of May 22, 1990 is incorporated
by reference to Exhibit 10.30 to the registrant's Current
Report on Form 8-K dated April 23, 1993.
(10.30) Letter of Credit dated April 27, 1993 from Credit Suisse,
New York Branch, to Dai-Ichi Kangyo Trust Company, as
beneficiary is incorporated by reference to Exhibit 10.31
to the restrant's Current Report on Form 8-K dated April
23, 1993.
(10.31) Letter Agreement dated April 22, 1993 between Chemical
Bank and the Company is incorporated by reference to
Exhibit 10.32 to the registrant's Current Report on Form 8-
K dated April 23, 1993.
-15-
(10.32) Letter Agreement dated February 17, 1994 between the
Company and RGI concerning temporary relinquishment by RGI
of its right to nominate 40% of the Company's Board of
Directors is incorporated by reference to Exhibit 10.33 to
the registrant's Current Report on Form 8-K dated February
22, 1994.
(28.10) Report by Douglas Elliman Appraisal and Consulting
Division dated as of December 31, 1993 is incorporated by
reference to Exhibit 28.10 to the registrant's Current
Report on Form 8-K dated February 22, 1994.
Exhibits submitted herewith:
(4.21) Instrument of Resignation, Appointment and Acceptance
dated as of December 1, 1993 among the Registrant,
Chemical Bank, successor by merger to Manufacturers
Hanover Trust Company, and United States Trust Company of
New York.
(4.5) By-laws of the registrant, as amended through March 8,
1994.
(10.33) Fourth Amendment dated February 22, 1994 to the Loan
Agreement.
(b) Reports on Form 8-K.
A report on Form 8-K was filed on October 27, 1993
reporting events under Item 7 of Form 8-K.
-16-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ROCKEFELLER CENTER PROPERTIES, INC.
/s/RICHARD M. SCARLATA
Richard M. Scarlata
Senior Vice President--Finance &
Administration
(Principal Financial Officer and
Principal
Accounting Officer)
Date: March 11, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
/s/EDWARD P. FONTAINE
Edward P. Fontaine
President and Chief Executive Officer
(Principal Executive Officer)
/s/CLAUDE M. BALLARD, JR.
Claude M. Ballard, Jr.
Director and Chairman of the Board
/s/BENJAMIN D. HOLLOWAY
Benjamin D. Holloway
Director
/s/PETER D. LINNEMAN
Peter D. Linneman
Director
/s/WILLIAM F. MURDOCH, JR.
William F. Murdoch, Jr.
Director
/s/PETER G. PETERSON
Peter G. Peterson
Director
Date: March 11, 1994
-17-
<TABLE>
<CAPTION>
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
(In thousands)
1993 1992 1991
<S> <C> <C> <C>
Rental revenue:
Fixed and percentage $152,187 $153,492 $153,273
Operating and real estate
tax escalations 55,643 57,029 57,224
Total rental revenue 207,830 210,521 210,497
Sales of services 18,767 18,479 19,700
Gross revenues 226,597 229,000 230,197
Operating expenses:
Real estate taxes 44,336 44,481 42,725
Maintenance and engineering 33,657 30,509 30,037
Other operating expenses 26,026 25,208 24,997
Utilities 16,553 16,360 16,092
Cost of service sales 13,919 14,884 15,262
General and administrative 5,871 6,231 4,285
Management fees 2,579 2,491 2,402
Ground rent 694 700 668
143,635 140,864 136,468
Operating income before
interest, depreciation and
amortization 82,962 88,136 93,729
Interest expense 114,599 114,040 114,481
Depreciation and amortization 21,821 19,834 17,137
Net loss ($53,458) ($45,738) ($37,889)
</TABLE>
[FN]
See accompanying notes.
-1-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
1. Basis of Presentation
The accompanying combined statements of operations include the
accounts of two partnerships, Rockefeller Center Properties (RCP)
and RCP Associates (Associates) (collectively, the Partnerships),
in which Rockefeller Group, Inc. (RGI) and one of its
subsidiaries, Radio City Music Hall Productions, Inc. (RCMHPI),
are the sole partners (the Partners). The Partnerships together
own the real property interests constituting most of the land and
buildings known as Rockefeller Center (the Property).
Transactions between the Partnerships have been eliminated in the
accompanying combined statements of operations.
2. Summary of Significant Accounting Policies
Depreciation and Amortization - Buildings and improvements are
depreciated using the straight-line method over their useful lives
which range from 15 to 50 years. Capital replacements are
depreciated using the straight-line method over their estimated
useful lives, which range from 3 to 15 years.
Deferred expenses, which represent expenditures associated with
obtaining new tenants and preparing the premises for occupancy,
are amortized on a straight-line basis over the related lease
terms.
Interest Expense - Interest expense on the Rockefeller Center
Properties, Inc. Mortgage Loan (see Note 3) is recognized based on
the average yield on the mortgage notes through December 31, 2000
(the Equity Conversion Date). The average yield combines the
differing coupon rates of interest (Base Interest) with the
amortization (using the interest method) of the original issue
discount.
Income Taxes - The net income or loss of the Partnerships is
included in determining the net income of their Partners which
have the responsibility to pay any related income taxes.
3. RCPI Mortgage Loan
Rockefeller Center Properties, Inc. (RCPI), a real estate
investment trust (REIT), used the net proceeds of its initial
public offerings to make a $1.3 billion participating mortgage
loan (the Loan) to the Partnerships. The net proceeds of the
offerings totaled $1,233,752,000 and were loaned to the
Partnerships on September 19, 1985, thus creating original issue
discount of approximately $66,248,000 with respect to the Loan.
-2-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
3. RCPI Mortgage Loan (Continued)
Prior to the Equity Conversion Date, the Loan provides for
specified quarterly Base Interest payments during its remaining
term with annualized coupon rates increasing from 7.73% in 1991 to
8.43% in 2000.
The combination of the varying rates of Base Interest with the
amortization of the original issue discount results in an
effective annual interest rate approximating 8.51% over the term
of the Loan. Through the year 2000, the Loan provides for
Additional Interest for each year in which gross revenues (as
defined) of the Property exceed $312.5 million. Additional
Interest is to accrue in an amount equal to the sum of (i) 31.5%
of such excess over $312.5 million plus (ii) $42.95 million.
Through December 31, 1993 no Additional Interest has been accrued.
In accordance with an Internal Revenue Service private letter
ruling, effective as of October 26, 1990, a new formula is used
for the purpose of calculating additional interest. The new
formula is intended to provide the REIT with the same amount of
additional interest as it would have received had the NBC
transaction (see Note 4) been a gross (as opposed to a net) rent
transaction.
Under the new formula for determination of additional interest,
actual gross revenues are increased by the amount of any real
estate taxes and operating expenses payable by a tenant to a third
party (e.g., to New York City or the provider of the services)
instead of to the Partnerships. Gross revenues are also increased
to include any rent credits NBC receives for capital improvements
which qualify towards the Partnerships' obligation to make
$197,618,000 of capital improvements to the Property. Under the
new formula, it is estimated that 1993 gross revenues for the
purpose of computing additional interest would have been $235.9
million.
In connection with the Loan, RCPI has been granted an option,
exercisable on the Equity Conversion Date (the Equity Option), to
convert the outstanding principal amount of the Loan into a 71.5%
equity interest in the partnership (representing the combination
of RCP and Associates) then owning the Property. There is no
scheduled amortization of the Loan prior to the Equity Conversion
Date.
In the event that the Equity Option is not exercised, the Loan
will mature in a single installment on December 31, 2007, will
bear interest (after 2000) equal to the London Interbank Offered
Rate (LIBOR) plus a spread of as much as 1%, and will be
prepayable at the option of the Partnerships (or successor
partnership) at 100% of its principal amount plus accrued
interest, if any.
-3-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
3. RCPI Mortgage Loan (Continued)
The Loan is secured by leasehold mortgages in the aggregate amount
of approximately $44.8 million which were assigned to RCPI and
consolidated, spread, and recorded as a first mortgage lien
against the entire Property. In addition, the Loan is secured by
an unrecorded mortgage (the Mortgage) in the amount of
approximately $1,255.2 million. The Loan is further secured by a
recorded Assignment of Rents pursuant to which the Partnerships
have assigned to RCPI, as security for repayment of the Loan, the
Partnerships' right to collect all rents with respect to the
Property.
The Loan Agreement requires the Partnerships to maintain a
standby, irrevocable letter of credit, or to deposit with a
trustee either cash or specified types of collateral of an
equivalent fair market value, (collectively, "Security"). This
Security provides for, among other things, the costs of recording
the Mortgage upon the occurrence of certain specified events and
supports the Partnerships' payment of Base Interest due on the
Loan. Letters of credit in favor of RCPI has been obtained by RGI
to satisfy this requirement.
In 1992, RCPI entered into a Stipulation and Agreement of
Settlement in settlement of a class action suit brought against
RCPI. Under the terms of this agreement, the Security was
increased from $126 million to $200 million, subject to periodic
reduction. As further security for the Loan, 100,000 square feet
of development rights associated with Rockefeller Center was added
to the Loan. Separately, the Partnerships agreed to maintain the
Security at $200 million until December 31, 1994. On January 1,
1995, the level of Security will revert to the level originally
required to be maintained under the Loan Agreement, which will not
be less than $90 million.
The Loan Agreement also contains covenants with respect to the
operation and maintenance of the Property and limitations on the
Partnerships' right to dispose of the Property and incur debt or
liens.
4. NBC Transaction
National Broadcasting Company, Inc. (NBC) leases approximately 1.2
million square feet of space in three Rockefeller Center buildings
(the GE Building, the Studio Building and the GE West Building).
-4-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
4. NBC Transaction (Continued)
Under agreements signed in 1988, the NBC lease has been extended
to the year 2022. Through 1997, NBC will continue to pay rent on
the basis of its prior lease. The agreements, however, provide
that, prior to 1997, NBC will have the right to directly pay a
portion of the operating expenses and real estate taxes on its
leased space, and reduce its lease payments accordingly.
From 1997 to 2022, NBC will pay rent at fixed rates varying
according to the types of space involved (such as office or
studio) and location within the three buildings. This rent, which
will increase by 15% in 2007 and again in 2017, has been
determined on a "net" basis, that is, without including amounts
normally payable with regard to real estate taxes and operating
expenses. Further, NBC has options for one 10-year renewal period
and one 9-year five month renewal period, at net rents determined
according to then fair market rental value. At NBC's option, the
first renewal period can be split into two renewal periods, the
first of three years and the second of seven years.
The agreements also grant to NBC options to lease, beginning in
1994, up to approximately 910,000 square feet of office space in
the GE Building which is currently leased to other tenants. To
date, NBC has exercised its right to lease 111,000 square feet at
a fixed rate, increasing by 15% in 2007 and again in 2017. The
remaining 799,000 square feet will be offered to NBC for lease at
then fair market net rental rates.
The agreements had granted to NBC an option to purchase the GE
West and Studio Buildings in the year 2022 for a purchase price
determined according to then-prevailing market values. Pursuant
to a March 12, 1993 agreement, the Partnerships and NBC canceled
NBC's option to purchase these buildings.
The transaction was structured to accommodate arrangements between
New York City and NBC for certain financial assistance in
connection with the project. The three affected buildings were
subjected to a condominium regime, and the NBC-occupied areas were
conveyed to the City's Industrial Development Agency (IDA) for
nominal consideration. These areas were then leased back to the
Partnerships at nominal rents, with NBC becoming a subtenant of
the Partnerships. Upon the expiration of the period of City
benefits, ownership will revert to the Partnerships. IDA
ownership is a technical structuring required to effectuate the
proposed transaction and will have no economic effect upon the
Partnerships.
-5-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
5. Related Party Transactions
RGI and affiliates occupy approximately 1.6% of the total rentable
space within the Property. The terms of the lease with RGI
provide for an annual base rent of approximately $4,013,000.
The Property includes the Radio City Music Hall and the land on
which it is situated. Radio City Music Hall is operated by an RGI
affiliate which pays a nominal rent for this facility and is
responsible for paying all costs (including real estate taxes)
related to its operation.
The Property includes a six-story parking garage. The garage is
leased to Rockefeller Center Management Corporation (RCMC) for an
annual base rent of approximately $2,300,000.
Rental revenue in the accompanying combined statements of
operations includes $7,778,000, $7,712,000 and $7,531,000 earned
in 1993, 1992 and 1991, respectively, under the terms of the above
mentioned leases. In addition to the base rent, rental revenue
includes $1,544,000, $1,572,000 and $1,631,000 in 1993, 1992 and
1991, respectively, relating to their proportionate share of
increases in certain costs and expenses of the Property.
Under the terms of a management agreement, RCMC provides
management and administrative services for the Property. During
1993, 1992 and 1991, RCMC charged the Partnerships $2,579,000,
$2,491,000 and $2,402,000, respectively, in management fees under
the terms of this agreement.
This management agreement also allows RCMC to receive commissions
with respect to leases negotiated within the Property, including
overrides when another broker is the procuring broker. During
1993, 1992 and 1991, RCMC was paid $2,888,000, $1,563,000 and
$1,601,000 in leasing commissions by the Partnerships. Cushman &
Wakefield, Inc., an RGI subsidiary, was paid $571,000, $138,000
and $11,000 in leasing commissions by the Partnerships during
1993, 1992 and 1991, respectively.
Under the terms of a franchise agreement with RCMC (as agent for
the Partnerships), Rockefeller Group Telecommunications Services,
Inc., a subsidiary of RGI, is permitted to provide shared
telecommunication services to tenants within the Property. No
fees are paid to the Partnerships relating to the right to provide
these services. The Partnerships have committed to pay for
certain of the capital additions associated with providing these
services up to an aggregate of $13,000,000. During 1993, 1992 and
1991, the cost of capital additions borne by the Partnerships
approximated $658,000, $451,000 and $492,000, respectively. Total
expenditures through December 31, 1993 approximate $8,435,000.
-6-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
5. Related Party Transactions (Continued)
The Partnerships participate in a cash management system under
which their funds, together with the funds of other related
companies, are managed by a subsidiary of RGI. At December 31,
1993, 1992 and 1991, the balances due to RGI affiliates include
$125,388,000, $79,141,000,
and $35,314,000, respectively, of interest free overdrafts in the
cash management system.
Salaried employees of the Partnerships participate in the defined
benefit pension plan maintained by RGI. Accordingly, the
Partnerships were charged their proportionate share of RGI's
pension cost which aggregated $489,000, $423,000 and $334,000 in
1993, 1992 and 1991, respectively. The hourly employees of the
Partnerships are covered by defined contribution plans. The
contributions to the multi-employer sponsored plans in 1993, 1992,
and 1991, aggregated $1,370,000, $1,326,000 and $1,236,000,
respectively.
The Partnerships provide certain health care and life insurance
benefits for current and retired salaried employees through plans
maintained by RGI. Accordingly, the Partnerships were charged
their proportionate share of RGI's health care and life insurance
costs which aggregated $1,725,000, $1,524,000 and $1,119,000 in
1993, 1992 and 1991, respectively.
The Partnerships adopted Statement of Financial Accounting
Standards No. 106, "Employers Accounting for Postretirement
Benefits Other than Pensions" in 1993, the effect of which was not
material.
6. Loans payable to RGI
The Loan with RCPI (see Note 3) provides that if the cumulative
cost of capital improvements made by the Partnerships is in excess
of specified amounts contained in the agreement for any calendar
year, the excess amount is deemed a renewable one-year loan from
RGI to the Partnerships for the next calendar year. The
cumulative amount of excess capital improvements totaled
$122,934,000, $107,477,000 and $101,962,000 at December 31, 1993,
December 31, 1992 and December 31, 1991, respectively.
These excess capital improvement loans accrue interest at 80% of
the prime rate, compounded quarterly. Loans for the cumulative
excess capital improvements existing at the end of the preceding
year do not begin to earn interest until the beginning of the
following year. Unpaid interest is added to the principal balance
and also earns interest at 80% of the prime rate, compounded
quarterly. The cumulative amount of unpaid interest totaled
$26,720,000, $20,467,000 and $14,303,000 at December 31, 1993,
December 31, 1992 and December 31, 1991, respectively.
-7-
ROCKEFELLER CENTER PROPERTIES AND RCP ASSOCIATES
NOTES TO COMBINED STATEMENTS OF OPERATIONS
Years ended December 31, 1993, 1992 and 1991
6. Loans payable to RGI (Continued)
The loan principal and accumulated interest are due and payable
following the Equity Conversion Date, December 31, 2000. If RCPI
exercises its conversion option to acquire a 71.5% equity interest
in the partnership then owning the Property, the loans payable to
RGI become the obligation of the Partnership having RCPI as a
71.5% partner, and cease to be the sole obligation of the prior
partner group.
7. Tenant Leasing Arrangements
The Partnerships lease to tenants office, retail, and storage
space in the Property through non-cancelable operating leases
expiring principally over the next 21 years, other than the NBC
lease (see Note 4). The leases require fixed minimum monthly
payments over their terms and provide for adjustments to rent for
the tenants' proportionate share of changes in certain costs and
expenses of the Property. Certain leases also provide for
additional rent which is based upon a percentage of sales of the
lessee.
The following is a schedule of minimum future rentals on non-
cancelable operating leases as of December 31, 1993:
<TABLE>
<CAPTION>
Year ending December 31,
<S> <C>
1994 $136,960,000
1995 100,728,000
1996 100,863,000
1997 102,667,000
1998 112,911,000
Later years 1,551,801,000
Total minimum future rentals $2,105,930,000
</TABLE>
-8-
Report of Ernst & Young, Independent Auditors
The Partners of
Rockefeller Center Properties and RCP Associates
We have audited the accompanying combined statements of operations of
Rockefeller Center Properties and RCP Associates (collectively, the
Partnerships) for the years ended December 31, 1993, 1992 and 1991.
These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the combined results of operations
of the Partnerships for the years ended December 31, 1993, 1992 and
1991, in conformity with generally accepted accounting principles.
/s/ERNST & YOUNG
New York, New York
February 4, 1994
-9-
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statements F-2
Balance Sheets F-2
Statements of Income F-3
Statements of Changes in Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
Report of Management F-15
Report of Independent Auditors F-16
Selected Financial Information F-17
Management's Discussion and Analysis F-18
Liquidity and Capital Resources - The Company F-18
Results of Operations - The Company F-20
Results of Operations - The Property F-22
Cash Flow - The Property F-24
Appraised Value - The Property F-25
Quarterly Stock Information F-26
Schedule I - Marketable Securities F-27
F-1
<TABLE>
<CAPTION>
BALANCE SHEETS
(Dollars in thousands)
DECEMBER 31,
1993 1992
<S> <C> <C>
ASSETS
Loan receivable, net of unamortized discount
of $40,636 and $44,814 (Notes 2 and 3) $1,259,364 $1,255,186
Portfolio securities, net of unamortized
discount of $5,157 in 1992 (Notes 2 and 4) 14,300 131,993
Interest receivable (Notes 2 and 3) 38,063 38,954
Deferred debt issuance costs, net (Note 2) 4,936 5,641
Cash 252 132
Other assets 594 304
$1,317,509 $1,432,210
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Commercial paper outstanding, net of
unamortized discount of $427 and $1,222
(Notes 2 and 5) $247,223 $377,078
Bank loan payable (Notes 2 and 5) 20,000
Current coupon convertible debentures due
2000 (Notes 2 and 5) 213,170 213,170
Zero coupon convertible debentures due 2000,
net of unamortized discount of
$289,642 and $317,149 (Notes 2 and 5) 296,543 269,036
Accrued interest payable (Notes 2 and 5) 33,662 29,008
Accounts payable and accrued expenses 1,746 2,068
792,344 910,360
Contingencies (Note 9)
Stockholders' equity:
Common stock, $.01 par value:
150,000,000 shares authorized;
38,260,704 and 37,510,000 shares issued and
outstanding (Notes 1 and 6) 383 375
Additional paid-in capital 705,517 700,439
Distributions to stockholders in excess of
net income (Note 7) (180,735) (178,964)
Total stockholders' equity 525,165 521,850
$1,317,509 $1,432,210
</TABLE>
[FN]
See notes to financial statements.
F-2
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
YEARS ENDED DECEMBER 31,
1993 1992 1991
<S> <C> <C> <C>
Revenues
Loan interest income (Notes 2 and 3) $108,363 $107,873 $107,313
Portfolio income (Notes 2, 4 and 5) 5,177 14,415 15,718
Short term investment income 20 126 151
113,560 122,414 123,182
Expenses
Interest expense:
Convertible debentures (Notes 2 and 5) 49,527 46,749 47,035
Commercial paper, bank loan and other
(Notes 2 and 5) 28,816 34,050 33,749
General and administrative (Note 8) 3,728 4,299 3,349
Amortization of deferred debt issuance
costs (Note 2) 705 705 760
82,776 85,803 84,893
Income before non-recurring income
and extraordinary (loss) gain on debt
extinguishment 30,784 36,611 38,289
Non-recurring income (Gain on sales of
portfolio securities) (Note 4) 8,593
Income before extraordinary (loss) gain
on debt extinguishment 39,377 36,611 38,289
Extraordinary (loss) gain on
debt extinguishment (Note 5) (3,451) 2,537 38
Net income (Note 7) $35,926 $39,148 $38,327
Income per share (Note 2):
Income before extraordinary (loss) gain
on debt extinguishment $1.05 $0.97 $1.02
Extraordinary (loss) gain on debt
extinguishment (0.09) 0.07
Net income per share $0.96 $1.04 $1.02
</TABLE>
[FN]
See notes to financial statements.
F-3
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands, except per share data)
YEARS ENDED DECEMBER 31, 1993, 1992 and 1991
Distributions
Additional to stockholders Total
Common Stock paid-in in excess stockholders'
Shares Amount capital of net income equity
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1990 37,510,000 $375 $700,439 ($121,028) $579,786
Net income 38,327 38,327
Distributions to
stockholders
($1.92 per share) (72,019) (72,019)
Balance at
December 31, 1991 37,510,000 375 700,439 (154,720) 546,094
Net income 39,148 39,148
Distributions to
stockholders
($1.69 per share) (63,392) (63,392)
Balance at
December 31, 1992 37,510,000 375 700,439 (178,964) 521,850
Issuance of Common
Stock 750,704 8 5,078 5,086
Net income 35,926 35,926
Distributions to
stockholders
($1.00 per share) (37,697) (37,697)
Balance at
December 31, 1993 38,260,704 $383 $705,517 ($180,735) $525,165
</TABLE>
[FN]
See notes to financial statements.
F-4
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
YEARS ENDED DECEMBER 31,
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Loan interest received $103,545 $101,660 $100,425
Portfolio and other interest received 6,553 13,924 14,979
Interest paid on commercial paper,
bank loans and other (31,016) (31,633) (34,797)
Interest paid on convertible
debentures (17,053) (17,209) (19,611)
Payments for accounts payable, accrued
expenses and other assets (3,798) (4,007) (3,087)
Net cash provided by operating
activities 58,231 62,735 57,909
Cash flows from investing activities:
Sales of portfolio securities 102,518
Portfolio maturities and redemptions 24,150 23,560 17,200
Net cash provided by investing
activities 126,668 23,560 17,200
Cash flows from financing activities:
Maturities of commercial paper, net (128,717) (12,545) 7,559
(Repayment of) proceeds from bank
loans payable, net (20,000) 20,000
Dividends paid (37,697) (63,392) (72,019)
Proceeds from issuance of common stock 5,086
Payments to reduce duration of
interest rate swaps (3,451)
Repurchase of convertible debentures (30,410) (10,600)
Net cash used in financing
activities (184,779) (86,347) (75,060)
Net increase (decrease) in cash 120 (52) 49
Cash at the beginning of the year 132 184 135
Cash at the end of the year $252 $132 $184
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net Income $35,926 $39,148 $38,327
Adjustments to reconcile net income to
net cash provided by operating activities:
Gain on sales of portfolio securities (8,593)
Loss (gain) on debt extinguishment 3,451 (2,537) (38)
Amortization of discount:
Zero coupon convertible debentures 27,507 24,956 22,641
Loan receivable (4,178) (3,840) (3,522)
Portfolio securities (383) (1,368) (1,151)
Decrease in deferred debt issuance
costs and other assets, net 415 593 863
Decrease (increase) in interest
receivable 891 (1,582) (3,001)
Increase in accrued interest payable
and amortized unpaid discount
on commercial paper 3,517 6,678 3,589
(Decrease) increase in accounts
payable and accrued expenses (322) 687 201
Net cash provided by operating
activities $58,231 $62,735 $57,909
</TABLE>
[FN]
See notes to financial statements.
F-5
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND PURPOSE
Rockefeller Center Properties, Inc. (the "Company") was incorporated in
Delaware on July 17, 1985. The Company qualifies and has elected to be
treated, for Federal income tax purposes, as a real estate investment trust
(a "REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"). The Company was formed to permit public investment in a portion
of Rockefeller Center. From the proceeds of its offering of Common Stock
and the offerings of its Current Coupon Convertible Debentures due 2000 and
Zero Coupon Convertible Debentures due 2000 (collectively, the "Convertible
Debentures"), the Company made a convertible, participating mortgage loan
(the "Loan") to two partnerships, Rockefeller Center Properties and RCP
Associates (collectively, the "Borrower"). The Borrower owns the real
property interests comprising most of the land and buildings known as
Rockefeller Center (the "Property"). The Loan, in the face amount of $1.3
billion, matures on December 31, 2007 and provides for both base interest
("Base Interest") at stated rates (See Note 3) and additional interest
("Additional Interest") based on Gross Revenues (as defined) of the
Property through December 31, 2000, and floating interest rates thereafter.
The Loan is convertible at the Company's option on December 31, 2000 (the
"Equity Conversion Date") into a 71.5% (subject to reduction in the event
of certain prepayments) general partnership interest in the partnership
which will own the Property (the "Partnership") on that date.
The Administrative Services Agreement which provided for certain
administrative and other services between Cushman & Wakefield Realty
Advisors, Inc., a company affiliated with the Borrower through common
ownership, and the Company was terminated as of June 2, 1993 (Note 8). As
of June 3, 1993, the Company became a self-administered REIT managing its
own day-to-day operations and affairs.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fair Values of Financial Instruments (Notes 3, 4 and 5):
FASB Statement No. 107, "Disclosures about Fair Value of Financial
Instruments", requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it
is practicable to estimate that value. In cases where quoted market prices
are not available, fair values are based on estimates using present value
and other techniques. Such techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows. Derived fair value estimates cannot be substantiated by comparison
to independent markets and may not reflect the values that could be
realized in any immediate settlement of the instrument or otherwise.
Statement 107 excludes certain financial instruments and all non-financial
instruments from its disclosure requirements. Accordingly, the aggregate
fair value amounts may not necessarily represent the underlying value of
the Company.
The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:
Loan receivable: As the Loan Receivable is the Company's principal
asset, fair value has been estimated by aggregating the fair value of the
Company's liabilities and equity, taking the fair value of the equity to be
the closing market price for the Company's common shares as reported on the
New York Stock Exchange composite tape ($6.75 per share) at December 31,
1993, and deducting therefrom the fair value of the Company's portfolio
securities and interest receivable.
Portfolio securities: The fair values for portfolio securities are
based on quoted market prices.
Short and long term debt: The carrying amounts of the Company's
commercial paper borrowings approximate their fair value. The fair values
of the Company's Current Coupon Convertible Debentures and Zero Coupon
Convertible Debentures are estimated using quoted market prices.
Off-balance-sheet financial instruments: Fair values for the Company's
off-balance-sheet financial instruments (asset and liability swaps) are
based on current settlement values with the applicable counter-parties
based on information supplied by such counter-parties.
F-6
Portfolio Securities (Note 4):
Portfolio securities consist of corporate and foreign government
obligations and are carried at cost, adjusted for amortization of discount
or premium, which approximates market.
Debt Issuance Costs:
Issuance costs of $10,690,000, pertaining to the outstanding Convertible
Debentures, at December 31, 1993 and 1992 have been deferred and are being
amortized straight-line over the period ending December 31, 2000, the
maturity date of the Convertible Debentures.
Loan Interest Income (Note 3):
Interest recognized on the Loan is calculated on the basis of the average
yield on the notes evidencing the Loan from the date of issuance through
December 31, 2000 (the date at which the Loan will, if not converted, begin
to bear floating rates of interest). The average yield is 8.51% per annum
and combines (using the interest method) the differing coupon rates of Base
Interest with the amortization of the original issue discount applicable to
the Loan.
Interest Expense (Note 5):
Interest expense recognized on the Convertible Debentures is based on the
average yields from the date of issuance through the maturity date,
December 31, 2000. The average yields are computed (using the interest
method) by (1) combining the differing coupon rates on the Current Coupon
Convertible Debentures and (2) amortizing the original issue discount
related to the Zero Coupon Convertible Debentures. The resulting effective
annual interest rates are 9.23% and 10.23% for the Current Coupon and Zero
Coupon Convertible Debentures, respectively.
Interest Rate Swap Agreements (Note 5):
The principal or notional amounts of interest rate swaps which are used for
hedging purposes are not reflected in the balance sheets. The incremental
revenue or expense associated with an interest rate swap is recognized over
the term of the swap arrangement and through March 31, 1993 had been
presented in the statements of income as a component of the interest
revenue of the related asset or the interest expense of the related
liability. In connection with the reduction of commercial paper
outstanding in April 1993 and the sale of a substantial portion of its
portfolio of investment securities in order to fund that reduction,
beginning in the second quarter of 1993, the Company presents interest rate
swaps on a net basis as a component of interest expense on commercial
paper, bank loan and other. Prior periods have not been restated.
Net Income Per Share:
Net income per share is based upon 37,567,746, 37,510,000 and 37,510,000,
average shares of Common Stock outstanding during 1993, 1992 and 1991,
respectively. For such periods of operations, fully diluted net income per
share is not presented since the effect of the assumed conversion of the
Convertible Debentures would either be anti-dilutive or not materially
different from net income per share as reported.
3. LOAN RECEIVABLE AND INTEREST INCOME
The Loan, which is in the face amount of $1.3 billion, was made pursuant to
a Loan Agreement between the Company and the Borrower on September 19, 1985
(as amended, the "Loan Agreement"), and is evidenced by two notes
(collectively, as amended, the "Note"). The Loan is secured by leasehold
mortgages in the aggregate amount of approximately $44.8 million which were
assigned to the Company, consolidated, spread and recorded as a first
mortgage lien against the entire Property. In addition, the Loan is
secured by an unrecorded mortgage (as amended, the "Mortgage") in the
amount of approximately $1,255.2 million. Prior to recordation, the
Mortgage may be subordinate to the rights of intervening lienors or other
persons who in good faith acquire other interests in the Property.
The Company is the beneficiary of standby irrevocable letters of credit
subject to specified reductions and which, among other things, provide
support for the Borrower's payment of Base Interest (as defined) on the
Loan. Subject to certain conditions, the Borrower is required to maintain
in effect similar letters of credit, or to pledge collateral with a fair
market value equal to the required amount of such letters of credit, during
the term of the Loan.
F-7
In April 1993, pursuant to agreements between the Borrower and the Company,
the level at which such letters of credit or other collateral must be
maintained was increased to $200 million until December 31, 1994. On
January 1, 1995, the level of this support will revert to the level
originally required to be maintained as of such date under the Loan
Agreement, which the Company expects will be not less than $90 million.
The Loan Agreement also contains covenants with respect to the operation
and maintenance of the Property and limitations on the Borrower's right to
dispose of the Property and to incur debt or liens.
The Note provides for specified quarterly Base Interest payments during its
term resulting in the following equivalent annualized coupon rates for each
of the following years ending December 31:
<TABLE>
<S> <C> <S> <C>
1991: 7.725% 1996: 8.400%
1992: 7.820% 1997: 8.410%
1993: 7.965% 1998: 8.410%
1994: 8.115% 1999: 8.420%
1995: 8.390% 2000: 8.430%
</TABLE>
In addition, for each year through 2000 in which Gross Revenues (as
defined) of the Property exceed $312.5 million, Additional Interest would
accrue in an amount equal to the sum of (i) 31.5% of such excess plus (ii)
$42.95 million and would be payable currently only to the extent of
available cash of the Borrower. If cash were not available, the payment of
Additional Interest would be deferred (without interest) until the Equity
Conversion Date or such earlier time as cash became available. No
Additional Interest has been earned by the Company to date.
If the Loan is not converted on the Equity Conversion Date, the Loan will
mature on December 31, 2007, will bear interest payable quarterly in
arrears at the same rate as the Floating Rate Notes (Note 5), and will be
prepayable at the option of the Borrower in whole or in part, at any time,
at 100% of its principal amount plus accrued interest. The fair value of
the Company's loan receivable at December 31, 1993, computed on the basis
described in Note 2, approximates $1.0 billion.
4. PORTFOLIO SECURITIES
The fair value of the Company's portfolio of investment securities at
December 31, 1993 approximates the carrying value. The Company liquidated
approximately 90% of its portfolio securities during 1993, which resulted
in non-recurring income of $8,593,000. The Company expects to liquidate
the remainder of its portfolio securities during 1994 either through sale
or maturities of the specific investments. Proceeds from the sales of
portfolio securities have been and will continue to be used to fund
scheduled reductions in the commercial paper outstanding under the
Company's letter of credit-backed facility expiring in December 1994.
5. DEBT
Convertible Debentures:
The Convertible Debentures were issued pursuant to an Indenture dated as of
September 15, 1985 (as amended, the "Indenture") between the Company and
Manufacturers Hanover Trust Company (now Chemical Bank), as Trustee. As of
December 31, 1993, United States Trust Company has replaced Chemical Bank
as Trustee. The Convertible Debentures are general unsecured obligations
of the Company which mature, and are convertible into shares of Common
Stock of the Company, on the Equity Conversion Date.
The Current Coupon Convertible Debentures bear interest from the date of
issuance until December 31, 1994 at the rate of 8% per annum, and from
January 1, 1995 until December 31, 2000 at the rate of 13% per annum,
payable annually on December 31 of each year.
F-8
Any Convertible Debentures not converted at maturity will be exchanged in
accordance with the terms of the Indenture for seven-year nonconvertible
floating rate notes (the "Floating Rate Notes") prepayable at the Company's
option at any time at par, which bear interest at the three-month London
Interbank Offered Rate (LIBOR) plus 1/4% or such greater spread (not in
excess of 1%) as is expected to result in the Floating Rate Notes trading
at par. The Floating Rate Notes would mature on December 31, 2007.
Between 1987 and 1992, the Company repurchased and retired a portion of its
Convertible Debentures. The cost of such repurchases, the face values
repurchased and retired and the gain or loss resulting from such
repurchases for 1992 and 1991 and on a cumulative basis are as follows:
<TABLE>
<CAPTION>
(In thousands) Years Ended December 31,
1992 1991
Cumulative
<S> <C> <C> <C>
Cost of debenture repurchases $217,295 $30,410 $10,600
Face value repurchased and
retired:
Current Coupon Convertible
Debentures $121,830 $30,410 $10,000
Zero Coupon Convertible
Debentures $366,065
Gain resulting from
extinguishment of debt $11,085 $2,537 $38
</TABLE>
At December 31, 1993, the Company had repurchased and retired 36.4% of the
Current Coupon Convertible Debentures and 38.4% of the Zero Coupon
Convertible Debentures. At December 31, 1993 and 1992, $213,170,000 of the
Current Coupon Convertible Debentures were outstanding and $586,185,000
face amount of the Zero Coupon Convertible Debentures were outstanding.
The proceeds from issuances of commercial paper were used by the Company to
finance its repurchases of its Convertible Debentures.
The Current Coupon Convertible Debentures are convertible at maturity at
the rate of 84.59 shares of Common Stock per $1,000 principal amount
(subject to anti-dilution adjustments). If the Current Coupon Convertible
Debentures outstanding as of December 31, 1993 are converted, 18,032,050
shares of Common Stock of the Company would be issued. The fair value,
based on quoted market prices at December 31, 1993, of the Company's
outstanding Current Coupon Convertible Debentures was approximately
$211,000,000. The Zero Coupon Convertible Debentures are convertible at
maturity at the rate of 46.06 shares of Common Stock per $1,000 principal
amount (subject to anti-dilution adjustments). If the Zero Coupon
Convertible Debentures outstanding as of December 31, 1993 are converted,
26,999,681 shares of Common Stock of the Company would be issued. The fair
value, based on quoted market prices at December 31, 1993, of the Company's
outstanding Zero Coupon Convertible Debentures was approximately
$257,000,000. In addition, the Convertible Debentures would become
convertible at special conversion rates (subject to anti-dilution
adjustments) in the event that such Convertible Debentures were called for
redemption or became redeemable at the option of the holder, or at any time
that an Event of Default were to occur and be continuing. The Convertible
Debentures may be redeemed by the Company at par plus accrued interest in
the event of the imposition of certain withholding taxes or certain
certification requirements, in the event of an acceleration of the Loan or
an exercise of the option to convert the Loan, or out of the proceeds from
a sale or pledge by the Company of an interest in the Loan or from a
substantial casualty or condemnation in respect to the Property.
The Indenture provides that, with certain exceptions, the Company will not
pay dividends on or purchase shares of its Common Stock if funds used for
all such dividends or purchases would exceed cumulative aggregate
Distributable Cash (cash receipts from operations less operating expenses
and interest) to that date. The Indenture also imposes certain
restrictions on the Company's ability to consent to amendments of or grant
waivers under the Loan Agreement or the Mortgage.
F-9
Commercial Paper Outstanding:
As of December 31, 1993 and 1992, there were $247,650,000 and $378,300,000
face amounts of commercial paper outstanding, respectively, at weighted
average interest rates of 3.50% and 3.82%, respectively, with a weighted
average maturity of 40 and 74 days, respectively. The Company's
commercial paper, which as of December 31, 1993 could be issued in amounts
up to a total of $260,000,000, is supported by letters of credit having
the highest short term credit ratings. One letter of credit, originally
in the amount of $200,000,000, was scheduled to expire in May 1993, but
has been extended to December 15, 1994. This letter of credit has been
reduced to $60,000,000 as of December 31, 1993 and is subject to further
scheduled reductions as outlined below. The other letter of credit, in the
amount of $200,000,000, is scheduled to expire in June 1995 and has no
scheduled reductions.
<TABLE>
<CAPTION>
Scheduled Facility Level
Reductions
<S> <C> <C>
December 31, 1993 $60,000,000
February 28, 1994 $15,000,000 45,000,000
May 31, 1994 15,000,000 30,000,000
August 31, 1994 12,000,000 18,000,000
December 15, 1994 18,000,000 0
</TABLE>
Reductions in the outstanding commercial paper borrowings supported by
this letter of credit have been and will continue to be funded with
proceeds from the sale of the Company's portfolio of investment securities
and from operating cash flow. The Company expects to liquidate all of the
remainder of its portfolio investments in 1994. The Company has also
agreed that during the term of this facility it will not repurchase any of
its convertible debentures or its common shares, and that it will limit
its annual dividend to the higher of $1.00 per share or 95% of annual net
income as computed for tax purposes.
The commercial paper borrowings are unsecured and upon maturity the Company
has refinanced them, and intends to continue to refinance them, with other
commercial paper borrowings. Commitment fees on each letter of credit are
payable quarterly in arrears and are charged to interest expense as
accrued.
Bank Loan Payable:
The bank loan outstanding at December 31, 1992 was unsecured and bore
interest at 4.10% per annum. This loan was repaid during the first quarter
of 1993 from the proceeds of additional commercial paper issued.
Interest Rate Swap Agreements:
In connection with its issuance of commercial paper and its portfolio of
investment securities, the Company entered into interest rate swap
agreements with financial institutions that were intended either to fix a
portion of the Company's interest rate risk on floating rate debt
("Liability Swaps"), or to fix the yield on its floating rate portfolio
securities ("Asset Swaps"). Under the Liability Swaps, the Company pays a
fixed rate of interest semi-annually and receives a variable rate of
interest semi-annually based on 180-day LIBOR. Under the Asset Swaps the
Company receives a fixed rate of interest semi-annually and pays a variable
rate of interest quarterly based on 90-day LIBOR.
F-10
The notional amounts, fixed and variable interest rates and expiration
dates relating to such contracts are summarized below:
<TABLE>
<CAPTION>
(In thousands) at December 31, 1993
Weighted
Notional Average
Type Expiring during Amount Interest
the Year Rates
<S> <C> <C> <C>
Liability Swaps (9
contracts) 1997 $30,000
1998 125,000
1999 130,000
Total Liability
Swaps Notional Amount $285,000
Pay fixed rates 9.73%
Receive variable
rates 3.43%
Asset Swaps (8
contracts) 1994 $5,000
1995 5,000
1996 20,000
1997 5,000
1998 5,000
Total Asset Swaps
Notional Amount $40,000
Pay variable rates 3.40%
Receive fixed rates 9.47%
<CAPTION>
(In thousands) at December 31, 1992
Weighted
Notional Average
Type Expiring during Amount Interest
the Year Rates
<S> <C> <C> <C>
Liability Swaps (10
contracts) 1993 $20,000
1998 155,000
2000 130,000
Total Liability
Swaps Notional Amount $305,000
Pay fixed rates 9.71%
Receive variable
rates 3.55%
Asset Swaps (8
contracts) 1994 $5,000
1995 5,000
1996 20,000
1997 5,000
1998 5,000
Total Asset Swaps
Notional Amount $40,000
Pay variable rates 3.67%
Receive fixed rates 9.47%
</TABLE>
F-11
The net notional principal, weighted average interest rate of net swaps
outstanding and annualized net payment relating to interest rate swap
contracts, as of December 31, are as follows:
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Net notional principal $245,000,000 $265,000,000
Weighted average interest rate
of net swaps outstanding 6.33% 6.22%
Annualized net payment $15,508,000 $16,483,000
</TABLE>
The current net settlement value of all swaps outstanding (the fair value
of the Company's off-balance sheet financial instruments) at December 31,
1993 and 1992, based on information supplied by the counter-parties to the
swap contracts, was a net liability for the Company of approximately $51
million and $46 million, respectively. Generally, the net settlement
value would decrease with an increase in LIBOR rates and would increase as
a result of a decrease in LIBOR rates.
The Company recorded an extraordinary loss of $3,451,000 for the year ended
December 31, 1993 as a result of payments to certain counter-parties to the
liability swap contracts resulting in a reduction in the duration of those
swap agreements, thereby reducing the Company's net swap liability. These
payments were made pursuant to agreements between the Company and certain
of its lenders whereby the Company had agreed to apply a portion of the net
proceeds from the issuance of common stock to certain swap agreements.
The Company has undertaken a study of its overall capital structure and as
part of such study it will continue to explore and evaluate, with the
assistance of one or more investment banking advisors, means to modify or
reduce its interest rate swap positions.
6. STOCKHOLDERS' EQUITY
In December of 1993, 750,704 warrants were exercised (Note 9) and a like
number of shares of Common Stock were issued, the proceeds from which
amounted to $5,086,000. Of the newly issued shares, 747,718 were eligible
for the $0.25 dividend paid in December 1993.
7. INCOME TAXES AND DISTRIBUTIONS
No provisions for current or deferred income taxes have been made by the
Company on the basis that it has qualified under the Code as a REIT and has
distributed at least 95% of its annual net income as computed for tax
purposes to stockholders. To the extent that such distributions exceed
such income, the excess will be treated as a return of capital. Net
capital gains generated by the Company are proportionately distributed to
the stockholders as net capital gains dividends. During the years ended
December 31, 1993, 1992 and 1991, the Company made per share distributions
to stockholders of $1.00, $1.69 and $1.92, respectively, of which
approximately $0.07, $0.65 and $0.90, respectively, represented returns of
capital. The Company has designated that $7,893,468 of the December 27,
1993 total distribution amount of $9,564,430 constitutes a net capital gain
dividend, amounting to approximately $.206 per share, or approximately
82.53% of the fourth quarter dividend. Dividends were paid in April, July,
October and December of each year. No significant difference exists
between financial statement income and taxable income.
8. GENERAL AND ADMINISTRATIVE EXPENSE
Cushman & Wakefield Realty Advisors, Inc. ("C&W Realty"), a company
affiliated with the Borrower through common ownership, acted as
Administrator for the Company, performing certain administrative and other
services pursuant to an Administrative Services Agreement through June 2,
1993, when the Administrative Services Agreement was terminated by the
Company. Fees paid to C&W Realty under this agreement amounted to $476,000
for the year ended December 31, 1993 and $1 million for each of the years
ended December 31, 1992 and 1991.
F-12
In addition to the foregoing, general and administrative expense for 1993
includes compensation and benefits for the Company's employees, and rent
and related facility costs including depreciation on furniture and
equipment for the period June 3, 1993 through December 31, 1993. Also
included in general and administrative expenses for each of the years ended
December 31, 1993, 1992 and 1991 are the following: directors and officers
liability insurance, registrar and transfer agent fees, debenture trustee
fees, legal, audit and appraisal fees, financial advisory fees and
stockholder reporting costs.
9. LEGAL MATTERS
On December 13, 1985, Phillip Pruitt commenced an action against the
Company and other defendants in the Supreme Court of the State of New
York, New York County alleging that the offering materials relating to the
Company's initial public offerings were false and misleading and seeking
rescission and damages on behalf of all purchasers of common stock of the
Company during the period commencing September 12, 1985 to and including
December 13, 1985.
On February 23, 1993 the judge before whom this litigation was pending
signed a Final Order and Judgment approving the terms of a Stipulation and
Agreement of Settlement dated as of May 31, 1992, as supplemented (the
"Settlement Agreement"), settling this litigation.
In accordance with the terms of the Settlement Agreement, on November 3,
1993 the Company issued warrants to purchase 3,000,098 shares of the
Company's common stock to persons eligible under provisions of the
Settlement Agreement. The warrants were exercisable during the 30-day
period ending December 3, 1993 at an exercise price of $7.00 per share of
common stock.
The Company is not a party to any material legal proceeding or
environmental litigation, nor is it aware of any such proceeding or
litigation pending or threatened against it.
10. THE PROPERTY
Summarized financial information of the Property is as follows:
<TABLE>
<CAPTION>
(In thousands) Years Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Gross revenue $226,597 $229,000 $230,197
Less:
Operating expenses (143,635) (140,864) (136,468)
Depreciation and
amortization (21,821) (19,834) (17,137)
Interest expense, net (114,599) (114,040) (114,481)
Net loss ($53,458) ($45,738) ($37,889)
</TABLE>
The cumulative cash flow shortfall of the Borrower since the inception of
the Loan in September 1985 ($433.2 million), has been funded by capital
contributions ($185.2 million), loans from its partners ($123 million) and
non-interest bearing advances from an affiliate ($125 million). The Loan
Agreement provides for the establishment of loans for the cumulative
portion of capital improvements made by the Borrower in excess of amounts
specified in the Loan Agreement. The cumulative amounts of excess capital
improvements totaled $123 million, $107.5 million and $102 million at
December 31, 1993, 1992 and 1991, respectively. These excess capital
improvement loans are deemed to be made to the Borrower by its partners and
bear interest at 80% of the prime rate (as defined), compounded quarterly,
which is added to the loan principal at the end of each year. At December
31, 1993, 1992 and 1991, the amount of such excess capital improvement
loans (including accrued interest) totaled $149.7 million, $127.9 million
and $116.3 million, respectively. The results of operations of the
Property for 1993, 1992 and 1991 reflect non-cash interest charges of $6.3
million, $6.2 million and $7.1 million, respectively, relating to interest
on these excess capital improvement loans. Both the
F-13
excess capital improvement loans and the non-interest bearing advances are
subordinate to the Company's Loan; however, if the Company exercises its
option to convert the Loan into an equity interest in the Partnership, any
outstanding loans for excess capital improvements (including accrued
interest) will become the obligation of the Partnership.
11. INTERIM FINANCIAL INFORMATION (unaudited)
<TABLE>
<CAPTION>
(In thousands, except per share data)
1993 1Q 2Q 3Q 4Q
<S> <C> <C> <C> <C>
Revenues $30,164 $27,715 $27,815 $27,866
Net income $14,301 $10,417 $6,878 $4,330
Net income per share $0.38 $0.28 $0.18 $0.12
<CAPTION>
1992 1Q 2Q 3Q 4Q
<S> <C> <C> <C> <C>
Revenues $30,640 $30,547 $30,597 $30,630
Net income $12,267 $9,658 $9,042 $8,181
Net income per share $0.33 $0.26 $0.24 $0.21
</TABLE>
F-14
REPORT OF MANAGEMENT
Board of Directors and Stockholders March 8, 1994
Rockefeller Center Properties, Inc.
The management of Rockefeller Center Properties, Inc. (the Company) has the
responsibility for preparing the accompanying financial statements and for
their integrity and objectivity. The statements were prepared in
accordance with generally accepted accounting principles applied on a
consistent basis and are not misstated due to material fraud or error. The
financial statements include amounts that are based on management's best
estimates and judgments. Management also prepared the other information in
the annual report and is responsible for its accuracy and consistency with
the financial statements.
The financial statements have been audited by Ernst & Young. Management
has made available to Ernst & Young all the Company's financial records and
related data. Furthermore, management believes that all representations
made to Ernst & Young during its audit were valid and appropriate.
Management has established and maintains a system of internal accounting
control that provides reasonable assurance as to the integrity and
reliability of the financial statements, the protection of assets from
unauthorized use or disposition, and the prevention and detection of
fraudulent financial reporting. Management continually monitors the system
of internal accounting control for compliance. In addition, as part of its
audit of the Company's financial statements, Ernst & Young evaluated
selected internal accounting controls to establish a basis for reliance
thereon in determining the nature, timing, and extent of audit tests to be
applied. Management believes that, as of December 31, 1993, the system of
internal accounting control is adequate to accomplish the objectives
discussed herein.
Management also recognizes its responsibility for fostering a strong
ethical climate so that the Company's affairs are conducted according to
the highest standards of personal and corporate conduct. This
responsibility is characterized and reflected in the Company's code of
business conduct. The code addresses, among other things, potential
conflicts of interest; business conduct; political activities; and
confidentiality of information. The Company maintains a program to assess
compliance with these policies.
The Audit Committee of the Board of Directors, consisting of independent
directors, is directly responsible for assuring that management fulfills
its financial reporting responsibilities. The Audit Committee met twice
during 1993 with management and Ernst & Young to discuss audit activities,
internal accounting controls, and financial reporting matters. Ernst &
Young has unrestricted access to the Audit Committee.
/s/EDWARD P. FONTAINE /s/RICHARD M. SCARLATA
Edward P. Fontaine Richard M. Scarlata
President and Senior Vice President
Chief Executive Officer Finance and Administration
F-15
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
Board of Directors and Stockholders
Rockefeller Center Properties, Inc.
We have audited the accompanying balance sheets of Rockefeller Center
Properties, Inc. as of December 31, 1993 and 1992, and the related
statements of income, changes in stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1993. Our audits
also included the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rockefeller Center
Properties, Inc. at December 31, 1993 and 1992, and the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 1993, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
/s/ERNST & YOUNG
New York, New York
January 19, 1994,
F-16
<TABLE>
<CAPTION>
SELECTED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
For the Year
Revenues $113,560 $122,414 $123,182 $123,513 $125,692
Net income 35,926 39,148 38,327 37,339 41,128
Net cash provided by
operating activities 58,231 62,735 57,909 56,356 57,177
Net cash provided by
investing activities 126,668 23,560 17,200 23,162 12,800
Dividends paid 37,697 63,392 72,019 70,894 69,769
Repurchase of convertible
debentures ----- 30,410 10,600 25,450 8,595
At Year End
Total assets $1,317,509 $1,432,210 $1,450,103 $1,460,617 $1,477,809
Debt:
Short term debt 247,223 397,078 389,299 384,443 364,000
Long term debt 509,713 482,206 487,660 475,019 478,323
Total debt 756,936 879,284 876,959 859,462 842,323
Total liabilities 792,344 910,360 904,009 880,831 864,468
Total stockholders' equity 525,165 521,850 546,094 579,786 613,341
Per Share
Net income per share $0.96 $1.04 $1.02 $1.00 $1.10
Dividends per share 1.00 1.69 1.92 1.89 1.86
Portion of dividends
representing
a return of capital 7.4% 38.2% 46.8% 46.7% 40.9%
Book value per share $13.73 $13.91 $14.56 $15.46 $16.35
</TABLE>
F-17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources - The Company
In September 1985, Rockefeller Center Properties, Inc. (the "Company")
issued 37,500,000 shares of Common Stock at $20 per share in an initial
public offering. Simultaneously with the offering of the Common Stock, the
Company issued Current Coupon Convertible Debentures in the principal
amount of $335,000,000 and Zero Coupon Convertible Debentures in the face
amount of $952,250,000 (collectively, the "Convertible Debentures"). The
Company received net proceeds of $1,233,770,000 as a result of such
offerings and its initial capitalization in July 1985. Such funds were
used to make a convertible, participating mortgage loan (the "Loan") in the
face amount of $1,300,000,000 to two partnerships (collectively, the
"Borrower"). The Loan, which is secured by the real property interests
owned by the Borrower comprising most of the land and buildings known as
Rockefeller Center (the "Property"), was made pursuant to a loan agreement
between the Company and the Borrower (as amended, the "Loan Agreement").
The Loan is convertible at the Company's option on December 31, 2000 (the
"Equity Conversion Date") into a 71.5% (subject to reduction in the event
of certain prepayments) general partnership interest in the partnership
which will own the Property (the "Partnership") on that date. During
December 1993, the Company issued an additional 750,704 shares of Common
Stock at $7.00 per share as the result of an exercise of an equivalent
number of warrants which were issued pursuant to a court-ordered class
action settlement. The Company received proceeds of $5,086,000 from this
Common Stock issuance. At December 31, 1993 the Company had 38,260,704
shares of Common Stock outstanding.
The Company's primary source of liquidity is interest income received on
the Loan. During the years ended December 31, 1993, 1992 and 1991, cash
generated from interest income on the Loan was $103,545,000, $101,660,000
and $100,425,000, respectively. The increase in each year over that of the
preceding year is attributable to the scheduled increase in the annualized
coupon rate on the Loan. The rate of Base Interest on the Loan increases
according to a fixed schedule. Following is a schedule of the rate of Base
Interest and the amount of Base Interest expected to be received by the
Company in each of the following years ending December 31:
<TABLE>
<CAPTION>
Rate Amount Rate Amount
<S> <C> <C> <S> <C> <C>
1994: 8.115% $105,495,000 1998: 8.410% $109,330,000
1995: 8.390% 109,070,000 1999: 8.420% 109,460,000
1996: 8.400% 109,200,000 2000: 8.430% 109,590,000
1997: 8.410% 109,330,000
</TABLE>
The Loan also provides for Additional Interest (as defined) to be earned by
the Company. For each year through 2000 in which Gross Revenues (as
defined) of the Property exceed $312.5 million, Additional Interest would
accrue in an amount equal to the sum of (i) 31.5% of such excess plus (ii)
$42.95 million and would be payable currently only to the extent of
available cash of the Borrower. If cash were not available, the payment of
Additional Interest would be deferred (without interest) until the Equity
Conversion Date or such earlier time as cash became available. No
Additional Interest has been earned by the Company to date and whether or
not the Company would earn Additional Interest would depend upon the
ability of the Borrower to re-lease the approximately 1.76 million
remaining square feet (approximately 28.5% of all space at the Property)
covered by leases expiring in 1994 at rates significantly above the rental
rates obtained for new and renewed leases in 1993 (see "Results of
Operations--The Property"). Based on present conditions in the Midtown
Manhattan rental market, the Company does not currently expect that it will
earn Additional Interest.
F-18
Portfolio and other interest received during 1993, 1992 and 1991 was
$6,553,000, $13,924,000 and $14,979,000, respectively. The decrease of
$7,371,000 in portfolio and other interest received from 1992 to 1993 was
due principally to sales of portfolio securities, the proceeds from which
were used to reduce the Company's short term debt during the year ended
December 31, 1993 (see Note 5 to the Financial Statements). During 1993,
the Company sold $98,700,000 in face amount of portfolio securities
recognizing a gain of $8,593,000. This gain represents the excess of
$102,518,000 in net proceeds from the sale over net carrying value of the
securities of $93,925,000. In addition, during 1993 the Company received
$24,150,000 from the maturity or early redemption of other portfolio
securities. The decrease in portfolio and other interest received of
$1,055,000 from 1991 to 1992 was due primarily to portfolio redemptions and
maturities. The balance of the investment portfolio consists of four
securities which are valued in total at $14,300,000 and which either mature
or will be sold in 1994. Accordingly, the Company expects to receive a
negligible amount of portfolio interest in 1994.
During the years ended December 31, 1993, 1992 and 1991, interest paid on
commercial paper, bank loans and other was $31,016,000, $31,633,000 and
$34,797,000, respectively. The following schedule presents the components
of such interest paid:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Interest rate swap
agreements $16,620,000 $14,608,000 $6,874,000
Commercial paper (including
commercial paper fees and 14,178,000 16,282,000 27,889,000
expenses)
Bank loans 218,000 743,000 34,000
$31,016,000 $31,633,000 $34,797,000
</TABLE>
The Company has undertaken a study of its overall capital structure and as
part of such study it will continue to explore and evaluate, with the
assistance of one or more investment banking advisors, means to modify or
reduce its interest rate swap positions. As discussed in Note 5 to the
Financial Statements, the annualized net payment relating to net interest
rate swaps outstanding at December 31, 1993 was $15,508,000. This amount
may change in 1994 and subsequent years as the floating rates receivable
under the Company's liability swaps and the floating rates payable under
the Company's asset swaps are periodically re-set. As discussed in Note 5
to the Financial Statements, the Company is committed to scheduled
reductions in its commercial paper borrowings issued under the letter of
credit which is scheduled to expire December 15, 1994. Accordingly, the
average amount of commercial paper outstanding during 1994 is expected to
be substantially below the average amount outstanding during 1993, and
barring a substantial increase in average commercial paper rates, the
Company would expect that interest paid on commercial paper will be lower
in 1994 than that paid in 1993. The Company's second letter of credit
which is scheduled to expire in June 1995 has no scheduled reductions.
However, the Company's ability to continue to issue commercial paper would
cease if the Company were not able to renew or replace that letter of
credit. If the Company were not able to continue to issue commercial paper
backed by this facility it would have to turn to commercial bank loans or
other sources to replace its current funding through the commercial paper
markets and there can be no assurance at this time that such replacement
funding would be available to the Company or as to the terms upon which any
such replacement funding, if available, could be obtained.
During the years ended December 31, 1993, 1992 and 1991, interest paid on
the Current Coupon Convertible Debentures was $17,053,000, $17,209,000 and
$19,611,000, respectively. The decrease in each year from that of the
prior year is a result of repurchases of such convertible debentures.
Coupon payments on outstanding Current Coupon Convertible Debentures are
made annually on December 31. The interest rate payable on the
$213,170,000 Current Coupon Convertible Debentures outstanding as of
December 31, 1993 is 8% per annum. This rate will remain in effect until
December 31, 1994, after which it is scheduled to increase to 13% per annum
through December 31, 2000. As a result of this increase in rate, the
Company's annual disbursement for
F-19
interest on these debentures, assuming that all such debentures outstanding
on December 31, 1993 remain outstanding, would increase by $10,658,500 for
1995 and each subsequent year. The Company did not repurchase any of its
debentures during 1993 and pursuant to the agreement expiring December 15,
1994 extending the maturity of one of its commercial paper facilities (see
Note 5 to the Financial Statements), the Company has agreed not to
repurchase any of its debentures during the term of that agreement.
Combined net cash flow provided by operating and investing activities
during 1993 was $184,899,000, from which the Company paid $37,697,000 in
dividends and used the balance to reduce short term debt including the
repayment of a $20,000,000 bank loan. During 1993, the Company also
received proceeds of $5,086,000 from the issuance of shares of Common Stock
as discussed above. Pursuant to agreements with certain of its lenders,
the Company has applied $3,451,000 from the net proceeds of stock issuance
in 1993 to reduce the duration of certain of its interest rate swaps (see
Note 5 to the Financial Statements).
In order to maintain its qualification as a real estate investment trust
(a "REIT") under the Internal Revenue Code of 1986, the Company is
obligated to distribute to its stockholders at least 95% of its annual net
income as computed for tax purposes. Historically, the Company had
distributed to its stockholders substantially all of its annual cash flow
in excess of interest and operating expenses, reserves and investments,
resulting in a substantial return of capital to stockholders. Through
December 31, 1993, cumulative distributions paid of $14.20 per share
included a cumulative return of capital of $4.84 per share. Distributions
are made in April, July, October and December of each year. As a result of
the Company's agreement with certain of its lenders to limit annual
dividends to the higher of $1.00 per share or 95% of its annual net income
as computed for tax purposes, the Company does not currently expect that
future dividends paid will include substantial amounts of return of
capital, if any.
The Company is the beneficiary of standby irrevocable letters of credit
subject to specified reductions and which, among other things, provide
support for the Borrower's payment of Base Interest (as defined) on the
Loan. Subject to certain conditions, the Borrower is required to maintain
in effect similar letters of credit, or to pledge collateral with a fair
market value equal to the required amount of such letters of credit, during
the term of the Loan. In April 1993, pursuant to agreements between the
Borrower and the Company, the level at which such letters of credit or
other collateral must be maintained was increased to $200 million until
December 31, 1994. On January 1, 1995, the level of this support will
revert to the level originally required to be maintained as of such date
under the Loan Agreement, which the Company expects will be not less than
$90 million.
Results of Operations - The Company
The Company's principal source of income during each of the years ended
December 31, 1993, 1992 and 1991 was loan interest income recognized on the
Loan. Loan interest income exceeded loan interest received in each of
those years by approximately $4.8 million, $6.2 million and $6.9 million,
respectively. The difference in each year is attributable partially to the
amortization of original issue discount applicable to the Loan and
partially to the recognition of interest income on the Loan according to
"the interest method" by which interest is calculated on the basis of the
average yield on the notes evidencing the Loan through the Equity
Conversion Date. Loan interest income accounted for 95.4%, 88.1% and 87.1%
of total revenues during the years ended December 31, 1993, 1992 and 1991,
respectively.
Portfolio income earned in 1993 was $5,177,000 or 4.6% of total revenues.
In 1992 and 1991, portfolio income accounted for 11.8% and 12.8% of total
revenues, respectively. The decline of $9,238,000 in portfolio income from
1992 to 1993 is primarily a result of sales and maturities of portfolio
securities as discussed above. The four remaining securities in the
portfolio at December 31, 1993 either mature or will be sold in 1994;
accordingly, the Company expects that portfolio income in 1994 will be
negligible.
F-20
Interest expense on Convertible Debentures during the years ended December
31, 1993, 1992 and 1991 was $49,527,000, $46,749,000 and $47,035,000,
respectively. The increase of $2,778,000 or 5.9% from 1992 to 1993 was
principally a result of accruals of interest on the increasing accretion of
the principal amount of the Zero Coupon Convertible Debentures. Such
accruals of interest grow at the annual rate of 10.2%.
Interest expense on commercial paper, bank loans and other for each of the
years ended December 31, 1993, 1992 and 1991 was $28,816,000, $34,050,000
and $33,749,000, respectively. The decline of $5,234,000 in such interest
expense from 1992 to 1993 principally reflects a combination of lower
average commercial paper borrowings outstanding during the year, at lower
average commercial paper rates, and lower average bank loans outstanding.
These savings were partially offset by the higher cost of servicing
interest rate swaps due to lower variable interest rates received on
liability swaps, and to increased commercial paper fees and expenses
incurred in connection with the agreement to extend the commercial paper
facility originally scheduled to expire in May 1993 until December 15,
1994.
Combined interest expense on convertible debentures, commercial paper, bank
loans and other totalled $78,343,000, $80,799,000 and $80,784,000 for each
of the years ending December 31, 1993, 1992 and 1991, respectively. These
amounts accounted for 94.6%, 94.2% and 95.2% of total expenses in each of
the respective years.
General and administrative expenses for the years ended December 31, 1993,
1992 and 1991 were $3,728,000, $4,299,000 and $3,349,000, respectively.
The decrease of $571,000 in general and administrative expenses from 1992
to 1993 principally reflects lower legal and financial advisory fees.
During the year ended December 31, 1993, the Company recognized non-
recurring income of $8,593,000 consisting of gains on sales of portfolio
securities. Also during the year ended December 31, 1993 the Company
incurred an extraordinary loss of $3,451,000 on debt extinguishment. The
extraordinary loss was the result of payments made by the Company to
certain of its lenders in order to reduce the duration of certain of its
interest rate swaps in accordance with agreements with such lenders (see
Note 5 to the Financial Statements). The Company recognized extraordinary
gains of $2,537,000 and $38,000 in 1992 and 1991, respectively, in
connection with extinguishment of debt. The extraordinary gains were the
result of repurchases made at discounts under carrying value. Carrying
value of the Current Coupon Convertible Debentures includes interest which
has been accrued at the effective annual interest rate of 9.23%, the
average yield to the maturity date. The average yield is computed, using
the interest method, by combining the differing coupon rates on the Current
Coupon Convertible Debentures. There have been no repurchases of
convertible debentures since the first quarter of 1992.
F-21
Results of Operations - The Property
The financial information and analysis included in the following discussion
of the results of operations of the Property have been furnished to the
Company by the Borrower.
The operating results of the Property during the years ended December 31,
1993, 1992 and 1991 are presented in summary form in the table below:
<TABLE>
<CAPTION>
Years Ended December 31,
(In thousands) 1993 1992 1991
<S> <C> <C> <C>
Gross revenue:
Fixed and percentage rents $148,960 $150,197 $152,289
Operating and real estate
tax escalation 55,643 57,029 57,224
Consideration revenues 3,227 3,295 984
Sales and service revenues 18,767 18,479 19,700
226,597 229,000 230,197
Operating expenses:
Real estate taxes 44,336 44,481 42,725
Utilities 16,553 16,360 16,092
Maintenance and engineering 33,657 30,509 30,037
Other operating expenses 40,639 40,792 40,927
Management fee 2,579 2,491 2,402
General and administrative 5,871 6,231 4,285
143,635 140,864 136,468
Operating income before interest
depreciation and amortization 82,962 88,136 93,729
Depreciation and amortization 21,821 19,834 17,137
Interest expense, net 114,599 114,040 114,481
Net loss ($53,458) ($45,738) ($37,889)
</TABLE>
The gross revenue of the Property for the year ended December 31, 1993
decreased by $2.4 million, or 1%, when compared to the prior year. The
decrease in gross revenue was primarily a result of lower fixed and
percentage rents and lower operating and real estate tax escalation
revenue. These combined decreases principally reflect lease renewals at
lower base rents due to market conditions and new base years for
escalation, as well as lower average occupancy levels of the Property
during 1993 as compared to 1992. The following table shows the occupancy
rates for the Property at specified dates:
<TABLE>
<S> <C> <S> <C>
March 31, 1992 -95.8% March 31, 1993 -93.9%
June 30, 1992 -94.6% June 30, 1993 -93.9%
September 30, 1992 -94.3% September 30, 1993 -94.1%
December 31, 1992 -94.0% December 31, 1993 -94.6%
</TABLE>
During the year ended December 31, 1993, 147 leases covering approximately
420,000 square feet of office, retail and storage space were concluded and
took effect at net effective annual rates averaging $35.93 per square foot.
Office space, which accounted for approximately 349,000 square feet was
leased at net effective annual rental rates averaging $31.54 per square
foot (compared to $31.40 per square foot for office space leases signed in
1992). Net effective annual rental rates are net of tenant improvements,
concessions and brokerage commissions. The gross rental rates for office
space leases which were concluded and took effect during the year ended
December 31, 1993 averaged $38.01 per square foot. The actual rate at
which each lease was executed depended upon location within the Property,
type of space leased, lease length and other factors. Of the approximately
349,000 square feet of office space leased during 1993, approximately
230,000 square feet
F-22
represented renewals of existing tenants at an average gross rental rate of
$38.52 per square foot. The combined fixed rent and escalation payments
prior to lease renewal for these renewing tenants averaged $52.21 per
square foot.
In addition, leases representing 646,000 square feet of the rental space
scheduled to become available in 1994 (of which 623,000 square feet was
accounted for by office space) were also signed during 1993. The rental
rates achieved on these 1994 leases met or exceeded existing market
conditions; nevertheless, because these leases were concluded principally
with major tenants, the average net effective rental rate achieved for
these leases was $28.86 per square foot ($28.12 per square foot for office
space). The gross rental rates for office space under these 1994 leases
averaged $39.34 per square foot. Of the approximate 623,000 square feet of
office space referred to above, approximately 552,000 square feet
represented renewals of existing tenants at an average gross rental rate of
$39.27 per square foot. The combined fixed rent and escalation payments
prior to lease renewal for these renewing tenants averaged $35.12 per
square foot.
The following table shows selected lease expiration information for the
Property as of December 31, 1993 and has been furnished to the Company by
the Borrower. Lease turnover during the term of the Loan could offer an
opportunity to increase the revenue of the Property or might have a
negative impact on the Property's revenue. Actual renewal rents and rental
income resulting therefrom will be significantly affected by market
conditions at the time and by the terms on which the Borrower can then
lease space.
<TABLE>
Year Number of % of total
leases Area (sq. ft.) rentable area
expiring
<S> <C> <C> <C>
1994 211 1,763,412 28.5%
1995 97 310,959 5.0
1996 58 117,407 1.9
1997 40 76,358 1.2
1998 39 175,330 2.8
1999 27 115,127 1.9
2000 20 327,374 5.3
2001 11 35,702 0.6
2002 20 130,822 2.1
2003 20 59,666 1.0
2004 17 190,570 3.1
2005-2019 33 917,518 14.8
2020 1 98,577 1.6
2022 2 1,285,860 20.8
Space under
temporary occupancy N/A 160,827 2.6
Vacant space N/A 332,505 5.4
Space occupied by
the Borrower N/A 87,444 1.4
596 6,185,458 100.0%
</TABLE>
The operating expenses of the Property increased by $2.8 million, or 2%,
during the year ended December 31, 1993, when compared to the prior year.
This increase was principally a result of increased maintenance and
engineering costs ($3.1 million) and higher utility costs ($.2 million).
These increases were partially offset by lower general and administrative
expense ($.4 million) and decreased other operating expenses ($.2 million).
The increase in maintenance and engineering resulted from increased labor
expense and higher building maintenance costs. Higher utility costs
reflect increased usage as a result of colder weather in 1993 as compared
to 1992 and increased rates. The decrease in general and administrative
expenses resulted from a lower provision for doubtful accounts. The
decrease in other operating expenses reflected decreases in cleaning costs
and the cost of sales of services to tenants, partially offset by an
increase in security expenses.
F-23
As a result of the foregoing, operating income before interest,
depreciation and amortization for the year ended December 31, 1993,
decreased by $5.2 million, or 6%, when compared to the prior year.
Depreciation and amortization for the year ended December 31, 1993
increased $2 million, or 10%, as a result of a higher fixed asset base
which included expenditures required by the Loan Agreement, other capital
expenditures and improvements to tenant spaces.
Interest expense, net during the year ended December 31, 1993 increased by
$.6 million, or 0.5%, as a result of scheduled increases in interest
expense on the Company's Loan and increased interest expense as a result of
additional loans made to the Borrower by its partners to fund certain of
the Property's capital improvements, partially offset by a decrease in the
interest rate on these capital improvement loans.
The gross revenue of the Property for the year ended December 31, 1992
decreased by $1.2 million, or 1% when compared to the prior year. The
decrease in gross revenue was primarily a result of lower fixed and
percentage rents and lower sales and service revenue. These decreases were
substantially offset by increased consideration revenue. Consideration
revenue principally consists of one time negotiated payments by tenants for
the right to cancel their leases prior to scheduled termination. The
decrease in fixed and percentage rents reflected lower occupancy levels at
the Property.
During the year ended December 31, 1992, 141 leases covering approximately
230,000 square feet of office, retail and storage space were concluded and
took effect at net effective annual rental rates averaging $33.76 per
square foot. Office space, which accounted for approximately 203,000
square feet, was leased at net effective annual rental rates averaging
$31.40 per square foot.
The operating expenses of the Property increased by $4.4 million, or 3%,
during the year ended December 31, 1992, when compared to the prior year.
This increase was principally the result of higher general and
administrative expense ($1.9 million), increased real estate taxes ($1.8
million), higher maintenance and engineering costs ($.5 million), and
higher utility costs ($.3 million).
Cash Flow - The Property
For the year ended December 31, 1993, the Property experienced an operating
cash deficit of $17.7 million after payments of interest to the Company of
$103.5 million. For the year ended December 31, 1992, the Property
experienced an operating cash deficit of $18.3 million after payments of
interest to the Company of $101.7 million. This decrease in operating cash
deficit of $.6 million was principally a result of changes in net working
capital partially offset by lower operating income before interest,
depreciation and amortization and increased interest paid to the Company.
For the year ended December 31, 1991, the Property experienced an operating
cash deficit of $8.5 million after payments of interest to the Company of
$100.4 million. The increase in operating cash deficit between 1991 and
1992 of $9.8 million was principally a result of lower operating income
before interest, depreciation and amortization and other changes in net
working capital. The Borrower also expended funds for capital improvements
to the Property, tenant improvements and leasing commissions as follows:
<TABLE>
<CAPTION>
(In Thousands)
Years ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Capital improvements $27,300 $24,900 $42,300
Tenant improvements 7,900 4,000 2,800
Leasing commissions
(including Legal
fees in 1993) 8,500 2,400 2,200
$43,700 $31,300 $47,300
</TABLE>
F-24
The cumulative cash flow shortfall of the Borrower since the inception of
the Loan in September 1985 ($433.2 million), has been funded by capital
contributions ($185.2 million), loans from its partners ($123 million) and
non-interest bearing advances from an affiliate ($125 million). The Loan
Agreement provides for the establishment of loans for the cumulative
portion of capital improvements made by the Borrower in excess of amounts
specified in the Loan Agreement. The cumulative amounts of excess capital
improvements totaled $123 million, $107.5 million and $102 million at
December 31, 1993, 1992 and 1991, respectively. These excess capital
improvement loans are deemed to be made to the Borrower by its partners and
bear interest at 80% of the prime rate (as defined), compounded quarterly,
which is added to the loan principal at the end of each year. At December
31, 1993, 1992 and 1991, the amount of such excess capital improvement
loans (including accrued interest) totaled $149.7 million, $127.9 million
and $116.3 million, respectively. The results of operations of the
Property for 1993, 1992 and 1991 reflect non-cash interest charges of $6.3
million, $6.2 million and $7.1 million, respectively, relating to interest
on these excess capital improvement loans. Both the excess capital
improvement loans and the non-interest bearing advances are subordinate to
the Company's Loan; however, if the Company exercises its option to convert
the Loan into an equity interest in the Partnership, any outstanding loans
for excess capital improvements (including accrued interest) will become
the obligation of the Partnership.
The Borrower is committed to expend significant amounts of funds for tenant
improvements and leasing commissions in connection with the renegotiated
and/or new 1994 leases. In order to renew and/or re-lease the remaining
space coming due in 1994, significant funds could also be required to be
expended. Additionally, the Borrower has committed to and may be required
to commit to rent abatements in connection with the renewal and/or
releasing of space.
The letters of credit previously discussed under Liquidity and Capital
Resources -- The Company, support the payment of Base Interest on the Loan
in the event of cash flow shortfalls from the Property.
Appraised Value - The Property
During 1993, the Company engaged an independent appraisal firm to appraise
the value assigned to the Property. This firm concluded that, as of
December 31, 1993, the value assigned to the various fee and leasehold
interests comprising the Property, subject to existing leases, was $1.15
billion, a decrease of $50 million from the value assigned in an appraisal
conducted as of December 31, 1992. This decrease is reflective of the
adverse impact on near term cash flow of the significant free rent and
tenant improvement allowances associated with the releasing of space which
rolls over in 1994. These appraisals are discussed in greater detail in
Part I, Item 1, of the Company's Form 10-K.
F-25
<TABLE>
<CAPTION>
QUARTERLY STOCK INFORMATION
Price Range (Composite)
1993 1Q 2Q 3Q 4Q
<S> <C> <C> <C> <C>
High $10 1/8 $8 3/4 $7 1/2 $7 1/4
Low $6 7/8 $6 3/4 $6 7/8 $6 1/2
<CAPTION>
1992 1Q 2Q 3Q 4Q
<S> <C> <C> <C> <C>
High $17 1/2 $17 3/8 $13 3/8 $10 1/2
Low $15 1/8 $13 3/8 $9 3/4 $6 7/8
</TABLE>
F-26
<TABLE>
<CAPTION>
SCHEDULE I -- MARKETABLE SECURITIES
ROCKEFELLER CENTER PROPERTIES, INC.
December 31, 1993
COL. A COL. B COL. C COL. D COL. E
Amount at
ISSUER GROUPINGS Principal Market Which
Amount of Value at Carried in
Notes Original Balance the Balance
Cost Sheet Date Sheet
<S> <C> <C> <C> <C>
CORPORATE NOTES
Fixed Rate Notes
Consumer Products
and Services $6,300,000 $6,679,059 $6,419,268 $6,300,000
Floating Rate Notes
Regional Banks 5,000,000 4,900,000 4,999,500 5,000,000
Total Corporate
Notes 11,300,000 11,579,059 11,418,768 11,300,000
FOREIGN GOVERNMENT
BONDS 3,000,000 3,579,060 3,165,240 3,000,000
Total Portfolio
Securities $14,300,000 $15,158,119 $14,584,008 $14,300,000
</TABLE>
F-27
INSTRUMENT OF RESIGNATION, APPOINTMENT AND
ACCEPTANCE, dated as of December 1,1993, among Rockefeller
Center Properties, Inc., a corporation duly organized and
existing under the laws of the State of Delaware, having its
principal office at 1166 Avenue of the Americas, New York, NY
10036 (the "Company"), Chemical Bank, successor by merger to
Manufacturers Hanover Trust Company, a banking corporation duly
organized and existing under the laws of the State of New York,
having its principal corporate trust office at 450 West 33rd
Street, New York, NY 10001 (the "Resigning Trustee"), and United
States Trust Company of New York, corporation duly organized and
existing under the laws of the State of New York, having its
principal corporate trust office at 114 West 47th Street, 15th
Floor, New York, NY 10036- 1532 (the "Successor Trustee");
RECITALS
- --------------
There are presently issued and outstanding $213,170,000 in
aggregate principal amount of the Company's Current Coupon
Convertible Debentures due 2000 and $586,185,000 in face amount
of the Company's Zero Coupon Convertible Debentures due
2000 (collectively, the "Securities") under an Indenture, dated
as of September 15, 1985 (the "Indenture"), between the Company
and the Resigning Trustee.
The Resigning Trustee wishes to resign as Trustee under the
Indenture; the Company wishes to appoint the Successor Trustee
to succeed the Resigning Trustee as Trustee under the Indenture;
and the Successor Trustee wishes to accept such appointment as
Trustee under the Indenture.
NOW THEREFORE, the Company, the Resigning Trustee and the
Successor Trustee agree as follows:
ARTICLE ONE
THE RESIGNING TRUSTEE
Section 101.
- ---------------
Pursuant to Section 610(b) of the Indenture, the Resigning
Trustee hereby confirms previous notification to the Company
that the Resigning Trustee is hereby resigning as Trustee under
the Indenture.
Section 102.
- ---------------
The Resigning Trustee hereby represents and warrants to the
Successor Trustee that:
(a) To the best of the knowledge of the Responsible Officers of
the Resigning Trustee assigned to its Corporate Trust
Department, no Event of Default and no event which, after notice
or lapse of time or both, would become an Event of Default, has
occurred and is continuing under the
Indenture.
(b) No covenant or condition contained in the Indenture has been
waived by the Resigning Trustee or by the Holders of the
percentage in aggregate principal amount of the Securities
required by the Indenture to effect any such waiver.
(c) There is no action, suit or proceeding pending or, to the
best of the knowledge of the Responsible Officers of the
Resigning Trustee assigned to its Corporate Trust Department,
threatened against the Resigning Trustee before any court or
governmental authority arising out of any action or omission by
the Resigning Trustee as Trustee under the Indenture.
Section 103.
- ---------------
The Resigning Trustee hereby assigns, transfers, delivers and
confirms to the Successor Trustee all right, title and interest
of the Resigning Trusteein and to the trust under the Indenture
and all the rights, powers and trusts of the Trustee under the
Indenture. The Resigning Trustee shall execute and deliver such
further instruments and shall take such further action as the
Successor Trustee may reasonably require so as to more fully and
certainly vest and confirm in the Successor Trustee all the
rights, trusts and powers hereby assigned, transferred,
delivered and confirmed to the Successor Trustee.
Section 104.
- ---------------
The Resigning Trustee hereby resigns as Paying Agent and
Registrar for the Securities and as the office or agency
maintain by the Company pursuant to Section 1002 of the
Indenture.
ARTICLE TWO
THE COMPANY
Section 201.
- ---------------
The Secretary of Assistant Secretary of the Company attesting to
the execution of this Instrument by the Company hereby certifies
that annexed hereto marked Exhibit A is a copy of Board
Resolutions duly adopted by the Board of Directors of the
Company, and in full force and effect on the date hereof
authorizing certain officers of the Company to: (a) accept the
Resigning Trustee's resignation as Trustee, Registrar and Paying
Agent under the Indenture; (b) appoint the Successor Trustee as
Trustee, Registrar and Paying Agent under the Indenture; and (c)
execute and deliver such agreements and other instruments as may
be necessary or desirable to effectuate the succession of the
Successor Trustee as Trustee under the Indenture.
Section 202.
- ---------------
The Company hereby appoints the Successor Trustee asTrustee
under the Indenture and confirms to the Successor Trustee all
the rights, powers and trusts of the Trustee under the
Indenture. The Issuer shall execute and deliver such further
instruments and shall do such other things as the Successor
Trustee may reasonably require so as to more fully and certainly
vest and confirm in the Successor Trustee all the rights, trusts
and powers hereby assigned, transferred, delivered and confirmed
to the Successor Trustee.
Section 203.
- ---------------
The Company hereby appoints the Successor Trustee as Paying
Agent and Registrar for the Securities and as the Company's
office or agency maintained pursuant to Section 1002 of the
Indenture.
ARTICLE THREE
THE SUCCESSOR TRUSTEE
Section 301.
- ---------------
The Successor Trustee hereby represents and warrants to
the Resigning Trustee and to the Company that the Successor
Trustee is qualified and eligible under the provisions of
Section 609 of the Indenture to act as Trustee under the
Indenture.
Section 302.
- ---------------
The Successor Trustee hereby accepts its appointment as Trustee
under the Indenture and shall hereby be vested with all the
rights, powers, trusts and duties of the Trustee under the
Indenture.
Section 303.
- ---------------
The Successor Trustee hereby accepts its appointment as Paying
Agent and Registrar for the Securities and as the Company's
office or agency maintained pursuant to the terms of the
Indenture.
ARTICLE FOUR
MISCELLANEOUS
Section 401.
- ---------------
Except as otherwise expressly provided or unless the context
otherwise requires, all terms used herein which are defined in
the Indenture shall have the meanings assigned to them in the
Indenture.
Section 402.
- ---------------
This Instrument and the resignation, appointment and acceptance
effected hereby shall be effective as of the opening of business
on the date first above written upon the execution and delivery
hereof by each of the parties hereto.
Section 403.
- ---------------
Notwithstanding the resignation of the Resigning Trustee
effected hereby, the Company shall remain obligated under
Section 607 of the Indenture to compensate, reimburse and
indemnify the Resigning Trustee in connection with its
trusteeship under the Indenture.
Section 404.
- ---------------
This Instrument shall be governed by and construed in accordance
with the laws of the jurisdiction which govern the Indenture and
its construction.
Section 405.
- ---------------
This Instrument may be executed in any number of counterparts
each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereby have caused this
Instrument of Resignation, Appointment and Acceptance to be duly
executed and their respective seals to be affixed hereunto and
duly attested all as of the day and year first above written.
[Corporate Seal] Rockefeller Center Properties, Inc.
By /s/RICHARD M. SCARLATA
Name: Richard M. Scarlata
Attest: Title: Senior Vice President
/s/STEPHANIE LEGGETT YOUNG
Secretary
[Corporate Seal] Chemical Bank
By /s/JOHN GENERALE
Name: John Generale
Attest: Title: Vice President
/s/VERA VAYR
Assistant Trust Officer
[Corporate Seal] United States Trust Company of
New York
By /s/GERARD F. GANEY
Name: Gerard F. Ganey
Attest: Title: Senior Vice President
/s/THOMAS A. McCUTCHEON
Assistant Secretary
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
On the 23rd day of November, 1993 before me personally
came Richard M. Scarlata, to me known, who, being by me duly
sworn, did depose and say that he resides at, Bronx, New
York; that he is a Senior Vice President of Rockefeller
CenterProperties, Inc., a corporation described in and which
executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed
pursuant to the authority of the Board of Directors of said
corporation; and that he signed his name thereto pursuant to
like authority.
/s/CAROL HANRATTY
Notary Public
[Notary Seal]
Carol Hanratty
Notary Public, State of New York
No. 24-4613016
Qualified in Kings County
Commission Expires March 30, 1995
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
On the 4th day of October, 1993, before me personally came
John Generale, to me known who, being by me duly sworn, did depose
and say that he resides at 915 82nd Street, Brooklyn, New
York 11228; that he is a Vice President of Chemical Bank, a
corporation described in and which executed the above
instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant tb the authority of the Board
of Directors of said corporation; and that he signed his name
thereto pursuant to like authority.
/s/MICHAEL A. SMITH
Notary Public
[Notary Seal]
Michael A. Smith
Notary Public, State of New York
No. 4908592
Qualified in Suffolk County
Certificate filed in New York County
Commission Expires Oct. 19, 1995
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
On the 21st day of October, 1993, before me personally came
Gerard F. Ganey, to me known who, being by me duly sworn, did
depose and say that he resides at Basking Ridge, New Jersey;
that he is a Senior Vice President of United States Trust
Company of New York, a corporation described in and which
executed the above instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed pursuant tb the
authority of the Board of Directors of said corporation; and
that he signed his name thereto pursuant to like authority.
/s/ALLISON BLUNNIE
Notary Public
[Notary Seal]
Allison Blunnie
Notary Public, State of New York
No. 41-5007490
Qualified in Queens County
Commission Expires February 1, 1995
EXHIBIT A
BOARD RESOLUTIONS
- ---------------
The following is a true copy of resolutions duly adopted as
of November 18, 1993, by the Board of Directors of
Rockefeller Center Properties, Inc. (the "Company").
"RESOLVED, that any officer of the Company is hereby
authorized to accept the resignation of Chemical Bank,
successor by merger to Manufacturers Hanover Trust
Company, as Trustee, Registrar and Paying Agent, under
the Company's Indenture, dated as of September 15,
1985, and as the Company's agent for service of
notices and demands to or upon the Company in
connection with the Securities issued under said
Indenture, and to appoint United States Trust Company
of New York, as Successor Trustee, Registrar and
Paying Agent under said Indenture and as the Company's
agent for the service of notices and demands to or
upon the Company in connection with the Securities
issued under said Indenture; and
FURTHER RESOLVED, that any officer of this Company is
hereby authorized to enter into such agreements and
other instruments as may be necessary or desirable to
effectuate the appointment of said Successor Trustee
under said Indenture. "
BY-LAWS
OF
ROCKEFELLER CENTER PROPERTIES, INC.
As Amended through March 8, 1994
TABLE OF CONTENTS
- -----------------
ARTICLE I
Stockholders
Section 1.1 Annual Meeting 1
Section 1.2 Special Meetings 1
Section 1.3 Notice of Meetings 1
Section 1.4 Quorum 2
Section 1.5 Voting 3
Section 1.6 Presiding Officer and Secretary 4
Section 1.7 Proxies 4
Section 1.8 List of Stockholders 4
ARTICLE II
Directors
Section 2.1 Number of Directors; Chairman 5
Section 2.2 Independent Directors 5
Section 2.3 Election and Term of Directors 6
Section 2.4 Stockholder Nomination of Director
Candidates 6
Section 2.5 Newly Created Directorships and Vacancies 8
Section 2.6 Resignation 8
Section 2.7 Removal 9
Section 2.8 Meetings 9
Section 2.9 Quorum and Voting 10
Section 2.10 Approval of Certain Transactions 10
Section 2.11 Written Consent of Directors in Lieu of a
Meeting 10
Section 2.12 Compensation 11
Section 2.13 Contracts and Transactions Involving
Directors 11
ARTICLE III
Committees of the Board of Directors
Section 3.1 Appointment and Powers 12
ARTICLE IV
Officers, Agents and Employees
Section 4.1 Appointment and Term of Office 13
Section 4.2 Resignation and Removal 14
Section 4.3 Compensation and Bond 15
Section 4.4 President 15
Section 4.5 Vice Presidents 15
Section 4.6 Treasurer 16
Section 4.7 Secretary 16
Section 4.8 Assistant Treasurers 17
Section 4.9 Assistant Secretaries 17
Section 4.10 Delegation of Duties 17
Section 4.11 Loans to Officers and Employees; Guaranty
of Obligations of Officers and Employees 18
ARTICLE V
Indemnification
Section 5.1 Indemnification of Directors, Officers,
Employees and Agents 18
ARTICLE VI
Common Stock
Section 6.1 Certificates 19
Section 6.2 Transfer of Stock 20
Section 6.3 Lost or Destroyed Certificates 20
Section 6.4 Stockholder Record Date 21
ARTICLE VII
Investment Policies
Section 7.1. Permitted Investments 22
ARTICLE VIII
Seal
Section 8.1 Seal 22
ARTICLE IX
Waiver of Notice
Section 9.1 Waiver of Notice 23
ARTICLE X
Checks, Notes, Drafts, Etc.
Section 10.1 Checks, Notes, Drafts, Etc. 23
ARTICLE XI
Amendments
Section 11.1 Amendments 24
ARTICLE XII
Emergency By-Laws
Section 12.1 Emergency By-Laws 24
BY-LAWS
OF
ROCKEFELLER CENTER PROPERTIES, INC.
ARTICLE I
Stockholders
- ------------
Section 1.1 Annual Meeting.
- ----------------------------
An annual meeting of stockholders of the Corporation for the
election of directors and for the transaction of any other proper
business shall be held in May or in June in each year on such
date at such hour and at such place within or without the State
of Delaware as may be fixed by the Board of Directors, or if not
so fixed, at 10:30 a.m. on the third Thursday in June in such
year at the principal business office of the Corporation at 1270
Avenue of the Americas, New York, New York 10020.
Section 1.2 Special Meetings.
- ------------------------------
A special meeting of the holders of stock of the Corporation
entitled to vote on any business to be considered at any such
meeting may be called only by the Secretary at the request of the
Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors. Any such request
shall state the purpose or purposes of the proposed meeting.
Section 1.3 Notice of Meetings.
- --------------------------------
Whenever stockholders are required or permitted to take any
action at a meeting, unless notice is waived in writing by all
stockholders entitled to vote at the meeting, a written notice of
the meeting shall be given, which shall state the place, date and
hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called.
Unless otherwise provided by law, and except as to any
stockholder duly waiving notice, the written notice of any
meeting shall be given personally by mail, not less than ten nor
more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, notice
shall be deemed given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his or her
address as it appears on the records of the Corporation.
When a meeting is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any
business which might have been transacted at the original
meeting. If, however, the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the
meeting.
Section 1.4 Quorum.
- --------------------
Except as otherwise provided by law or by the Certificate of
Incorporation or by these By-Laws in respect of the vote required
for a specified action, at any meeting of stockholders the
holders of a majority of the outstanding stock entitled to vote
thereat, either present or represented by proxy, shall constitute
a quorum for the transaction of any business, but the
stockholders present, although less than a quorum, may adjourn
the meeting to another time or place and, except as provided in
the last paragraph of Section 1.3 of these By-Laws, notice need
not be given of the adjourned meeting.
Section 1.5 Voting.
- --------------------
Whenever directors are to be elected at a meeting, they shall be
elected by a plurality of the votes cast at the meeting by the
holders of stock entitled to vote. Whenever any corporate
action, other than the election of directors, is to be taken by
vote of stockholders at a meeting, it shall, except as otherwise
required by law or by the Certificate of Incorporation or by
these By-Laws, be authorized by a majority of the votes cast at
the meeting by the holders of stock entitled to vote thereon.
Except as otherwise provided by law or by the Certificate of
Incorporation, each holder of record of stock of the Corporation
entitled to vote on any matter at any meeting of stockholder
shall be entitled to one vote for each share of such stock
standing in the name of such holder on the stock ledger of the
Corporation on the record date for the determination of the
stockholders entitled to vote at the meeting.
The vote for directors and, upon the demand of any stockholder
entitled to vote, the vote on any other matter at a meeting shall
be by written ballot, but otherwise the method of voting and the
manner in which votes are counted shall be discretionary with the
presiding officer at the meeting.
Section 1.6 Presiding Officer and Secretary.
- ---------------------------------------------
At every meeting of stockholders the Chairman of the Board, or in
his or her absence (or if there be none) the President, or in his
absence a Vice President, or, if none be present, the appointee
of the meeting, shall preside. The Secretary, or in his or her
absence an Assistant Secretary, or if none be present, the
appointee of the presiding officer of the meeting, shall act as
secretary of the meeting.
Section 1.7 Proxies.
- ---------------------
Each stockholder entitled to vote at a meeting of stockholders
may authorize another person or persons to act for him or her by
proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer
period. Every proxy shall be signed by the stockholder or by his
or her duly authorized attorney
Section 1.8 List of Stockholders.
- ----------------------------------
The officer who has charge of the stock ledger of the Corporation
shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present.
The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list
required by this Section or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders
ARTICLE II
Directors
- ---------
Section 2.1 Number of Directors; Chairman.
- -------------------------------------------
The Board of Directors shall consist of five directors until
changed by amendment of the Certificate of Incorporation. The
Board of Directors shall designate, by a majority vote, a
Chairman of the Board who shall preside at all meetings of the
Board of Directors.
Section 2.2 Independent Directors.
- -----------------------------------
At least three members of the entire Board of Directors and a
majority of every committee of the Board of Directors shall be
Independent Directors. An Independent Director shall mean a
Director who is not, directly or indirectly, an affiliate of
Rockefeller Group, Inc. ("RGI"). An affiliate of RGI shall mean
a person who: (a) is an officer or director or employee of RGI;
(b) beneficially owns 5% or more of any class of equity
securities of RGI because of the power to vote, sell, or exercise
a right to acquire such securities; (c) is an officer, director
or employee or beneficially owns 5% or more of any class of
equity securities of an entity that controls, is controlled by or
is under common control with, RGI; (d) has a member of his
immediate family who has one of the foregoing relationships with
RGI; (e) is a descendant of John D. Rockefeller, Jr.; (f) is an
executor, administrator or testamentary trustee of any descendant
of John D. Rockefeller, Jr.; (g) is a trustee of any trust of
which the principal beneficiaries are one or more of the
descendants of John D. Rockefeller, Jr.; or (h) is an officer or
director of any corporation if more than 50% of the voting power
of such corporation is beneficially owned, directly or
indirectly, by (i) one or more of the descendants of John D.
Rockefeller, Jr., (ii) any executor, administrator or
testamentary trustee of any descendant of John D. Rockefeller,
Jr., or (iii) any trustee of any trust of which the principal
beneficiaries are one or more descendants of John D. Rockefeller,
Jr.
Section 2.3 Election and Term of Directors.
- --------------------------------------------
As provided in the Certificate of Incorporation, one class of
directors shall be elected annually, by election at the annual
meeting of stockholders, to serve until the third annual meeting
following such election. If the annual election of directors is
not held on the date designated therefor, the directors shall
cause such election to be held as soon thereafter as convenient.
Each director shall hold office from the time of his or her
election and qualification until his or her successor is elected
and qualified or until his or her earlier resignation or removal.
Section 2.4 Stockholder Nomination of Director Candidates.
- -----------------------------------------------------------
Nominations for the election of directors may be made by the
Board of Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the election
of directors generally. However, any stockholder entitled to
vote in the election of directors generally may nominate one or
more persons for election as directors at a meeting only if
written notice of such stockholder's intent to make such
nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation not later than (i) with respect to
an election to be held at an annual meeting of stockholders,
ninety days prior to the anniversary date of the immediately
preceding annual meeting, or, for the first annual meeting, by
January 28, 1986, and (ii) with respect to an election to be held
at a special meeting of stockholders for the election of
directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to
stockholders. Each such notice shall set forth: (a) the name
and address of the stockholder who intends to make the nomination
and of the person or persons to be nominated; (b) a
representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder
as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of each
nominee to serve as a director of the Corporation if so elected.
The presiding officer of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the
foregoing procedure.
Section 2.5 Newly Created Directorships and Vacancies.
- -------------------------------------------------------
Newly created directorships resulting from any increase in the
number of directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a
majority of the remaining directors then in office, even though
less than quorum of the Board of Directors. Any director elected
in accordance with the preceding sentence shall hold office for
the remainder of the full term of the class of directors in which
the new directorship was crated or the vacancy occurred and until
such director's successor shall have been elected and qualified.
No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Section 2.6 Resignation.
- -------------------------
Any director may resign at any time upon written notice to the
Corporation. Any such resignation shall take effect at the time
specified therein or, if the time be not specified, upon receipt
thereof, and the acceptance of such resignation, unless required
by the terms thereof, shall not be necessary to make such
resignation effective.
Section 2.7 Removal.
- ---------------------
Any director may be removed from office, but only for cause, by
the affirmative vote of the holders of at least two-thirds of the
then outstanding shares of common stock of the Corporation
entitled to vote.
Section 2.8 Meetings.
- ----------------------
Meetings of the Board of Directors, regular or special, may be
held at any place within or without the State of Delaware.
Members of the Board of Directors, or of any committee designated
by the Board, may participate in a meeting of such Board or
committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute
presence in person at such meeting. An annual meeting of the
Board of Directors shall be held after each annual election of
directors. If such election occurs at an annual meeting of
stockholders, the annual meeting of the Board of Directors shall
be held at the same place and immediately following such meeting
of stockholders, and no notice thereof need be given. The Board
of Directors may fix times and places for regular meetings of the
Board and no notice of such meetings need be given. A special
meeting of the Board of Directors shall be held whenever called
by the Chairman of the Board, if any, or by the President or by
at least one-half of the directors for the time being in office,
at such time and place as shall be specified in the notice or
waiver thereof. Notice of each special meeting shall be given by
the secretary or by a person calling the meeting to each director
by mailing the same, postage prepaid, not later than the forth
day before the meeting, or by telexing or transmitting by
facsimile the same or personally telephoning the same not later
than the day before the meeting.
Section 2.9 Quorum and Voting.
- -------------------------------
Subject to the provisions of the Certificate of Incorporation,
three directors, at least two of whom shall be Independent
Directors, shall constitute a quorum for the transaction of
business, but, if there be less than a quorum at any meeting of
the Board of Directors, a majority of the directors present may
adjourn the meeting from time to time, and no further notice
thereof need be given other than announcement at the meeting
which shall be so adjourned. Except as otherwise provided by
law, by the Certificate of Incorporation or by these By-Laws, the
vote of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 2.10 Approval of Certain Transactions.
- -----------------------------------------------
Any transaction between the Corporation and RCP Associates, a New
York limited partnership; Rockefeller Center Properties, a New
York general partnership, or any person, corporation, partnership
or other entity controlled, controlling or under common control
with either of them must be approved by a majority of the
Independent Directors.
Section 2.11 Written Consent of Directors in Lieu of a Meeting.
- ---------------------------------------------------------------
Any action required or permitted to be taken at any meeting of
the Board of Directors or of any committee thereof may be taken
without a meeting if all member of the Board or of such
committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings
of the Board or committee.
Section 2.12 Compensation.
- ---------------------------
Directors may receive compensation for services to the
Corporation in their capacities as directors or otherwise in such
manner and in such amounts as may be fixed from time to time by
the Board of Directors.
Section 2.13 Contracts and Transactions Involving Directors.
- -------------------------------------------------------------
No contract or transaction between the Corporation and one or
more of its directors or officers, or between the Corporation and
any other corporation, partnership, association, or other
organization in which one or more of its directors or officers
are directors or officers, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the
director or officer is present at or participates in the meeting
of the Board of Directors or committee thereof which authorizes
the contract or transaction, or solely because his, her or their
votes are counted for such purpose, if: (1) the material facts
as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board or committee in good
faith authorizes the contract or transaction by the affirmative
votes of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or (2) the
material facts as to his or her relationship or interest and as
to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or
transaction.
ARTICLE III
Committees of the Board of Directors
- ------------------------------------
Section 3.1 Appointment and Powers.
- ------------------------------------
The Board of Directors may from time to time, by resolution
passed by majority of the whole Board, designate one or more
committees, each committee to consist of one or more directors of
the Corporation and a majority of Independent Directors. The
Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. The
resolution of the Board of Directors may, in addition or
alternatively, provide that in the absence or disqualification of
a member of a committee, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he,
she or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board
of Directors, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may
require it, except as otherwise provided by law. Unless the
resolution of the Board of Directors expressly so provides, no
such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Any such
committee may adopt rules governing the method of calling and
time and place of holding its meetings. Unless otherwise
provided by the Board of Directors, a majority of any such
committee (or the member thereof, if only one) shall constitute a
quorum for the transaction of business, and the vote of a
majority of the members of such committee present at a meeting at
which a quorum is present shall be the act of such committee.
Each such committee shall keep a record of its acts and
proceedings and shall report thereon to the Board of Directors
whenever requested so to do. Any or all members of any such
committee may be removed, with or without cause, by resolution of
the Board of Directors, passed by a majority of the whole Board.
ARTICLE IV
Officers, Agents and Employees
- ------------------------------
Section 4.1 Appointment and Term of Office.
- --------------------------------------------
The officers of the Corporation shall include a President, a
Secretary and a Treasurer, and may include one or more Vice
Presidents, one or more Assistant Secretaries and one or more
Assistant Treasurers. All such officers shall be appointed by
the Board of Directors or by a duly authorized committee thereof.
Any number of such officers may be held by the same person, but
no officer shall execute, acknowledge or verify any instrument in
more than one capacity. Except as may be prescribed otherwise by
the Board of Directors or a committee thereof in a particular
case, all such officers shall hold their offices at the pleasure
of the Board for an unlimited term and need not be reappointed
annually or at any other periodic interval. The Board of
Directors may appoint, and may delegate power to appoint, such
other officers, agents and employees as it may deem necessary or
proper, who shall hold their offices or positions for such terms,
have such authority and perform such duties as may from time to
time be determined by or pursuant to authorization of the Board
of Directors.
Section 4.2 Resignation and Removal.
- -------------------------------------
Any officer may resign at anytime upon written notice to the
Corporation. Any officer, agent or employee of the Corporation
may be removed by the Board of Directors, or by a duly authorized
committee thereof, with or without cause at any time. The Board
of Directors or such a committee thereof may delegate such power
of removal as to officers, as agents and employees not appointed
by the Board of Directors or such a committee. Such removal
shall be without prejudice to a person's contract rights, if any,
but the appointment of any person as an officer, agent or
employee of the Corporation shall not of itself create contract
rights.
Section 4.3 Compensation and Bond.
- -----------------------------------
The compensation of the officers of the Corporation shall be
fixed by the Board of Directors, but this power may be delegated
to any officer in respect of other officers under his or her
control. The Corporation may secure the fidelity of any or all
of its officers, agents or employees by bond or otherwise.
Section 4.4 President.
- -----------------------
The President shall be the chief executive officer of the
Corporation. He or she shall have general charge of business
affairs of the Corporation. The President may employ and
discharge employees and agents of the Corporation, except such as
shall be appointed by the Board of Directors, and he or she may
delegate these powers. The President may vote the stock or other
securities of any other domestic or foreign corporation of any
type or kind which may at anytime be owned by the Corporation,
may execute any stockholders' or other consents in respect
thereof and may, in his or her discretion, delegate such powers
by executing proxies, or otherwise, on behalf of the Corporation.
The Board of Directors by resolution from time to time may confer
like powers upon any other persons or persons.
Section 4.5 Vice Presidents.
- -----------------------------
Each Vice President shall have such powers and perform such
duties as the Board of Directors or the President may from time
to time prescribe. In the absence or inability to act of the
President, unless the Board of Directors shall otherwise provide,
the Vice President who has served in that capacity for the
longest time and who shall be present and able to act, shall
perform all the duties and may exercise any of the powers of the
President. The performance of any duty by a Vice President
shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his or her power to act.
Section 4.6 Treasurer.
- -----------------------
The Treasurer shall have charge of all funds and securities of
the Corporation, shall endorse the same for deposit or collection
when necessary and deposit the same to the credit of the
Corporation in such banks or depositaries as the Board of
Directors may authorize. He or she may endorse all commercial
documents requiring endorsements for or on behalf of the
Corporation and may sign all receipts and vouchers for payments
made to the Corporation. He or she shall have all such further
powers and duties as generally are incident to the position of
Treasurer or as may be assigned to him or her by the President or
the Board of Directors.
Section 4.7 Secretary.
- -----------------------
The Secretary shall record all the proceedings of the meetings of
the stockholders and directors in a book to be kept for that
purpose and shall also record therein all action taken by written
consent of directors in lieu of a meeting. He or she shall
attend to the giving and serving of all notices of the
Corporation. He or she shall have custody of the seal of the
Corporation and shall attest the same by his or her signature
whenever required. The Secretary shall have charge of the stock
ledger and such other books and papers as the Board of Directors
may direct but may delegate responsibility for maintaining the
stock ledger to any transfer agent appointed by the Board of
Directors. The Secretary shall have all such further powers and
duties as generally are incident to the position of Secretary or
as may be assigned to him or her by the President or the Board of
Directors.
Section 4.8 Assistant Treasurers.
- ----------------------------------
In the absence or inability to act of the Treasurer, any
Assistant Treasurer may perform all the duties and exercise all
the powers of the Treasurer. The performance of any such duty
shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his or her power to act.
An Assistant Treasurer shall also perform such other duties as
the Treasurer or the Board of Directors may assign to him or her.
Section 4.9 Assistant Secretaries.
- -----------------------------------
In the absence or inability to act of the Secretary, any
Assistant Secretary may perform all the duties and exercise all
the powers of the Secretary. The performance of any such duty
shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his or her power to act.
An assistant Secretary shall also perform such other duties as
the Secretary or the Board of Directors may assign to him or her.
Section 4.10 Delegation of Duties.
- -----------------------------------
In case of the absence of any officer of the Corporation, or for
any other reason that the Board of Directors may deem sufficient,
the Board of Directors may confer for the time being the powers
or duties, or any of them, of such officer upon any other officer
or upon any director.
Section 4.11 Loans to Officers and Employees; Guaranty of
Obligations of Officers and Employees.
- --------------------------------------
The Corporation may lend money to, or guarantee any obligation
of, or otherwise assist any officer or other employee of the
Corporation or any subsidiary, including any officer or employee
who is a director of the Corporation or any subsidiary, whenever,
in the judgment of the directors, such loan, guaranty or
assistance may reasonably be expected to benefit the Corporation.
The loan, guaranty or other assistance may be with or without
interest, and may be unsecured, or secured in such manner as the
Board of Directors shall approve, including, without limitation,
a pledge of shares of stock of the Corporation.
ARTICLE V
Indemnification
- ---------------
Section 5.1 Indemnification of Directors,
Officers, Employees and Agents.
- -------------------------------
Any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (including any action or suit by or in the right of
the Corporation to procure a judgment in its favor) by reason of
the fact that he or she is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture trust or other
enterprise, shall be indemnified by the Corporation, if, as and
to the extent authorized by applicable law, against expenses
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in
connection with the defense or settlement of such action, suit or
proceeding. The indemnification expressly provided by statute in
a specific case shall not be deemed exclusive of any other rights
to which any person indemnified may be entitled under any lawful
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such officer, and
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
ARTICLE VI
Common Stock
- ------------
Section 6.1 Certificates.
- --------------------------
Certificates for stock of the Corporation shall be in such from
as shall be approved by the Board of Directors and shall be
signed in the name of the Corporation by the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary. Such certificates may be
sealed with the seal of the Corporation or a facsimile thereof.
Any of or all of the signatures on a certificate may be a
facsimile. In case any officer, transfer agent or registrar who
has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such an officer, transfer
agent or registrar, or in case the authority of any officer
authorized to sign certificates for stock of the Corporation
shall have been withdrawn, before such certificate is issued, it
may be issued by the Corporation with the same effect as if he or
she were such officer, transfer agent or registrar, or as if such
officer had the power to sign such a certificate, at the date of
issue.
Section 6.2 Transfer of Stock.
- -------------------------------
Transfers of stock shall be made only upon the books of the
Corporation by the holder, in person or by duly authorized
attorney, and on the surrender of the certificate or certificates
for such stock properly endorsed. The Board of Directors shall
have the power to make all such rules and regulations, not
inconsistent with the Certificate of Incorporation and these By
Laws and the law, as the Board of Directors may deem appropriate
concerning the issue, transfer and registration of certificates
for stock of the Corporation. The Board may appoint one or more
transfer agents or registrars of transfers, or both, and may
require all stock certificates to bear the signature of either or
both.
Section 6.3 Lost or Destroyed Certificates.
- --------------------------------------------
The Corporation may issue a new stock certificate in the place of
any certificate theretofore issued by it, alleged to have been
lost, stolen or destroyed, and the Corporation may require the
owner of the lost, stolen or destroyed certificate or his or her
legal representative to given the Corporation a bond sufficient
to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate. The
Board of Directors may require such owner to satisfy other
reasonable requirements.
Section 6.4 Stockholder Record Date.
- -------------------------------------
In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a
record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days
prior to any other action. Only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to
notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend or other
distribution, or to exercise such rights in respect of any such
change, conversion or exchange of stock, or to participate in
such action, as the case may be, notwithstanding any transfer of
any stock on the books of the Corporation after any record date
so fixed.
If no record date is fixed by the Board of Directors, (1) the
record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the date on which notice is
given, or, if notice is waived by all stockholders entitled to
vote at the meeting, at the close of business on the day next
preceding the day on which the meeting is held, and (2) the
record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
ARTICLE VII
Investment Policies
- -------------------
Section 7.1. Permitted Investments.
- ------------------------------------
The Corporation may from time to time make such investment of
funds of the Corporation as the President or the Treasurer shall,
in the discretion of such officer, consider appropriate provided,
however, that no such investment shall be made or retained if the
making or retention of such investment would result in the
disqualification of the Corporation for taxation as a real estate
investment trust as defined in section 856 et. seq. of the
Internal Revenue Code of 1986, as amended.
ARTICLE VIII
Seal
- ----
Section 8.1 Seal.
- ------------------
The seal of the Corporation shall be circular in form and shall
bear, in addition to any other emblem or device approved by the
Board of Directors, the name of the Corporation, the year of its
incorporation and the words "Corporate Seal" and "Delaware". The
seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
ARTICLE IX
Waiver of Notice
- ----------------
Section 9.1 Waiver of Notice.
- ------------------------------
Whenever notice is required to be given by statute, or under any
provision of the Certificate of Incorporation or these By-Laws, a
written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed
equivalent to notice. In the case of a stockholder, such waiver
of notice may be signed by such stockholder's attorney or proxy
duly appointed in writing. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when
the person attends a meeting for the express purpose of objecting
at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, directors or
members of a committee of directors need be specified in any
written waiver of notice.
ARTICLE X
Checks, Notes, Drafts, Etc.
- ---------------------------
Section 10.1 Checks, Notes, Drafts, Etc.
- ------------------------------------------
Checks, notes, drafts, acceptances, bills of exchange and other
orders or obligations for the payment of money shall be signed by
such officer or officers or person or persons as the Board of
Directors or a duly authorized committee thereof may from time to
time designate.
ARTICLE XI
Amendments
- ----------
Section 11.1 Amendments.
- --------------------------
These By-Laws or any of them may be altered or repealed, and new
By-Laws may be adopted, by the stockholders by vote at a meeting.
The Board of Directors shall also have power, by a majority vote
of the whole Board of Directors, to alter or repeal any of these
By-Laws, and to adopt new By-Laws.
ARTICLE XII
Emergency By-Laws
- -----------------
Section 12.1 Emergency By-Laws.
- ---------------------------------
The Emergency By-Laws provided in this Section 12.1 shall be
operative during any emergency in the conduct of the business of
the corporation resulting from an attack on the United States or
on a locality in which the corporation conducts its business or
customarily holds meetings of its Board of Directors or its
stockholders, or during any nuclear or atomic disaster, or during
the existence of any catastrophe, or other similar emergency
condition, as a result of which a quorum of the Board of
Directors or a standing committee thereof cannot readily be
convened for action notwithstanding any different provision in
the preceding By-Laws or in the Certificate of Incorporation or
in the law. To the extent not inconsistent with the provisions
of this Section, The By-Laws of the Corporation shall remain in
effect during any emergency and upon its termination the
Emergency By-Laws shall cease to be operative. Any amendments of
these Emergency By-Laws may make any further or different
provision that may be practical and necessary for the
circumstances of the emergency.
During any such emergency: (A) A meeting of the Board of
Directors or a committee thereof may be called by any officer or
director of the Corporation. Notice of the time and place of the
meeting shall be given by the person calling the meeting to such
of the directors as it may be feasible to reach by any available
means of communication. Such notice shall be given at such time
in advance of the meeting as circumstances permit in the judgment
of the person calling the meeting; (B) The director or directors
in attendance at the meeting shall constitute a quorum; (C) The
officers or other persons designated on a list approved by the
Board of Directors before the emergency, all in such order of
priority and subject to such conditions and for such period of
time (not longer than reasonably necessary after the termination
of the emergency) as may be provided in the resolution approving
the list, shall, to the extent required to provide a quorum at
any meeting of the Board of Directors, be deemed directors for
such meeting; (D) The Board of Directors, either before or during
any such emergency, may provide, and from time to time modify,
lines of succession in the event that during such emergency any
or all officers or agents of the corporation shall for any reason
be rendered incapable of discharging their duties; (E) The Board
of Directors, either before or during any such emergency, may,
effective in the emergency, change the head office or designate
several alternative head offices or regional offices, or
authorize the officers so to do; and (F) To the extent required
to constitute a quorum at any meeting of the Board of Directors
during such an emergency, the officers of the corporation who are
present shall be deemed, in order of rank and within the same
rank in order of seniority, directors for such meeting.
No officer, director or employee acting in accordance with any
Emergency By-Laws shall be liable except for willful misconduct.
These Emergency By-Laws shall be subject to repeal or change by
further action of the Board of Directors or by action of the
stockholders.
FOURTH AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO THE LOAN AGREEMENT, as defined below (the
"Amendment"), dated February 22, 1994, is by and
between RCP Associates, a New York limited partnership, and
Rockefeller Center Properties, a New York general partnership
(collectively, the "Borrowers") and Rockefeller Center
Properties, Inc., a Delaware corporation (the "Lender").
RECITALS
- --------
A. The Borrowers and the Lender wish to amend the
Loan Agreement, dated as of September 19, l985, as amended by a
Consent and Agreement, dated as of December 1, 1988, the Second
Amendment to the Loan Agreement, dated April 6, 1993 and the
Third Amendment to the Loan Agreement, dated as of April 6, 1993
(as amended, the "Loan Agreement"), pursuant to which the Lender
loaned the Borrowers $1.3 billion. Capitalized terms not
otherwise defined have the meanings set forth in the Loan
Agreement.
B. Certain Recognized Leases presently contain, and
Leases with respect to which the Lender may execute
nondisturbance and attornment agreements in the future may
contain, Rent Offset Rights.
C. The Borrowers wish to induce the Lender in the
future to enter into nondisturbance and attornment agreements in
which the Lender recognizes Rent Offset Rights by providing
additional collateral security in accordance with the terms
hereof and the Rent Offset Escrow Agreement for the Borrowers'
obligations under the Loan Agreement and the other Loan Documents
if the Rent Offset Amount exceeds $37,500.000.
AGREEMENT
- ---------
In consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt
and sufficiency of which are acknowledged hereby, the parties
agree as follows.
SECTION 1. Amendments.
(a) Section 1.01 of the Loan Agreement is
amended by adding the following definitions in the appropriate
alphabetical order:
"Account Statement" has the meaning ascribed
to it in the Rent Offset Escrow
Agreement.
"Eligible Securities" has the meaning
ascribed to it in the Rent Offset Escrow Agreement.
"Escrow Value" has the meaning ascribed to it in the Rent Offset
Escrow Agreement.
"Excess Amount" has the meaning ascribed to it in Section
6.08(m)(v).
"Minimum Deposit Amount" has the meaning ascribed to it in
Section 6.08(m)(iv).
"Minimum Rent Offset Security Amount" means, at any time, an
amount equal to 50% of the positive excess, if any, of the Rent
Offset Amount at such time over $37,500,000.
"Qualified Institution" means a bank that maintains a branch or
office in New York City whose long-term debt securities are rated
Baa or better by Moody's Investors Service, Inc. or BBB or better
by Standard & Poor's Corporation.
"Qualified Tenant" has the meaning ascribed to it in the
Mortgages.
"Recognized Leases" means Leases in which Qualified Tenants have
Rent Offset Rights and with respect to which the Lender has
executed nondisturbance and attornment agreements in accordance
with Section 2.02 of the Mortgages pursuant to which the Lender
expressly recognizes such Rent Offset Rights.
"Rent Offset Amount" means, at any time, the total amount of the
Borrowers' outstanding obligations at such time under all
Recognized Leases to fund Tenant Allowances and other items which
obligations are reasonably quantifiable and likely to be incurred
and in respect of which obligations Qualified Tenants are permitted
to exercise Rent Offset Rights.
"Rent Offset Certificate" has the meaning ascribed to it in
Section 6.08(m)(iii).
"Rent Offset Escrow Account" means the Escrow Account established
pursuant to the Rent Offset Escrow Agreement.
"Rent Offset Escrow Agent" means the Escrow Agent under the Rent
Offset Escrow Agreement.
"Rent Offset Escrow Agreement" means the Escrow and Collateral
Security Agreement, dated as of February 1994, among the
Borrowers, the Lender and Mellon Bank N.A., a national banking
association, as escrow agent.
"Rent Offset Escrow Fund" means the Escrow Fund under the Rent
Offset Escrow Agreement.
"Rent Offset Letter of Credit" has the meaning ascribed to it in
Section 6.08 (m)(ii).
"Rent Offset Rights" means all rights of a Qualified Tenant
pursuant to the express terms of a Lease between such tenant and
the Borrowers to reduce or offset rent payable thereunder if the
Borrowers breach certain obligations under such Lease, including
the
funding of Tenant Allowances and other items.
"Rent Offset Support Facilities" has the meaning ascribed to it
in Section 6.08 (m)(ii).
"Rent Offset Support Period" has the meaning ascribed to it in
Section 6.08 (m)(i).
"Rent Offset Support Provider" means the issuer of any Rent
Offset Letter of Credit or the Rent Offset Escrow Agent.
"Responsible Officer" means the Chairman of the Board, the
President, the Treasurer, any Vice President or any Assistant
Treasurer.
"Tenant Allowance" means an obligation of
any of the Borrowers in any Lease to fund or finance Tenant
Improvements.
(b) Section 6.08 of the Loan Agreement is amended by adding the
following new paragraph (m):
"(m) (i) Subject to Section 2.02 of the Mortgages and subject to
compliance by the Borrowers with their respective obligations
under this Section 6.08(m), the Lender agrees that it will enter
into nondisturbance and attornment agreements with Qualified
Tenants in substantially the form as attached as Exhibit A hereto
and with such additional changes to such form as may be
reasonably requested by Qualified Tenants; provided that the
Borrowers shall maintain in accordance with this Section 6.08(m)
and the Rent Offset Escrow Agreement credit support facilities to
provide additional security for the obligations of the Borrowers
hereunder in an amount equal to the Minimum Rent Offset Security
Amount at all times during the period commencing on the date
hereof and ending on the earlier of the Conversion Date and the
Maturity of the Notes (the "Rent Offset Support Period").
(ii) The rent offset support facilities to
be provided by the Borrowers pursuant to this Section 6.08(m)
(the "Rent Offset Support Facilities") may include (A) one or
more irrevocable standby Letters of Credit, naming the Lender as
beneficiary and issued by a Qualified Institution, each
substantially in the form as attached as Exhibit B hereto (each,
a "Rent Offset Letter of Credit"), and (B) cash and/or Eligible
Securities deposited in the Rent Offset Escrow Account pursuant
to the Rent Offset Escrow Agreement; Provided, however, that the
Borrowers shall, except to the extent permitted to be reduced
pursuant to Section 6.08(m)(v), replace each expiring Rent Offset
Letter of Credit at least 30 days prior to the expiration of such
Rent Offset Letter of Credit with a new Rent Offset Letter of
Credit and/or by the deposit to the Rent Offset Escrow Account of
cash and/or Eligible Securities in an amount equal to the face amount
of the expiring Rent Offset Letter of Credit; and, provided, further,
that if the Borrowers shall fail to replace any expiring Rent Offset
Letter of Credit at least 30 days prior to the expiration date thereof
with a new Rent Offset Letter of Credit and/or by the deposit in the Rent
Offset Escrow Account of cash and/or Eligible Securities having a
fair market value, as determined by the Rent Offset Escrow Agent,
equal to the face amount of the expiring Rent Offset Letter of Credit
as provided herein, the Lender shall be permitted to draw upon such
Rent Offset Letter of Credit in accordance with the terms thereof.
Provided that no Event of Default has occurred and is continuing,
the Lender agrees to deposit the proceeds of all drawings made by it
under any Rent Offset Letters of Credit into the Rent Offset Escrow
Account.
(iii) The Borrowers shall, on or prior to 10th day of each
calendar month, commencing with the 10th day of March, 1994,
deliver to the Lender and the Rent Offset Escrow Agent a
certificate, dated as of the last day of the immediately
preceding calendar month (the "Rent Offset Certificate"), signed
by a Responsible Officer of a general partner of each of the
Borrowers that sets forth as of the last day of the immediately
preceding calendar month (A) the total Rent Offset Amount as of
such last day in respect of all Recognized Leases, as determined
by the Borrowers in good faith, (B) the face amount of all
outstanding Rent Offset Letters of Credit as of such last day,
(C) the Escrow Value of the Escrow Fund as of such last day, as
reflected in the Account Statement delivered by the Escrow Agent
pursuant to Section 2(c)(ii) of the Rent Offset Escrow Agreement,
and (D) the Minimum Rent Offset Security Amount.
(iv) Whenever the Rent Offset Certificate most recently delivered
pursuant to Section 6.08(m)(iii) hereof shows that the Minimum Rent
Offset Security Amount as reflected in such Rent Offset Certificate
exceeds the aggregate face amount of all Rent Offset Letters of
Credit, if any, held by the Lender plus the Escrow Value of all
cash and Eligible Securities deposited in the Rent Offset Escrow
Account, in each case, as reflected in such Rent Offset
Certificate (such excess, the "Minimum Deposit Amount"), the
Borrowers shall, on or prior to the 15th day of the calendar
month immediately following the date as of which such Rent Offset
Certificate is dated deliver any combination of (A) additional
Rent Offset Letters of Credit to -the Lender and/or (B) cash
and/or Eligible Securities to the Rent Offset Escrow Agent for
deposit under the Rent Offset Escrow Agreement, with an aggregate
face amount and fair market value (as determined by the Borrowers
in good faith), as the case may be, equal to the Minimum Deposit
Amount. So long as no Event of Default shall have occurred and be
continuing the Borrowers shall be entitled to retain and withdraw
from the Rent Offset Escrow Account all income, if any, received
with respect to the Rent Offset Escrow Fund on a daily basis or
at such other times as the Borrowers may otherwise direct.
(v) Whenever the Rent Offset Certificate most recently delivered
pursuant to Section 6.08(m)(iii) shows that the sum of the
aggregate face amount of all Rent Offset Letters of Credit, if
any, held by the Lender, plus the Escrow Value of all cash and
Eligible Securities deposited in the Rent Offset Escrow Account,
in each case, as reflected in such Rent Offset Certificate
exceeds the Minimum Rent Offset Security Amount as reflected in
such Rent Offset Certificate (such excess, the "Excess Amount"),
the Borrowers shall, at any time prior to the date on which the
nest succeeding Rent Offset Certificate is delivered pursuant to
Section 6.08(m)(iii) and provided that no Event of Default has
occurred and is continuing, have the right to reduce or cause to
be reduced the face amount of any Rent Offset Letters of Credit,
and/or withdraw cash and/or Eligible Securities from the Rent
Offset Escrow Account in accordance with the Rent Offset -Escrow
Agreement and thereby reduce the Rent Offset Escrow Fund, in an
aggregate amount equal to such Excess Amount.
(vi) So long as no Event of Default has occurred and is
continuing, the Borrowers shall be entitled to withdraw from the
Rent Offset Escrow Account an amount sufficient to pay or
reimburse the Borrowers for 50% of any payment made or to be made
by the Borrowers to fund Tenant Allowances or other items
pursuant to the terms of Recognized Leases; provided that any
such payment by the Borrowers shall result in a reduction of the
Rent Offset Amount equal to 100% of the amount expended by the
Borrowers with respect to such Tenant Allowance or other item.
(vii) So long as no Event of Default has occurred and is
continuing, the Borrowers shall be entitled (A) to substitute (x)
for cash on deposit in the Rent Offset Escrow Account, Eligible
Securities having a fair market value, as determined by the Rent
Offset Escrow Agent, equal to the amount of cash to be withdrawn
and paid to the Borrowers and (y) for Eligible Securities on
deposit in the Escrow Account, cash and/or other Eligible
Securities having a fair market value, as determined by the Rent
Offset Escrow Agent, equal to the fair market value, as
determined by the Rent Offset Escrow Agent, of the Eligible
Securities to be withdrawn and delivered to the Borrowers, (B) to
withdraw from the Escrow Account the amount of cash and/or
Eligible Securities deposited in the Escrow Account (as directed
by the Borrowers) with a fair market value, as determined by the
Rent Offset Escrow Agent, equal to the face amount of any Rent
Offset Letters of Credit delivered to the Lender in substitution
for such cash and/or Eligible Securities and (C) to reduce or
cause to be reduced the face amount of any Rent Offset Letter of
Credit by the amount of cash and the fair market value, as
determined by the Rent Offset Escrow Agent, of any Eligible
Securities delivered to the Rent Offset Escrow Agent in
substitution for such reduction in the face amount of such Rent
Offset Letter of Credit.
(viii) At any time or from time to time (i) after the occurrence
and during the continuance of any Event of Default as a result of
which the Notes have been accelerated or have otherwise become
due and payable in full prior to their Maturity Date or (ii) if
the Notes have not been paid or otherwise satisfied in full on,
and have not been converted prior to, their Maturity Date, the Lender
shall be entitled to withdraw from the Rent Offset Escrow Account
all cash and Eligible Securities on deposit therein and to make
drawings under the Rent Offset Letters of Credit up to the amount
which remains due and payable and unpaid under the Notes for
application by the Lender in payment of the obligations of the
Borrowers under the Notes and the other Loan Documents in the
manner provided in Section 5.06 of the Mortgages. The Lender
agrees that it will give written notice to the Borrowers and the
applicable Rent Offset Support Provider at least one Business Day
prior to any withdrawals from the Rent Offset Escrow Account or
drawings under Rent Offset Letters of Credit pursuant to the
provisions of this Section 6.08(m)(viii) (which notice shall state
the date it intends to make such withdrawal or drawing); provided
that the giving of such notice shall not be a condition precedent
to any such withdrawal or drawing.
(ix) The Lender agrees to execute and/or deliver promptly all
notices, instructions and other documents reasonably requested by
the Borrowers or any Rent Offset Support Provider to effectuate
and accomplish the provisions of this Section 6.08(m), the Rent
Offset Escrow Agreement and any Rent Offset Letter of Credit,
including, without limitation, by acknowledging the cancellation
or reduction in the face amount of any Rent Offset Letter of
Credit permitted to be cancelled or reduced hereunder.
The Lender and the Borrowers agree that the Borrowers will be
irreparably damaged and will not have an adequate remedy at law
in the event that the foregoing covenant to execute and/or
deliver such notices, instructions and other documents has not
been timely complied with, and therefore agree that the Borrowers
shall be entitled to injunctive relief, including specific
enforcement, to enforce the provisions of the foregoing covenant,
in addition to any other remedy to which the Borrowers may be
entitled at law, time being of the essence. The Lender agrees
that if any action should be brought by the Borrowers in equity
to enforce the foregoing covenant, the Lender shall not raise the
defense that there is an adequate remedy at law.
(x) If any reduction of the face amount of any Rent Offset Letter
of Credit requires a corresponding deposit in the Rent Offset
Escrow Account pursuant to either the second proviso of Section
6.08(m)(ii) or Section 6.08(m)(vii), the Borrowers shall have
delivered to the Lender prior to such reduction and deposit an
opinion of counsel or other evidence, in either case reasonably
acceptable to the Lender, to the effect that such deposit shall
be valid and legally binding on the Borrowers and shall not be a
voidable preference or fraudulent conveyance in the event of the
commencement of an insolvency proceeding with respect to either of
the Borrowers."
SECTION 2. Effectiveness. The amendments to the Loan Agreement
provided for in Section 1 hereof shall become effective as of the
date hereof upon the execution and delivery of one or more
counterparts of this Amendment duly executed by the Borrowers and
the Lender.
SECTION 3. Miscellaneous. (a) Except as expressly
provided herein, the execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any rights,
powers or remedies of the Borrowers and the Lender under the Loan
Agreement, nor constitute a waiver of any provision of the Loan
Agreement. Except as expressly provided in Sections 1 and 2
hereof, the Loan Agreement shall be unchanged and remain in full
force and effect and the Loan Agreement as amended hereby is
ratified and confirmed.
(b) This Amendment may be executed in any number
of counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same instrument
and any of the parties hereto may execute this Amendment by
signing any such counterpart.
(c) This Amendment shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to its principles of conflicts of law.
(d) From and after the effectiveness of this
Amendment as provided in Section 2, all references to the Loan
Agreement in the Loan Agreement, the Loan Documents and the Rent
Offset Escrow Agreement shall be deemed to be references to the
Loan Agreement after giving effect to this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed as of the day and year first
above written.
ROCKEFELLER CENTER RCP ASSOCIATES
PROPERTIES
By: Rockefeller Group, Inc.,
By: Rockefeller Group, Inc., a General Partner
a General Partner
By: /s/GWEN A. ROWDEN By: /s/GWEN A. ROWDEN
Name: Gwen A. Rowden Name: Gwen A. Rowden
Title: Vice President Title: Vice President
By: Radio City Music Hall By:
Radio City Music Hall Productions, Inc.,
Productions, Inc., a General Partner
a General Partner
By: /s/GWEN A. ROWDEN By:
By: /s/GWEN A. ROWDEN Name: Gwen A. Rowden
Name: Gwen A. Rowden Title: Vice President
Title: Vice President
By: RCP Associates,
a General Partner
By: Rockefeller Group, Inc.
a General Partner
By: /s/GWEN A. ROWDEN
Name: Gwen A. Rowden
Title: Vice President
ROCKEFELLER CENTER
PROPERTIES, INC.
By: /s/RICHARD M. SCARLATA
Name: Richard M. Scarlata
Title: Senior Vice President
EXHIBIT A
NONDISTURBANCE AND ATTORNMENT AGREEMENT
- ---------------------------------------
THIS NONDISTURBANCE AND ATTORNMENT AGREEMENT (this "Agreement"),
made as of the [blank] day of [blank], 19[blank], by and among
ROCKEFELLER CENTER PROPERTIES, INC., a Delaware corporation
having an address at 1270 Avenue of the Americas, New York, New
York ("Mortgagee"), ROCKEFELLER CENTER PROPERTIES, a New York
general partnership having an address at 1230 Avenue of the
Americas, New York, New York, RCP ASSOCIATES, a New York limited
partnership having an address at 1230 Avenue of the Americas, New
York, New York (Rockefeller Center Properties and RCP Associates
being referred to collectively hereinafter as "Landlord"), and
[blank], a [blank] having an address at [blank]
("Tenant").
W I T N E S S E T H :
- ---------------------
WHEREAS, Landlord and Tenant have entered into a lease dated as
of [blank], 19[blank], with respect to certain space (the
"Demised Premises") in the building known as [blank] (together
with the real property on which said building is located, the
"Premises") (said lease, along with any amendments thereto as to
which Mortgagee consents in writing to be bound, being referred
to hereinafter as the "Lease");
WHEREAS, Mortgagee is the holder of the mortgages described on
Exhibit A hereto, between Mortgagee and Landlord (collectively,
together with all renewals, modifications, consolidations,
replacements, substitutions, additions and extensions, and as
spread or consolidated, the "Mortgages"), which encumber the
Premises and Landlord's interest in the Lease;
WHEREAS, Mortgagee is the assignee under that certain Amended and
Restated Assignment of Rents, dated as of December 1, 1988,
between Landlord and Mortgagee (together with all renewals,
modifications, consolidations, replacements, substitutions,
additions and extensions, and as spread or consolidated, the
"Assignment"), which further encumbers the Premises and
Landlord's interest in the leases pertaining thereto;
WHEREAS, the Lease provides that the Lease and all of Tenant's
rights thereunder are and shall be at all times and in all
respects subject and subordinate to the lien of the Mortgages and
the Assignment, and to all advances now or hereafter made under
or secured by the Mortgages and/or the Assignment; and
WHEREAS, Mortgagee, Landlord and Tenant desire to enter into this
Agreement upon the terms, covenants and conditions contained
herein.
NOW, THEREFORE, in consideration of the Demised Premises and the
agreements of the parties contained herein, the parties hereby
agree as follows:
1. Tenant hereby confirms that the Lease and all of Tenant's
rights thereunder are and shall be at all times and in all
respects subject and subordinate to the lien of the Mortgages and
the Assignment, and to all advances now or hereafter made under
or secured by the Mortgages and/or the Assignment.
2. Provided Tenant complies with this Agreement and shall not be
in default under the Lease beyond the applicable grace period
provided therein with respect to the default in question as of
the date Mortgagee commences a foreclosure action or proceeding
to enforce either or both of the Mortgages or the Assignment, (a)
Tenant shall not be named as a party in any foreclosure action or
proceeding to enforce either or both of the Mortgages or the
Assignment, unless such joinder shall be required under
applicable law, and in which case Mortgagee shall not seek
affirmative relief from Tenant in such action or proceeding, nor
shall the Lease be cut off or terminated nor Tenant's possession
thereunder be disturbed in any such action or proceeding and (b)
subject to the provisions of Paragraph 4 of this Agreement,
Mortgagee will recognize the Lease and Tenant's rights
thereunder.
3. Upon any foreclosure of either or both of the Mortgages or
enforcement of the Assignment or other acquisition of the
Premises (whether by deed-in-lieu of foreclosure, in connection
with a proceeding under the United States Bankruptcy Code or any
amendments, modifications or supplements thereto or replacements
thereof (the "Code") or otherwise), Tenant shall attorn to Mortgagee
or any other party acquiring said property or so succeeding to
Landlord's rights (any such party, including Mortgagee in such
capacity, being the Successsor Landlord") and shall recognize the
Successor Landlord as its landlord under the Lease, and Tenant shall
promptly execute and deliver any instruments that the Successor Landlord
may reasonably request in writing to evidence further said attornment.
4. Upon such attornment, the Lease shall continue as
a direct lease between the Successor Landlord and Tenant upon all
the terms, covenants and conditions thereof as are then
applicable except that the Successor Landlord shall not be (a)
liable for any previous act or omission of Landlord under the
Lease, (b) subject to any offsets, defenses, claims or
counterclaims that Tenant may have against Landlord or any
predecessor landlord (provided, that, notwithstanding the
foregoing, the Successor Landlord, and anyone claiming by,
through or under any Successor Landlord and/or the Mortgage,
shall be bound by any and all offsets that Tenant may have which
are expressly set forth in the Lease), (c) bound by any covenant
to perform or complete any construction (including, without
limitation, repairs and restoration following damage or
destruction or any condemnation involving the property) in
connection with said property or the Premises or to pay any sums
to Tenant in connection therewith, (d) bound by any prepayment of
more than one (1) month's rent or other charges under the Lease
unless such payment shall have been expressly approved in writing
by Mortgagee, (e) liable for any security deposit payable under
the Lease unless such security deposit shall have been received
by the Successor Landlord, (f) bound by any amendment,
modification, extension, expansion, termination, cancellation or
surrender of the Lease unless approved in writing by Mortgagee or
(g) bound by the specific provisions of the Lease noted on
Exhibit B hereto. Without limiting the foregoing, the provisions
of this Paragraph 4 shall constitute an agreement pursuant to
Section 291-f of the Real Property Law of the State of New York.
5. The attornment provided for in Paragraph 3 of
this Agreement shall inure to the benefit of any Successor
Landlord, shall be self-operative, and no further instrument
shall be required to give effect to the attornment. Tenant,
however, upon demand of any Successor Landlord, agrees to
execute, from time to time, instruments in confirmation thereof,
reasonably satisfactory to any such Successor Landlord,
acknowledging such attornment and setting forth the terms and
conditions of its tenancy. Nothing contained in this Paragraph
shall be construed to impair any right otherwise exercisable by
any such Successor Landlord.
6. Tenant certifies that there are no known defaults
on the part of the Landlord under the Lease, that the Lease is a
complete statement of the agreement of the parties
thereto with respect to the letting of the Demised Premises, that
the Lease is in full force and effect and that all conditions to
the effectiveness or continuing effectiveness thereof required to
be satisfied as of the date hereof have been satisfied; Provided,
however, that, as of the date hereof, the term commencement date
(as defined in the Lease) has not occurred.
7. From and after the date hereof, Tenant shall send
a copy of any notice of default or notice in connection with the
commencement of any action to terminate the Lease (whether in
connection with a proceeding pursuant to the Code or otherwise)
or similar statement under the Lease to Mortgagee at the same
time such notice or statement is sent to Landlord under the Lease
and agrees that, notwithstanding any provisions of the Lease to
the contrary, such notice shall not be effective unless Mortgagee
shall have been given such notice and shall have failed to cure
such default as hereinafter provided. Such notices shall be sent
by certified or registered mail, postage prepaid, return receipt
requested or shall be delivered to Mortgagee at Mortgagee's
address first set forth above (or at such other address as
Mortgagee shall specify in a written notice to Tenant at the
address first specified above for Tenant). Any such notice of
default shall be deemed to be given to Mortgagee on the earlier
of (a) the day of receipt (as evidenced by a receipt signed by
Mortgagee or the refusal to accept delivery by Mortgagee) or
(b) three (3) days after Tenant's deposit of such notice in the
mail, first class postage prepaid. With respect to the commencement
by Tenant of any action to terminate the Lease, Mortgagee shall
have the right, but not the obligation, to cure any default on the
part of Landlord that is the basis for such action within a reasonable
time (including the time required for Mortgagee to obtain
possession of the Premises if such possession is necessary to
effect such cure) after receipt of the notice by Tenant with
respect to such action.
8. Tenant shall not change, or consent to an amendment,
modification or other change in, the terms, covenants, conditions
and agreements of the Lease in any manner or agree to any
cancellation, surrender or termination thereof without the
express consent in writing of Mortgagee, and no such amendment,
modification, other change, cancellation, surrender or
termination made without such consent by Mortgagee shall be
binding on Mortgagee or release Tenant from any of its
obligations under the Lease.
9. Anything herein or in the Lease to the contrary
notwithstanding, in the event the Successor Landlord shall
acquire title to the Premises (whether by foreclosure or in
connection with a proceeding pursuant to the Code or otherwise),
the Successor Landlord's obligations under the Lease, as
described herein, shall continue only during the period such
Successor Landlord owns the Premises, and such Successor Landlord
shall have no obligation, nor incur any liability, beyond the
Successor Landlord's then interest, if any, in the Premises and
Tenant shall look exclusively to such interest of the Successor
Landlord, if any, in the Premises for the payment and discharge
of any obligations imposed on the Successor Landlord hereunder or
under the Lease and the Successor Landlord is hereby released or
relieved of any other liability hereunder and under the Lease.
Tenant agrees that with respect to any money judgment which may
be obtained or secured by Tenant against the Successor Landlord,
Tenant shall look solely to the estate or interest owned by the
Successor Landlord in the Premises and Tenant will not collect or
attempt to collect any such judgment (a) from any officer, director,
shareholder, partner, employee, agent or representative of the Successor
Landlord or (b) out of any assets of the Successor Landlord other
than the Successor Landlord's estate or interest in the Premises.
10. Tenant acknowledges and Landlord agrees that Landlord's
interest under the Lease and the rent and all other sums due
thereunder are assigned to Mortgagee as if they existed at the
time of the execution of the Assignment and at that time formed a
part of the security for the obligations secured by the Mortgages
and the Assignment, upon all of the terms and conditions
contained in the Assignment. In the event Mortgagee notifies
Tenant of a default under either or both of the Mortgages and the
Assignment and demands that Tenant pay its rent and all other
sums due under the Lease to Mortgagee, Tenant agrees that it
shall pay its rent and all other sums due under the Lease to
Mortgagee.
11. Landlord hereby consents to the terms and provisions of this
Agreement, including, without limitation, Paragraph 10 hereof.
12. This Agreement is not intended to amend the Mortgages, nor is
it intended to increase or diminish the rights and obligations
under the Mortgages of the parties thereto.
13. By signing below, each of the signatories to this Agreement
represents that (a) it has full power and authority to execute
this Agreement and to bind itself to performance hereunder and
(b) the execution and delivery of this Agreement (1) have been
duly authorized by all necessary acts on its part, (2) do not
violate or conflict with its organizational documents, (3) do not
conflict with any law or judgment of a government authority
applicable to it and (4) do not result in the breach of or
constitute a default under any agreement or other obligation to
which it is a party.
14. This Agreement may not be modified, amended or terminated
unless in writing and duly executed by the party against whom the
same is sought to be asserted and constitutes the entire
agreement between the parties with respect to the subject matter
hereof. Upon execution by every party hereto, this Agreement
shall supersede any previously executed agreement in effect
between Mortgagee and Tenant with respect to the matters
addressed herein.
15. This Agreement shall be governed by the laws of the State of
New York applicable to agreements made and to be performed within
such State. The undersigned hereby submit to personal
jurisdiction in the State of New York for all matters, if any,
which shall arise with respect to this Agreement, and waive any
and all rights under the laws of any other state or country to
object to jurisdiction within the State of New York or to
institute a claim of forum non conveniens with respect to any
court in the State of New York for the purposes of litigation
with respect to this Agreement. The parties hereto agree that
this Agreement shall not be recorded.
16. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ROCKEFELLER CENTER PROPERTIES, INC.
By: [blank]
Name: [blank]
Title: [blank]
ROCKEFELLER CENTER PROPERTIES
By: ROCKEFELLER GROUP, INC.,
A General Partner
By: [blank]
Name: [blank]
Title: [blank]
RCP ASSOCIATES
By: ROCKEFELLER GROUP, INC.,
A General Partner
By: [blank]
Name: [blank]
Title: [blank]
TENANT
By: [blank]
Name: [blank]
Title: [blank]
Exhibit A
- ---------
Amended and Restated Consolidated Mortgage and Security
Agreement, dated as of December 1, 1988, in the amount of
$44,839,996.00, by and among RCP Associates and Rockefeller
Center Properties, as mortgagor, and Rockefeller Center
Properties, Inc., as mortgagee, recorded in the Register's Office
on December 21, 1988 in Reel 1510 at page 1049.
Amended and Restated Mortgage and Security Agreement, dated as of
December 1, 1988, in the amount of $1,255,160,004.00, by and
among RCP Associates and Rockefeller Center Properties, as
mortgagor, and Rockefeller Center Properties, Inc., as mortgagee.
EXHIBIT B
- ---------
IRREVOCABLE STANDBY LETTER OF CREDIT
Issued by [blank]
Date: [blank]
No: [blank]
Rockefeller Center Properties, Inc. 1270 Avenue of the Americas
New York, New York 10020
Dear Sirs:
1. At the request and for the account of Rockefeller Center
Properties and RCP Associates (the "Borrowers") pursuant to a
Letter of Credit Reimbursement Agreement, dated as
of [blank], (the "Reimbursement Agreement") between ourselves
(the "Bank") and the Borrowers, we hereby establish in favor of
Rockefeller Center Properties, Inc. (the "Company") our
Irrevocable Standby Letter of Credit No. whereby we authorize the
Company to draw hereunder in the amount not to exceed $[blank]
(the "Face Amount"). This Letter of Credit is available in
multiple drawings on proper presentation of drafts at sight and
upon the terms and conditions hereinafter set forth. Capitalized
terms used and not defined herein shall have the meanings
assigned to them in Annex A hereto.
2. This Letter of Credit may be drawn under on any Banking Day
from and including the date hereof until and including the
Termination Date. "Termination Date" means the earliest to occur
of (i) [blank], 199[blank] (the period from and including the
date hereof to and including [blank], 199[blank], the "Initial
Term"), or, if the Bank shall not have terminated this Letter of
Credit pursuant to Section 6, the date to which the Letter of
Credit has been renewed as provided in the succeeding sentence,
(ii) the date on which the Letter of Credit is terminated by the
Borrowers and the Company pursuant to Section 6, (iii) the date
on which the Letter of Credit is terminated by the Bank pursuant
to Section 7, and (iv) the Conversion Date. Unless the Bank gives
written notice of termination pursuant to Section 6 hereof, this
Letter of Credit shall be automatically renewed on the same terms
and conditions (except that the Face Amount shall be adjusted as
provided herein) for successive one-year terms (each such term a
"Renewal Term") commencing on the last day of the Initial Term or
a Renewal Term, as appropriate (a "Scheduled Termination Date"),
and ending on the anniversary of such Scheduled Termination Date.
3. The Company may make drawings under this Letter of Credit by
presentation of a sight draft of the Company drawn on the Bank in
the form of Annex B hereto, stating on its
face: "Drawn under $[blank] Irrevocable Standby Letter of Credit
No. [blank]" accompanied by a certificate executed on behalf of
the Company in the form of either Annex C, Annex D or Annex E
hereto.
Presentation of each such draft and certificate shall be made at
the branch of the Bank at [blank], New York, New York [blank],
Attention: [blank], or at any other branch in the City and State
of New York which may be designated by the Bank by written notice
delivered to the Company; provided, however, that if the Bank
shall fail to maintain the branch specified above, or shall fail
to designate another branch in the City of New York as aforesaid,
then any drafts and certificates under this Letter of Credit may
be presented at any other branch of the Bank.
4. The Bank hereby agrees that all drafts drawn under and in
compliance with the terms of this Letter of Credit will be duly
honored by the Bank upon delivery of the sight drafts and duly
completed and executed certificates specified in Section 3 hereof
and if presented at the Bank's aforesaid branch before the close
of business on the Termination Date. If a drawing is made by the
Company hereunder at or prior to 11:00 a.m., New York City time,
on a Banking Day, and provided that such drawing and the
documents presented in connection therewith conform to the terms
and conditions hereof, payment shall be made of the amount
specified (or such lesser amount as may be available hereunder)
at or prior to 4 p.m., New York City time, on the same Banking
Day. If a drawing is made by the Company hereunder after 11:00 a.m.,
New York City time, on a Banking Day, and provided that such drawing
and the documents presented in connection therewith conform to the
terms and conditions hereof, payment shall be made of the amount
specified (or such lesser amount as may be available hereunder)
at or prior to 4 p.m., New York City time, on the next succeeding
Banking Day. Payment under this Letter of Credit to the Company
shall be made by credit of immediately available funds to the
Company's account, [Account No. 115-064290 at Chemical Bank], New
York, New York, or to such other account maintained at a
financial institution in the City and State of New York as the
Company may designate in writing to the Bank at or prior to the
time of such drawing.
5. Notwithstanding any other provision in this Letter of Credit,
each drawing honored by the Bank hereunder shall pro tanto reduce
the Face Amount hereof.
6. The Borrowers and the Company may terminate this Letter of
Credit at any time upon 30 days' prior joint written notice to
the Bank, which notice shall specify the effective date of such
termination. Any such termination shall be effective on the date
specified in the notice. In addition to the rights provided in
Section 7 hereof, the Bank may terminate this Letter of Credit by
giving the Borrowers and the Company written notice not less than
90 days prior to the end of the Initial Term or any Renewal Term
(the "Non-Renewal Notice") that it will not renew the Letter of
Credit for a period following the expiry of such Initial Term or
Renewal Term, as the case may be.
7. If an Event of Default (as defined in the Reimbursement
Agreement) shall occur and be continuing under the Reimbursement
Agreement, the Bank shall have the right, at its sole option, by
written notice to the Borrowers and the Company, to terminate
this Letter of Credit at the time the Bank pays to the Company
cash in an amount equal to the Face Amount of this Letter of
Credit then in effect. After any such payment by the Bank in
accordance with this Section 7, no further drawings shall be
permitted under this Letter of Credit.
8. Only the Company (or any transferee permitted by Section 10
hereof) may make drawings under this Letter of Credit. Upon
payment as provided in Section 3 of the amount specified in a
sight draft drawn hereunder, the Bank shall be fully discharged
of its obligation under this Letter of Credit with respect to
such sight draft and the Bank shall not thereafter be obligated
to make any further payments under this Letter of Credit with
respect to such sight draft to the Company or any other Person.
9. (a) This Letter of Credit is subject to the Uniform Customs
and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication No. 400 (the
"Uniform Customs"), and shall, as to matters not governed by the
Uniform Customs, be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made
and to be performed entirely within such State including, without
limitation, Article S of the Uniform Commercial Code as in effect
in the State of New York.
(b) Any notice or other communication required
or permitted hereunder to be given to or by the Bank shall be in
writing and shall be personally delivered, telexed, sent by
facsimile transmission or sent by certified, registered mail,
postage prepaid to the addresses set forth below.
if to the Bank, to:
[blank]
if to the Company, to:
Rockefeller Center Properties, Inc.
1270 Avenue of the Americas
New York, New York 10020
Attention: President
if to the Borrowers, to each of them:
c/o Rockefeller Group, Inc.
1230 Avenue of the Americas
New York, New York 10020
Attention: Secretary
with a copy to:
Rockefeller Group, Inc.
1230 Avenue of the Americas
New York, New York 10020
Attention: Treasurer
Except as otherwise specified herein, all notices and other
communications shall be deemed to have been duly given on (i) the
date of delivery if delivered personally, (ii) on the date
of transmission by telex with confirmed answerback, (iii) the
date received if sent by facsimile transmission or (iv) the date
three Banking Days following deposit in the mails properly
addressed and postage prepaid, whichever shall first occur. Any
person named above may by notice given to the Bank in accordance
with this Section 9(b) designate another address for receipt of
notices and communications hereunder, and the Bank may by notice
given to any other person named above in accordance with this
Section 9(b) designate another address for receipt by the Bank of
notices and communications hereunder from such person.
10. Notwithstanding Article 54(e) of the Uniform
Customs, the Company may transfer its rights under this Letter of
Credit in their entirety (but not in part) to any transferee
(other than the Borrowers) who has succeeded the Company as the
Lender pursuant to Section 8.04(c) of the Loan Agreement and such
transfer shall be effected upon the presentation to the Bank of
this Letter of Credit accompanied by a transfer letter in the
form of Annex F hereto. Upon such presentation, the Bank shall
issue and deliver to or on the order of the Company a replacement
letter of credit in the form of the Letter of Credit surrendered
to it, except that such replacement letter of credit shall name
the transferee designated in the transfer letter as the
beneficiary of such replacement letter of credit.
11. If at any time prior to presentation of documents for payment
hereunder, the Bank receives a certificate signed by one who
states therein that he is a duly authorized vice president of the
Company, stating that this Letter of Credit has been lost,
stolen, mutilated or destroyed, the Bank will, upon receipt of
(i) an indemnity bond, in form and substance satisfactory to the
Bank and issued by an insurance company acceptable to the Bank,
(ii) in the case of mutilation of the Letter of Credit, the
mutilated Letter of Credit, and (iii) in the case of loss, theft
or destruction of the Letter of Credit, such proof of loss as the
Bank shall specify, issue to the Company a replacement letter of
credit dated the same date, bearing the same number and in the
same amount as this Letter of Credit.
12. The Bank shall promptly advise the Borrowers or the Company
of the Face Amount then in effect from time to time upon the
written request of the Borrowers or the Company.
13. This Letter of Credit sets forth in full the Bank's
undertaking, and such undertaking shall not in any way be
modified or amended by reference to any document, instrument or
agreement referred to herein, except the certificates, transfer
letter and sight draft referred to herein; and any
such reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement except for such
certificates, sight draft and transfer letter.
Very truly yours,
[Bank]
By: [blank]
Name: [blank]
Title: [blank]
ANNEX A
- -------
DEFINITIONS
- -----------
"Banking Day" means every day other than Saturday, Sunday and
each day on which banks in New York City are authorized or
required by law or executive order to close.
"Conversion Date" means the date on which the Bank receives
written notice from the Company that the Conversion Date has
occurred pursuant to the Loan Agreement.
"Letter of Credit" means the Letter of Credit to which this Annex
A is attached.
"Loan Agreement" means the Loan Agreement in the form dated as of
September 19, 1985 between the Borrowers and the Company, as
amended by a Consent and Agreement, dated as of December 1, 1988,
as amended by a Second Amendment to Loan Agreement, dated April
6, 1993, as amended by a Third Amendment to Loan Agreement, dated
April 6, 1993 and as amended by a Fourth Amendment to Loan
Agreement, dated February [blank], 1994.
"Rent Offset Escrow Agent" has the meaning ascribed to it in the
Loan Agreement.
ANNEX B
- -------
Letter of Credit No. [blank]
New York, New York
[Date]
At sight
PAY TO THE ORDER CF Rockefeller Center Properties, Inc. the sum
of U.S. $ [blank] DOLLARS.
DRAWN UNDER THE $ [blank] IRREVOCABLE STANDBY
LETTER OF CREDIT NO. [blank]
ROCKEFELLER CENTER PROPERTIES INC.
By: [blank]
Name: [blank]
Title: [blank]
To: [Bank]
ANNEX C
- -------
CERTIFICATE FOR PAYMENT UPON ACCELERATION OF NOTES
- --------------------------------------------------
The undersigned, a duly authorized officer of Rockefeller Center
Properties, Inc. (the "Company"), hereby certifies to [blank]
(the "Bank"), with respect to the Bank's Irrevocable Standby
Letter of Credit No. [blank] (the "Letter of Credit") issued in
favor of the Company, the matters set forth below. Capitalized
expressions used in this Certificate without definition have the
meanings set forth in the Letter of Credit or in Annex A thereto.
1. The Company has declared all amounts due under both of the
Notes (as defined in the Loan Agreement) to be immediately due
and payable pursuant to both of the Mortgages (as defined in the
Loan Agreement), and the Borrowers have failed to pay the Company
after a demand for payment has been made by it, $[blank] in the
aggregate with respect thereto. The Company is making a drawing
in the amount of $[blank] under the Letter of Credit with respect
to amounts unpaid following acceleration of the Notes under both
of the Mortgages.
2. The Company has not previously made a drawing under the Letter
of Credit with respect to the amounts drawn hereby under the
Letter of Credit.
3. The sight draft accompanying this Certificate has been duly
executed and delivered by the Company and such sight draft does
not exceed the amount available to be drawn under the Letter of
Credit with respect to the accelerated indebtedness under the
Notes.
4. This Certificate is presented prior to the Conversion Date.
IN WITNESS WHEREOF, the Company has executed and delivered this
Certificate as of the [blank] day of [blank], [blank].
By: [blank]
Name: [blank]
Title: [blank]
ANNEX D
- -------
CERTIFICATE FOR PAYMENT UPON FAILURE TO PAY NOTES AT MATURITY
- -------------------------------------------------------------
The undersigned, a duly authorized officer of Rockefeller Center
Properties, Inc. (the "Company"), hereby certifies to [blank]
(the "Bank"), with respect to the Bank's Irrevocable Standby
Letter of Credit No. [blank] (the "Letter of Credit") issued in
favor of the Company, the matters set forth below. Capitalized
expressions used in this Certificate without definition have the
meanings set forth in the Letter of Credit or in Annex A thereto.
1. The Notes have not been paid or otherwise satisfied in full
on, and have not been converted prior to, their Maturity Date and
the Borrowers have failed to pay the Company after a demand for
payment has been made by it, $[blank] in the aggregate with
respect thereto. The Company is making a drawing in the amount of
$[blank] under the Letter of Credit with respect to amounts
unpaid following acceleration of the Notes under both of the
Mortgages.
2. The Company has not previously made a drawing under the Letter
of Credit with respect to the amounts drawn hereby under the
Letter of Credit.
3. The sight draft accompanying this Certificate has been duly
executed and delivered by the Company and such sight draft does
not exceed the amount available to be drawn under the Letter of
Credit with respect to the accelerated indebtedness under the
Notes.
IN WITNESS WHEREOF, the Company has executed and delivered this
Certificate as of the [blank] day of [blank], [blank].
By: [blank]
Name: [blank]
Title: [blank]
ANNEX E
- -------
CERTIFICATE FOR PAYMENT
UPON NON-RENEWAL OF LETTER OF CREDIT
- ------------------------------------
The undersigned, a duly authorized officer of Rockefeller Center
Properties, Inc. (the "Company"), hereby certifies to [blank]
(the "Bank"), with respect to the Bank's Irrevocable Standby
Letter of Credit No. [blank] (the "Letter of Credit") issued in
favor of the Company, the matters set forth below. Capitalized
expressions used in this Certificate without definition have the
meanings set forth in the Letter of Credit or in Annex A thereto.
1. The Company has received a non-renewal notice dated [blank]
(the "Non-Renewal Notice").
2. The Company is entitled under the terms of the Loan Agreement
to make a drawing under the Letter of Credit of the amount of the
sight draft accompanying this Certificate as a consequence of the
receipt of the NonRenewal Notice and the failure of the Borrowers
(as defined in the Loan Agreement) to obtain a replacement letter
of credit or deposit collateral with the Rent Offset Escrow Agent
in the manner and within the times specified in the Loan
Agreement.
3. The Company has not previously made a drawing under the Letter
of Credit as a consequence of receipt of the Non-Renewal Notice.
4. The sight draft accompanying this Certificate has been duly
executed and delivered by the Company and such sight draft does
not exceed the amount available to be drawn under the Letter of
Credit.
5. This Certificate is presented prior to the Conversion Date.
IN WITNESS WHEREOF, the Company has executed and delivered this
Certificate as of the [blank] day of [blank], [blank].
By: [blank]
Name: [blank]
Title: [blank]
ANNEX F
- -------
[Bank]
Re: [blank], Irrevocable
Standby Letter of Credit No. [blank]
Gentlemen:
For value received, the undersigned hereby irrevocably transfers
to:
(Name of Transferee)
(Address)
all rights of the undersigned to draw under the above Letter of
Credit. Said transferee has succeeded the undersigned as Lender
under the Loan Agreement among the undersigned, Rockefeller
Center Properties and RCP Associates dated as of September 29,
1985 as amended, and is entitled to all rights of the undersigned
thereunder.
By this transfer, all rights of the undersigned in such Letter of
Credit are transferred to the transferee and the transferee shall
have the sole right as beneficiary thereof. All communications
with respect to the Letter of Credit, if any are to be advised
directly to the transferee without necessity of any consent of or
notice to the undersigned.
Yours very truly,
SIGNATURE AUTHENTICATED
ROCKEFELLER CENTER PROPERTIES, INC.
(Bank)
By: [blank]
Name: [blank]
Title: [blank] (Authorized
Signature)
